By Kevin E. Noonan --
The complexities that can be attendant on defending against an infringement allegation, and the possibility that a straightforward path to non-infringement can be complicated by claim construction even for terms construed using their plain meaning, are illustrated in the Federal Circuit's opinion affirming a jury verdict of infringement in LifeNet Health v. LifeCell Corp.
The suit involved LifeNet's ("Net") allegation that LifeCell's ("Cell") sales of "[p]lasticized soft tissue grafts for transplant" for "medical, orthopedic, dental, and cosmetic surgery applications" infringed its U.S. Patent No. 6,569,200. These grafts provide an alternative to freeze drying the tissue for transplantation (which was conventional art practice); instead, the water in the tissue is replaced with "biocompatible plasticizers" including, inter alia, glycerol. Using the claimed grafts avoids rehydration from a freeze-dried state that raised problems in the art.
Claim 1 of the '200 patent is representative:
1. A plasticized soft tissue graft suitable for transplantation into a human, comprising:
a cleaned soft tissue graft having an internal matrix; and
one or more plasticizers contained in said internal matrix;
said one or more plasticizers are not removed from said internal matrix of said plasticized soft tissue graft prior to transplantation into a human.
Relevant to the Court's decision, the italicized limitation in the claim was added during prosecution to overcome prior art (Cavallaro reference, U.S. Patent No. 5,718,012) that disclosed using plasticizers to strengthen collagen threads but required that the plasticizer be removed before use.
The specification of the '200 patent states that while the glycerol or other plasticizer can be removed prior to implantation the removal step isn't required. The physician has options:
(1) "direct implantation of the grafts without further processing following removal from the packaging";
(2) "implantation following a brief washing in sterile isotonic saline to remove any remaining traces of plasticizer associated with the immediate surfaces of the grafts"; or
(3) "implantation following an extended (approximately 1 hour) washing with sterile isotonic saline to remove as much plasticizer as possible."
Cell's accused infringing soft tissue grafts were preserved in a plasticizer ("Solution E") wherein the graft was soaked in saline for at least 2 minutes prior to use, a treatment that removes "significant amounts" of the plasticizers.
The District Court's claim construction was directed to the limitation (added during prosecution) that the plasticizers were "not removed" from the graft prior to use. Net argued that some, but not all, of the plasticizer could be removed, while Cell argued that none of the plasticizer could be removed if infringement would lie. According to the opinion, Cell argued that the term required that "no processing steps are taken, before transplantation into a human that result in any amount of the one or more plasticizers being taken out of the internal matrix of the plasticized soft tissue graft," while Net argued that the term meant the grafts were used "without complete replacement of the plasticizer or plasticizers in the internal matrix of the tissue graft prior to direct implantation into a human." The District Court construed the claim using the plain meaning of the term, that "not removed" means 'no plasticizers are removed prior to transplantation.'" To a jury, Cell presented evidence that "as much as 50% of the plasticizer in [its] products is removed during the  saline rinse" in arguing its products did not infringe. Net countered that the graft comprises an internal matrix from which the plasticizer is not removed by Cell's rinse (as required by the claim and based on expert testimony) and thus the limitation is met and Cell's accused articles infringed. A jury decided that Cell infringed the asserted claims of the '200 patent, found Cell had not established its invalidity defenses, and awarded Net almost $34 million. Cell appealed.
The Federal Circuit affirmed, in an opinion by Chief Judge Prost, joined by Judges Reyna and Chen. Cell presented five arguments on appeal: 1) the jury (rather than the court) improperly resolved a dispute regarding the meaning of "not removed" in the claim; 2) no matter how the term is construed, Cell cannot be liable for direct infringement, because it is the physician or technician that prepares a graft for transplantation, not the company; 3) the claims are indefinite for reciting a "method of use" limitation in a claim to an apparatus, citing IPXL Holdings, LLC v. Amazon.com, Inc., 430 F.3d 1377 (Fed. Cir. 2005); 4) the District Court misconstrued the term "plasticized soft tissue graft" which, if properly construed, renders its products non-infringing; and 5) the claims are anticipated by U.S. Patent No. 4,357,274 or obvious over this reference and the knowledge of one having ordinary skill in the art.
