** NOT FOR PRINTED PUBLICATION **

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS
LUFKIN DIVISION

TYCO HEALTHCARE GROUP LP and §

UNITED STATES SURGICAL CORP., §
§
Plaintiffs, § Civil Action No. 9:09-CV-176
§
v. §
§ JUDGE KEITH F. GIBLIN
APPLIED MEDICAL RESOURCES CORP., §
§
Defendant. §

ORDER ON PENDING MOTIONS IN LIMINE

Plaintiff Tyco Healthcare Group LP filed suit against Defendant Applied Medical Resources

Corp. claiming infringement of United States Patent Nos. 5,304,143, 5,685,854, 5,603,702,

5,895,377, and 5,542,931.1 This Order is directed toward the parties’ pending motions in limine.

I. Tyco’s Motions in Limine [Doc. # 199, 9:06-cv-151]

A. Motion in Limine #1: Preclusion of Testimony, Evidence, or Argument Regarding Applied’s

Inequitable Conduct Defense or Counterclaim to the Jury.

Granted. Applied’s inequitable conduct counterclaims will be tried to the bench.

Inequitable conduct is a question of law. PerSpective Biosys., Inc. v. Pharmacia Biotech, Inc., 225

F.3d 1315, 1318 (Fed. Cir. 2000) (“The defense of inequitable conduct is entirely equitable in nature,

1
After a dispute over subject matter jurisdiction based on the ownership of the patents-in-
suit, the original case involving Tyco and Applied, 9:06-cv-151, was dismissed, while the co-
pending case filed by both Tyco and United States Surgical Corp. against Applied, 9:09-cv-176.
involving the same facts and patents, was permitted to proceed to trial. Certain motions filed in
9:06-cv-151 and pending when that case was closed, including the instant motion, were re-urged
in 9:09-cv-176.

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and thus not an issue for a jury to decide.”). While there are several different ways in which a district

court can deal with the issue of inequitable conduct during a jury trial—i.e., reserving the entire issue

to itself or submitting special interrogatories to the jury on the facts of materiality and intent—absent

a clear showing of prejudice or failure to achieve a fair trial, the trial court’s choice of procedure will

not be disturbed. Hebert v. Lisle Corp., 99 F.3d 1109 (Fed. Cir. 1996).

However, Applied suggests that it is entitled to discuss its inequitable conduct allegations

to the extent that the question of whether or not the Yoon reference (United States Patent No.

5,395,342 to Yoon) was presented to the PTO is relevant to its validity case. Applied cites Syntex

(U.S.A.) LLC v. Apotex, Inc., 407 F.3d 1371, 1383 (Fed. Cir. 2005) for the proposition that “a

challenger’s burden to show invalidity is more difficult to satisfy when prior art references have been

presented to the PTO.” See also Bausch & Lomb, Inc. v. Barnes-Hind/Hydrocurve, Inc., 796 F.2d

443, 447 (Fed. Cir. 1986). The Federal Circuit has emphasized that whether or not a reference was

before the PTO:

has no effect on the presumption [of validity] or on who has the burden of proof . . . Neither
does the standard of proof change; it must be clear and convincing evidence or its equivalent
. . . Deference is due the Patent and Trademark Office decision to issue the patent with
respect to evidence bearing on validity which it considered but no such deference is due with
respect to evidence it did not consider. All evidence bearing on the validity issue, whether
considered by the PTO or not, is to be taken into account by the tribunal in which validity
is attacked.

Am. Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1360 (Fed. Cir. 1984).

As discussed at length in the court’s June 26, 2009 Order Denying Tyco’s Motion for

Summary Judgment on Inequitable Conduct, the Yoon patent was introduced before the Board of

Patent Appeals and Interferences (“BPAI”) during an interference between the ‘854 Green patent

application and United States Patent No. 5,209,737 to Ritchart. The ‘737 patent was assigned to

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Applied. As per the agreement of the parties, the BPAI ultimately found there to be no interference-

in-fact, but directed the Examiner of the Green ‘854 application to consider, in a footnote, “the

patentability issues raised in Ritchart et al’s motion identified as . . . R-MOTN-14 in Paper No. 143

of this interference proceeding.” Doc. # 212, at 3. Paper No. 143 was the BPAI Administrative

Patent Judge’s decision on certain motions, which described R-MOTN-14 as “Ritchart et al’s request

for the Administrative Patent Judge to request Green to explain why prior art cited in Green’s

motions 1 and 13 does not render Green’s claims unpatentable.” Id. Green’s motion 13 cites the

Yoon patent to the BPAI, and R-MOTN-14 raises the issue of the patentability of the ‘854

application claims over, among others, the Yoon patent. It was undisputed that, with the exception

of the interference proceeding, the Yoon patent is not mentioned anywhere in the ‘854 patent’s file

history, nor was it disclosed during prosecution of the Smith ‘702 or ‘377 patents.

