DePuy Orthopaedics Inc v. Orthopaedic Hospital

Filing 380

OPINION AND ORDER: Court DENIES WITHOUT PREJUDICE 256 and 305 Motions to strike and allows the Hospital to file related motions in limine later in anticipation of trial, as necessary; DENIES 236 , 241 , 243 , and 251 Motions for Summar y Judgment; DENIES WITHOUT PREJUDICE 232 and 247 DePuy's Daubert motions and 257 , 258 , and 259 the Hospital's Daubert motions; DENIES 333 Motion for a status conference; and ADOPTS the 366 Report and Recommendation. Signed by Judge Joseph S Van Bokkelen on 8/31/2017. (tc)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
DEPUY ORTHOPAEDICS, INC.,
Plaintiff,
v.

Case No.: 3:12-CV-299-JVB-MGG

ORTHOPAEDIC HOSPITAL,
Defendant.
OPINION AND ORDER
This case involves contracts and patents regarding orthopaedic implants.
The Court referred this case to Magistrate Judge Michael G. Gotsch for a Report and
Recommendation on:
1.

DePuy’s motion for summary judgment regarding contract issues (DE 236);

2.

DePuy’s motion for summary judgment regarding invalidity (Hamilton) (DE
241);

3.

DePuy’s motion for summary judgment regarding invalidity (Li) (DE 243);

4.

DePuy’s motion for summary judgment of non-infringement (DE 251);

5.

Hospital’s request for oral argument (DE 303); and

6.

Hospital’s motion to strike (DE 305).

After holding oral arguments, Judge Gotsch issued a thorough and well-reasoned Report
and Recommendation (DE 366). He recommends:
1.

Denying without prejudice the Hospital’s motions to strike (DEs 256 and 305)
and allowing it to file related motions in limine later in anticipation of trial, as
necessary;

2.

Denying DePuy’s motions for summary judgment for invalidity (DEs 241 and
243);

3.

Denying DePuy’s motion for summary judgment of non-infringement (DE 251);
and

4.

Denying DePuy’s motion for summary judgment on contract issues (DE 236).

DePuy objects to the recommendation for denial of its motion for summary judgment of
non-infringement. (DE 371.) DePuy urges the Court to construe the “Thermal Treatment
Limitation” as meaning “without exposing the implant to thermal treatments recognized as
thermal treatments to extinguish free radicals, including temperatures above 25°C for more than
two hours.” DePuy argues that under that construction, its accused processes and products do not
infringe.

A.

Background
Magistrate Judge Christopher A. Nuechterlein’s Order following a Markman hearing

details the background of this case. (DE 163 at 2–8.) Judge Gotsch’s Report and
Recommendation also presents a useful summary. (DE 366 at 1–7.)
As of 1999, orthopaedic implants caused problems. They deteriorated inside the body,
releasing particles that damaged adjacent bone. So persons of ordinary skill in the art (“POSAs”)
began irradiating the implants to improve wear-resistance.
But radiation caused oxidation, which also deteriorated the implants. So POSAs started
applying heat—thermal treatments, including re-melting (heating the implant above its melt
temperature) and annealing (heating the implant below its melt temperature)—to improve
oxidation-resistance of implants.
But thermal treatments still weakened the implants, so the Hospital (a California research
hospital) researched the creation of oxidation-resistant implants without re-melting or annealing.
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The Hospital and DePuy (an Indiana medical device manufacturer) wanted to work
together to develop better technology and products related to orthopaedic implants. The parties
entered into a Research Agreement and a Patent Rights and License Agreement (“PLRA”) in
1999.
DePuy agreed to assume financial responsibility for prosecuting, maintaining, and
enforcing related patent rights; to develop and market products using the new technology; and to
pay royalties to the Hospital on sales using the new technology. The Hospital would retain
ownership of any patents arising from the technology.
The collaboration produced five patents related to polyethylene orthopaedic implants
(“the 110 Family”). These patents are all directed to a method for making wear-resistant and
oxidation-resistant polyethylene orthopaedic implants without thermally treating them to
extinguish free radicals. Each of these patents teaches a limitation the parties call the “Thermal
Treatment Limitation.”
But before any of the 110 Family Patents issued, DePuy started selling artificial knee
systems made from a polyethylene product it manufactured called AOX. The Hospital concluded
AOX used technology from the 110 Family, and told DePuy it owed royalties on AOX sales
under the PLRA.
Lawsuits ensued.
As relevant here, DePuy’s basic position is that AOX falls outside the Thermal Treatment
Limitation, which is essential to the 110 Family Patents. The Thermal Treatment Limitation
states: “without thermally treating the implant to extinguish free radicals . . . .” (See, e.g., DE
147-1 at 12 (‘710 Patent)). DePuy argues that under a proper construction, this term means

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“without exposing the implant to thermal treatments recognized as thermal treatments to
extinguish free radicals, including temperatures above 25°C for more than two hours.” (DE 371
at 3.) DePuy argues that because AOX is heated above 25°C for more than two hours it is not
covered by the 110 Family Patents and therefore does not infringe them.

