U.S. International Trade Commission

In the Matter of

Publication 4111 November 2009

Washington, DC 20436

Investigation No. 337-TA-569

Certain Endoscopic Probes For Use In 

Argon Plasma Coagulation Systems
U.S. International Trade Commission

Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

COMMISSIONERS 

Shara L. Aranoff, Chairman 

Daniel R. Pearson, Vice Chairman 

Deanna Tanner Okun 

Charlotte R. Lane 

Irving A. Williamson 

Dean A. Pinkert 
U.S. International Trade Commission

Washington, DC 20436 

www.usitc.gov

In the Matter of

Publication 4111 November 2009

Investigation No. 337-TA-569

Certain Endoscopic Probes For Use In 

Argon Plasma Coagulation Systems


registration”). The complaint also alleged that a domestic industry exists and/or is in the process of being 

established, with regard to the ‘745 patent and the ‘630 registration under subsection (a)(2). The notice 

of investigation named Canady Technology, LLC of Hampton, Virginia (“Canady USA”); Canady 

Technology Germany GmbH of Germany (“Canady Gmbh”); and KLS Martin as the respondents. The 

complaint requested that the Commission institute an investigation pursuant to Section 337 and, after the 

investigation, issue a permanent exclusion order and a permanent cease and desist order. The 

investigation has been terminated as to KLS Martin on the basis of a settlement agreement. 

On January 16,2008 the administrative law judge issued a final ID finding no violation of 

section 337 in this investigation. The ALJ found no violation of section 337 through the importation or 

sale for importation of argon plasma probes sold by the Canady in the United States. In particular, the ID 

found that the Canady probes do not directly infringe the ‘745 patent; that even if there were direct 

infringement there is no contributory infringement or inducement to infringe the ‘745 patent by Canady; 

that ERBE has not shown that there is a domestic industry with respect to the ‘745 patent because the 

ERBE products are not used to practice its claims; and that the ‘745 patent is not invalid. 

On January 28,2008, ERBE filed its petition for review of the ID, challenging the ALJ’s findings 

with respect to no infringement of the ‘745 patent and the absence of a domestic industry. Canady filed 

its Contingent Petition for review of the ID on January 29,2008. 

Having examined the record of this investigation, including the ALJ’s final ID and the 

submissions of the parties, the Commission has determined to review the portions of the ALJ’s 

determination relating to the construction of the phrase “predetermined minimum safety distance” the 

associated findings on infiingement and domestic industry. On review, the Commission has determined 

to take no position with respect to these issues, and to affirm the ALJ’s determination of no violation of 

section 337. 

This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended, 19 

U.S.C. tj 1337, and Commission rule 210.42, 19 C.F.R. tj 210.42. 

By order of the Commission. w??!!? Marilyn R. A 

Secretary to the Commission 

Issued: March 17,2008 

-2- 
CERTAIN ENDSCOPIC PROBES FOR USE IN, 

COMPONENTS ARGON PLASMA COAGULATION 

SYSTEMS 

3 3 7-TA-569 

PUBLIC CERTIFICATE OF SERVICE 

I, Marilyn R. Abbott, hereby certifL that the attached NOTICE OF COMMISSION 

DECISION TO REVIEW IN PART AN INITIAL DETERMINATION AND ON 

REVIEW TO AFFIRM THE ADMINISTRATIVE LAW JUDGE’S 

DETERMINATION THAT THERE IS NO VIOLATION OF SECTION 337 has 

been served by hand upon the Commission Investigative Attorney, Jeffrey Hsu, Esq., 

and the following parties as indicated, on March 18, 2008 

500 E Street, SW 

Washington, DC 20436 

COUNSEL FOR COMPLAINANTS ERBE 

ELEKTRONMEDIZIN GmbH AND ERBE USA, INC.: 

Philip G. Hampton, 11, Esq. 

Laurence E. Fisher, Esq. 

Steven M. War, Esq. 

DICKSTEIN SHAPIRO MORIN & OSHINSKY LLP 

1825 Eye Street, NW 

Washington, DC 20006-5403 

( ) Via Hand Delivery 

( ) Via Overnight Mail (v Via First Class Mail 

( ) Other: 

P-202-420-2200 

F-202-420-220 1 

ON BEHALF OF RESPONDENTS CANADY 

TECHNOLOGY LLC AND CANADY TECHNOLOGY 

GERMANY GmbH: 

Timothy R. DeWitt, Esq. 

24 IP Law Group USA, PLLC 

12 E. Lake Drive 

Annapolis, MD 21403 

P-703-340-1686 

F-703-340-1687 

( ) Via Hand Delivery 

( ) Via Overnight Mail 8 ViJirst Class Mail 
Page 2 - Public Certificate of Service 

337-TA-569 

RESPONDENT: 

KLS Martin GmbH & Co. KG 

Am Gansacker 1B 

79224 Umkirch 

Germany 

( ) Via Hand Delivery 

( ) Via Overnight Mail 

Via First Class Mail 

( )Other: 

TABLE OF CONTENTS 

I . INTRODUCTION ....................................................... 2 

A . ProceduralHistory ................................................. 2 

1 . InGeneral .................................................. 2 

2 . Motion for Sanctions ......................................... 7 

B . TheParties ....................................................... 9 

1 . Complainants ............................................... 9 

2 . Respondents ................................................ 9 

Overview of the Technology ........................................ 10 

The Patent at Issue - The ‘745 Patent ................................. 10 

The Products at Issue .............................................. 12 

1 . ERBE’sProducts ........................................... 12 

2 . Canady’s Products .......................................... 12 

C . 

D . 

E . 

I1 . JURISDICTION AND IMPORTATION ..................................... 13 

A . Subject Matter Jurisdiction ......................................... 13 

B . Personal Jurisdiction .............................................. 13 

I11 . STANDARDS OF LAW ................................................. 14 

A . Claim Construction ............................................... 14 

B . Infringement ..................................................... 19 

1 . Literal Infringement ......................................... 19 

2 . Infringement Under the Doctrine of Equivalents ................... 20 

3 . Indirect Infringement ........................................ 20 

C . Domestic Industry - Technical Prong .................................. 21 

D . Validity ......................................................... 22 

1 . Anticipation, 35 U.S.C. $9 102 (a) and (b) ....................... 23 

2 . Obviousness, 35 U.S.C. 0 103 (a) .............................. 24 

IV . CLAIM CONSTRUCTION ............................................... 27 

A . AssertedClaims .................................................. 27 

B . DisputedClaimTerms ............................................. 30 

1 . “predetermined minimum safety distance” (claims 1 and 35) ........ 30 

2 . “sidewardly” (claims 1 and 35) ................................ 41 

3 . “working channel” (claims 1 and 35) ........................... 42 

V . INFRINGEMENT ...................................................... 48 

Direct Infringement ............................................... 49 

1 . Claimsland35 ............................................ 50 

2 . Claims3.4.11.13.38. 39 .................................... 70 

Indirect Infringement .............................................. 70 

1 . Contributory Infringement .................................... 70 

2 . Inducement ................................................ 77 

A . 

B . 
VI . DOMESTIC INDUSTRY ................................................ 81 

VI1 . VALIDITY ............................................................ 93 

A . Anticipation ..................................................... 93 

B . Obviousness ..................................................... 97 

VI11 . UNENFORCEABILITY . PATENT EXHAUSTION ........................... 99 

CONCLUSIONS OF LAW .................................................... 101 

RECOMMENDED DETERMINATION ON REMEDY AND BOND .................. 103 

I . RemedyandBonding ................................................... 103 

A . Limited Exclusion Order .......................................... 103 

B . CeaseandDesist ................................................ 103 

C . Bond During Presidential Review Period ............................. 104 

.. 

11 
LIST OF ABBREVIATIONS 

CDX 

CFF 

CIB 

Complainants’ demonstrative exhibit 

Complainants’ proposed findings of fact 

Complainants’ initial post-hearing brief 

CORFF 

COSFF 

CPX 

Complainants’ objections to Respondents’ proposed findings of fact 

Complainants’ objections to Staffs proposed findings of fact 

I Complainants’ physical exhibit 

CRB 

cx 

Complainants’ reply post-hearing brief 

Complainants’ exhibit 

Dep. 

JSUF 

Jx 

1 Deposition ~~~~~ 

Joint Statement of Undisputed Facts 

Joint Exhibit 

RDX 

RFF ’ 

RIB 

Respondents’ demonstrative exhibit 

Respondents’ proposed findings of fact 

Respondents’ initial post-hearing brief 

ROCFF I Respondents’ objections to Complainants’ proposed findings of fact 

ROSFF 

RPX 

Respondents’ objections to Staffs proposed findings of fact 

Respondents’ physical exhibit 

RRB 

RRX 

Rx 

Respondents’ reply post-hearing brief 

Respondents’ rebuttal exhibit 

Respondents’ exhibit 

SIB I Staffs initial post-hearing brief 

SFF 

SOCFF I Staffs objections to Complainants’ proposed findings of fact 

Staffs proposed findings of fact 

SORFF 

SRB 

Tr. I Transcript 

Staffs objections to Respondents’ proposed findings of fact 

Staffs reply post-hearing brief 

... 

111 
CONTAINS CONFIDENTIAL BUSINESS INFORMATION 

UNITED STATES INTERNATIONAL TRADE COMMISSION 

Washington, D.C. 

In the Matter of 

CERTAIN ENDOSCOPIC PROBES FOR USE IN 

ARGON PLASMA COAGULATION SYSTEMS 

Inv. No. 337-TA-569 

INITIAL DETERMINATION ON VIOLATION OF SECTION 337 AND 

RECOMMENDED DETERMINATION ON REMEDY AND BOND 

Administrative Law Judge Charles E. Bullock 

(January 16,2008) 

Pursuant to the Notice of Investigation' and Rule 210.42(a) of the Rules of Practice and 

Procedure of the United States International Trade Commission, this is the Administrative Law 

Judge's Initial Determination in the matter of Certain Endoscopic Probes for Use in Argon Plasma 

Coagulation Systems, Investigation No. 337-TA-569. 

The Administrative Law Judge hereby determines that a violation of Section 337 of the Tariff 

Act of 1930, as amended has not been found in the importation into the United States, the sale for 

importation, or the sale within the United States after importation of certain endoscopic probes for 

use in argon plasma coagulation systems in connection with claims 1,3,4,11,13,35,37,38,39 and 

41 of U.S. Patent No. 5,720,745. Furthermore, the Administrative Law Judge hereby determines that 

a domestic industry in the United States does not exist that practices US. Patent No. 5,720,745. 

' 71 Fed. Reg. 28,386 (May 16,2006). 

1 
I. INTRODUCTION 

A. Procedural History 

1. In General 

On April 10, 2006, Complainants ERBE Elektromedizin GmbH and ERBE USA, Inc. 

(collectively “ERBE”) filed a complaint with the Commission pursuant to Section 337 of the Tariff 

Act of 1930, as amended, 19 U.S.C. 0 1337. The complaint asserts unfair methods of competition 

and unfair acts in violation of Section 337 by Respondents Canady Technology, LLC and Canady 

Technology Germany GmbH (collectively “Canady”), and KLS Martin GmbH & Co. KG (“IUS 

Martin”) in connection with the importation, sale for importation, and sale within the United States 

after importation of certain endoscopic probes for use in argon plasma coagulation systems. 

The complaint accuses Canady and IUS Martin’s products of infringing claims 1,3,4, 1 1, 

13, 35, 37, 38, 39, and 41 of U.S. Patent No. 5,720,745 (“the ‘745 patent”) owned by ERBE. The 

complaint also accuses Canady and KLS Martin’s products of infringing U.S. Supplemental 

Trademark Registration No. 2,637,630 (“the ‘630 mark”). The complaint Wher alleges that there 

exists a domestic industry with respect to the ‘745 patent and the ‘630 mark. ERBE seeks, among 

other things, a limited exclusion order of the infringing endoscopic probes for use in argon plasma 

coagulation systems. On May 1 1,2006, the Commission issued a notice of investigation that was 

subsequently published in the Federal Register on May 16,2006.* The notice of investigation named 

ERBE as complainant and Canady and KLS Martin as respondents.’ The notice of investigation also 

71 Fed. Reg. 28,386 (May 16,2006). ’ Id. 

2 
named the Commission Investigative Staff (“Staff’) as a party.4 

On June 28,2006, Administrative Law Judge Harris issued Order No. 2, setting the target 

date for completion of this investigation to July 18, 2007. 

On September 1,2006, Judge Harris issued Order No. 4, an unreviewed initial determination 

terminating the investigation as to Respondent IUS Martin on the basis of a settlement agreement.5 

On November 6,2006, Judge Harris issued Order No. 5, setting a procedural schedule and 

modifying the target date for completion of this investigation from July 18, 2007, to August 16, 

2007. 

On December 29,2006, the Commission reassigned this investigation from Judge Harris to 

Administrative Law Judge Barton.6 

On April 26,2007, Judge Barton issued Order No. 17, an unreviewed initial determination 

setting a new procedural schedule and extending the target date for completion of this investigation 

from October 18,2007, to April 3, 2O0fL7 

On July 5, 2007, the Commission reassigned this investigation from Judge Barton to 

Administrative Law Judge Bullock.8 

On November 9,2007, Order No. 47 issued as an initial determination extending the target 

date in this investigation to May 16, 2008. The initial determination was unreviewed by the 

Commission.’ 

Id. 

See Notice of a Comm’n Determination Not to Review (October 3,2006). 

See Notice of a Comm’n Determination to Reassign (December 29,2006). 

See Notice of a Comm’n Determination Not to Review (June 1 1,2007). 

See Notice of a Comm’n Determination to Reassign (July 5,2007). 

7 

’ See Notice of a Comm’n Determination Not to Review (December 3,2007). 
The parties have stipulated as to certain material facts.” Particular stipulated facts that are 

relevant to this Initial Determination are cited accordingly. 

An evidentiary hearing was conducted before the undersigned from August 24-3 1, 2007. 

During the hearing, ERBE withdrew its claims that Canady infi-inged the ‘630 mark. In addition, 

ERBE further narrowed its claims of infringement of the ‘745 patent and the accused products 

imported and sold in the United States by Canady.” In support of its case-in-chief and rebuttal case, 

ERBE called the following witnesses: 

Dr. Jerome Waye (Chief of the Gastrointestinal Endoscopy Unit at Mt. Sinai Medical 

Center);” 

Rickie L. Steward (National Service Manager for ERBE USA);I3 

Sara Eisenbacher (Manager of the Digestive Health Center Endoscopy Suite at North 

Carolina Baptist Hospital); 

John Day (Vice President of Marketing at ERBE USA);14 

Steven Wereley (ERBE’s expert witness);” 

Harold Walbrink (ERBE’s expert witness);16 and 

Creighton White (President and CEO of ERBE USA).I7 

In support of its case-in-chief and rebuttal case, Canady called the following witnesses: 

lo See Joint Statement of Undisputed Facts (“JSUF”), filed on July 19,2007. 

See, Tr. at 231-33 (8/27/07); Tr. at 267-68 (8/28/07). 

CX-3 (Waye Direct). 

I3 CX-6C (Steward Direct). 

l4 CX-5C (Day Direct). 

l5 CX-1 (Wereley Direct); CX-258 (Wereley Rebuttal). 

l6 CX-2C (Walbrink Direct); CX-267C (Walbrink Rebuttal). 

l7 CX-4C (White Direct). 

4 
0 Nathaniel Fisch, Ph.D. (Canady’s expert witness);” 

James Michael Shifflette (Canady’s expert witness);” 

After the hearing, post-hearing briefs and reply briefs, together with proposed findings of 

fact, conclusions of law and rebuttals to the same, were filed on September 18,2007 and October 

9,2007, respectively. 

Brian G. Gore (Canady’s expert witness);20 and 

Dr. Jerome Canady (employee of Canady Technology LLC).21 

On September 18,2007, the Staff filed an uncontested motion for admission of SX-3 into 

evidence, which is hereby granted. 

On September 20, 2007, ERBE filed a motion to strike new arguments in Canady’s posthearing briefwhich were not previously disclosed during discovery or in Canady’s pre-hearing brief. 

On October 1,2007, the undersigned issued Order No. 45, granting ERBE’s motion. Specifically, 

the undersigned ruled that the only obviousness combinations that will be considered are U.S. Patent 

No. 5,207,675 (“the ‘675 patent”) in combination with the 1994 article by Gunter Farin and Karl 

Grund, the 1994 article by K. Grund, D. Storek and G. Farin, and/or the ‘138 Marwaring patent. 

On December 2 1,2007, the Staff informed the undersigned via letter that on December 1 8, 

2007, the United States District Court for the Western District of Pennsylvania, issued an order 

granting Canady’s motion for partial summary judgment of noninfringement of the ‘745 patent.22 

l8 RX-95 (Fisch Direct); RRX-28 (Fisch Rebuttal). 

l9 RX-88 (Shifflette Direct); RRX-6 (Shifflette Rebuttal). 

2o RRX-27 (Gore Rebuttal). 

21 RX-1C (Canady Direct). 

22 See ERBE Electromedizin GmbH v. Canady Technology LLC, Civ. Action No. 05-1 674 

(W.D. Pa.) 

5 
Specifically, the Court found that Canady does not indirectly infringe claims 1 , 3 , 4,11, 13 , 3 5,37, 

38,39, and 41 of the ‘745 patent through its sale of IUS Martin 1.5 mm, IUS Martin 2.3 mm, and 

KLS Martin 3.2 mm probes. As in the district court case, ERBE accuses Canady in this investigation 

of indirectly infringing claims 1, 3,4, 11, 13, 35, 37, 38, 39, and 41 of the ‘745 patent through its 

sale, offer for sale and/or importation of IUS Martin 1.5 mm probes and KLS Martin 2.3 mm 

probes.23 

In light of the relevance of the district court’s order to this investigation, on December 21, 

2007, the undersigned issued Order No. 47, ordering the parties to comment by December 27,2007, 

on how the district court opinion impacts this investigation. Based on the parties’ responses to Order 

No. 47, it does not appear that the district court’s order is currently appealable as it only granted 

partial summary judgment and neither party has moved to have it certified as final under Federal 

Rule of Civil Procedure 54(b). Additionally, as of the time of this writing, the parties could still file 

motions for reconsideration of the district court’s order granting partial summary judgment of 

noninfringement. Thus, the undersigned does not believe at this point in time that the district court’s 

order is a final judgment that would have a preclusive effect on this in~estigation.~~ Because 

23 The Soring 2.3 mm probes accused in this investigation were not at issue before the 

district court. 

24 For claim preclusion to apply, the party asserting the bar must prove that: (1) the parties 

are identical or in privity; (2) the first suit proceeded to a final judgment on the merits; and (3) the 

second claim is based on the same set of transactional facts as the first. See Ammex v. US. , 334 F.3d 

1052, 1055 (Fed. Cir. 2003); see also Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 398 

(1981); Young Eng’rs, Inc. v. United States Int’Z Trade Cornrn’n, 721 F.2d 1305, 1314 (Fed. Cir. 

1983)(stating that this court would adopt the transactional approach advocated by the Restatement 

(Second) of Judgments). For issue preclusion to apply: (1) the issue must be identical to the one 

decided in the first action; (2) the issue must actually have been litigated in the first action; (3) the 

resolution of the issue must have been essential to a final judgment in the first action; and (4) the 

party against whom preclusion is asserted must have had a full and fair opportunity to litigate the 

6 
circumstances may change in the interim period .between the issuance of this initial determination 

and the Commission’s final determination, the undersigned has attached to this initial determination 

as Appendix B a copy of the order and opinion of the U.S. District Court for the Western District 

of Pennsylvania as part of the record in this in~estigation.~~ 

2. Motion for Sanctions 

On September 10,2007, ERBE filed a motion (Motion Docket No. 569-56) for issuance of 

an order sanctioning Canady for failure to make or cooperate in discovery and failure to comply with 

Order No. 22. ERBE asks the undersigned to sanction Canady for its alleged behavior by issuing 

the following adverse inferences: 1) the 2.3 mm Soring probes include an electrode offset from the 

opening at the distal end of the tube a predetermined minimum safety distance; and 2) the gas exiting 

the distal end of the 2.3 mm Soring probes is a not-directed, non laminar stream that forms an inert 

gas atmosphere between the distal end of the tube and the region of the tissue to be coagulated.26 On 

September 24,2007, Canady filed an opposition to ERBE’s motion for sanctions. The Staff did not 

file a response. 

On May 30,2007, Administrative Law Judge Barton issued Order No. 22, granting in part 

ERBE’s motion to compel discovery but denying inspection of Canady’s facility.27 Among other 

issue in the first action. See Certain NOR and NAND Flash Memory Devices and Products 

Containing Same, 337-TA-560, 2006 ITC LEXIS 749, at *7, Order No. 5 (May 2006); see also 

Morgan v. Dep’t ofEnergy, 424 F.3d 1271,1274-75 (Fed. Cir 2005). 

25 The district court’s order encompasses more than Canady’s motion for summaryjudgment 

of noninfringement. The portions of the District Court’s order that are relevant to this investigation 

are addressed under Section E of the court’s order titled, “Defendant’s Motion for Summary 

Judgement.” See District Court Order at 33-38,46-47; Appendix B 

26 ERBE Mot. at 1-2. 

27 See Order No. 22 (May 30,2007). 

7 
things, Order No. 22 required Canady to produce “those probes which reside in its inventory in 

significant quantities, or which may be obtained by other means, and produce for inspection those 

probes which are available in more limited quantities or explain why they cannot be produced.”28 

On June 13, 2007, Canady made available to ERBE a CT-3500 electrosurgical generator and 

produced four Soring probes S-422535, S-422537, S-422538, and S-422541. On August 20,2007, 

while inspecting ERBE’s direct exhibits, counsel for Canady noted for the first time that he believed 

one of the Soring probes may have been tampered with. At the hearing in this investigation, Dr. 

Canady testified that he was “1000% sure” that Soring probes S-422535 and S-422537 had been 

altered. 

ERBE argues that because they have a video demonstration showing them opening the 

packages of probes and photos showing the condition of the probes once removed from the 

packaging that any tampering had to have been by Canady before their production on June 13, 

2007.29 According to ERBE, because the tampering took place before the June 13,2007 production 

of the probes, Canady’s actions violate both Order No. 22 and Canady’s obligation to cooperate in 

dis~overy.~~ Canady on the other hand argues that they shipped the probes sealed to ERBE from 

their inventory and thus it must be ERBE who altered the probe^.^' 

ERE3E relies on its video demonstration, close-up photos, and accompanying declarations in 

support of its assertion that Canady must have altered the probes. The video demonstration, photos 

and many of the declarations submitted therewith were offered as evidence at the hearing in this 

28 Id. at 7. 

29 ERBE Mem. at 2. 

30 Id. 

31 Canady Mem. at 4. 

8 
investigation and were the subject of much contention. Ultimately, the undersigned ruled that the 

video and declarations were inadmi~sible.~~ Because the video and declarations have already been 

ruled inadmissible, it would be inconsistent with that ruling to consider such evidence in support of 

ERBE’s post-hearing motion for sanctions. Regardless, the evidence submitted does not prove that 

Canady tampered with the probes. Thus, the undersigned finds ERBE has failed to prove that 

Canady’s production of the Soring probes on June 13,2007, violated Order No. 22. Accordingly, 

ERBE’s motion for sanctions (Motion Docket No. 569-56) is denied. 

B. The Parties 

1. Complainants 

Complainant ERBE Elektromedizin GmbH is a German corporation with a principal place 

of business in Tubingen, Germany.33 Complainant ERBE USA, Inc. is a wholly-owned subsidiary 

of ERBE Elektromedizin GmbH and is a Georgia corporation with its corporate headquarters and 

principal place of business in Marietta, Georgia.34 

2. Respondents 

Respondent Canady Technology, LLC is a Delaware corporation with its principal place of 

business in Hampton, Virginia and sales and distribution offices in McKeesport, Penn~ylvania.~~ 

Respondent Canady Technology Germany GmbH is a German corporation with its principal place 

of business in Berlin, Germany.36 

32 

33 

34 

35 

36 

See Tr. at 79:l-80:24 (Aug. 24,2007); Tr. at 1328:7-14, 1329:14-19 (Aug. 31,2007). 

JSUF 7 10 (July 19,2007). 

Id. at 7 11. 

Id. at 7 12. 

Id. at 7 13. 

9 
IUS Martin GmbH & Co. KG is a German corporation with is principal place of business 

in Tuttlingen, Germany.37 

C. Overview of the Technology 

At issue in this investigation are certain endoscopic probes for use in argon plasma 

coagulation systems. The flexible argon probes at issue in this investigation are used as part of an 

electrosurgical system that includes an argon unit, a radio frequency (RF) generator, a flexible argon 

probe, and a connecting cable which attaches the flexible argon probes to the argon unit/RF 

generator c~mbination.~’ The electrosurgical systems are used for, among other things, gas assisted 

coagulation in the gastrointestinal and tracheobronchial systems. The flexible argon probes at issue 

in this investigation are single use disposable items that must be replaced after each endoscopy 

procedure.39 The argon units, RF generators and connecting cables may be used in multiple 

 procedure^.^^ 

D. 

The ‘745 patent is entitled “Electrosurgical Unit and Method for Achieving Coagulation of 

Biological Tissue” and was issued to inventors Giinther Farin, Karl Ernst Grund, and Klaus Fischer 

on February 24, 199tL4’ The patent is assigned to ERBE Electromedizin GmbH.42 The ‘745 patent 

application, App. No. 579,879, was filed on December 28,1995, and is a continuation-in-part of Ser. 

The Patent at Issue - The ‘745 Patent 

37 Id. at 7 14. 

38 Id. at 7 21. 

39 Id. at 722. 

40 Id. at 7 23. 

42 JSUF at 77 55, 56 (July 19,2007). 

Id. at 7 53-54; JX-1 (the ‘745 patent); JX-2 (the ‘745 patent prosecution history). 41 

10 
No. 98 1,009, which was filed on November 24,1992, and subsequently abandoned.43 Generally, the 

‘745 patent concerns a high-frequency electrosurgery unit for coagulating biological tissue.44 The 

‘745 patent has 48 claims.45 Of the 48 claims, two independent claims, claims 1 and 35 are at issue 

in this in~estigation.~~ Dependent claims 3,4,11,13, which depend from claim 1, are also at issue.47 

Dependent claims 37,38, and 39, which depend either directly or indirectly from claim 35, are also 

at issue.48 

The notice of investigation also lists dependent claim 4 1 as at issue in this investigation and 

each of the parties have addressed this claim in their briefs. According to the ‘745 patent, however, 

claim 41 depends from claim 32, which depends from independent claim 29.49 Neither dependent 

claim 32 nor independent claim 29 is at issue in this investigation and no party has addressed either 

claim. From a footnote in ERBE’s opening post-hearing brief it appears that ERBE (and by 

extension the other parties through their own briefing) believe dependent claim 41 depends either 

directly or indirectly on independent claim 35. However, there is nothing in the certificate of 

correction attached to the patent in JX-1 , nor anything that could be found in the prosecution history 

in JX-2 to support ERBE’s assertion that claim 41 depends from claim 35. Because the two claims 

on which claim 4 1 depends, independent claim 29 and dependent claim 32, have not been asserted 

or addressed by the parties in this investigation, the undersigned will not consider dependant claim 

43 Id. at 7 57. 

44 Id. at 7 59. 

45 See JX-1 at 11:lO-18:6. 

46 CIB at 1 n.3. 

47 Id. 

48 Id. 

49 See JX-1 at 16:29-30. 

11 
4 1 in this initial determination. 

E. The Products at Issue 

1. ERBE’s Products 

ERBE sells the following electrosurgical generators in combination with argon supply units 

in the United States: ICC 350 RF generator and APC 300 argon supply unit; ICC 200EA RF 

generator and APC 300 argon supply unit; and VI0300D RF generator and APC 2 argon supply 

unit.50 In addition, ERBE sells various sizes of “single use only” ERBE APC straight-fireprobe^.^' 

ERBE asserts that the above products satisfl the technical prong of the domestic industry 

requirement for the ‘745 patent. 

2. Canady’s Products 

Canady sells, in the United States, various sizes of imported “single use only” argon probes, 

manufactured by IUS Martin, for use in ERBE APC system.52 ERBE accuses the 1.5 mm diameter 

and 2.3 mm diameter IUS Martin Probes of infringing the asserted claims of the ‘745 patent when 

used in combination with an ERBE electrosurgical unit, argon supply unit, connecting cables, and 

commercial endoscopes. ERBE accuses the following IUS Martin probes of indirect infringement: 

1322535 (1.5 mm), 1322537 (2.3 mm), and 1322538 (2.3 mm). 

Canady also sells, in the United States, various sizes of imported “single use only” argon 

probes manufactured by Soring GmbH.53 ERBE accuses the Soring 2.3 mm probes of infringing the 

asserted claims of the ‘745 patent when used in combination with the Canady CT 3500 

50 CFF 77 27,29-35; JSUF 77 37,38 (July 19,2007). 

51 JSUF 7 50 (July 19,2007). 

52 Id. at fl739,40,67. 

53 Id. at fll 45,46,74. 

12 
electrosurgical unit, also manufactured by Soring, Soring argon supply unit, connecting cables, and 

commercial endoscopes. ERBE accuses the following Soring probes of indirect infiingement: 

S422537andS422538. 

11. JURISDICTION AND IMPORTATION 

Section 337 confers subject matter jurisdiction on the International Trade Commission to 

investigate, and if appropriate, to provide a remedy for, unfair acts and unfair methods of 

competition in the importation of articles into the United States. In order to have the power to decide 

a case, a court or agency must have both subject matter jurisdiction, and jurisdiction over either the 

parties or the property involved.54 

A. Subject Matter Jurisdiction 

ERBE alleges that Canady has violated Subsection 337(a)(l)(A) and (B) in the importation 

and sale of products that infringe the ‘745 patent. The parties have stipulated that Canady has 

imported into the United States, has sold to third parties who later imported into the United States, 

andor has sold within the United States after importation the accused products.55 Accordingly, the 

Commission has subject matter jurisdiction over Canady in this in~estigation.~~ 

B. Personal Jurisdiction 

Canady has responded to the complaint and notice of investigation, participated in the 

investigation, including participating in discovery, made an appearance at the hearing, and submitted 

54 19 U.S.C. § 1337; also see Certain Steel Rod Treating Apparatus and Components 

ThereoJ Inv. No. 337-TA-97, Commission Memorandum Opinion, 215 U.S.P.Q. 229,231 (1981) 

(“Steel Rod”). 

55 JSUF at T[fl67,74 (July 19,2007). 

56 See Amgen, Inc. v. US. Int’l Trade Comm’n, 902 F.2d 1532, 1536 (Fed. Cir. 1990) 

(“Amgen”). 

13 
post-hearing briefs, thereby submitting to the personal jurisdiction of the Commi~sion.~~ 

111. STANDARDS OF LAW 

A. Claim Construction 

Analyzing whether a patent is infringed “entails two steps. The first step is determining the 

meaning and scope of the patent claims asserted to be infringed. The second step is comparing the 

properly construed claims to the device or process accused of infringing.”58 The first step is a 

question of law, whereas the second step is a factual determinati~n.~~ Concerning the first step of 

claim construction, “[ilt is well-settled that, in interpreting an asserted claim, the court should look 

first to the intrinsic evidence of record, i. e., the patent itself, including the claims, the specification 

and, if in evidence, the prosecution history . . . . Such intrinsic evidence is the most significant 

source of the legally operative meaning of disputed claim language.”60 

“In construing claims, the analytical focus must begin and remain centered on the language 

of the claims themselves, for it is that language that the patentee chose to use to ‘particularly point 

[ ] out and distinctly claim [ ] the subject matter which the patentee regards as his invention.’”61 

“Quite apart from the written description and the prosecution history, the claims themselves 

57 See CertainMiniature Hacksaws, Inv. No. 337-TA-237, U.S.I.T.C. Pub. No. 1948, Initial 

Determination (unreviewed by Commission in relevant part) at 4, 1986 WL 379287 (U.S.I.T.C., 

October 15, 1986) (“Miniature Hacksaws”). 

58 Dow Chem. Co. v. Unitedstates, 226 F.3d 1334,1338 (Fed. Cir. 2000) (“Dow Chemical”), 

citing Markman v. Westview Instruments, Inc., 52 F.3d 967,976 (Fed. Cir. 1995) (en banc), afd, 

517 U.S. 370 (1996) (“Markman”). 

59 Markman, supra. 

“ Bell Atlantic NetworkServ., Inc. v. Covad Communications Group, Inc., 262 F.3d 1258, 

1267 (Fed. Cir. 2001) (“BellAtlantic”). See also Phillips v. AWH Corp., 415 F.3d 1303, 1312-17 

(Fed. Cir. 2005) (“Phillips”), cert. denied, 126 S.Ct. 1332. 

61 Interactive Gift Express, Inc. v. Compusewe Inc., 256 F.3d 1323, 1331 (Fed. Cir. 2001) 

(“Interactive Gift Express”) (citing 35 U.S.C. fj 112,y 2). 

14 
provide substantial guidance as to the meaning of particular claim terms.”62 Usage of a term in both 

the asserted and unasserted claims is “highly instructive” in determining the meaning of the same 

term in other claims.63 “Furthermore, a claim term should be construed consistently with its 

appearance in other places in the same claim or in other claims of the same patent.”64 

“While not an absolute rule, all claim terms are presumed to have meaning in a claim.”65 If 

the claim language is not clear on its face, “[tlhen we look to the rest of the intrinsic evidence, 

beginning with the specification and concluding with the prosecution history, if in evidence” for the 

purpose of “resolving, if possible, the lack of clarity.”66 

There is a “heavy presumption” that claim terms are to be given “their ordinary and 

accustomed meaning as understood by one of ordinary skill in the art,” and in aid of this 

interpretation, “[d]ictionaries and technical treatises, which are extrinsic evidence, hold a ‘special 

place’ and may sometimes be considered along with the intrinsic evidence when determining the 

ordinary meaning of claim terms.”67 Caution must be used, however, when referring to nonscientific dictionaries “lest dictionary definitions . . . be converted into technical terms of art having 

legal, not linguistic significance.”68 

62 Phillips, 41 5 F.3d at 13 14 (citing Vitronics Corp. v. Conceptronic Inc., 90 F.3d 1576,1582 

63 Id. 

64 Rexnord Corp. v. Laitram Corp., 274 F.3d 1336,1342 (Fed. Cir. 2001) (“Rexnord”) (citing 

Phonometrics Inc. v. Northern Telecom Inc., 133 F.3d 1459, 1465 (Fed. Cir. 1998) 

(“Phonometrics”)). 

65 Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 38 1 F.3d 1 1 1 1, 1 1 19 (Fed. Cir. 

2004) (“Innova”)). 

66 Id. 

6’ Bell Atlantic, 262 F.3d at 1267-68. 

68 Id. at 1267 (internal quotation marks omitted). 

(Fed. Cir. 2003) (“Vitronics”)). 

15 
The presumption in favor of according a claim term its ordinary meaning is overcome “( 1) 

where the patentee has chosen to be his own lexicographer, or (2) where a claim term deprives the 

claim of clarity such that there is ‘no means by which the scope of the claim may be ascertained from 

the language used.”’69 In this regard, “[tlhe specification acts as a dictionary ‘when it expressly 

defines terms used in the claims or when it defines terms by impli~ation.”’~~ 

The specification is considered “always highly relevant” to claim construction and “[u]sually, 

it is dispositive; it is the single best guide to the meaning of a disputed term.”71 The prosecution 

history is also examined for a claim’s scope and meaning “to determine whether the patentee has 

relinquished a potential claim construction in an amendment to the claim or in an argument to 

overcome or distinguish a ~eference.”~~ 

“[Ilf the meaning of the claim limitation is apparent from the intrinsic evidence alone, it is 

improper to rely on extrinsic evidence other than that used to ascertain the ordinary meaning of the 

claim limitation. [citation omitted] However, in the rare circumstance that the court is unable to 

determine the meaning of the asserted claims after assessing the intrinsic evidence, it may look to 

additional evidence that is extrinsic to the complete document record to help resolve any lack of 

ciarity.3,73 

“Extrinsic evidence consists of all evidence external to the patent and prosecution history 

69 Id. at 1268. 

70 Id. See also Phillips, 415 F.3d at 1316. 

7‘ Id. 

