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CONMED CORPORATION v. ERBE ELECTROMEDIZIN GMBH

January 16, 2003

CONMED CORPORATION, AND ASPEN LABORATORIES, INC., A WHOLLY-OWNED SUBSIDIARY OF CONMED CORPORATION, PLAINTIFFS,
v.
ERBE ELECTROMEDIZIN GMBH, AND ERBE USA, INC., DEFENDANTS



The opinion of the court was delivered by: David N. Hurd, District Judge.

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

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 22 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: First — for a declaratory judgment of non-infringement of patent; Second — a declaratory judgment of invalidity of patent; Third — a declaratory judgment of unenforceability of patent; Fourth — tortious interference with contractual relations; Fifth — tortious interference with prospective business relations; Sixth — false advertising and unfair competition in violation of the Lanham Act, 15 U.S.C. § 1125; and Seventh — common law unfair competition. The complaint seeks compensatory and punitive damages, attorneys' fees and costs, and injunctive relief.

Defendants moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6). This motion was denied in an amended memorandum decision and order dated March 7, 2001. ConMed v. Erbe Electromedizin GmbH, 129 F. Supp.2d 461 (N.D.N.Y. 2001). Thereafter, defendants answered the complaint on March 26, 2001, and asserted seven counterclaims for: First — direct patent infringement;*fn1 Second — induced patent infringement; Third — contributory patent infringement; Fourth — tortious interference with contractual relations; Fifth — tortious interference with prospective business relations; Sixth — false advertising and unfair competition in violation of the Lanham Act, 15 U.S.C. § 1125; and Seventh — common law unfair competition.

Plaintiffs now move for partial summary judgment pursuant to Fed.R.Civ.P. 56 seeking declaratory judgment on its first three causes of action regarding the non-infringement, invalidity, and unenforceability of the patent and dismissal of defendants' counter-claims for patent infringement against them. Defendants oppose, and cross-move for partial summary judgment pursuant to Rule 56 seeking declaratory judgment on the validity of the patent. Oral argument was heard on August 15, 2002, in Utica, New York. Decision was reserved.

II. FACTS

The following are the undisputed facts in this case, and — where noted — the disputed facts as alleged by each side.

ConMed and Erbe are rival manufacturers of electrosurgical 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 7500 Electrosurgical Generator with ABC technology (the "ABC generator"), which is manufactured by Aspen. ConMed's ABC technology is fully protected under patents owned by the plaintiffs. ConMed's proprietary rights in the ABC system are based principally on U.S. Patent No. 4,781,175 (the "`175 patent" or "McGreevy"), which was issued on November 1, 1988. This generator has various attachable accessories for use in different surgical procedures. One such accessory, which is the specific product at issue in this lawsuit, is the ABC Flex GI Probe (the "ABC probe").

Erbe manufactures and markets a rival system — the Erbe APC300 "Argon Plasma Coagulator" (the "APC 300"). Just as with ConMed's system, the Erbe APC 300 system offers an argon gas-assisted GI probe as an accessory. Defendants' probe is protected by United States Patent No. 5,720,745 (the "`745 patent") which is the patent at issue in this action.

Both sides' electrosurgical devices work by passing electrical current through an inert stream of argon gas. Through the use of argon gas, the devices allow a surgeon to either cut or cauterize tissue with precision. Tissue is cut when sufficient energy is applied to vaporize the tissue. Tissue is cauterized when only enough electricity is applied to dehydrate it.

In 1992, Erbe filed a U.S. Patent Application No. 981,009 (the "`009 application") that disclosed a device and "method for coagulating tissue during endoscopic surgery by using argon plasma coagulation." The United States Patent and Trademark Office ("USPTO") rejected the `009 application based on obviousness, as well as other structural grounds. The patent examiner's rejection, which was affirmed by the Board of Patent Appeals (Muldoon Decl. Exh. 5), was based, in part, upon the decision that it would have been obvious to one skilled in the relevant art to combine the teachings of two prior patents (Manwaring and Trencosky)*fn2 to achieve the invention at issue in the `009 application. The USPTO found that "[i]t would have been obvious to one of ordinary skill in the art to have provided the Trencosky et al. coagulator within a working channel of an endoscope to treat internal tissue. . . ." Erbe appealed this determination and lost.

