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District Court’s Failure to Construe a Disputed Claim Term Considered Harmless Error

February 02, 2009

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Last Month at the Federal Circuit - March 2009

Judges: Bryson, Dyk (dissenting), Prost (author)

[Appealed from: W.D. Tex., Judge Furgeson]

In Kinetic Concepts, Inc. v. Blue Sky Medical Group, Inc., Nos. 07-1340, -1341, -1342 (Fed. Cir. Feb. 2, 2009), the Federal Circuit affirmed the district court’s denial of (1) Defendants Medela, Inc. and Blue Sky Medical Group, Inc.’s (“Blue Sky”) motion for JMOL on obviousness; (2) Defendants’ alternative motion for a new trial on obviousness; and (3) Plaintiff Kinetic Concepts, Inc.’s motion for JMOL on infringement and its alternative motion for a new trial on infringement. Additionally, the Federal Circuit affirmed the district court’s claim construction rulings.

Kinetic Concepts, Inc., KCI Licensing, Inc., KCI USA, Inc., and Wake Forest University Health Sciences (collectively “KCI”) brought suit against Medela AG, Medela, Inc., Richard Weston, and Blue Sky(collectively “Defendants”), alleging infringement of U.S. Patent Nos. 5,636,643 (“the ’643 patent”) and 5,645,081 (“the ’081 patent”), as well as claims of false advertising, unfair competition, and conspiracy. Defendants responded with counterclaims alleging that the asserted patents were invalid and unenforceable. After a six-week trial, the jury found the asserted patents not invalid, unenforceable, or infringed. The jury also found against KCI on its false advertising, unfair competition, and conspiracy claims.

After trial, Defendants filed a motion for JMOL asserting that the claims were invalid as obvious under 35 U.S.C. § 103. In the alternative, Defendants requested a new trial on obviousness. KCI filed its own motion for JMOL on infringement, or in the alternative, requested a new trial on infringement. The district court denied each of these motions.

Defendants appealed the district court’s denial of their JMOL motion on obviousness, arguing that, under a proper claim construction, no reasonable juror could have found that the prior art did not render the asserted patents invalid. In the alternative, Defendants sought a new trial on obviousness, asserting that the Supreme Court’s decision in KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007), effected a supervening change in the law that retroactively rendered the jury instructions on obviousness erroneous. Defendants also appealed the district court’s determination that several claim terms, including “selected stage of healing,” “reduction in bacterial density in the wound by at least 50%,” and “screen for prevention of overgrowth,” were not indefinite. KCI cross-appealed the district court’s denial of its motion for JMOL of infringement, and alternatively requested a new trial on infringement because (1) Defendants presented a legally insufficient “practicing the prior art” defense, (2) compared the accused product to KCI’s product, and (3) engaged in “class warfare” before the jury.

The patents-at-issue relate to treating difficult-to-heal wounds by applying suction, which is referred to in the patents as “reduced pressure” or “negative pressure,” and encompass both apparatus and method claims. The Federal Circuit primarily focused on four limitations, at least one of which is present in each of the asserted claims: (1) using “reduced” or “negative” pressure to “treat a wound” or “facilitate the healing of a wound”; (2) a “screen” or “screen means” limitations; (3) a limitation requiring treating toward a “selected stage of healing”; and (4) “a reduction in bacterial density in the wound by at least 50%.”

With respect to claim construction, the district court first construed the phrase “treating a wound” to mean “giving medical care to an injury,” and the phrase “facilitating the healing of a wound” to mean “facilitating the healing of injuries,” but, in the middle of the trial, the district court vacated its construction of “wound.” As a result, “treating a wound” was construed to mean “giving medical care to a wound.” At trial, the jury was given this construction of “treating a wound” but was not instructed on the meaning of “facilitating the healing of wounds.” Additionally, the district court construed the “screen” limitation to mean “a porous material that applies a counteracting force to granulation tissue to stop growth of granulation tissue above the level of skin surrounding the wound, the porous material being positioned at the wound within the sealing means.”