72 Id. 

73 Id. at 1268-69. 

16 
,774 . . . It includes “such evidence as expert testimony, articles, and inventor te~timony.”~~ But, 

“[ilf the intrinsic evidence resolves any ambiguity in a disputed claim, extrinsic evidence cannot be 

used to contradict the established meaning of the claim language.”76 “What is disapproved of is an 

attempt to use extrinsic evidence to arrive at a claim construction that is clearly at odds with the 

claim construction mandated by the claims themselves, the written description, and the prosecution 

history, in other words, with the written record of the patent.”77 

In interpreting particular limitations within each claim, “adding limitations to claims not 

required by the claim terms themselves, or unambiguously required by the specification or 

prosecution history, is impermi~sible.”~~ Usually, a patent is not limited to its preferred 

embodiments in the face of evidence of broader coverage by the claims.79 A claim construction that 

excludes the preferred embodiment in the specification of a patent, however, is “rarely, if ever, 

correct 

On the other hand, “there is sometimes ‘a fine line between reading a claim in light of the 

specification, and reading a limitation into the claim from the specification.”’81 In order to negotiate 

74 Markman, 52 F.3d at 980. 

75 Bell Atlantic, 262 F.3d at 1269. 

76 DeMarini Sports, Inc. v. Worth, Inc., 239 F.3d 1314, 1322-23 (Fed. Cir. 2001) 

77 Markman, 52 F.3d at 979. 

78 Dayco Prod., Inc. v. Total Containment, Inc., 258 F.3d 1317, 1327 (Fed. Cir. 2001) 

(“Dayco Products”), citing Laitram Corp. v. NEC Corp., 163 F.3d 1342, 1347 (Fed. Cir. 1998) 

(“Laitram”) (“a court may not import limitations from the written description into the claims”). 

79 Acromed Corp. v. Sofamor Danek Group, Inc., 253 F.3d 1371, 1382-83 (Fed. Cir. 2001) 

(“Acromed”); Electro Med. Sys. S.A. v. Cooper Life Sci., Inc., 34 F.3d 1048, 1054 (Fed. Cir. 1994) 

(“Electro Med”) (“particular embodiments appearing in a specification will not be read into the 

claims when the claim language is broader than such embodiments”). 

(“DeMarini”). 

Vitronics, 90 F.3d at 1583-34. 

Bell Atlantic, 262 F.3d at 1270. 

17 
this “fine line,” one guideline is that features of embodiments in the specification do not restrict 

patent claims “unless the patentee has demonstrated a clear intention to limit the claim scope using 

‘words or expressions of manifest exclusion or restriction.”’82 Another guideline is that features of 

an embodiment in the specification do not restrict claims unless the specification defines the claim 

terms “by implication” as may be “found in or ascertained by a reading of the patent 

For the specification to limit the claims, there must be “a clear case of the disclaimer of subject 

matter that, absent the disclaimer, could have been considered to fall within the scope of the claim 

language.”84 

Claims amenable to more than one construction should, when it is reasonably possible to do 

so, be construed to preserve their validity.85 A claim cannot, however, be construed contrary to its 

plain language.86 Claims cannot be judicially rewritten in order to fulfill the axiom of preserving 

their validity; “if the only claim construction that is consistent with the claim’s language and the 

82 Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 898, 906 (Fed. Cir. 2004) (“LiebelFlarsheim”). 

83 Irdeto Access, Inc. v. Echostar Satellite Corp., 383 F.3d 1295, 1300 (Fed. Cir. 2004) 

(“‘Irdeto”). 

84 Liebel-Flarsheim, 358 F.3d at 907. The Federal Circuit “has expressly rejected the 

contention that if a patent describes only a single embodiment, the claims of the patent must be 

construed as being limited to that embodiment.” Liebel-Flarsheim, supra, 358 F.3d at 906 (emphasis 

added); also see, e.g., Golight, Inc. v. Wal-Mart Stores, Inc., 355 F.3d 1327, 1331 (Fed. Cir. 2004) 

(“Golight”); Bio-Technology General Corp. v. Duramed Pharmaceuticals, Inc., 325 F.3d 1356,1362 

(Fed. Cir. 2003) (“Bio-Technology”) (aspects of only embodiment described in specification not read 

into claims). The Liebel-Flarsheim panel further held that even where a patent describes only a 

single embodiment, claims will not be “read restrictively unless the patentee has demonstrated a 

clear intention to limit the claim scope using ‘words or expressions of manifest exclusion or 

restriction.”’ Id. 

85 Karsten Mfg. Corp. v. Cleveland Golf Co., 242 F.3d 1376, 1384 (Fed. Cir. 2001) 

(“Karsten”). 

86 See Rhine v. Casio, Inc., 183 F.3d 1342, 1345 (Fed. Cir. 1999) (“Rhine”). 

18 
written description renders the claim invalid, then the axiom does not apply and the claim is simply 

in~alid.”’~ 

Pursuant to 35 U.S.C. tj 112, 7 6, “[aln element in a claim for a combination may be 

expressed as a means or step for performing a specified function without the recital of structure, 

material, or acts in support thereof, and such claim shall be construed to cover the corresponding 

structure, material, or acts described in the specification and equivalents thereof.” An applicant may 

therefore “claim an element of a combination functionally, without reciting structures for performing 

those functions.”88 To invoke this rule, “a claim limitation that actually uses the word ‘means’ will 

invoke a rebuttable presumption that tj 1 12,a 6 applies. By contrast, a claim term that does not use 

‘means’ will trigger the rebuttable presumption that $ 1 12,y 6 does not apply.”89 

B. Infringement 

1. Literal Infringement 

Literal infringement is a question of fact.” Literal infringement requires the patentee to 

prove that the accused device contains each limitation of the asserted claim(s). Each element of a 

claim is considered material and essential, and in order to show literal infringement, every element 

must be found to be present in the accused device.” If any claim limitation is absent from the 

87 Id. 

Apex Inc. v. Raritan Computer, Inc., 325 F.3d 1364, 1371 (Fed. Cir.), cert. denied, 540 

89 Linear Technology Corp. v. Impala Linear Corp., 379 F.3d 13 1 1,13 19 (Fed. Cir. 2004) 

90 Tegal Corp. v. Tokyo Electron Am., Inc., 257 F.3d 133 1, 1350 (Fed. Cir. 2001) (“Tegal 

91 London v. Carson Pirie Scott & Co., 946 F.2d 1534, 1538 (Fed. Cir. 1991) (“London”). 

88 

U.S. 1073 (2003) (“Apex”). 

(“Linear”). 

”), cert. denied, 535 U.S. 927 (2002). 

19 
accused device, there is no literal infringement of that claim as a matter of law.92 

2. Infringement Under the Doctrine of Equivalents 

Under the doctrine of equivalents, infringement may be found if the accused product 

performs substantially the same function in substantially the same way to obtain substantially thce 

same result.93 

3. Indirect Infringement 

To establish a claim for induced infringement, a complainant must show that a respondent 

has actively induced a person to make, use, or sell a product or use a method that falls within the 

scope of the claims of the patent at issue.94 The required elements of a claim of induced 

infringement are: “( 1) an act of direct infringement; (2) the accused infringer actively induced a third 

party to infringe the patent; and (3) the accused infringer knew or should have known that his actions 

would induce infringement.”95 

Under 35 U.S.C. 0 27 1 (c), a seller of a component of an infringing product can be held liable 

for contributory infringement if: “( 1) there has been an act of direct infringement by a third party; 

(2) the accused contributory infringer knows that the combination for which its component was made 

92 Buyer AG v. Elan Pharm. Research Corp., 212 F.3d 1241, 1247 (Fed. Cir. 2000) 

93 Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605,608 (1950) 

94 35 U.S.C. 3 271(b). 

95 Certain Flash Memory Circuits and Products Containing Same, Inv. No. 337-TA-382, 

U.S.I.T.C. Pub. 3046, Commission Opinion on the Issues Under Review and on Remedy, the Public 

Interest, and Bonding, at 16, 1997 WL 817778 (U.S.I.T.C., July 1997) (“Flash Memory”) citing 

Manville Sales Corp. v. Paramount Sys. Inc., 917 F.2d 544,553 (Fed. Cir. 1990) (“Manville”). See 

also Certain Headboxes and Papermaking Machine Forming Sections for the Continuous 

Production of Paper, and Components ThereoJ; Inv. No. 337-TA-82, USITC Pub. No. 1 138 at 18- 

19 (1 98 1) (“Headboxes”). 

(“Buyer”). 

(“Graver Tan#’). 

20 
was both patented and infringing; and (3) there are no substantial non-infringing uses for the 

component part, i. e., the component is not a ‘staple article’ of 

C. 

In a patent-based complaint, a violation of Section 337 can be found “only if an industry in 

the United States, relating to the articles protected by the patent . . . concerned, exists or is in the 

process of being e~tablished.”~~ This “domestic industry requirement” has an “economic” prong and 

a “technical” prong. 

Domestic Industry - Technical Prong 

A complainant in a patent-based Section 337 investigation must demonstrate that it is 

practicing or exploiting the patents at issue.98 In order to find the existence of a domestic industry 

exploiting a patent at issue, it is sufficient to show that the domestic industry practices any claim of 

that patent, not necessarily an asserted claim of that patent.99 Fulfillment of this so-called “technical 

prong” of the domestic industry requirement is not determined by a rigid formula, but rather by the 

articles of commerce and the realities of the rnarketplace.lo0 

96 Flash Memory, Commission Opinion at 9- 10. 

97 19 U.S.C. 5 1337(a)(2). 

98 See 19 U.S.C. 5 1337(a)(2) and (3); also see Certain Microsphere Adhesives, Process for 

Making Same, and Products Containing Same, Including Self-stick Repositionable Notes, Inv. No. 

337-TA-366, Commission Opinion at 8, 1996 WL 1056095 (U.S.I.T.C., January 16, 1996) 

(“Microsphere Adhesives”), afld sub nom. Minnesota Mining & Mfg, Co. v. US. Int’l Trade 

Comm ’n, 91 F.3d 171 (Fed. Cir. 1996) (Table) (“3M”); Certain Plastic Encapsulated Integrated 

Circuits, Inv. No. 337-TA-3 15, U.S.I.T.C. Pub. No. 2574 (November 1992), Commission Opinion 

at 16, 1992 WL 8 13959 (“Encapsulated Circuits”). 

99 Microsphere Adhesives, Commission Opinion at 7- 16. 

loo Certain Diltiazem Hydrochloride and Diltiazem Preparations, Inv. No. 337-TA-349, 

U.S.I.T.C. Pub. No. 2902, Initial Determination at 138, 1995 WL 945191 (U.S.I.T.C., February 1, 

1995) (unreviewed in relevant part) (“Diltiazem”); Certain Double-Sided Floppy Disk Drives and 

Components ThereoJ; Inv. No. 337-TA-215,227 U.S.P.Q. 982,989 (Commission Opinion 1985) 

(“Floppy Disk Drives”). 

21 
The test for claim coverage for the purposes of the technical prong of the domestic industry 

requirement is the same as that for infringement.”’ “First, the claims of the patent are construed. 

Second, the complainant’s article or process is examined to determine whether it falls within the 

scope of the claims.”’02 As with infringement, the first step of claim construction is a question of 

law, whereas the second step of comparing the article to the claims is a factual determination. lo3 To 

prevail, the patentee must establish by a preponderance of the evidence that the domestic product 

practices one or more claims of the patent either literally or under the doctrine of equivalent^."^ 

D. Validity 

A patent is presumed valid.lo5 The party challenging a patent’s validity has the burden of 

overcoming this presumption by clear and convincing evidence.’06 Since the claims of a patent 

measure the invention at issue, the claims must be interpreted and given the same meaning for 

purposes of both validity and infringement analyses. As with an infringement analysis, an analysis 

of invalidity involves two steps: the claim scope is first determined, and then the properly construed 

claim is compared with the prior art to determine whether the claimed invention is anticipated and/or 

rendered 

lo’ Certain Doxorubicin and Preparations Containing Same, Inv. No. 337-TA-300, Initial 

Determination at 109, 1990 WL 7 10463 (U.S.I.T.C., May 2 1,1990) (“Doxorubicin”), af’d, Views 

of the Commission at 22 (October 3 1, 1990). 

lo* Id. 

lo3 Markman, 52 F.3d at 976. 

lo4 See Buyer, 212 F.3d at 1247. 

lo5 35 U.S.C. 0 282; Richardson-Vicks Inc. v. Upjohn Co., 122 F.3d 1476, 1480 (Fed. Cir. 

Richardson-Vicks Inc., supra; Uniroyal, Inc. v. Rudkin- Wiley Corp., 837 F.2d 1044 (Fed. 

lo7 Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1351 (Fed. Cir. 2001) 

1997) (“Richardson-Vicks”). 

Cir.) (“Uniroyal”), cert. denied, 488 U.S. 825 (1988). 

(“Amazon. com”). 

106 

22 
1. Anticipation, 35 U.S.C. $3 102 (a) and (b) 

A patent may be found invalid as anticipated under 35 U.S.C. tj 102(a) if “the invention was 

known or used by others in this country, or patented or described in a printed publication in this 

country, or patented or described in a printed publication in a foreign country, before the invention 

thereof by the applicant for patent.” 35 U.S.C. tj 102(a). A patent may be found invalid as anticipated 

under 35 U.S.C. tj 102(b) if “the invention was patented or described in a printed publication in this 

or a foreign country or in public use or on sale in this country, more than one year prior to the date 

of the application for patent in the United States.”108 Under 35 U.S.C. 3 102(e), a patent is invalid 

as anticipated if “the invention was described in a patent granted on an application for patent by 

another filed in the United States before the invention thereof by the applicant for patent.”’” 

Anticipation is a question of fact.”’ 

Under the foregoing statutory provision, a claim is anticipated and therefore invalid when 

“the four corners of a single, prior art document describe[s] every element of the claimed invention, 

either expressly or inherently, such that a person of ordinary skill in the art could practice the 

invention without undue experimentation.””’ To be considered anticipatory, the prior art reference 

must be enabling and describe the applicant’s claimed invention sufficiently to have placed it in 

possession of a person of ordinary skill in the field of the invention.’I2 But, the degree of enabling 

lo’ 35 U.S.C. tj 102(b). 

IO9 35 U.S.C. tj 102(e). 

‘lo Texas Instruments, Inc. v. US. Int’I Trade Cumm ’n, 988 F.2d 1165,1177 (Fed. Cir. 1993) 

‘11 Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed. Cir. 2000), 

11* Hellfix Ltd. v. Blok-Lok, Ltd., 208 F.3d 1339, 1346 (Fed. Cir. 2000) (“Helzfzx”); In re 

(“Texas Instruments If’). 

cert. denied, 532 U.S. 904 (2001) (“Advanced Display Systems”). 

Paulsen, 30 F.3d 1475, 1478 (Fed. Cir. 1994) (“Paulsen”). 

23 
detail contained in the reference does not have to exceed that contained in the patent at issue.113 

Further, the disclosure in the prior art reference does not have to be express, but may 

anticipate by inherency where the inherency would be appreciated by one of ordinary skill in the 

To be inherent, the feature must necessarily be present in the prior art.115 Inherency may not 

be established by probabilities or possibilities. The mere fact that a certain thing may result from 

a given set of circumstances is not sufficient. If, however, the disclosure is sufficient to show that 

the natural result flowing from the operation as taught would result in the performance of the 

questioned function, it seems to be well settled that the disclosure should be regarded as sufficient. 

This modest flexibility in the rule that “anticipation” requires that every element of the claims appear 

in a single reference accommodates situations where the common knowledge of technologists is not 

recorded in the reference; that is, where technological facts are known to those in the field of the 

invention, albeit not known to judges.’I6 

2. Obviousness, 35 U.S.C. 3 103 (a) 

Under 35 U.S.C. 9 103(a), apatent is valid unless “the differences between the subject matter 

sought to be patented and the prior art are such that the subject matter as a whole would have been 

obvious at the time the invention was made to a person having ordinary skill in the art to which said 

subject matter pertain^.""^ The ultimate question of obviousness is a question of law, but “it is well 

‘I3 Paulsen, 30 F.3d at 1481 n.9. 

‘I4 Glaxo Inc. v. Novopharm Ltd., 52 F.3d 1043,1047 (Fed. Cir.), cert. denied, 5 16 U.S. 988 

‘I5 See Finnigan Corp. v. US. Int ’I Trade Comm ’n, 180 F.3d 1354,1365-66 (Fed. Cir. 1999) 

‘I6 See Cont’l Can Co. v. Monsanto Co., 948 F.2d 1264, 1268-69 (Fed. Cir. 1991) 

‘17 35 U.S.C. 9 103(a). 

(1 995) (“Glaxo”). 

(“Finnigan”). 

(“Continental Can ”); Finnigan, 180 F.2d at 1365. 

24 
understood that there are factual issues underlying the ultimate obviousness decision.”118 

Once claims have been properly construed, “[tlhe second step in an obviousness inquiry is 

to determine whether the claimed invention would have been obvious as a legal matter, based on 

underlying factual inquiries including : (1) the scope and content of the prior art, (2) the level of 

ordinary skill in the art, (3) the differences between the claimed invention and the prior art ; and (4) 

secondary considerations of non-obviousness” (also known as “objective evidence”). ’ l9 

Although the Federal Circuit case law also required that, in order to prove obviousness, the 

patent challenger must demonstrate, by clear and convincing evidence, that there is a “teaching, 

suggestion, or motivation to combine, the Supreme Court has rejected this “rigid approach” 

employed by the Federal Circuit in KSR Int ’I Co. v. Teleflex Inc. :I2’ 

When a work is available in one field of endeavor, design incentives and other 

market forces can prompt variations of it, either in the same field or a different one. 

If a person of ordinary skill can implement a predictable variation, 0 103 likely bars 

its patentability. For the same reason, if a technique has been used to improve one 

device, and a person of ordinary skill in the art would recognize that it would 

improve similar devices in the same way, using the technique is obvious unless its 

actual application is beyond his or her skill. Sakraida and Anderson’s-Black Rock are 

illustrative-a court must ask whether the improvement is more than the predictable 

use of prior art elements according to their established function. 

Following these principles may be more difficult in other cases than it is here 

because the claimed subject matter may involve more than the simple substitution of 

one known element for another or the mere application of a known technique to a 

piece of prior art ready for the improvement. Often, it will be necessary for a court 

to look to interrelated teachings of multiple patents; the effects of demands known 

to the design community or present in the marketplace; and the background 

knowledge possessed by a person having ordinary skill in the art, all in order to 

‘I8 Richardson-Vicks Inc., 122 F.3d at 1479; Wang Lab., Inc. v. Toshiba Corp., 993 F.2d 

‘I9 Smiths Indus. Med. Sys., Inc. v. Vital Signs, Inc., 183 F.3d 1347, 1354 (Fed. Cir. 1999) 

120 KSR Int’l Cu. v. Teleflex Inc., 500 U.S. - (2007), 127 S.Ct. 1727, 1739 (“KSR”). 

858, 863 (Fed. Cir. 1993) (“Wang Laboratories”). 

( “Smiths Industries”), citing Graham v. John Deere Co., 383 U.S. 1, 17 (1 966) (“Graham”). 

25 
determine whether there was an apparent reason to combine the known elements in 

the fashion claimed by the patent at issue. To facilitate review, this analysis should 

be made explicitly. See In re Kahn, 441 F.3d 977,988 (CA Fed. 2006) (“[Rlejections 

on obviousness grounds cannot be sustained by mere conclusory statements; instead, 

there must be some articulated reasoning with some rational underpinning to support 

the legal conclusions of obviousness”). As our precedents make clear, however, the 

analysis need not seek out precise teachings directed to the specific subject matter of 

the challenged claim, for a court can take account of the inferences and creative steps 

that a person of ordinary skill in the art would employ. 

The obviousness analysis cannot be confined by a formalistic conception of the 

words teaching, suggestion, and motivation, or by overemphasis on the importance 

of published articles and the explicit content of issued patents. The diversity of 

inventive pursuits and of modern technology counsels against limiting the analysis 

in this way. In many fields it may be that there is little discussion of obvious 

techniques or combinations, and it often may be the case that market demand, rather 

than scientific literature, will drive design trends. Granting patent protection to 

advance that would occur in the ordinary course without real innovation retards 

progress and may, in the case of patents combining previously known elements, 

deprive prior inventions of their value or utility.121 

“Secondary considerations,” also referred to as “objective evidence of non-obviousness,” 

such as “commercial success, long felt but unsolved needs, failure of others, etc.” may be used to 

understand the origin of the subject matter at issue, and may be relevant as indicia of obviousness 

or non-obviousness.122 Secondary considerations may also include copying by others, prior art 

teaching away, and professional acclaim. 123 

12’ KSR, 500 U.S. at - ; 127 S.Ct. at 1740-41. 

12* Graham, 383 U.S. at 17-18. 

123 See Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 894 (Fed. Cir. 1984) 

(“Perkin-Elmer”), cert. denied, 469 U.S. 857 (1984); Avia Group Int’l, Inc. v. L.A. Gear California, 

853 F.2d 1557, 1564 (Fed. Cir. 1988) (“Avia”) (copying by others); In re Hedges, 783 F.2d 1038, 

1041 (Fed. Cir. 1986) (“Hedges”) (prior art teaching away; invention contrary to accepted wisdom); 

Kloster Speedsteel AB v. Crucible Inc., 793 F.2d 1565 (Fed. ir. 1986) (“Kloster”), cert. denied, 479 

U.S. 1034 (1987) (wide acceptance and recognition of the invention). 

26 
Evidence of “objective indicia of non-obviousness,” also known as “secondary 

considerations,” must be considered in evaluating the obviousness of a claimed invention, but the 

existence of such evidence does not control the obviousness determination. A court must consider 

all of the evidence under the Graham factors before reaching a decision on obvi~usness.’~~ In order 

to accord objective evidence substantial weight, its proponent must establish a nexus between the 

evidence and the merits of the claimed invention, and aprima facie case is generally made out “when 

the patentee shows both that there is commercial success, and that the thing (product or method) that 

is commercially successful is the invention disclosed and claimed in the patent.”125 Once the patentee 

has made aprima facie case of nexus, the burden shifts to the challenger to show that the commercial 

success was caused by “extraneous factors other than the patented invention, such as advertising, 

superior workmanship, etc.”126 

IV. CLAIM CONSTRUCTION 

A. Asserted Claims 

The asserted claims read as follows (with the first instance of the disputed terms highlighted 

in italics): 

1. An electrosurgical unit for achieving coagulation of tissue, comprising: 

an endoscope having: 

a proximal end and an opposing distal end, and 

124 Richardson-Vicks Inc., 122 F.3d at 1483-84. 

125 In re GPAC Inc., 57 F.3d 1573, 1580 (Fed. Cir. 1995) (“GPAC’); Demaco Corp. v. F. 

Von LangsdorffLicensing Ltd, 851 F.2d 1387, 1392 (Fed. Cir. 1988), cert. denied, 488 US. 956 

(1988) (“Demaco”); Certain Crystalline Cefadroxil Monohydrate, Inv. No. 337-TA-293, 

Commission Opinion (March 15, 1990),15 U.S.P.Q.2d 1263, 1270 (“Certain Crystalline”). 

126 Id. at 1393. 

27 
a plurality of working channels extending between the two ends, each channel having a 

predetermined diameter and having an opening at each end; 

a flexible, hollow tube having a longitudinal axis disposed in one of the working channels 

of the endoscope, the tube having a diameter which is less than the diameter of the channel 

through which it is inserted, the tube including: 

a distal end and an opposing proximal end, each end of the tube having an opening, the tube 

having an inside and an outside, 

the tube positioned within the endoscope such that a portion of the tube including the 

opening at the distal end of the tube protrudes beyond the opening at the distal end of the 

endoscope and such that a gas stream exits from the opening at the distal end of the tube in 

order to establish an inert gas atmosphere between the distal end of the tube and the region 

of the tissue to be coagulated, and 

an electrode for ionizing the inert gas positioned inside the tube and offset from the opening 

at the distal end of the tube apredetermined minimum safety distance, such that the electrode 

can not come in contact with the tissue; 

a source of pressurized ionizable, inert gas connected to the opening at the proximal end of 

the tube and pressurized such that a stream of gas flows from the source, through the tube 

and exits through the opening at the distal end of the tube at a lowflow rate of less than 

about I litedminute; 

optical means positioned within a second working channel of the endoscope and protruding 

sufficiently from the opening at the distal end of the second channel of the endoscope to view 

the distal end of the tube and the tissue to be coagulated; and 

the portion of the tube protruding from the distal end of the endoscope positioned such that 

the longitudinal axis of the tube is arranged sidewardly of the area of tissue to be coagulated. 

3. The electrosurgical unit for achieving coagulation of tissue of claim 1, wherein the opening 

at the distal end of the tubepositioned longitudinallyfiom the tube. 

4. The electrosurgical unit for achieving coagulation of tissue of claim 1, wherein the gas 

comprising [sic] argon. 

1 1. The electrosurgical unit for achieving coagulation of tissue during endoscopic surgery of 

claim 1, wherein an endpiece made out of a heat resistant material like ceramics is inserted 

into a distal end portion of the tube. 

28 
13. The electrosurgical unit for achieving coagulation of tissue during endoscopic surgery of 

claim 1 , whereby the distal end portion of the tube protruding out of the distal end portion 

of the endoscope is provided with ring shaped markings permitting observation through said 

optical means how far the distal end of the tube protrudes out of the distal end of the working 

channel of the endoscope, into which the tube is inserted. 

35. A method for coagulating tissue during endoscopic surgery comprising the following steps: 

providing a surgical endoscope, the endoscope having a proximal end, an opposing distal 

end, an opening at each end, and a plurality of working channels extending between the 

openings at each end, each channel having a predetermined diameter, the endoscope having 

a flexible, hollow tube having a longitudinal axis inserted through one of the working 

channels of the endoscope, the tube having a diameter which is less than the diameter of the 

channel through which it is inserted, the tube having a distal end, an opposing proximal end 

connected to a source of ionizable, inert gas, an opening at each end, a channel extending 

between the two ends, an inside, an outside; and an electrode, arranged stationarily inside the 

tube and being offset from the opening at the distal end of the tube a predetermined 

minimum safety distance in such a manner that the electrode can not come into contact with 

the tissue; the tube positioned within the working channel of the endoscope such that the 

opening at the distal end Of the tube protrudes beyond the opening at the distal end of the 

endoscope, and can be observed through optical means provided at or near the distal end of 

said endoscope; 

supplying the inert gas from the source of said gas through the tube to the distal end opening 

of said tube with such a low flow rate, that gas exiting through said distal end opening is a 

not directed, non laminar stream but forms an inert gas atmosphere between the distal end 

of the tube and the region of the tissue to be coagulated, while the distal end opening is 

maintained at a distance from the tissue to be coagulated in which situation the area of tissue 

to be coagulated is positioned sidewardly of the extended longitudinal axis of the said 

protruding end portion of said tube; 

ionizing said inert gas atmosphere by activating a high frequency voltage source connected 

to the electrode by establishing an electric field in the inert gas atmosphere between the 

electrode and the sidewardly arranged area of tissue to be coagulated; and 

supplying an electric current by means of a plasma jet as a function of the direction of said 

electric field and the electric conductivity of the tissue surface to be coagulated, and 

coagulating an area of the tissue sidewardly of the extended longitudinal axis of the 

protruding end of the tube while the distal end opening of the tube is maintained in a 

substantially stationary position at a predetermined distance from the tissue to be coagulated, 

and while the ionized gas is being supplied through the distal end opening of the tube as a 

not directed, non laminar stream with a low flow rate. 

29 
37. The method as claimed in claim 35, whereby a distal end portion of said tube is a tubular end 

piece made out of a heat resistant ceramic material. 

38. The method as claimed in claim 35, whereby the stream of gas exits through said distal end 

opening with a flow rate of less than about one liter per minute. 

39. The method as claimed in claim 38, whereby tissue in the gastrointestinal tract is coagulated. 

B. Disputed Claim Terms 

The parties assert that the following claim terms are in dispute: “working channels,” “gas 

stream,” “inert gas atmosphere,” “predetermined minimum safety distance,” “low flow rate,” “less 

than about 1 litedminute,” “optical means,” “sidewardly,” “positioned longitudinally from the tube,” 

and “not directed, non laminar stream.”lZ7 However, only those claim terms that are in controversy 

need to be construed, and only to the extent necessary to resolve the controversy.”* To resolve the 

controversy among the parties, the limitations “predetermined minimum safety distance,” 

“sidewardly,” and “working channel” must be construed. lZ9 

1. “predetermined minimum safety distance” (claims 1 and 35) 

The parties couch their claim construction dispute in terms ofthe limitation “minimum safety 

distance.” However, the post trial briefs indicate that the parties are in general agreement as to the 

limitation’s proper construction. ERBE argues that the limitation “minimum safety distance” should 

be construed to mean the minimum distance between the electrode and the opening in the distal end 

See CIB at 14-28; RIB at 9-28; SIB at 10-42. 

12’ Vanderlande Indus. Nederland BV v. Int ’I Trade Comm. , 366 F.3d 13 1 1,1323 (Fed. Cir. 

2004); Vivid Tech., Inc. v. American Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999). 

As discussed in detail, infra, at V.A. 1 ., the undersigned finds that ERBE has failed to 

prove that anyone has performed an APC procedure using the accused products in a manner that 

satisfies the limitations “predetermined minimum safety distance,” “sidewardly,” and “working 

channel” of the asserted claims of the ‘745 patent. Accordingly, the undersigned need not construe 

the other allegedly disputed limitations. 

30 
of the tube that will not allow the electrode to contact Canady argues that the limitation 

is properly construed as the predetermined minimum distance to prevent an electrode from coming 

into contact with the tis~ue.’~’ The Staff argues that properly construed the “minimum safety 

distance” means the minimum distance between the electrode and the distal end of the tube that will 

not allow the electrode to contact tissue. 132 

The parties true dispute appears not to be the proper construction of the phrase 

“predetermined minimum safety distance,” but rather the proper construction of the limitation “an 

electrode . . . positioned inside the tube and offset from the opening at the distal end of the tube a 

predetermined minimum safety distance” of claim 1 and the limitation “an electrode, arranged . . . 

inside the tube and being offset from the opening at the distal end of the tube a predetermined 

minimum safety distance” of claim 35. In this regard, ERBE argues that these limitations are 

properly construed as requiring the electrode to be recessed from the working face of the probe 

whether the working face of the probe is the plastic tube or a ceramic tip.’33 Canady and the Staff 

both argue that the electrode must be recessed from the end of the tube, not the working face of the 

probe as ERBE suggests.’34 

Turning first to the claims of the ‘745 patent, the language of independent claims 1 and 35 

is examined. Claim 1 is drawn to an electrosurgical unit.’35 Claim 35 is drawn to a method for 

130 CIB at 17. 

‘’I RIB at 14. 

13* SIB at 16. 

133 CIB at 18; CRB at 9-12. 

RIB at 15-16; SIB at 19-20; RRB at 4-5; SRB at 12. 

JX-1 at 11:ll. 

31 
coagulating tissue during endoscopic surgery.’36 Both claims require, inter alia, an endoscope that 

has a flexible, hollow tube disposed in one of its working channels.’37 The tube has a distal end and 

an opposing proximal end, with an electrode positioned “inside the tube and offset from the opening 

at the distal end of the tube.”138 Thus, in accordance with the clear and unambiguous language of 

claims 1 and 35, the electrode must be positioned so that it is: (1) inside the tube; and (2) offset from 

the opening at the distal end of the tube. 

In addition to claims 1 and 35, it is asserted by the Staff that dependent claims 1 1 and 37 also 

inform the proper claim con~truction.’~~ Claim 11 depends from claim 1 and adds a limitation 

requiring that “an endpiece made out of a heat resistant material like ceramics is inserted into a distal 

end portion of the tube.”140 Claim 37 depends from claim 35 and adds a limitation requiring that “a 

distal end portion of said tube is a tubular endpiece made out of a heat resistant ceramic material.”141 

Having reviewed the language of dependent claims 1 1 and 37, the undersigned finds that dependent 

claims 1 1 and 37 do not aid in the proper construction of the limitation of claims 1 and 35 requiring 

the electrode to be offset from the distal end of the tube. There simply is nothing in the dependent 

claims that discusses the position of the electrode in the tube. To the extent dependent claims 1 1 and 

37 aid in determining the correct claim construction, they do so, as discussed in more detail below, 

only by illuminating the weakness of EWE’S claim construction argument. 

In contrast to the clear and unambiguous language of claims 1 and 35 calling for the electrode 

136 Id. at 15:25-26. 

137 Id. at 11:13, 11:17-19, 15:27, 15:31-33. 

13’ Id. at 11:22-24, 11:32-35, 15:36-37, 15:41-43. 

139 See SIB at 19-20. 

140 JX-1 at 12:13-16. 

14’ Id. at 16:18-20. 

32 
to be offset from the distal end of the tube, ERBE’s proposed claim construction requires the 

electrode to be offset from what ERBE refers to as “the working face of the probe,” whether the 

working face be the end of the tube or the end of a ceramic insert.142 ERBE points to several aspects 

of the claims that it alleges support its claim construction. Specifically, ERBE argues that claim 37, 

which depends from claim 35, “makes clear that the tube may include a ceramic insert.”’43 Under 

such conditions, ERBE argues that “the end of the insert is the end of the tube, and is the point from 

which the electrode is recessed.”144 In further support of its claim construction, ERBE points to the 

fact that claims 1 and 35 require a gas stream to exit through the opening at the distal end of the 

tube.’45 According to ERBE, “[glas can only exit at the very end of the tube, whether or not the tube 

includes an insert.’46 

ERBE’s claim construction presupposes that claims 1 and 3 5 are broad enough to encompass 

an endoscope having a tube with a ceramic endpiece inserted therein. On this point, however, the 

Staff argues that it would be improper to construe claims 1 and 35 to cover a probe with a ceramic 

endpiece inserted into the distal end portion of the flexible tube.’47 Specifically, the Staff argues that 

because dependent claims 11 and 37 add a ceramic endpiece limitation, the doctrine of claim 

differentiation bars construing claims 1 and 35 to incorporate ceramic end piece^.'^^ In support of 

its argument, the Staff cites to Liebel-Flarsheim Co. v. Medrad, Inc.14’ In Liebel Flarsheim, the 

142 CIB at 18; CRB at 9-12. 

143 CIB at 18 n.20. 

144 Id. 

145 Id. 

146 Id. 

’47 SIB at 19. 

‘48 SIB at 19. 

149 358 F.3d 898 (Fed. Cir 2004). 

33 
Federal Circuit applied the doctrine of claim differentiation to the facts of that case stating that “the 

juxtaposition of independent claims lacking any reference to a pressure jacket with dependent claims 

that add a pressure jacket limitation provides strong support for Liebel’s argument that the 

independent claims were not intended to require the presence of the pressure jacket.”15’ While the 

Staff cites the proper law, the Staff misapplies its teachings. 

“Under the doctrine of claim differentiation, dependent claims are presumed to be narrower 

in scope than the independent claims from which they depend.”I5’ Because of this presumed 

difference in scope, the doctrine of claim differentiation generally prohibits construing an 

independent claim as requiring that which is contained in the dependent claim, because to do so 

would make the dependant claim superflu~us.’~~ Contrary to the Staffs argument, that does not 

mean that the scope of the independent claim cannot encompass that which is in its dependent claim. 

In fact, quite the opposite, because a dependent claim is necessarily narrower in scope than the 

independent claim on which it depends, an independent claim is typically construed broad enough 

to encompass those limitations in the dependent ~1airn.I~~ Theundersigned, therefore, finds the 

150 Id. at 909-910. 

15’ See AK Steel Corp. v. Sollac, 344 F.3d 1234, 1242 (Fed. Cir. 2003); see also 35 U.S.C. 

