Adenta GmbH v. OrthoArm, Inc.

501 F.3d 1364, 84 U.S.P.Q. 2d (BNA) 1428, 2007 U.S. App. LEXIS 22315, 2007 WL 2713327
CourtCourt of Appeals for the Federal Circuit
DecidedSeptember 19, 2007
Docket2006-1571, 2006-1598
StatusPublished
Cited by42 cases

This text of 501 F.3d 1364 (Adenta GmbH v. OrthoArm, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Adenta GmbH v. OrthoArm, Inc., 501 F.3d 1364, 84 U.S.P.Q. 2d (BNA) 1428, 2007 U.S. App. LEXIS 22315, 2007 WL 2713327 (Fed. Cir. 2007).

Opinion

*1366 LOURIE, Circuit Judge.

OrthoArm, Inc. appeals from the decisions of the United States District Court for the Eastern District of Wisconsin denying its motion to dismiss this case for lack of subject matter jurisdiction and its motion, following a jury verdict, for judgment as a matter of law that claims 1-8 and 10-13 of U.S. Patent 6,257,883 (the “'883 patent”) are not invalid. Adenta GmbH v. OrthoArm, No. 04-C-905, 2006 WL 156753 (E.D.Wis. Jan. 20, 2006) (Jurisdiction Order); Adenta GMBH v. OrthoArm, No. 04-C-905, 2006 WL 1938654 (E.D.Wis. July 11, 2006) (JMOL Order). Adenta GmbH, Dr. Wolfgang Heiser, and Claus Schendell cross-appeal from the decision of the district court denying their request for a declaratory judgment that the case is exceptional. Because we determine that a case or controversy exists, we affirm the decision of the district court denying the motion to dismiss for lack of subject matter jurisdiction. Because we determine that substantial evidence exists in the record supporting the jury’s verdict that the asserted claims of the '883 patent are invalid based on a public use or sale under 35 U.S.C. § 102(b), we affirm the decision of the district court denying the motion for judgment as a matter of law. We affirm the district court’s decision that no inequitable conduct was shown, and we also affirm the decision of the district court denying Adenta’s motion to declare the case exceptional.

BACKGROUND

The '883 patent is directed to an orthodontic bracket. Orthodontic brackets are structures that adhere to the surface of a patient’s tooth and together with an ar-chwire comprise what is commonly referred to as “braces.” The patented bracket includes a means for opening a clip that holds the archwire in place. The inventor of the '883 patent is Dr. John Voudouris, who was the president of Orth-oArm. Voudouris assigned the patent to OrthoArm. In 2001, OrthoArm sued American Orthodontics Corporation (“American”) for infringement of the patent based on American’s sale of brackets. American manufactured and distributed brackets for Adenta GmbH (“Adenta”). Instead of proceeding with the litigation, American and OrthoArm entered into a Mutual Settlement Agreement (the “Settlement Agreement”), wherein OrthoArm assigned the '883 patent to American, and American agreed to pay OrthoArm a four percent royalty on its sales of a bracket, known as the Time bracket.

Thereafter, American asked Adenta to pay a part of the royalty obligation that it owed to OrthoArm under the Settlement Agreement. American and Adenta accordingly entered into a Royalty Sharing Agreement, wherein each party agreed to pay OrthoArm half of the four percent royalty obligation on sales of the Time bracket. American and Adenta also entered into a License Agreement that gave Adenta a license to sell another version of a bracket, known as the Evolution bracket. Under the terms of the License Agreement, Adenta owed American a four percent royalty on sales of the Evolution bracket.

Adenta later advised American and OrthoArm that it believed that the '883 patent was invalid and that it would stop paying royalties on sales of both the Time and Evolution brackets. American responded with a letter stating that a failure to pay royalties would constitute a breach of the License Agreement, and that in the event of such a breach, American would “pursue its available legal remedies to protect its rights” (the “American Letter”). Adenta thereafter filed a complaint in the *1367 District Court for the Eastern District of Wisconsin seeking a declaratory judgment that the '883 patent is invalid and unenforceable. Adenta alleged that the district court had subject matter jurisdiction because the American Letter constituted a threat of an imminent patent infringement suit. Adenta also alleged that the '883 patent was invalid on the ground that Wolfgang Heiser, an Austrian orthodontist, and Claus Sehendell, Adenta’s president, had publicly displayed or offered for sale a Time bracket at a Florida trade show in 1994. Adenta also alleged that the '883 patent was unenforceable based on improper inventorship and that inventor Voudouris allegedly knew of the Time bracket, but failed to disclose it to the United States Patent and Trademark Office (“PTO”) during prosecution of the '883 patent.

OrthoArm moved to dismiss the suit for lack of subject matter jurisdiction on the ground that Adenta never had a reasonable apprehension that it would be sued by American, and that Adenta and American conspired to contest the validity of the '883 patent. The district court noted that it could not “resolve the suit” without more documentation, but denied OrthoArm’s motion to dismiss. Thereafter, OrthoArm filed a renewed motion to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). After further consideration of the jurisdictional issue, the court denied the renewed motion. The case proceeded to trial on the invalidity and unenforceability issues.

During trial, Adenta argued that the claims of the '883 patent were invalid based on the public use or sale of its orthodontic bracket in 1994 at the 84th Annual Session of the American Association of Orthodontists in Orlando, Florida (the “Florida trade show”), which was held more than one year before the priority date of the '883 patent. The parties agreed that Exhibit 61, which was a photo of a bracket, represented the type of Time bracket that was allegedly shown at the trade show. Adenta presented testimony from five witnesses to verify that the type of bracket as depicted in Exhibit 61 was in fact displayed at the 1994 Florida trade show. Those witnesses were Sehendell and Heiser, who worked at Adenta; John Russell, who was a sales representative for Adenta’s brackets in England; Lee Tune-berg, who was a vice president at American; and inventor Voudouris.

Adenta also presented various documents to support its claim that the Time bracket of the type shown in Exhibit 61 was displayed at the 1994 Florida trade show. Those documents included: drawings of a bracket made by Heiser in 1992 and 1993 (Exhibit 23); a German patent application that disclosed the Time bracket filed March 3,1994 (Exhibit 52); the Florida Conference Exhibitor Guide (Exhibit 77); a fax dated June 1994 from Russell to Sehendell that asked if Heiser would come to Britain to discuss the Time bracket (Exhibit 12); a German article that included photos of the Time bracket (Exhibit 7); and a letter from Adenta’s German patent attorney to Adenta’s U.S. Patent attorney instructing the U.S. attorney to file an application on the Time bracket within a year of the 1994 Florida trade show (Exhibit 24).

The jury returned a verdict in favor of Adenta, finding that claims 1-8 and 10-13 of the '883 patent were invalidated by Adenta’s public use or sale of its bracket at the 1994 Florida trade show. The jury also found that there was no showing of inequitable conduct because Voudouris did not withhold material information from the PTO.

OrthoArm filed a motion for judgment as a matter of law asserting that Adenta had not met its clear and convincing bur *1368

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501 F.3d 1364, 84 U.S.P.Q. 2d (BNA) 1428, 2007 U.S. App. LEXIS 22315, 2007 WL 2713327, Counsel Stack Legal Research, https://law.counselstack.com/opinion/adenta-gmbh-v-orthoarm-inc-cafc-2007.