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BOEHRINGER INGELHEIM VETMEDICA v. SCHERING-PLOUGH

October 26, 1999

BOEHRINGER INGELHEIM VETMEDICA, INC., BOEHRINGER INGELHEIM/NOBL LABORATORIES, INC., REGENTS OF UNIVERSITY OF MINNESOTA AND SOUTH DAKOTA STATE UNIVERSITY, PLAINTIFFS,
v.
SCHERING-PLOUGH CORPORATION AND SCHERING CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Harold A. Ackerman, District Judge.

    OPINION

This matter comes before the court on a motion filed by Boehringer Ingelheim Vetmedica, Inc. Boehringer Ingelheim/Nobl Laboratories, Inc., Regents of University of Minnesota and South Dakota State University (hereinafter collectively "Plaintiffs" or "Boehringer") seeking a preliminary injunction against Schering-Plough Corporation and Schering Corporation (hereinafter collectively "Defendants" or "Schering") pursuant to 35 U.S.C. § 283 (1988) for violating its patent.*fn1 For the reasons discussed below, Plaintiffs' motion is DENIED.

I. Background

A. Procedural History

This action and Plaintiffs' motion for a preliminary injunction follows this Court's denial of Plaintiffs' motion for a preliminary injunction with respect to Patent No. 5,476,778 ("the '778 Patent"), see Boehringer Ingelheim v. Schering-Plough, 984 F. Supp. 239 (D.N.J. 1997) (hereinafter "Boehringer I"), and denial of both parties' motions for summary judgment regarding that patent. See Boehringer Ingelheim v. Schering-Plough, 6 F. Supp.2d 324 (D.N.J. 1998) (hereinafter "Boehringer II"). Although the current action addresses Patent No. 5,840,563 ("the '563 Patent") rather than the '778 Patent, this action is based upon the same conflict between the parties over a vaccine for a disease known as Porcine Reproductive Respiratory Syndrome ("PRRS"). Familiarity with the Court's previous opinions is assumed.

In June 1997, this Court held a hearing pursuant to Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed.Cir. 1995). On October 6, 1997 this Court denied Boehringer's preliminary injunction motion finding that Boehringer failed to demonstrate a likelihood of success on the merits given Schering's substantial defense of obviousness pursuant to 35 U.S.C. § 103(a). See Boehringer I, 984 F. Supp. at 258-259. Specifically, the Court found that Schering had presented a substantial defense that using MA-104 cells to grow the PRRS virus had been obvious to one of ordinary skill in the art at the time of Boehringer's invention based upon prior art relating to the growth of the swine influenza virus. In addition, in Boehringer I, this Court also found that Boehringer was not entitled to a preliminary injunction because it failed to establish irreparable harm from the Defendants' sale of a competing swine vaccine. Id. at 264. For those reasons, the Court declined to issue a preliminary injunction.

Shortly after the denial of Boehringer's motion for preliminary injunction, Schering filed a motion for summary judgment, Boehringer filed its own summary judgment motion and Boehringer renewed its motion for a preliminary injunction. By written opinion issued on April 27, 1998, this Court denied each of those motions. See Boehringer II, 6 F. Supp.2d 324. First, the Court denied Boehringer's motion for summary judgment finding that genuine issues of material fact remained regarding obviousness and infringement pursuant to the doctrine of equivalents. The Court also rejected Boehringer's renewed preliminary injunction motion finding that Boehringer still had not demonstrated either irreparable harm or that Schering's validity defense was devoid of substantial merit and thus it was "far from certain that Boehringer would be likely to succeed on the merit of its infringement claim." Id. at 338.

While the '778 Patent litigation was pending, Boehringer's patent application with the United States Patent Office (hereinafter either "Patent Office" or "USPO") for its '563 Patent was also pending. In November 1998, after the motion practice in the '778 Patent litigation was completed, the Patent Office issued to Boehringer the '563 Patent entitled "Method for Growing Swine Infertility and Respiratory Syndrome Virus" which named Danny Chladek, David Gorcyca and Louis Harris as inventors. Shortly thereafter on December 17, 1998, Boehringer commenced the present action alleging that Schering had infringed its newly-issued '563 and '805 Patents and by motion filed on January 22, 1999 Boehringer moved for a preliminary injunction to preclude Schering from selling its allegedly infringing swine vaccine. Schering opposes Boehringer's newest request for a preliminary injunction and another preliminary injunction hearing was held before this Court in June 1999.

B. Brief Factual History

The disease at the center of this dispute, PRRS, also known as Mystery Swine Disease ("MSD") and Swine Infertility and Respiratory Syndrome ("SIRS"),*fn2 infects pigs and causes them to give birth to dead or sickly piglets. In addition to these reproductive failure, PRRS also causes serious respiratory symptoms and other symptoms such as anorexia, fever, dyspnea, and neurological impairment. Both Plaintiffs and Defendants have marketed a vaccine for PRRS since June 1994 and July 1996, respectively. Tr. at 2.79, 2.92

As discussed supra Boehringer possesses several patents relating to its PRRS vaccine. According to Plaintiffs, "the '778 patent, . . ., claims methods of growing, isolating, and attenuating PRRS viruses in simian cells for vaccine preparation. . . . the '563 patent claims methods of growing the PRRS virus on simian cells, while the '805 patent claims cultures and compositions containing the PRRS virus." Pl. Br. at pp. 1-2.

While Plaintiffs' claim against Defendants for infringement of the '778 Patent is still pending and is scheduled for trial in approximately two weeks, the Court considers Plaintiffs' newly filed motion for preliminary injunction which alleges that Defendants have infringed Plaintiffs' '563 patent.*fn3 Specifically, the subject of the instant motion is Plaintiffs' contention that Defendants' sale of a swine vaccine for the prevention of PRRS has violated Claim 3 of the '563 Patent. Pl. Br. at p. 2.