5 1 12 (“[A] claim in dependent form shall contain a further limitation of the subject matter claimed. 

A claim in dependent form shall be construed so as to incorporate by reference all the limitations of 

the claim to which it refers.”). 

152 See Karlin Tech., Inc. v. Surgicalllynamics, Inc., 177 F.3d 968 (Fed. Cir. 1999)(“[The 

doctrine of claim differentiation,] which is ultimately based on the common sense notion that 

different words or phrases used in separate claims are presumed to indicate that the claims have 

different meanings and scope, . . . normally means that limitations stated in dependent claims are not 

to be read into the independent claim from which they depend.”). 

See AK Steel Corp., 344 F.3d at 1242 (“Moreover, and most importantly, claims 1 and 

5 must also encompass aluminum with up to about 10% silicon, i. e., Type 1 silicon, because claims 

3 and 7, which depend from claims 1 and 5, respectively, expressly recite ‘up to about 10% 

silicon.”’); see also 35 U.S.C. 0 112. 

153 

34 
Staffs argument on this point unpersuasive. Based on the language of the claims, it is presumed that 

independent claims 1 and 3 5 are broad enough to read on an endoscope having a tube with a ceramic 

endpiece. 

Although claims 1 and 35 are broad enough to read on an endoscope having a tube with a 

ceramic endpiece, that does not mean as ERBE suggests that “the end of the insert is the end of the 

tube, and is the point from which the electrode is recessed.”’54 As previously stated, dependent claim 

1 1 adds a limitation to claim 1 requiring that “an endpiece made out of a heat resistant material like 

ceramics is inserted into a distal end portion of the tube.”155 Likewise, as previously stated, 

dependent claim 37 adds a limitation to claim 35 requiring that “a distal end portion of said tube is 

a tubular endpiece made out of a heat resistant ceramic material.”’56 Absent something in the 

specification or prosecution history that would demand otherwise, “[tlhere is presumed to be a 

difference in meaning and scope when different words or phrases are used in separate claims.”157 

Thus, the applicant’s introduction of the new term “endpiece” in dependent claims 11 and 37 

presumes that the “endpiece” is different from the “tube” introduced in claims 1 and 35. Moreover, 

dependent claim 1 1 explicitly requires that the endpiece be “inserted” into a distal end portion of the 

tube, thereby clearly defining the “endpiece” as a separate element from the “tube.” Contrary to 

ERBE’s general argument, dependent claims 11 and 37 do not suggest the limitations of claims 1 

and 35 requiring that the electrode be offset from the end of the tube should be construed as 

154 CIB at 18 n.20. 

JX-1 at 12:13-16. 

156 Id. at 16:18-20. 

157 Tandon Corp. v. 

1987). 

United States Int’l Trade Comm ’n, 831 F.2d 1017, 1023 (Fed. Cir. 

35 
permitting the offset to be determined from “the working end of the probe.” 

With regard to ERBE’s claim construction argument based on the limitation of claims 1 and 

35 requiring a gas stream to exit through the opening at the distal end of the tube, the undersigned 

is unpersuaded. ERBE’s argument is premised on its assertion that, in an endoscope with a tube 

having a ceramic insert, the gas stream will not exit through the opening at the distal end of the tube, 

but rather the opening at the end of the ceramic insert.”* ERBE’s premise, however, is incorrect. 

Even with a ceramic endpiece inserted into the distal end of the tube, the gas will still exit through 

the opening at the end of the tube. The end of the tube is the end of the tube, and adding a ceramic 

insert does not change that fact. Once the gas proceeds past the plane at the end of the tube, the gas 

has exited the distal end of the tube. 

Having examined the language of the claims, the specification is consulted. ERBE relies 

heavily on the specification of the ‘745 patent to support its argument that claims 1 and 35 should 

be construed as requiring the electrode to be recessed from the face of the probe whether the working 

face of the probe is the plastic tube or a ceramic tip.159 In particular, ERBE notes that in some 

embodiments of the invention, such as that shown in Figure 14, “the distal end of the APC probe is 

a plain end of the plastic tube,” while in other embodiments, such as that shown in Figure 13, “the 

distal end of the APC probe is a ceramic in~ert.”’~’ Additionally, ERBE points to a sentence in the 

specification that states that “[tlhe electrode 8 is arranged in all embodiments in such a manner, that 

substantially no direct contact is possible with the tissue to be coagulated or with other tissue, out 

See CIB at 18 (“Gas can only exit at the very end of the tube, whether or not the tube 

includes an insert.”). 

15’ See CIB at 18-1 9. 

16’ Id. at 18. 

36 
of which reason the electrode 8 is offset from the face 10 of the tube 2 and the endpiece 12, 

respectively, for a minium distance A.”161 ERBE never explains in its opening brief the legal 

significance of these observations or why they support its proposed claim construction. While ERBE 

does state in its reply brief that “[olne of ordinary skill in the art would refer to the specification to 

resolve any doubts as to how to measure the “predetermined minimum safety distance,” ERBE does 

not elaborate as to what “doubts” it is referring.’62 As discussed supra, the language of claims 1 and 

35 is unambiguous that the electrode must be offset from the opening at the distal end of the tube. 

Moreover, there is nothing in the passages in the specification to which ERBE cites that indicate a 

clear intent on the part of the applicant to define the distal end of the tube as “the working end of the 

probe, whether the working end be that of the tube or of a ceramic insert.” In fact, the specification 

carefully differentiates between the tube and the endpiece thereby supporting the notion that the tube 

and endpiece are separate and distinct elements. 

ERBE also notes in its reply brief that if the Staffs and Canady’s interpretation were correct, 

Figure 13 of the ‘745 patent would have the safety distance A measured from the end of the tube 

rather than the opening 9.163 According to ERBE, there is no such illustration in the specification 

and no indication that one of ordinary skill in the art would interpret the predetermined minimum 

safety distance in a way that is not illustrated in any embodiment of the patent.’64 Again, ERBE fails 

to explain the legal significance of its argument. Contrary to ERBE’s assertion, at a minimum 

Figures 2-4 , 12, 14, and 15 of the ‘745 patent disclose embodiments of the invention configured 

Id. (quoting JX-1 at 4:41-44). 

162 See CRB at 10. 

163 Id. 

164 Id. at 11. 

37 
with the electrode positioned as properly construed herein to be both inside the tube and offset a 

predetermined minimum safety distance from the end of the tube. See JX- 1 at Figs. 2-4,12,14,15. 

Notably, each of the embodiments includes an endpiece inserted into the distal end of the tube. Id. 

Figure 1 3, which is reproduced below, shows a ceramic endpiece 12 inserted into the distal 

end of the tube 2.’65 The ceramic endpiece 12 has an orifice 9 in which an electrode 23 is 

disposed.’66 The electrode 23 is offset a minimum safety distance “A” from the distal end 10 of the 

ceramic endpiece 12. 167 

10 9 

FIG, 13 

As seen above, Figure 13 shows the electrode 23 disposed outside the tube 2 and offset from the end 

10 of the ceramic endpiece 12. In contrast, as discussed supra, the clear and unambiguous language 

of claims 1 and 35 require the electrode to be: (1) “positioned inside the tube” and (2) “offset from 

the opening at the distal end of the tube.” Thus, even assuming arguendo that EWE’S proposed 

claim construction were adopted and the limitation requiring the electrode to be offset from the distal 

end of the tube were construed to permit the electrode to be offset from the working end of the probe, 

165 See JX-1 at 5:37-46, Figure 13. 

166 Id. 

167 Id. 

38 
whether the working end of the probe be the end of the tube or the end of the endpiece, claims 1 and 

35 would still not read on the embodiment illustrated in Figure 13 of the ‘745 patent because the 

electrode is not “positioned inside the tube.” Accordingly, to construe claims 1 and 35 to read on 

the embodiment illustrated in Figure 13, the limitation of claims 1 and 35 requiring the electrode to 

be positioned inside the tube would have to be ignored. As the Federal Circuit stated in Harold 

Schoenhaus v. Genesco, Inc, “where a patent specification includes a description [of an embodiment] 

lacking a feature, but the claim recites that feature, the language of the claim controls. In that case, 

the claim excludes the described embodiment, which is dedicated to the public.”’68 Here, Figure 13 

describes an embodiment with the electrode positioned outside the tube, while the claim explicitly 

requires the electrode to be positioned inside the tube. Thus, the language of the claim controls. 

Having examined the specification, the prosecution history is consulted. In this instance, 

however, the prosecution history does not aid in the construction of the disputed limitation. No party 

argues otherwise. 

In the end, it is “the claims made in the patent [that] are the sole measure of the grant.”169 

’ 

HaroldSchoenhaus v. Genesco, Inc, 440 F.3d 1354,1359 (Fed. Cir. 2006) (citing Unique 

Concepts, Inc. v. Brown, 939 F.2d 1558,1562-63 (Fed. Cir. 1991)); See Unique Concepts, Inc. , 939 

F.2d at 1563 (Fed. Cir. 1991) (“When the language of a claim is clear, as here, and a different 

interpretation would render meaningless express claim limitations, we do not resort to speculative 

interpretation based on claims not granted.”); see also InnovdPure Water, Inc., 381 F.3d at 11 19, 

reaffirmed in Phillips, 415 F.3d 1303 (Fed. Cir. 2005) (en banc) (“we observe that Safari’s 

interpretation largely reads the term ‘operatively’ out of the phrase ‘operatively connected.’ While 

not an absolute rule, all claim terms are presumed to have meaning in a claim.”); Texas Instruments 

Inc. v. United States Znt ’1 Trade Comm ’n, 988 F.2d 1 165, 1 17 1 (Fed. Cir. 1993) (“To construe the 

claims in the manner suggested [by the patentee] would read an express limitation out of the claims. 

This we will not do because courts can neither broaden nor narrow claims to give the patentee 

something different than what he has set forth.” (internal quotations omitted)). 

169 See Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336 (1961); white v. 

Dunbar, 119 U.S. 47, 52 (1 886) (“The claim is a statutory requirement, prescribed for the very 

39 
As the Federal Circuit stated in Johnson & Johnston Assocs. Inc. v. R. E. Serv. Co., 

the claim requirement presupposes that a patent applicant defines his invention in the 

claims, not in the specification. After all, the claims, not the specification, provide 

the measure of the patentee’s right to exclude.’70 

Here, claims 1 and 35 clearly and unambiguously require that the electrode be positioned “inside the 

tube” and “offset from the opening at the distal end of the tube.”17’ As discussed above, nothing in 

the specification or prosecution history demands a contrary result. Accordingly, the undersigned 

finds that one of ordinary skill in the art at the time of the invention would construe the limitation 

“an electrode . . . positioned inside the tube and offset from the opening at the distal end of the tube 

a predetermined minimum safety distance” of claim 1 and the limitation “an electrode, arranged . 

. . inside the tube and being offset from the opening at the distal end of the tube a predetermined 

minimum safety distance” of claim 35 as requiring the electrode to be positioned inside the tube and 

offset from the opening at the distal end of the tube a predetermined distance that will not allow the 

electrode to contact tissue. 

purpose of making the patentee define precisely what his invention is; and it is unjust to the public, 

as well as ‘an evasion of the law, to construe it in a manner different from the plain import of its 

terms.”). 

I7O Johnson & Johnston Assocs. Inc. v. R. E. Serv. Co., 285 F.3d 1046,1052 (Fed. Cir. 2002) 

(en banc); see also Milcor Steel Co. v. George A. Fuller Co., 3 16 U.S. 143, 146 (1942) (“Out of all 

the possible permutations of elements which can be made from the specifications, he reserves for 

himself only those contained in the claims.”); McCZain v. Ortmayer, 141 U.S. 419 (1891) (“The 

claim is the measure of his right to relief, and while the specification may be referred to to limit the 

claim, it can never be made available to expand it.”). 

In construing claims, the analytical focus must begin and remain centered on the 

language ofthe claims themselves, for it is that language that the patentee chose to use to particularly 

point out and distinctly claim the subject matter which the patentee regards as his invention.” 

Interactive Gift Express, Inc. v. Compuserve, Inc., 256 F.3d 1323, 1331 (Fed. Cir. 2001). 

171 66 

40 
2. “sidewardly” (claims 1 and 35) 

ERBE argues that the limitation “sidewardly” should be construed to mean a10ngside.l~~ 

Canady argues in its opening post-hearing brief that the limitation “arranged sidewardly of the area 

of tissue to be coagulated” is properly construed as the longitudinal axis of the tube being tangential 

to and spaced a distance from the tissue to be c0agu1ated.l~~ However, in its reply post-hearing brief, 

Canady states that it would agree to a construction of the limitation “arranged sidewardly of the area 

of tissue to be coagulated” as the area of the tissue to be coagulated is positioned alongside of, or 

parallel to, the longitudinal axis of the flexible tube and not in the axial direction of the tube.’74 

While the Staff argues in its opening brief that “sidewardly” should be construed as at or toward one 

side, the Staff notes in its reply brief that it would find acceptable ERBE’s proposed construction of 

“sidewardly” as a10ngside.I~~ 

The term “sidewardly” is used in independent claims 1 and 35 of the ‘745 patent. In claim 

1 , the portion of the tube protruding from the distal end of the endoscope is required to be positioned 

such that the extended longitudinal axis of the tube is arranged sidewardly of the area of tissue to be 

coagulated. In claim 35, the tissue to be coagulated is again required to be positioned sidewardly of 

the extended longitudinal axis of the protruding end portion of the tube.’76 It is plain from the claim 

language cited above that the term “sidewardly” describes the positional relationship between the 

tissue to be coagulated and the extended longitudinal axis of the protruding end portion of the tube. 

172 CIB at 22. 

173 RIB at 20. 

174 RRB at 7-8. 

175 See SIB at 35-36; SRl3 at 15. 

176 JX-1 at 15:60-63, 16:l-2, 16:6-8. 

41 
Having examined the language of the claims, the specification is consulted. The specification 

uses the term “sidewardly” only once, stating: “in this case rather large areas of tissue can be 

coagulated sidewardly from the axis 41 of tube 2 as shown in FIGS. 15 and 20.”177 Figures 15 and 

20 are reproduced below. 

9 If 

I. . ._ *.. . 

FiG. 15 18 Fip. 20 

As seen above, the figures show the tissue to be coagulated (labeled 18 in Fig. 15) oriented 

alongside, or generally parallel to, the extended longitudinal axis (i.e., the dashed line in Fig. 15) of 

the protruding end of the tube (labeled 2 in Figs. 15, 20). Thus, the specification supports the 

parties’ proposed claim constructions. 

Having examined the specification, the prosecution history is consulted. However, in this 

instance, the prosecution history does not aid in the proper construction of the limitation 

“sidewardly.” No party argues otherwise. 

Accordingly, based on the language of the claims in light of the specification and prosecution 

history, the undersigned finds one of ordinary skill in the art would construe the limitation 

“sidewardly” as “alongside.” 

3. “working channel” (claims 1 and 35) 

ERBE argues in its pre-hearing brief that the limitation “working channel” should be 

17’ Id. at 9:30-34. 

42 
construed as a channel of an endoscope through which a device (e.g. flexible endoscopic tubes, 

optical means andor surgical instruments) may be inserted. 17’ However, in its post-hearing briefs, 

ERBE now argues that the limitation “working channel” should be construed as a channel of an 

endoscope through which work is ~erf0rmed.I~~ Canady argues that the limitation should be 

construed as a channel that has an opening at each end through which a device may be inserted.I8’ 

The Staff argues that properly construed “working channel” means a course through which a device 

(e.g., flexible endoscope tube, optical means, surgical instrument) may be directed or moved.’” It 

appears fiom the parties post-hearing briefs that the dispute regarding the limitation “working 

channel” is not over the meaning of the word “channel” but rather on how the word “working” 

modifies or narrows the word “channel.” 

Turning first to the claims, it is noted that asserted independent claims 1 and 35 each call for 

a “plurality of working channels.” The term “plurality” is construed in accord with its plain and 

customary meaning to mean at least two. Thus, claims 1 and 35 each require at least two working 

channels. 

Claims 1 and 35 each describe a working channel as a feature of an endoscope.I8’ According 

to the both claims 1 and 35, a working channel must extend between the two ends of the endoscope 

and have a predetermined diameter.lS3 In claim 1, one of the at least two working channels is also 

explicitly required to be capable of having a tube of smaller diameter inserted there through, while 

178 CPHB at 18. 

179 CIB at 14. 

RIB at 6. 

18’ SIB at 11. 

18* JX-1 at 11:12-14,15:27-29. 

183 Id 

43 
a second working channel is explicitly required to have optical means positioned therein.Ig4 In claim 

35, one of the working channels is explicitly required to have a tube of smaller diameter inserted 

there through.’85 Unlike claim 1 , claim 35 does not add any additional limitations on the second of 

the at least two working channels. While none of the above limitations placed on a “working 

channel” are particularly useful in determining the proper meaning of the limitation, they are 

nevertheless useful from a claim construction standpoint because any construction of the limitation 

“working channel” must be broad enough to encompass those limitations. Any claim construction 

that reads out one of the limitations of a working channel explicitly recited in claims 1 and 35 would 

be impermissible. 

Having examined the claims, the specification is consulted. Figure 1 , reproduced below, 

shows an endoscope with two working channels labeled 6 and 7.’86 

lg4 Id. at 11:17-19, 11:44-45. 

Id. at 15:33-35. 

Id. at Figure 1. 

44 
The specification describes the channels in Figure 1 by stating that “[tlhe tube 2 protrudes out of the 

distal end of a working channel 7” and “the distal end of a second working channel 6 can be seen.”187 

Unfortunately, this description does not add anything new that would aid in the proper construction 

of the limitation. 

In addition to the description of the endoscope in Figure 1 of the ‘745 patent, the 

specification also describes other aspects of a working channel. For example, the specification 

repeatedly states that the tube used to perform the tissue coagulation is inserted through a working 

channel of the endoscope. In addition, the specification states that a manipulator, which is used to 

adjust the direction of the distal end of the tube, may also be inserted through a second working 

channel of an endoscope.’88 Additionally, the specification states that a working channel may serve 

as a gas supply ~0nduit.I~~ Further, the specification teaches that in a double-channel therapeutic 

endoscope, a working channel may also be used to supply suction.190 

Having examined the specification the prosecution history is examined. However, in this 

instance, the prosecution history does not aid in the proper construction of the limitation “working 

channel.” No party argues otherwise. 

“While not an absolute rule, all claim terms are presumed to have meaning in a claim.”191 

Thus, the word “working” in the limitation “working channel” is presumed to be significant. 

18’ Id. at 3:67-4:1,4:3-4. 

Zd. at 5:21-30. 

Is’ Zd. at 4:51-54. 

I9O Id. at 10:49-51. 

I9I See Innova/Pure Water, Inc., 381 F.3d at 11 19 (“we observe that Safari’s interpretation 

largely reads the term ‘operatively’ out of the phrase ‘operatively connected.’ While not an absolute 

rule, all claim terms are presumed to have meaning in a claim.”). 

45 
Accordingly, it would be improper, absent something in the specification or prosecution history, to 

construe the limitation “working channel” the same as the word “channel.” The impropriety of such 

action is reinforced in this instance by the fact that claim 35 explicitly includes limitations directed 

to both a “working channel” and a “channel.” Specifically, in addition to requiring a plurality of 

working channels, claim 35 also requires a tube with a distal end, a proximal end, an opening at each 

end, and a “channel” extending between the two ends.I9* The fact that the claim distinguishes 

between the “working channel” in which the tube is inserted and the “channel” that runs between 

the ends of the tube, further supports the notion that the term “working” in the limitation “working 

channel” is significant. 

ERBE argues that only its proposed construction gives meaning to the word “working” and 

distinguishes a “working channel” from a “channel.”’93 The undersigned disagrees. In fact, the 

opposite appears true. According to ERBE, the limitation “working channel” must be construed 

broadly enough to include “channels that allow for the carriage of surgical instruments, endoscopic 

probes and manipulators, the placement of optical means, and the delivery of gas.”’94 ERBE also 

argues that the limitation must be construed to include channels for air, water and Thus, 

under ERBE’s proposed construction of “working channel” as a channel through which work is 

performed, it appears that every channel in an endoscope would be a working ~hanne1.l~~ On that 

19* See JX-1 at 15:37-41. 

‘93 CRB at 7. 

194 See CIB at 15. 

195 Id. ; CRB at 6. 

196 See CORFF 176 (noting that a biopsy channel, aidwater channel, lens channel, water jet 

channel, and light guide channel are all “working channels.”); CORFF 102 (“A working channel is 

a channel used to perform work such as to house devices for irrigation or suction, to introduce light, 

to house a lens and/or lens system for visualization purposes, or other means for making the system 

46 
point, the undersigned notes that conspicuously absent from ERBE’s post-hearing briefs is any 

indication of what type of a channel an endoscope would have that is not a working channel under 

ERBE’s proposed construction. 

Regardless, the language of asserted claim 3 5 contradicts ERBE’s proposed construction. 

Claim 35, which is a method for coagulating tissue, includes the step of “supplying the inert gas from 

the source of said gas through the tube to the distal end opening of said tube.”197 As previously 

discussed, the tube has a “channel” extending between its two ends.I9’ Therefore, according to the 

language of claim 35, the inert gas travels through the channel of the tube. Because the channel acts 

as a gas conduit, under ERBE’s proposed construction it would be a working channel, and one would 

expect that if ERBE’s construction were correct the applicant would refer to it as such. However, 

claim 35 does not refer to it in such a manner. Rather claim 35 specifically refers to it simply as a 

“channel.” This further undermines the propriety of ERBE’s proposed construction. 

ERBE also argues that because the specification teaches that a working channel can be used 

to supply suction or serve as a gas conduit, the limitation “working channel” must be broader than 

just a channel through which a device may be inserted.’99 The undersigned, however, is 

unpersuaded. The fact that the specification teaches that a working channel can be used to supply 

suction or serve as a gas conduit does not run afoul of a construction of “working channel” as a 

channel through which a device may be inserted. Under the Staffs and Canady’s proposed 

constructions, as long as a working channel is capable of having a device inserted there through, 

work within the human body.”). 

197 JX-1 at 1553-54. 

19’ See JX-1 at 15:37-41 

199 CRB at 6. 

47 
there is nothing preventing the working channel from being used to supply gas or suction. 

Having examined the language of the claims and specification of the ‘745 patent, the 

undersigned finds Canady’s and the Staffs claim construction arguments generally persuasive. 

However, the undersigned takes issue in some respects with both parties’ constructions. Specifically, 

the undersigned finds fault in the fact that neither proposed construction seemingly gives any 

significance to the word “working” in the limitation “working channel.” Additionally, the 

undersigned finds that the Staffs proposed construction requiring a working channel to be a channel 

through which a device may be directed or moved impermissibly reads limitations from the 

specification into the claims. Although the specification does discuss directing and/or moving 

devices through a working channel, none of the statements in the specification amount to an explicit 

disavowal of claim scope and there is nothing in the claim language to suggest the applicant intended 

to define “working channel” in such terms. 

Accordingly, based on the language of the claims in light of the specification, the 

undersigned finds that one of ordinary skill in the art would construe the limitation “working 

channel” as a channel through which a device that performs work may be inserted. 

V. INFRINGEMENT 

The following table summarizes ERBE’s allegations of infringement against Canady.200 

2oo See SFF 7 10; see also Tr. at 231, 267, 268, 233 (Aug. 27, 2007). For each accused 

product alleged to infringe independent claim 1, EWE also alleges that the product infringes 

dependent claims 3,4,11, and 13, of the ‘745 patent. For each accused product alleged to infringe 

independent claim 35, EWE also alleges that the product infringes dependent claims 37,38, and 39, 

of the ‘745 patent. 

48 
Dimensions 

1322538 23 mm x 

3.4 m 

5-422537 2-3 mx 

WIls 2.3 m 

51322537 

S-422538 23mx 

was 3.4 m 

S1322538 

# 

rf 

# 

r/ 

r, 

# 

A. Direct Infringement 

As seen in the table above, EWE alleges that Canady’s accused products indirectly infringe 

the asserted claims ofthe ‘745 patent through contributory infringement and inducement. To prevail 

on its allegations of indirect infringement, ERBE must first prove that the asserted claims ofthe ‘745 

patent have been directly infringed.201 To prove direct infringement, “a patentee must either point 

to specific instances of direct infringement or show that the accused device necessarily infringes the 

patent in suit.”202 ERBE does not argue that the accused products necessarily infringe the ‘745 patent 

and thus pursuant to Ground Rule 8.2, EWE has waived any such argument.203 Accordingly, to 

20’ Dynacore Holdings Corp. v. US. Philips Corp., 363 F.3d 1263, 1272 (Fed Cir. 2004) 

(“Indirect infringement, whether inducement to infringe or contributory infringement, can only arise 

in the presence of direct infringement.”); Linear Tech. Corp. v. Impala Linear Corp., 379 F.3d 13 1 1, 

1326 (Fed. Cir. 2004) (“There can be no inducement or contributory infringement without an 

underlying act of direct infringement.”). 

*02 ACCO Crands, Inc. v. ABA Locks Manufactureer Co., Ltd, 501 F.3d 1307, 1313 (Fed 

Cir. 2007) 

*03 See inpa, at V.B. 1 .a., c. (discussing noninfringing uses of accused products). 

49 
prove direct infringement, ERBE must point to specific instances of direct infringement. 

1. Claims 1 and 35 

a. IUS Martin Probes 

(1) IUS Martin 1.5 mm probes (part no. 1322535) 

ERBE alleges that the North Carolina Baptist Hospital (NCBH) uses KLS Martin 1.5 mm 

probes to directly infringe claims 1 and 35 of the ‘745 patent.204 In support, ERBE relies entirely on 

the testimony of Ms. Sara Eisenbacher, manager of the digestive health center endoscopy suite at 

NCBH. At the hearing, Ms. Eisenbacher testified as to the following pertinent facts: (1) NCBH 

performs Argon Plasma Coagulation (“APC”) procedures in bronchoscopy;205 (2) in the last fiscal 

year, NCBH has performed approximately twelve APC bronchoscopy procedures;206 (3)NCBH uses 

APC units with generator systems made by ERBE;207 (4) the APC units have a default setting of 0.3 

liters/min;208 (5) the APC bronchoscopy procedures are performed using 1.5 mm probes;209 (6) over 

the last fiscal year NCBH has utilized both Canady and ERBE probes;210 (7) at the time NCBH 

started ordering Canady probes, it is not known the number of ERBE probes in inventory;211 (8) 

NCBH purchased twenty Canady 1.5 rnm probes of which nine probes remain in inventory;212 and 

(9) there are many ways that a probe can be pulled fiom inventory without having been used on a 

204 See CIB at 3 1,42. 

205 See Tr. at 452:6-9 (Aug. 27,2007). 

206 Id. at 452:lO-19. 

207 Id. at 452:20-25. 

208 Id. at 456:12-23. 

209 Id. at 457:4-7. 

210 Id. at 454:2-5. 

211 Id. at 4585-16,465510. 

212 Id. at 454:19-455:2. 

50 
patient, including being misplaced in inventory, used for management, or used for review in the 

ERBE argues that “it is more likely than not that eleven IUS Martin probes have been used 

in APC procedures in bronchoscopy at NCBH during its previous fiscal year.”214 However, the 

evidence of record does not support such a conclusion. The evidence of record merely establishes 

that NCBH purchased 20 Canady 1.5 mm probes, performed approximately 12 APC bronchoscopy 

procedures in the last fiscal year, and that 11 Canady 1.5 mm probes are no longer in inventory. 

Contrary to ERBE’s argument, the absense of 1 1 Canady probes from inventory does not establish 

their use in bronchoscopy procedures. 

As stated above, Ms. Eisenbacher testified that there are many ways that a probe can be 

pulled from inventory without having been used on apatient, including being misplaced in inventory, 

used for management, or used for review in the in~titution.~’~ Additionally, when explicitly asked 

whether she had “any reason to believe that no Canady probes have been used on patients,” Ms. 

Eisenbacher answered that “[ulntil I were to go through medical records, I cannot - I cannot presume 

any information on what was used and what was not used.”216 Further, Ms. Eisenbacher testified that 

she did not know how many ERBE 1.5mm probes were in inventory at the time NCBH began 

purchasing IUS Martin 1.5 mm probes from can ad^.^^^ Thus, while approximately twelve APC 

procedures were performed at NCBH over the last fiscal year, there is no evidence of record 

213 Id. at 455:21-456:5. 

214 CRB at 21 n.15. 

215 Tr. at 455:21-456:5. 

216 Id. at 456:9-11. 

217 Id. at 458:5-16,465:5-10. 

51 
regarding how many of those procedures were performed using ERBE probes and how many, if any, 

were performed using KLS Martin 1.5 mm probes purchased from Canady. Ms. Eisenbacher’s 

testimony on this point is entirely inconclusive. 

Moreover, ERBE has failed to prove that any 1.5 mm KLS Martin probe sold by Canady has 

an electrode positioned inside the tube and offset from the opening at the distal end of the tube as 

required by claims 1 and 35 of the ‘745 patent. As construed herein, the limitation “an electrode 

. . . positioned inside the tube and offset from the opening at the distal end of the tube a 

predetermined minimum safety distance” of claim 1 and the limitation “an electrode, arranged . . . 

inside the tube and being offset from the opening at the distal end of the tube a predetermined 

minimum safety distance” of claim 35 require the electrode to be positioned inside the tube and 

offset from the opening at the distal end of the tube a predetermined distance that will not allow the 

electrode to contact tissue. ERBE admits that for KLS Martin probes, the electrode protrudes from 

the distal end of the tubing portion of the probe into the ceramic tip or endpiece.*’* Because the 

electrode in the IUS Martin probes extends beyond the end of the tube and into the ceramic 

endpiece, the electrode cannot be said to be positioned inside the tube and offset from the opening 

at the distal end of the tube a predetermined minimum safety distance as required by independent 

claims 1 and 35 of the ‘745 patent.*19 

218 See SFF fl 104; CX-65; CX-73; CPX-1; CPX-8. 

219 ERBE argues that even if the claim language of the ‘745 patent is interpreted to require 

an electrode offset from the end of the plastic tube and not the end of a ceramic insert, the Canady 

probes still infiinge the ‘745 patent under the doctrine of equivalents. See CIB at 36. According to 

ERBE, an electrode recessed from the tip of a ceramic insert has the same function and result of 

protecting tissue from contact with the electrode and works in the same way by offsetting the 

electrode fiom the opening of the probe as an electrode offset from the end of the plastic tube. Id. 

ERBE did not include in its pre-hearing brief any doctrine of equivalents arguments with respect to 

52 
Additionally, ERBE has failed to prove any specific instance of a KLS Martin 1.5 mm probe 

having been used in an APC procedure in a manner such that the longitudinal axis of the tube is 

arranged “sidewardly” of the area of tissue to be coagulated. As construed herein, the limitation 

“sidewardly” means alongside. Thus, to satisfy this claim element, ERBE must show that NCBH 

used a KLS Martin 1.5 mm probe in an APC procedure where the longitudinal axis of the tube was 

arranged alongside the area of tissue to be coagulated. The only evidence of record on this point 

comes from Ms. Eisenbacher who testified as follows: 

Q. 

A. Yes. 

Q. 

A. Certainly. 

Have you ever observed any APC procedures in bronchoscopy? 

When you are doing an APC procedure in bronchoscopy, is it typical for the 

physician to aim the probe at the tissue to be coagulated? 

the limitations of claims 1 and 35 requiring an electrode positioned “inside the tube” and “offset 

from the opening at the distal end of the tube.” See CPHl3 at 36-62. Accordingly, pursuant to 

Ground Rule 8.2, ERBE has waived any such arguments. 

Even if it had not been waived, however, the undersigned finds ERBE’s argument entirely 

deficient. ERBE’s argument consists of nothing more than one sentence of attorney argument with 

no citation to any record evidence. Infringement under the doctrine of equivalents is a question of 

fact that requires evidence. See Hebert v. LisZe Corp., 99 F.3d 1109, 11 17 (Fed. Cir. 1996) 

(“Questions of the technologic equivalency of a claimed invention and an accused device are . . . questions of fact, and require determination by the trier of fact, based on evidence.”). Moreover, 

Claims 1 and 35 both expressly require the electrode to be positioned “inside the tube.” However, 

under ERBE’s DOE argument, the electrode would be disposed outside the tube. Thus, EWE’S 

argument completely vitiates the “inside the tube” limitation of claims 1 and 35, in violation of the 

all-elements rule. See K-2 Corp. v. SuZomon S.A., 191 F.3d 1356, 1367 (Fed. Cir. 1999) (“It is also 

fundamental that the text of the claim must be closely followed: each element contained in a patent 

claim is deemed material to defining the scope of the patented invention, and thus the doctrine of 

equivalents must be applied to individual elements of the claim, not to the invention as a whole. 

Therefore, the doctrine of equivalents cannot be used to vitiate an element from the claim in its 

entirety.”)(internal quotations and citations omitted); see also Tronzo v. Biomet, Inc., 156 F.3d 1 154, 

1 160 (Fed. Cir. 1998) (“If a theory of equivalence would vitiate a claim limitation, however, then 

there can be no infringement under the doctrine of equivalents as a matter of law.”). Accordingly, 

for the reasons discussed above, even if ERBE had not waived its DOE argument, the undersigned 

would still find no equivalency. 

53 
Q. 

A. 

What percentage of the time are they able to aim directly at tissue, if they are in a 

bronchi? 

Depends on the lesion location. . . . However, if the lesion is completely lateral to 

your view, you must angulate the endoscope to have the lesion in view to be able to 

apply the therapy.220 

ERBE argues that Ms. Eisenbacher testified that in some procedures the physician must angulate the 

endoscope to be able to coagulate the tissue and that this testimony satisfies the claim limitation of 

claims 1 and 35 requiring the longitudinal axis of the tube arranged alongside the area of tissue to 

be coagulated. The undersigned disagrees. 

As Ms. Eisenbacher plainly testified, when the “lesion is completely lateral to your view” 

(i.e., the probe is arranged alongside the lesion), “you must angulate the endoscope to have the lesion 

in view” (i.e., the endoscope must be moved from its position alongside the lesion to a position 

where the endoscope is at an angle to the tissue to be coagulated). In light of Ms. Eisenbacher’s 

testimony that when a lesion is alongside the probe, the physician must move the endoscope from 

its sidewardly position to one that is at an angle to the tissue to be coagulated, the undesigned finds 

ERBE has failed to prove that a KLS Martin 1.5 m probe was used in an APC procedure where 

the longitudinal axis of the tube is arranged sidewardly of the area of tissue to be coagulated as 

required by claims 1 and 35 of the ‘745 patent. 

Further, ERBE has failed to prove a specific instance where NCBH used a KLS Martin 1.5 

mm probe in an APC procedure with an endoscope having a plurality of working channels. ERBE 

relies entirely on Ms. Eisenbacher’s testimony that the Olympus bronchoscope used by NCBH has 

built-in optics to conclude that the endoscope used by NCBH has a second working channel.221 

220 Tr. 458:20-459: 12. 

221 See CRB at 24. 

54 
However, there is no testimony in the record that each of the alleged working channels in the 

Olympus bronchoscope used by NCBH extend between the two ends of the endoscope or have a 

predetermined diameter as required by claims 1 and 35 of the ‘745 patent. Moreover, there is no 

testimony that the endoscope has at least two working channels that are capable of having a device 

that performs work inserted there through. In fact the testimony is inopposite. Specifically, Ms. 

Eisenbacher testified as follows: 

Q. Now, with respect to the Olympus bronchoscope that you mentioned, how many 

channels does that have into which a probe can be inserted? 

A. One. 

Q. So there is only one channel that the APC probe can be inserted into? 

A. Into our inventory, correct.222 

Accordingly, the undersigned finds ERBE has failed to prove that a IUS Martin 1.5 mm probe has 

been used by anyone at NCBH in an APC procedure with an endoscope having a plurality of working 

channels as required by claims 1 and 35 of the ‘745 patent. 