Under these facts, the only person who would be able to state for certainty whether the Yoon

reference was considered by the Examiner is the Examiner himself. This individual, Paul Hirsch,

is not on either party’s witness list. The court sees little advantage to allowing extended presentation

of only somewhat relevant evidence, which will ultimately be inconclusive regarding whether or not

the Yoon patent was before the Examiner during prosecution, at trial.

Therefore, because the dangers of confusion of the issues and waste of time substantially

outweigh the marginal probative value of this evidence under Rule 403, the court will grant Tyco’s

motion. All evidence of inequitable conduct, including whether the Yoon patent was before the

Examiner during prosecution, is excluded. A separate bench trial will be held on inequitable

conduct.

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B. Motion in Limine #2: Preclusion of Evidence, Testimony, or Argument Relating to the
Existence of Prior Patent Infringement Actions Between Tyco and Applied.

Denied. Tyco concedes—in bold and italicized font, no less—that Tyco “could not continue

to sell its marketed products covered by the ‘143, ‘854, ‘377, and/or ‘702 patents following the

permanent injunction in Applied I.” Doc. # 199, at 9 (emphasis in original). The value of these four

patents to a potential licensee is therefore less than it might normally be, and it is difficult for the

court to understand how the injunction entered into at the end of Applied I is not relevant to a

reasonable royalty analysis under Georgia-Pacific. The value of the Green and Smith patents, and

the amount of damages Tyco can obtain for any infringement of them, is inextricably linked to the

previous Tyco/Applied litigation.

Similarly, the facts that in Applied I and II, Tyco products which were the commercial

embodiment of the Green and Smith patents were found to infringe Applied’s ‘737, ‘553, and ‘336

patents, and that all three of Applied’s patents were found to be valid, is relevant to the willfulness

analysis. Applied’s argument is that it was reasonable, in light of the outcome of the Applied I and

II litigations, for it to develop the accused products without obtaining an opinion of counsel or

performing patent clearance may or may not have merit, but Applied’s belief cannot be analyzed in

a vacuum. Any potential prejudice to Tyco can be cured by an instruction directing the jury that it

may consider the evidence of prior litigation only for purposes of willfulness and damages.

C. Motion in Limine #3: Preclusion of Evidence, Testimony, or Argument Relating to Tyco’s

Alleged Non-Use of the Green and Smith Patents

Denied. For the reasons already discussed, Tyco’s non-use of the Green and Smith patents

is a consequence of the injunction entered at the end of Applied I. The ability of a potential licensee

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to use any license it obtained under the Green and Smith patents would factor into the amount it was

willing to pay under the Georgia-Pacific analysis and the ultimate value of the patents.

D. Motion in Limine #4: Preclusion of Evidence, Testimony, or Argument that Tyco did not
Properly Mark Products with the ‘143 and ‘702 Patent Numbers.

E. Applied’s Motion in Limine to Limit Tyco to Damages for Infringement Incurred After the
Suit was Filed for the Green Patents [Doc. # 54, 9:09-cv-176].

Denied. Patentees and their licensees must mark products covered by a patent with the

applicable patent number(s), or forfeit their entitlement to pre-suit damages. See 35 U.S.C. §

287(a)2; Amsted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 185 (Fed. Cir. 1994)

(construing “for or under” language in Section 287(a) to apply to licensees: “A licensee who makes

or sells a patented article does so ‘for or under’ the patentee, thereby limiting the patentee’s damage

recovery when the patented article is not marked.”).

Tyco has the burden to plead and prove at trial that it complied with the statutory

requirements of marking during the period of infringement, Sentry Protection Prods. Inc. v. Eagle

Mfg. Co., 400 F.3d 910, 918 (Fed. Cir. 2005), including the burden to prove proving the non-

existence of patented articles. See, e.g., Soverain Software LLC v. Amazon.com, Inc., 383 F. Supp.