B.

Pending motions
DePuy has six motions currently pending: four motions for summary judgment (DEs 236,

241, 243, and 251) and two Daubert motions (DEs 232 and 247).
The Hospital also has six motions currently pending: two motions to strike (DEs 256 and
305), three Daubert motions (DEs 257, 258, and 259), and one motion for a status/scheduling
conference (DE 333).
The Court referred DePuy’s four motions for summary judgment, the Hospital’s request
for oral argument (DE 303), and the Hospital’s motion to strike to Judge Gotsch for a Report and
Recommendation.
Judge Gotsch disposed of the motion for oral argument, held a hearing, and issued a
Report and Recommendation. He recommends denying without prejudice the Hospital’s motions
to strike (DEs 256 and 305). He also recommends denying DePuy’s motions for summary
judgment (DEs 236, 241, 243, and 251).
DePuy objects to the recommendation for denial of its motion for summary judgment of
non-infringement. (DE 371.) DePuy urges the Court to construe the “Thermal Treatment
Limitation” in a particular way, and to conclude that AOX falls outside the patents and therefore
does not infringe.

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C.

Review of the Magistrate Judge’s Report and Recommendation
A district court may refer dispositive matters to a magistrate judge, in which case the

magistrate judge may submit to the district judge a report and recommended disposition,
including any findings of fact. 28 U.S.C. § 636(b)(1)(B); Fed. R. Civ. P. 72(b)(1); see also Schur
v. L.A. Weight Loss Ctrs, 577 F.3d 752, 760 (7th Cir. 2009).
The magistrate judge’s recommendation on a dispositive matter is not a final order. The
district judge makes the ultimate decision to “accept, reject, or modify” the findings and
recommendations. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3); see also Schur, 577 F.3d at
760–61.
After a magistrate judge makes a report and recommendation, if a party raises specific
objections to findings and recommendations, the district court must review those objections de
novo, determining for itself whether the magistrate judge’s decisions as to those issues are
supported by substantial evidence or were the result of an error of law. 28 U.S.C. § 636(b)(1);
Fed. R. Civ. P. 72(b)(3); see also Johnson v. Zema Sys. Corp., 170 F.3d 734, 739 (7th Cir. 1999).
The court may, however, defer to conclusions to which neither party objected. Schur, 577
F.3d at 760–61. If a party fails to object to a magistrate judge’s report and recommendation, or
objects to some issues but not others, the party waives appellate review of the issues to which the
party has not objected. Johnson, 170 F.3d at 739.

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D.

DePuy’s objection to the Report and Recommendation
DePuy essentially raises only one big objection to the Report and Recommendation.

DePuy objects to the recommendation that the Court deny its motion for summary judgment of
non-infringement (DE 251). DePuy argues the Court should construe the Thermal Treatment
Limitation as meaning “without exposing the implant to thermal treatments recognized as
thermal treatments to extinguish free radicals, including temperatures above 25°C for more than
two hours.”
DePuy argues that under this construction, DePuy does not infringe the patents because
the Hospital doesn’t dispute that AOX was heated above 25°C for more than two hours. Finally,
DePuy argues that granting its motion for summary judgment will dispose of all claims and
counterclaims in this case.
Accordingly, the Court reviews this issue de novo.

E.

DePuy’s motion for summary judgment of non-infringement

(1)

Summary judgment standard
The Federal Rules of Civil Procedure mandate that motions for summary judgment be

granted “if the pleadings, depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). A party seeking
summary judgment bears the initial responsibility of informing a court of the basis for its motion
and identifying those portions of the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, which it believes demonstrate the absence

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of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once a
properly supported motion for summary judgment is made, the non-moving party cannot resist
the motion and withstand summary judgment by merely resting on its pleadings. Fed. R. Civ. P.
56(e); Donovan v. City of Milwaukee, 17 F.3d 944, 947 (7th Cir. 1994).
In viewing the facts presented on a motion for summary judgment, a court must construe
all facts in a light most favorable to the non-moving party and draw all legitimate inferences and
resolve all doubts in favor of that party. NLFC, Inc. v. Devcom Mid-Am., Inc., 45 F.3d 231, 234
(7th Cir. 1995). A court’s role is not to evaluate the weight of the evidence, to judge the
credibility of witnesses, or to determine the truth of the matter, but instead to determine whether
there is a genuine issue of triable fact. Anderson v. Liberty Lobby, 477 U.S. 242, 249–50 (1986).

