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Integra LifeSciences Corp. v. Hyperbranch Medical Technology, Inc.

United States District Court, D. Delaware

April 20, 2018

INTEGRA LIFESCIENCES CORP., INTEGRA LIFESCIENCES SALES LLC, CONFLUENT SURGICAL, INC., and INCEPT LLC, Plaintiffs,
v.
HYPERBRANCH MEDICAL TECHNOLOGY, INC., Defendant.

          REPORT AND RECOMMENDATION

          CHRISTOPHER J. BURKE UNITED STATES MAGISTRATE JUDGE.

         In this action filed by Plaintiffs Integra LifeSciences Corp., Integra LifeSciences Sales LLC, Confluent Surgical, Inc. and Incept LLC (collectively, "Plaintiffs" or "Integra") against Defendant HyperBranch Medical Technology, Inc. ("Defendant" or "HyperBranch"), Plaintiffs allege infringement of United States Patent Nos. 7, 009, 034 (the '"034 patent"), 7, 332, 566 (the '"566 patent"), 7, 592, 418, 8, 003, 705 and 8, 535, 705 (the '"5705 patent") (collectively, the "patents-in-suit" or "asserted patents").[1] Presently before the Court are: (1) Plaintiffs' Motion for Summary Judgment of Infringement of claim 10 of the '034 patent, (D.I. 399) ("Plaintiffs' Motion"); and (2) Defendant's Motion for Summary Judgment of Invalidity of claim 10 of the '034 patent for obviousness, (D.I. 393) ("Defendant's Motion").[2] The Court recommends that Plaintiffs' Motion be GRANTED-IN-PART and Defendant's Motion be DENIED for the reasons set out herein.

         I. BACKGROUND

         A. The Parties and the Accused Products

         The Court incorporates by reference its recent discussions of the parties and of the accused products at issue (HyperBranch's Adherus Dural Sealant, Adherus Spinal Sealant, Adherus AutoSpray Dural Sealant, and Adherus AutoSpray Extended Tip (ET) Dural Sealant (the "Accused Products")), set out in the Court's February 20, 2018 and March 13, 2018 Report and Recommendations. (D.I. 508 at 2-3; D.I. 555 at 2-3)

         B. The '034 Patent

         The Court also incorporates by reference its recent discussion of the '034 patent, set out in the Court's Report and Recommendation dated March 13, 2018. (D.I. 555 at 4) The instant Motions relate to claim 10 of the '034 patent, which depends from claim 1. Claim 1 and claim 10 recite:

1. A method of preparing a composition suitable to coat a tissue of a patient, the method comprising: mixing reactive precursor species comprising nucleophilic functional groups, reactive precursor species comprising electrophilic functional groups, and a visualization agent such that the nucleophilic functional groups and electrophilic functional groups crosslink after contact with the tissue to form a hydrogel having an interior and an exterior, with the exterior having at least one substrate coating surface and the visualization agent being at least partially disposed within the interior and reflecting or emitting light at a wavelength detectable to a human eye to thereby provide a means for visualization of the coating by a human eye.
10. The method of claim 1, wherein the hydrogel forms within 5 seconds after contact with the substrate.

('034 patent, cols. 39:56-40:2, 40:23-24)

         C. Procedural History

         Plaintiffs filed the instant case on September 15, 2015. (D.I. 1) On September 25, 2015, Chief Judge Leonard P. Stark referred this case to the Court to hear and resolve all pretrial matters, up to and including the resolution of case-dispositive motions. (D.I. 15)

         Briefing on the instant Motions was completed on December 21, 2017, (D.I. 463, 465), and the Court heard oral argument on the Motions (and various other summary judgment and Daubert motions filed in the case) on January 5, 2018, (D.I. 482 (hereinafter, "Tr.")). A 7-day trial is set to begin on May 29, 2018. (D.I. 660)

         II. STANDARD OF REVIEW

         The Court incorporates by reference its prior discussion of the legal standards for resolving summary judgment motions and for establishing patent infringement, which was found in its February 20, 2018 Report and Recommendation. (D.I. 508 at 4-7)