To prove direct infringement, ERBE must prove that a KLS Martin 1.5 mm probe was 

actually used in a way that infringes the asserted claims of the ‘745 patent. As discussed above, 

ERBE has failed to establish that NCBH has ever used a KLS Martin 1.5 mm probe in an APC 

procedure. Additionally, even if the evidence showed that NCBH had actually used a IUS Martin 

1.5 mm probe in an APC procedure, ERBE has failed to prove that the probes are used in a manner 

that infringes claims 1 and 35 of the ‘745 patent. Specifically, ERBE has failed to at least prove: (1) 

that a KLS Martin 1.5 mm probe satisfies the limitations of the asserted claims requiring an electrode 

222 Tr. 462:9-16 (Aug. 27,2007). 

55 
positioned “inside the tube” and “offset from the opening at the distal end of the tube a 

predetermined minimum safety distance;” (2) that a KLS Martin 1.5 mm probe was used with an 

endoscope having a plurality of working channels; and (3) that a KLS Martin 1.5 mm probe was used 

in a procedure where the longitudinal axis of the tube was arranged sidewardly of the tissue to be 

coagulated. Accordingly, the undersigned finds that ERBE has failed to prove that KLS Martin 1.5 

mm probes (part no. 1322535) imported and sold by Canady directly infringe either independent 

claim 1 or independent claim 35 of the ‘745 patent. 

(2) KLS Martin 2.3 mm probes (part nos. 1322537,1322538) 

ERBE alleges that the Cleveland Clinic Foundation uses KLS Martin 2.3 mm probes (part 

no. 1322537) to directly infringe claim 1 of the ‘745 patent.223 Additionally, ERBE alleges that the 

Cleveland Clinic Foundation, Mayo Clinic, MetroHealth General Hospital, Indiana University 

Hospital and Georgetown University Hospital use of KLS Martin 2.3 mm probes (part nos. 

1322537, 1322538) directly infringes claim 35 of the ‘745 patent.224 

Exhibit CX-65, reproduced below, is a drawing of an exemplary KLS Martin probe created 

by ERBE’s expert, Dr. Walbrink, based upon his inspection of a sample KLS Martin probe.225 

223 CIB at 31. 

224 Id. at 42. 

225 See CIB at 34-35; CX-2C at 248-49. 

56 
Canady APC Probe 

Flexible Hollow Ceramic 

lube Makings Tip Lengthwise 

A H G Mi 

Proximal End 1 

As can be plainly seen in the above drawing, the electrode in a IUS Martin probe extends beyond 

the end of the tube and into the ceramic insert.226 In fact, ERBE admits that for IUS Martin probes, 

the electrode protrudes from the distal end of the tubing portion of the probe into the ceramic tip or 

As construed herein, the limitation “an electrode . . . positioned inside the tube and offset 

from the opening at the distal end of the tube a predetermined minimum safety distance” of claim 

1 and the limitation “an electrode, arranged . . . inside the tube and being offset from the opening at 

the distal end of the tube a predetermined minimum safety distance” of claim 35 require the electrode 

to be positioned inside the tube and offset from the opening at the distal end of the tube a 

predetermined distance that will not allow the electrode to contact tissue. Because the electrode in 

a IUS Martin probe extends beyond the opening at the distal end of the tube and into the ceramic 

endpiece, the electrode cannot be said to be positioned inside the tube and offset from the opening 

226 See CX-65; see also CX-73, CPX-1 , CPX-8. 

227 See SFF 7 104. 

57 
at the distal end of the tube a predetermined minimum safety distance as required by claims 1 and 

3 5 .228 

Additionally, ERBE has failed to prove a specific instance where a KLS Martin 2.3 mm 

probe has been used in an APC procedure with an endoscope having a plurality of working channels. 

In its opening post-hearing brief, ERBE relies entirely on the testimony of its expert, Mr. Walbrink, 

and illustrations,of two exemplary endoscopes to support its argument that a IUS Martin 2.3 mm 

probe has been used with an endoscope having a plurality of working channel^."^ In its reply posthearing brief, EWE switches gears and specifically points to the testimony of various IUS Martin 

2.3 mm probe users that ERBE’s alleges use an endoscope with a plurality of working channels.230 

The exemplary endoscope shown in Exhibit CX-59 has an instrument channel, two light 

guide lenses, an aidwater nozzle, and auxiliary water channel and an objective lens.231 The 

exemplary endoscope shown in SX-11 has a biopsy channel, aidwater nozzle, objective lens, a water 

jet, and a light guide lens.232 According to Mr. Walbrink, each of the channels, lenses, water jets, 

etc. in the exemplary endoscopes are working channels since each is used to perform work such as 

diagnosis, washing, lighting an area, or manipulating an instrument.233 However, the limitation 

228 ERBE again argues that even if the claim language of the ‘745 patent is interpreted to 

require an electrode offset from the end of the plastic tube and not the end of a ceramic insert, the 

Canady probes still infringe the ‘745 patent under the doctrine of equivalents. See CIB at 36. As 

discussed supra, the undersigned finds that ERBE has waived any such argument. Moreover, even 

if ERBE had not waived its DOE argument, as discussed supra, the undersigned would still find no 

equivalency. See supra, at n.2 13. 

229 See CIB at 32-33,42. 

230 See CRB at 23-24. 

231 See CX-59. 

232 See SX-I 1. 

233 See Tr 826: 1 1-830:6 (Aug. 29,2007). 

58 
“working channel” has been construed herein as a channel through which a device that performs 

work may be inserted. Thus, contrary to Mr. Walbrink’s testimony, each of the exemplary 

endoscopes only has one working channel, labeled instrument channel in CX-59 and biopsy channel 

in SX-11. 

As stated above, the limitation “ working channel” has been construed herein as a channel 

through which a device that performs work may be inserted. Of the various KLS Martin 2.3 mm 

probe users cited by ERBE in its reply post-hearing brief, only Dr. Ferguson from MetroHealth and 

Dr. Al-Kawas from Georgetown University Hospital testified that they have used endoscopes with 

a plurality of working channels.234 Notably, both doctors indicated that such endoscopes are used 

only on occasion.235 Although both Dr. Ferguson and Dr. Al-Kawas testified to having used on 

occasion endoscopes with a pluralty of working channels, the record is devoid of any evidence that 

on any occasion where such an endoscope was used that a KLS Martin 2.3 mm probe was used 

therewith. Thus, the undersigned finds ERBE has failed to prove a specific instance where a IUS 

Martin 2.3 mm probe was used in an APC procedure with an endoscope having a plurality of 

working channels as required by claims 1 and 35 of the ‘745 patent. 

To prove direct infringement, ERBE must prove that a IUS Martin 2.3 mm probe was 

actually used in a way that infringes the asserted claims of the ‘745 patent. As discussed above, 

ERBE has failed to establish that a IUS Martin 2.3 mm probes has actually been used in an APC 

procedure in a manner that infringes claims 1 and 35 of the ‘745 patent. Specifically, ERBE has 

failed to at least prove: (1) that a IUS Martin 2.3 mm probe satisfies the limitations of the asserted 

234 See JX-27 at 000078:13-17; JX-25 at 000013:7-11. 

235 Id. 

59 
claims requiring an electrode positioned “inside the tube’’ and “offset from the opening at the distal 

end of the tube a predetermined minimum safety distance;’’ and (2) that a KLS Martin 2.3 mm probe 

was used with an endoscope having a plurality of working channels. Accordingly, the undersigned 

finds that ERBE has failed to prove that IUS Martin 2.3 mm probes (part nos. 1322537, 1322538) 

imported and sold by Canady directly infringe either independent claim 1 or independent claim 35 

of the ‘745 patent. 

b. Soring Probes (part nos. S-422537, S-422538) 

ERBE alleges that the GraceNaldese Hospital uses Soring 2.3mmprobes (part no. S-422537) 

to directly infringe claim 1 of the ‘745 patent.236 ERBE also alleges that the GraceNaldese Hospital 

and MetroHealth General Hospital use Soring 2.3 mmprobes (part no. S-422537) to directly infringe 

claim 35 of the ‘745 patent.237 

ERBE does not allege that any institution uses the accused Soring 2.3 mm probes (part no. 

S-422538) in a manner that directly infringes either claim 1 or claim 35 of the ‘745 patent.238 

However, in a footnote ERBE argues that if the Soring 2.3 mm probes (part no. S-422537) infringed 

the asserted claims of the ‘745 patent, then the Soring 2.3 rnm probes (part no. S-422538) also 

infringe the asserted claims.239 According to ERBE, Dr. Canady testified that the 2.3 mm Soring 

probes (part no. S-422538) have the same flow characteristics as the 2.3 mm Soring probes (part no. 

S-422537), that Canady’s counsel represented in its opening statement that the two probes should 

be treated the same for infringement purposes, and that Canady represented in its 5 1 O(k) application 

236 CIB at 31. 

237 Id. at 42. 

238 See id. at 30-56. 

239 See id. at 31 n.31. 

60 
that the differences in lengths between the predicate ERBE probes and the IUS Martin probes did 

not cause any difference in flow resistance.240 As previously discussed, to prove direct infringement 

ERBE must point to specific instances of direct infringement. “Hypothetical instances of direct 

infringement are insufficient to establish vicarious liability or indirect infringement.”241 Even 

assuming arguendo that Soring probes with part number S-422538 were to be treated the same as 

Soring 2.3 mm probes with part number S-422537 for purposes of infringement, that does not relieve 

ERBE of its obligation to prove a specific instance of direct infringement using a Soring 2.3 mm 

probe (part no. S-422538). The record in this investigation contains no evidence of anyone having 

used a Soring 2.3 mm probe (part no. S-422538) in an infringing manner. Accordingly, the 

undersigned finds that ERBE has failed to prove that Soring 2.3 mm probes (part no. S-422538) 

directly infringe either independent claim 1 or independent claim 35 of the ‘745 patent. 

With regard to the Soring 2.3 mm probes (part no. S-422537), adispute exists over the proper 

structure of the probes. Specifically, the parties dispute the position of the electrode in the probes. 

ERBE argues that a visual inspection of the Soring 2.3 mm probes shows that each includes a 

recessed electrode.242 ERBE also argues that Canady’s 5 1 O(k) application supports a finding that the 

electrode in a Soring 2.3 mm probe is recessed.243 In contrast, both Canady and the Staff argue that 

the record evidence shows the electrode in a Soring 2.3 mm probe is not recessed from the distal end 

of the tube, but rather the electrode is flush with the end of the tube or slightly protruding from it.244 

240 Id. 

24’ See ACCO Brands, 501 F.3d at 13 13. 

242 CRB at 26. 

243 Id. 

244 RIB at 42-43; SIB at 54; SRB at 29-30. 

61 
In support, Canady and the Staff cite to the testimony of Dr. Canady, a mammogram of a Soring 

2.3mm probe, and an assembly drawing of a Soring 2.3 mm probe.245 

ERBE argues that by visual inspection of the Soring 2.3 mm probes the undersigned can 

conclude that the electrode satisfies the limitations of claims 1 and 35.246 The undersigned has 

visually inspected the Soring probes admitted as Exhibits CPX-10 and CPX-11 and finds it 

impossible to tell with any certainty where the electrode is located within the scant opening at the 

end of a 2.3mm Soring probe. The electrode inside the probe appears to be about as thick as a 

human hair and just being able to tilt the end of the probe under a light in a way that allows one to 

find the electrode in the opening at the end of the probe is very difficult. Moreover, once the 

electrode is found it is impossible to determine whether it is flush with the end of the tube or 

recessed from the opening as ERBE suggests. 

ERBE also argues that Canady’s 5 1 O(k) application247 to the United States Food and Drug 

Administration (“FDA”) establishes that the electrode in a Soring 2.3 mm probe is offset from the 

end of the As submitted, Canady’s 5 1 O(k) application only applies to KLS Martin probes.249 

245 Id. 

See CRB at 26. Notably, ERBE chose not to have any of its experts examine the Soring 

2.3 mm probes. ERBE also did not have any of its experts opine or testifj about the structure of the 

Soring 2.3 mm probes. 

247 “5 1 O(k) notifications are submittals of engineering and clinical information which are 

provided to the FDA to permit that agency to assess the safety and effectiveness of a new product 

with regard to a predicate product which is already on the market.” Cardiovention, Inc. v. 

Medtronic, Inc., 483 F. Supp. 2d 830, 840 (D. Minn. 2007) (quoting Sunrise Med. HHG, Inc. v. 

AirSep Corp., 95 F. Supp. 2d 348, 405 (W.D. Pa. 2000)). In the 510(k) context, “substantial 

equivalence” means that the proposed device has the same intended use as the predicate device and 

that it either has the same technological characteristics as the predicate device or is as safe and 

effective as the predicate device. See 21 C.F.R. 0 807.100(b). 

246 

248 See CIB at 35. 

249 See CX-183 at 2,7, 1 1. 

62 
However, at the hearing in this investigation, Dr. Canady testified that he believed the 510(k) 

application also covered Soring probes.250 Based on this testimony, ERBE argues that a statement 

in Canady’s 5 1 O(k) application describing the placement of the electrode in the IUS Martin probes 

as recessed 1-2 mm supports a finding that “every Soring [2.3 mm] probe has the electrode set back 

from the distal opening a predetermined minimum distance for safety purposes.”251 

Although Dr. Canady did testifl that he believed the 5 1 O(k) application covered the accused 

Soring probes, he made clear that his testimony should not be taken to mean that he believed the 

KLS Martin probes were equivalent to the Soring probes in all respects, but only that they were 

equivalent in their intended use.252 In fact, in contrast to the statement in the 5 1 O(k) application, Dr. 

Canady testified that in the Soring probes the electrode is either flush with the end of the ceramic 

insert or protrudes slightly Furthermore, when asked whether there is a difference in 

the construction of the Soring probes and the KLS Martin probes, Dr. Canady testified that there was 

a difference with regard to the placement of the electrode.254 In light of the above testimony of Dr. 

Canady, the undersigned finds ERBE’s 5 1 O(k) argument unpersuasive. The record simply does not 

250 See Tr. at 133O:lO-15 (Aug. 31,2007)(“Q. And do you believe that the Soring probes 

that fit to the CT-3500 are covered by the same 5 1 O(k) for which the Soring probe - for which the 

KLS Marin probes had been cleared? A. Yes.”); see also JX-23C at 108:4-6. 

251 See CIB at 35; CX-183 at 15 (“[rlecessed positioned in the ceramic tip (1 -2 mm to the 

outlet) is an electrode made of tungsten.”). 

252 See Tr. at 133O:lO-20 (Aug. 31, 2007)(“Q. So you believe that the IUS Martin probes 

and the Soring probes are equivalent probes? A. They are equivalent in its intended use, yes.”). 

2s3 Id. at 1334: 19-1 335:3 (Aug. 3 l,2007)(“This is the third time I will say the Soring probes 

sit just flush or just outside the ceramic tip. They do not recess back from the ceramic tip.”); see also 

id. at 1332:4-11. 

Id. at 1337:l-8 (“Q. Okay. So there is a difference in the construction of the Soring 

probes from the IUS Martin probes with regards to the electrode’s positioning vis-avis the ceramic 

tip? A. Yeah, there is a difference of the KLS Martin’s wire outside of the tubing, but it is set back 

a little bit from the opening of the ceramic tip versus the Soring probe.”). 

254 

63 
support the conclusion that when Dr. Canady testified that the 510(k) application “covered” the 

Soring probes that he intended the specific structural details of the IUS Martin probes described in 

the 5 1 O(k) application to also describe the accused Soring 2.3 mm probes. 

Moreover, the record evidence relied on by the Staff and Canady further supports Dr. 

Canady’s testimony regarding the placement of the electrode in the Soring probes. As seen below, 

an image of a Soring 2.3mm probe created by x-ray mamography shows the electrode flush or 

slightly protruding from the end of the ceramic insert.255 

In addition, the assembly drawing below plainly shows and describes the placement of the electrode 

in a Soring 2.3 mm probe as being at least flush with the end of the ceramic insert.256 

255 See RX-56; see also Tr. at 1247:3-6, 1250: 14: 18 (Aug, 3 1,2007). 

256 Rx-53c. 

64 
H f 

I Irl H 

As translated, the assembly instructions enumerated in the above assembly drawing state, in pertinent 

part: 

1. Slide the needle with wire-centering device into the Teflon tube (5) until the end 

of the Tungsten wire of the needle (1) is at least flush with the end face of the Teflon 

tube (5), i.e. the Tungsten wire of the needle (1) should not be recessed into the 

Teflon tube. 

2. Slide in the insulating insert (3) until it is flush with the Teflon tube (5).257 

Accordingly, based on the above evidence of record, the undersigned finds the electrode in a Soring 

2.3 mm probe is at least flush with the end of the tube. 

As construed herein, the limitation “an electrode . . . positioned inside the tube and offset 

from the opening at the distal end of the tube a predetermined minimum safety distance” of claim 

1 and the limitation “an electrode, arranged. . . inside the tube and being offset from the opening at 

the distal end of the tube a predetermined minimum safety distance” of claim 35 require the electrode 

to be positioned inside the tube and offset from the opening at the distal end of the tube a 

257 See RX-54C. 

65 
predetermined distance that will not allow the electrode to contact tissue. Because the electrode in 

a Soring 2.3 mrn probe is at least flush with the distal end of the tube, the electrode cannot be said 

to be offset from the opening at the distal end of the tube a predetermined minimum safety distance. 

Thus, contrary to ERBE’s argument, the record evidence demonstrates that the accused Soring 

probes (part no. S-422537) do not satisfy every limitation of either independent claim 1 or 

independent claim 35 of the ‘745 patent.258 

Additionally, ERBE has failed to prove that either GraceNaldese Hospital or MetroHealth 

General Hospital has used a Soring 2.3 mm probe in an APC procedure with an endoscope having 

a plurality of working channels as required by claims 1 and 35. In its opening post-hearing brief, 

ERBE cites only to the testimony of its expert, Mr. Walbrink, and the illustrations of two exemplary 

endoscopes to prove that a Soring 2.3 mm probe has been used with an endoscope having aplurality 

of working channels.259 In its reply post-hearing brief, ERBE also relies on the testimony of Ms. 

Marshburn from GraceNaldese Hospital for support.26o 

The exemplary endoscope shown in Exhibit CX-59 has an instrument channel, two light 

guide lenses, an aidwater nozzle, and auxiliary water channel and an objective lens.261 The 

exemplary endoscope shown in SX-11 has a biopsy channel, aidwater nozzle, objective lens, a water 

258 ERBE again argues that even if the claim language of the ‘745 patent is interpreted to 

require an electrode offset from the end of the plastic tube and not the end of a ceramic insert, the 

Canady probes still infringe the ‘745 patent under the doctrine of equivalents. See CIB at 36. As 

discussed supra, the undersigned finds that ERBE has waived any such argument. Moreover, even 

if ERBE had not waived its DOE argument, as discussed supra, the undersigned would still find no 

equivalency. See supra, at n.2 13. 

259 See CIB at 32-33,42. 

260 See CRB at 25. 

261 See CX-59. 

66 
jet, and a light guide lens.262 According to Mr. Walbrink, each of the channels, lenses, water jets, 

etc. in the exemplary endoscopes are working channels since each is used to perform work such as 

diagnosis, washing, lighting an area, or manipulating an instrument.263 However, the limitation 

“working channel” has been construed herein as a channel through which a device that performs 

work may be inserted. Thus, contrary to Mr. Walbrink’s testimony, each of the exemplary 

endoscopes only has one working channel, labeled instrument channel in CX-59 and biopsy channel 

in SX-11. 

With regard to Ms. Marshburn’s testimony, the record shows that when GraceNaldese 

Hospital performs an APC procedure with a Soring probe, it uses a gastroscope with a lumen for 

suction, air and biopsy.264 According to Ms. Marshbum, during an APC procedure a Soring 2.3 mm 

probe is inserted through the biopsy channel of the gastroscope.265 In addition to having a lumen for 

suction, air and biopsy, the record also shows that the gastroscope has a lens with a cord that runs 

through the endoscope and connects with a computer monitor for viewing.266 Thus, ERBE argues 

that the endocope used by GraceNaldese has two working channels, one in which the probe is 

inserted and another in which the lens is disposed.267 However, as construed herein, a “working 

channel” is a channel through which a device that performs work may be inserted. Thus, contrary 

to ERBE’s argument, the endoscope used by GraceNaldese Hospital has only one working channel, 

the biospy channel. Accordingly, the undersigned finds that ERBE has failed to prove that a 2.3 mm 

262 

263 

264 

265 

266 

267 

See SX-11. 

See Tr 826:ll-830:6 (Aug. 29,2007). 

JX- 1 9 at 1 3 :25- 14: 8. 

Id. at 11:l-7. 

Id at 22:3-21. 

CRB at 25. 

67 
Soring probe has been used with an endoscope having a plurality of working channels as required 

by both independent claim 1 and independent claim 35 of the ‘745 patent. 

Further, with regard to both claims 1 and 35 of the‘745 patent, ERBE has failed to prove any 

specific instance of a Soring 2.3 mm probe having been used by GraceNaldese Hospital in an APC 

procedure in a manner such that the longitudinal axis of the tube is arranged “sidewardly” of the area 

of tissue to be coagulated. As construed herein, the limitation “sidewardly” means alongside. Thus, 

to satisfy this claim element with regard to claims land 35, ERBE must show GraceNaldese 

Hospital used a Soring 2.3 mm probe in an APC procedure where the longitudinal axis of the tube 

was arranged alongside the area of tissue to be coagulated. 

The only evidence of record regarding GraceNaldese Hospital that ERBE relies on to prove 

that the longitudinal axis of the tube is arranged “sidewardly” of the area of tissue to be coagulated 

comes from the deposition testimony of Ms. Cynthia H. Marshburn. Ms. Marshburn works at 

GraceNaldese Hospital as a nurse for surgical services in the endoscopy lab.268 On this point, Ms. 

Marshburn testified, in pertinent part, as follows: 

Mr. War: I’m going to hand you what’s already been marked as Exhibit No. ITC 203. It’s 

a different type of catheter, but I’d like you to take the end of the catheter, and with your 

hand, show me what the orientation between the catheter and the tissue that’s being 

coagulated is that you typically see on the video screen. 

The Witness: It’s like you’re looking at the TV screen. You’re actually looking at 

the image of what you’re - the polyp or whatever you’re looking at. It’s usually 

aimed right at it, straight to it. 

Mr. War: Is it always aimed right at it? 

The Witness: Yes, because the end of the catheter is straight. I mean, you may be 

268 JX- 1 9 at 000002 : 1 5- 1 7,000003 : 10-22. 

68 
looking - you may be - it’s according to how he has the angle of the scope. It could 

be - like if you’re looking at the lumen, he could be angled a little bit because of the 

folds, especially in the colon at a side, but you’re aiming right at the tissue.269 

ERBE argues that Ms. Marshburn’s testimony stating that “he could be angled a little bit because 

of the folds” supports a conclusion that GraceNaldese Hospital has used a Soring 2.3 mm probe in 

a manner where the probe is “sidewardly” of the tissue to be coagulated. The undersigned disagrees. 

Contrary to ERBE’s argument, Ms. Marshburn explicitly testified that even if the probe is angled 

a little bit the probe is still aimed “right at the Additionally, Ms. Marshburn testified that 

the view on the TV screen of a polyp, or whatever is being looking at, is “right at it, straight to it.”271 

Ms. Marshburn’s testimony that the probe is oriented “right at the tissue” indicates that the probe is 

perpendicular to the tissue to be coagulated and not alongside the tissue as required by claims 1 and 

35 of the ‘745 patent. Accordingly, the undersigned finds ERBE has failed to prove that a Soring 

2.3 mm probe sold by Canady has been used by GraceNaldese Hospital in an APC procedure where 

the longitudinal axis of the tube is arranged “sidewardly” of the area of tissue to be coagulated as 

required by both independent claim 1 and independent claim 35 of the ‘745 patent. 

To prove direct infringement, ERBE must prove that a Soring 2.3 mm probe was actually 

used in a way that infringes the asserted claims of the ‘745 patent. As discussed above, ERBE has 

failed to prove that the probes are used in manner that infringes either independent claim 1 or 

independent claim 35 of the ‘745 patent. Specifically, ERBE has failed to at least prove: (1) that a 

Soring 2.3 mm probe satisfies the limitations of the asserted claims requiring an electrode positioned 

269 Id. at 000024:9-000025:4. 

270 Id. at 000025: 1-4. 

271 Id. at 000024: 17-20. 

69 
“offset from the opening at the distal end of the tube a predetermined minimum safety distance;” (2) 

that a Soring 2.3 mm probe has been used in an APC procedure with an endoscope having a plurality 

of working channels; and (3) that with regard to GraceNaldese Hospital that anyone has used a 

Soring 2.3 mm probe in a procedure where the longitudinal axis of the tube was arranged sidewardly 

of the tissue to be coagulated. Accordingly, the undersigned finds that ERBE has failed to prove that 

Soring 2.3 mm probes (part no. S-422537) imported and sold by Canady directly infringe either 

independent claim 1 or independent claim 35 of the ‘745 patent.272 

2. Claims 3,4,11,13,38,39 

As discussed, above, the undersigned finds that ERBE has failed to prove that any of the 

accused KLS Martin and Soring probes directly infringe either independent claim 1 or independent 

35 of the ‘745 patent. Because neither independent claim 1 nor independent claim 35 is directly 

infringed, dependent claims 3,4,11, 13,38, and 39, cannot be directly infringed. Accordingly, the 

undersigned finds that ERBE has failed to prove that any of the accused KLS Martin and Soring 

probes directly infringe claims 3,4, 11, 13,38, and 39, of the ‘745 patent. 

B. Indirect Infringement 

1. Contributory Infringement 

a. IUS Martin 1.5 mm probes (part no. 1322535) 

ERBE asserts that Canady contributes to the infringement of the asserted claims of the ‘745 

patent by offering for sale, selling and importing the KLS Martin 1.5 mm probes (part no. 

272 The undersigned would find that the Soring 2.3 mm probes (part no. S-422538), do not 

directly infringe either independent claim 1 or independent claim 35 of the ‘745 patent for the same 

reasons relied on for the Soring 2.3 mm probes (part no. S-422537). 

70 
1322535).273 To prevail on its contributory infringement claim, ERBE must show that the KLS 

Martin 1.5 mm probes sold by Canady directly infringe the asserted claims of the ‘745 patent.274 As 

discussed supra, the undersigned finds ERBE failed to prove that the KLS Martin 1.5 mm probes 

were used in amanner that infringes the asserted claims. Accordingly, the undersigned finds Canady 

is not liable for contributory infringement with regard to the KLS Martin 1.5 mm probes (part no. 

1322535). 

Notwithstanding the above finding, even if ERBE had proven an act of direct infringement 

using a KLS Martin 1.5 mm probe, the undersigned would still find no contributory infringement. 

Under 35 U.S.C. 0 271(c), a seller of a component of an infringing product can be held liable for 

contributory infringement if: “( 1) there has been an act of direct infringement by a third party; (2) 

the accused contributory infringer knows that the combination for which its component was made 

was both patented and infringing; and (3) there are no substantial non-infringing uses for the 

component part.”275 EWE has the burden of establishing aprima facia case that the accused probes 

are not “suitable for substantially noninfringing use.” Once it does so, the burden shifts to Canady 

to introduce evidence that end-users actually use the accused products in a noninfringing manner.276 

Under 35 U.S.C. 0 271(c), the determination of whether there are substantial noninfringing uses 

273 CIB at 55. 

274 Dynacore Holdings Corp. v. US. Philips Corp., 363 F.3d 1263, 1272 (Fed Cir. 2004) 

(“Indirect infringement, whether inducement to infringe or contributory infringement, can only arise 

in the presence of direct infringement.”); Linear Tech. Corp. v. Impala Linear Corp., 379 F.3d 13 1 1, 

1326 (Fed. Cir. 2004) (“There can be no inducement or contributory infringement without an 

underlying act of direct infringement.”). 

275 Flash Memory, Commission Opinion at 9- 10. 

276 Golden Blount, Inc. v. Robert HPeterson Co., 438 F.3d 1354,1363-64 (Fed. Cir. 2006); 

Lucent Techs., Inc. v. Gateway, Inc., 2007 U.S. Dist. LEXIS 19219 (D. Cal. 2007). 

71 
focuses on “the thing sold” by the one accused of contributing to infringement.277 

ERBE argues that there are no substantial noninfringing uses of the KLS Martin 1.5 mm 

probes because the probes can only be used with ERBE APC systems and because almost all the 

flow rates within the default flow rate range of 0.0 to 1.0 liter per minute set by the instrument 

recognition feature of ERBE APC Systems are covered by the asserted claims of the ‘745 patent.278 

Canady, on the other hand, argues that the KLS Martin 1.5 mm probes have substantial noninfringing 

uses. Specifically, Canady argues that use of the KLS Martin 1.5 mm probes in a manner that is not 

“sidewardly” of the tissue to be coagulated constitutes a substantial noninfringing use.279 

There can be no dispute that the asserted claims of the ‘745 patent each require the probe to 

be positioned sidewardly of the tissue to be coagulated. Thus, use of a KLS Martin 1.5 mm probe 

in a manner that is not sidewardly of the tissue to be coagulated is a noninf’ringing use. The only 

evidence of record regarding the use of a KLS Martin 1.5 mm probe comes from Ms. Eisenbacher 

of NCBH. At the hearing, Ms. Eisenbacher testified as follows: 

Q. Have you ever observed any APC procedures in bronchoscopy? 

A. Yes. 

Q. When you are doing an APC procedure in bronchoscopy, is it typical for the 

physician to aim the probe at the tissue to be coagulated? 

A. Certainly. 

Q. What percentage of the time are they able to aim directly at the tissue, if they are in 

a bronchi? 

A. Depends on the lesion location. If you are looking down a tube, which 

277 Hodosh v. Block Drug Co., Inc., 833 F.2d 1575,1578 (Fed. Cir. 1987); see also Aquatex 

Industries, Inc. v. Techniche Solutions, 419 F.3d 1374, 1380 n.* * (Fed. Cir. 2005) (noting that the 

proper question for contributory infringement was whether defendant’s product as sold was a staple 

article, not whether the product contained components that themselves could have other 

noninfringing uses). 

278 See CIB at 55. 

279 RIB at 32. 

72 
essentially is the bronchus, at the junction it bifurcates into a branch. If the lesion is 

directly in front of you, it is very easy to apply and direct the probe at a lesion. 

However, if the lesion is completely lateral to your view, you must angulate 

the endoscope to have the lesion in view to be able to apply the therapy.280 

Ms. Eisenbacher’s testimony makes plain that physicians at NCBH do not “typically” use the probes 

sidewardly of the tissue to be coagulated, but rather aim the probe at the tissue to be coagulated. 

Moreover, in cases where the lesion is at the junction of where the bronchi branches, Ms. 

Eisenbacher testified that it was very easy to apply and direct the probe at the lesion. In light of Ms. 

Eisenbacher’s testimony, the undersigned finds that the use of a IUS Martin 1.5 mm probe in a 

manner that is not sidewardly of the tissue to be coagulated constitutes a substantial noninfringing 

use. Accordingly, the undersigned finds Canady not liable for contributory infringement under 35 

U.S.C. 271(c) for its offer for sale, sale, or importation of KLS Martin 1.5 mm probes (part no. 

1322535). 

b. IUS Martin 2.3 mm probes (part nos. 1322537,1322538) 

ERBE asserts that Canady contributes to the infringement of claims 35, 37, and 39, of the 

‘745 patent by offering for sale, selling and importing the IUS Martin 2.3 mm probes (part nos. 

1322537, 1322538).281 To prevail on its contributory infi-ingement claim, ERBE must show that the 

IUS Martin 2.3 mm probessold by Canady directly infringe the asserted claims of the ‘745 patent.282 

As discussed supra, the undersigned finds ERBE failed to prove that the IUS Martin 2.3 mm probes 

280 Tr. 458: 17-459: 12 (Aug. 27,2007). 

281 CIB at 55. 

282 Dynacore Holdings Corp. v. US. Philips Corp., 363 F.3d 1263, 1272 (Fed Cir. 2004) 

(“Indirect infringement, whether inducement to infringe or contributory infringement, can only arise 

in the presence of direct infringement.”); Linear Tech. Corp. v. Impala Linear Corp., 379 F.3d 13 1 1, 

1326 (Fed. Cir. 2004) (“There can be no inducement or contributory infringement without an 

underlying act of direct infringement.”). 

73 
were used in a manner that infringes claims 35, 37, and 39 of the ‘745 patent. Accordingly, the 

undersigned finds Canady is not liable for contributory infringement with regard to the KLS Martin 

2.3 mm probes (part nos. 1322537, 1322538). 

c. Soring 2.3 mm probes (part nos. 422537,422538) 

ERBE asserts that Canady contributes to the infringement of claims 35, 37, and 39, of the 

‘745 patent by offering for sale, selling and importing the Soring 2.3 mmprobes (part nos. S-422537, 

S-422538).283 To prevail on its contributory infringement claim, ERBE must show that the Soring 

2.3 mm probes sold by Canady directly infringe the asserted claims of the ‘745 patent.284 As 

discussed supra, the undersigned finds ERBE failed to prove that the Soring 2.3 mm probes were 

used in a manner that infringes claims 35, 37, and 39, of the ‘745 patent. Accordingly, the 

undersigned finds Canady is not liable for contributory infringement with regard to the Soring 2.3 

mm probes (part nos. S-422537, S-422538). 

Notwithstanding the above finding, even if ERBE had proven an act of direct infringement 

using the Soring 2.3 mm probes, the undersigned would still find no contributory infringement. 

Under 35 U.S.C. 0 271(c), a seller of a component of an infringing product can be held liable for 

contributory infringement if: “( 1) there has been an act of direct infringement by a third party; (2) 

the accused contributory infringer knows that the combination for which its component was made 

was both patented and infringing; and (3) there are no substantial non-infringing uses for the 

283 CIB at 55-56. 

284 Dynacore Holdings Corp. v. US. Philips Corp., 363 F.3d 1263, 1272 (Fed Cir. 2004) 

(“Indirect infringement, whether inducement to infringe or contributory infringement, can only arise 

in the presence of direct infringement.”); Linear Tech. Corp. v. Impala Linear Corp. , 379 F.3d 13 1 1 , 

1326 (Fed. Cir. 2004) (“There can be no inducement or contributory infringement without an 

underlying act of direct infringement.”). 

74 
component part.”285 ERBE has the burden of establishing aprima facia case that the accused probes 

are not “suitable for substantially noninfringing use.” Once it does so, the burden shifts to Canady 

to introduce evidence that end-users actually use the accused products in a noninfringing manner.286 

Under 35 U.S.C. 0 271(c), the determination of whether there are substantial noninfringing uses 

focuses on “the thing sold” by the one accused of contributing to infringement.287 

ERBE argues that there are no substantial noninfringing uses of the Soring 2.3 mm probes 

because the CT-3500 is sold with preset flow rate/wattage combinations, both GraceNaldese and 

MetroHealth use the probes at 0.5 liters per minute, neither Ms. Marshburn of GraceNaldese 

Hospital nor Dr. Ferguson of MetroHealth has identified a substantial noninfringing use, and at the 

Argon 1 and Argon 2 settings, all the flow rates within the preprogrammed flow rate ranges infiinge 

claims 35,37,39 and 41.288 ERBE notes that GraceNaldese Hospital purchases 82% of the Soring 

probes purchased (i.e., 900 out of 1,100) and argues that in light of the number of probes purchased 

by GraceNaldese Hospital and their infringing use, Canady cannot show a substantial noninfringing 

use.289 Canady and the Staff argue to the contrary that the Soring 2.3 mm probes have substantial 

noninfringing uses.29o Specifically, both Canady and the Staff argue that the use of Soring 2.3 mm 

285 Flash Memory, Commission Opinion at 9-1 0. 

286 Golden Blount, Inc. v. Robert H. Peterson Co., 438 F.3d 1354,1363-64 (Fed. Cir. 2006); 

Lucent Techs., Inc. v. Gateway, Inc., 2007 U.S. Dist. LEXIS 19219 (D. Cal. 2007). 