Cell's claim construction argument regarding the meaning of the term "not removed" was that the legal dispute about the term's meaning was wrongly presented to the jury (insofar as the jury was required to determine the plain meaning of this term), citing O2 Micro International Ltd. v. Beyond Innovation Technology Co., 521 F.3d 1351 (Fed. Cir. 2008). The Federal Circuit held that Cell had not requested further construction at trial and thus had not properly raised an O2 Micro issue. The panel recognized that this term related to two types of removal: how much of the plasticizer was removed, and from where it was removed (i.e., the "degree" of removal versus the locus of removal at the "internal matrix" of the tissue). The opinion further recognized that Cell's argument on appeal was that the internal matrix was the same as the tissue graft, so that removal of the plasticizer from the "gaps and voids" of the tissue was the same as removal from the internal matrix. Unfortunately for Cell, the Federal Circuit found that Cell did not "timely request modification of the district court's claim construction" and, moreover, argued throughout that the issue was one of fact rather than being a claim construction question. On the merits, the Court noted (in a footnote) that the term was properly construed according to its plain meaning in light of disclosure in the specification, including that the graft could be briefly rinsed or washed for one hour prior to transplantation; presumably, these treatments also resulted in no removal of the plasticizer from the internal matrix. Finally, on this issue the Court rejected Cell's attacks on Net's experts' trial testimony and particularly purported contradictions contained therein. Accordingly, the Court held that there was substantial evidence supporting the jury's finding of infringement.
On the question of divided infringement or inducement of infringement, the panel held that "the non-removal limitation clarifies that the recited plasticizer has not been removed and, because the plasticizer is biocompatible, can remain in the internal matrix of the tissue graft during transplantation, i.e., it need not ever be removed." As a limitation related to characterizing properties of the graft, rather than reciting a method step, the practice of this element required no action by a third party, and the Court affirmed the jury's finding of literal infringement liability on this basis (and the District Court's refusal to grant JMOL).
With regard to the IPXL issue (that it is improper for a claim to recite "method of use" limitations in a claim to an apparatus), the Court's determination regarding the non-removal limitation on the divided infringement question (that it recited a property of the tissue graft and not an affirmative limitation regarding steps to remove the plasticizer from the graft) was dispositive: under this reading of challenged claims 1-4 there was no mixing of apparatus and method claims and thus the claims were not indefinite.
Cell's challenge to the District Court's construction of the term "plasticized soft tissue graft" was based on its assertion that in addition to interpreting the term to mean that the "water of hydration" in the tissue had been replaced by the plasticizer, the Court should have required that the graft was "'dehydrated' in the sense that the tissue can only have 'low residual moisture.'" The Federal Circuit agreed with Net's position that the term "dehydration" "merely means that some of the water has been replaced with plasticizer," consistent with the District Court's construction and based on specific disclosure in the specification.
Finally with regard to Cell's invalidity arguments, the panel found substantial evidence supporting the jury's finding that the '274 patent did not anticipate the '200 patent's claims. Specifically, based on conflicting expert testimony, the Court was persuaded that while the '200 patent disclosed methods for avoiding "significantly altering" the mechanical properties of the tissue graft, the methods disclosed in the '274 patent resulted in significant alternation of the mechanical properties of the tissue. "The ultimate issue on this record was a classic factual dispute that the jury was free to resolve in LifeNet's favor," according to the opinion, citing Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d 1342, 1361 (Fed. Cir. 2012). Cell's obviousness arguments were similarly unpersuasive and the Federal Circuit upheld the District Court's denial of JMOL or a new trial on this issue.
LifeNet Health v. LifeCell Corp. (Fed. Cir. 2016)
Panel: Chief Judge Prost and Circuit Judges Reyna and Chen
Opinion by Chief Judge Prost