Claim 1 of the '563 Patent, upon which Claim 3 is dependent, claims:

  A method of growing swine infertility and respiratory
  syndrome virus comprising: (a) inoculating the swine
  infertility and respiratory syndrome virus on simian
  cells; and

(b) incubating the inoculated simian cells.

Pl. Br. Ex. A, col. 23, lines 14-18. Claim 2 states, "[t]he method of claim 1 wherein the simian cells are simian kidney cells." Id. at lines 19-20. Finally, Claim 3, the Claim in dispute, states, "[t]he method of claim 2 wherein the simian kidney cells are MA-104 simian kidney cells." Id. at lines 21-22. Plaintiffs contend that Defendants' swine vaccine literally infringes the '563 Patent and infringes that patent under the doctrine of equivalents.

II. Brief Summary of the Arguments

Boehringer has requested a preliminary injunction to enjoin Schering from selling its swine vaccine and seeks a recall of Schering's current PRRS vaccines. Boehringer argues that the prior art which was the basis of this Court's denial of Boehringer's request for a preliminary injunction in the '778 litigation is not relevant to this patent based upon additional evidence gathered by Boehringer since the '778 preliminary injunction hearing. Specifically, Boehringer relies on the deposition testimony of six of Schering's experts to support its argument that growing the PRRS virus on MA-104 cells was not obvious. Therefore, Boehringer argues that this Court should enjoin Schering from infringing Boehringer's '563 Patent because there is no longer an issue that its invention is obvious and because it also satisfies the other requirements necessary for a preliminary injunction.

In opposition to Boehringer's motion for a preliminary injunction, Schering challenges the validity and enforceability of Boehringer's '563 patent as well as Boehringer's ability to meet the other heavy showing required for a preliminary injunction. With respect to the likelihood of Boehringer's success on the merits, Schering asserts three defenses to the '563 Patent. First, Schering argues that the '563 Patent was not patentable under 35 U.S.C. § 103(a). Essentially, Schering argues that since "one of ordinary skill in the art would have a reasonable expectation that the SIRS virus would grow on simian cells and in particular MA-104," the '563 Patent is not valid. Def. Br. at p. 4.

Second, Schering argues that Boehringer's inequitable conduct during its presentation of the '563 and '778 Patents to the USPO invalidates the '563 Patent. Specifically, Schering argues that Boehringer's failure to direct the Patent Office's attention to the relevant prior art and provide the Patent Office with the pleadings, briefs and opinions of this Court from the '778 litigation amounted to inequitable conduct which invalidates the '563 Patent. Schering also argues that Boehringer's inequitable conduct before the USPO in its prosecution of the '778 Patent taints the '563 patent rendering it unenforceable. Third, Schering argues that the '563 Patent violates the written description requirement for a patent as articulated in 35 U.S.C. § 112 (hereinafter "section 112") because, in part, the specification is limited to virus ATCC-VR2322 and does not support Boehringer's broad generic claim.

With respect to Boehringer's showing of irreparable harm, Schering argues that Boehringer is not entitled to a presumption of irreparable harm because it has not made a strong showing of patent validity. Schering also argues that even if Boehringer were entitled to this presumption, the presumption is more than adequately rebutted by Schering's ability to compensate Boehringer in the event a finding of infringement is made. Schering also argues that as a matter of law this Court should reject Boehringer's argument that its loss of market share and its reduction in research expenditures is irreparable harm. Finally, with respect to the last two factors under the relevant test for a preliminary injunction, Schering argues that the balance of hardships militates against an injunction and that the public interest does not favor an injunction.

In response to Schering's obviousness challenge, Boehringer argues that the prior art relied upon by Schering "relates only to `simian cells' generally, with MA-104 cells receiving only parenthetical treatment," Pl. Rep. Br. at p. 1, whereas the non-obvious innovation within Claim 3 is the growing of PRRS on M-104 cells, specifically. Id. Boehringer goes on to argue that the prior success growing viruses on MA-104 cells is restricted to the four examples shown by Schering which fails to satisfy the test set forth in section 103(a) and that those four examples are not instructive with respect to the PRRS virus. Boehringer also argues that (a) the USPO's issuance of the '563 Patent should be given deference by this Court, (b) that two of the articles relied upon by Schering actually "taught away" rather than encouraged the use of MA-104 cells in PRRS research and (c) the other prior art relied upon by Schering does not satisfy section 103. Boehringer also responds to Schering's inequitable conduct accusation by arguing that (a) the prior art relied upon by this Court in the '778 litigation, other pertinent prior art references and the existence of the '778 litigation to the Patent Office and the two patent examiners who reviewed the application for the '563 Patent (and not buried among irrelevant materials) and (b) Schering's argument is devoid of any allegation of intent, a required element for a successful claim of inequitable conduct. Pl. Rep. Br. at pp. 6-7. In response to Schering's claim that the '563 Patent is invalid under section 112, Boehringer argues that both examiners of the USPO believed that Claim 3 was valid under that section and that the specification is not limited in the ways argued by Schering. Finally, Boehringer renews its arguments that it is entitled to a presumption of irreparable harm and that even without this presumption it has proven that it will suffer further irreparable harm if its request for a preliminary injunction is denied.

III. Summary of Testimony

At the preliminary injunction hearing held before this Court in June 1999, Boehringer called the following witness: Dr. Easterday, Dr. Michael Murtaugh, Paul Hays and George Gould. Schering called Dr. Richard Steece, Dr. Robert Rowland and Harry Manbeck on its behalf. The following is a summary of the testimony.