287 Hodosh v. Block Drug Co., Inc., 833 F.2d 1575,1578 (Fed. Cir. 1987); see also Aquatex 

Industries, Inc. v. Techniche Solutions, 419 F.3d 1374, 1380 n.* * (Fed. Cir. 2005) (noting that the 

proper question for contributory infringement was whether defendant’s product as sold was a staple 

article, not whether the product contained components that themselves could have other 

noninfringing uses). 

288 See CIB at 56. 

289 Id. 

290 See RRl3 at 27; SIB at 65-66. 

75 
probes in a manner where the extended longitudinal axis of the protruding end of the tube is not 

“sidewardly” of the tissue to be coagulated constitutes a substantial noninfringing use.291 

There can be no dispute that the asserted claims of the ‘745 patent each require the probe to 

be positioned sidewardly of the tissue to be coagulated. Thus, use of a Soring 2.3 mm probe in a 

manner that is not sidewardly of the tissue to be coagulated is a noninfringing use. As discussed in 

detail, supra, with regard to ERBE’s allegations of direct infringement by GraceNaldese Hospital, 

the record evidence in this investigation does not show that GraceNaldese Hospital ever used a 

Soring 2.3 mm probe in a manner where the extended longitudinal axis of the protruding end of the 

tube was “sidewardly” of the tissue to be coagulated.292 Moreover, Ms. Marshburn testified that 

when performing an APC procedure at GraceNaldese Hospital the probe is always aimed right at 

the tissue.293 A probe aimed right at the tissue cannot be said to be alongside the tissue to be 

coagulated. Thus, using EWE’S own calculations from Exhibit CX-l68C, the record evidence 

shows that 82% of Soring 2.3 mm probes sold by Canady are used in a noninfringing manner by 

GraceNaldese Hospital.294 

Additionally, the testimony of Dr. Ferguson from MetroHealth supports the conclusion that 

the Soring 2.3 mm probes have substantial noninfiinging uses. Although Dr. Ferguson did testify 

that he has used a straight-fire probe in a manner where the probe is “tangential” to the tissue to be 

coagulated, he made clear that such use was only on occasion and only when MetroHealth was out 

29’ Id. 

292 See supra, at V.A. 1 .b. 

293 See JX-19 at 000024:9-000025:4. 

294 See CX-168C; see also CIB at 56. 

76 
of stock of side-fire Moreover, Dr. Ferguson explicitly testified that his typical practice 

is to point the opening at the end of the tube at the tissue to be coagulated.296 If the tube is pointed 

at the tissue to be coagulated, the tube cannot be said to be alongside the tissue. Thus, the testimony 

from Dr. Ferguson indicates that typically the Soring 2.3 mm probes are used in a noninfiinging 

manner. 

For the reasons discussed above, the undersigned finds that both GraceNaldese Hospital and 

MetroHealth’s use of Soring 2.3 mm probes in a manner where the extended longitudinal axis of 

the protruding portion of the tube is not “sidewardly” of the tissue to be coagulated constitutes a 

substantial noninfringing use. Accordingly, the undersigned finds Canady not liable for contributory 

infringement under 35 U.S.C. 271(c) for its offer for sale, sale, or importation of Soring 2.3 mm 

probes (part nos. S-422537, S-422538). 

2. Inducement 

a. IUS Martin Probes 

ERBE asserts that Canady induces infringement of all the asserted claims of the ‘745 patent 

by its offer for sale, sale, and importation of KLS Martin 1.5 rnm and 2.3 mm probes.297 To prevail 

on its claim of inducement, EWE must show that the KLS Martin 1.5 mm and 2.3 mm probes sold 

by Canady directly infringe the asserted claims of the ‘745 patent.298 As discussed supra, the 

undersigned finds ERBE failed to prove that the IUS Martin 1.5 mm and 2.3 mm probes were used 

295 See JX-27 at 000083 : 13-000084: 1. 

296 See id. at 000076:20-000077: I. 

297 See CIB at 50. 

Dynacore Holdings Corp., 363 F.3d at 1272 (Fed Cir. 2004); Linear Tech. Corp., 379 298 

F.3d at 1326. 

77 
in a manner that directly infringes the asserted claims. Accordingly, the undersigned finds Canady 

is not liable for inducing infringement of the asserted claims of the ‘745 patent with regard to the 

accused KLS Martin 1.5 mm and 2.3 mm probes (part nos. 1322535,1322537,1322538). 

b. Soring Probes 

ERBE asserts that Canady induces infringement of all the asserted claims of the ‘745 patent 

by its offer for sale, sale, and importation of Soring 2.3 mm probes.299 To prevail on its claim of 

inducement, ERBE must show that the Soring 2.3 mm probes sold by Canady directly infringe the 

asserted claims of the ‘745 patent.300 As discussed supra, the undersigned finds ERBE failed to 

prove that the Soring 2.3 mm probes were used in a manner that directly infringes the asserted 

claims. Accordingly, the undersigned finds Canady is not liable for inducing infringement of the 

asserted claims of the ‘745 patent with regard to the accused Soring 2.3 mm probes (part nos. S422537, S-42253 8). 

Notwithstanding the above finding, even if ERBE had proven an act of direct infringement 

using the Soring 2.3 mm probes, the undersigned would still find no inducement. Under 35 U.S.C. 

9 271 (b), “[wlhoever actively induces infringement of a patent shall be liable as an infringer.” 35 

U.S.C. 0 271(b). To sustain its claim for inducement, ERBE must prove that once Canady knew of 

the patent, Canady actively and knowingly aided and abetted another’s direct infringement.301 It is 

not enough, however, for Canady to merely have knowledge of the acts alleged to constitute 

299 See CIB at 50, 54-56. 

300 Dynacore Holdings Corp., 363 F.3d at 1272 (Fed Cir. 2004); Linear Tech. Corp., 379 

301 DSUMedical Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1305 (Fed. Cir. 2006). 

F.3d at 1326. 

78 
“The mere knowledge of possible infringement by others does not amount to 

inducement; specific intent and action to induce infiingement must be 

ERBE argues that Canady knows that when it sells Soring 2.3 mm probes that the probes will 

be used at low flow rates because Canady sells the CT-3500 with default flow rates of 0.5 lpm, 1 .O 

lpm, and 1.5 l~rn.~’~ In addition, EWE asserts that Dr. Canady demonstrated the CT-3500 to Dr. 

Ferguson at MetroHealth using a starting flow rate of 0.5 lpm.305 Also, ERBE asserts that Dr. 

Canady suggested to GraceNaldese Hospital that they should use the lower flow rates.306 Further, 

ERBE argues that because Canady asserts its 5 1 O(k) clearance applies to the Soring probes that 

Canady must “intend for the Soring probes to be used in a similar, infringing manner as IUS Martin 

Further, ERBE asserts that Dr. Canady testified in his deposition that there was no 

302 Id. 

303 Id. (internal quotations omitted). 

304 CIB at 54. 

305 Id. 

306 Id. 

307 Id. The 5 1 O(k) application submitted to the FDA is written only for probes manufactured 

by IUS Martin. See CX-183 at 00002-00007,00011. However, at the hearing in this investigation, 

Dr. Canady testified that he believed the 5 1 O(k) application also applied to its Soring probes. See 

Tr. at 133O:lO-15, 1330:24-1331:15 (Aug. 31, 2007). To the extent that ERBE is relying on any 

statements in the 5 1 O(k) application regarding the equivalence of the KLS Martin probes (and by 

extension under ERBE’s argument the Soring probes) and the ERBE probes that are listed as the 

predicate devices in the 510(k) application to prove that the Soring probes are equivalent to the 

ERBE predicate probes for purposes of patent infringement, the undersigned finds error. 

“5 1 O(k) notifications are submittals of engineering and clinical information which are 

provided to the FDA to permit that agency to assess the safety and effectiveness of a new product 

with regard to a predicate product which is already on the market.” Cardiovention, Inc. v. 

Medtronic, Inc., 483 F. Supp. 2d 830, 840 (D. Minn. 2007) (quoting Sunrise Med. HHG, Inc. v. 

AirSep Corp., 95 F. Supp. 2d 348, 405 (W.D. Pa. 2000)). In the 510(k) context, “substantial 

equivalence” means that the proposed device has the same intended use as the predicate device and 

that it either has the same technological characteristics as the predicate device or is as safe and 

effective as the predicate device. See 21 C.F.R. 6 807.100(b). Thus, the term “equivalence” as used 

in a 5 1 O(k) application has a meaning different from the way the term is used in the area of patent 

79 
difference between the IUS Martin probes and the Soring probes regarding the distance the electrode 

is recessed fiom the orifice at the end of the probe.308 

It is noted at the outset that ERBE fails to make an actual inducement argument regarding 

the Soring probes in either its opening brief or reply brief.309 All ERBE includes in the one 

paragraph in each of its briefs devoted to inducement of the Soring 2.3 mm probes are a series of 

assertions, as outlined above. Nowhere in the briefs is there an actual argument tying those 

assertions to the legal standard for proving inducement. On this fact alone, ERBE’s inducement 

allegation fails. 

Even ignoring this fact, however, the merits of ERBE’s inducement argument are woefully 

inadequate. The only acts of Canady that ERBE relies on in support of its inducement argument are 

Canady’s sale of the Soring 2.3 mm probes, apossible demonstration to MetroHealth using a 0.5 lpm 

flow rate, and a suggestion made to GraceNaldese Hospital to use the lower flow rates. None of 

these acts either individually or in concert show a specific intent on the part of Canady to have 

MetroHealth or GraceNaldese Hospital infringe the asserted claims of the ‘745 patent. 

law. Because statements of equivalence in a 5 1 O(k) application need mean nothing more than the 

proposed device is as safe and effective as the predicate device, it would be error to conclude merely 

from a statement of equivalence in a 5 1 O(k) application that the proposed device and the predicate 

device are equivalent for purposes of proving infringement under the patent laws. Other courts have 

similarly concluded. See Cardiovention, Inc., 483 F. Supp. 2d 830; Univ. of Flu. Research 

Foundation, Inc. v. Orthovita, Inc., 1998 U.S. Dist. LEXIS 22648, *80 n.23 (D. Fla. 1998), urd, 

21 7 F.3d 854 (Fed. Cir. 1999)(decision without published opinion). 

Canady and the Staff argue that as a matter of law, statements in a 5 1 O(k) application can not 

be used to support a finding of infringement. Other than what is stated above, the undersigned 

expresses no opinion on this point. 

308 See CIB at 54. In support, ERBE cites to Dr. Canady’s deposition testimony in JX-23C 

at 000 133 : 13-2 1. The passage cited by ERBE, however, does not support its assertion. 

309 See CIB at 54, CRB at 36. 

80 
Conspicuously absent from ERJ3E's briefs is any assertion whatsoever that Canady took any action 

to induce GraceNaldese Hospital or MetroHealth to use the Soring 2.3 mm probes in a manner 

where the extended longitudinal axis of the protruding portion of the tube is arranged sidewardly of 

the tissue to be coagulated as required by the asserted claims of the '745 patent. 

For the reasons discussed above, the undersigned finds ERBE has failed to prove that Canady 

has the specific intent necessary to support a finding of inducement. Accordingly, the undersigned 

finds Canady not liable for inducing infringement under 35 U.S.C. 271(b) for its offer for sale, sale, 

or importation of Soring 2.3 mm probes (part nos. S-422537, S-422538). 

VI. DOMESTIC INDUSTRY 

A. Technical Prong 

To satisfy the technical prong of the domestic industry requirement of Section 337, the 

complainant must demonstrate that it practices or exploits the patent at i~sue.~" The complainant 

need only show that it practices one claim of the asserted patent.311 The standard for determining 

whether the complainant practices at least one claim of the asserted patent is the same as that for 

infringement.312 That is, the complainant must show that the domestic industry either directly or 

indirectly infringes at least one claim of the asserted patent. 

To directly infringe the asserted claims of the '745 patent requires at least an RF generator, 

310 See 19 U.S.C. 1337(a)(2); Certain Microlithographic Machines, Inv. No. 337-TA-468, 

Initial Determination at 63 (April 3, 2003). 

311 Certain Microsphere Adhesives, Process for Making Same, and Products Containing 

Same, Including Self-stick Repositionable Notes, Inv. No. 337-TA-366, Commission Opinion at 16 

(1 996). 

Certain Microlithographic Machines, Initial Determination at 64. 312 

81 
an argon source, a probe and an endoscope.313 ERBE, however, does not sell endoscopes. Thus, the 

domestic industry cannot directly infringe the claims of the asserted patent. Accordingly, to satisfy 

the technical prong requirement ERBE must prove that its domestic industry indirectly infringes at 

least one claim of the ‘745 patent. 

“Indirect infringement, whether inducement to infringe or contributory infringement, can only 

arise in the presence of direct infringement.”314 To prove direct infringement, ERBE must either 

point to specific instances of direct infringement or show that its APC systems necessarily infringe 

the ‘745 patent.315 On this point, ERBE argues that its APC systems are used by NCBH, Robert 

Wood Johnson University Hospital, Dr. Jerome Waye, Cleveland Clinic Foundation, and Indiana 

University Hospital to directly practice independent claims 1 and 35 of the ‘745 patent.316 ERBE 

also argues that its APC systems are used by the Mayo Clinic to directly practice claim 35 of the ‘745 

patent.317 Canady asserts that ERBE has failed to prove direct infringement by any of these users, 

arguing that: (1) none of ERBE’s users use an ERBE APC system at a “low flow rate” (claim 35); 

(2) an ERBE APC system does not produce a flow of argon that is “non-directed, non laminar” 

(claim 35); (3) none of ERBE’s users use an ERBE APC system with the probe maintained in a 

“substantially stationary position” (claim 35); (4) none of ERBE’s users use an EWE APC system 

with an endoscope having a plurality of working channels (claims 1 and 35) and optical means 

protruding from a distal end of a working channel (claim 1); and (5) the probe in an ERBE APC 

313 See CIB at 30. 

314 Dynacore Holdings Corp., 363 F.3d at 1272. 

315 ACCO Crands, Inc. v. ABA LochManufactureer Co., Ltd., 501 F.3d 1307, 1313 (Fed 

316 See CIB at 60,63-64. 

317 Id. at 63-64. 

Cir. 2007) 

82 
system does not have an electrode that is offset from the distal opening at the end of the tube by a 

predetermined minimum safety distance (claims 1 and 35).318 The Staff argues that ERBE has shown 

that Dr. Waye and Dr. Goustout of the Mayo Clinic use ERBE APC systems to practice at least 

claims 1 and 35 of the ‘745 patent.319 

EWE sets forth claim by claim, element by element, where in the record it finds support for 

its assertion that a particular limitation is satisfied by each of the users listed above.320 As discussed 

above, to satis@ the technical prong requirement, ERBE need only show that one of these users of 

its APC systems practices one claim of the ‘745 patent. However, for the reasons discussed below, 

the undersigned finds ERBE has failed to prove that any user of an ERBE APC system has directly 

practiced any claim of the ‘745 patent. 

Specifically, the undersigned finds ERBE has failed to prove that any user of its APC system 

uses an endoscope with a plurality of working channels, required of both independent claim 1 and 

independent claim 35. Since ERBE only asserts that it satisfies the technical prong vis a vis claims 

1 and 35, the undersigned will confine the analysis herein to those claims. Independent claims 1 and 

35 of the ‘745 patent each require an endoscope having a plurality of working channels extending 

between the .ends of the endoscope with each channel having a predetermined diameter.321 In 

addition, both claims 1 and 35 require one of the working channels to be capable of having a tube 

of smaller diameter inserted therein. Further, with regard to claim 1 , a second working channel is 

318 RRB at 39. 

3’9 SRB at 41. 

320 See CIB at 6 1-68. 

321 See JX-1 at 11:14-16, 15:29-31. 

83 
required to have an optical means positioned therein.322 

Although ERBE asserts that nine different users of its APC Systems directly practice at least 

one claim of the ‘745 patent, almost all the record evidence cited to and relied on in ERBE’s posthearing briefs regarding the above limitations comes from the testimony of ERBE’s expert, Mr. 

Walbri~k.~’~ Mr. Walbrink did not testify about any specific endoscope used by any of the nine 

ERBE APC System users, but rather testfied only as to what he refered to as a “typical 

endoscope.”324 With regard to claim 35, ERBE also asserts that Dr. Gostout ofthe Mayo Clinic uses 

an endoscope with a plurality of working channel^.^" 

Exhibits CX-59 and SX-11 illustrate the two exemplary endoscopes relied on by ERBE and 

Mr. Walbrink to prove that ERBE APC system users actually perform APC procedures with an 

endoscope having a plurality of working channels.326 The illustration in CX-59 is of the distal end 

of an Olympus Innoflex Colonovideoscope (i.e. endoscope). According to the illustration, the 

Olympus endoscope has an instrument channel, two light guide lenses, an aidwater nozzle, and 

auxiliary water channel and an objective lens.327 Exhibit SX-11 shows an exemplary video 

endoscope from a book titled, “Colonoscopy: Principles and Pra~tice.”~” The endoscope in SX-11 

has a biopsy channel, aidwater nozzle, objective lens, a water jet, and a light guide lens.329 

According to Mr. Walbrink, each of the channels, lenses, water jets, etc. in the exemplary 

322 Id. at 1 1 :44-45. 

323 See CIB at 60-61,64; CRB at 44-45. 

324 See CX-2C at 107:9-13. 

32s See CIB at 64. 

326 See CX-59; SX-I 1. 

327 See CX-59. 

328 See SX-I 1. 

329 See SX-11. 

84 
endoscopes are working channels since each is used to perform work such as diagnosis, washing, 

lighting an area, or manipulating an instrument.330 However, the limitation “working channel” has 

been construed herein as a channel through which a device that performs work may be inserted. 

Thus, contrary to Mr. Walbrink’s testimony, each ofthe exemplary endoscopes has only one working 

channel, labeled instrument channel in CX-59 and biopsy channel in SX- 1 1. 

With regard to the testimony of Dr. Gostout, the record indicates that Dr. Gostout uses an 

endoscope when performing APC procedures that has optics and “a working channel to place devices 

through it.”331 According to Dr. Gostout, most current endoscopes are ~ideo-based.~~~ Dr. Gostout’s 

testimony is woefully inadequate to support a finding that an ERBE APC system user has used an 

endoscope with a plurality of working channels during an APC procedure. Notably, there is no 

testimony that the alleged working channels run from one end of the endoscope to the other or that 

each channel has a predetermined diameter as explicitly required by both claims 1 and 35 of the ‘ 745 

patent. Further, because the optics are video-based, the alleged channel in which the lens and video 

chip camera are disposed is not a course through which a device that performs work may be inserted. 

Thus, the alleged optics channel is not a working channel as the limitation has been construed herein. 

Accordingly, the undersigned finds that ERBE has failed to prove a specific instance of any of its 

ERBE APC system users actually using an endoscope with a plurality of working channels as 

required by independent claim 1 and independent claim 35 of the ‘745 patent. 

Additionally, with regard to claim 1, ERBE has failed to prove that any of its APC system 

330 See Tr 826: 1 1 -830:6 (Aug. 29,2007). 

331 See JX-24:00009: 16-1 8. 

332 Id. at 1O:l-3. 

85 
users have used an endoscope with optical means positioned in one of the working channels. To 

prove that its APC system users have used an endoscope with optical means positioned in one of the 

plurality of working channels, EWE relies on its expert, Mr. Walbrink. Mr. Walbrink testified that 

a “typical endoscope” would have multiple working channels with optical means in one of the 

working channels.333 According to Mr. Walbrink, the optical means would consist of either a 

fiberoptic bundle and a lens or a video chip camera and a lens.334 Although Mr. Walbrink testified 

that he examined endoscopes that had an optical means consisting of either a lens and fiberoptic 

bundle or a lens and video chip camera, there is no evidence that an ERBE APC system user has ever 

used an endoscope that has a fiberoptic bundle and lens combination in a manner that infringes a 

claim of the ‘745 patent. In fact, the record evidence in the investigation is clear that in today’s 

endoscopes use of a video chip camera in conjunction with a lens is the Thus, for Mr. 

Walbrink’s testimony to be at all relevant in trying to prove that an ERBE APC system user actually 

practices a claim of the ’745 patent, it must show that an endoscope with a video chip camera and 

lens satisfies the limitations of a claim of the ‘745 patent. 

In support of his conclusion that an ERBE APC system used in a surgical procedure would 

satisfy the limitation of claim 1 requring an endoscope with optical means positioned in one of the 

333 See CX-2C at 107:9-13. 

334 Id. at 186: 12-1 87:7. While the undersigned has not construed the limitation “optical 

means” herein, it is assumed for purposes of deciding whether ERBE satisfies the technical prong 

requirement, that a video chip camera and lens satisfies the optical means limitation of the asserted 

claims of the ‘745 patent. 

335 See e.g., RFF No. 105 (“Viewing optics is built into the single-channel and doublechannel endoscopes that are on the market today.”); RFF No. 177 (“Modern endoscopes have a video 

chip located at the distal end of the endoscope.”); RFF No. 186 (“Video chips are the predominant 

method in the industry of sending optical signals from a probe to a monitor in the operating room.”). 

86 
working channels, Mr. Walbrink points to Exhibit CX-34, which as previously discussed is a 

brochure for an Olympus Innoflex Colonovideoscope (i.e., endoscope) and Exhibit CX-59, which 

is an enlarged schematic from the brochure showing the distal end of the Olympus Innoflex 

endoscope.336 According to Mr. Walbrink, the Olympus Innoflex endoscope would be “typical of 

an endoscope.”337 Exhibits CX-34 and CX-59 only show the distal end of a video endoscope and 

thus it is impossible to confirm in such an endoscope whether the alleged working channel that 

contains the optical means extends between the two ends of the endoscope or whether the working 

channel has a predetermined diameter as required by claims 1 and 35.338 

Exhibit SX- 1 1 , which also has previously been discussed, includes a schematic, reproduced 

below, of an exemplary video endoscope showing both an end view and cross sectional view of the 

endoscope. 

The cross section view shows an optical means consisting of the lens and video chip camera 

336 See CX-2C at 108:21-109:2; see also CX-34; CX-59. Exhibit CX-59 has annotaions 

made by Mr. Walbrink (seen as A, B, C, - c6, D) and as such would be more appropriately classified 

as a demonstrative exhibit. See CX-2C at 1 1 1 :2-10. 

337 See CX-2C at 109:3, 1 17:2-7. 

338 See CX-34; CX-59. 

87 
combination dicussed by Mr. Walbrink.339 As previously stated, claim 1 requires a plurality of 

working channels with optical means positioned in one ofthe working channels. Additionally, claim 

1 explicitly requires that each working channel extend between the two ends of the endoscope and 

have a predetermined diameter. As is plainly seen in the cross sectional view above, the course in 

which the lens and video chip camera combination are positioned has one diameter in which the 

CCD signal wires are positioned and a larger diameter to accomodate the lens and CCD camera.34o 

Because the course in which the lens and video chip camera are positioned has more than one 

diameter it cannot be said to have a singular predetermined diameter. Thus, the undersigned finds 

that ERBE has failed to prove a specific instance of an ERBE APC system user using an endoscope 

during an APC procedure that has optical means positioned in one of the plurality of working 

channels as required by claim 1. 

To prove that one of its products practices at least one of the claims of the ‘745 patent, ERBE 

must prove that a user of its APC system actually performs an APC procedure in a way that infringes 

the asserted claims of the ‘745 patent. As discussed above, ERBE has failed to prove that any of its 

ERBE APC system users have performed an APC procedure in manner that practices either 

independent claim 1 or independent claim 35 of the ‘745 patent. Specifically, ERBE has failed to 

at least prove: (1) with regard to claims 1 and 35, that its users use an endoscope with a plurality of 

working channels; and (2) with regard to claim 1, that its users use an endoscope with optical means 

positioned in one of the working channels. Accordingly, the undersigned finds that ERBE has failed 

339 Id. 

340 See SX-11 at 241; see also SX-11 at Fig. 22.2 (showing the smaller diameter sheathing 

that encapsulates the wires coming from the video chip camera). 

88 
to prove that any of its ERBE APC system users practice a claim of the ‘745 patent. Because ERBE 

has failed to prove that any of its APC system users practice a claim of the ‘745 patent, the 

undersigned finds that ERBE has failed to satisfy the technical prong of the domestic industry 

requirement. 

B. Economic Prong 

Section 337(a)(3) sets forth the criteria for determining whether a domestic industry exists 

stating that: 

an industry in the United States shall be considered to exist if there is in the United 

States, with respect to the articles protected by the patent . . . concerned - 

(A) significant investment in plant and equipment; 

(B) significant employment of labor or capital; or 

(C) substantial investment in its exploitation, including engineering, research and 

development,or licensing.341 

As the statute uses the disjunctive term “or,” EWE can satisfy the economic prong of the 

domestic industry rquirement under any one of the three criteria set forth in Section 337(a)(3). Thus, 

while ERBE argues that it satisfies the economic prong under each of the criteria listed above, it is 

sufficient that the undersigned finds, as discussed in detail below, that ERBE has satisfied the 

economic prong under Section 337(a)(3)(C) through its investments in the exploitation of the ‘745 

patent. 

Before getting into the merits of ERBE’s assertion that it satisfies the economic prong of the 

domestic industry requirement through its exploitation of the ‘745 patent, Canady raises an issue 

which must first be addressed. Specifically, Canady argues that because ERBE never pled in its 

complaint a domestic industry under 19 U.S.C. 6 1337 (a)(3)(C) that it is now precluded from so 

341 19 U.S.C. 0 1337(a)(3) 

89 
doing.342 Canady cites to the Initial Determination in EPROM EEPROM Flash Memory, and Flash 

Microcontroller Semiconductor Devices and Products Containing Same (“EPROM’) in support of 

its argument that ERBE has waived its right to pursue a domestic industry under section 337(a)(3)(C) 

because it is was not pled in the complaint.343 EPROM, however, does not support that conclusion.344 

Ground Rule 8.2 states in pertinent part that “[alny contentions not set forth in detail as 

required herein shall be deemed abandoned or withdrawn, except for contentions of which a party 

is not aware and could not be aware in the exercise of reasonable diligence at the time of filing the 

pre-trial brief.”345 ERBE raised the argument that it satisfied the domestic industry requirement of 

section 337 through the exploitation of the ‘745 patent at least as early as the filing on July 26,2007, 

of its motion for summary determination on the economic prong.346 Notably, in its opposition to 

ERBE’s motion for summary determination, Canady never argues that ERBE waived its right to 

argue a domestic industry under 337(a)(3)(C). Based on the summary determination motion filed, 

Canady should have been well aware that ERBE was alleging a domestic industry through its 

substantial investment in the exploitation of the ‘745 patent. However, Canady did not include in 

its pre-hearing brief an argument that ERBE had waived its right to assert a domestic industry under 

section 337(a)(3)(C).347 Furthermore, even after pre-hearing briefs were Canady never filed 

342 See RIB at 67-68. 

343 Id. at 67. 

344 See EPROM, Inv. No. 337-TA-395, Initial Determination, 1998 ITC Lexis 85 at “175 

345 See Order No. (July 5,2007). 

346 See ERBE Mot. For Sum. Det. On Economic Prong at 17 (July 26,2007)(“(iii) substantial 

347 See RPHB at 86-92. 

348 There can be no argument that after pre-hearing briefs were filed, Canady was on notice 

(March 19,1998). 

investment in exploitation”). 

that ERBE was going to argue domestic industry under 337(a)(3)(C). See CPHB at 63-84. 

90 
a motion in limine to preclude ERBE’s section 337(a)(3)(C) domestic industry argument or exclude 

the related evidence, nor did Canady raise its waiver argument at the pre-hearing conference or 

during the hearing in this investigation. Accordingly, the undersigned finds Canady has waived its 

right to argue that ERBE is precluded from asserting a domestic industry under 337(a)(3)(C). 

Although the APC systems and probes sold by ERBE in the United States are all 

manufactured in Germany and then imported into the United States,349 the Commission has found 

that a domestic industry may exist for purposes of Section 337 based on a complainant’s investments 

in domestic nonmanufacturing activities. For example, in Certain Variable Speed Wind Turbines 

and Components ThereoJ; Inv. No. 337-TA-376 (“Wind Turbines”), the Commission noted that 

while the complainant had ceased to manufacture the article covered by the patent at issue, it 

continued to exploit the patent “albeit in a more limited fashion” through its operation and 

maintenance of wind turbines already in place.350 Similarly, activities such as quality control, repair 

and packaging of imported products, domestic repair and installation activities and domestic product 

servicing have served as the basis for a domestic industry.351 

The record shows that EWE performs extensive service and repair for APC systems in the 

United States. In fact, ERBE has approximately [ 3 worth of equipment devoted 

to APC products and testing at its facility in Georgia.352 Additionally, ERBE recently added space 

349 See Complaint at 756. 

350 Wind Turbines, U.S.I.T.C. Pub. 3003, Comm. Opn. at 17-18 (August 30, 1996). 

35‘ See Certain Home Vacuum Packaging Machines, Inv. No. 337-TA-496, Initial 

Determination on Temporary Relief (unreviewed in relevant part) at 143; Certain Diltiazem 

Hydrochloride and Diltiazem Preparations, Inv. No. 337-TA-349, USITC Pub. No. 2902, Initial 

Determination (unreviewed in relevant part) at 138-39, 1995 WL 945191 (U.S.I.T.C., February 1, 

1995) (“Diltiazem”). 

352 See CX-LFC:OOOO~~. 

91 
to its Georgia facility and added equipment worth approximately [ I3j3 The record shows 

that the majority of the recent expansion of the Georgia facility was needed to accommodate ERBE’s 

APC systems business and to facilitate the software upgrades for VI0 APC systems.354 

[ 

355 

356 

357 

358 

359 

1360 

As shown above, the amounts ERBE has expended on its APC business (i.e., its APC 

systems and probes) in the United States are substantial. Accordingly, the undersigned finds ERBE 

has establish the existence of a domestic industry in APC systems and probes. 

353 cx-4c:oooo14. 

354 cx:4c:ooooo12. 

355 CX-6C:OOOOO8 - 10 (Q.46-53.). 

356 CX-6C:OO0020 (Q. 1 1 1, 1 12); CIB at 69-70. 

357 CX-6C:OOOO16-17 (Q.91-96). 

358 CX-6C:OOOO17; Trial Tr. 8/27/2007 at 408-09. 

359 CX-6C:OOOO18-19 (Q.101, 102). 

360 CX-6C:OOOO19 (Q. 103). 

92 
VII. VALIDITY 

A. Anticipation 

1. Prior Use of Dr. Canady’s Prototype 

Canady argues that Dr. Canady’s design, development, and use of prototype APC probes 

constitutes prior art to the ‘745 patent under 35 U.S.C. $ 102(a) and anticipates the asserted claims 

of the ‘745 patent.361 To prove anticipation, Canady must show that every limitation in the asserted 

claims ofthe ‘745 patent are disclosed expressly, or inherently, by the use of Dr. Canady’s prototype. 

Among the many limitations in the ‘745 patent that Canady has the burden of showing are disclosed 

by the use of Dr. Canady’s prototype is the limitation in independent claims 1 and 35 requiring that 

the extended longitudinal axis of the protruding portion of the tube be arranged “sidewardly” of the 

tissue to be coagulated.362 

Canady argues that Dr. Canady’s prototype was used sidewardly of the tissue to be 

coagulated and thus satisfies this claim limitation.363 In support, Canady cites to its finding of fact 

701 and states that “it plainly can be seen in the videos of Dr. Canady’s procedures that in many 

instances the prototype probe was not perpendicular to the tissue when coagulation was 

performed.”364 Moreover, Canady argues that the videos show examples in which the longitudinal 

axis of the prototype probe was substantially parallel to the tissue to be coagulated.365 

36’ See RIB at 80, 83. 

362 JX-1 at 11:49-52, 1559-64. 

363 See RIB at 90. 

364 Id. 

365 Id. 

93 
Canady’s finding of fact 701 states: 

In a video (Respondents’ Exhibit RPX-3) of an endoscopic coagulation procedure 

performed by Dr. Canady on December 29,1991 using one of the prototype probes, 

you can see that the snare was used in a normal manner to remove the polyp. The 

snare was then withdrawn into the probe and APC was performed using the probe 

while the same was withdrawn inside the tube. RX-1C (Canady, p.3); RPX-3; 

Canady, Tr. 1 3 6 1 : 1 - 1 7.366 

This finding does not even mention, much less support the assertion that Dr. Canady’s prototype was 

used in a manner where the longitudinal axis of the protruding portion of the tube was sidewardly 

of the tissue to be coagulated. Additionally, the cited testimony in the finding of fact does not 

support Canady’s assertion. With regard to the video, produced as Exhibit RPX-3, Canady does not 

cite to any specific time segment(s) in the video that would show the alleged use of the probe 

sidewardly of the tissue to be coagulated. Apparently Canady relies on its statement in its brief that 

it can be “plainly” seen from the video.367 However, such is not the case. To the contrary, the video 

is not of very good Absent testimony describing the procedure(s) taking place on the 

video, the video is of little value. With regard to the portion of the video shown and discussed at the 

hearing, in response to a question from ERBE asking whether the tissue that was shown to be 

coagulated was directly in front of the probe, Dr. Canady responded “[tlhat’s what I see there.”369 

As properly construed herein, the limitation “sidewardly” in the asserted claims of the ‘745 

patent means alongside.370 If the tissue to be coagulated is directly in front of the probe it cannot be 

said to be alongside the probe as required by the asserted claims of the ‘745 patent. Thus, the 

366 RFF 7 701. 

367 See RIB at 90. 

368 See RPX-3. 

369 Tr. 1363 at 12-16. 

See supra, at IV.B.2. 370 

94 
undersigned finds that Canady has failed to prove by clear and convincing evidence that Dr. 

Canady’s prototype was ever used in a manner where the longitudinal axis of the protruding portion 

of the tube was arranged “sidewardly” of the tissue to be coagulated as required by the asserted 

claims of the ‘745 patent. Accordingly, for at least the reasons discussed above, the undersigned 

finds that the use of Dr. Canady’s prototype does not anticipate the asserted claims of the ‘745 

patent. 

2. The ‘675 Patent 

Canady argues that the asserted claims of the ‘745 patent are anticipated under 35 U.S.C. 0 

102(b) by United States Patent No. 5,207,675 (“the ‘675 patent”). Notably, the ‘675 patent was 

considered by the examiner during the prosecution of the ‘745 patent at issue in this investigation 

and is cited on the front page of the ‘745 patent. Because the ‘675 patent was considered by the 

patent examiner, Canady’s burden of showing anticipation is made more 

To prove anticipation, Canady must show that every limitation in the asserted claims of the 

‘745 patent are disclosed expressly, or inherently, in the ‘675 patent. Among the many limitations 

in the ‘745 patent that Canady has the burden of showing are disclosed by the ‘675 patent is the 

limitation in independent claims 1 and 35 requiring that the extended longitudinal axis of the 

protruding portion of the tube be arranged “sidewardly” of the tissue to be On this 

point, Canady argues that although the ‘675 patent does not explicitly disclose this limitation, it 

371 See Glaxo Group Ltd. v. Apotex, Inc., 376 F.3d 1339,1348 (Fed. Cir. 2004)(“Apotex has 

the burden of showing invalidity by clear and convincing evidence. This burden is “especially 

difficult” when, as is the present case, the infringer attempts to rely on prior art that was before the 

patent examiner during prosecution.”)(internal citations omitted). 

372 JX-1 at 11:49-52,1559-64. 

95 
would nevertheless be inherent.373 Specifically, Canady argues that it is a property of physics that 

current will follow the path of least resistance and thus the probes disclosed in the ‘675 patent 

inherently would arc to the side when positioned sidewardly of the To prove inherency, 

Candy must show that the limitation of the asserted claims requiring the extended longitudinal axis 

of the protruding portion of the tube be arranged sidewardly of the tissue to be coagulated is 

necessary present in the ‘675 patent.375 Even assuming arguendo that Canady’s assertion that current 

will follow the path of least resistance is inherently disclosed, Canady has still failed to set forth any 

evidence that would show that the ‘675 patent necessarly discloses the positioning of the protruding 

end of the probe such that it is arranged alongside the tissue to be coagulated. Thus, the undersigned 

finds that Canady has failed to prove by clear and convincing evidence that the ‘675 patent discloses 

the extended longitudinal axis of the protruding portion of the tube arranged “sidewardly” of the 

tissue to be coagulated as required by the asserted claims of the ‘745 patent. 

