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BOEHRINGER INGELHEIM VETMEDICA v. SCHERING-PLOUGH

September 21, 2001

BOEHRINGER INGELHEIM VETMEDICA, INC., ET AL., PLAINTIFFS,
V.
SCHERING-PLOUGH CORPORATION AND SCHERING CORPORATION, DEFENDANTS.



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

    AMENDED OPINION

This matter comes before the court upon motions of Defendants Schering-Plough Corporation and Schering Corporations ("Schering" or "defendants") for judgment as a matter of law and for a new trial. Plaintiff, Boehringer Ingelheim Vetmedica, Inc., ("Boehringer" or "plaintiff") opposes these motions. For the reasons stated below, these motions are DENIED.

Background

A. Factual Background

This patent litigation arises from the efforts of Boehringer and of Schering to develop a vaccine for a disease known as Porcine Reproductive Respiratory Syndrome ("PRRS"). This disease infects pigs and causes them to give birth to dead or sickly piglets. In addition, it causes reproductive failure, respiratory disease, and other symptoms such as anorexia, fever, dyspnea and neurological impairment. In previous opinions issued in this case, this court has discussed at greater length the general process by which vaccines are developed and the respective parties' efforts to develop vaccines. The court presumes the reader's familiarity with those discussions. See, e.g., Boehringer Ingelheim v. Schering-Plough, 984 F. Supp. 239, 243 245. On December 19, 1995, the United States Patent Office ("USPO") issued Boehringer Patent No. 5,476,778 ("'778 Patent").

In this case, Boehringer claims that Schering's sales of a swine vaccine infringed upon claims 1 and 2 of Boehringer's '778 Patent, both literally and under the doctrine of equivalents. Claims 1 and 2 were as follows:

1. A method of growing and isolating swine infertility and respiratory syndrome virus, ATCC-VR2332, which comprises inoculating the virus on a full or partial sheet of simian cells in the presence of a serum in a suitable growth medium and incubating the inoculated cell sheet at about 34 [degrees] C. to 37 [degrees] C. until CPE*fn1 is observed.
2. The method as recited in claim 1 wherein the simian cell line is MA-104.

In November 1998, while the litigation of this infringement action was pending, the USPO issued to Boehringer Patent No. 5,840,563 ("'563 Patent"), also for a method of growing PRRS. On December 17, 1998 Boehringer commenced an action, 1998-CV-5703, alleging that Schering had infringed Claim 3 of its newly issued '563 Patent.

B. Procedural History

On October 6, 1997, this Court issued an opinion detailing its claim construction under Markman and denying Boehringer's preliminary injunction motion in the '778 Patent case. In denying Boehringer's motion for a preliminary injunction, the court found 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), and that Boehringer failed to demonstrate irreparable harm from the defendants' sale of a competing swine vaccine. The court also found, however, that Boehringer did not engage in certain inequitable conduct in the prosecution of the patent. See Boehringer I, 984 F. Supp. at 258-59, 264. On April 27, 1998, this court denied Schering's motion for summary judgment and Boehringer's motion for summary judgment, as well as Boehringer's renewed motion for a preliminary injunction in the '778 Patent case. See Boehringer II, 6 F. Supp.2d 324. The court found that neither Schering nor Boehringer had demonstrated that no genuine issues of material fact remained regarding obviousness and infringement pursuant to the doctrine of equivalents, and that Boehringer still had not demonstrated irreparable harm or its likelihood of success on the merits. Id. at 338.

On October 26, 1999, this court denied Boehringer's preliminary injunction motion in the '563 Patent case, finding that Boehringer failed to demonstrate a likelihood of success on the merits given Schering's substantial defenses of obviousness and inequitable conduct on the part of Boehringer in obtaining the patent, and that Boehringer had failed to show irreparable injury. See Boehringer III, 68 F. Supp.2d 508. Boehringer appealed the court's decision to the Federal Circuit, who dismissed the appeal on February 22, 2000.

On June 20, 2000, this Court issued an opinion holding that Boehringer did not engage in inequitable conduct in obtaining the '778 Patent, finding that Schering failed to demonstrate that Boehringer's inclusion of third parties' work in an application section rather than citing that work as prior art, and Boehringer's failure to disclose two references which suggested a cause of swine disease was not material. The court also found that Schering had not demonstrated plaintiffs intent to deceive. See Boehringer IV, 106 F. Supp.2d 667.

Prior to trial on the issues effecting the '778 Patent, this Court severed the issue of inequitable conduct from the issues of obviousness and infringement. The issues of obviousness and infringement were tried by a jury, and on January 20, 2000 the jury returned a verdict in favor of Boehringer on those issues. The issue of inequitable conduct was tried by this Court sitting without a jury, and on June 20, 2000, this court entered judgment in favor of Boehringer on that issue. Within 10 days of that Order being entered, Schering moved for a new trial pursuant to Rule 59 and for a judgment as a matter of law pursuant to Rule 50. Boehringer filed papers opposing those motions. On August 2, 2000, this court granted Boehringer's motion for injunctive relief in the '778 Patent case and found that Schering's post-trial motions were timely but that Schering was not entitled to stay of this case pending resolution of its post-trial motions. See Boehringer V, 106 F. Supp.2d 696.

