IP Watch: Validity of Key Boston Scientific Patent Upheld

OnOctober 12, Boston Scientific Corp. (Natick, MA) announced that the U.S. Court of Appeals for the Federal Circuit had affirmed the validity of one of its key cardiac resynchronization patents in a case against Medtronic Inc. (Minneapolis).

Boston Scientific reports that the court upheld the validity of U.S. Patent RE38,119, which Guidant—now part of Boston Scientific—had exclusively licensed from Mirowski Family Ventures LLC. The decision supports previous court rulings related to the suit Medtronic filed in August 2003, in which the company challenged its obligations to pay royalties under the '119 patent and sought to have the patent declared invalid.

Mirowski Family Ventures LLC is the entity that holds the patent rights of Michel Mirowski, MD, inventor of the implantable defibrillator.

“We are pleased that the court of appeals has upheld the validity of this important patent,” said Jim Tobin, president and CEO of Boston Scientific. “This victory reaffirms the strength of our cardiac rhythm management intellectual property portfolio and further spotlights our history of bringing innovative technologies to market that benefit clinicians and their patients.”

Medtronic issued a statement saying it disagrees with the decision and “will pursue appropriate legal recourse.”

Innogenetics Gets $7 Million Verdict

At the beginning of September, a jury in the U.S. District Court for the Western District of Wisconsin unanimously found that Abbott Laboratories (Abbott Park, IL) had willfully infringed U.S. patent 5,846,704 (the ‘704 patent), belonging to Innogenetics NV (Ghent, Belgium). The patent covers a method of genotyping the hepatitis C virus (HCV).

Innogenetics is an international biopharmaceutical company building parallel businesses in the areas of specialty diagnostics and therapeutic vaccines. The company's diagnostics division develops a large number of specialty products covering infectious diseases (hepatitis C, hepatitis B, and HIV), genetic testing (HLA tissue typing and cystic fibrosis), and neurodegeneration (Alzheimer's disease).

The verdict directs Abbott to pay Innogenetics $7 million for infringement damages to date. At the judge's discretion, that amount may be increased up to three times the verdict award, because the jury specifically determined that Abbott's patent infringement was willful.

“This is a landmark victory for Innogenetics, and possibly for other innovators like us out there,” said Frank Morich, CEO of Innogenetics. “This win protects an important patent for us, and provides compensation for this major infringement. But perhaps just as importantly it says that being a large, global company does not entitle you to willfully disregard intellectual property laws without consequence.”

Because of the strength of the verdict and the determination that the infringement was willful, Innogenetics indicated that it would seek an injunction against Abbott diagnostic products that infringe its '704 patent and would also pursue other available remedies.

The lawsuit began in September 2005 when Innogenetics brought suit against Abbott Laboratories, alleging that Abbott was infringing its '704 patent. Innogenetics received an unexpectedly early indication of the court's leanings in August 2006, when the court determined that Abbott's HCV genotyping products literally infringed at least claims 1–3 of Innogenetics' HCV genotyping patent.

Abbott subsequently argued that the patent should be ruled invalid. But o n September 2, the jury returned a unanimous verdict that the '704 patent was valid in all respects. The final verdict was issued just one week later.

Founded in 1985, Innogenetics is a public company listed on the Euronext Brussels exchange. The company employs 530 people worldwide and has sales subsidiaries in Brazil, France, Germany, Italy, Spain, and the United States. For 2005, Innogenetics reported total revenues (product sales, royalties, and license fees) of €48.6 million. The company has a market capitalization of approximately €295 million.

Early IP Disclosure Leads to Win for Scantibodies

At the beginning of October, the U.S. Court of Appeals for the Federal Circuit ruled that a patent asserted against diagnostic test companies Scantibodies Clinical Laboratory Inc. and Scantibodies Laboratory Inc. (Santee, CA) is invalid, because the inventors disclosed their invention more than one year prior to the original filing date of the patent.

The October ruling overturned a lower court decision, and came after four years of patent infringement litigation between Scantibodies and Nichols Institute Diagnostics Inc. in the U.S. District Court for the Southern District of California.