A. Boehringer's Witnesses

Dr. Easterday, an expert in virology with a long-standing history in the field of animal virology, testified about the state of the art of virology in 1991 and 1992. Dr. Easterday stated that at that time, the normal procedure a virologist would employ to grow a new unknown virus on a culture would be to first attempt to grow the virus on that homologous species. Tr. at 1.79-1.80.*fn4 The term "homologous species" means that species in which the virus in known to effect. For example, in this case since the virus effected swine, the first step would be to attempt to grow PRRS on swine cells. Tr. at 1.80. Thus, as Dr. Easterday explained, the first step would be to attempt to grow the new unknown virus on a cell line from the species which the virus is known to effect. Id. If this proves unsuccessful, Dr. Easterday said, the next step is to attempt to grow the unknown virus on whatever cell lines are available to the research virologist and it is a matter of "trial and error." Tr. at 1.80-1.81.

With respect to the prior art that existed in 1991 on the use of MA104 cells to grow viruses, Dr. Easterday testified that the use of MA-104 cells was not obvious based upon prior art available at that time. Specifically, Dr. Easterday testified that the preeminent book of swine diseases, Diseases of Swine, available in 1991 taught that only one identified porcine virus was known at that time to grow on MA-104 cell lines. Tr. at 1.85-1.86; Pl. Exh. 16. Dr. Easterday identified that virus as porcine rotavirus which is "one of the viruses that infect swine responsible for enteric disease causing diarrhea of swine." Tr. at 3.5. Dr. Easterday testified that in 1991 a person of ordinary skill in the art would not have tried to grow PRRS on MA-104 cells because "there is one — one virus of a very different kind of disease that was demonstrated to have grown on MA-104 cells, and given the preponderance of other kinds of things, I don't think there is anything that leads one to consider that the MA-104 would have been a cell to try." Tr. at 3.5.

Dr. Easterday then reviewed three articles published prior to 1991 which discuss the mystery surrounding PRRS and the number of premier investigators of swine diseases who were unable to determine the cause of PRRS or successfully isolate and grow the virus. Tr. at 3.11-3.14. Dr. Easterday also discussed an article "Porcine Reproductive and Respiratory Syndrome" published in the Seventh Edition of the Diseases of Swine periodical in 1992. Tr. at 3.15. The etiology of the disease, as described by Dr. Easterday based upon this article, was premised upon discrediting several hypothesis that certain known infectious agents were the likely primary cause of PRRS such as African swine fever, cholera, hemagglutinnating encephalitis, porcine parvoviruus, classical swine influenza, encephalomyocarditis virus (commonly referred to as EMC or EMCV), pseudorabies, porcine enterovirus or transmissible gastroenteritis virus. Tr. at 3.16-3.18; Pl. Exh. 76. Dr. Easterday explained that based upon this article, one who was trying to ascertain the causative agent of PRRS would not pursue any information regarding these eliminated causative agents. Tr. at 3.18.

Dr. Easterday also referred to four articles which Schering's experts relied upon in support of their obviousness argument. Tr. at 3.20; Pl. Exhs. 18-21. He summarized that Exhibit 18, the "Isolation and Serotyping of Porcine Rotaviruses and Antigenic Comparison with other Rotaviruses," published in 1984 speaks to rotaviruses "that were isolated from the intestinal contents of piglets, pigs with diarrhea using MA-104 cells." Tr. at 3.20; Pl. Exh. 18. Dr. Easterday explained that Exhibit 19 entitled "Simian Hemorrhagic Fever, Isolation and Characterization of a Viral Agent," published in 1968 relates to the isolation and characterization of a viral agent from rhesus monkeys which suffered a febrile hemorrhagic disease. Tr. at 3.20-3.21; Pl. Exh. 19. He explained that Exhibit 20 entitled "Use of Immunoelectron Microscopy to Show Ebola Virus during 1989 United States Epizootic," published in 1990, relates to the growth of a group of viruses related to Ebola that use MA-104 cells. Tr. at 3.21; Pl. Exh. 20. Finally, Dr. Easterday explained that Exhibit 21 entitled "Replication of Infectious Bursal Disease Virus in Continuous Cell Lines," published in 1986 relates to a chicken disease which was grown on three mammalian continuous cell lines including MA-104. Tr. at 3.21; Pl. Exh. 21.

Dr. Easterday was not aware of any other instances, apart from the four discussed in these articles which were identified by Schering's experts, in which a virus was grown on MA-104. Tr. at 3.21. Of these four viruses, Dr. Easterday explained that only one was a swine virus — rotavirus — such that an ordinary person trying to identify the causative agent of PRRS would not have consulted that literature or found any of that literature helpful. Tr. at 3.21-3.22.

Dr. Easterday said that at the time of Boehringer's invention, he did not know that swine influenza virus grew on MA-104 cells even though there was a report by Dr. Mark Goldstein, et al. (hereinafter referred to as the "Goldstein article") in 1970 that swine influenza grew on simian cells. Tr. at 3.23; Pl. Exh. 22. Dr. Easterday explained that the Goldstein article taught that the simian cells were the least desirable of three cell lines tested by Dr. Goldstein to grow the swine influenza virus. Tr. at 3.24. Dr. Easterday also testified that it is was more common that swine influenza was cultured on embryonated chicken eggs and in fact, he could not recall any other articles documenting the growth of swine influenza on simian cells. Tr. at 3.23-3.24. Moreover, Dr. Easterday testified that nobody of ordinary skill in the art in 1991 would have looked to the swine influenza literature in researching PRRS because at that time, swine influenza "had been ruled out as a cause of the PRRS syndrome." Tr. at 3.25.

