Trustees of Columbia University v. Roche Diag.

Page 90

272 F.Supp.2d 90

The TRUSTEES OF COLUMBIA UNIVERSITY IN the CITY OF NEW YORK, Plaintiff, v. ROCHE DIAGNOSTICS GMBH, formerly known as Boehringer Mannheim GmbH, Defendant.

No. C.A.93-11512-NG.

United States District Court, D. Massachusetts.

September 30, 2002.

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John A. Bauer, Fulbright & Jaworski, New York City, Peter F. Felfe, Fulbright & Jaworski, New York City, Cornelius J. Moynihan, Jr., Nixon Peabody, LLP, Boston, MA, Nicholas G. Papastavros, Nixon Peabody, LLP, Boston, MA, for Defendant.

Sarah C. Columbia, Choate, Hall & Stewart, Boston, MA, Rodney E. Gould, Rubin, Hay & Gould, Framingham, MA, Thomas F. Maffel, Griesinger, Tighe & Maffei, LLP, Boston, MA, Donna A. Tobin, Cooper & Dunham LLP, New York City, Norman H. Zivin, Cooper & Dunham LLP, New York City, for Plaintiff.

FINDINGS OF FACT/CONCLUSIONS OF LAW

GERTNER, District Judge.

TABLE OF CONTENTS
  I. INTRODUCTION ...........................................................95
 II. FINDINGS OF FACT .......................................................97
     A. The Axel Patents ....................................................97
     B. The Acts At Issue ...................................................97
        1. Manufacture of the Production Clone ..............................98
        2. Shipment Of "Bailed" EPO Production Cells ........................99
        3. Shipment Of Albumin-Free EPO .....................................99
        4. Freezing Of the EPO Production Clone ............................100
III. LEGAL ANALYSIS ........................................................100
     A. Infringement .......................................................100
        1. Did GI Directly Infringe The Axel Patents? ......................100
           a. Revision of Markman Findings With Respect To The Terms
                "Linked" and "Unlinked" ....................................100
           b. Did GI Directly Infringe Any Of The Unlinked Claims? .........101

              (1) Literal Infringement .........................................101
              (2) Doctrine Of Equivalents ......................................102
           c. Did GI Directly Infringe Any of the Linked Claims (Claims 54-73
               Of The '216 Patent)? ............................................103
        2. Did Roche Induce GI to Commit Any of the Allegedly Infringing
             Acts? .............................................................104
           a. Did Roche Induce GI To Make The EPO Production Clone
               MCB, Or MWCB? ...................................................104
           b. Did Roche Induce GI To Make Bulk EPO? ............................105
           c. Did Roche Induce GI to Freeze and Store the EPO Production
                Clone after GI Was Enjoined from Producing EPO? ................108
        3. Did Roche Directly Infringe The Axel Patents Under 35 U.S.C
             § 271(g)? ....................................................108
           a. Importing Albumin-Free EPO .......................................108
           b. Importing GI's "Bailed" Cells ....................................109
     B. Roche's Defenses .......................................................109
        1. Are Claims 54-73 Of The '216 Patent Invalid Because Of
             Obviousness? ......................................................109
        2. Are Claims 54-73 of the '216 Patent Barred By Inequitable Conduct
             By Columbia? ......................................................111
        3. Does Columbia Have Unclean Hands, or Did it Misuse its Patents
             with Anti-competitive Effect? .....................................112
        4. Did Columbia Grant An Implied License To GI And Roche? ..............114
        5. Are Columbia's Infringement Claims Barred By Laches? ................116
     C. Damages ................................................................117
        1. Was Roche's Infringement Willful? ...................................117
        2. Columbia's Damages ..................................................118
           a. Columbia's Damages For Roche's Inducing GI to Produce Bulk
                EPO ............................................................119
           b. Columbia's Damages For Roche's Shipping Albumin-Free EPO
                To GI ..........................................................120
           c. Columbia's Damages For Roche's Return Of Bailed Cells Of GI's
                EPO Production Clone ...........................................120
 IV. CONCLUSION ................................................................120

I. INTRODUCTION

This case involves an allegation by plaintiff Columbia University ("Columbia") of patent infringement against defendant Roche Diagnostics GmbH (formerly Boehringer Mannheim, GmbH) ("Roche"), a multinational pharmaceutical corporation having its principal place of business in Mannheim, Germany. In essence, Columbia claims that Roche induced or otherwise collaborated with Genetics Institute ("GI"), a United States company based in Cambridge, Massachusetts, to produce the drug Erythropoietin ("EPO")¹ using methods and products for which Columbia holds the patents. Columbia also alleges that Roche, without proper authority, imported into the United States products made by its patented processes.

