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Medinol Ltd. v. Cordis Corp.

United States District Court, S.D. New York

March 14, 2014

MEDINOL LTD., Plaintiff,
v.
CORDIS CORPORATION AND JOHNSON & JOHNSON, Defendants

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[Copyrighted Material Omitted]

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For Plaintiff: Richard Louis DeLucia, Esq., Elizabeth A. Gardner, Esq., Aloysius Antony Pfeffer, Esq., Caryn Harsche Cross, Esq., Mark Alexander Chapman, Esq., Eric Thomas Schreiber, Esq., Kenyon & Kenyon, New York, NY; Arthur R. Miller, Esq., New York University School of Law, New York, NY.

For Defendants: Gregory L. Diskant, Esq., Scott Barry Howard, Esq., Kathleen Marie Crotty, Esq., Anthony Christopher DeCinque, Esq., Marla Phyllis Dunn, Esq., Peter Abraham Nelson, Esq., Patterson, Belknap, Webb & Tyler LLP, New York, NY.

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OPINION AND ORDER

Shira A. Scheindlin, U.S.D.J.

I. INTRODUCTION

Medinol Ltd. (" Medinol" ) brings this patent infringement action against Cordis Corporation and Johnson & Johnson (collectively, " Cordis" ). On June 13,2013, I granted defendants' request to bifurcate the case in order to address Cordis's equitable defense of laches prior to starting discovery on the merits. I held a bench trial on the issue of laches from January 20 to January 24, 2014. The parties made post-trial submissions on January 31, 2014. Pursuant to Rule 52(a) of the Federal Rules of Civil Procedure, I make the following findings of fact and conclusions of law.[1] In reaching these findings and conclusions, I the testimony, examined the documentary evidence, observed the demeanor of the witnesses, and considered the arguments and submissions of counsel.

II. FINDINGS OF FACT

A. The Parties

Medinol is an Israeli medical devices company founded by Drs. Jacob (Kobi) Richter and Judith Richter in the early 1990s.[2] Dr. Kobi Richter (" Richter" ) also serves as Medinol's chairman and chief technology officer.[3] Cordis is a medical device company incorporated in Florida and an affiliate of Johnson & Johnson, a public corporation based in New Jersey.[4]

B. The Patents and Products at Issue

1. Medinol's Patents

This case pertains to the following patents, which were invented by Gregory Pinchasik and Jacob Richter and are owned by Medinol:

● U.S. Patent No. 5,980,552 (the " '552 patent" ), issued on November 9, 1999;
● U.S. Patent No. 6,059,811 (the " '811 patent" ), issued on May 9, 2000;
● U.S. Patent No. 6,589,276 (the " '276 patent" ), issued on July 8, 2003; and
● U.S. Patent No. 6,875,228 (the " '228 patent" ), issued on April 5, 2005 (collectively,

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the " Pinchasik patents" ).[5]

Each of the Pinchasik patents " issued from a continuation patent application, and each of these continuation patents claims priority to the ultimate parent application [--] U.S. Patent No. 5,449,373 (the " '373 patent" ), issued on September 12, 1995." [6]

Each of the Pinchasik " patents has the same figures" and each of the Pinchasik patents includes " claims . . .read[ing] on the embodiments of Figure 3 as described in the accompanying text of the specifications." [7] While the claims in the Pinchasik patents vary,[8] much of the key text, including the " Field and Background of the Invention," " Summary of the Invention," " Brief Description of the Drawings" and " Description of the Preferred Embodiments" sections are substantially similar.[9] The Pinchasik patents describe " articulated stents" that have " substantially rigid segments" connected by " flexible links" that allow the stent to bend.[10] Neither Richter nor Medinol ever sought to sell or licence the Pinchasik patents to a third party.[11]

Medinol also owns a second suite of stent patents, which are " continuations in part" from the '373 patent.[12] This suite of patents -- U.S. Patent No. 5,733,303, issued on March 31, 1998 (the " '303 patent" ); U.S. Patent No. 5,843,120, issued on December 1, 1998; and U.S. Patent No. 5, 972,018 (the " '018 patent" ) (collectively, the " Israel patents" ) -- was invented by Henry Marshall Israel and Gregory Pinchasik.[13] Richter admits that the Israel patents are continuations in part of the original '373 Pinchasik patent.[14] The Israel patents are similar to the Pinchasik patents except that the latter suite is " uniformly flexible" along its length.[15] Medinol licensed the Israel patents to Boston Scientific Corporation (" Boston Scientific" ) in 1996.[16] But Richter believes that the Israel patents were different because they created a " uniformly flexible" stent, while the Pinchasik patents created an " articulated" stent." [17]

Richter considered the Israel patents to be stronger than the Pinchasik patents. This is reasonably inferred from the fact that Richter has never sought to sell, license or enforce the Pinchasik patents but did license the Israel patents to a major medical devices company. Further, as discussed below, Medinol aggressively enforced the Israel patents around the world but never brought a claim on the Pinchasik patents until filing this suit.