In addition, Dr. Easterday reviewed the Drs. Dea and Van Alstine articles relied upon by Schering and opined that neither article would have led one to grow PRRS on MA-104 and in fact, Dr. Van Alstine's failed attempts to grow PRRS on MA-104 cells would have steered investigators away from MA-104 cells. Tr. at 3.26-3.32. Dr. Easterday rendered the same opinion with respect to the 1990 Conference of Research Workers in Animal Disease which documented the successful inoculation of young pigs from PRRS, the unsuccessful attempts to locate the causative agent of PRRS but the successful attempts to rule out certain causative agents. Tr. 3.34-3.36. Dr. Easterday emphasized that without knowing what the causative agent of PRRS was, one would not know on what to grow PRRS. Tr. at 3.36.

On cross-examination, Dr. Easterday testified that in 1991, people seeking the cause of PRRS were not only using porcine cell lines but were also looking to swine influenza and pseudorabies as possible causes of PRRS. Tr. at 3.88-3.89. In addition, Dr. Easterday testified that in January 1991 he was aware that porcine viruses grew on simian cells from his knowledge of rotavirus research. Tr. at 3.89. Dr. Easterday also testified that prior to April 1991, it was common knowledge that one should try to grow viruses on heterological cells, i.e., from species other than the host species, and that in October 1990, Dr. Van Alstine had tried to isolate PRRS by using a small array including non-homogenous cells and a MA-104 cell line. Tr. at 3.104-3.105. Dr. Easterday concluded from this article, however, that one should not try the same cells as those tested by Dr. Van Alstine, including MA-104, because Dr. Van Alstine did not have success growing PRRS on those cell lines. Tr. at 3.107-3.108. He also testified that it did not appear that Dr. Van Alstine included MA-104 cells within the first test array, but added MA-104 cells after testing cells derived from swine testicles and baby hamster kidneys. Tr. at 3.115.

Dr. Michael Murtaugh testified at Boehringer's behest regarding the specification of the '563 Patent as an expert in veterinary pathobiology with a particular interest in infectious diseases which effect pigs. Tr. at 2.8-2.9, 2.14. Dr. Murtaugh defined ATCC VR-2332 ("VR-2332") as "the first PRRS virus, isolated and characterized in North America. That was the specific virus which was first isolated by Boehringer on MA-104 cells and then deposited in the American-type culture." Tr. at 2.23-2.24.

In addition, Dr. Murtaugh opined that the references to VR-2332 as an example of the PRRS/SIRS virus and references in the specification to the existence of other viruses which were also examples of the PRRS/SIRS virus communicated to a person of ordinary skill in the art that VR-2332 was merely one isolate of the PRRS/SIRS virus such that its being named specifically in the specification is not a limitation to the invention. Tr. at 2.32. Finally, Dr. Murtaugh also supported this opinion with a reference in the specification to the fact that three examples of the PRRS virus had been cultured on MA-104 cells. Tr. at 2.33-2.34.

With respect to whether the specification of the '563 Patent only provides a description of a method for growing the PRRS virus "until CPE is observed,"*fn5 Dr. Murtaugh testified that the '563 Patent was not so limited. Specifically, Dr. Murtaugh testified that the specification did not rely on CPE or any particular period of time for incubation but rather relies on scientific techniques. Tr. at 2.34-2.41. Dr. Murtaugh further opined that the specification was sufficient to allow a person of ordinary skill in the art to grow PRRS viruses other than VR-2332 on MA-104 cells because the "inventors provided a clear generic description for growth of the virus, which is not limited to 2332." Tr. at 2.41.

On cross-examination, Dr. Murtaugh conceded that the absence of Drs. Collins and Benfield's names in the '563 Patent as compared to the '444 application means that the specification no longer inform a reader who produced what information. Tr. at 2.56-2.59. Dr. Murtaugh maintained, however, that the reference to three isolates from three different herds demonstrated that the '563 Patent is not limited by its terms to the VR-2332 isolate, though he conceded that "[s]ubsequent analysis may reveal whether they [the three isolates] appear to be identical or not.". Tr. at 2.72-2.74.

Paul Hays, a Vice-President of Boehringer America and Head of Corporate Marketing at Boehringer Germany, also testified on Boehringer's behalf. Tr. at 2.77. Mr. Hays's testimony focused on Boehringer's sale of the PRRS vaccine under the names Respers ReproTM, Ingelvac PRRS, MLVTM and a combination vaccine which includes the PRRS vaccine as well as other swine vaccines. Tr. at 2.80. Mr. Hays stated that in 1994, Boehringer sold 7.7 million doses, in 1996 it sold 25 million doses and in 1998 Boehringer sold 15.7 million doses. Tr. at 2.81. According to Mr. Hays's analysis of Boehringer's financial data, after its peak in 1996 when Boehringer sold $19.5 million worth of the PRRS vaccine products, Boehringer's sales declined in the United States after Schering introduced its product to the market. Tr. at 2.82. Specifically, Mr. Hays stated that Boehringer's PRRS sales dropped from $19.5 million in 1996 to $16.8 million in 1997 and continued to decline thereafter. Tr. at 2.92-2.93.

Putting aside the recent losses in the latter half of 1998, Mr. Hays testified that Boehringer had PRRS sales of approximately $18 million in 1996, $15.7 million in 1997 and $9.8 million in 1998. Tr. at 2.90. Mr. Hays stated that these sales were a driving force in Boehringer's intentions to become a leader in the swine industry and represent moneys earned by Boehringer which in turn were used to further realize that goal by purchasing Fermenta Animal Health Products which markets a number of swine products. Tr. at 2.91. In addition, according to Mr. Hays, Boehringer also acquired NOBL Laboratories, another swine products company, and built a biological production facility in Missouri based on the then-existing and anticipated PRRS vaccine profits. Tr. at 2.91. Mr. Hays described the PRRS vaccine as a "wild success" which allowed Boehringer to get its "foot in the door" with swine producers. Tr. at 2.91-2.92. Mr. Hays testified further that Boehringer's combination PRRS vaccine which was introduced in 1998 is not countered by a similar product sold by Schering. Tr. at 2.117.