The ‘675 patent also fails to disclose the limitation of the asserted claims of the ‘745 patent 

requiring an electrode positioned inside the tube and offset from the opening at the distal end of the 

tube a predetermined minimum safety distance.376 While the ‘675 patent does disclose that “[a] 

flexible wire is provided within the tube for conducting radio frequency (W) current,” the ‘675 

patent makes clear that “[tlhe wire has a distal end for placement adjacent the distal end of the 

373 See CIB at 90. 

374 Id. at 90-91. 

375 Abbott Labs. v. Baxter Pharm. Prods., 471 F.3d 1363, 1368 (Fed. Cir. 2006)(“[A] prior 

art reference may anticipate without disclosing a feature of the claimed invention if that missing 

characteristic is necessarily present, or inherent, in the single anticipating reference.”). 

376 See JX-1 at 11:33-37, 15:40-46. 

96 
If the distal end of the wire is positioned adjacent the distal end of the tube the wire cannot 

be said to be offset form the opening at the distal end of the tube as required by the asserted claims. 

Canady’s only other citation to the ‘675 patent states that “[iln the embodiment shown, polypectomy 

snare 64 is moveable with wire 28 from inside the tube 10 to outside the tube 10 . . .’7378 Canady 

provides no explanation as to why or how this passage satisfies the limitation in the asserted claims 

and one is not readily apparent.379 The undersigned finds that this passage does not disclose an 

electrode inside the tube and offset fiom the opening at the end of the tube a predetermined 

minimum safety distance. Thus, the undersigned finds that Canady has failed to prove by clear and 

convincing evidence that the ‘675 patent discloses an electrode positioned inside the tube and offset 

from the opening at the distal end of the tube a predetermined minimum safety distance as required 

by the asserted claims of the ‘745 patent. 

Accordingly, for at least the reasons discussed above, the undersigned finds that the ‘675 

patent does not anticipate the asserted claims of the ‘745 patent. 

B. Obviousness 

Canady argues that asserted claims of the ‘745 patent are obvious under 35 U.S.C. $103 in 

light of the ‘675 patent in combination with the 1994 article by Gunter Farin and Karl Grund, the 

1994 article by K. Grund, D. Storek and G. Farin, andor the ‘ 138 Marwaring patent.380 Both ERBE 

and the Staff argue that Canady has failed to prove by clear and convincing evidence that the asserted 

377 See RX-3 at 3:17-18,1:61-65; see also RIB at 88. 

378 RIB at 88. 

379 Id. 

380 See Order No. 45 (October 1 , 2007)(granting ERBE’s Motion to Strike New Arguments 

in Respondents’ Post-hearing Brief). 

97 
claims of the ‘745 patent are obvious in light of the above combinations of reference^.^" 

Section 103 forbids issuance of a patent when “the differences between the subject matter 

sought to be patented and the prior art are such that the subject matter as a whole would have been 

obvious at the time the invention was made to a person having ordinary skill in the art to which said 

subject matter pertains.”382 The Supreme Court in Graham v. John Deere Co ofKansas City set 

forth the framework for determining obviousness under section 103. 

Under 103, the scope and content of the prior art are to be determined; differences 

between the prior art and the claims at issue are to be ascertained; and the level of 

ordinary skill in the pertinent art resolved. Against this background the obviousness 

or nonobviousness of the subject mater is determined. Such secondary 

considerations as commercial success, long felt but unsolved needs, failure of others, 

etc., might be utilized to give light to the circumstances surrounding the origin of the 

subject matter sought to be patented.383 

Canady’s obviousness argument merely consists of stringing together elements of the 

invention that are allegedly present in the cited prior art.384 Canady offers absolutely no analysis, no 

explanation and no evidence addressing any of the John Deere factors.385 Moreover, Canady has 

failed to articulate any reason or basis that would have prompted a person of ordinary skill in the 

relevant art to combine the elements from the prior art references in the manner reflected in the 

381 CRB at 48-49; SRB at 45. The parties dispute the priority date of the ‘745 patent at issue 

and thus whether the Farin and Grund articles are prior art. See CIB at 45; RIB at 76; SRB at 45. 

However, even assuming arguendo that the Farin and Grund references are prior art to the ‘745 

patent, as discussed infia, the undersigned still finds Canady has failed to prove by clear and 

convincing evidence that the asserted claims of the ‘745 patent are invalid under Section 103. 

382 35 U.SC. $103(a). 

383 383 U.S. 1,17- 1 8 (1 966); KSR International Co. v. Telejlex Inc., 2007 U.S. LEXIS 4745 

384 See RIB at 83-94. 

385 See Id. 

(2007). 

98 
asserted claims of the ‘745 patent.386 In its reply brief, Canady asserts that the motivation to combine 

the references can be found in the references themselves.387 However, Canady provides no further 

explanation or citation pointing to where such motivation can be found.388 In essence, it appears that 

Canady is asking the undersigned to take the references on which it relies and then figure out on its 

behalf whether one of ordinary skill in the art would have a motivation to combine them. 

Based on the evidence presented by Canady in its post-hearing briefs, or rather lack thereof, 

the undersigned finds that Candy has failed to prove by clear and convincing evidence that any of 

the asserted claims of the ‘745 patent are obvious in light of the ‘675 patent in combination with the 

1994 article by Gunter Farin and Karl Grund, the 1994 article by K. Grund, D. Storek and G. Farin, 

and/or the ‘ 138 Marwaring patent. 

VIII. UNENFORCEABILITY - PATENT EXHAUSTION 

The undersigned notes at the outset that a finding of patent exhaustion does not result in a 

finding of unenforceability as suggested from the heading under which Canady makes its argument. 

Patent exhaustion, otherwise known as the first sale doctrine, is an affirmative defense to 

infringement. 89 

386 Id. 

387 RRl3 at 42. 

388 Id. 

389 See Jazz Photo Corp. v. United States, 439 F.3d 1344, 1350 (Fed. Cir. 2006)c‘We 

articulated the affirmative defense of first sale and permissible repair in Jazz I, holding that the 

“unrestricted sale of a patented article, by or with the authority of the patentee, ‘exhausts’ the 

patentee’s right to control further sale and use of that article by enforcing the patent under which it 

was first sold.”); see also Monsanto Co. v. Scruggs, 459 F.3d 1328, 1332-36 (Fed. Cir. 

2006)(referring to patent exhaustion doctrine as an affirmative defense and discussing whether patent 

exhaustion doctrine barred patent infringement claims); AntodBauer, Inc. v. PAG, Ltd., 329 F.3d 

1343, 1349-50 (Fed. Cir. 2003)(discussing patent infringement analysis and presenting patent 

exhaustion doctrine as a defense). 

99 
Canady argues that because ERBE placed no conditions on purchasers of its argon units and 

electrosurgical generators at the time of sale that ERBE has exhausted any patent rights under the 

‘745 patent.390 As the Federal Circuit Court has held, “when a patented product has been sold the 

purchaser acquires ‘the right to use and sell it, and . . . the authorized sale of an article which is 

capable of use only in practicing the patent is a relinquishment of the patent monopoly with respect 

to the article sold.”’39‘ However, it is not any sale that invokes this “first sale” or “patent 

exhaustion” doctrine. Rather, 

The unrestricted sale of a patented article, by or with the authority of the patentee, 

“exhausts” the patentee’s right to control further sale and use of that article by 

enforcing the patent under which it was first sold. In United States v. Masonite 

Corp., 316 U.S. 265,278,62 S. Ct. 1070, 86 L. Ed. 1461, 1942 Dec. Comm’r Pat. 

777 (1942), the Court explained that exhaustion of the patent right depends on 

“whether or not there has been such a disposition of the article that it may fairly be 

said that the patentee has received his reward for the use of the article.” See, e.g., 

Intel Corp. v. ULSISys. Tech., Inc., 995 F.2d 1566, 1568,27 USPQ2d 1136, 1138 

(Fed. Cir. 1993) (“The law is well settled that an authorized sale of a patented 

product places that product beyond the reach of the patent.”) Thus when a patented 

device has been lawfully sold in the United States, subsequent purchasers inherit the 

same immunity under the doctrine of patent exhaustion.392 

The ‘745 patent does not protect the individual argon units, generators or probes sold by 

ERBE. As has been previously discussed and acknowledged by Canady, to practice the asserted 

claims of the ‘745 patent requires at a minimum, a gas source, generator, probe and endoscope. 

ERBE does not sell endoscopes. Therefore, the sales by ERBE are not of a “patented article” as the 

law requires. Accordingly, the undersigned finds Canady ’s argument unpersuasive. 

390 See RIB at 94-95. 

391 Monsanto Co. v. McFarling, 302 F.3d 1291,1298 (Fed. Cir. 2002) (quoting Unitedstates 

392 Jazz Photo Corp. v. International Trade Comm ’n, 264 F.3d 1094,1105 (Fed. Cir. 2001), 

v. Univis Lens Co., 3 16 U.S. 241,249 (1942)). 

cert. denied, 536 U.S. 950, 153 L. Ed. 2d 823, 122 S. Ct. 2644 (2002). 

100 
CONCLUSIONS OF LAW 

1. 

2. 

3. 

The Commission has subject matter jurisdiction in this investigation. 

The Commission has personal jurisdiction over Canady. 

Canady’s accused products are not used in a manner that directly infringes claims 1 , 3,4,11 , 

13, 35, 37, 38, or 39 of U.S. Patent No. 5,720,745 in violation of 35 U.S.C. 0 271(a). In 

addition, Canady’s accused products do not indirectly infringe these claims under 35 U.S.C 

$3 271(b) or (c). 

An industry in the United States does not exist with respect to ERBE’s products that is 

protected by any claim of U.S. Patent No. 5,720,745, as required by 19 U.S.C. 0 1337(a)(2) 

and (3). 

Claims 1,3,4, 11, 13,35,37,38, and 39 of U.S. Patent No. 5,720,745 are not invalid under 

35 U.S.C. 0 102 for anticipation. 

Claims 1,3,4, 11, 13,35,37,38, and 39 of U.S. Patent No. 5,720,745 are not invalid under 

35 U.S.C. 0 103 for obviousness. 

4. 

5. 

6. 

101 
INITIAL DETERMINATION 

Based on the foregoing opinion, findings of fact, conclusions of law, the evidence, and the 

record as a whole, and having considered all pleadings and arguments, including the proposed 

findings of fact and conclusions of law, it is the Administrative Law Judge’s Initial Determination 

that a violation of Section 337 of the Tariff Act of 1930, as amended has not been found in the 

importation into the United States, the sale for importation, or the sale within the United States after 

importation of certain endoscopic probes for use in argon plasma coagulation systems in connection 

with claims 1, 3, 4, 1 1, 13, 35, 37, 38, 39 and 41 of U.S. Patent No. 5,720,745. Furthermore, the 

Administrative Law Judge hereby determines that a domestic industry in the United States does not 

exist that practices U.S. Patent No. 5,720,745. 

The Administrative Law Judge hereby CERTIFIES to the Commission this Initial 

Determination, together with the record of the hearing in this investigation consisting of the 

following: the transcript of the evidentiary hearing, with appropriate corrections as may hereafter be 

ordered by the Administrative Law Judge; and further the exhibits accepted into evidence in this 

investigation as listed in the attached exhibit lists. 

Pursuant to 19 C.F.R. 3 210.42(h), this Initial Determination shall become the determination 

of the Commission unless a party files a petition for review pursuant to 19 C.F.R. 9 2 10.43(a) or the 

Commission, pursuant to 19 C.F.R. 8 210.44, orders on its own motion a review of the Initial 

Determination or certain issues therein. 

102 
RECOMMENDED DETERMINATION ON REMEDY AND BOND 

I. Remedy and Bonding 

A. Limited Exclusion Order 

Under Section 337(d), the Commission may issue either a limited or a general exclusion 

order. A limited exclusion order instructs the U.S. Customs Service to exclude from entry all articles 

that are covered by the patent at issue and that originate from a named respondent in the 

investigation. A general exclusion order instructs the U.S. Customs Service to exclude from entry 

all articles that are covered by the patent at issue, without regard to source. 

ERBE requests that a limited exclusion order be issued that prohibits the importation of all 

infringing endoscopic probes for use in argon plasma coagulation Canady asserts that 

no exclusion order should be issued, as it would adversely affect the public interest.394 While Staff 

does not believe that the evidence supports a violation of Section 337, Staff asserts that, should a 

violation be found, that a limited exclusion order as to the infringing probes imported by or on behalf 

of Canady would be appropriate.395 

The undersigned agrees that the evidence shows that if a violation is found, a limited 

exclusion order would be proper. 

B. Cease and Desist 

Under Section 337(f)(l), the Commission may issue a cease and desist order in addition to, 

or instead of, an exclusion order. Cease and desist orders are warranted primarily when the 

393 CIB 98. 

394 RIB 95-96. 

395 SIB 87-88; SRB 49. 

103 
respondent maintains a commercially significant inventory of the accused products in the United 

Staff asserts that the evidence shows that Canady has no commercially significant inventory 

of the KLS Martin probes, but that the evidence shows that Canady has a commercially significant 

inventory of Soring probes in the United States. Therefore, Staff asserts that if a violation is found, 

a cease and desist order would be appropriate.397 

The undersigned agrees that the evidence shows that Canady maintains significant inventories 

of Soring probes in the United States and that if a violation is found, a cease and desist order is 

warranted. 

C. Bond During Presidential Review Period 

If the Commission enters an exclusion order or cease and desist order, parties may continue 

to import and sell their products during the pendency of the Presidential review under a bond in an 

amount determined by the Commission to be "sufficient to protect the Complainants from any 

inj"~."~~~ 

ERBE requests a bond in the amount of 100% of the entered value of accused products.399 

Canady requests that no bond be set. In the alternative, Canady requests that the bond be set at 

$3,860.10, which is the royalty amount that Canady asserts that ERBE received from ConMed 

Corporation in a prior district court litigati~n.~" Staff requests a bond in the amount of $15-$50 per 

396 Certain Crystalline, 15 U.S.P.Q.2d at 1277-79. 

397 SIB 88; SRB 49. 

398 19 U.S.C. 5 1337(e); 19 C.F.R. 5 210.50(a)(3). 

399 CIB 98. 

400 RIB 96-97; RRB 43-44. 

104 
probe, which represents the price differential between ERBE and Canady's probedo1 

The Commission frequently sets the bond by attempting to eliminate the difference in sales 

prices between the patented domestic product and the infringing product."o2 In this case, the parties 

have introduced evidence that the price differential between ERBE and Canady's probes is $15-$50 

per probe. Accordingly, the undersigned recommends a bond in the amount of $50 per probe. 

Within seven days of the date of this document, each party shall submit to the office of the 

Administrative Law Judge a statement as to whether or not it seeks to have any portion of this 

document deleted from the public version. The parties' submissions must be made by hard copy by 

the aforementioned date. 

Any party seeking to have any portion of this document deleted from the public version 

thereof must submit to this office a copy of this document with red brackets indicating any portion 

asserted to contain confidential business information. The parties' submission concemingthe public 

version of this document need not be filed with the Commission Secretary. 

SO ORDERED. 

Charles E. Bullock 

Administrative Law Judge 

401 SIB 88; SRE! 50. See SFF 154. 

402 See Certain Microsphere Adhesives, Commission Opinion at 24. 

105 
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Exhibit 

Purpose 

Technical Background; 

Claim Construction 

UNITED STATES INTERNATIONAL, TRADE COMMISSION 

Washington, D.C. 

Sponsoring 

Witness 

By motion 

Before Charles E. Bullock 

Administrative Law Judge 

Exhibit 

No. 

SX-1 

In the Matter of 

Exhibit 

Title 

Excerpts from McGraw-Hill 

Dictionary of Scientific and 

Technical Terms at 127, 147,777, 

780, 1009, 1070,1104,1348, 1521, 

1705, 1932, 1933,2083, and 2137 

(5th ed., 1994) 

CERTAIN E'hDOSCOPIC PROBES 

FOR USE IN ARGON PLASMA 

COAGULATION SYSTEMS 

Technical Background; 

Patent 

InfiingementAVonInfringement 

Technical Background; 

Claim Construction 

COMMISSION INVESTIGATIVE STAIFF'S 

FINAL EXHIBIT LIST 

(September 4,2007) 

Bromell 

Waye 

sx-2 1 

sx-3 

sx4c 

through 

sx- 10 

sx-11 

Inv. No. 337-TA-569 

"Tools of the Trade" - ASGE First 

Year Fellows Endoscopy Course 

2006 (previously marked as 

Complainants' Deposition Exhibit 13) 

Chapter 22 from "Colonoscopy: 

Principles and Practice," Jerome D. 

Waye, Douglas K. Rex, & 

Christopher B. Williams, eds. (2003) 

at 238-58 (previously marked as 

Defendants' Deposition Exhibit 1 17) 

(WAYE 000033-57) 

I 

I 

Exhibit 

Status 

Admitted 

813 1 

Withdrawn 

Admitted 

813 1 

Withdrawn 

Admitted 

8/27 

- 
-2- 

' Trademark Infringement 

sx- 12 

through 

sx-14c 

White; Erhe; 

Day 

sx-15c 

SX-16C 

through 

sx-3oc 

SX-3 1 

E-mail chain fi-om Unspecified 

Sender to Creighton White dated 

October 24,2005 re: APC Warranty 

Statement (previously marked as 

Defendants' Deposition Exhibit 12) 

(EITC 1 1547-48) 

Chapter entitled "Fluid Mechanics 

Theory" by Nguyen and Wereley 

(Wereley 000039-83) 

Technical Background; 

Claim Construction; 

InfringemenwonInfringement 

Admitted 

Wereley 

~ ~ 

Claim Construction By motion 

Withdrawn 

sx-33 

Admitted 

812 8 

Withdrawn 

SX-32 Excerpts from Webster's II New 

Riverside University Dictionary at 

(1984) at 248, and 1082. 

Admitted 

813 1 

Respectfully submitted, 

/s/ Karin J. Norton 

Lynn I. Levine, Director 

Thomas S. Fusco, Supervisory Attorney 

Karin J. Norton, Investigative Attorney 

JeKkey T. Hsu, Investigative Attorney 

OFFICE OF UNFAIR IMPORT INVESTIGATIONS 

U.S. International Trade Commission 

500 E Street, S.W., Suite 401 

Washington, D.C. 20436 

(202) 205-2606 

(202) 205-2579 

(202) 205-2158 (Facsimile) 
APPENDIX B 

U.S. DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA 

ORDER AND OPINION GRANTING PARTIALLY SUMMARY JUDGMENT OF 

NONINFRINGEMENT OF THE ‘745 PATENT 
P 

e’ ** Office of 

Unfair Import Investigations 

JEFFREY T. HSU 

Investigative Attorney 

Direct Dial: (202) 205-2579 

Fax: (202) 205-21 58 

UNITED STATES INTERNATIONAL TRADE COMMISSION 

WASHINGTON, D.C. 20436 

December 2 1,2007 

Re: Certain Endoscopic Probes for Use in Argon Plasma Coagulation 

Procedures, Inv. No. 337-TA-569 

VIA HAND DELIVERY 

The Honorable Charles E. Bullock 

Administrative Law Judge 

U.S. International Trade Commission 

500 E Street SW, Rm 317-1 

Washington, D.C. 20436 

Dear Judge Bullock: 

Enclosed with this letter is a copy of the December 18,2007 Order and Opinion of Court 

in ERBE Electromedizin GmbH v. Canady Technology LLC, Civ. Action No. 05-1674, US. 

District Court, W.D. Pa., in which ERBE accuses certain products sold by Canady of infi-inging 

claims of U.S. Patent No. 5,720,745 (the ‘“745 Patent”). The Order grants Canady’s motion for 

summary judgment of non-infiingement of the ‘745 patent as to certain endoscopic probes sold 

by Canady that are manufactured by KLS Martin GmbH & Co. KG (“KLS Martin”). See Order 

at pp. 33-38. 

The same claims of the‘745 patent asserted by ERBE in the district court (whch the Staff 

understands to be claims 1, 3,4, 11, 13, 35,37, 38, 39 and 41), and KLS Martin probes, are also 

at issue in the above-referenced investigation. However, the Soring GmbH probes sold by 

Canady that are at issue in the above-referenced investigation were not before the Court. 

Nonetheless, the Staff thought that it should bring this recently-issued Order to your attention. 

Sincerely, 

Je eyT. su,Esq. 

Inbestigative Attorney 
Enclosure 

cc: Timothy R. Dewitt, Esq. 

Charles E. Schill, Esq. 

Timothy C. Bickham, Esq. 

-Philip G. Hampton, 11 Esq. 

Steven M. War, Esq. 

(all cc’s w/o enclosure) 
Case 2:05-cv-01674-DWA Document 222 Filed 121-1 8/2007 Page 1 of 47 

IN THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF PENNSYLVANIA 

ERBE ELECTROMEDIZIN GMBH, et al., 1 

1 

1 

1 

-vs- 1 

Plaintiffs, 1 

Civil Action No. 05-1 674 

CANADY TECHNOLOGY LLC, et al., 1 

1 

1 

Defendants. 1 

AMBROSE, Chief District Judge. 

OPINION and ORDER OF COURT 

SY N 0 PSIS 

Plaintiff, ConMed Corporation ("ConMed"), filed a Motion for Partial Summary 

Judgment. (Docket No. 114). Plaintiff, ERBE Elektromedizin GmbH and ERBE USA, Inc. 

(collectively "ERBE"), filed a Motion for Partial Summary Judgment (Docket No. 137). 

Defendants, Dr. Jerome Canady and Canady Technology LLC, also filed a Motion for 

Summary Judgment. (Docket No. 182). The briefing regarding the same is finally 

complete. After careful consideration of the submissions of the parties, ConMed's 

Motion for Partial Summary Judgment (Docket No. 114) is granted in part and denied 

in part, ERBE's Motion for Partial Summary Judgment (Docket No. 137) is granted in 

part and denied in part, and Defendants' Motion for SummaryJudgment (Docket No. 

182) is granted in part and denied in part. 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 2 of 47 

I. BACKGROUND 

Plaintiff, Erbe Elektromedizin GmbH, manufactures and sells flexible 

endoscopic probes for argon plasma coagulation (“APC”). ERBE is the owner, by 

assignment, of Patent No. 5,720,745 (“Patent ‘745) issued on February 24,1998, titled 

“Electrosurgical Unit and Method for Achieving Coagulation of Biological Tissue.” It 

was filed as a continuation-in-part of ERBE’s prior Application Serial No. 981,009 (“the 

‘009 application’),’ and had a six year prosecution history. Plaintiff, Erbe USA, Inc., 

is a subsidiary of ERBE Elektromedizin GmbH. 

ERBE USA is the owner of U.S. Trademark Reg. No. 2,637,630 (“the ‘630 

Registration), registered on the supplemental Register by the USPTO on October 15, 

2002. The ‘630 Registration is for the color blue as applied to the tube portion of its 

flexible endoscopic probes for use in argon plasma coagulation (“the Blue Probe 

Mark”). According to the Amended Complaint, ERBE asserts the following as their 

trade dress: “a substantially elongated blue tube having a plurality of graduated 

black markings at the end of the elongated tube. (Docket No. 18, 748). 

Plaintiff, ConMed Corporation (“Conmed”), is in the business of manufacturing 

and selling electrosurgical generators and related devices, including argon gasenhanced electrocoagulation equipment. ConMed is the owner, by assignment, of 

Patent No. 4,781,175 (“‘175 patent”), which was issued on November 1, 1988, titled 

“Electrosurgical Conductive Gas Stream Technique of Achieving improved Eschar for 

’The ‘009 application was filed on November 24,1992. The ‘009 application was rejected by the 

USPTO on August 2,1993. After losing an appeal of the rejection, ERBE filed the continuationin-part 

application on December 28,1995, that led to the issuance of the ‘745 patent. 

2 
? 

Case 2:O5-cv-01674-DWA Document 222 Filed 12/18/2007 Page 3 of 47 

Coagulation.” The ‘175 patent was filed on April 8,1986, by FrancisT. McGreevy, Carol 

Bertrand, and Karl W. Hahn, and expired on April 8, 2006. 

On January 21,2000, ERBE entered into an agreement with ConMed to license 

several ConMed patents, including the ‘175 patent. under the Agreement, ERBE was 

licensed to manufacture and sell various argon gas-enhanced electrocoagulation 

equipment, including electrosurgical generators and flexible probes related to 

argon gas-en hanced electrocoagulation. 

Defendant, Canady Technology, markets and sells single use disposable flexible 

APC probes that may be connected to an adapter that in turn is connected to an 

ERBE APC electrosurgical unit. Defendant, Dr. Jerome Canady, is the CEO and partial 

owner of Canady Technology. 

ERBE and ConMed filed an Amended Complaint against Defendants setting 

forth the following six counts: 

Count I: Infringement of the ‘745 Patent 

Count II: Infringement of the ’175 Patent 

Count Ill: Federal Trademark Infringement under the 

Count IV: unfair Competition in Violation Of 15 U.S.C. SI125 

Count V: Common Law Infringement and Unfair 

Competition 

Lan ham Act 

Count VI Passing Off 

(Docket No. 18). In response, Defendants answered the Amended Complaint and 

Defendant, Canady Technologies, filed the following Counterclaims: 

3 
7 

Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 4 of 47 

First Counterclaim: Declaratory Judgment of Non-Infringement 

Second Counterclaim: Declaratory Judgment of invalidity 

Third Counterclaim: Declaratory Judgment of Implied License 

Fourth Counterclaim: Declaratory Judgment of Unenforceability Due 

to Inequitable Conduct 

Fifth Counterclaim: Agreement in Restraint of Trade/Conspiracy to 

Monopolize - Violation of $$I and 2 of The Sherman Act 

Six Counterclaim: Monopolization and Attempted Monopolization 

Violation of $2 of The Sherman Act 

Seventh Counterclaim: Declaratory Judgment of Unenforceability 

Due to Patent Misuse 

Eighth Counterclaim: Tortious Interference with a Contract 

Ninth Counterclaim: Tortious Interference with a Business 

Expectancy 

(Docket No. 27). 

Pending are the following Motions: 1) ConMed’s Motion to Strike Portions of 

Defendants’ Summary Judgment Papers under Rule 56(e) (Docket No. 142); 2) 

ConMed’s Motion for Partial Summary Judgment (Docket No. 114); 3) ERBE’s Motion 

for Partial Summary Judgment (Docket No. 137); and 4) Defendants’ Motion for 

Summary Judgment as to all of Plaintiffs’ claims (Docket No. 182). The parties have 

all responded and replied to the pending Motions. Therefore, the issues are now 

ripe for review. 

11. LEGAL ANALYSIS 

A. STANDARD OF REVIEW 

Summary judgment may only be granted if the pleadings, depositions, 

4 
Case 2:05-cv-OI674-DWA Document 222 Filed 12/18/2007 Page 5 of 47 

answers to interrogatories, and admissions on file, together with the affidavits, if 

any, show that there is no genuine issue as to any material fact and that the moving 

party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56U. Rule 56 

mandates the entry of summary judgment, after adequate time for discovery and 

upon motion, against the party who fails to make a showing sufficient to establish 

the existence of an element essential to that party’s case, and on which that party 

will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 

(1 986). 

In considering a motion for summary judgment, this Court must examine the 

facts in a light most favorable to the party opposing the motion. InternationalRaw 

Materials, Ltd, v. Stauffer Chemical Co., 898 F.2d 946, 949 (3d Cir. 1990). The burden 

is on the moving party to demonstrate that the evidence creates no genuine issue 

of material fact. Chipollini v. Spencer Gifts, Inc., 814 F.2d 893,896 (3d Cir. 1987). The 

dispute is genuine if the evidence is such that a reasonable jury could return a 

verdict for the non-moving party. Anderson v. Liberty Lobby, lnc., 477 U.S. 242,248 

(1986). A fact is material when it might affect the outcome of the suit under the 

governing law. Id. Where the non-moving party will bear the burden of proof at 

trial, the party moving for summaryjudgment may meet its burden by showing that 

the evidentiary materials of record, if reduced to admissible evidence, would be 

insufficient to carry the non-movant’s burden of proof at trial. Celotex, 477 U.S. at 

322. 

Once the moving party satisfies its burden, the burden shifts to the 

5 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 6 of 47 

nonmoving party, who must go beyond its pleadings, and designate specific facts 

by the use of affidavits, depositions, admissions, or answers to interrogatories 

showing that there is a genuine issue for trial. Id. at 324. Summary judgment must 

therefore be granted "against a party who fails to make a showing sufficient to 

establish the existence of an element essential to that party's case, and on which 

that party will bear the burden of proof at trial." White v. Westinghouse Electric Co., 

862 F.2d 56, 59 (3d Cir. 19881, quoting, Celotex, 477 U.S. at 322. Furthermore, in 

antitrust litigation, "[tlo survive a motion for summary judgment, an antitrust 

plaintiff must produce economically plausible evidence supporting the elementsof 

its claim." Harrison Aire, Inc. v. Aerostar Intern., lnc., 423 F.3d 374, 380 (36 Cir. 2005); 

citing, Matsushita Nec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986). "if 

the plaintiff's theory is economically senseless, no reasonable jury could find in its 

favor, and summary judgment should be granted." Id., quoting, Eastman Kodak Co. 

v. lrnage Tech. Sews., lnc., 504 U.S. 451, 468-69 (19921. 

B. CONMED'S MOTION TO STRIKE 

ConMed filed a Motion for Summary Judgment. (Docket No. 114). Defendants 

filed various documents in opposition thereto including, a Memorandum of Law 

with Exhibit (Docket Nos. 129,1321, a Responsive Statement of Material Facts (Docket 

NO. 1311, a declaration of Jerome Canady (Docket No. 1331, and a declaration of Lewis 

Gelbman. (Docket No. 134). ConMed, filed a Motion to Strike Portions of Defendants' 

Summary Judgment Papers Under Federal Rule of civil Procedure 56(e1. (Docket No. 

142). Generally, ConMed is seeking an order striking seventy-seven (771 different 

6 
, 

Case 2:05-cv-01674-DWA Document 222 filed 12/18/2007 Page 7 of 47 

portions of Defendants’ opposition papers. Id. Defendants have filed a Brief in 

Opposition to the same. (Docket No. 155). 

Rule 56(e) of the Federal Rules of Civil Procedure provides as follows: 

(e) Form of Affidavits; Further Testimony; Defense 

Required. Supporting and opposing affidavits shall be 

made on personal knowledge, shall set forth such facts as 

would be admissible in evidence, and shall show 

affirmatively that the affiant is competent to testify to 

the mattersstated therein. Sworn or certified copies of all 

papers or parts thereof referred to in an affidavit shall be 

attached thereto or served therewith. The court may 

permit affidavits to be supplemented or opposed by 

depositions, answers to interrogatories, or further 

affidavits. When a motion for summaryjudgment is made 

and supported as provided in this rule, an adverse party 

may not rest upon the mere allegations or denials of the 

adverse party’s pleading, but the adverse party’s response, 

by affidavits or as otherwise provided in this rule, must set 

forth specific facts showing that there is a genuine issue 

for trial. If the adverse party does not so respond, 

summary judgment, if appropriate, shall be entered 

against the adverse party. 

F.R.C.P. 56(e). Moreover “[aln affidavit that is ‘essentially conclusory’ and lacking in 

specific facts is inadequate ...I’ to defeat a motion for summary judgment. 

Mandonado v. Ramirez, 757 F.2d 48, 51 (3d Cir. 19851, quoting DreXel Union 

Prescription Centers, Inc., 582 F.2d 781, 789-90 (3d Cir. 1978). See, Schoch v. First 

Fidelity Bancorporation, 912 F.2d 654, 657 (3d Cir. 1990); Quiroga v. Hasbro, Inc., 934 

F.2d 497, 500 (3d Cir. 19901, cert. denied, 502 U.S. 940 (1991). “Legal memoranda and 

oral argument are not evidence and cannot by themselves create a factual dispute 

sufficient to defeat a summary judgment motion.” Jersey Cent. Power 22 Light Co. 

v. Township ofLacey, 772 F.2d 1103, 1109-10 (3d Cir. 1985). 

7 
Case 2:05-cv-O1674-DWA Document 222 Filed 12/18/2007 Page 8 of 47 

ConMed has broken down the specific statements it wishes to have stricken 

into seven categories: 1) statements in Defendants' Brief and Statement of Facts 

that are unsupported by any citation; 21 factual assertions regarding the state of 

mind of another; 3) factual assertions based on hearsay; 4) factual assertions based 

on conclusory allegations, speculation, and unsubstantiated assertions; 5) improper 

expert opinion testimony; 6) loose exhibitsattached to the brief with no sponsoring 

testimony; and 7) sham fact issues. (Docket No. 144, pp. 3-16; see also, Docket No. 

142, Ex. A). With regard to the first category, ConMed argues specifically that item 

numbers 3-5, 7-8, 10-11, 15-16, 18, 20-22, 24-26, 29-34, 36-37, 64, 67, 69, 71 and 75 of 

Exhibit A (Docket No. 142) should be stricken because they all contain assertions that 

are unsupported by any citation to admissible proof. (Docket No. 144, pp. 3-41. In 

response, Defendants assert that the statementsset forth in item numbers 1-44 and 

64-77 are not evidence, but are attorney argument explaining the evidence and 

reasonable inferences to be drawn therefrom. (Docket No. 155, p. 3). Because 

Defendants concede that these statements are argument and not evidence, I need 

not accept them as true. That does not mean, however, that the statements must 

be stricken from record. Consequently, ConMed's Motion to Strike is denied in this 

regard. 

With regard to its second argument, ConMed specifically argues that item 

numbers 15,19,20, 22,43-44,54-55, and 57-61 Of Exhibit A (Docket NO. 142) Should be 

stricken because they contain factual assertions regarding the state of mind of 

another. (Docket No. 144, pp. 5-61. In response, Defendants argue that the items 

8 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 9 of 47 

identified relate to Dr. Canady’s and Mr. Gelbman‘s personal knowledge that KLS 

Martin has refused to supply generators and dual mode probes to Canady 

Technologyand that the statements are admissible to show KLS Martin’s reasonsfor 

not supplying the generators and dual mode probes. (Docket No. 155, pp. 5-61. I 

agree with Defendants that item numbers 58 and 59 are admissible to show the 

state of mind of why KLM Martin no long supplied generatorsand dual mode probes 

to Canady Technology. See, Callahan v. A.E.V., lnc., 182 F.3d 237, 241 (3d Cir. 1999) ( 

“[Pllaintiffs themselves can testify that the customers are in fact no longer shopping 

at their stores. Furthermore, although the reports of the customers’ statements are 

hearsay, they are admissible as evidence of the customers’ states of mind, i.e., their 

reasons for no longer shopping at the plaintiffs‘ stores.”). MOreOver, item numbers 

57, 60 and 61 may be admissible for other reasons. See, Callahan, 182 F.3d at 253 

(“[Tlhe plaintiffs’ own testimony about the actual behavior of their customers is not 

hearsay. Rather, it is admissible evidence of lost business, although not of the reason 

therefore. Thus, in the present case, the plaintiffs’testimony that certain customers 

no longer purchased beer from them, coupled with their testimonyconcerning the 

customers’ statements of their motive, which is admissible hearsay under Rule 

803(3), are together evidence of the fact of damage.”). Furthermore, as pointed out 

earlier, Defendants admit that item numbers 1-44 and 64-77 are attorney argument, 

and therefore, I need not strike those items. Finally, item number 54 and 55 relate 

to Dr. Canady’s state of mind and should not be stricken. Thus, ConMed’s Motion to 

Strike in this regard is denied and item numbers 15,19,20,22,43-44,54-55,58-59, and 

9 
Case 2:05-cv-01674-DWA Document 222 Filed 12/1 812007 Page 10 of 47 

60-61 should not be stricken. 