(2)

Discussion
DePuy seeks summary judgment that AOX is not covered by, and therefore does not

infringe, any of the patent claims asserted by the Hospital, because AOX does not meet the
Thermal Treatment Limitation asserted by the patents. (DE 251 at 1.)
Patent infringement analysis involves two steps: (1) determining the meaning and scope
of the patent claim, and (2) comparing the properly construed claims to the accused process. See
Markman v. Westview Instruments, Inc., 517 U.S. 370, 374 (1996) (“Victory in an infringement
suit requires a finding that the patent claim covers the alleged infringer’s product or process,
which in turn necessitates a determination of what the words in the claim mean.”) (internal
quotations omitted). The first step—claim construction—is a matter of law for the court. Id. at
970–71.

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To establish infringement, “every element and limitation of the claim must be present in
the accused device, literally or by an equivalent.” Inpro II Licensing, S.A.R.L. v. T-Mobile USA,
Inc., 450 F.3d 1350, 1357–58 (Fed. Cir. 2006). Literal infringement occurs when every limitation
of a patent claim appears in the accused method; in other words, when the properly construed
claim literally “reads on” the accused method. Amhil Enters. Ltd. v. Wawa, Inc., 81 F.3d 1554,
1562 (Fed. Cir. 1996).
Summary judgment regarding infringement “is proper when no reasonable jury could
find that every limitation recited in a properly construed claim either is or is not found in the
accused device either literally or under the doctrine of equivalents.” U.S. Philips Corp. v.
Iwasaki Elec. Co., 505 F.3d 1371, 1374–75 (Fed. Cir. 2007). Specifically, summary judgment of
non-infringement is proper when the moving party shows that “no reasonable jury could have
found infringement on the undisputed facts or when all reasonable factual inferences are drawn
in favor of the patentee.” TechSearch, LLC v. Intel Corp., 286 F.3d 1360, 1371 (Fed. Cir. 2002).
The Court already completed the first part of the analysis—the claim construction—
regarding the Thermal Treatment Limitation. Judge Nuechterlein held a Markman hearing and
issued an Order construing this term. DePuy disagrees with that construction, but has not moved
for reconsideration of that construction. Instead, as the Hospital notes, DePuy essentially moves
for summary judgment that AOX does not infringe the asserted claims on the basis of DePuy’s
construction of the Thermal Treatment Limitation, a construction Judge Nuechterlein specifically
already rejected.
In short, the problem for DePuy is that it asks for summary judgment of non-infringement
on the basis of a claim construction the Court already denied.

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Each of the Hospital’s asserted patent claims contains the Thermal Treatment Limitation.
This is a negative limitation: “without thermally treating the implant to extinguish free radicals.”
(See, e.g., DE 147-1 at 12 (‘710 Patent)). DePuy argues AOX does not meet this limitation, and
therefore is not covered by the Hospital’s patents, because AOX products are heated at
temperatures above 25°C for over two hours, and are then maintained for weeks or months at
room temperature. (DE 252 at 5.)
DePuy acknowledges Judge Nuechterlein held a Markman hearing and issued an Order
regarding the Thermal Treatment Limitation. He ruled on January 8, 2016, that “the plain and
ordinary meaning of the Term will apply in this litigation going forward.” (DE 163 at 33.)
But DePuy argues that Judge Nuechterlein ruled that thermal treatments at 25°C or higher
for two hours or longer (“25+2”) exceed the scope of the Thermal Treatment Limitation, and that
he left open the possibility that thermal treatments at lower temperatures for shorter durations
also might exceed the scope of that term.
The problem is that’s not what the Markman Order says.
Judge Nuechterlein ruled that DePuy had not carried its burden to show that the Thermal
Treatment Limitation was indefinite. (DE 163 at 31.) Then he noted that “the Hospital would
likely agree that generally speaking thermal treatments at 25°C or higher for two hours or more
would be outside the scope of the Term.” (DE 163 at 32.) He left open the possibility that
thermal treatments of less than 25+2 could exceed the scope of the term. But he also left open the
possibility that thermal treatments equal to or greater than 25+2 could be within the scope of the
term. The phrase “generally speaking” admits exceptions.