Mr. Hays testified that Boehringer is one of the largest privately-held drug companies in the world with 24,000 employees, business on every continent and revenues in 1998 of approximately $5.1 billion. Tr. at 2.112-2.114. Mr. Hays stated, however, that Boehringer's United States sales were $107 million in 1998 and the PRRS vaccine accounted for $12 million of these sales. Tr. at 2.115-2.116. Mr. Hays testified that Boehringer would neither go out of business or cease offering the PRRS vaccine if they did not receive a preliminary injunction in this case. Tr. at 2.116. Nor did Mr. Hays have any concern that Schering would not be able to pay any damage award ordered in this case if Boehringer prevailed after a full trial. Tr. at 2.122. Mr. Hays, however, expressed concern that if Boehringer did not receive immediate relief from Schering's infringing product, it would lose its advantage of having its "foot in the [swine producers'] door." In addition, Mr. Hays was concerned that swine producer's use of the PRRS vaccine only on sows may also limit further Boehringer's market share which is not reparable with money damages. Tr. at 2.106.

George Gould, an attorney at the law firm of Gibbons, Del Deo in Newark, New Jersey was the last witness to testify on behalf of Boehringer. Mr. Gould opined that Claim 3 of the '563 Patent is not misleading, but rather a "true representation of what a dependent claim would look like standing alone, when you read back from the claims on which it depends, what it tells you to do, which is to substitute certain words for other words." Tr. at 4.79-4.80. Mr. Gould also opined that there is nothing unusual about Boehringer's proceeding with the '563 Patent several years after prosecuting its '778 Patent. Tr. at 4.81.

With respect to Schering's inequitable conduct arguments, Mr. Gould further opined that the post-1992 amendment to the standard for inequitable conduct in 37 C.F.R. § 1.56 should apply to this case because the '563 Patent was pending at the time and the prior test was unworkable. Tr. at 4.83. He also considered the file history of the '563 Patent and testified that the file history "demonstrates on multiple occasions these references were considered by the patent examiner, and no rejection of the claims based on those references were ever made." Tr. at 4.91. Mr. Gould further testified that he had not seen any evidence that Boehringer intentionally buried the Drs. Dea and Van Alstine references in its '563 Patent application. Tr. at 4.95. He concluded that Schering did not have a substantial defense of inequitable conduct. Tr. at 4.82.

With respect to Schering's argument that Boehringer committed inequitable conduct by not submitting to the Patent Office copies of Schering's briefs from the '778 Patent litigation, Mr. Gould did not believe this amounted to inequitable conduct and thought that Boehringer's actions were consistent with a reasonable interpretation of its obligations under the law. Tr. at 4.97. Mr. Gould said that examiners, who have no legal training, do not want to be overwhelmed with litigation documents because their primary focus at that point is on the teachings of the prior art. Tr. at 4.98. He testified that he did not know what Boehringer should have done with the Court's opinion in the '778 litigation but thought that an examiner would not know the meaning of it or what to do with it. Tr. at 4.100. Mr. Gould also thought it was not necessary for Boehringer to provide the Patent Office with copies of Schering's briefs, as long as the underlying material information was made available to the examiner, which occurred in this case. Tr. at 4.102-4.103. Mr. Gould also suggested that if Boehringer submitted Schering's brief to the Patent Office Boehringer would have also had to submit the remainder of the '778 file to the Patent Office which would have overwhelmed the Patent Office. Mr. Gould believed that Boehringer had advised the examiner of the existence of the '778 litigation and its failure to provide to the Patent Office any documents from the '778 litigation showed its even handedness with respect to the '563 Patent application. Tr. at 4.103-105.

On cross-examination, it was established that this Court's opinion in Boehringer I denying Boehringer's preliminary injunction request was issued in October 1997 and Boehringer cited information to the Patent Office from that opinion but did not give the Patent Office a copy of the opinion. Tr. at 4.110. Mr. Gould clarified that in his opinion it is the examiner's responsibility to review and analyze prior art and the applicant need not submit to the examiner other people's opinions of the prior art, even if those opinions are from experts and a federal district court judge. Tr. at 4.111-4.113. With respect to Manual of Patent Examining Procedure (hereinafter "MPEP") section 2001.06(c) entitled "Information from Related Litigation," Mr. Gould said that this section does not require the submission of court documents to the Patent Office but merely requires that an applicant submit to the Patent Office the underlying material information. Tr. at 4.116. Mr. Gould acknowledged, however, that if the examiner knew that the work of Drs. Collins and Benfield (which had been characterized as part of the invention), was really prior art, and determined that that research was material, the examiner would have had the right to rely upon that research in his obviousness determination. Tr. at 4.131. He said the corollary was also true, i.e., if the examiner did not know that this research was prior art, he could not have used it in his obviousness determination. Tr. at 4.132.

Mr. Gould conceded that the examiner is the only person who can view prior art and determine whether it is material, especially in light of conflicting opinions as to the materiality and teachings of the prior art. Tr. at 4.137. Mr. Gould stated, however, that the handout distributed at the Livestock Conservation Institute Proceedings in October 1990 (hereinafter referred to as "L.C.I.") containing the Drs. Dea and Van Alstine references is not material to the '563 Patent and there was no obligation to disclose its existence to the examiners handling the '563 Patent. Tr. at 4.142-4.143. Mr. Gould also said that he would not have cited to the examiner the deposition testimony of Ms. Devlin, which Mr. Gould found confusing. TR. at 4.144. Indeed, Mr. Gould opined that Boehringer discharged its duty in the '563 Patent prosecution under section 2001.06(c) by sending the examiner the references listed in Gould Exhibit 2, Bates numbers 58449 through 58451. Tr. at 4.144-4.145.