         HyperBranch's invalidity defense based on obviousness is also at presently at issue. A patent granted by the United States Patent and Trademark Office (the "PTO") is presumed to be valid. 35 U.S.C. § 282(a); Microsoft Corp. v. i4i Ltd. P'ship, 564 U.S. 91, 102 (2011). The rationale underlying this presumption of validity is that "the PTO, in its expertise, has approved the claim[.]" KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 426 (2007). The burden of proving invalidity rests with the patent challenger at all times, who, when disputed questions of fact arise, must establish a patent's invalidity by clear and convincing evidence in order to prevail. Microsoft Corp., 564 U.S. at 98-99, 114; see also Id. at 114-15 (Breyer, J., concurring). Clear and convincing evidence places within the mind of the fact finder "an abiding conviction that the truth of [the] factual contentions are highly probable." Procter & Gamble Co. v. Teva Pharms. USA, Inc., 566 F.3d 989, 994 (Fed. Cir. 2009) (quoting Colorado v. New Mexico, 467 U.S. 310, 316(1984)).

         A patent claim is invalid as obvious under 35 U.S.C. § 103 "if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains." 35 U.S.C. § 103; see also KSR Int'l, 550 U.S. at 406-07. "Obviousness is a question of law based on underlying factual findings: (1) the scope and content of the prior art; (2) the differences between the claims and the prior art; (3) the level of ordinary skill in the art; and (4) objective indicia of nonobviousness." Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d 1342, 1360 (Fed. Cir. 2012) (quoting Graham v. John Deere Co., 383 U.S. 1, 17 (1966)). A party seeking to invalidate a patent on the basis of obviousness must establish (by clear and convincing evidence) that a person of ordinary skill in the art ("POSITA") would have been motivated to combine the teachings of the prior art references to achieve the claimed invention, and that the POSITA would have had a reasonable expectation of success in doing so. Id.

         Objective considerations of nonobviousness constitute "independent evidence" which "may often be the most probative and cogent evidence of nonobviousness in the record." Mintz v. Dietz & Watson, Inc., 679 F.3d 1372, 1378 (Fed. Cir. 2012) (internal quotation marks and citations omitted). The objective considerations, which include unexpected results, expert skepticism, copying, commercial success, praise by others, and long-felt need, "help inoculate the obviousness analysis against hindsight." Id. at 1378-79. The United States Court of Appeals for the Federal Circuit has explained that:

These objective criteria thus help turn back the clock and place the claims in the context that led to their invention. Technical advance, like much of human endeavor, often occurs through incremental steps toward greater goals. These marginal advances in retrospect may seem deceptively simple, particularly when retracing the path already blazed by the inventor. For these reasons, this court requires consideration of these objective indicia because they provide objective evidence of how the patented device is viewed in the marketplace, by those directly interested in the product.

Id. at 1378 (internal quotation marks and citation omitted). The proponent of the evidence of objective considerations bears the burden of showing that a nexus exists between the claimed features of the invention and the objective evidence offered to show non-obviousness. Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034, 1068 (Fed. Cir. 2016). The existence of a nexus is a question of fact. Id.

         III. DISCUSSION

         A. Plaintiffs' Motion

         Plaintiffs move for summary judgment that Defendant and its customers have directly infringed claim 10 of the '034 patent. (D.I. 400 at 1, 5) They also move for summary judgment that HyperBranch is liable for induced infringement and contributory infringement of claim 10. (Id. at 1)

         Claim 10 is directed to a method of preparing a composition, and "[a] method claim is directly infringed only by one practicing the patented method." Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 775 (Fed. Cir. 1993) (emphasis in original); see also Mirror Worlds, LLC v. Apple Inc., 692 F.3d 1351, 1359 (Fed. Cir. 2012) (explaining that to establish direct infringement of a method claim, the plaintiff "has to show that [the defendant] performed all of the steps in the claimed method[]"). Here, Plaintiffs assert that HyperBranch itself has performed each step of claim 10 by formulating and manufacturing the Accused Products, and then using them to make hydrogels in the course of demonstrating the Accused Products to customers and potential customers. (D.I. 400 at 5; D.I. 465 at 1) Morever, Plaintiffs contend that HyperBranch's customers have performed every step of claim 10 by using the Accused Products for dural repair. (D.I. 400 at 5; D.I. 465 at l)[3] Defendant makes several different arguments in response, which the Court will take up in turn.