On August 16, 2000, this court issued an order staying all proceedings in the '563 Patent case pending resolution of appeals in the '778 Patent case. On August 28, 2000, this court subsequently issued an order administratively terminating the '563 patent case "without prejudice to the right of the parties to reopen the proceedings for good cause shown."

Schering brings its renewed motion for judgment as a matter of law pursuant to Fed.R.Civ.P. 50(b). During trial Schering had filed notice of a motion for judgment as a matter of law pursuant to Fed.R.Civ.P. 50(a), on the grounds that Boehringer failed to produce evidence that its commercial process of incubating for XX hours*fn2 is equivalent to the claim requirement of "incubating . . . until CPE is observed" or evidence that its vaccine strain ATCC-VR2525 is equivalent to the claimed virus strain ATCC-VR2332. On December 16, 1999, the Court indicated that it reserved opinion on that motion. In its renewed motion, Schering alleges that its commercial process of incubating for XX is not equivalent to the claim requirement of "incubating . . . until CPE is observed." Schering also alleges that its vaccine strain ATCC-VR2525 is not equivalent to the claimed virus strain ATCC-VR2332. Finally, Schering asserts that claim 2 of the '778 Patent is invalid for obviousness. Boehringer opposes each of Schering's assertions and contends that Schering has failed to prove that there was no rational basis for the jury's findings of equivalency and obviousness.

Likewise Schering brings its motion for a new trial pursuant to Fed.R.Civ.P. 59. Schering contends that the jury's findings of equivalency were contrary to the great weight of evidence, that the trial was permeated by improper, irrelevant, and one-sided evidence concerning Boehringer's vaccine, and that the brevity of the jury's deliberations confirms the need for a new trial. In response, Boehringer argues that it provided conclusive proofs of infringement under the doctrine of equivalents at trial, that its references to its vaccine were explicitly permitted by the court's orders and were limited and appropriate, rather than prejudicial, and finally that the duration of the jury deliberations does not warrant a new trial.

On December 4, 2000, however, just over five months after filing the above motions, Schering wrote to the court to request that decisions on its post-trial motions be held in abeyance pending briefing by both parties on the impact of an en banc decision issued by the Federal Circuit on November 29, 2000, Festo Corporation v. Shoketsu Kinzoku Kogyo Kabushiki and Co., Ltd., 234 F.3d 558 (Fed.Cir. 2000). Schering asserts that the Festo decision overruled prior Federal Circuit precedents by placing new and significant limitations on the doctrine of equivalents. Boehringer subsequently wrote to the court, objecting to further delays in consideration of the post-trial motions on the grounds that the Festo decision only addressed the impact of amendment-based prosecution-history estoppel on the application of the doctrine of equivalents. Since the claim Schering was found to have infringed was never amended during the prosecution of the '778 patent, Boehringer contends that "prosecution history estoppel is simply irrelevant to this case." Schering, however, argues that Festo equated argument and amendment based prosecution history estoppel and therefore Festo's limitation on the doctrine of equivalents would also apply to argument-based prosecution history estoppel.

This court will address the impact of the Festo decision on this case and then turn to Schering's post-trial motions.

Legal Standard

1. Festo's impact on the Doctrine of Equivalents

One important function of a patent is to provide notice to the public as to which devices or methods would and would not infringe upon that patent. Greater certainty is thought to protect enterprise and experimentation, since competitors can proceed with a clear understanding of what would constitute infringement. See Markman v. Westview Instr., Inc., 517 U.S. 370, 390, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). The courts have also found, however, that literal interpretation of patent claims does not always provide the necessary protection to patent holders. For instance, claimants may make only insubstantial changes to an invention, thereby avoiding literal infringement but effectively copying a patented method or device. See Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 607-608, 70 S.Ct. 854, 94 L.Ed. 1097 (1950). In order to protect against such an abuse of the patent system, the courts have developed the doctrine of equivalents. Under this doctrine, a patent claim is infringed if an equivalent element of each element of a patented claim is present in the allegedly infringing device or method. See Pennwalt Corp. v. Durand-Wayland, Inc., 833 F.2d 931, 935 (Fed.Cir. 1987) (en banc).

This doctrine has been limited to prevent it from broadening or expanding the claims of a patent. Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17, 29, 117 S.Ct. 1040, 137 L.Ed.2d 146 (1997). Therefore, in order to be found equivalent, the differences between a specific element of the accused device or method and the claimed element must be insubstantial. Id. Every element of a claim must be represented either literally or by an equivalent, and the determination of equivalency is applied on an element-by-element basis. Pennwalt Corp., 833 F.2d at 935.

One restraint on the application of the doctrine of equivalents is prosecution history estoppel. According to the Federal Circuit, "[p]rosecution history estoppel precludes a patentee from obtaining under the doctrine of equivalents coverage of subject matter that has been relinquished during the prosecution of its patent application," either by amendments or by "arguments made to obtain allowance of the claims at issue." See Pharmacia & Upjohn Co. v. Mylan Pharmaceuticals, Inc., 170 F.3d 1373, 1376-77 (Fed.Cir. 1999).