On re-direct, Mr. Gould re-iterated the fact that the Drs. Collins and Benfield research as well as the Drs. Dea and Van Alstine references were presented to the examiner of the '563 Patent and the examiner affixed his initial next to those articles indicating that he had reviewed them in considering that patent. Tr. at 4.147.

B. Schering's Witnesses

Schering called Dr. Richard Steece, a virologist, pathogenic bacteriologist and industrial microbiologist employed at the Association of Public Health Laboratories which is funded by the Federal Center for Disease Control to testify as an expert in human and veterinary virology. 3.129-3.132. Dr. Steece testified that at the end of 1990 hundreds of different cell cultures existed on which to grow diseases but that whenever he received an unknown animal virus, he would typically use a four-cell array composed of two primary monkey kidney cells, cynolmolgus and rheses, and two human cells, human diploid fiboblast cells and a transformed human heteroploid line. Tr. at 3.133-3.134. Dr. Steece explained that he chose these four cell lines based on his personal experience and training as well as the current state of the art regarding cell inoculation. Tr. at 3.134-3.135. He categorized simian cells as "generally the most permissive cells that we have available to us in virology." Tr. at 3.135. He testified that in the late 1970s when he was trained at the CDC, the CDC was recommending that scientist include a monkey kidney line in their viral diagnostic laboratory. Tr. at 3.138.

Dr. Steece reviewed the Dr. Dea reference and his methods of using four cells to grow PRRS — Vero cells, porcine fallopian tube, swine or porcine testicles and a baby hamster kidney — and opined that the use of two to four cell lines in an array is consistent with normal practices. Tr. at 3.143-3.144. Dr. Steece further opined that prior to April 1991, one skilled in the art with access to Dr. Dea's article would include a simian line in an array in an attempt to isolate a porcine virus which was causing respiratory and reproductive symptoms. Tr. at 3.145. He said that "[i]t would be very logical if an individual had a simian cell, that they would include it as part of their standard array." Tr. at 3.145. Dr. Steece said that the tone of Dr. Dea's article was very excited because at that time Dr. Dea thought he had isolated PRRS since it was not yet known that what he had really isolated was EMC such that one reading his article would try to replicate his methods and his results. Tr. at 3.146-3.148. With respect to Dr. Van Alstine's reference, Dr. Steece reviewed the cells used by Dr. Van Alstine and concluded that it was "very logical" for Dr. Van Alstine to include a simian cell in his array prior to 1991. Tr. at 3.151. As with the Dr. Dea article, Dr. Steece described the Dr. Van Alstine article as "extremely encouraging" because although Dr. Van Alstine did not isolate the PRRS virus he had some results isolating some rotavirus. Tr. at 3.152. He interpreted Dr. Van Alstine's comment "Don't put on blinders" to mean that investigators should not be overly narrow their focus and that "the jury is still out." Tr. at 3.153.

Dr. Steece strongly disagreed with Dr. Easterday's statement that finding a cell line on which to grow PRRS was a "crap shoot." Tr. at 4.5. Rather, Dr. Steece testified that cell lines are arranged because the investigator has a "reasonable expectation" that they will work and it is neither a matter of luck nor a "hit or miss situation" how arrays are chosen. Tr. at 4.5. Dr. Steece said that rather than luck, it is a cell line's permissiveness as well as the relevant science and information available that determines what cell lines should be used in an array. Tr. at 4.10. Dr. Steece said that without knowing which of his standard array would successfully grow a virus, he had a "reasonable expectation" that he would be successful with at least one of the cells. Tr. at 4.10. Dr. Steece opined further that one's expectations would be "very high" that one would isolate the PRRS virus in the array used by Dr. Van Alstine because the array contained a number of permissive cells that grow a wide variety of viruses. Tr. at 4.15.

On cross-examination, Dr. Steece testified that he had only cultured one virus several times (a pseudorabies virus), had no experience with the PRRS virus and had never heard of the PRRS virus until he was contacted in connection with this litigation. Tr. at 4.18. Dr. Steece also stated that the majority of his experience with virus isolation was with the isolation of human viruses and not veterinary viruses. Tr. at 4.20. Dr. Steece further stated that the majority of isolations he conducted between 1980 and 1990 while he was the supervisor of the virology/serology section for the Scientific Laboratory Division in New Mexico was of human viruses and that the four cell array used at that lab was selected based on the types of samples that lab received, which rarely included swine viruses. Tr. at 4.22-4.23. Dr. Steece testified that while he was working at the laboratory in New Mexico, he sometimes used cell lines other than his standard four cell lines to isolate a virus but said this divergence from his usual array was due only to financial burdens associated with his usual array. Tr. at 4.27.

Dr. Steece admitted that the CDC only concerns itself with human pathogens and zoonotic viruses.*fn6 and thus only recommends cell lines for human research. Tr. at 4.28. Dr. Steece stated that the CDC publication embodied in Defendant's Exhibit 62 was not used by the New Mexico lab to develop its cell arrays and in fact, he had no knowledge of how the New Mexico lab developed its four cell array. Tr. at 4.29. He also conceded that he did not include MA-104 cells in his standard array, nor did the array contain any continuous simian cell lines and that he did not even have MA-104 cells in his lab. Tr. at 4.30.