The patent in question deals with human parathyroid hormone (hPTH), a protein comprised of 84 amino acids that plays an important role in regulating calcium metabolism. The accurate measure of parathyroid levels is critical in the treatment of kidney dialysis patients. When levels of hPTH are not accurately measured, dialysis patients may be treated with incorrect levels of vitamin D supplements that can result in life-threatening consequences.

In 1998, Scantibodies developed the first third-generation assay for hPTH—a more sensitive and accurate diagnostic test. Scantibodies began offering testing services using its third-generation assay in 2001. Nichols, a subsidiary of Quest Diagnostics Inc . (Lyndhurst, NJ), also formerly manufactured assays to measure parathyroid hormone and in 2002 sued Scantibodies, alleging that its parathyroid assays and antibodies infringed Nichols's patent rights.

Scantibodies was represented by attorneys from the law firm of Morrison & Foerster LLP. “We're very pleased with the court's decision, which finally brings to an end a patent case that should have been ended by Nichols voluntarily in 2003, when we discovered and informed Nichols of the inventors' prior art disclosure of the claimed invention,” said David Doyle, a senior patent litigation partner in Morrison & Foerster's San Diego office.

Scantibodies twice sought summary judgment of invalidity based on the inventors' own prior art abstract, which was published in the European Journal of Pharmaceutical Sciences in 1994. The inventors disclosed their work in that publication more than a year before filing for any U.S. patent protection for the claimed invention.

The district court denied both of the Scantibodies summary judgment motions, and the case proceeded to trial in 2005. A jury found the Nichols patent invalid on the grounds of failure to disclose the best mode, lack of enablement, and lack of written description, but the district court reversed the jury's verdicts and entered judgments of validity and infringement, which Scantibodies appealed.

Leading up to the final ruling, on September 20 the Federal Circuit held that all of the patent claims asserted by Nichols had been anticipated by the inventors' own prior disclosures and are therefore invalid.

“As patent cases have become battlegrounds, this is a favorable resolution to part of an ongoing saga,” said Eric Acker, a Morrison & Foerster intellectual property litigation partner. “We're thrilled that Scantibodies can continue using their more accurate hPTH test and test kit antibodies, which will directly benefit dialysis patients.”

Meanwhile, Nichols Institute Diagnostics didn't quite make it for the conclusion of the litigation it initiated. In April, “after carefully considering several options,” Quest Diagnostics announced that it had decided to discontinue its subsidiary's operations and product sales. According to a message posted on the Nichols Web site, the firm is now working on a detailed plan for an orderly closing, which will include a process for instrument collection and cleanup. Quest reported that the closure would result in a second-quarter pretax charge of up to $45 million.

In addition to Doyle and Acker, the Morrison & Foerster appellate team representing Scantibodies included associates Drew Woodmansee and Katie Parker, with guidance from Beth Brinkmann, chair of the firm's appellate practice group, and of counsel Seth Galanter.

Given Imaging Files Counterclaim against Olympus

On October 23, capsule endoscopy system manufacturer Given Imaging Ltd. (Yoqneam, Israel) announced that it had filed claims of patent infringement against Olympus Corp. (Tokyo) and its subsidiaries Olympus Medical Systems Corp. and Olympus America Inc. The claims were filed in response to a complaint filed by Olympus in May 2006 in the Eastern District of Pennsylvania.

Given Imaging's counterclaim asserts that the capsule endoscopy system that Olympus stated it intends to market in the United States will infringe four of Given Imaging's patents. These patents include Given Imaging's first patent, U.S. Patent 5,604,531, issued in 1997, and other patents covering features of capsule endoscopes and capsule endoscopy systems.

Given Imaging is requesting an injunction to prevent Olympus from selling in the United States any product that infringes Given Imaging's patents.

“Given Imaging is committed to leading innovation in the field of capsule endoscopy and offering our customers the broadest and most advanced platform for capsule endoscopy,” said Homi Shamir, president and CEO of Given Imaging. “We also have built a broad patent estate including hundreds of patent applications and dozens of issued patents worldwide. As such, we intend to protect our interests and our market vigorously.”

