St. Jude Medical Cardiology Division Inc. et al v. Volcano Corporation

Filing 195

MEMORANDUM ORDER Granting, and Granting with Leave to Amend 155 MOTION to Dismiss and MOTION to Strike (see Memorandum Order for further details). Signed by Judge Richard G. Andrews on 6/11/2014. (nms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

ST. JUDE MEDICAL, CARDIOLOGY
DIVISION, INC., ST. JUDE MEDICAL
SYSTEMS AB, and ST. JUDE MEDICAL
S.C., INC.,
Plaintiffs,

Civil Action No. 12-441-RGA

v.
VOLCANO CORPORATION,
Defendant.

MEMORANDUM ORDER
Before the Court is St. Jude's Motion to Dismiss Volcano's Inequitable Conduct
Counterclaim and to Strike its Affirmative Defense Pursuant to Rules 12(b)(6) and 12(f). (DJ.
155). The briefing is complete (D.I. 156, 166 & 177), and the Court heard oral argument on June
6, 2014. For the reasons set forth below, St. Jude's motion IS GRANTED with respect to Glenn
Law, and GRANTED WITH LEAVE TO AMEND with respect to Johan Svanerudh and Sauli
Tulkki.
In order to establish inequitable conduct, an accused infringer must prove that a specific
individual with a duty of candor to the PTO "misrepresented or omitted material information
with the specific intent to deceive the PTO." Therasense, Inc. v. Becton, Dickinson & Co., 649
F.3d 1276, 1287 (Fed. Cir. 2011) (en bane). Allegations of inequitable conduct must be pled
with particularity. Exergen Corp. v. Wal-Mart Stores, 575 F.3d 1312, 1328 (Fed. Cir. 2009).
"[T]o plead the 'circumstances' of inequitable conduct with the requisite 'particularity' under
Rule 9(b ), the pleading must identify the specific who, what, when, where, and how of the

material misrepresentation or omission committed before the PTO." Id. The pleading must also
show that the omitted information is not cumulative of the information already on the record by
identifying the particular claim limitations that are absent from the record. Id. at 1329-30 ("Such

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allegations are necessary to explain both 'why' the withheld information is material and not
cumulative, and 'how' an examiner would have used this information in assessing the
patentability of the claims."). Finally, "[a] charge of inequitable conduct based on a failure to
disclose will survive a motion to dismiss only if the plaintiffs complaint recites facts from which
the court may reasonably infer that a specific individual both knew of invalidating information
that was withheld from the PTO and withheld that information with a specific intent to deceive
the PTO." Delano Farms Co. v. Cal. Table Grape Comm 'n, 655 F.3d 1337, 1350 (Fed. Cir.
2011). St. Jude asserts Volcano's inequitable conduct counterclaim and affirmative defense 1 are
legally deficient for failing to adequately plead the who, where, what, why, and how, as well as
materiality and intent to deceive the PTO. (D.1. 156, pp. 2-3).
Volcano alleges three individuals committed inequitable conduct: Johan Svanerudh, Sauli
Tulkki, and Glenn Law. Messrs. Svanerudh and Tulkki were employees of Radi Medical
Systems AB, a predecessor to St. Jude, and are the named inventors on the '514 patent. Mr. Law
prosecuted the '514 patent application. These three individuals, according to Volcano, provided
an incomplete and misleading representation to the PTO regarding the capabilities of Volcano's
prior art WaveMap system. (D.1. 166, pp. 1-4).
One of the advances embodied in the '514 patent is the ability to calculate and
"graphically display[] physiological variables related to blood pressure." '514 patent, 1: 11-12.

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Because both an affirmative defense and a counterclaim asserting inequitable conduct must meet the particularity
requirements dictated by Rule 9(b), Volcano's "counterclaim and affirmative defense for inequitable conduct rise or
fall together." Senju Pharm. Co., Ltd. v. Apotex, Inc., 921 F. Supp. 2d 297, 306 (D. Del. 2013).

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Volcano asserts its WaveMap system possessed this capability when connected to a
hemodynamic monitoring system, and that Messrs. Svanerudh and Tulkki knew this based on
their familiarity with several Volcano documents, none of which were disclosed to the PTO.
These documents include the December 1996 version of the WaveMap Operator's Manual, the
WaveMap brochure, the Wave Wire brochure, and the WaveMap® Pressure Guide Wire System,
Operator's Manual. (D.I. 148, iii! 83 & 92). In addition, Mr. Svanerudh drafted a written report
detailing the WaveMap's functionality after experimenting with it (id,

if 91), and another Radi

employee prepared a video demonstrating how to connect a hemodynamic monitoring system to
the WaveMap device. (Id,

if 93). By failing to disclose these documents and falsely

representing to the PTO that the WaveMap "do[es] not have a graphical interface, only
numerical displays showing measured values" (' 514 patent, 1:53-56), Volcano asserts Messrs.
Svanerudh and Tulkki committed inequitable conduct. As for Mr. Law, Volcano alleges he was
aware of the WaveMap's capabilities based on his knowledge of the December 1996 version of
the WaveMap Operator's Manual, the WaveMap brochure, and the Wave Wire brochure. (D.I.
148, if 83). Indeed, while prosecuting a separate patent for St. Jude in 2000, Mr. Law submitted
a 1998 Wave Wire brochure and other Volcano documents as part of the Information Disclosure
Statement to the PTO. (D.I. 166, p. 7; D.I. 148, iii! 66 & 67). Volcano maintains Mr. Law's
failure to submit these documents relating to the WaveMap when prosecuting the '514 patent
constitutes inequitable conduct.
The Court agrees that Volcano has failed to adequately plead the inequitable conduct
allegations. There are no facts in Volcano's complaint that would allow the Court to "reasonably
infer" Mr. Law withheld documents detailing the WaveMap's functionality with the specific
intent to deceive the PTO. See Delano Farms Co., 655 F.3d at 1350. Mr. Law's disclosure of

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certain WaveMap documents during the prosecution of a different Radi patent but not for the
'514 patent is insufficient to infer an intent to deceive. The complaint is also insufficient with
respect to Messrs. Svanerudh and Tulkki because it fails to sort out the specific facts and
attribute them to a particular individual. (See, e.g., D.I. 148, iii! 95, 98, 104 & 107 (referring to
"the applicants for the '514 patent and other individuals that had a duty of candor and good faith
in dealing with the USPTO")). Volcano needs to individually identify whose actions constitute
affirmative misconduct or were contrary to the duty of candor, and material to the issuance of the
'514 patent, on particular dates, with the intent to deceive the PTO. Volcano should also plead
facts explaining why the omitted references are not cumulative of other prior art reviewed during
prosecution, specifically U.S. Patent No. 6,193,669.
The Court grants the motion to dismiss the inequitable conduct counterclaim and
affirmative defense (D.I. 155), but with leave to amend against Messrs. Svanerudh and Tulkki
within ten days.

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Entered this

1 day of June, 2014.
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