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Baxter International, Inc. v. CareFusion Corporation

United States District Court, N.D. Illinois, Eastern Division

March 20, 2017

BAXTER INTERNATIONAL, INC., Plaintiff,
v.
CAREFUSION CORPORATION and BECTON, DICKINSON AND COMPANY, Defendants.

          MEMORANDUM OPINION AND ORDER

          AMY J. ST. EVE, United States District Court Judge

         Defendants CareFusion Corporation and Becton, Dickinson and Company (collectively, “Defendants”) have moved for leave to amend their answer and counterclaims to assert inequitable conduct pursuant to Federal Rule of Civil Procedure 15. (R. 79.) Plaintiff Baxter International, Inc. (“Baxter”) opposes Defendants' motion on the grounds that amendment is futile and that Defendants failed to act diligently in seeking leave to amend. (R. 94.) For the following reasons, the Court grants Defendants' motion.

         BACKGROUND

         I. Baxter's Allegations and the Patents at Issue

         In its First Amended Complaint, Baxter alleges that Defendants' Alaris System-an infusion pump system that enables the delivery of intravenous (“IV”) fluids and drugs-infringes three of Baxter's patents, U.S. Patent Nos. 5, 764, 034 ('034 Patent); 5, 782, 805 ('805 Patent); and 6, 321, 560 ('560 Patent). (R. 29 at ¶¶ 9, 11, 25-45.)[1]

         The ‘034 Patent, entitled “Battery Gauge For A Battery Operated Infusion Pump” was filed on April 10, 1996. (R.29-1, ‘034 Patent, 1). The ‘034 Patent lists two inventors, George Bowman and Grace Esche, and is assigned to Baxter. (Id.). The ‘034 Patent is directed to an infusion pump capable of estimating the amount of time left on a battery by monitoring both the voltage available from the battery and the amount of current flowing from the battery. (Id., col. 2: 14-16, 20-23). The summary of the ‘034 Patent recites: “[t]he present invention provides a medical infusion pump which incorporates cost-effective, sensitive battery monitoring.” (Id., col. 2: 11-13). The summary further discloses an electric circuit which enables a “sampling technique [that] alternates between sampling battery voltage and sampling current drain.” (Id., col. 2: 25-28). “A method is then applied to the sampling signals by a microprocessor which determines the amount of time left under battery power.” (Id., col. 2: 28-30). The specification recites that the “invention also provides several troubleshooting alert, alarm and failure messages” to health care providers. (Id., col. 8: 15-16). The alert condition includes “a battery low alert, which indicates that the auxiliary battery has less than a predetermined amount of infusion time left.” (Id., col. 8: 29-32). The alarm condition “indicates that the auxiliary battery charge has diminished below the level necessary to continue infusion.” (Id., col. 8: 34-35).

         The '805 Patent, entitled “Medical Infusion Pump, ” was also filed on April 10, 1996. (R. 29-2, '805 Patent, 1.) It lists the following inventors: Randolph Meinzer, Grace Esche, Eric Michael, Kimball Knowlton, Cynthia Bennett, Eric Linner, Kenneth Lynn, Joseph Kruft, Eileen Hirotsuka, Daniel Kusswurm, Jane Zeisloft, Janice Stewart, Debra Gelhar, and Gilbert Rivas. (Id.) The summary of the '805 Patent indicates that “[t]he present invention provides a medical infusion pump which is readily adaptable to use in multiple clinical settings without unduly burdening the user with programming parameters for such a variety of uses.” (Id. col. 1:65-67, col. 2:1-3.) The invention “allows the user to select the number of flow channels available or to allow for existing pumps to add flow channels as needed.” (Id., col. 2:2-5.) The pump contains “a display area for displaying user interface information” on the main body portion as well as “an auxiliary display area for displaying supplemental user interface information.” (Id. col. 2:12- 14.)

         II. Defendants' Inequitable Conduct Allegations

         Defendants seek to amend their answer and counterclaims to assert inequitable conduct based on Baxter's prosecution of the applications that led to the issuance of the '034 and '805 Patents. (R. 77-1, Defs.' Proposed Am. Answer & Counterclaims, 21, 24-29.) In short, Defendants claim that Baxter omitted material information during the course of prosecuting the two patents-specifically, the existence of two infusion pumps that anticipated and/or rendered obvious Baxter's patent claims-that would have caused the PTO not to issue the '034 and '805 Patents.

         Defendants allege that the '034 and '805 Patents are “based on a Baxter product alternatively called the ‘Colleague' or ‘Odyssey' infusion pump.” (Id. at 24, ¶ 27.) When Baxter was developing the Colleague/Odyssey infusion pump, “its primary competitors in the infusion pump market included CareFusion's predecessors IVAC Corporation (‘IVAC') and IMED Corporation (‘IMED').” (Id. at 25, ¶ 28.) At that time, IVEC marketed the Signature Edition (“SE”) infusion pumps, which were available in single-channel (“model 7100” or “SE I”) and dual-channel (“model 7200” or “SE II”) configurations. (Id. at 25, ¶ 29.) “The only material difference between the [two SE] pumps was the number of pumping channels. The other relevant aspects of the pumps, including the battery monitoring user interface features, were the same.” (Id.) Also at that time, IMED marketed the Gemini line of infusion pumps, “including the four-channel Gemini PC-4 infusion pump.” (Id. at 25, ¶ 30.)