         1. Direct Infringement By HyperBranch

         In Plaintiffs' opening brief, they argue that HyperBranch itself has performed every step of claim 10 "by formulating and manufacturing the Adherus products and using the Adherus products to make hydrogels while demonstrating the accused products to customers and potential customers." (D.I. 400 at 5) Plaintiffs then cite to evidence establishing that HyperBranch employees and distributors were present in operating rooms and related locations, instructing physicians and staff on how to set up the products and on how to use the products. (Id. at 5-6 (citing D.I. 429, ex. 3 at 184-85; id, ex. 4 at 39-40; id., ex. 5 at 15-16, 20-25, 38-43, 52; id, ex. 6 at HyperBranch's Responses and Objections Nos. 25, 27-28, 33; id., ex. 7 at 53-57, 60-61, 91-92, 115-16)) Plaintiffs further note that that the Instructions for Use included with the Accused Products teach end users to assemble and use the products to make hydrogels, and HyperBranch prepares videos showing how to prepare and apply the Accused Products. (Id. (citing D.I. 429, ex. 3 at 156, 168; id., exs. 8, 11-15, 17-19, 44))

         In response, Defendant asserts that claim 10 requires '"mixing .. . after contact with the tissue to form a hydrogel[, ]'" and that Plaintiffs have failed to establish that "anyone employed by HyperBranch (or one of its distributors)" has ever used an Accused Product and applied it to '"the tissue'" of a patient. (D.I. 441 at 3 (certain emphasis in original, certain emphasis added)) While it is true that Defendant's employees and/or its distributors perform demonstrations to surgeons in which they spray the product onto a surface, Defendant argues that this fact does not prove direct infringement, in that it does not meet the requirement that the product be applied to "the tissue." (Id.) And Defendant further retorts (in a footnote) that the mere fact that HyperBranch employees and/or its distributors might be present in an operating room when hospital personnel use the Accused products to form a sealant on the tissue of a patient is not sufficient proof of Defendant's infringement, because those hospital employees do not work for Defendant. (Id. at 3 n.3)

         In their reply brief, Plaintiffs respond that Defendant should be held "vicariously liable" for the actions of surgeons who actually apply the Accused Products to the tissue of patients. (D.I. 465 at 2) They argue that this is appropriate under the current legal framework for direct infringement of a method claim. (Id.)

         Plaintiffs are correct that the Federal Circuit has held-in cases including Travel Sentry, Inc. v. Tropp, 877 F.3d 1370, 1378 (Fed. Cir. 2017) and Eli Lilly & Co. v. Teva Parenteral Meds., Inc., 845 F.3d 1357, 1364-65 (Fed. Cir. 2017)-that an entity can be held responsible for others' performance of a patented method under 35 U.S.C. § 271(a) where, inter alia, that entity directs or controls the performance of others. A two-pronged test is utilized to determine whether liability can be found: the alleged infringer must (1) condition participation in an activity or receipt of a benefit upon others' performance of one or more steps of a patented method; and (2) establish the manner or timing of that performance. Eli Lilly, 845 F.3d at 1365; see also Travel Sentry, 877 F.3d at 1378. Whether a single actor has directed or controlled the acts of one or more third parties is a question of fact. Travel Sentry, 877 F.3d at 1378.

         Under the circumstances here, it would not be equitable for the Court to grant Plaintiffs' summary judgment based on this theory. For one thing, Plaintiffs raised the vicarious liability argument for the first time in their reply brief. (Tr. at 144; Defendant's Summary Judgment Presentation, Slide 131) In Plaintiffs' opening brief, Plaintiffs never clearly identified their reliance on a vicarious liability theory. In that brief, they did not, for example: (1) use the words "vicarious liability"; (2) note the above-referenced two-part test for vicarious liability; or (3) cite to any supporting caselaw (like the decision in Eli Lilly).[4] At best, Plaintiffs vaguely foreshadowed their future reliance on this theory by citing to evidence that Defendant's employees/distributors instructed their customers on how to use the Accused Products. (D.I. 400 at 6) A party really should be clear in its opening brief as to the bases on which it is entitled to relief-so that, among other things, the responding party is fairly put on notice of which fights it has to fight (and which it does not).

         Moreover, the Court does not have before it some other important information about this claim. That is, the Court does not know: (1) what Plaintiffs' theory was during the course of this litigation as to direct infringement of claim 10 (and whether, as Defendant alleges, Plaintiff did not earlier disclose the vicarious liability theory), or (2) whether Defendant had ever contended, prior to its opposition brief, that it does not infringe claim 10 because it does not directly ...


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