Dr. Steece testified that one reading Dr. Van Alstine's article might conclude that he had isolated PRRS because he isolated swine influenza which Dr. Van Alstine suggested might be a causative agent of PRRS. Tr. at 4.45. Dr. Steece, however, did not know whether by late 1990 there was "good serological evidence" that swine influenza did not cause PRRS. Tr. at 4.45. Dr. Steece further acknowledged that Dr. Van Alstine did not identify in his article which of the cell lines he used, successfully grew the swine influenza virus. Tr. at 4.46. Indeed, Dr. Steece expanded his opinion and said that since Dr. Van Alstine failed to identify which cell line successfully grew swine influenza, one skilled in the art would have been motivated to try each of the cell lines used by Dr. Van Alstine. Tr. at 4.47. He said an investigator would just have to try the cells and see if they worked without any expectation of which one would work over the next. Tr. at 4.47. Dr. Steece further testified that while one skilled in the art would have a high expectation that the virus would grow on his array he could not "draw on any one in particular," and would not have expected the simian cells to work to the "exclusion of all others." Tr. at 4.52. He also said that PRRS was not easily discovered, there were many theories as to its causative agent and nobody had been able to grow the PRRS virus and identify it as such. Tr. at 4.54.

With respect to Dr. Collins's article upon which Dr. Steece relied in developing his opinions regarding inequitable conduct, Dr. Steece testified first that this article conclusively showed that PRRS was caused by a virus but later stated that Dr. Collins's statement that "[t]o date, no microorganism has been isolated from the tissue homogenate used as the inoculum or from tissues collected from gnotobiotic piglets," does not use the word "virus" such that there is no written conclusion that Dr. Collins did in fact have a virus. Tr. at 4.49-4.50.

On re-direct, Dr. Steece clarified the basis for his opinion that the Dr. Van Alstine article made clear that he was dealing with a virus based on the filtering studies discussed in the articles. Tr. at 4.57.

Schering also called Dr. Robert Rowland to testify as an expert in PRRS pathogenesis, i.e., how the disease is caused and what the disease process is. Dr. Rowland's post-doctoral fellow work at the University of Minnesota focused primarily on studying the interaction between a virus known as "LDV," an arteri virus closely related to PRRS, and mice. Tr. at 5.6-5.7. Since 1994, Dr. Rowland has worked primarily with PRRS and focuses on how the virus replicates itself inside a cell and inside of a pig and the results of that replication. Tr. at 5.8-5.9. At the time of the hearing, Dr. Rowland had not published any articles relating to his PRRS research but had two articles about to be published. Tr. at 5.9-5.10.

Dr. Rowland testified that prior to 1991 there were at least a thousand references to animal viruses being grown on cells derived from other animals. Tr. at 5.13-5.14. After the preliminary injunction hearing in the '778 litigation, Dr. Rowland also researched the literature available prior to April 1991 which described MA-104 as a permissive cell line and attached those articles to his expert report. Tr. at 5.15; Def. Exh. 7-21. He also researched references available prior to April 1991 demonstrating the culturing of porcine viruses on simian cells and found that swine influenza, pseudorabies, African swine fever virus, porcine enterovirus, swine vesicular disease virus, vesicular stomatitis virus, vesicular exanthema, porcine rotavirus, EMCV and porcine epidemic diarrhea virus and Japanese B encephalitis virus were known porcine viruses which were cultured on simian cells prior to April 1991. Tr. at 5.17-5.18; Schering Exh. 25-39.

Specifically, Dr. Rowland referred to an article by Goldstein, et al. published in 1969/1970 which discussed the growth of swine influenza on simian cells after it was passaged in eggs. Tr. at 5.21-5.22; Schering Exh. 37. He also referred to a book Symposium of Diagnosis and Treatment of Swine Diseases published in 1982 which includes a list of swine respiratory diseases, a number of which, according to Dr. Rowland, were known by 1991 to grow on simian cells. Tr. at 5.23. In addition, Dr. Rowland referred to references, such as an article published in 1986 in a book called Veterinary Obstetrics and Genital Diseases, which detailed swine reproductive diseases which were known by 1991 to grow on simian cells. Tr. at 5.24-5.25. Dr. Rowland said that if one were to have "hit the books" to learn how to grow PRRS, one would have reviewed these articles and books. Tr. at 5.28. In light of these references Dr. Rowland opined that the reason investigators had trouble solving the PRRS problem was that there was a lack of money or lack of interest dedicated to PRRS research prior to 1990 and because the disease displayed so many different symptoms it was difficult for investigators to understand the disease. Tr. at 5.25.

Dr. Rowland testified with respect to the claim description that the fact that the viral agent was recovered from three herds would not necessarily mean that more than the VR-2332 strain was involved. Tr. at 5.31. He explained that he based this opinion on the fact that the claim paragraph did not specify that anything other than VR-2332 was recovered, so he concluded that nothing else was recovered. Tr. at 5.31. He said that the fact that three herds were used to obtain isolates did not change his mind because if the herds were geographically close to each other, they may have been infected with the same virus. Tr. at 5.31. Dr. Rowland said that even if the specification made clear that the herds were on different farms, he still would not conclude that anything other than VR-2332 was recovered because it was not specified in the paragraph. Tr. at 5.32. He further testified that the nomenclature of virology at the time of the hearing, "strain" is used to describe isolates that are different, and isolates are not considered different isolates even if they are taken from several homogenates taken from a single pig. Tr. at 5.33. Therefore, he concluded that the claim description did not indicate that Boehringer was in possession of any strain of PRRS other than VR-2332. Tr. at 5.33-5.34.

On cross-examination, Dr. Rowland admitted that he had never heard of PRRS until 1992, after its cause was discovered and prior to 1991, he had not cultured any significant veterinary viruses. Tr. at 5.41. With respect to his testimony regarding the virus being extracted from three herds, Dr. Rowland said that it is not his testimony that a person of ordinary skill would think that exactly the same form of PRRS had been taken from the three herds as VR-2332. Tr. at 5.42. Dr. Rowland, however, conceded that it would have been reasonable for a person of ordinary skill to conclude based upon all of the information in column 8, that the recovery method used on the virus derived from the three herds was the same recovery method that was used to get VR-2332 in the first instance. Tr. at 5.45-5.46. He agreed that, in fact, no other cell other than simian cells was disclosed anywhere in the '563 Patent capable of growing PRRS such that one could reasonably infer that simian cell technology was used to recover the viruses from the three herds. Tr. at 5.46. Dr. Rowland further conceded that the definition of "infectious agent" contained in the '563 Patent was broad enough to include any agent causing PRRS and therefore, that the use of "infectious agent" rather than reference to VR-2332 in the "Detailed Description of the Invention," would imply that any virus capable of causing PRRS was within this definition and that the invention was not restricted to VR-2332. Tr. at 5.46-5.48.