After losing its appeal on the `009 application, Erbe filed a new patent application as a continuation-in-part ("CIP") of the `009 application. This patent application would ultimately issue as the `745 patent.*fn3 In an apparent effort to overcome the objections to the `009 application, the CIP application added new material and claim limitations. This application was rejected by the patent examiner as obvious in view of the teachings of Manwaring, Canady, and Morrison, Jr. Specifically, the examiner found that

it would have been obvious to one of ordinary skill in the art to have provided the Manwaring endoscopic coagulator with an inert gas, such as argon, as the conductive fluid, particularly in view of the teaching of Canady. It would have been further obvious to have provided the Manwaring device, as modified by the teaching of Canady, with a very low flow rate of the inert gas to provide a non-laminar flow pattern to blanket the treatment tissue in view of the teaching of Morrison, Jr [sic] et al.

(Muldoon Decl. Exh. 7 at 6.)

On June 27, 1997, Erbe endeavored to distinguish the CIP application from the prior art by claiming that its invention provided a "low gas flow rate" while Canady*fn4 disclosed flow rates in excess of one liter per minute and flow velocities of up to 19 kilometers per hour. Erbe sought to distinguish Morrison, Jr. by noting that Morrisson, Jr. taught "such a slow flow rate that a continuous HF electrical signal can not be applied," while Erbe's invention provided "a continuous high frequency electrical supply." (Muldoon Decl. Exh. 8 at 10-11.) Based on the limitations contained in its June 27, 1997 amendment, the USPTO allowed Erbe's claims, and the `745 patent was issued on September 18, 1997. (Muldoon Decl. Exh. 9.)

In late 1999, ConMed began marketing its ABC probe as an accessory to its ABC generator. The ABC probe uses a laminar jet of ionized argon gas to deliver energy to tissue. Erbe contends that when used in the manner taught by ConMed, the ABC probe generates a non-laminar argon gas flow for electrosurgical coagulation.

III. STANDARD OF REVIEW

A. Summary Judgment

Summary judgment must be granted when the pleadings, depositions, answers to interrogatories, admissions, and affidavits show that there is "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Richardson v. New York State Dep't of Corr. Servs., 180 F.3d 426, 436 (2d Cir. 1999). Facts, inferences therefrom, and ambiguities must be viewed in a light most favorable to the nonmovant. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Richardson, 180 F.3d at 436; Project Release v. Provost, 722 F.2d 960, 968 (2d Cir. 1983). Once the moving party has met the initial burden of demonstrating the absence of a genuine issue of material fact, the nonmoving party "must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); Liberty Lobby, Inc., 477 U.S. at 250; Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986); Matsushita Elec. Indus. Co., 475 U.S. at 587. At that point the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., 475 U.S. at 586. To withstand a summary judgment motion, sufficient evidence must exist upon which a reasonable jury could return a verdict for the nonmovant. Liberty Lobby, Inc., 477 U.S. at 248; Matsushita Elec. Indus. Co., 475 U.S. at 587.

IV. DISCUSSION

The parties have raised numerous arguments in support of their motions and in opposition to their opponents' motions. Rather than addressing each argument separately, the parties' contentions will be considered in the context of deciding the two determinative issues — the validity of the `745 patent and whether the ABC probe infringes it.

A. Validity of the `745 Patent

The validity of the `745 patent is the threshold consideration on the instant motions. If the `745 patent is not valid, it follows as a matter of law that ConMed's ABC probe cannot infringe it. Accordingly, it is appropriate to begin the analysis with a consideration of the parties' arguments directed toward the validity of Erbe's patent.

ConMed attacks the validity of the `745 patent on the grounds that (1) the patent claims were described in a publication more than one year prior to its filing date, and (2) Erbe has engaged in inequitable ...


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