The dispute revolves around U.S. Patent Nos. 4,399,216 ("the '216 patent"),² 4,634,665 ("the '665 patent"),³ and 5,179,017 ("the '017 patent")⁴ (collectively referred to as the "Axel patents").⁵ When Columbia obtained the first of the Axel patents, it broke new ground: It identified a process to produce important proteins, including glycoproteins such as EPO, by genetic engineering. But while the Axel patents have had a significant effect on the field of biotechnology over the last twenty years, the end of the patents' protection is near; the first will expire in 2003.

The Axel patents cover processes for inserting two genes into a host cell ("cotransformation") in which one of the genes encodes a marker protein, and the other gene encodes a protein of interest.⁶ The claims also cover the cell lines produced by the process of amplification and cotransformation, variously described hereafter as the EPO generating Chinese Hamster Ovary ("CHO") host cell, the production clone, or DN2-3α3. See Trustees of Columbia University in the City of New York v. Roche Diagnostics GmbH, 126 F.Supp.2d 16 (D.Mass.2000).⁷ However, the claims do not cover the protein of interest itself that is produced by the cell, EPO.

On December 11, 2000, I issued a Markman decision that construed key claim language in the Axel patents. Most crucially, based upon an analysis of the intrinsic evidence, I adopted Columbia's interpretation of the phrase "dominant selectable phenotype" found in claim 54 of the '216 patent.⁸ Id. at 31. In addition, construing conflicting Federal Circuit precedent, I found that the product-by-process claims were not limited to the product prepared by the process set forth in the claims of the Axel patents. Id. at 31-32.

On April 27, 2001, I resolved motions for summary judgment. See Trustees of Columbia University in the City of New York v. Roche Diagnostics GmbH, 150 F.Supp.2d 191 (D.Mass.2001). I granted summary judgment in favor of Roche on Columbia's claims of direct infringement under 35 U.S.C. 271(a) because there was no evidence that any infringing activities by Roche had occurred in the United States. Id. at 201-204. I also found that Roche's exporting of EPO and an EPO-generating cell line did not violate 35 U.S.C. 271(f), which prevents companies from circumventing the U.S. patent laws by exporting non-infringing components to be assembled abroad into a infringing final product. Roche's actions were beyond the intended scope of liability under Section 271(f). Id. at 204-205.

However, on the question of whether Roche was liable under 35 U.S.C. § 271(b) for inducing GI to infringe the Axel patents, I found that disputed questions of material facts remained.⁹

A jury waived trial was held before me on July 10, 2001, through July 31, 2001.

II. FINDINGS OF FACT

A. The Axel Patents

The Axel patents relate to processes for inserting two genes — a DNA I expressing a protein of interest and a DNA II expressing a protein conferring a selectable phenotype — into a recipient cell whereby the recipient cell incorporates and expresses both of the genes and makes the proteins encoded by the genes. The process of inserting these genes into a recipient cell whereby each of the genes is expressed is referred to as "cotransformation."

In addition, because the DNA II encodes a selectable phenotype, and cells that do not express DNA II will not survive, one can select for cells that incorporate and express DNA II. Thus, the Axel patents allow for the selection of cells which have successfully incorporated the gene encoding the protein of interest (DNA I). The Axel patents also disclose that if the DNA I and DNA II are genetically linked, then amplifying (i.e., increasing the number of copies of the gene) DNA II will also amplify DNA I.

For a more detailed description of the Axel patents and its claims, see Trustees of Columbia University, 126 F.Supp.2d. at 17-22.

B. The Acts At Issue

In April 1982, GI embarked upon a project to isolate the EPO gene, insert it into recipient cells, and express it in those cells. GI subsequently solicited pharmaceutical companies to help fund its research and commercialize its products worldwide. Trial Exhibits ("Trial Exs.") P138, P139. In June 1984, GI reached an agreement with Chugai Pharmaceutical Company, Ltd. ("Chugai") (the "GI-Chugai License Agreement"), in which the parties agreed to collaborate to "undertake a research and development project utilizing...