In addition, although on direct examination Dr. Rowland testified that column 6, lines 19 through 22 does not support a conclusion that the '563 Patent includes more than VR-2332, on cross-examination he admitted that those lines support a conclusion that the inventors did not intend to limit the patent to their specific examples. Tr. at 5.49. He also admitted that lines 1 through 6 in column 9, previously discounted by him in his direct testimony, tells a person of ordinary skill that VR-2332 is but an example of the virus causing PRRS. Tr. at 4.49-4.50.

With respect to the issue of obviousness, on cross-examination Dr. Rowland conceded that he found only two references to porcine viruses being grown on MA-104 cells prior to 1991 and that, indeed, those articles would not have given a person of ordinary skill in the art a reasonable expectation that the PRRS virus would grow on MA-104 cells in 1991. Tr. at 5.53. With respect to the articles Dr. Rowland referred to in his expert report, Schering Exh. 25 through 39, which report the growth of certain porcine viruses on simian cells, Dr. Rowland admitted that only one of those articles, Schering Exhibit 29, referred to a swine virus being grown on MA-104 cells. Tr. at 5.53-5.54.

With respect to Dr. Collins' abstract referring to his homogenate work, Pl. Exh. 29, Dr. Rowland agreed that Dr. Collins did not reach a conclusion that he had a virus in his homogenate. TR. at 5.59. Dr. Rowland said that after he reviewed Dr. Collins article, he concluded with 90% certainty that what Dr. Collins had was a virus, but that there was a chance that it was not a virus. Tr. at 5.59.

Harry Manbeck, former General Patent Counsel for General Electric, former United States Commissioner of Patents and Trademarks, and Assistant Secretary of Commerce, testified as an expert in patent law, the United States Patent Office and its procedures. With respect to Claim 3 of the '563 Patent, Mr. Manbeck testified that Claim 3 does not appear in the '563 Patent as it does on Boehringer's Exhibit 1. Tr. at 5.78. He testified that in a independent and dependent claim situation, if a patent examiner finds the independent claim patentable, he will "allow a reasonable number of dependent claims without consideration of whether they actually add further patentability." Tr. at 5.80-5.81. Mr. Manbeck testified that this means that in authorizing the broader claim, the examiner may not have focused on the dependent claims. Tr. at 5.81.

On the issue of disclosure to the Patent Office, Mr. Manbeck testified that the process of full disclosure to the Patent Office is necessary since the patent procedure is an ex parte procedure. Tr. at 5.82-5.83. He re-iterated that the Patent Office's only access to prior art is its own discovery and the information provided by the applicant. Tr. at 5.82-5.83. Mr. Manbeck explained, however, that an examiner's ability to discover prior art for himself is limited by the technological limitations of the Patent Office and the fact that technical publications are not classified for the examiner's benefit. Tr. at 5.84-5.85. The examiner also only dedicates 15 to 17 hours to each patent and therefore, relies heavily on the information provided by the applicant. Tr. at 5.88-5.89.

Mr. Manbeck explained that rules of the Patent Office require a duty of candor and good faith and a subset of that duty is the duty of disclosure. Tr. at 5.89. He testified that he had considerable input in changing the standard for disclosure contained in 37 C.F.R. § 1.56 which was changed to make the standard of materiality under the rule "more precise." Tr. at 5.90-5.91. He said that the change in 1992 was not meant as a substantive change to the standard for disclosure and that, in fact, the application of both the old and new rule should result in the same conclusion. Tr. at 5.91. Mr. Manbeck explained that the old rule defined materiality as a "substantial likelihood that a reasonable examiner would consider the reference important in deciding whether or not to issue claims in patent cases." Tr. at 5.92. The new rule, promulgated in 1992, defines materiality in terms of whether a reference "if by itself or taken together with other references, would create a prima facie case of unpatentability." Tr. at 5.93. In addition, the inquiry is whether the "reference would be inconsistent with an argument being made for patentability by the applicant or would be inconsistent with the position he was taking in opposition to the examiner's position." Tr. at 5.93.

Mr. Manbeck opined that after the parties were before this Court in the '778 litigation, Boehringer was required to tell the examiner all material information from those proceedings. Tr. at 5.96. He also explained that all examiners attend a Patent Academy and learn the applicable law and regulations and are all very experienced. Tr. at 5.95. Mr. Manbeck further explained that MPEP section 2001.06(c) provides that "[w]here the subject matter for which a patent is being sought or has been involved in litigation, the existence of such litigation and any other material information arising there from must be brought to the attention of the Patent and Trademark Office." Examples of such material information include evidence of possible prior public uses or sales, questions of inventorship, prior art, allegations of `fraud,' `inequitable conduct,' and `violation of duty of disclosure.' Tr. at 5.97-5.98. Mr. Manbeck provided another example of such material as any assertion made during the litigation which is "contradictory to assertions made to the examiner. Such information might arise during litigation in, for example, pleadings, admissions, discovery including interrogatories, depositions and other documents and testimony." Tr. at 5.98. Mr. Manbeck qualified this testimony with the fact that this is not a statutory obligation but rather advice from the Patent Office to attorneys. Tr. at 5.99. He also said that a failure to disclose such information without intent ...


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