Medical Designs, Inc. v. Medical Technology, Inc.

786 F. Supp. 614, 1992 U.S. Dist. LEXIS 2625, 1992 WL 41625
CourtDistrict Court, N.D. Texas
DecidedFebruary 3, 1992
DocketCiv. A. CA-4-84-188-AG
StatusPublished
Cited by2 cases

This text of 786 F. Supp. 614 (Medical Designs, Inc. v. Medical Technology, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Medical Designs, Inc. v. Medical Technology, Inc., 786 F. Supp. 614, 1992 U.S. Dist. LEXIS 2625, 1992 WL 41625 (N.D. Tex. 1992).

Opinion

MEMORANDUM OPINION

McGLINCHEY, United States Magistrate Judge.

This action was tried before United States Magistrate Judge Alex H. McGlinchey, without a jury, by consent of the parties and pursuant to the March 25, 1991 Order of Reference from United States District Judge, David O. Belew, Jr., [Title 28, United States Code, Section 636(c) ], and in accordance with the appellate direction of Archie v. Christian, 808 F.2d 1132, 1137 (5th Cir.1987). All post-trial pleadings and proposed findings of fact and law have been filed. The Magistrate Judge has duly considered the testimony and exhibits introduced at trial, all pre-trial and post-trial pleadings, and now finds the following: Jurisdiction

The Court has jurisdiction over this action under Title 35, United States Code, Section 100, et seq. and Title 28, United States Code, Section 1338(a); venue is proper under Title 28, United States Code, Section 1400.

Parties

The plaintiff, Medical Designs, Inc., is a Texas corporation. The defendant, Medical Technology, Inc., is a Texas corporation. Individual defendant, Gary Bledsoe, is a former employee and a forty-nine percent (49%) stockholder in Medical Designs, Inc. as well as a founder, Chief Executive Officer and a seven percent (7%) stockholder in Medical Technology, Inc. Third party de *617 fendant, Floyd Hutson, is a founder, president and a fifty-one percent (51%) stockholder in Medical Designs, Inc.

Contentions

Plaintiff, Medical Designs, Inc. (MDI), asserts Medical Technology, Inc. (MTI) and Gary Bledsoe (Bledsoe) are infringing United States Patent No. 4,407,276 (the ’276 patent) entitled “Brace for Articulated Limbs” or both the ’276 patent and United States Patent Des. 269,379 (the ’379 patent) entitled “Articulated Knee Brace” by selling the following braces: Bledsoe Brace, Bledsoe Post-Op Brace, Bledsoe Colorado Special/Rehab Brace, Bledsoe Brace II, Bledsoe Adjustable Brace, and the Bledsoe Lever-Lock Brace. Plaintiff seeks damages adequate to compensate MDI for infringement, in no event less than a reasonable royalty, attorneys fees, and an injunction against MTI and Bledsoe from further infringement.

MTI asserts the ’276 and the ’379 patents are invalid under Title 35, United State Code, Sections 102 and/or 103, or in the alternative the ’276 and/or ’379 patents are unenforceable. MTI further asserts that if the patents are found to be valid and enforceable, MTI and Bledsoe did not infringe the patents.

Background

Gary Bledsoe began working initially for Hutson & Associates, Inc., primarily a manufacturers’ representative, in late November or early December of 1979 as an independent sales representative. On or about May 19 or 20, 1980 Floyd Hutson and Gary Bledsoe, on behalf of Hutson and Associates, were at Biomet, an orthopedic product company, in Warsaw, Indiana. During a meeting at Biomet, Bledsoe drew for Hut-son and Roy Harroff a rough sketch of a leg brace that he described as a hinged knee immobilizer. The sketch for Harroff evolved into the ’276 patent. After explaining the concept to Hutson and Harroff, Bledsoe asked Harroff if Biomet could make a prototype from the sketch. Bledsoe was not pleased with the Biomet prototype that was shipped August 30, 1980 and consequently proceeded to fabricate his own prototypes beginning in October of 1980.

MDI was formed January 1981 for the purpose of developing, manufacturing and selling what became the ’276 and ’379 knee braces. Bledsoe is the inventor of the ’276 and ’379 patents. Bledsoe assigned his rights to these inventions to MDI on January 21, 1981 and December 30, 1980 respectively. On April 11,1982 Bledsoe left MDI. During late April and May of 1982 Bledsoe and others formed MTI. Bledsoe prepared a prospectus for potential investors in MTI in which he stated his belief that the ’276 patent would not issue. All claims were initially rejected by the Patent and Trademark Office (PTO) March 2, 1982. The Bledsoe family owns 49% of the stock of MTI; Gary Bledsoe is the owner of 7% of the 49%. MTI was backed by a group of investors including several physicians and others who put up starting capital. These investors hold the other 51% of the stock in MTI.

Pre-Trial History

This cause of action was filed May 18, 1984. On July 12, 1984 MTI answered, filed a third-party complaint against Floyd Hutson and counterclaims against MDI urging the court to declare ’276 and ’379 invalid, unenforceable, not infringed, and to award attorney fees. This case was stayed February 19, 1986, pending a final decision in a related state court case. On March 4, 1987 this case and Civil Action No. CA-4-87-140-E were consolidated. On November 16, 1989 this consolidated case was reopened. Gary Bledsoe was made a party to this action February 15, 1991. On March 25, 1991 this cause of action was referred to United States Magistrate Judge Alex H. McGlinchey for the conduct of all further proceedings and the entry of judgment in accordance with Title 28, United States Code, Section 636(c).

Prior to trial, the court denied motions for summary judgement and a motion in limine, i.e., finding in this case the equitable doctrine of assignor estoppel did not apply.

Assignor estoppel is an equitable doctrine that prevents an individual and *618 those in privity with him from invalidating his own invention. This equitable doctrine is mainly concerned with the balance of the equities between the parties. Shamrock Technologies v. Medical Sterilization, 903 F.2d 789 (Fed.Cir.1990) citing Diamond Scientific Co. v. Ambico, Inc., 848 F.2d 1220, 1224 (Fed.Cir.1988) cert. dismissed, 487 U.S. 1265, 109 S.Ct. 28, 101 L.Ed.2d 978 (1988). The four primary justifications for applying assignor estoppel are (1) to prevent unfairness and injustice; (2) to prevent one from benefiting from his own wrong; (3) by analogy to estoppel by deed in real estate; and (4) by analogy to a landlord-tenant relationship. Diamond Scientific Co., 848 F.2d at 1224. In this case the application of assignor estoppel would allow MDI and Hutson to benefit from MDI’s wrongdoing, proceeding with their patent application without calling to the attention of the PTO examiner material prior art. It would be unjust and unfair to apply assignor estoppel to Bledsoe and MTI because neither has done any wrong in connection with the ’276 or ’379 patents in suit.

In a proper case general principles of equity may preclude use of assignor estoppel to bar a viable equitable defense arising from post-assignment events. Buckingham Prods. Co. v. McAleer Mfg. Co., 108 F.2d 192, 195 (6th Cir.1939).

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