Over the last twenty years, the Federal Circuit has wrestled with the degree of estoppel applicable when parties amend claims to exclude more than was necessarily required in order to obtain a patent. In Hughes Aircraft Co. v. United States, 717 F.2d 1351 (Fed.Cir. 1983), the Federal Circuit found that courts should only permit estoppel to the extent that a claim was narrowed in order to demonstrate that the claim was not obvious in light of prior art. Equivalents of the unnecessarily excluded claims could still infringe upon the patent. In Kinzenbaw v. Deere & Co., 741 F.2d 383 (Fed.Cir. 1984), however, the Federal Circuit did not consider the extent to which an amendment was or was not necessary to obtain a patent, but instead ruled that a prior claim amendment entirely precluded the application of the doctrine of equivalents to the amended element. Nevertheless, the Federal Circuit tended to apply the more flexible rule in Hughes Aircraft rather that the strict bar in Kinzenbaw in the following years. See Festo at 572-74.

In its Festo opinion, however, the Federal Circuit, sitting en banc, indicated that its twenty years of experience with the "flexible bar" approach enunciated in Hughes Aircraft had demonstrated that the flexible bar approach was difficult to apply and failed to provide notice of patented claims to the general public, because it was impossible to anticipate the extent of a patented claim under the flexible bar standard. Id. at 574-75. The co-existence of the flexible and strict bar standards also caused considerable confusion. Id. As a result, the Court explicitly reversed its longstanding practice and sharply limited the application of the doctrine of equivalents with respect to amended claim elements, holding that any amendment that narrows the scope of a claim automatically precludes the application of the doctrine of equivalents to the amended claim element. Id. at 569. The court further held that amendments made for reasons "substantially related to patentability" are not limited to amendments made to avoid prior art, but include any amendment related to a statutory requirement for a patent. Id. at 566. Finally, the court found that voluntary amendments should be treated in the same way as amendments required by the examiner and that "unexplained" amendments foreclose recourse to the doctrine of equivalents. Id at 568, 578.

The question, then, is how does Festo impact the instant case. Schering asserts that prior to the Festo decision, prosecution history estoppel was limited solely to instances in which a patentee has attempted to overcome prior art under § 102 or § 103. According to Schering, Festo clarified that prosecution history estoppel may also arise when a patentee has attempted to overcome other statutory rejections relating to patentability, including rejections under 35 U.S.C. § 101 and § 112. Finally, Festo clarified that prosecution history estoppel is a legal question to be determined by the Court based solely upon consideration of the public record of a patent's prosecution history.

Schering contends that Boehringer made two limiting arguments in prosecuting its patent. The first was in response to a utility rejection which indicated that "[t]he specification provides insufficient evidence that the infectious agent is the etiological agent of mystery swine disease. From the prior art it is not clear for example that the virus as described in the specification is a contaminant, infective with a combination of other agent(s) and/or that several other viruses cause the disease." In argument, Boehringer stated that it had provided evidence that the infectious agent was the etiological agent of mystery swine disease.

The second allegedly limiting argument was in response to a best mode rejection which stated that "because it is not clear that the virus isolate VR2332, possessing the biological properties of causing Mystery Swine Disease is known and publicly available . . . and because the best mode disclosed by the specification requires the use of the virus, a suitable deposit for patent purposes is required." In response, Boehringer filed a Chaldek declaration, as Schering puts it, "to evidence compliance with the deposit requirements of the Budapest Convention." See Schering's letter to the court dated December 18, 2000.

As a result of these two limiting arguments, Schering contends that under Festo, Boehringer is estopped from arguing an equivalency for the ATCC-VR2332 limitation. Boehringer replies that Festo did not address argument-based prosecution history, and that in any case this court found that Boehringer did not surrender anything to obtain its patent. This court agrees that Festo's holding on amendment based estoppel does not apply to the facts of this case, but on grounds different than those articulated by Boehringer.

At its Markman hearing, this court addressed two claims by Schering regarding the significance of the term "swine infertility and respiratory syndrome virus, ATCC-VR2332" located in the preamble of claim 1. The court found that the plain language of the patent preamble itself limited the patent to the ATCC-VR2332 strain of the virus. See Boehringer I at 248-250. This court did not make findings regarding the impact of the prosecution history on whether or not the patent was limited to a particular strain, except to note that the strain of the virus was essential to the claimed invention throughout the prosecution of the patent. The only finding the court made based on the prosecution history of the patent was that the prosecution history did not indicate that the patent was limited to virulent strains of the virus, but instead encompassed virulent and non-virulent strains. Id. at 249-251.

Therefore, the patent, as interpreted at the Markman hearing, is narrow on its face, rather than as a result of surrendering material in the course of the patent prosecution. The fact that the strain was essential to the prosecution of the patent and that it was formally deposited as evidence of the viability of the art and its best method, is consistent with a patent which is literally limited to a particular strain of the virus. Such references are not evidence that Boehringer surrendered broader claims when prosecuting the patent in order to obtain the patent. Boehringer is not subject to ...


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