2. Cordis's Products

Medinol alleges that Cordis's Cypher and Cypher Select stents infringe the Pinchasik patents. The Cypher stent was

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introduced in Europe in 2002 and in the United States in 2003.[18] The Cypher Select was introduced in Europe in 2003 but has never been sold in the United States.[19]

The Cypher and Cypher Select are drug-eluting stents that cover a platform bare-metal stent with a polymer sirolimus coating to release the drug inside the artery.[20] The platform bare-metal stent used in the Cypher is the BX Velocity[21] and the platform bare-metal stent in the Cypher Select is the BX Agile.[22] The platform bare-metal stents for both the Cypher and the Cypher Select " were at all times manufactured by Norman Noble in Ohio." [23]

Cordis previously sold the BX Velocity as a bare-metal stent in Europe starting in 1999 and in the United States starting in 2000, but never sold the BX Agile bare-metal stent.[24] Medinol posits that although the two drug-eluting stents use different bare-metal platforms, there is " hardly a difference between the Cypher Select and the Cypher." [25] On June 15, 2011, Cordis announced that it would " stop the manufacture of Cypher and Cypher Select . . . by the end of 2011." [26]

C. The Medinol-Cordis Relationship

1. April 2000 -- October 2004: The Israel Litigation

On April 14, 2000, Boston Scientific and Medinol sued Cordis for patent infringement in the United States District Court for the District of Delaware, seeking damages, a preliminary injunction and a permanent injunction based on allegations that the BX Velocity infringed the Israel patents.[27] The Pinchasik patents were not asserted during the Israel litigation.[28] After Boston Scientific filed the infringement lawsuit against the BX Velocity, Cordis began a " standard procedure" of exploring design options to develop a non-infringing alternative to the BX Velocity.[29] The product of this development was the BX Agile bare-metal stent used as the platform for the Cypher Select.[30]

In the summer of 2000, Cordis argued against a preliminary injunction on the grounds that the BX Velocity was not " substantially uniformly flexible along its longitudinal axis" and thus did not infringe the Israel patents.[31] Richter was present in the courtroom for the August 3, 2000 oral arguments on the preliminary injunction motion and throughout the duration of the trial in 2001.[32] Cordis advanced the

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same argument during the trial, arguing that the " BX Velocity did not meet the 'substantially uniformly flexible' limitation of claim 47 of the '018 patent [because] most of the flexibility of the BX Velocity is in the connectors." [33] Cordis also argued that claim 12 of the '303 patent, which reads on Figure 3 of the '373 patent, is invalid for obviousness because it is a combination of prior art from earlier patents.[34]

The trial court " denied Medinol's request for a preliminary injunction." [35] On September 12, 2011, the jury in the Israel trial returned a verdict in favor of Cordis on both obviousness and non-infringement. On September 22, 2002, the court " denied Medinol's motions for judgment as a matter of law and for a new trial." [36] On January 14, 2004, the United States Court of Appeals for the Federal Circuit affirmed the finding of invalidity but chose not to reach the finding of non-infringement.[37] On October 4, 2004, the United States Supreme Court denied Medinol's petition for a writ of certiorari.[38]

Richter testified that he did not realize that the BX Velocity potentially infringed the Pinchasik patents until 2005, after the Israel litigation finished.[39] This testimony is not credible. While Richter may have legitimately believed that the BX Velocity was " continuously" or " uniformly" flexible, he was clearly on notice that Cordis did not believe the BX Velocity was continuously

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flexible and instead argued that it achieved flexibility from articulation points or hinges. This was obvious from Cordis's advertising of the BX Velocity[40] and from the arguments it advanced during the August 2000 preliminary injunction hearing and the September 2001 trial. Richter " never put [the Pinchasik] patents in the case because [he] ...


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