Defendants alleged several errors in the district court’s treatment of its obviousness contentions (1) that the court’s failure to construe “wound” prevented the jury from properly assessing whether the prior art was within the scope of the asserted claims; (2) that the district court erred by finding that substantial evidence supported the jury’s finding that the patents were not obvious; and (3) that the district court was required to conduct its own independent obviousness analysis and erred by simply reviewing the jury’s verdict for substantial evidence.

First, the Federal Circuit rejected the Defendants’ argument that “wound” should be construed broadly, finding instead that “wound” did not encompass either the “fistulae,” described in one series of prior art references, or the “pus pockets,” described in another series of prior art references. Relying on Phillips v. AWH Corp., 415 F.3d 1393, 1315 (Fed. Cir. 2005) (en banc), the Federal Circuit held that because all of the examples in the specification described skin wounds, a broader interpretation “would thus expand the scope of the claims far beyond anything described in the specification.” Slip op. at 11. The Court further found that the district court’s failure to instruct the jury on the construction of “wound” in this case was harmless. Id. at 12. Thus, “[b]ecause the jury’s verdict is supported under the proper construction, and because we perceive no danger under the circumstances of this case that the jury may have used an incorrect construction of ‘wound’ that might have prejudiced Defendants, there is no need to remand for a new trial.” Id.

Second, the Federal Circuit found that the jury’s verdict of nonobviousness was supported by substantial evidence. Given the competing expert testimony on the subject, the jury was entitled to judge the credibility of the experts. Additionally, because KCI addressed each of Defendants’ prior art references and provided the jury with a basis for determining that they did not teach or suggest “treating a wound with negative pressure,” a limitation found in every asserted claim, the Court found the evidence sufficient to support the jury’s verdict of nonobviousness.

Third, the Federal Circuit rejected the Defendants’ assertion that the district court erred by not conducting its own obviousness analysis while entertaining their JMOL motion. Given the substantial evidence presented by KCI, the Federal Circuit concluded that the Defendants failed to establish that the asserted claims were obvious as a matter of law.

Additionally, the Federal Circuit rejected the Defendants’ request for a new trial on obviousness because the Court was not persuaded that the instruction on the teaching, suggestion, or motivation requirement for obviousness was “probably responsible for an incorrect verdict,” given the substantial evidence that none of the prior art references “treat wounds with negative pressure.” Id. at 16 (citation omitted).

Further, the Federal Circuit rejected the Defendants’ indefiniteness arguments. First, the term “selected stage of healing” was not indefinite because the ’643 patent specification provided several examples of selected stages of healing that, as explained in a declaration from one of the inventors, a doctor of ordinary skill in the art would understand how the selected stage of healing may vary from wound to wound. Second, “reduction in bacterial density in the wound by at least 50%” was not indefinite in light of a specific method described in Example 2 of the ’643 patent to measure bacterial density. Finally, the term “screen” was not indefinite in light of KCI’s explanation that the Defendants mischaracterized the inventors’ deposition testimony as definitions of “overgrowth.” Accordingly, the Court found that in light of KCI’s explanation of the record, it was not persuaded that the term “screen” is “insolubly ambiguous.” Id. at 19.

Turning to KCI’s cross-appeal and motion for JMOL of infringement, the Court first stated that “while Defendants’ evidence may not have been overwhelming, it was nonetheless sufficient to support the jury’s conclusion.” Id. at 21. Second, the Federal Circuit found that substantial evidence supported a finding that Blue Sky lacked the necessary intent to establish induced infringement, even though “KCI may be correct that ‘practicing the prior art’ [as Defendants’ had argued] is not a defense to patent infringement.” Id. at 23 (citation omitted). Finally, the Court denied KCI’s motion for a new trial, finding that the district court did not abuse its discretion in denying KCI’s motion.

In a dissenting opinion, Judge Dyk stated that the district court’s failure to construe the term “wound” was a “clear error.” Additionally, Judge Dyk believed the panel majority adopted too narrow a construction for the term. Under Judge Dyk’s broader construction of the term, he would have found the claims obvious in light of the prior art.