2d 904, 908 (E.D. Tex. 2005); DR Sys., Inc. v. Eastman Kodak Co., 2009 WL 2632685 (S.D. Cal.

Aug. 24, 2009) (“Accordingly, between the parties, [patentee] Kodak is in the best position to

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“Patentees, and person making, offering for sale, or selling within the United States any
patented article for or under them . . . may give notice to the public that the same is patented. . .
In the event of failure so to mark, no damages shall be recovered by the patentee in any action for
infringement, except on proof that the infringer was notified of the infringement and continued to
infringe thereafter, in which event damages may be recovered only for infringement occurring
after such notice. Filing of an action for infringement shall constitute such notice.”

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introduce evidence as to whether the patented technology has been used in its products or those of

its licensees.”).

It is apparently undisputed that Tyco did not itself sell any products during the damages

period. Applied argues, however, that: (1) Tyco sold products covered by the ‘143 and ‘702 patents

during the period from 1994-97—although it stopped doing so after 1997—and failed to mark these

products with the appropriate patent numbers; and (2) USSC’s licensee—ConMed, by way of

Imagyn—sold products during the damages period that were covered by, but not marked with, the

Green patent numbers.3 As already noted, a licensee must mark products covered by a patent with

the applicable patent number, just as a patent owner must, or the patent owner is limited to pre-suit

damages. There is also case law to support the proposition that a patentee or licensee that sells non-

marked products covered by a patent then stops may nevertheless be limited to pre-suit damages

without actual notice. See, e.g., Northbrook Digital Corp. v. Browster, Inc., 2008 WL 4104695 at

3
Applied recently filed a motion for leave to file a late motion in limine, and a motion in
limine limiting Tyco to damages for infringement incurred after the suit was filed for the two
Green patents. According to Applied, to settle the USSC/Imagyn case—in which USSC accused
Imagyn’s Universal Converter trocar product of infringing the Green ‘143 patent—Imagyn and
USSC entered into a settlement agreement on October 15, 1999. The details of the
USSC/Imagyn case can be found in the court’s previous Order regarding subject matter
jurisdiction in 9:06-cv-151 [Doc. # 255]. In the Agreement, USSC gave Imagyn a covenant not
to sue for the covered products—including the Universal Converter product—and a license under
the Green ‘143 patent and continuations thereof (of which the Green ‘854 patent is one). The
Agreement had no provision on patent marking. ConMed purchased certain assets of Imagyn’s
in 2000-01, including the Universal Converter trocar product. ConMed also purchased the
USSC/Imagyn Settlement Agreement’s release and covenant not to sue in the transaction.
According to Applied, the ConMed Universal Converter product is a covered product under the
USSC/Imagyn settlement agreement which is not marked with the Green patent numbers. The
court will grant Applied’s motion for leave to file the motion in limine [Doc. # 53], but, for the
reasons discussed in this Order, will deny the motion in limine [Doc. # 54] at this time.

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*3 (D. Minn. Aug. 26, 2008); Alpex Computer Corp. v. Parker Bros., 1988 WL 507622 at *2 (D.

Mass. Aug. 12, 1988).4

It may very well be that Tyco is limited to pre-suit damages for some or all of the Green

patents and the Smith ‘702 patents based on a failure to mark. However, since the burden to prove

marking—or an absence of patented articles—rests on Tyco, it would be inappropriate to grant either

Tyco or Applied’s motion in limine regarding marking without first giving Tyco the opportunity to

present its case at trial. If Tyco cannot do so, the appropriate motion will be entertained at that time.

F. Motion in Limine #5: Preclusion of Any Testimony, Evidence, or Argument Relating to

Applied’s ‘553 Patent.

Denied. Partly for the reasons already discussed above, the ‘553 patent is relevant as to

damages. Both parties’ experts relied on a 1998 royalty agreement between Applied and Johnson

& Johnson licensing the ‘553 patent, and the ‘533 patent is relevant to the extent that it was one of

the patents involved in Applied I and II.

G. Motion in Limine #6: Preclusion of Any Testimony, Evidence, or Argument Relating to

Applied’s Purported Non-Infringing Alternatives.