At the same time, Given Imaging filed its response to Olympus's allegation that Given Imaging infringes U.S. Patent 5,010,412. The '412 patent was purchased by Olympus from the Boeing Co. in July 2005. In its response, Given Imaging denies infringement of the '412 Patent and asserts that the '412 Patent is invalid.

Given is developing a full line of endoscopy capsules for detecting disorders of the gastrointestinal tract. The company's technology platform is the Given System, which features a disposable, miniature video camera contained in a capsule, which is ingested by the patient. In August 2001, the Given System was cleared for marketing in the United States as an adjunctive tool for visualization of abnormalities of the small intestine, and, in July 2003, as a first-line tool in the detection of abnormalities of the small bowel.

In October 2005, Olympus launched a high-resolution capsule endoscope in Europe. The company is pursuing clearance to market the technology in the United States.

Smith & Nephew Gets Injunction against Synthes

At the beginning of October, the Federal District Court for the Western District of Tennessee granted a request by Smith & Nephew Inc. (Memphis, TN) for a permanent injunction directed at Synthes (USA) Inc. (West Chester, PA). The injunction prevents Synthes from promoting, distributing, or selling its trochanteric fixation nail (TFN) and proximal femoral nail (PFN) products for the treatment of intertrochanteric fractures in the United States.

Intramedullary nails are placed inside the bone to aid in the healing of bone fractures. Smith & Nephew's Trigen nail system is used in the healing of proximal femoral (upper leg bone) fractures.

Smith & Nephew originally filed its suit against Synthes in November 2002. A nonjury trial began in December 2004 concluded in March 2005. In the resulting ruling, issued in August 2005, the court upheld the validity of Smith & Nephew's U.S. patents 5,167,663 and 5,312,406, and ruled that the Synthes TFN and PFN products infringed on those patents.

On September 28, 2006, district court judge Samuel H. Mays Jr. issued a series of findings, concluding that Synthes' infringement caused Smith & Nephew to lose sales for its competing products and damaged Smith & Nephew's market share for orthopedic implants in ways that cannot be fully compensated by monetary damages alone. The damage inflicted on Smith & Nephew satisfied the recently announced, more-stringent standard for granting permanent injunctions in patent infringement cases, as adopted by the U.S. Supreme Court in the highly publicized case, eBay Inc. v. MercExchange LLC. The court's findings provided a foundation for the injunction order issued a week later.

“We believe the court's ruling recognizes the strength and merit of Smith & Nephew's case as innovators in trauma surgery,” said Mark Augusti, president of Smith & Nephew's orthopedic trauma and clinical therapies division. “We will continue to vigorously defend our intellectual property rights as we develop new and innovative products.”

The law firm of Wyatt, Tarrant & Combs LLP (Memphis, TN) served Smith & Nephew as cocounsel in the filing, preparation, and trial of the case. Attorney Mark Vorder-Bruegge Jr. and paralegal Debbie Burk staffed most of the firm's services in the case. Glen Reid Jr. provided the firm's cocounsel services in the Markman proceeding that construed the meaning of the patent for the trial. Vorder-Bruegge is a partner in the firm's Memphis office, and a member of the commercial litigation and intellectual property and technology licensing practice groups. Reid is also a partner in the firm's Memphis office and is a member of the firm's commercial litigation and tort and insurance practice groups and cochair of its litigation department.

Synthes was represented by Leo Merken, partner and cochair of the medical device intellectualproperty practice for the law firm of Jones Day (Irvine, CA).

Synthes investor relations representatives reportedly downplayed the October verdict, indicating that they did not consider it a material event for the company. According to an investment report prepared by Helvea SA (Geneva), Synthes intends to appeal the recent verdict, and such additional appeals are not expected to be completed before the end of 2007.

In the meantime, Synthes will continue marketing its TFN and PFN products for eight other indications for use not prohibited by the injunction. And even without any promotional support, the company cannot prevent surgeons from ordering and using its TFN nail for intertrochanteric fractures.

© 2006 Canon Communications LLC

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