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Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc.

United States Court of Appeals, Federal Circuit

January 13, 2015

BARD PERIPHERAL VASCULAR, INC., AND DAVID GOLDFARB, M.D., Plaintiffs-Appellees, AND C.R. BARD, INC., Counterclaim Defendant-Appellee,
W.L. GORE & ASSOCIATES, INC., Defendant-Appellant

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[Copyrighted Material Omitted]

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Appeal from the United States District Court for the District of Arizona in No. 2:03-CV-00597-MHM, Judge Mary H. Murguia.


MICHAEL W. MCCONNELL, Kirkland & Ellis LLP, of Washington, DC, argued for plaintiffs-appellees and counterclaim defendant-appellee. With him on the brief were JOHN C. O'QUINN, WILLIAM H. BURGESS, DENNIS J. ABDELNOUR and LIAM P. HARDY; STEVEN C. CHERNY, of New York, New York; and JOHN L. STRAND, Wolf, Greenfield & Sacks, P.C., of Boston, Massachusetts.

JAMES W. PORADEK, Faegre Baker Daniels LLP, of Minneapolis, Minnesota, argued for defendant-appellant. With him on the brief were TIMOTHY E. GRIMSRUD; JARED B. BRIANT and LESLIE B. PRILL, of Denver, Colorado; and MICHAEL E. FLOREY and DEANNA REICHEL, Fish & Richardson P.C., of Minneapolis, Minnesota.

Before PROST, Chief Judge, NEWMAN and HUGHES, Circuit Judges., OPINION filed by Chief Judge PROST. Concurring opinion filed by Circuit Judge HUGHES., Dissenting opinion filed by Circuit Judge NEWMAN.


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[113 U.S.P.Q.2d 1381] Prost, Chief Judge.

W.L. Gore & Associates, Inc. (" Gore" ) appeals from the judgment of the United States District Court for the District of Arizona of willfulness in the infringement of U.S. Patent No. 6,436,135 (" '135 patent" ). For the reasons stated below, we affirm.


This dispute began with the filing of the 1974 patent application from which the '135 patent eventually issued--twenty-eight years later. The technology and patent claims that have been at issue are thoroughly discussed in this court's previous decisions involving the '135 patent and underlying application. See Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 670 F.3d 1171 (Fed. Cir. 2012) (" Bard I " ); Cooper v. Goldfarb, 240 F.3d 1378 (Fed. Cir. 2001) (" Cooper II " ); Cooper v. Goldfarb, 154 F.3d 1321 (Fed. Cir. 1998) (" Cooper I " ).

Briefly, the '135 patent relates to prosthetic vascular grafts made of highly-expanded polytetrafluoroethylene (" ePTFE" ). The ePTFE material is made of solid nodes of PTFE connected by thin PTFE fibrils. It is sold by Gore under the brand name " Gore-Tex." The patent generally covers a vascular graft formed by ePFTE that is thus homogeneously porous--a structure that allows uniform cell regrowth to establish a firm integration of the graft into the body. The different claims of the patent are directed to grafts made of ePTFE with varying internodal distances, which are also called fibril lengths.

In 2003, Bard Peripheral Vascular, Inc. (" BPV" ) and Dr. David Goldfarb filed suit against Gore for infringement of the '135 patent. A jury found the '135 patent valid and that Gore willfully infringed, and, in December 2010, the district court denied Gore's motions for judgment as a matter of law (" JMOL" ) reversing the verdict. Gore appealed, and, in February 2012, the panel affirmed. Bard I, 670 F.3d at 1193. The en banc court denied review but granted rehearing " for the limited purpose of authorizing the panel to revise the portion of its opinion addressing willfulness." Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 476 F.App'x 747 (Fed. Cir. June [113 U.S.P.Q.2d 1382] 14, 2012) (en banc). The panel accordingly vacated the parts of its opinion discussing

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willfulness and allowing enhanced damages and attorneys' fees. Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 682 F.3d 1003, 1005 (Fed. Cir. 2012) (" Bard II " ). It held that as to the threshold determination of willfulness, " the objective determination of recklessness, even though predicated on underlying mixed questions of law and fact, is best decided by the judge as a question of law subject to de novo review." Id. at 1007. The panel remanded " so that the trial court may apply the correct standard to the question of willfulness in the first instance." Id. at 1008.[1]

On remand, the district court again found that, in view of Bard II, it was " clear to this Court, just as it was to the jury, that Defendant, as a 'reasonable litigant,' could not have 'realistically expected' its defenses to succeed." Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., No. 03-0597, 2013 WL 5670909, at *12 (D. Ariz. Oct. 17, 2013) (order denying JMOL on willful infringement) (" Bard III " ). Gore appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(1).


Gore argues that at the time of suit, neither BPV nor Goldfarb had standing to sue for infringement of the '135 patent. Gore thus seeks to vacate the district court's judgment in its entirety and to have the case dismissed for lack of jurisdiction. The crux of Gore's argument is that at the time the suit was filed, only C.R. Bard, Inc. (" Bard Inc." ) could have possessed standing to sue. We reject that argument.

