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Prosecution History Estoppel from Distinguishing Argument Overcomes Claim Differentiation Based on Facially Narrower Dependent Claim

December 09, 2010

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Last Month at the Federal Circuit - January 2011

Judges: Rader, Newman (concurring-in-part, dissenting-in-part), Prost (author)

[Appealed from: W.D. Pa., Chief Judge Ambrose]

In ERBE Elektromedizin GmbH v. Canady Technology LLC, Nos. 08-1425, -1426 (Fed. Cir. Dec. 9, 2010), the Federal Circuit affirmed the district court’s grant of SJ of noninfringement and of the trademark and trade dress claims.  The Court also affirmed SJ against one defendant as to that defendant’s antitrust counterclaim.

This case involved three competitors that create argon gas-enhanced electrosurgical products for electrosurgery.  ConMed Corporation (“ConMed”) owns U.S. Patent No. 4,781,175 (“the ’175 patent”). The ’175 patent is directed at argon gas-assisted electrosurgical products used in argon beam coagulation (“ABC”).  Dr. Jerome Canady, the founder, CEO, and partial owner of Canady Technology LLC (collectively “Canady”), owns U.S. Patent No. 5,207,675 (“the ’675 patent”), which discloses a “surgical tissue coagulator” that includes a “flexible tube” with a handle that is used to maneuver the tube within an endoscope for argon gas-assisted electrosurgery.  And finally, ERBE Elektromedizin GmbH and ERBE USA, Inc. (collectively “ERBE”) own U.S. Patent No. 5,720,745 (“the ’745 patent”), which is directed to electrosurgical systems and methods for coagulating biological tissue with a high frequency current using argon plasma, i.e., argon plasma coagulation (“APC”).

ERBE unsuccessfully tried to register the color blue as applied to these “flexible endoscopic probes for use in argon plasma coagulation” on the PTO’s Principal Register.  Thereafter, ERBE did register the color blue as applied to the tube portion of the APC probes on the PTO Supplemental Register.

ERBE and ConMed brought the instant action against Canady.  ERBE and ConMed alleged, inter alia, contributory and induced infringement of the ’745 and ’175 patents based on Canady’s flexible endoscopic argon gas-assisted electrosurgical probes.  ERBE also alleged trademark infringement because of the blue color on the Canady probes.  Based on its purported trade dress, consisting of the blue tube with black markings at the end, ERBE further asserted a claim for unfair competition.  Canady denied all claims.  Canady asserted, inter alia, antitrust counterclaims against ERBE and ConMed, including contentions that the ’745 patent infringement claims against Canady constituted anticompetitive sham litigation.

After construing the claims, the district court granted SJ of noninfringement of the ’745 patent in favor of Canady.  The district court also granted SJ on ERBE’s trademark and trade dress claims in Canady’s favor, and on Canady’s antitrust counterclaims in favor of ERBE and ConMed.  The district court denied SJ of noninfringement of the ’175 patent claims, leading to a settlement.

On appeal, the Court found that the district court properly construed the term “low flow rate” in the ’745 patent claims.  The Court observed that during prosecution, the applicants had distinguished the claimed low flow rate from the flow rates disclosed in the Canady ’675 patent to obtain its invention.  The Court held that the prosecution history “clearly and unambiguously demonstrate[d] that the applicants unequivocally disclaimed flow rates from 1 to 12 liters per minute.”  Slip op. at 14.  Accordingly, the claimed flow rates were limited to less than 1 liter per minute.

The Court rejected ERBE’s claim differentiation argument.  The Court explained that, while all limitations of a claim must generally be considered meaningful, no canon of claim construction is absolute in its application.  “Claim differentiation may be helpful in some cases, but it is just one of many tools used by courts in the analysis of claim terms.”  Id. at 14-15.  Because the inventors clearly and unambiguously disclaimed such flow rates that produced laminar jets, the Court affirmed the district court’s claim construction.  And because ERBE did not contest that it failed to present evidence that the accused Canady probes exhibit sufficiently low velocities under the district court’s construction of “low flow rate,” the Court also affirmed SJ of noninfringement.

The Court next addressed ERBE’s trademark and trade dress claims.  ERBE contended that SJ was inappropriate because the blue color of its probes was not functional and had acquired the requisite secondary meaning.  The Court concluded that ERBE failed to present a genuine issue of material fact that the color blue does not make the probe more visible through an endoscopic camera or that such a color mark would not lead to anticompetitive effects.  The Court also found that ERBE did not offer any evidence that created a genuine issue of whether the color blue on its flexible endoscopic probes had secondary meaning.

The Court also affirmed the district court’s grant of SJ as to ERBE’s trade dress claims.  The district court granted SJ on these claims because ERBE failed to present any argument that the black rings at the end of the probe were nonfunctional.  ERBE similarly failed to present any evidence relating to its trade dress claims on appeal.

Lastly, the Court turned to Canady Technology’s cross-appeal and whether the district court properly granted SJ on Canady Technology’s antitrust counterclaims in favor of ERBE and ConMed.  A party is generally immune to antitrust liability based on its filing of a lawsuit unless the narrow “sham litigation” exception applies.  The Court found that ERBE had probable cause to bring patent enforcement litigation, as evident from the claim construction analysis.  Although ERBE’s arguments were not winning ones, ERBE presented nonfrivolous arguments for its proposed construction of the disputed claim term, and so there was no sham litigation.

Canady also argued that the district court improperly failed to consider whether ERBE’s alleged predatory acts other than sham litigation violated antitrust law.  The Court further held that Canady Technology failed to show that ERBE engaged in predatory acts in violation of antitrust law.  Accordingly, the Court affirmed the district court’s grant of SJ on the antitrust counterclaims.

Judge Newman dissented-in-part with respect to SJ on the trademark and trade dress claims, stating that there were genuine issues regarding the nonfunctionality and the secondary meaning of the color blue.  Judge Newman noted that registration of the blue color on the Supplemental Register required a showing that the color was not functional and that, under the APA, the PTO’s holding should receive deference.  Judge Newman also argued that the factual issue of whether blue, or the particular shade of blue at issue, is the only color of the spectrum that contrasts with bodily fluids was fairly placed into dispute.  Regarding secondary meaning, Judge Newman stated that the panel majority discounted ERBE’s unrebutted evidence regarding secondary meaning and observed only the absence of other possible types of evidence relating to secondary meaning.  But, according to Judge Newman, the Third Circuit’s standard is not rigid and a party attempting to establish secondary meaning must not always show that marketing materials succeeded in creating buyer association.  The dissent concluded that the factual issue of likelihood of confusion should have been considered and a reasonable inference should have been drawn in ERBE’s favor on SJ.


Summary authored by Adam M. Breier, Ph.D., student associate at Finnegan.