         On approximately June 30, 1995-about nine months before Baxter filed its applications for what became the '034 and '805 Patents-Baxter filed an application with the U.S. Food and Drug Administration (“FDA”) for clearance to market the Odyssey Volumetric Infusion Pump. (Id. at 25, ¶¶ 31, 36.) In this application, Baxter identified three infusion pumps that the FDA had already approved as being “substantially equivalent” to the Odyssey pump: (1) IMED's Gemini PC-4 Volumetric Infusion Pump/Controller, cleared on June 9, 1992; (2) Abbott Laboratories' LifeCare 175 Breeze Volumetric Infusion System, cleared on April 7, 1993; and (3) IVAC's Signature Edition I Volumetric Infusion Pump, Model 7100, cleared on August 19, 1993. (Id. at 25, ¶ 32.) In its FDA submission, Baxter included manuals for the three predicate devices it identified as well as a “feature comparison chart” comparing the Odyssey pump to the three predicate pumps. (Id. at 26, ¶ 33.) Based on its comparison of the predicate devices and the Odyssey pump, Baxter represented that “‘the indication statement for the Odyssey Volumetric Infusion Pump is almost identical to the indication statement for IVAC's Signature Edition™ Volumetric Infusion Pump, Model[] 7100'”[2] and that “the Colleague pump ‘does not have any unique technological features as compared to currently marketed pumps.'” (Id. at 27, ¶ 34.) According to Defendants, Baxter's FDA submission amounts to an admission that “the Signature Edition and Gemini PC-4 pumps were known prior art.” (Id. at 25-26, ¶ 32.)

         Defendants allege that the PTO would not have issued the '034 and '805 Patents if Baxter “had disclosed the existence of the Gemini PC-4 infusion pump and the Gemini PC-4 manual” or the “Signature Edition pumps and the Signature Edition I manual, ” as it had in its FDA application. (See Id. at 27-28, ¶ 39-40.) Specifically, Defendants claim that the SE II (model 7200) pump-which Defendants allege is materially the same as the SE I (model 7100) pump- “anticipates and/or renders obvious at least asserted claims 1-2, 5, 8-10, 24-26, 28-30, and 35 of the '805 Patent and asserted claims 1-3 and 9-12 of the '034 Patent.” (Id. at 27-28, ¶ 39.) Additionally, Defendants claim that the Gemini PC-4 infusion pump anticipates and/or renders obvious at least asserted claims 1, 3, 5, 8-10, 24-26, 28-29, 31, and 35 of the '805 Patent and claims 1-3 and 9-12 of the '034 Patent. (Id. at 28, ¶ 40.) To support these contentions, Defendants rely on charts of the “invalidity of asserted claims, ” which Defendants attach to their proposed amended answer and counterclaims. (Id. at 27-28, ¶¶ 39-40; Exs. A-D.)

         Defendants allege that “many of the named inventors of the '034 and '805 Patents were also actively involved in Baxter's [FDA] submission for the Colleague/Odyssey pump, including at least Randolph Meinzer, Grace Esche, Eric Michael, Kimball Knowlton, Cynthia Bennett, Eric Linner, Kenneth Lynn, Joseph Kruft, Eileen Hirotsuka, Daniel Kusswurm, Jane Zeisloft, Janice Stewart, Debra Gelhar, and Gilbert Rivas.” (Id. at 27, ¶ 37.) Ms. Esche testified at her deposition that she was aware that IVAC, IMED, and Abbott marketed pumps that were in direct competition with the Odyssey/Colleague pump, and Mr. Bowman similarly testified that he knew IVAC was a direct competitor of Baxter. (Id. at 27, ¶ 38.) Both Esche and Bowman did not provide an explanation of why the documents related to the predicate devices in Baxter's FDA application were not submitted to the PTO. (Id. at 28-29, ¶ 42.) Defendants claim that “[g]iven the involvement of the named inventors of the '034 and '805 Patents in Baxter's [FDA] application for the Odyssey/Colleague infusion pump (the commercial embodiment of both patents) and Baxter's identification of the Signature Edition and Gemini PC-4 infusion pumps as two of the three most relevant predicate devices to the FDA, the most reasonable inference is that Baxter's named inventors deliberately withheld this prior art from the [PTO] in order to obtain patent claims that would not otherwise have been allowed.” (Id. at 29, ¶ 43.)

         III. Procedural History

         Pursuant to Local Patent Rule 2.3, Defendants served Baxter with their Initial Non-Infringement, Unenforceability, and Invalidity Contentions in July 2016. (R. 81-3.) In those contentions, Defendants asserted that the Gemini PC-4 pump and the SE II (model 7200) pump anticipated or rendered obvious many of the claims in the '034 and '805 Patents. (Id. at 5, 8-9.)[3]Defendants included detailed claim charts explaining where the elements of Baxter's asserted patent claims are found in the prior art. (Id., D-4, D-6, E-1, E-2.) Defendants also noted that they “reserve[d] the right to amend or supplement [their] contentions if discovery or further investigation reveals evidence of inequitable conduct or other bases of unenforceability, such as the failure to disclose knowledge of a competitor's on-sale, directly competing products during prosecution of the '034 patent[ and the] '805 patent.” (Id. at 23.)

         At a December 13, 2016 status conference, Defendants noted that the deposition testimony of Bowman might reveal additional information related to its invalidity and unenforceability contentions, but the parties could not schedule his deposition before Defendants' final contention deadline. (R. 81-4 at 9-10.) The Court instructed the parties “come back in shortly after the deposition, and you can let me know at that point orally if there is something that was brought up that [would warrant amendment].” (Id. at 10.) On December 20, 2016, Defendants took Esche's deposition. (R. 77-3.) Two days later, Defendants served their Final Unenforceability and Invalidity Contentions, in which, among other things, Defendants asserted in a section regarding unenforceability that Baxter was aware of the Gemini PC-4 and the SE I pump but “failed to provide prior art documents in its possession for such infusion pumps to the [PTO] during the prosecution of the asserted patents.” (R. 77-4 at 28.) On January 18, 2017, Defendants took Bowman's ...


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