955 F. Supp. 2d 69
D. Mass.2013Background
- S & N sued Hologic (and subsidiary Interlace) for infringement of U.S. Pat. No. 7,226,459 and U.S. Pat. No. 8,061,359; after a 10-day jury trial the jury found the asserted claims valid and infringed. A subsequent two-day bench trial addressed Hologic’s inequitable-conduct defense as to the '359 patent.
- The '359 patent is a continuation of an earlier patent application (resulting in U.S. Patent No. 7,249,602) by inventor Dr. Marc Hans Emanuel, who combined a cutter with an endoscope and used an Olympus endoscope in his prototype and drawings; the Olympus scope was not disclosed to the PTO in the U.S. filings for the earlier application and was not cited in the '359 prosecution (which did cite the Bonnet patent).
- Hologic alleged two forms of inequitable conduct: (1) Emanuel affirmatively misrepresented aspects of the Olympus scope as his invention (egregious misconduct), and (2) Emanuel and S & N in-house counsel Norman Hainer failed to disclose the Olympus endoscope as material prior art during prosecution.
- The court applied the Federal Circuit’s Therasense (intent and but-for materiality) standard for inequitable conduct, requiring clear-and-convincing proof of specific intent to deceive and either affirmative egregious misconduct or but-for materiality.
- The court found no sufficient evidence of affirmative egregious misconduct or that specific intent to deceive was the single most reasonable inference as to Emanuel; found Hainer knew of the Olympus scope but that the Olympus reference was cumulative of Bonnet so Hologic failed to prove materiality by a preponderance; therefore inequitable conduct claim failed.
- The court denied Hologic’s JMOL motions on the jury-tried issues, granted S & N’s motion related to inequitable conduct (i.e., rejected Hologic’s claim), allowed a permanent injunction but STAYED it pending PTO reexamination and appeals, ordered the parties to agree on a sunset royalty during the stay, and left damages calculation unresolved due to an ambiguous mixed jury award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| JMOL on jury findings of infringement and validity | Jury verdict supported by evidence; uphold findings | Insufficient evidence to support infringement/validity | Court denied JMOLs; jury verdicts sustained as legally sufficient |
| Affirmative egregious misconduct (Emanuel) | Emanuel’s application language and drawings misrepresent Olympus features as his own | Statements and drawings were misleading and not disclosed | Court: statements ambiguous but not the extreme, affirmative egregious misconduct required by Therasense not shown; claim fails |
| Failure to disclose prior art (Emanuel, Hainer) | Olympus scope was used in prototype and omitted; withholding was deliberate | Omitted Olympus was cumulative of disclosed Bonnet and other prior art | Court: Emanuel’s intent to deceive not proven by clear and convincing evidence; Hainer knew of Olympus but Olympus was cumulative so materiality not shown; inequitable conduct not proved |
| Permanent injunction | S & N: infringement causes irreparable harm (lost share, lost opportunities); monetary damages inadequate | Hologic: market expansion, price effects limited; injunction would cause massive hardship and may be unjust if patents are later invalidated | Court: eBay factors split; injunction granted but STAYED pending PTO reexamination/appeals; parties to set sunset royalty during stay |
| Damages ambiguity (mixed lost profits + royalty) | S & N seeks resolution consistent with jury intent or further proceedings | Hologic contends verdict compensates S & N | Court: jury award ambiguous (lost profits $4M + royalty rate 16% but no base); court cannot resolve without speculation; parties to agree on approach or try damages further |
Key Cases Cited
- Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (tightened inequitable-conduct standard requiring specific intent and but-for materiality or affirmative egregious misconduct)
- Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357 (Fed. Cir. 2008) (intent to deceive must be the single most reasonable inference)
- Function Media, LLC v. Google, Inc., 708 F.3d 1310 (Fed. Cir. 2013) (general verdicts permissible where legal issues rest on underlying factual questions)
- eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (U.S. 2006) (four-factor test for permanent injunctions in patent cases)
- Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142 (Fed. Cir. 2011) (continued infringement and direct competition support irreparable harm)
- Presidio Components, Inc. v. American Technical Ceramics Corp., 702 F.3d 1351 (Fed. Cir. 2012) (trespass/monopoly analogy; injunction considerations)
- i4i Ltd. Partnership v. Microsoft Corp., 598 F.3d 831 (Fed. Cir. 2010) (difficulty of quantifying certain patent damages)
- Douglas Dynamics, LLC v. Buyers Prods. Co., 717 F.3d 1336 (Fed. Cir. 2013) (intangible harms from violation of the right to exclude relevant to injunction analysis)