Niazi Licensing Corporation v. St. Jude Medical S.C., Inc.

Background

Niazi Licensing Corporation (NLC) owns United States Patent No. 6,638,268, which covers a double-catheter system designed for use in the coronary sinus and methods for using that system. NLC alleges that St. Jude infringed the patent directly and indirectly. Earlier in the case, the court determined that several claims were indefinite, leaving Claim 11 as the only remaining method claim. The court also construed Claim 11 to require that its steps be performed in the listed order and construed “the catheter” to mean “the double catheter.”

NLC and St. Jude filed competing motions to exclude expert testimony. NLC sought to exclude St. Jude’s technical expert, Dr. Arthur Erdman. St. Jude sought to exclude NLC’s technical expert, Dr. Martin Burke, and damages expert, Brad Carlson. St. Jude also asked the court to reconsider its earlier construction of “the catheter.”

NLC’s Motion Concerning Dr. Erdman

The court denied NLC’s motion to exclude Dr. Erdman. NLC argued that Dr. Erdman was not qualified to testify about the medical procedure for implanting permanent pacing leads because he was not a medical doctor or electrophysiologist and had not performed or witnessed that procedure.

The court explained that St. Jude offered Dr. Erdman primarily as an engineering expert on non-infringement, invalidity, and the material properties and physical capabilities of the catheter components involved in Claim 11. Dr. Erdman has a Ph.D. in mechanical engineering, 45 years of experience in mechanical design, bioengineering, medical-device and product design, and experience designing catheters. The court found that his education and experience matched the subjects of his proposed testimony. Any concerns about gaps in his experience or the factual basis for his opinions could be addressed through cross-examination rather than excluding his testimony.

St. Jude’s Motion Concerning Dr. Burke

The court denied St. Jude’s motion to exclude Dr. Burke’s opinions and testimony. St. Jude argued that Dr. Burke did not understand the difference between direct and indirect patent infringement. The court rejected that argument because NLC offered Dr. Burke as an electrophysiology expert concerning the medical procedure for implanting pacing leads, not as an expert on patent law. St. Jude did not challenge Dr. Burke’s technical qualifications in the relevant field.

St. Jude also argued that Dr. Burke’s opinions should be excluded because he had not personally read the court’s claim-construction order. The court found that Dr. Burke had received the relevant claim construction from counsel and that St. Jude had not shown why this preparation method made his opinions inadmissible.

St. Jude further argued that Dr. Burke applied Claim 11’s required sequence incorrectly and failed to apply the court’s construction of “the catheter.” The court acknowledged that expert testimony conflicting with or ignoring a claim construction may be excluded. But after reviewing Dr. Burke’s reports and deposition testimony, the court found that his report applied the required sequence and treated “the catheter” as the double catheter, consisting of inner and outer catheters. The court treated inconsistencies between his report and deposition testimony as matters for cross-examination and the weight of his opinions, not grounds for exclusion.

St. Jude’s Motion Concerning Carlson

The court granted in part and denied in part St. Jude’s motion concerning Carlson. It granted the motion as to Carlson’s opinions and testimony about the royalty base and excluded those opinions. The court denied the motion in all other respects.

A royalty base is the amount or value used to calculate a reasonable royalty for patent infringement. The court explained that when a patent does not cover an entire product, damages must be apportioned, meaning the damages analysis must separate the value of the patented features from the value of unpatented features. NLC agreed that the entire-market-value rule did not apply.

Carlson identified the smallest salable patent-practicing unit as an outer catheter, an inner catheter, a guide wire, and a lead because those components were recited in Claim 11. But the court found that Carlson did not separate the value of the claimed method from the value of unpatented features in those components. In particular, the patent covered a method for placing an electrical lead using a double catheter, not the lead itself, and the patent did not teach or disclose the lead’s electrical features.

The court also rejected Carlson’s method of limiting sales of outer catheters and leads to the number of inner-catheter sales. Although that reduced the royalty base, the court found no logical connection between the reduction and the portion of the components’ value attributable to the patented method. Carlson also did not apportion the value through an adjustment to the royalty rate. The court therefore concluded that his royalty-base opinions did not comply with the required apportionment principles.

Request for Reconsideration

The court denied St. Jude’s request to reconsider the earlier construction of “the catheter.” Under the district’s local rules, a party generally must first obtain the court’s permission before filing a reconsideration motion. St. Jude had not sought or received that permission, so the request was not properly before the court.

Order

The court denied NLC’s motion to exclude Dr. Erdman’s expert testimony. It granted in part and denied in part St. Jude’s motion concerning Dr. Burke and Carlson: Carlson’s royalty-base opinions and testimony were excluded, while the motion was denied in all other respects. The court also denied St. Jude’s request for reconsideration.