In 1980, Goldfarb--who was the inventor and original assignee of the '135 patent's application--entered into a license agreement with Bard Inc. involving the application and any patents that might issue. Gore argues that in that agreement, Goldfarb granted all substantial rights to the patent--thereby resulting in a virtual assignment to Bard Inc. In 1996, Bard Inc. acquired IMPRA, which later became a wholly owned subsidiary, BPV, and in September, Bard Inc. transferred its interest in the 1980 agreement to BPV. Gore argues that because there is no evidence of a written instrument effecting the transfer of the interest to BPV, BPV did not in fact acquire standing to sue for infringement. In sum, Gore contends that both plaintiffs lacked standing: Goldfarb, because he had virtually assigned his rights to Bard Inc., and BPV, because Bard Inc. had not properly transferred its rights.

Gore raised this argument on standing twice before at the district court--prior to its first appeal in this case. Gore first filed a pre-trial JMOL motion on standing, which the district court denied. Gore again raised the issue as a post-trial JMOL motion, which the district court again denied. The district court's discussion of the standing issue and denial of Gore's motion was contained in the same March 31, 2009 opinion and order denying Gore's various other JMOL motions that Gore appealed to this court. In that appeal, although the issue was not raised in briefing, the panel confirmed that the district court had jurisdiction under 28 U.S.C. § 1338(a). Bard I, 670 F.3d at 1178.

Gore does not claim that there exists any material difference between the argument it raised before the district court then and that it now raises on this appeal. Indeed, in its first appeal, Gore conceded that the district court had jurisdiction.

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Brief for Appellant at 1, Bard I, 670 F.3d 1171 (Fed. Cir. 2012), 405 F.App'x 501, 2010 WL 4853331. Instead, Gore contends that we are not bound by the prior panel's determination on standing, based on the fundamental principle that " [t]he question of standing is not subject to waiver" because " [t]he federal courts are under an independent obligation to examine their own jurisdiction." See United States v. Hays, 515 U.S. 737, 742, 115 S.Ct. 2431, 132 L.Ed.2d 635 (1995).

The " party invoking federal jurisdiction bears the burden of establishing" standing at any stage of the litigation. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). In this case, Gore challenged the plaintiffs' standing at the district court. The district court determined that the plaintiffs met their burden and had established standing. On appeal, this court again confirmed that the plaintiffs had standing. Gore argues that because it did not brief the issue on appeal, and the prior panel did not discuss the issue of standing, the standing issue has yet to be resolved with finality.

As an initial matter, however, we have no reason to assume that the prior panel did not weigh standing. This was not a case in [113 U.S.P.Q.2d 1383]which a standing issue remained dormant in facts buried deep in the record, or which was not recognized by either party or the trial court. While Gore's briefs in that appeal did not raise the standing issue, the district court's opinion discussing Gore's standing challenge were attached to the opening brief as required pursuant to Federal Circuit Rule 28(a)(12). Had the prior panel seen merit in Gore's standing challenge, it could have asked for additional briefing, as this court has done in other cases. See, e.g., Consumer Watchdog v. Wis. Alumni Research Found., No. 13-1377 (Fed. Cir. Nov. 14, 2013) (order requesting supplemental briefing on the issue of appellant's standing) ECF No. 29. We are bound, therefore, by the prior panel's determination that the plaintiffs had standing and that the district court had jurisdiction. See Gould, Inc. v. United States, 67 F.3d 925, 930 (Fed. Cir. 1995) ( " The law of the case is a judicially created doctrine, the purposes of which are to prevent the relitigation of issues that have been decided and to ensure that trial courts follow the decisions of appellate courts." ).

To be sure, there are exceptional circumstances in which a panel may not adhere to the decision in a prior appeal in the same case, when " (1) the evidence in a subsequent trial is substantially different; (2) controlling authority has since made a contrary decision of the law applicable to the issues; or (3) the earlier ruling was clearly erroneous and would work a manifest injustice." Id. This is not such a case. Gore raises no new facts in this appeal and seeks only to relitigate the same standing theory that the district court rejected before. Gore does not point to any change in the relevant law. This is also not a case in which the district court made findings on remand that " undermine" the prior appellate affirmance of standing. Pub. Interest Research Grp. of N.J., Inc. v. Magnesium Elektron, Inc., 123 F.3d 111, 117 (3d Cir. 1997). And, we see no clear error in the previous decision on standing that would warrant an extraordinary review at this stage.

