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Depuy Orthopaedics, Inc. v. Orthopaedic Hospital

United States District Court, N.D. Indiana, Hammond Division

August 31, 2017

DEPUY ORTHOPAEDICS, INC., Plaintiff,
v.
ORTHOPAEDIC HOSPITAL, Defendant.

          OPINION AND ORDER

          JOSEPH S. VAN BOKKELEN UNITED STATES DISTRICT COURT

         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.

         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 “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 ...


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