Denied. Tyco relies on the court’s March 31, 2009 Order for its argument that Applied

cannot argue that non-infringing alternative products developed no earlier than 2007 can be

considered non-infringing alternatives for damages purposes. However, the court’s order was

concerned only with exclusion of nearly 5,000 pages as untimely under the Scheduling Order, and

discussed the relevance of 2007 (and later) non-infringing alternatives only insofar as it related to

whether the untimely documents would be permitted. After weighing all four of the relevant factors,

4
The parties should be prepared to cite cases and otherwise defend their position should
either of these issues arise at trial.

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the court concluded it did not. Therefore, to the extent that Tyco seeks to exclude any properly and

timely disclosed evidence of non-infringing alternatives that was not the subject of the March 31

Order, the motion is denied.

Because it seems likely to be an issue at trial, the court will caution Applied that non-

infringing alternatives that are distant in time from the hypothetical negotiations in 2002 and 2004

will not be permitted at trial.5 While the court does not see any problem with the 5 mm Spartan

trocars, which Applied states were available before the time of the hypothetical negotiation, Applied

should be very careful about seeking to introduce alternatives which were not commercially available

until long after 2002 or 2004. If Applied has properly and timely disclosed evidence of later in time

alternatives—which was not previously excluded by the March 31 Order—Applied should notify

the court before it seeks to introduce it so a determination regarding admissibility can be made

outside the presence of the jury.

H. Motion in Limine #7: Preclusion of Any Testimony, Evidence, or Argument Relating to

Group Purchasing Organizations, Bundling Contracts, or any Related Antitrust Issues.

Denied. Tyco has indicated its intention to offer testimony and evidence of lost sales as a

part of reasonable royalty calculation. Applied has the right to show that any increase in market sales

may be due to changing GPO standards instead of the allegedly patented features of the accused

products. Therefore, any evidence relating to GPOs and bundling contracts are relevant to a

reasonable royalty determination and will be allowed.

5
Of course, this does not preclude Applied from presenting properly and timely disclosed
evidence of non-infringing alternatives should Tyco open the door by arguing, for example, that
Applied had no such alternatives at any time.

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 II. Applied’s Motions in Limine [Doc. # 202, 9:06-cv-151]

A. Motion in Limine #1: Exclusion of Testimony of Patricia Williams

Denied as moot. Tyco has indicated to the court that it no longer plans to call Ms. Williams,

as the dispute over ownership of the patents-in-suit has been resolved.

B. Motion in Limine #2: Exclusion of Evidence or Argument Regarding Doctrine of

Equivalents

Denied. This request is in the nature of a motion to strike portions of Mr. Dubral’s

report/testimony or a motion for summary judgment as to the doctrine of equivalents, and is such is

inappropriate for a motion in limine. Mr. Dubral will be limited at trial to only the opinions

disclosed in his report and associated charts.

However, Applied is correct that Tyco is required to provide “particularized testimony and

linking argument as to the insubstantiality of the differences between the claimed invention and the

accused device, or with respect to the function, way, result test . . . on a limitation-by-limitation

basis.” AquaTex Indus. v. Techniche Sols., 479 F.3d 1320, 1328 (Fed. Cir. 2007). To the extent that

Tyco is not able to elicit such evidence from Mr. Dubral, who will, again, be limited to the

disclosures in his report only, the court will entertain a properly presented motion for judgment as

a matter of law on the doctrine of equivalents at the appropriate time.

III. Applied’s Motion in Limine to Limit Tyco to Damages for Infringement Incurred
After the Suit was Filed for the Green Patents [Doc. # 54, 9:09-cv-176]

For the reasons discussed above, the court will grant Applied leave to file this motion in

limine, but deny the motion in limine at this time.

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 IT IS THEREFORE ORDERED that Plaintiff Tyco Healthcare Group LP’s Motion in

Limine [Doc. # 199, 9:06-cv-151] is GRANTED IN PART.

.
IT IS FURTHER ORDERED that Defendant Applied Medical Resources Corp.’s Motion

in Limine [Doc. # 202, 9:06-cv-151] is DENIED.

IT IS FURTHER ORDERED that Applied’s Motion for Leave to File [Doc. # 53, 9:09-

cv-176] is GRANTED.

IT IS FURTHER ORDERED that Applied’s Motion in Limine to Preclude Plaintiffs

From Seeking Damages for Alleged Infringement of the Green Patents Prior to July 19, 2006

[Doc. # 54, 9:09-cv-176] is DENIED.

SIGNED this the 26th day of February, 2010.

____________________________________
KEITH F. GIBLIN
UNITED STATES MAGISTRATE JUDGE

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