Indeed, on the merits, this is an easy question. We review de novo the district court's determination of a party's standing, while reviewing any factual findings relevant to that determination for clear error. SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1377 (Fed. Cir. 2007). Gore's argument hinges on the absence of a written instrument transferring

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to BPV what it contends was the virtual assignment from Goldfarb to Bard Inc. See Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1250 (Fed. Cir. 2000) (holding that a written instrument was needed to document the " transfer of proprietary rights" to support standing to sue for patent infringement); 35 U.S.C. § 261 (" Applications for patent, patents, or any interest therein, shall be assignable by law in an instrument in writing." ) (emphases added). However, BPV has never claimed that in 2003 it had all substantial rights to the '135 patent.[2] BPV's position is only that it was an exclusive licensee with the right to sue for infringement. It is well established that the grant of a license does not need to be in writing. See Waymark Corp. v. Porta Sys. Corp., 334 F.3d 1358, 1364 (Fed. Cir. 2003) (" Only assignments need be in writing under 35 U.S.C. § 261. Licenses may be oral." ); Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1552 (Fed. Cir. 1995) (en banc) (holding that to be an exclusive licensee a party may rely on either an express or implied promise of exclusivity). In any event, in 1997 there was a memorialized transfer of the exclusive license from Goldfarb and Bard Inc. to BPV's predecessor. We agree with the district court that this 1997 agreement between the parties settles BPV's right to sue at the time of the complaint as Goldfarb's exclusive licensee. Bard III, [WL] at *19-20.

BPV and Goldfarb thus readily meet their burden to establish standing. For Gore to prevail, it would have to establish each of the following propositions: (1) the 1980 agreement that was styled as an " exclusive license" between Goldfarb and Bard Inc. was in fact a virtual assignment, and (2) Bard Inc.'s transfer of its rights to BPV under the agreement failed because it was not in writing. We see no error in the district court's well-reasoned analysis on the first point--inter alia, Goldfarb retained significant reversionary rights, there was a field of use restriction, and Goldfarb retained the right to share in damages. [113 U.S.P.Q.2d 1384] See Id. at *15. There was no basis, therefore, to conclude that Goldfarb had transferred " all substantial rights" to Bard. See Abbott Lab. v. Diamedix Corp.., 47 F.3d 1128, 1132 (Fed. Cir. 1995) (finding that even limited rights retained by the patentee made it a necessary party in any subsequent infringement suit). But even if Gore could get past those first shoals, it would founder at the second. Gore argues that since Bard represents that it transferred its entire interest in the 1980 agreement to BPV, if that interest were a virtual assignment, then the transfer would fail without a written agreement. But, there is no question that in 1997, there was a written agreement between the parties affirming Bard's transfer of its rights to BPV. Gore argues that our case law prevents such a retroactive agreement--but for support of this proposition, all Gore cites is precedent in which we considered agreements that were executed after the suit was filed, such as Mars, Inc. v. Coin Acceptors, Inc., 527 F.3d 1359 (Fed. Cir. 2008). Here, by contrast, the 1997 memorialization occurred years before the suit was filed. The 1997 agreement was not a nunc pro tunc written agreement that occurred after the complaint. Compare, e.g., Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1366-67 (Fed. Cir. 2010); Enzo APA & Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1093

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(Fed. Cir. 1998). Accordingly, the plaintiffs had standing at the time of the complaint, and the district court had jurisdiction pursuant § 1338(a). We turn, then, to Gore's appeal on the merits.


To establish willful infringement, the patentee has the burden of showing " by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent." In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc) cert denied 552 U.S. 1230, 128 S.Ct. 1445, 170 L.Ed.2d 275 (2008). " The state of mind of the accused infringer is not relevant to this objective inquiry." Id. Only if the patentee establishes this " threshold objective standard" does the inquiry then move on to whether " this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer." Id. While this second prong of Seagate may be an issue of fact, the threshold determination of objective recklessness requires " objective assessment" of the accused infringer's defenses. Bard II, 682 F.3d at 1006. In Bard II we held that objective recklessness, even though " predicated on underlying mixed questions of law and fact, is best decided by the judge as a question of law subject to de novo review." Id. at 1007.[3] Even when underlying factual issues were sent to the jury in the first instance--such as in this case--" the judge remains the final arbiter of whether the defense was reasonable." Id. at 1008 (emphasis added).

Accordingly, under Bard II, we review de novo the district court's determination whether Gore's " position is susceptible to a reasonable conclusion of no infringement." Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1310 (Fed. Cir. 2011). Objective recklessness will not be found where the accused infringer has raised a " substantial question" as to the validity or noninfringement of the patent. Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., 620 F.3d 1305, 1319 (Fed. Cir. 2010); DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314, 1336 (Fed. Cir. 2009).

On remand, the district court evaluated several defenses raised by Gore and determined that none of them were objectively reasonable. On appeal, Gore appeals only its determination with respect to Gore's inventorship defense. This defense arises from the decades-long record, which includes parallel examination of Gore's and Goldfarb's patent applications on vascular grafts made of ePTFE, an interference declared in 1983 between the applications, which we reviewed in Cooper I and Cooper II, as well as the infringement proceedings [113 U.S.P.Q.2d 1385] in this case that were finally resolved--except as to the issue of ...

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