D Del reversed in part in Arthrocare v. Smith & Nephew
Three patents of ArthroCare were at issue (US 5,697,536; 5,697,882; 6,224,592). ArthroCare sued Smith & Nephew for infringement; Smith & Nephew counterclaimed against ArthroCare and Ethicon, asserting a violation of antitrust law (stating that an earlier settlement between ArthroCare and Ethicon blocked other competitors). The trial was bifurcated.
A JURY determined that the patents were VALID and that Smith & Nephew infringed. The JUDGE dismissed Smith & Nephew's counterclaim under 12(b)(6) before Smith & Nephew could respond to the motion [!. As amazing as this seems, I had an improperly filed 12(b)(6) motion turned into a summary judgment motion AND ruled upon (unfavorably to me) IN ONE DECISION in D NJ. This stuff happens!]
As a first point, Smith & Nephew appealed the dismissal of the counterclaim, and prevailed. The CAFC cited Neitzke v. Williams, 490 US 319, 329 (1989). The CAFC also cited pertinent Third Circuit law (e.g., Oatess v. Sobelevich, 914 F.2d 428 (CA3 1990))[As an aside, in my case, I also cited the very clear Third Circuit law on this point, and lost at district court.] There is a great line in the ArthroCare case: "However, we note that the district court did not intend to issue a permanent injunction until after it disposed of the antitrust.." [!!]
As a second point, Smith & Nephew appealed the denial of judgment as a matter of law that the asserted claims of the '536 were anticipated. The CAFC disagreed with D Del about the disclosure of key claim elements in the cited prior art, and held that the evidence did show the claim elements in the prior art. The CAFC identified three errors in the legal reasoning of D Del:
1. There is no requirement that an anticipating reference disclose specific examples. The reference need only be enabling and describe the applicant's claimed invention sufficiently to have placed it in possession of a person of ordinary skill in the field [citing In re Paulsen, 30 F.3d 1475, 1479 (CAFC 1994)]
2. On the area of "conducting fluid," the district court ignored the teachings of conducting fluid in the CLAIMS of a prior art patent.
3. The district court improperly limited the teaching of a patent to its preferred embodiment. The CAFC cited: Ultradent, 127 F.3d 1065 (CAFC 1997).
The CAFC found that Smith & Nephew had shown by clear and convincing evidence that the asserted claims of the '536 patent were anticipated. This meant that the jury verdict was not supported by substantial evidence.