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The reason Judge Nuechterlein did not nail the term to a specific temperature and
temporal minimum threshold is that the term, by its express, plain language, includes an
additional factor: “to extinguish free radicals.”
As the Hospital acknowledges, “depending on a myriad of variables,” heat treatment of
25+2 might extinguish free radicals by more than a trivial amount, but that doesn’t mean every
heat treatment within that range extinguishes free radicals by more than a trivial amount. (DE
296 at 12–13.)
Judge Nuechterlein concluded that POSAs understood the plain and ordinary meaning of
the term, so he ruled that the plain and ordinary meaning would apply.
DePuy claims Judge Gotsch contradicted his predecessor by opining in the Report and
Recommendation that “the fact that AOX is exposed to temperatures above 25°C for two hours
or more is not enough to show non-infringement” because other factors must be considered. (DE
371 at 6, quoting DE 366 at 43–44.)
But there is no contradiction.
Judge Nuechterlein opined that a mere showing of 25+2 was insufficient to establish
exclusion from the scope of the patents because the Thermal Treatment Limitation “defines the
excluded thermal treatments based on how they extinguish free radicals, not based strictly on
temperature and duration.” (DE 163 at 32.) And Judge Gotsch likewise noted that “the fact that
AOX is exposed to temperatures above 25°C for two hours or more is not enough to show noninfringement.” (DE 366 at 44.)
DePuy also claims Judge Gotsch did not explain with specificity what the other factors
might be. But this claim also lacks merit. Judge Gotsch explained that his predecessor explained

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what the term itself already explained: whether the thermal treatment extinguishes free radicals is
a relevant factor in determining whether the thermal treatment is within the scope of the Thermal
Treatment Limitation.
DePuy proceeds to claim the two Magistrate Judges reached diametrically opposed
conclusions regarding what the Thermal Treatment Limitation means. (DE 371 at 7.) As already
demonstrated, however, this is incorrect. DePuy claims Judge Nuechterlein “concluded that
‘thermal treatments at 25°C or higher for two hours or more would be outside the scope of the
Term,’ Dkt. No. 163 at 32 . . . .” (DE 371 at 7, quoting DE 163 at 32.) But DePuy quotes the
Order out of context. As already noted, Judge Nuechterlein actually wrote that “the Hospital
would likely agree that generally speaking thermal treatments at 25°C or higher for two hours or
more would be outside the scope of the Term.” (DE 163 at 32.) Contrary to DePuy’s assertion,
this is not a conclusion by Judge Nuechterlein that 25+2 is unequivocally beyond the scope of
the patents.
Saying “the Hospital would likely agree that generally speaking X is true” is not the same
as saying “the Court concludes that X is always, unequivocally, ineluctably true.”
After a de novo review, the Court agrees with the Report and Recommendation that the
record “is replete with competing evidence,” and that genuine issues of material fact regarding
whether AOX meets the Thermal Treatment Limitation preclude summary judgment for noninfringement. Construing the facts in the light most favorable to the non-moving party, and
drawing all legitimate inferences in its favor, the Court cannot say DePuy is entitled to judgment
of non-infringement as a matter of law.

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The Court DENIES DePuy’s motion for summary judgment of non-infringement (DE
251).

F.

Remainder of the Report and Recommendation
DePuy did not object to the remainder of the Report and Recommendation. The Court

thoroughly reviewed the entire Report and Recommendation, and agrees with its conclusions and
adopts its recommendations.
Accordingly, the Court:
1.

2.

DENIES DePuy’s motions for summary judgment for invalidity (DEs 241 and
243); and

3.

G.

DENIES WITHOUT PREJUDICE the Hospital’s motions to strike (DEs 256
and 305) and allows the Hospital to file related motions in limine later in
anticipation of trial, as necessary;

DENIES DePuy’s motion for summary judgment on contract issues (DE 236).

Other pending motions
DePuy also has two Daubert motions pending (DEs 232 and 247) and the Hospital has

three Daubert motions pending (DEs 257, 258, 259). Given this Order, the Court DENIES these
motions WITHOUT PREJUDICE. If, in light of this Order, either party wants to maintain one
or more of its Daubert motions, it may either simply re-file them, or may re-file them with
additions or subtractions in light of this Order. Then, the opposing party will have the customary
time to respond, and may respond either by simply re-filing its prior response, or by re-filing it
with additions or subtractions as appropriate. Then, the moving party will have the customary
time to reply, in similar fashion.
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The Court also denies the Hospital’s motion for a status conference (DE 333).

H.

Conclusion
The Court:
1.

DENIES WITHOUT PREJUDICE the Hospital’s motions to strike (DEs 256
and 305) and allows the Hospital to file related motions in limine later in
anticipation of trial, as necessary;

2.

DENIES DePuy’s motions for summary judgment (DEs 236, 241, 243, and 251);

3.

DENIES WITHOUT PREJUDICE DePuy’s Daubert motions (DEs 232 and
247) and the Hospital’s Daubert motions (DEs 257, 258, and 259);

4.

DENIES the Hospital’s motion for a status conference (DE 333); and

5.

ADOPTS the Report and Recommendation (DE 366).

SO ORDERED on August 31, 2017.
s/ Joseph S. Van Bokkelen
JOSEPH S. VAN BOKKELEN
UNITED STATES DISTRICT COURT

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