The opinion of the court was delivered by: Hurd, District Judge.
AMENDED MEMORANDUM-DECISION AND ORDER
On June 22, 2000, plaintiffs Conmed Corporation ("Conmed") and
Aspen Laboratories, Inc. ("Aspen") (collectively "plaintiffs")
commenced the instant action against defendants ERBE
Electromedizin GmbH and ERBE USA, Inc. (collectively "ERBE" or
"defendants") pursuant to 28 U.S.C. § 2201, 2202 and 1338, and
the Patent Laws of the United States, Title 35 of the United
States Code, and various state laws. Plaintiffs are asserting
seven causes of action for (1) a declaratory judgment of
non-infringement of patent; (2) a declaratory judgment of
invalidity of patent; (3) a declaratory judgment of
unenforceability of patent; (4) tortious interference with
contractual relations; (5) tortious interference with prospective
business relations; (6) false advertising and unfair competition
in violation of the Lanham Act, 15 U.S.C. § 1125; and (7) common
law unfair competition. The complaint seeks compensatory and
punitive damages, attorneys' fees and costs, and injunctive
Oral argument was heard on January 12, 2001, in Utica, New
York. Decision was reserved. For the reasons that follow, the
motion will be denied.
This action arises out of an alleged threat by ERBE's CEO,
Christian Erbe, to seek an injunction to halt the marketing of a
flexible argon probe by Conmed. The following are the undisputed
facts in this case, and — where noted — the disputed facts as
alleged by the nonmoving plaintiffs.
Conmed and ERBE are rival manufacturers of surgical devices,
accessories, and support equipment. Each sells a comparable argon
gas-assisted gastrointestinal coagulation probe in the United
States. Conmed's product line is known as the "Argon Beam
Coagulation" ("ABC®") series of products. The principal product
in this series is the Conmed System 7500TM Electrosurgical
Generator with ABC® technology (the "ABC generator"), which is
manufactured by Aspen. The ABC generator is fully protected under
patents owned by the plaintiffs. This generator has various
attachable accessories for use in different surgical procedures.
These attachments are generally not compatible with other units.
One such accessory, which is the specific product at issue in
this lawsuit, is the ABC® Flex Gl Probe (the "Gl probe").
ERBE manufactures and markets a rival system — the ERBE
APC300TM "Argon Plasma Coagulator" (the "APC 300"). Just as with
Conmed's system, the ERBE APC 300 system offers an argon
gas-assisted Gl probe as an accessory. Defendants' probe is
protected by United States Patent No. 5,720,745 (the "'745
patent"). The availability of such a probe is an important factor
to customers considering the purchase of either Conmed's or
ERBE's electrosurgical generators. In addition, the probes are
disposable attachments, and are not intended to be reused.
Because the probes are disposable, their continued availability
is a relevant consideration to potential customers.
The complaint alleges that in the fall of 1999, the parties
were engaged in settlement negotiations over an unrelated
litigation when ERBE suggested that Conmed needed to take a
license of the '745 patent in order to continue selling its Gl
probe. Conmed responded to this request with a detailed response
from its patent counsel, setting forth the reasons why the Gl
probe did not infringe the defendants' '745 patent. At that time,
plaintiffs believed that the defendants were satisfied with this
response, and that the matter was resolved.
Conmed alleges that in February 2000, it subsequently learned
from a sales representative in California that ERBE was implying
in written marketing materials that plaintiffs' Gl probe
infringed the '745 patent. These materials contained a
head-to-head comparison of the argon gas-assisted Gl probes of
the two companies, and emphasized the superiority of the ERBE
probe through material misrepresentations and falsehoods —
including a purported advantage based on ERBE's superior patent
protection. Conmed received similar reports from other sources
over the next several months.
This course of deceptive and unlawful marketing culminated in
the above-referenced statement of Christian Erbe, which
predicated the instant lawsuit. This statement — that defendants
were moving rapidly to halt plaintiffs' manufacturing of flexible
argon probe devices — was repeated to a potential customer of
plaintiffs in a letter written by Steve Cramton, an authorized
dealer of ERBE products (the "Cramton letter").
Conmed also alleges that it learned of the Cramton letter — and
Christian Erbe's threat of patent litigation — when a customer
asked one of its sales representative if the parties were
currently engaged in patent litigation. In addition, plaintiffs
assert that ERBE's provision of competitive patent-related
information to a sales representative is consistent with industry
practice because "[i]n the medical device industry, distributors
and sales representatives for manufacturers typically do not have
familiarity with patents and generally rely on statements and
materials provided by manufacturers on such issues." See
Plaintiffs' Opposition at 5 n. 3. This practice, in plaintiffs'
view, made the purported threat by Christian Erbe more credible,
and led to the development of an apprehension by plaintiffs that
patent litigation was imminent.
Shortly after learning of the contents of the Cramton letter,
Conmed commenced the instant action. A letter from plaintiffs'
general counsel, Daniel S. Jonas ("Jonas"), accompanied service
of the complaint upon the defendants. This letter stated, in
It appears to us at this time, however, that ERBE
either believes that CONMED and Aspen infringe
ERBE's United States Patent 5,720,745, or ERBE
believes that it is acceptable in ERBE's commercial
marketing, to imply that CONMED's products may become
unavailable as a result of patent litigation that
ERBE has no intention of commencing.
Exhibit "A" to Defendants' Motion to Dismiss the Complaint (the
"Jonas letter") (emphasis added). This letter was marked "For
Settlement Purposes Only" and contained an invitation by Jonas to
contact him to discuss settlement of this action. The instant
A. 12(b)(1) Motion to ...