With regard to ConMed’s third argument, ConMed summarily submits that 

item numbers 1, 6, 9, 12-15, 53, and 60-61 should be stricken from the summary 

judgment papers since they are based on hearsay. (Docket No. 144, p. 7). Again, 

items 1, 6, 9, and 12-15 will not be stricken because they are simply attorney 

argument. With regard to item 53, 60 and 61, Defendants argue that they are not 

being offered for the truth of the matter but rather fall within one of the hearsay 

exceptions such as an admission against interest. Asset forth above, item numbers 

60 and 61 are admissible, not for the truth of the matter, but for other purposes. 

Item number 53 is admissible for that same reason. Consequently, ConMed’s Motion 

to Strike in this regard is denied. 

With regard to ConMed’s fourth argument, ConMed summarily submits that 

item numbers 2,4,7,9,14-16,18-19,22,24,31,36,43-44,47-48,51-52,54-55, and 57-62 

should be stricken because they are conclusory, speculation, or unsubstantiated 

assertions. (Docket No. 144, p. 7-81. Again, items 2,4, 7,9,14-16,18-19,22, 24 31, 36, 

and 43-44 will not be stricken because they are simply attorney argument. With 

regard to item numbers 47-48,51-52,54-55, and 57-62, the statements made therein 

are based on Mr. Gelbman’s and Dr. Canady‘s knowledge and go to the weight of the 

evidence. Therefore, ConMed’s Motion to Strike in this regard is denied. 

With regard to ConMed’s fifth argument, ConMed argues that item numbers 

3, 5, 7, 11, 33, 34, 45-48, 52, 63-65, 67, and 75 should be stricken because the 

statements contain improper expert opinion testimony. (Docket No. 144, pp. 8-12). 

10 
Case 2:05-cv-01674-DWA Document 222 Filed 1211 8/2007 Page 1 1 of 47 

First, ConMed argues that Dr. Canady’s testimony regarding the definition of the 

relevant market should be stricken because the antitrust element requiring the 

definition of the relevant market requires expert testimony and Dr. Canadywas not 

listed as an expert witness in this case. (Docket NO. 144, pp. 8:9). AS ConMed 

recognizes in a footnote, however, I have held that “[wlhile it appears as though 

many parties in antitrust cases utilize expert testimony in order to establish relevant 

market and market power, we have found noauthority which indicates that expert 

testimony is required, and we do not venture to so hold.” F.B. Leopold Co., Inc. v. 

Roberts Filter Mfg. Co., Inc., 882 F.Supp. 433,452 (W.D.Pa. 1995). Based on the same, 

I decline to require expert testimony here. 

ConMed further argues that if Dr. Canady is attempting to define the relevant 

market, said testimony is inadmissable because “it is based entirely on 

unsubstantiated conclusory statements that neither provide probative evidence nor 

reach the key question of what the relevant customers have come to define as the 

relevant market.” (Docket No. 144, p. IO). I disagree. Dr. Canady sufficiently sets 

forth his personal knowledge to discuss the interchangeability aspect of the 

relevant market. Furthermore, Defendants do not rely solely on Dr. Canady’s 

affidavit to define the relevant market. (Docket No. 155, p. 8-11). Consequently, I will 

not strike item numbers 3, 5, 7, 11, 33, 34, 64-65, 67, 75 of Defendants’ Brief in 

Opposition /Statement of Facts or item number 63 regarding Dr. Canady’s affidavit. 

Additionally, ConMed argues that item numbers 45-48 should be stricken 

because they relate to Mr. Gelbman’s expert opinions on how to evaluate 
Case 2:05-cv-O1674-DWA Document 222 Filed 12/18/2007 Page 12 of 47 

investment in a start-up company, what circumstances are more or less attractive 

to potential investors, and the causes for the delay in Canady Technology’s roll out 

of new product. (Docket No. 144, p. 12). I disagree that this is expert testimony. To 

the contrary, Mr. Gelbman was hired by Dr. Canady to assist him in developing a 

business plan and introducing Dr. Canady to a number of potential investors. 

(Docket No. 134, 72). Consequently, he is permitted to discuss his background and 

what he did for Canady Technology. 

Finally, ConMed argues that item numbers 53-55 should be stricken because 

they relate to expert opinion of Dr. Canady on what investors in a start-up company 

view as important. (Docket No. 144, p. 12). I disagree that the statements therein 

are expert testimony. Furthermore, as I stated previously, these items are 

admissible for other purposes. Consequently, ConMed’s Motion to Strike in this 

regard is denied. 

With regard to ConMed’s sixth argument, ConMed argues that the exhibits 

attached to Defendants’ Brief in Opposition should be stricken because the exhibits 

are not referenced, authenticated, nor explained in either of the declarations filed 

by Defendants. (Docket No. 144, pp. 13-14). This is not the standard, however. It is 

well-established in this jurisdiction that the nonmoving party does not have to 

produce evidence in a form that would be admissible at trial to avoid summary 

judgment. J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1542 (36 Cir. 19901, 

citing Celotex, 477 U.S. at 324. Instead, the court must be satisfied that the 

nonmoving party’s evidence is capable of being reduced to admissible evidence at 

12 
Case 2:05-cv-01674-DWA Document 222 Filed 1211 8/2007 - Page 13 of 47 

trial. J.F. Feeser, Inc., 909 F.2d at 1542. Consequently, ConMed's Motion to Strike is 

denied in this regard. 

With regard to ConMed's seventh argument, ConMed argues that portions of 

Dr. Canady's affidavit should be stricken because they are a sham. (Docket No. 144, 

pp. 14-16). The "sham affidavit" doctrine is well established in the Third Circuit. See, 

Baer v. Chase, 392 F.3d 609, 623-26 (3d Cir. 2004). Under the doctrine, a party may 

not create a genuine issue of material fact by filing an affidavit contradicting his/her 

own sworn testimony without offering a plausible explanation for the conflict. Id., 

citing Hackman v. Valley Fair, 932 F.2d 239,241 (3d Cir.1991). In such situation, a trial 

court may disregard the offsetting affidavit. Id. Nevertheless, just because there 

is a discrepancy between deposition testimony and the deponent's later affidavit, 

the trial court is not required to disregard the affidavit. Id. at 624, citing 

Kennett-Murray Corp. v. Bone, 622 F.2d 887,894 (5th Cir.1980). The Third Circuit has 

recognized that "there are situations in which sworn testimony can quite properly 

be corrected by a subsequent affidavit ... [andl [wlhere the witness was confused at 

the earlier deposition or for some other reason misspoke, the subsequent 

correcting or clarifying affidavit may be sufficient to create a material dispute of 

fact." Martin v. MerreIl Dow Pharmaceuticals, Inc., 851 F.2d 703, 705 (3d Cir.1988). 

Here, the two statements in question by Dr. Canady are not directly in 

opposition to each other.2 To that end, there could be plausible explanations for 

ConMed's perceived discrepancy. In fact, in opposition, Dr. Canady states that his 

'The first statement was made in an affidavit on October 27, 2005, at 126. The second 

statement was made in an affidavit on April 23, 2007, at 814. (Docket No. 114, p. 15). 

13 
Case 2:O5-cv-016?4-DWA Document 222 Filed 12/18/200? Page 14 of 47 

April 23, 2007, affidavit was not referring to the January 26, 2005, meeting, but 

rather to meetings that occurred on April 19-20, 2005 and May 11, 2005, and thus, 

there is no conflict. (Docket No. 155, p. 12-13). Consequently, I will not disregard the 

April 23, 2007, affidavit. Therefore, ConMed's Motion to Strike in this regard is 

denied. 

Accordingly, ConMed's Motion to Strike is denied in its entirety. 

C. CONMED'S MOTION FOR PARTIAL SUMMARY JUDGMENT 

ConMed is moving for summaryjudgment as to Canady Technology's antitrust 

counterclaims (Counterclaims Five and Six), Canady Technology's patent misuse 

counterclaim (Counterclaim Seven), and Canady Technology's tort counterclaims 

(Counterclaims Eight and Nine).3 (Docket NO. 114). Specifically, ConMed seeks 

summary judgment as to Counterclaims Five, Six and Seven4 under the Noerr 

Pennington doctrine, or alternatively, because Canady Technology allegedly cannot 

offer admissible evidence creating a jury question as to the essential elements 

3ConMed mistakenly states that the Counterclaims were asserted by both Defendants, when 

in fact, the counterclaims were asserted only by Canady Technology. Compare, Motion for Partial 

Summary Judgment (Docket No. 114), with, Answer to Amended Complaint and Counterclaims, 71103- 

216 (Docket No. 27). 

4CanadyTechnology's patent misuse counterclaim merely incorporates the paragraphs set forth 

in its Affirmative Defenses and Counterclaims and then simply concludes that ERBE and ConMed 

misused the '745 and '175 patents. (Docket No. 27, 117204-05). ConMed argues that the patent misuse 

counterclaim is nothing more than alleging the "wrongful" enforcement of the patents, to which it is 

entitled to immunity under theNoerr-Pennington doctrine. (Docket No. 120, p. 26). CanadyTechnology 

does not address Counterclaim Seven in its Brief in Opposition. (Docket No. 132). After a review of the 

record, I find there is no genuine issue that Counterclaim Seven is based on the wrongful enforcement 

of the patents. Therefore, in determining whether ConMed is entitled to summary judgment under 

the Noerr-Pennington doctrine, I will address Counterclaim Seven together with Counterclaim Five. C.R. 

Bard, Inc. v. M3Systems, Inc., 157 F.3d 1340,1373 (Fed. cir. 1998) ("'[Wlrongful' enforcement of patents, 

is activity protected under Noerr and California Motor, and is not subject to collateral attack as a new 

ground of 'misuse.'") 

14 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 15 of 47 

under §§lor 2 of the Sherman Act. id. Additionally, ConMed seeks summary 

judgment as to Counterclaims Eight and Nine because the fraudulent statement 

attributed to ConMed allegedly was not made, was not fraudulent, and would not 

be actionable as a matter of law. Id. 

1. Counterclaim Six 

In response to ConMed's Motion for Partial Summary Judgment, Canady 

Technology submits that "based upon discovery taken in the case" it is no longer 

pursuing Counterclaim Six against ConMed. (Docket No. 132, pp. 1-21. Consequently, 

Counterclaim Six is dismissed against ConMed and its Motion for Partial Summary 

Judgment as to Counterclaim Six is denied as moot. 

2. Counterclaim Five and Seven 

In this case, Counterclaims Five and Seven are based on the act of ConMed 

bringing a patent infringement claim against Defendantsas a sham. (Docket No. 27, 

Counterclaims Five and Seven). ConMed first argues that it is entitled to summary 

judgment as to Counterclaims Five and Seven based on the Noerr-Pennington 

doctrine' and because Canady Technology cannot satisfy the "sham" litigation 

exception. (Docket No. 120, pp. 10-19 and Docket No. 154, pp. 3-41. "Under the NoerrPennington doctrine, '[a1 party who petitions the government for redress generally 

is immune from antitrust liability.' (Citation omitted). That immunity is so potent 

that it protects petitioning notwithstanding an improper purpose or motive." 

Mariana v. Fisher, 338 F.3d 189, 198 (3d Cir. 20031, quoting A.D. Bedell Wholesale Co., 

?5ee, Eastern R.R. Presidents Conference v. Noerr Motor Freight, 365 US. 127 (1961) and United 

Mine Workers of Am. v. Pennington, 381 U.S. 657 (1965). 

15 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 16 of 47 

Inc. v. Philip Morris lnc., 263 F.3d 239, 250 (3d Cir. 20011, cert. denied, 534 U.S. 1081 

(2002). “The Noerr/Pennington doctrine protects antitrust defendants’ rights to 

‘freely inform the government of their wishes’ and ‘to seek action on laws in the 

hope that they may bring about an advantage to themselves and a disadvantage to 

their competitors.”’ Santana ProductsInc. v. Bobrick Washroom Equip., Inc., 401 F.3d 

123, 131 n. 13 (3d Cir. 20051, quoting Eastern R.R. Presidents Conference v. Noerr 

Motor Freight, Inc., 365 U.S. 127 (1961). 

The immunity under Noerr-Pennington doctrine, however, is not unlimited. 

There is a “sham” litigation exception to the doctrine. An77Stm?g Surgical Center, 

Inc. v. Armstrong County Memorial Hospital, 185 F.3d 154,158 (34 Cir. 1999). “Where 

the challenged private conduct is only ‘sham’ petitioning - Le., where it ‘is not 

genuinely aimed at procuring favorable government action as opposed to a valid 

effort to influence government action” - Noerrl-Penningtonl immunity is not 

available. Id., quoting, Professional Real Estate Investors, Inc. v. Columbia Pictures, 

Inc., 508 U.S. 49 (1993)(”PRE”). “In essence, sham petitioning entails ’the use of the 

governmental process-as opposed to the outcome of that process-as an 

anticompetitive weapon.”’ Id. (emphasis in original), quoting, PRE, 508 U.S. at 61. PRE 

outlined a two-part test to apply to determine whether a petition is “sham” 

litigation. PRE, 508 U.S. at 60-61. 

First, the lawsuit must be objectively baseless in the sense 

that no reasonable litigant could realistically expect 

success on the merits. If an objective litigant could 

conclude that the suit is reasonably calculated to elicit a 

favorable outcome, the suit is immunized under Noerr, 

and an antitrust claim premised on the sham exception 

16 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 17 of 47 

must fail. Only if challenged litigation is objectively 

meritless may a court examine the litigant's subjective 

motivation. Under this second part of our definition of 

sham, the court should focus on whether the baseless 

lawsuit conceals an attempt to interfere directlywith the 

business relationships of a competitor, through the use of 

governmental process-as opposed to the outcome of that 

process-as an anticompetitive weapon. This two-tiered 

process requires the plaintiff to disprove the challenged 

lawsuit's legal viability before the court will entertain 

evidence of the suit's economic viability. 

Cheminor Drugs, Ltd. v. Ethyl Corp., 168 F.3d 11 9, 122-23 (3d Cir. 19991, quoting PRE, 

508 U.S. at 60-61 (citations omitted). 

Canady Technology, however, argues that where the defendant has filed "a 

whole series of legal proceedings," the test is different. (Docket No. 132, pp. 14-15). 

In cases in which "the defendant is accused of bringing a 

whole series of legal proceedings," the test is not 

"retrospective" but "prospective": "Were the legal filings 

made, not out of a genuine interest in redressing 

grievances, but as part of a pattern or practice of 

successive filings undertaken essentially for purposes of 

harassment?" Id. As the Ninth Circuit has noted, it is 

immaterial that some of the claims might, "as a matter of 

chance," have merit. The relevant issue is whether the 

legal challenges "are brought pursuant to a policy of 

starting legal proceedings without regard to the merits 

and for the purpose of injuring a market rival." Id. 

Primetime24 Joint venture v. National Broadcasting, Co., Inc., 219 F.3d 92,101 (2d Cir. 

20001, quoting, uSS-POSCO Indus. v. contra Costa county Bldg. & Constr. Trades 

Council, AFL-C/O, 31 F.3d 800,811 (9th Cir.1994). In looking at ConMed solely, and not 

at ConMed and ERBE jointly as Canady Technology does, I disagree with Canady 

Technology that Primetime applies to ConMed. To begin with, the Counterclaim 

facts onlyassertone previous litigation which was brought by ConMed against ERBE. 

17 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 18 of 47 

(Docket No. 27,6182). After a review of the record, the exhibits supplied by Canady 

Technology also reveal one arbitration brought by ConMed against Jerome Canady, 

M.D. (Docket No. 129-5, Ex. 6). I do not find that this amounts to "simultaneous and 

voluminous," a "series of," or a "pattern of," legal proceedings. See, Marchon 

Eyewear, Inc. v. TUra LP, 2002 WL 31253199, *9 (E.D.N.Y. 2002) (two other lawsuits did 

not amount to a "pattern" or "a whole series of legal proceedings"); Livingston 

Downs Racing Ass'n Inc. v. Jefferson Downs Corp., 192 F.Supp.2d 519, 539 

(M.D.La.,2001)(preSUmablyfOUr lawsuits not enough, but nine lawsuits were enough); 

see Amarel v. Connell, 102 F.3d 1494, 1519 (9th Cir.1996); See also Applera Corp. v. MJ 

Research, lnc ., 303 F.Supp.2d 130, 133-34 (D.COnn. 2004)(explaining context of 

Primetime, as involving 'I 'huge volumes' of legal challenges," referred to as 

"automatic petitioning")(quoting Primetime, 219 F.3d at 95-96, 101); In re Fresh Del 

Monte Pineapple, 2007 WL 64189, *I7 n. 19 (S.D.N.Y. January 4, 2007). Consequently, 

I find that Canady Technology must meet the two part test set forth in PRE. 

Thus, I must first determine if the filing against Defendants is "objectively 

baseless." If it is not objectively baseless, then the filing of the lawsuit was not a 

sham and ConMed is entitled to immunity under the Noerr-Pennington doctrine. 

I 

PRE, 508 US. at 60-61. Canady Technology, argues that patent infringement claim by 

ConMed is objectively baseless because the '175 Patent and the '745 Patents are 

diametrically opposed and therefore it is impossible to infringe on both Patents at 

the same time. (Docket No. 132, pp. 16-18). When considering this Motion brought 

by ConMed, I am only concerned with ConMed's claim of infringement of the '175 

18 
Case 2:05-cv-01674-DWA Document 222 Filed 1211 812007 Page 19 of 47 

Patent. COnMed does not have any claims regarding the ‘745 Patent. See, Amended 

Complaint (Docket No. 18). Therefore, I find this argument lacks merit. 

Canady Technology also argues in one paragraph that the patent 

infringement claim by ConMed is objectively baseless due to the doctrine of patent 

exhaustion. (Docket No. 132, pp. 21-22). “The first sale/patent exhaustion doctrine 

establishes that the unrestricted first sale by a patentee of his patented article 

exhausts his patent rights in the article.” Monsanto Co. v. Scruggs, 459 F.3d 1328, 

1336 (Fed. Cir. 20061, citing Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700, 701 (Fed. 

Cir. 1992); and LCfIecs., Inc. v. Bizcom Necs., Inc., 453 F.3d 1364 (Fed. Cir. 2006). I find 

that Canady Technology’s one paragraph argument fails to adequately address the 

issues germane to such a discussion and how the application of the patent 

exhaustion doctrine would destroy the application of the Noerr-Pennington 

immunity as it applies to COnMed. Consequently, I find no merit to this argument 

either. 

Finally, Canady Technology argues that ConMed’s “attempts to characterize 

its settlement and license agreement with ERBE as a ‘successful’ enforcement 

action,” as a means to justify its suit filed against it, is irrelevant to the issue of 

whether ConMed’s infringement claim is objectively baseless. (Docket No. 132, p. 19). 

Even assuming this to be true, it does not mean that there are not other reasons 

upon which the claim was objectively based. After a review of the evidence, I find 

there was probable cause to bring the claim. See, Jonas Decl. and Exs. (Docket No. 

124). Thus, I find that Count II of the Amended Complaint (Docket No. 18) regarding 

19 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 20 of 47 

the '175 Patent, is not objectively baseless. 

Therfefore, I find that Canady Technology's sham exception argument fails to 

defeat the application of the Noerr-Pennington doctrine as it relates to ConMed. 

Consequently, ConMed is entitled to summary judgment as to the antitrust and 

patent misuse Counterclaims.6 

3. Counterclaims Eight and Nine 

Next, ConMed argues that it is entitled to summary judgment as to 

Counterclaims Eight and Nine because Canady Technology failed to establish its 

tortious interference claims. (Docket No. 120, pp. 26-29; Docket No. 154, pp. 4-51. To 

assert a cause of action for intentional interference with a contractual relation, 

whether existing or prospective, under Pennsylvania law, the moving part must 

prove: 

(1) the existence of a contractual, or prospective 

contractual relation between the complainant and a third 

party; 

(2) purposeful action on the part of the defendant, 

specifically intended to harm the existing relation, or to 

prevent a prospective relation from occurring; 

(3) the absence of privilege or justification on the part of 

the defendant; and 

(4) the occasioning of actual legal damage as a result of 

the defendant's conduct." 

'Since I have not found that the challenged litigation is objectively baseless, I may not consider 

the second prong of the sham litigation exception, the litigant's subjective motive. Cherninor Drugs, 

Ltd., 168 F.3d at 122-23, quoting PRE, 508 U.S. at 60-61("0nly if challenged litigation is objectively 

meritless may a court examine the litigant's subjective motivation."). Additionally, based on this 

finding, I need not consider ConMed's alternative arguments regarding Counterclaims Five and Seven. 

See, ConMed's Brief in Support (Docket No. 120, pp. 17-25). 

20 
Case 2:05-cv-01674-DWA Document 222 Filed 1211 8/2007 Page 21 of 47 

Crivelli v. General Motors Corp., 21 5 F.3d 386, 394-95 (3d Cir. 20001, citing, Strickland 

v. University of Scranton, 700 A.2d 979, 985 (Pa.Super. 1997). ConMed only 

that Canady Technology cannot prove the first two elements. (Docket No. 

27). 

argues 

120, p. 

With regard to the first element, Canady Technology alleges in its Amended 

Complaint that it had a binding contract with KLS Martin for the supply of APC 

generators for distribution in the United Statesand based on a Letter of Intent from 

KLS Martin, it has a reasonably certain business expectation. (Docket No. 27, 11207, 

213). To that end, Canady Technology has only come forward with a Letter of 

Intent. (Docket No. 132, Ex. IO). Thus, there is no evidence of an existing contract 

with KLS Martin. Consequently, COnMed is entitled to summary judgment as to 

Counterclaim Eight. 

There is, however, evidence of a prospective contractual relation. (Docket No. 

132, Ex. IO). As a result, I will consider whether there is a genuine issue of material 

fact with regard to the second element for Counterclaim Nine. ConMed argues that 

there is no evidence of a purposeful action on its part to prevent a prospective 

relation from occurring. (Docket No. 120, pp. 27-29). After a review of the record, 

I disagree. The letter authored by Joseph Corasanti, President and CEO of ConMed, 

dated May 27, 2005, was a letter sent to Dr. Canady regarding “Amendments to 

License and Supply Agreements.” See, Jonas Decl. at Ex. 0 (Docket No. 124, Ex. 0). 

This letter was sent not only to Dr. Canady, but to Michael Martin of KLS Martin. 

Viewing this letter in the light most favorable to the non-moving party, Canady 

21 
Case 2:05-cv-016?4-DWA Document 222 Filed 12/18/2007 Page 22 of 47 

Technology, I find there is a genuine issue of material fact as to the second element. 

AS a result, ConMed's Motion for Summary Judgment as to Counterclaim Nine is 

denied. 

D. ERBE'S MOTION FOR PARTIAL SUMMARY JUDGMENT 

ERBE is moving for summary judgment as to Canady Technology's inequitable 

conduct counterclaim (Counterclaim Four), patent misuse counterclaim 

(Counterclaim Seven), and the antitrust counterclaims (Counterclaims Five and Six). 

(Docket NO. 137). 

1. Counterclaim Four - Inequitable Conduct 

Counterclaim Four asserts a cause of action for inequitable conduct. (Docket 

No. 27). ERBE argues that it is entitled to summary judgment as to Counterclaim 

Four because Canady Technology cannot establish any inequitable conduct. (Docket 

No. 149, pp. 14-19). Applicants for patents and their representatives are required to 

prosecute applications in the PTO with candor, good faith, and honesty. Molins PLC 

v. Textron, 48 F.3d 11 72,1178 (Fed. Cir. 19951, citing Precision Instrument Mfg. Co. v. 

Automotive Maintenance Mach. Co., 324 U.S. 806, 818 (1945). A breach of this duty 

constitutes inequitable conduct. Molins, supra. As the Federal Circuit Court of 

Appeals has summarized: 

Inequitable conduct includes affirmative 

misrepresentation of a material fact, failure to disclose 

material information, or submission of false material 

information, coupled with an intent to deceive. 

Determination of inequitable conduct requires a two-step 

analysis. First, the trial court must determine whether the 

conduct meets a threshold level of materiality. The trial 

court must then also determine whether the evidence 

22 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 23 of 47 

shows a threshold level of intent to mislead the PTO.. -. 

Once the threshold levels of materiality and intent have 

been established, the trial court is required to weigh 

them. In light of all the circumstances, the court must 

then determine whether the applicant's conduct is so 

culpable that the patent should be held unenforceable. 

Bd. of EdUC. ex rel. Bd. of Tr. of FSU v. Am. Bioscience, Inc., 333 F.3d 1330, 1343 (Fed. 

Cir. 2003) (internal citations omitted). 

Information is material "if there is a 'substantial likelihood that a reasonable 

examiner would have considered the information important in deciding whether 

to allow the application to issue as a patent.' " Honeywell Intern. Inc. v. Universal 

Avionics Systems Corp., 488 F.3d 982, 1000 (Fed. Cir. 20071, quoting, Halliburton Co. 

v. Schlurnberger Tech. Corp., 925 F.2d 1435, 1440 (Fed. Cir.1991) quoting, 37 C.F.R. § 

1.56 (1989). Intent meansthe "design, resolve, or determination with which a person 

acts; a state of mind in which a person seeks to accomplish a given result through 

a course of action." Molins, 48 F.3d at 1180. That does not mean that the party 

alleging inequitable conduct must come forward with "smoking gun" evidence. 

Merck & Co. v. Danbury Pharmacal, Inc., 873 F.2d 1418, 1422 (Fed. Cir. 1989) ("Intent 

need not, and rarely can, be proven by direct evidence."). Rather, intent to deceive 

may be inferred from the facts and circumstances surrounding the applicant's 

overall conduct. Id. (Intent "is most often proven by a showing of acts the natural 

consequences of which are presumably intended by the actor.") 

Inequitable conduct is a question of equity to be decided by the court. 

Paragon PodiatryLab. v. KLMLabs, 984 F.2d 1182,1190 (Fed. Cir. 1993). A party alleging 

inequitable conduct as a defense must prove the threshold elements of materiality 

23 
Case 2:05-cv-01674-DWA Document 222 Filed 1211 812007 Page 24 of 47 

and intent by clear and convincing evidence. Abbott Labs v. Torpharm, Inc., 300 F.3d 

1367,1380 (Fed. Cir. 2002). While generally, "precedent urges caution in the grant of 

summary judgment respecting a defense of inequitable conduct, summary 

judgment is not foreclosed." Paragon Podiatry, 984 F.2d at 1190. "[AI motion for 

summary judgment may be granted when, drawing all reasonable factual inferences 

in favor of the non-movant, the evidence is such that the non-movant can not 

prevail." Abbott Labs, 300 F.3d at 1379, citing ATD Corp. v. Lydall, Inc., 159 F.3d 534, 

547 (Fed. Cir. 1998). 

In this case, ERBE specifically argues that there is no evidence of a 

misrepresentation or omission, that its conduct was immaterial, and there was no 

evidence of intent with regard to the alleged misrepresentations cited to by Canady 

Technology in its Answer to Amended Complaint and Counterclaims. (Docket No. 

149, pp. 14-19, citing Docket NO. 27,18 62-76].' in response, Canady Technology does 

not address these alleged misrepresentations. (Docket No. 165, p. 23). Rather, it 

appears from its Brief that the inequitable conduct complained about now by 

Canady Technology is that "the inventors of the '745 patent and the patent 

attorneys failed to disclose to the USPTO material information relating to 

laparoscopic use of argon plasma coagulation prior to 1992." (Docket No. 165, p. 23). 

As pointed out by Canady Technology, in 1985, ERBE became a distributor for 

a company called "BeaCOn." (Docket No. 167, p. 19). The Beacon products dealt with 

71n addition, Canady Technology asserts other statements were material misrepresentations 

with the intent to deceive. (Docket No. 27, 8870-76). These statements have nothing to do with 

laparoscopy. Id. 

24 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 25 of 47 

by ERBE included Beamer One and Beamer Two. Id. at 20. These were argon gas 

sources with controlled elements for the flow rates. Id. Additionally, ERBE 

distributed electrosurgical pencils, laparoscopic probes and one other instrument. 

ld. at 20-21. ERBE's work on its own argon gas-assisted coagulation equipment or 

apparatus did not begin until 1993. Id. at25. According to Canady Technology, "[tlhe 

laparoscopic probes distributed by ERBE unquestionably constituted prior art to the 

'745 patent and its parent '009 application' yet were never disclosed to the USPTO 

during the prosecution." (Docket No. 165, p. 23). 

ERBE's only argument in opposition is that the information was immaterial 

because it was cumulative. (Docket No. 187, p. 6). Specifically, ERBE argues that 

"[tlhe use of laparoscopy was disclosed to the Examiner" in the article Technology 

of Arqon Plasma Coagulation with Particular Regard to Endoscopic Applications and 

in U.S. Patent No. 4,753,223 ("the '223 Patent), which appear on the face of the '745 

Patent. (Docket No. 187, p. 6). While I agree that cumulative information is not 

material, Honeywell Intern. lnc., 488 F.3d. at 1000, I do not find this information to 

be cumulative. 

To begin with, the reference to the '223 Patent on the face of the '745 Patent 

refers to "Bremer" and not Beamer. I have no evidence regarding the '223 Patent, 

let alone that it states anything about prior laparoscopic art. Consequently, the 

reference of the '223 Patent does not support ERBE cumulative argument. 

Furthermore, the above referenced article merely references laparoscopy in 

'The '009 application was filed on November 24, 1992. (Docket No. 179-4, Ex. 3). 

25 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 26 of 47 

one sentence: "Applicators for laparoscopy are designed so as to facilitate their 

application via trocar sleeves (Figure 91." (Docket No. 138-38, Ex. 30, p. 34). Based on 

the same, I do not find the information discussed by Canady Technology to be 

cumulative of other information already before the Patent Office. 

Therefore, after a review of the evidence set forth above, I find that Canady 

Technology had met its burden of showing a genuine issue regarding inequitable 

conduct. Consequently, summary judgment as to Counterclaim four is not 

wa r ra n ted . 

2. Counterclaims Five and Six 

Counterclaims Five and Six are based on the act of ERBE bringing a patent 

infringement claim against Defendants as a sham. (Docket No. 27, Counterclaims 

Five and Six). ERBE argues that it is entitled to summary judgment as to 

Counterclaims Five and Six based on the Noerr-Pennington doctrine and because 

Canady Technology cannot satisfy the "sham" litigation ex~eption.~ (Docket No. 137 

and Docket No. 149, pp. 19-20, 24-28). The standard for the Noerr-Pennington 

doctrine is set forth above. 

The exception to the Noerr-Pennington doctrine relied upon by Canady 

Technologies is the "sham litigation" exception. (Docket No. 165, p. 5). As set forth 

above, PRE outlined a two-part test to apply to determine whether a petition is 

'ERBE also asserts that Canady Technology cannot prove the other exception to NoerrPennington immunity. (Docket No. 137 and Docket No. 149, pp. 20-24). This exception is called the 

Walker Process fraud exception. See, Walker Process Equip., Inc. v. Food Mach. & Chem., COW., 382 US. 

172, (1965). Canady Technology, however, does not base its Counterclaims upon the Walker Process 

fraud exception. (Docket No. 165, p. 5). Therefore, I need not consider this exception. 

26 
Case 2:O5-cv-01674-DWA Document 222 Filed 12/18/2007 Page 27 of 47 

"sham" litigation. PRE, 508 U.S. at 60-61. First, the lawsuit must be objectively 

baseless. Id. If, and only if the lawsuit is objectively baseless, then the court may 

examine the litigant's subjective motivation. Id. 

Canady Technology, however, argues that where the defendant has filed "a 

whole series of legal proceedings," the test is different. (Docket No. 132, pp. 14-15). 

In cases in which "the defendant is accused of bringing a 

whole series of legal proceedings," the test is not 

"retrospective" but "prospective": "Were the legal filings 

made, not out of a genuine interest in redressing 

grievances, but as part of a pattern or practice of 

successive filings undertaken essentially for purposes of 

harassment?" As the Ninth Circuit has noted, it is 

immaterial that some of the claims might, "as a matter of 

chance," have merit. The relevant issue is whether the 

legal challenges "are brought pursuant to a policy of 

starting legal proceedings without regard to the merits 

and for the purpose of injuring a market rival." 

Primetime 24 Joint Venture v. National Broadcasting, Co., InC., 21 9 F.3d 92,101 (24 Cir. 

20001, quoting, USS-POSCO Indus. v. Contra Costa County Bldg. & Constr. Trades 

Council, AFL-C/O, 31 F.3d 800, 811 (9th Cir.1994). In looking at ERBE solely, and not at 

ConMed and ERBE jointly as Canady Technology does, I disagree with Canady 

Technology that Primetime applies to ERBE. Canady Technology asserts that 

ERBE has brought four separate litigations against Defendants." (Docket NO. 165, p. 

8). ERBE does not dispute that there are four lawsuits. (Docket No. 187, pp. 3-5; 

Docket No. 149, pp. 29-33). While I do not attempt to set forth the exact number of 

"Canady Technology specifically asserts that "ConMed and ERBE have brought against Canady 

Technology and its CEO, Dr. Canady, four separate lawsuits and an arbitration." (Docket No. 165, p. 8). 

As set forth above, the record reveals that the arbitration was brought only by ConMed against Dr. 

Canady. (Docket No. 129-5, Ex. 61. As a result, I only consider the four lawsuits. 

27 
Case 2:05-cv-01674-DWA Document 222 Filed 1211 812007 Page 28 of 47 

litigations necessary to fall within the Primetime standard, I do not find that four 

lawsuits amount to "simultaneous and voluminous," a "series of," or a "pattern of," 

legal proceedings. See, Marchon Eyewear, Inc. v. Tura LP, 2002 WL 31253199, *9 

(E.D.N.Y. 2002) (two other lawsuits did not amount to a "pattern" or "a whole series 

of legal proceedings"); Livingston Downs Racing Ass'n Inc. v. Jefferson Downs Corp., 

192 F.Supp.2d 519,539 (M.D.La.,2001)(preSumablyfOur lawsuits not enough, but nine 

lawsuits were enough); See Amarel v. Connell, 102 F.3d 1494,1519 (9th Cir.1996); See 

also Applera Corp. v. MJ Research, Inc ., 303 F.Supp.2d 130, 133-34 (D.COnn. 

2004)(explaining context of Primetime, as involving " 'huge volumes' of legal 

challenges," referred to as "automatic petitioning'Xquoting Primetime, 219 F.3d at 

95-96,101). Consequently, I find that Canady Technology must meet the two part 

test set forth in PRE. 

Thus, I must now determine whether ERBE's lawsuit against Defendants is 

"objectively baseless in the sense that no reasonable litigant could realistically 

expect success on the merits." PRE, 508 U.S. at 60; Cheminor Drugs, Ltd., 168 F.3d at 

122. "The existence of probable cause to institute legal proceedings precludes a 

finding that an antitrust defendant has engaged in sham litigation." PRE, 508 U.S. at 

62. "Probable cause to institute civil proceedings requires no more than a 

reasonable belief that there is a chance that a claim may be held valid upon 

adjudication ... the existence of probable cause is an absolute defense." Id. at 62-62. 

Canady Technology asserts that ERBE's trademark and trade dress claims are 

objectively baseless. (Docket No. 165, pp. 8-91. As support for this position, Canady 

28 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 29 of 47 

Technology makes a number of conclusory statements without any references to 

the record or supportive case law. Id. Moreover, the case law cited to by Canady 

Technology does not suggest that ERBE did not have "probable cause to institute" 

the case, which is the test to be applied. Consequently, I find that Canady 

Technology has failed to show, based on the evidence, that ERBE's trademark and 

trade dress claims are "objectively baseless." PRE, 508 U.S. at 60; CheminorDrugs, Ltd., 

168 F.3d at 122. 

Next, Canady Technology argues that the patent infringement claims were 

objectively baseless. (Docket No. 165, pp. 9-13). Canady Technology sets forth three 

arguments as to why ERBE's patent infringement claims were objectively baseless: 

1) since there is no direct infringement, there can be no indirect infringement; 2) 

the '745 Patent and the '175 Patent are diametrically opposed so it cannot be 

infringing on both; and 3) ERBE litigated the same claims against ConMed in another 

lawsuit and lost the case on summary judgment. (Docket No. 165, pp. 9-13). I will 

address each of these arguments. 

ERBE's patent claims are for indirect infringement. (Amended Complaint, 

Docket No. 18, Counts I and Ill. There can be no indirect infringementwithout direct 

infringement. See, 35 U.S.C. S271(c);"ArgO Mfg. Co. v. convertible Top Replacement 

"35 U.S.C.A. 5 271U provides as follows: 

(c) Whoever offers to sell or sells within the United States or imports into the United 

States a component of a patented machine, manufacture, combination or composition, 

or a material or apparatus for use in practicing a patented process, constituting a 

material part of the invention, knowing the same to be especially made or especially 

adapted for use in an infringement of such patent, and not a staple article or 

commodity of commerce suitable for substantial noninfringing use, shall be liable as 

a contributory infringer. 

29 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 30 of 47 

Co., 365 U.S. 336, 341 (1961) (“[llt is settled that if there is no direct infringement of 

a patent there can be no contributory infringement.”). Along those lines, Canady 

Technology’s first argument is that ERBE’s patent claims are objectively baseless 

because there is no direct infringement. In support of this conclusion, Canady 

Technology argues that “ERBE’s and ConMed’s entire argument is that the accused 

Canady Technology probes are unpatented components of the larger patented 

systems (APC units, generators, etc) sold by ERBE.” (Docket No. 165, p. 11). It 

continues that purchasers of an ERBE system have an implied license to use and to 

repair the system it purchased. (Docket No. 165, p. 11). Because the probes are 

single use disposable items, or “spent parts, Canady Technology argues that the 

probe may permissibly be replaced by the user. ld. Therefore, it concludes that 

there can be no direct act of infringement of either patent. Id. 

“A patentee grants an implied license [for the life of an arti~lel’~ to a purchaser 

when (1) the patentee sells an article that has no noninfringing uses and (2) the 

circumstances of the sale plainly indicate that the grant of a license should be 

inferred.” Anton/Bauer, lnc. v. PAC, LTD., 329 F.3d 1343 (Fed. Cir. 20031, citing, Met-Coil 

Sys. Corp. v. Korners Unlimited, lnc., 803 F.2d 684, 686 (Fed. Cir. 1986). Once a 

purchaser has an implied license, the purchaser may then repair it with replacement 

parts from others under the doctrine of repair and continue to use the article in the 

patented combination without infringing upon the patent. The Kendall Co. v. 

[Aln implied license arising from sale of a component to be used in a patented combination 

extends only for the life of the component whose sale and purchase created the license.” 

Carborundurn Co. v. Molten Metal Equipment Innovations, Inc., 72 F.3d 872, 879 (Fed. Cir. 1995). 

30 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 31 of 47 

Progressive Med. Tech., 85 F.3d 1570, 1573-74 (Fed. Cir. 1996). In such a case, direct 

infringement can only occur when there is a complete reconstruction of the device. 

Id. at 1574. 

[Tlhe terms “repair” and “reconstruction” are used to 

define the boundary between permitted and prohibited 

activities with respect to patented items after they have 

been placed in commerce. Originating in the principle of 

exhaustion of the patent right after first sale, the general 

rule is that ”while the ownership of a patented article 

does not include the right to recreate a substantially new 

article, it does include the right to preserve the useful life 

of the original article.” Precedent has elaborated on the 

right of the owner to replace unpateneted components, 

provided that the activity is not such as to make a new 

article. In Aro Manuf. Co. v. Convertible Top Replacement 

Co., 365 U.S. 336, (1961) the Court stated the cantrolling 

inquiry governing the replacement of unpatented parts 

of a patented article: 

reconstruction of a patented entity, 

comprised of unpatented elements, is 

limited to such a true reconstruction of the 

entity as to “in fact make a new article,” after 

the entity, viewed as a whole, has become 

spent .... Mere replacement of individual 

unpatented parts, one at a time, whether of 

the same part repeatedly or different parts 

successively, is no more than the lawful right 

of the owner to repair his property. Id. at 

364. 

Id. (Citations omitted). 

Thus, to begin with, the articles sold must have no noninfringing uses. 

Anton/Bauer, Inc. v. PAC, LTD., 329 F.3d 1343 (Fed. Cir. 2003). In this case, I find that 

Canady Technology has failed to demonstrate that the articles sold have no 

noninfringing uses. (Docket No. 165, pp. 9-11). Consequently, I find that Canady 

31 
Case 2:05-cv-OIS74-DWA Document 222 Filed 12/18/2007 Page 32 of 47 

Technology has not met its burden under this argument. 

With regard to Canady Technology’s second argument, even assuming that 

both patents are diametrically opposed, there is evidence that some of its probes 

could potentially function at flow rates as low as 0.1 Vmin for the 1.5 mm Canady 

probe, 0.5 Vmin for the 2.3 mm Canady probe, and 0.6 I/min for the Canady 3.2 mm 

probe. ERBE Ex. 13, Summary (Docket No. 138-18, p. 20). Therefore, I do not find 

ERBE’s claims to be objectively baseless in this regard. 

With regard to its third argument, I agree with Canady Technology that ERBE 

cannot put its head in the sand and play dumb even though the opinion was 

vacated.13 This does not mean, however, that ERBE did not have an objective basis 

for filing its patent claims against Canady Technology. The claims in this case are not 

exactly the same. Consequently, I find that Canady Technology has failed to meet 

its burden of showing that the patent claims are objectively baseless. Consequently, 

I find that Canady Technology has failed to demonstrate that ERBE’s patent 

infringement claims were objectively baseless. Therefore, ERBE is entitled to NoerrPennington immunity with regard to its patent infringement claims and, thus, 

entitled to summary judgment as to Counterclaims Five and Six. 

3. Counterclaim Seven 

Canady Technology’s seventh Counterclaim is one of patent misuse. (Docket 

No. 27). Like the antitrust counterclaims, ERBE argues, inter alia, that Canady ’ 

I3ERBE attempts to disown the findings within the vacated summaryjudgment opinion by the 

U.S. District Court for the Northern District of New York at 00-CV-0987 as set forth at Docket No. 163-11 

(Ex. LL), while in the same brief attempts to use those portions it believes are helpful. Compare, Docket 

No. 149, p. 25 with p. 19. ERBE Cannot have it both ways. 

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Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 33 of 47 

Technology's patent misuse counterclaim is based on sham litigation. (Docket No. 

149, pp. 37-39). In response, Canady Technology merely states one sentence: "For 

the reasons stated above with respect to Defendants' antitrust claims, ERBE (sic) 

frivolous enforcement actions constitute patent misuse and render the '745 patent 

unenforceable." (Docket No. 165, p. 24). Consequently, Canady Technology has failed 

to present any argument as to why ERBE is not entitled to Noerr-Pennington 

immunity for its patent misuse counterclaim. As a result, Canady Technology has 

not met its burden. Therefore, I find that ERBE is entitled to Noerr-Pennington 

immunity with regard to Counterclaim Seven and, thus, summaryjudgment in favor 

of ERBE is warranted as to Counterclaim Seven. 

E. DEFENDANTS' MOTION FOR SUMMARY JUDGMENT 

Defendants, both Dr. Canady and Canady Technology, move for summary 

judgment as to "all of Plaintiffs' claims." (Docket No. 182). As set forth above, there 

are six (6) counts to Plaintiffs' Amended Complaint. (Docket No. 18). I will begin with 

the patent infringement claims (Counts I and Ill. 

1. Patent Infringement Claims - Counts I and II 

There is a two-part test to be applied in all patent infringement claims. 

DynaC0t-e Holdings Corp. v. US. PhilipsCorp., 363 F.3d 1263,1273 (Fed. Cir. 2004). First, 

a court must engage in a claims construction. Id., citing, Cybor Corp. v. FAS Techs., 

lnc., 138 F.3d 1448, 1454 (Fed. Cir. 1998Hen bancl. Then, a court must compare the 

properly construed claims to the allegedly infringing device. Id. I have previously 

construed the claims. (Docket No. 112). Therefore, I must now engage in the second 

33 
Case 2:05-cv-01674-DWA Document 222 Filed 1211 8/2007 Page 34 of 47 

part of the two-part test. 

Plaintiffs have brought indirect infringement claimsas to both the ‘745 Patent 

and the ‘175 Patent. (Docket No. 18 - counts I and 11). The indirect infringement 

claims are for contributory infringement and inducement to infringe. Id. “Indirect 

infringement, whether inducement to infringe or contributory infringement, can 

only arise in the presence of direct infringement ....I’ Dynacore Holdings Corp., 363 

F.3d at 1272. Title 35 U.S.C.A. § 271 relates to infringement of patents and provides, 

in pertinent part, as follows: 

a) Except as otherwise provided in this title, whoever 

without authority makes, uses, offers to sell, or sells any 

patented invention, within the United States or imports 

into the United States any patented invention during the 

term of the patent therefor, infringes the patent. 

(b) Whoever actively induces infringement of a patent 

shall be liable as an infringer. 

(c) Whoever offers to sell or sells within the United States 

or imports into the United States a component of a 

patented machine, manufacture, combination or 

composition, or a material or apparatus for use in 

practicing a patented process, constituting a material part 

of the invention, knowing the same to be especially made 

or especially adapted for use in an infringement of such 

patent, and not a staple article or commodity of 

commerce suitable for substantial noninfringing use, shall 

be liable as a contributory infringer. 

35 U.S.C.A. S 271. Thus, to prove contributory infringement pursuant to §271(c), a 

patent holder must demonstrate the following: 1) that the alleged infringer made 

and sold the alleged infringing product; 2) the alleged infringing product has no 

substantial non-infringing uses; 3) that the alleged infringer made sales within the 

34 
Case 2:05-cv-O7674-DWA Document 222 Filed 1211 8/2007 Page 35 of 47 

United States that contributed to another's direct infringement; and 4) direct 

infringement. DSU Medical Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1303 (Fed. Cir. 2006). 

To prove inducement to infringe under §271(b), "a patent holder must prove that 

once the defendants knew of the patent, they 'actively and knowingly aidled1 and 

abett[edl another's direct infringement.' However, 'knowledge of the acts alleged 

to constitute infringement' is not enough. The 'mere knowledge of possible 

infringement by others does not amount to inducement; specific intent and action 

to induce infringement must be proven."' Id. at 1305 (citations omitted). As with 

contributory infringement, to prove inducement to infringe a patent holder must 

also prove direct infringement. Dynacore Holdings Corp., 363 F.3d at 1272. 

I will now apply this law to the patents at issue in this case. 

a. '745 Patent - Count I 

Defendants first argue that there can be neither contributory infringement 

or induced infringement because there is no direct infringement. (Docket No. 183, 

pp. 9-14). To begin with, there are three types of accused probes: 1.5 mm, 2.3 mm, 

and 3.2 mm. A "patentee always has the burden to show direct infringement for 

each instance of indirect infringement." DSUMedical Corp. v. JMS Co., Ltd., 471 F.3d 

1293,1303 (Fed. Cir. 2006). After a review of the evidence, I agree with Defendants 

that ERBE has failed to produce or cite to any evidence of anyone ever using an 

accused 1.5 mm probe or a 3.2 mm probe. See, Docket No. 211. Thus, there is no 

genuine issue of material fact that the accused 1.5 mm probes and its 3.2 mm 

probes did not directly infringe on the '745 Patent. DSU Medical Corp, 471 F.3d at 

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Case 2:05-cv-O1674-DWA Document 222 Filed 12/18/2007 Page 36 of 47 

1305. Accordingly, summary judgment in favor of Defendants is warranted with 

regard to Count I as it relates to Defendants' 1.5 mm probes and 3.2 mm probes. 

The other accused probes at issue are the Canady 2.3 mm probes. To that 

end, Defendants submit that their 2.3 mm probes do not infringe the '745 Patent 

because they are used at flow rates greater than 1 Vmin and flow velocities greater 

than 19 km/hr. (Docket No. 183, pp. 9-14). Based in part on the prosecution history, 

I construed the term "less than about 1 Iiter/minute" to mean "less than 1 

Iiter/minute" and the term "low flow rate" to mean a rate of flow of less than about 

1 liter/minute and producing flow velocities less than 19 km/hour such that the gas 

exiting through the distal end opening forms a non laminar inert gas atmosphere. 

(Docket No. 112, p. 18-21). Accordingly, based on the rationaleset forth in the claims 

construction opinion, I find that when any probe is used with an ERBE APC system 

with a flow rate of 1 Vmin or greater or has flow veocities of 19 km/hour or greater, 

there can be no direct infringement of the '745 Patent. (Docket No. 112). W i t h 

regard to the flow velocities of less than 19 km/hour, ERBE cites to the rebuttal 

report of its expert, Steven Wereley. (Docket No. 211, p. 14-15, citing ERBE Ex. IO, pp. 

4-5 at Docket No. 207-13). While he suggests the calculations used by Defendants' 

expert are incorrect, Mr. Wereley does not provide any testimony with regard to 

what the flow velocities are, let alone, that they are less than 19 km/hour. Id.; see 

also, ERBE Ex. 30 at Docket No. 207-32. Thus, after a review of the record, I find that 

ERBE has failed to produce direct evidence that the flow velocities of the accused 

2.3 mm probes were less than 19 km/hour. See, Docket No. 211, pp. 14-15. Without 

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Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 37 of 47 

such evidence, ERBE cannot meet its burden of proving that the accused 2.3 mm 

probes directly infringed on the '745 Patent. Thus, there is no genuine issue of 

material fact that the accused 2.3 mm probes did not directly infringe on the '745 

Patent. DSU Medical Corp, 471 F.3d at 1305. Accordingly, summary judgment in 

favor of Defendants is warranted with regard to Count I as it relates to Defendants' 

2.3 mm probes. 

Even if I did not find this to be the case, summary judgment would still be 

warranted as to ERBE's contributory infringement because ERBE has failed to 

demonstrate a genuine issue of material fact that the accused 2.3 mm probes have 

no substantial non-infringing uses. Specifically, Defendants argue that ERBE has 

failed to meet its burden of proving that there are no substantial non-infringing 

uses on the accused probes. (Docket No. 183, pp. 11-12; Docket No. 217, pp. 2-31. In 

support of the same, Defendants produced the depositions of Dr. Gostout of the 

Mayo Clinic and Dr. AI-KaWaS of Georgetown University Hospital who testified that 

they use flow rates higher than 1 I/min when using the accused probes. (Docket No. 

179-28, pp. 11-12; Docket No. 196-5, pp. 11-12). In addition, they have produced a 

chart which indicates all of their sales. (Docket No. 27, pp. 12-24, Ex. A). 

In response, ERBE argues that this evidence does not amount to "a substantial 

non-infringing use" because they are not a "qualitatively significant noninfringing 

use" since they have produced evidence from Dr. Vargo of the Cleveland Clinic who 

testified that when he begins all of his APC procedures, he sets the argon flow rate 

at 0.8 and then adjusts the flow rate up or down to achieve the desired effect. 

37 
Case 2:05-cv-01674-DWA Document 222 Filed 1211 812007 Page 38 of 47 

(Docket No. 211, p. 15, citing Ex. 22 at Docket No. 207-24). I am not persuaded by 

ERBE's argument. The affidavit of Dr. Vargo merely shows that one doctor has used 

the probes in a potentially infringing manner.I4 The issue, however, is not whether 

the accused probes have been used in an infringing manner, but whether the 

accused probes have a substantial non-infringing use. DSU Medical Corp, 471 F.3d at 

1303. 

According to the evidence submitted, Dr. Gostout and Dr. AI-KaWaS have used 

650 of the accused probes at flow rates at 1 I/min or higher, while Dr. Vargo has used 

160 of the accused probes below 1 I/min. Based on this evidence, the accused probe 

is used 80% of the time in a non infringing manner. It is unreasonable to consider 

an 80% noninfrining usage as an occasional aberrant use of the accused probes. To 

the contrary, I find this evidence to be a qualitatively significant noninfringing use. 

Consequently, I find that there is no genuine issue of material fact that the 

accused 2.3 mm probes have substantial non-infringing uses. Accordingly, the claim 

of contributory infringement contained in Count I cannot stand for this reason as 

well. 

b. '175 Patent - Count II 

Defendants argue that they are entitled to summary judgment as to Count I1 

of the Amended Complaint alleging infringement of the '175 Patent because: 1) 

their accused probe does not contain a pencil; and 2) their accused probe does not 

I4There is no evidence from Dr. Vargo regarding the flow velocity. 

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Case 2:05-cv-01674-DWA Document 222 Filed 1211 8/2O07 Page 39 of 47 

have a “plurality of individual passageway^."'^ (Docket No. 183, p. 14; Docket No. 217, 

p. 4-51. In response, ConMed acknowledges that this court construed Claim 1 to 

require a pencil and “all equivalents of that” pencil. (Docket No. 200, pp. 5-61. 

ConMed argues, however, that based on Mr. Walbrink’s interpretation of the claims 

the pencil structure should not properly be included in Claim 1. Additionally, 

ConMed argues, based on Mr. Walbrink’s interpretation of the claims, that the 

”plurality of passageways“ structure should not be included in Claim 1. To that end, 

ConMed requests that I revise my claim construction decision accordingly. (Docket 

No. 200, p. 6). I decline to do so. 

ConMed next argues that there is a genuine issue of material fact that the 

accused probes contain a structure that satisfies the requirement of a “pencil or its 

equivalent.” (Docket No. 200, pp. 6-10). In support of its position, ConMed supplies 

the expert declaration of Harold J. Walbrink. (Docket No. 200, pp. 6-10, citing, Expert 

Report of Dr. Walbrink at Docket No. 204, 77(e)-(f)). Based on the same and viewing 

it in the light most favorable to the non-moving party, I find there is a genuine issue 

of material fact on this issue. Therefore, summary judgment is not warranted on 

this basis. 

ConMed further argues that there is a genuine issue of material fact that the 

accused probes have a structure that satisfies the requirement of a ”flexible cord 

with a plurality of individual passageways. (Docket No. 200, pp. 11-14). In support of 

’’In their Reply Brief, Defendants argue in two sentences that summary judgment is warranted 

because ConMed fails to satisfy its burden of proving no substantial non-infringing uses. (Docket No. 

217, p. 5). I refuse to consider such a fleeting argument not made in their original Motion or Brief and 

for which ConMed had no opportunity to respond. (Docket Nos. 182 and 183). 

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Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 40 of 47 

its position, ConMed once again relies on the expert declaration of Mr. Walbrink. 

(Docket No. 200, pp. 11-14, citing, Expert Report of Dr. Walbrink at Docket No. 204, 

77(c)). Based on the same and viewing it in the light most favorable to the nonmoving party, I find there is a genuine issue of material fact on this issue as well. 

Therefore, summary judgment is not warranted on this basis. 

Consequently, summary judgment as to Count II of Plaintiffs' Complaint is 

denied 

2. Count Ill - Federal Trademark lnfrinqement of US. Trademark Reg. No. 

2,637,603 ("'630 Registration") under the Lanham Act AND Count IV - 

Unfair Competition in Violation of 15 U.S.C. §I125 (Trade DreSS)"j 

Defendants argue that they are entitled to summary judgment as to the '630 

trademark (Count Ill) and trade dress (Count IV) claims because they are invalid and 

that Defendants do not infringe upon them. (Docket No. 183, pp. 14-21. The '630 

trademark is not registered on the Primary Register, but rather is registered on the 

Supplemental Register. (Docket No. 211, p. 19; Docket No. 179-13 - Ex. 12). 

Furthermore, the trade dress is unregistered. (Docket No. 211, p. 19). The parties 

agree that the elements necessary to prove both ERBE's trademark infringement 

claim and ERBE's trade dress claim are virtually the same. (Docket No. 183, pp. 14-24; 

Docket No. 211, pp. 8-9, 19-24). Specifically, ERBE must prove that the Blue Probe 

mark and its trade dress are non-functional, that they are inherently distinctive or 

46 'Trade dress' refers to the design or packaging of a product which serves to identify the 

products source." Shire US 1nc. v. Barr Laboratories, Inc., 329 F.3d 348, 353 (3d Cir. 2003). 

40 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 41 of 47 

have acquired inherent distinctiveness through secondary meaning,I7 and that there 

isa likelihood of confusion. See, QualitexCo. v. Jacobson Prods. Co., Inc., 514 U.S. 159 

(1 995); Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 21 0-1 1 (2000); Shire US 

Inc. v. Barr Laboratories, Inc., 329 F.3d 348,353 (3d Cir. 2003); DUraCO Prods., InC. v. Joy 

Plastic Enterprises, Ltd., 40 F.3d 1431, 1439 (3d Cir. 1994); see also, Docket No. 183, p. 

15. Defendants argue that ERBE cannot prove any of the elements. (Docket No. 183, 

pp. 15-24). 

With regard to the first element, the Supreme Court has explained that "'[iln 

general terms, a product feature is functional,' and cannot serve as a trademark, 'if 

it is essential to the use or purpose of the article or if it affects the cost or quality 

of the article,' that is, if exclusive use of the feature would put competitors at a 

significant non-reputation-related disadvantage." Qualitex Co., 514 U.S. at 165, 

quoting Inwood Lab oratories, Inc. v. lves Laboratories, Inc., 456 US. 844, 850, n. 10 

(1982). "The Restatement (Third) of Unfair Competition adds that, if a design's 

'aesthetic value' lies in its ability to 'confe[rl a significant benefit that Cannot 

practically be duplicated by the use of alternative designs,' then the design is 

'functional.' Restatement (Third) of Unfair Competition § 17, Comment c, pp. 175-176 

(1993). The 'ultimate test of aesthetic functionality,' it explains, 'is whether the 

recognition of trademark rights would significantly hinder competition.' Id., at 176." 

Qualitex Co., 514 U.S. at 170. 

17ERBE does not argue that the blue probe trademark or trade dress is inherently distinctive. 

See, Docket No. 211. Rather, ERBE relies on the proposition that the Blue Probe mark and trade dress 

have acquired inherent distinctiveness (secondary meaning). 

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Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 42 of 47 

Defendants argue that the color blue is functional for surgical procedures in 

that blue enhances endoscopic identification. See, CT Ex. 14 at Docket No. 179-15 

(stating that "[bllue color enhances positive Endoscopic identification"). 

Furthermore, Defendants submit that the only other competitor is ConMed and it 

probes are blue in color. See, CT Ex. 21 at Docket No. 179-22. Specifically, with 

regard to the trade dress, Defendants submit that the black markings are, "by ERBE'S 

own binding admission, functional." (Docket No. 183, p. 24). AS support Defendants 

point to the patent wherein it states: 

As may be seen from FIGS. 22 and 23, the distal end 

portion of tube 2 protruding from the end of the working 

channel 7 of the endoscope 1 may be provided with 

markings 50,51, 52. An arrangement of such ring shaped 

markings allows to observe, how far tube 2 protrudes out 

of the distal end of the working channel 7 of the 

endoscope. 

CT. EX. 2 (Docket NO. 179-3, p. 21). 

In opposition, ERBE argues that the blue color of its probes is not essential to 

their use or propose. (Docket No. 211, p. 19). In support of this position, ERBE only 

submits the declaration of Christian Erbe who declares that "[bllue is one of many 

colors available for APC Probes. Any color, other than beige or red, would be clearly 

visible during endoscopic procedures." (Docket No. 211, p. 20, citing, Ex. 25, 724 at 

Docket No. 207-27). Based on the same, ERBE concludes that the color blue is not 

"uniquelysuperior." (Docket No. 211, p. 20). The Third Circuit has held, however, that 

"merely because there are other shapes and designs ' which defendant could use 

and still produce a workable' product, the design used is not thereby non42 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 43 of 47 

functional.” Keene Corp. v. Paraflexlndus., Inc., 653 F.2d 822,827 (3d Cir. 1981). ERBE 

does not submit any argument that the black markings are non-functional. (Docket 

No. 211, p. 19). Thus, viewing the evidence in the light most favorable to ERBE, I find 

there is no genuine regarding the issue that the blue color of its APC probes or that 

the black markings are non-functional. Consequently, summary judgment in favor 

of Defendants as to ERBE’s trademark (Count Ill) and trade dress claims (Count IV) is 

warranted on this ground. 

Even if there was a genuine issue as to whether the blue color and the black 

markings were found to be non-functional, summary judgment as to ERBE’s 

trademark (Count 111) and trade dress claims (Count IV) would still be warranted 

because there is no genuine issue of material fact as to whether the trademark and 

trade dress have acquired secondary meaning. “To establish secondary meaning, a 

manufacturer must show that, in the minds of the public, the primary significance 

of a product feature or term is to identify the source of the product rather than the 

product itself.” lnwood Laboratories, lnc. v. lves Laboratories, Inc., 456 U.S. 844,851 

(19821, citing, Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 118 (1938); Duraco 

Prods., Inc., 40 F.3d at 1440. 

Factors relevant to a finding of secondary meaning in a 

product configuration include: (1) plaintiff‘s advertising 

expenditures, measured primarily with regard to those 

advertisements which highlight the supposedly 

distinctive, identifying feature, see First Brands Corp. v. 

Fred Meyer, lnc., 809 F.2d 1378, 1383 (9th Cir.1987); (2) 

consumer surveys linking the distinctive product 

configuration to a particular, single source (although the 

identity of the source need not be known); and (3) length 

and exclusivity of use. Consumer surveys and testimony 

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Case 2:05-cv-016?4-DWA Document 222 Filed 12/18/2007 Page 44 of 47 

are probably the only direct evidence of secondary 

meaning; the othersourcesare circumstantial, though the 

plaintiff may rely solely on them. 

Duraco Products, Inc., 40 F.3d at 1452. 

Defendants argue that ERBE cannot prove that the blue probe trademark and 

trade dress have acquired secondary meaning. (Docket No. 183, pp. 19-21). 

Specifically, Defendants submit that: 1) there is no evidence to conclude that the 

color blue identifies ERBE as the supplier of flexible endoscopic tubing; 2) the probes 

of the other competitor, ConMed, are blue; 3) there is very little advertising 

evidence regarding the color blue; 4) there are no surveys; and 5) the length of use 

of the color blue has been 8 years, which is a short time in the world of 

trademarks. (Docket No. 183, p. 20-21). Additionally, with regard to the trade dress, 

Defendants assert that ConMed’s probes have a plurality of graduated black 

markings as well. (Docket No. 183, p. 24; see, CT Ex. 21). 

In response, ERBE submits that its blue probe mark and trade dress have 

acquired secondary meaning. (Docket No. 211, pp. 21-22). ERBE argues that it can 

prove that the blue probe trademark and trade dress have acquired secondary 

meaning because it has been using the color blue for over 30 years on its medical 

equipment and its has promoted the Blue Probe mark in various marketing 

materials including brochures, giveaways and through the use of the tagline “TRUE 

BLUE PROBE FOR ARGON PLASMA COAGULATION.” (Docket NO. 211, pp. 21-22). ERBE 

does not submit any specific evidence with regard to the black markings. Id. 

After a review of the evidence, however, I find that ERBE has failed to come 

44 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 45 of 47 

forward with sufficient evidence to create a genuine issue of material fact with 

regard to the issue of whether the blue probe trademark and trade dress have 

acquired secondary meaning. Specifically, I find that while ERBE may have been 

using the color blue for over 30 years, there is no evidence that, in the minds of the 

public, the primary significance of the color blue is to identify ERBE as the source of 

the product rather than the probes. Inwood, supra. Furthermore, while ERBE 

concludes that it has promoted the Blue Probe mark in various marketing materials, 

ERBE has failed to provide any evidence of the marketed materials or the related 

expenditures. Furthermore, ERBE has failed to supply any surveys or customer 

testimony regarding the same. Finally, as Defendants point out, ConMed, the other 

competitor, uses blue tubing on its probes.Thus, I find that there is no genuine issue 

regarding secondary meaning. Consequently, summary judgment in favor of 

Defendants as to ERBE's trademark (Count Ill) and trade dress claims (Count IV) is 

warranted on this ground as well.'' 

Counts V and VI are titled Common Law Infringement and Unfair Competition 

and Common Law Passing Off. (Docket No. 18). "The test for common law trademark 

infringement and unfair competition is essentially the same as the test for 

infringement and unfair competition under the Lanham Act." Tillery v. Leonard & 

Sciolla, LLP, 437 F.Supp.2d 312, 328 (E.D.Pa. 20061, citing, Fisons Horticulture, Inc. v. 

''Since I have found that summary judgment as to Counts Ill and IV is warranted based on 

functionality and secondary meaning, I need not consider the arguments regarding likelihood of 

confusion. Furthermore, since I have granted summaryjudgment in favor of Defendants as to ERBE's 

trademark claim, I need not address Defendants' argument regarding whether Defendants'alleged use 

of the ERBE trademark in comparing the prices of its products to ERBE's products is lawful. (Docket 

NO. 183, pp. 25-26). 

45 
Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 46 of 47 

Vigoro Indus., 30 F.3d 466, 472 (3d Cir.1994). Since I have found that summary 

judgment is warranted as to Counts Ill and IV, summary judgment is similarly 

warranted as to Counts V and VI. 

....................... 

ORDER OF COURT 

AND NOW, this ISth day of December, 2007, after careful consideration of the 

submissions of the parties and for the reasons set forth in the accompanying 

Opinion it is ordered as follows: 

1. ConMed’s Motion to Strike (Docket No. 142) is denied. 

2. ConMed’s Motion for Partial Summary Judgment (Docket No. 114) is 

granted in part and denied in part as follows: 

a. Counterclaim Six is dismissed against ConMed and its Motion for 

Partial Summary Judgment as to Counterclaim Six is denied as 

moot; 

b. ConMed’s Motion is granted as to Counterclaims Five, Seven, and 

Eight, and, as such, summary judgment is entered in favor of 

ConMed as to the same; and 

c. ConMed‘s Motion is denied as to Counterclaim Nine. 

3. ERBE’s Motion for Partial Summary Judgment (Docket No. 137) is 

granted in part and denied in part as follows: 

a. ERBE’s Motion is denied as to Counterclaim Four; and 

b. ERBE’s Motion is granted as to Counterclaims Five, Six and Seven. 

4. Defendants’ Motion for Summary Judgment (Docket No. 1821 is granted 

in part and denied in part as follows: 

46 
L Case 2:05-cv-01674-DWA Document 222 Filed 12/18/2007 Page 47 of 47 

a. Defendants' Motion is granted as to Counts I, Ill-VI of the 

Amended Complaint; and 

b. Defendants' Motion is denied as to Count It of the Amended 

Com plaint. 

It is further Ordered that a settlement/pre-trial conference is scheduled for 

Tuesday, January 8, 2008, at 10:30 A.M. before the undersigned on the Third Floor, 

Suite 3280 of the U.S. Post Office & Courthouse. Counsel are to have settlement 

authority and parties are to be either present or available by telephone. Position 

letters are to be faxed to Chief Judge Ambrose three (3) days prior to the 

conference. 

BY THE COURT: 

/S/ DOnetta W. Ambrose 

Donetta W. Ambrose, 

Chief U. S. District Judge 

47 
CERTAIN ENDOSCOPIC PROBES FOR 

USE IN ARGON PLASMA COAGULATION 

SYSTEMS AND PRODUCTS CONTAINING SAME 

INV. NO. 337-TA-569 

CERTIFICATE OF SERVICE 

I, Marilyn R. Abbott, hereby certify that the attached ORDER was served upon Jeffrey T. 

Hus, Esq., Commission Investigative Attorney, and the following parties via first class mail 

and air mail where necessary on January 28 ,2008. 

Mahlyn Ij! Abbott, Secretary 

U.S. International Trade Commission 

500 E Street, SW 

Washington, D. C. 20436 

FOR COMPLAINANTS ERBE ELEKTRONMEDIZIN GmbH AND ERBE USA, INC.: 

Philip G. Hampton, 11, Esq. 

Laurence E. Fisher, Esq. 

Steven War, Esq. 

Amanda S. Pitcher, Esq. 

Charles J. Monterio, Jr., Esq. 

DICKSTEIN SHAPIRO LLP 

1825 Eye Street, NW 

Washington, D. C. 20006 

FOR RESPONDENTS CANADY TECHNOLOGY LLC AND CANADY TECHNOLOGY 

GERMANY GmbH: 

Charles F. Schill, Esq. 

Timothy C. Bickham, Esq. 

STEPTOE & JOHNSON LLP 

1330 Connecticut Avenue, NW 

Washington, D. C. 20036 
CERTAIN ENDOSCOPIC PROBES FOR 

USE IN ARGON PLASMA COAGULATION 

SYSTEMS AND PRODUCTS CONTAINING SAME 

Timothy R. DeWitt 

24 IP Law Group USA, PLLC 

12 E. Lake Drive 

Annapolis, MD 2 1403 

PUBLIC MAILING LIST 

Sherry Robinson 

8891 Gander Creek 

Drive, Miamisburg, OH 45342 

LEXIS -NEXIS 

Ronnita Green 

Thomson West 

1100 Thirteenth Street, NW, Suite 200 

Washington, D. C. 20005 

INV. NO. 337-TA-569 


as the respondents. The complaint requested that the Commission institute an investigation pursuant to 

Section 337 and, after the investigation, issue a permanent exclusion order and a permanent cease and 

desist order. 

On June 20,2006, ERBE and KLS Martin filed a “Joint Motion to Terminate Investigation As to 

KLS Martin Based on a Settlement Agreement.” On July 7, 2006, the Commission Investigative 

Attorney filed a motion in support of the joint motion to terminate, noting that she was unaware of any 

information indicating that the settlement agreement would be contrary to the public interest. 

On September 1,2006, the ALJ issued the subject ID (Order No. 4) terminating the investigation 

as to KLS Martin on the basis of a settlement agreement. The ALJ found no indication that termination 

of the investigation on the basis of the settlement agreement would adversely affect the public interest, 

and that the procedural requirements for terminating the investigation had been met. No petitions for 

review were filed. 

The Commission has determined not to review the ID. 

This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended, 19 

U.S.C. 4 1337, and Commission rule 210.42, 19 C.F.R. 9 210.42. 

By order of the Commission. 

Issued: October 3,2006 
CERTAIN ENDSCOPIC PROBES FOR USE IN 

ARGON PLASMA COAGULATION SYSTEMS 

337-TA-569 

CERTIFICATE OF SERVICE 

I, Marilyn R. Abbott, hereby certify that the attached NOTICE OF A COMMISSION 

DETERMINATION NOT TO REVIEW AN INITIAL DETERMINATION TERMINATING 

THE INVESTIGATION AS TO A RESPONDENT ON THE BASSIS OF A SETTLEMENT 

AGREEMENT has been served on upon the Commission Investigative, Attorney Karin J. Norton and 

all parties via first class mail and air mail where necessary on October 3, 2006. 

646rilyn R. gbbott, Secretary 

U.S. International Trade Commission 

500 E Street, SW 

Washington, DC 20436 

- co FOR COMPL INANTS ERBE 

ELEKTRONMEDIZIN GmbH AND ERBE 

USA, INC.: 

Philip G. Hampton, 11, Esq. 

Steven War, Esq. 

Gabriela Coman, Esq. 

Megan S. Woodworth, Esq. 

DICKSTEIN SHAPIRO MORIN & 

OSHINSKY LLP 

2101 L Street, NW 

Washington, DC 20037- 1 526 

P-202-785-9700 

ON BEHALF OF RESPONDENTS 

CANADY TECHNOLOGY LLC AND 

CANADY TECHNOLOGY GERMANY 

GmbH: 

Charles F. Schill, Esq. 

Timothy C. Bickham, Esq. 

STEPTOE & JOHNSON LLP 

1330 Connecticut Avenue, NW 

Washington, DC 20036 

P-202-429-3000 

P-202-429-3902 

RESPONDENT: 

KLS Martin GmbH & Co. KG 

Am Gansacker 1B 

79224 Umkirch 

Germ any 

Timothy R. DeWitt, Esq. 

24 IP Law Group USA, PLLC 

12 E. Lake Drive 

Annapolis, MD 2 1403 

P-703-340-1686 

F-703-340- 1687