use or the cross-elasticity of demand between the product itself
and substitutes for it.” Brown Shoe Co. v. United States, 370 U.S.
294, 325 (1962).

In support of its definition of the relevant market as the
“modular revision hip prosthesis” market, Zimmer offers the
testimony of one of its marketing officers, David Weidenbenner, and
experts from both DePuy and Zimmer who analyzed the issue of
damages from the alleged infringement, Creighton G. Hoffman and
Daniel M. McGavock.® Zimmer makes a number of conclusory
statements about how their chosen definition is appropriate as
representing a specific segment of the market, and that its product
is primarily used in that market. The reports of Mr. Hoffman and
Mr. McGavock, however, explain that there are two types of hip
prostheses, modular and non-modular, and two types of surgery,
primary and revision. Zimmer offers no evidence that modular and
non-modular prostheses are never interchangeable, nor that modular
prostheses are never used in primary surgeries. In fact, the
proffered report from Zimmer’s expert suggests the opposite - that

non-modular prostheses are used more frequently in revision

® The relevance of these experts’ reports is questionable, as
neither expert analyzed a relevant market for antitrust purposes.
See Berlyn, Inc. v. Gazette Newspapers, 223 F. Supp. 2d 718, 729
(D. Md. 2002). Mr. Weidenbenner’s testimony is also of
questionable value, as his comments are from the perspective of
marketing efforts, not antitrust analysis. See Independent Ink,
Inc. v. Trident, Inc., 210 F. Supp. 2d 1155, 1170 (C.D. Cal. 2002).

19


relevant prior art that was not submitted to the patent office
during the period prior to issuance of the patents.’

DePuy argues that Zimmer, despite vigorous examination of
witnesses in lengthy depositions and the availability of transcript
from relevant prior litigation, has not proved and cannot prove
that the individuals involved with the prosecution of the ‘706
Patent had actual knowledge of any of Zimmer’s references prior to
December 6, 1994, the date on which the ‘706 Patent issued. I
agree.

Testifying in a prior litigation in 1996, all three inventors
stated that they had not seen the Lima LTO Brochures until at least
one year after the ‘706 Patent issued, and attorney Coffey
testified in this action that he had not seen the Lima LTO
Brochures until his preparation for a November 2002 deposition.

Similarly, there is no direct evidence offered by Zimmer to
establish that the three inventors or Mr. Coffey ever saw the Chao

Excerpt prior to issuance of the ‘706 Patent.?

2 Elk Corp. of Dallas v. GAF Building Materials Corp.,168
F.3d 28 (Fed.Cir. 1999) (undisputed actual knowledge of withheld
prior art); Bristol-Myers Squibb v. Rhone~Poulenc Rorer, 326 F.3d
1226, 1239-40 (Fed.Cir. 2003) (miscited by Zimmer as “Jackson”
(evidence of actual knowledge undisputed) ;Akron Polymer Container
Corp. v. Exxcel Container, Inc., 148 F.3d 1380 (Fed. Cir.
1988) (attorney prosecuting application disclosed the prior art in
connection with a contemporaneous , separate application); GFI Inc.
v. Franklin Corp., 265 F.3d 1268 (Fed.Cir. 2001) (knowledge of
withheld prior art undisputed).

3 I excluded consideration of the Kotz brochure for purposes
of § 102 because of the lack of evidence that it had been printed

13


alleges that Zimmer’s product has a piece, an integrated body and
neck, that provides the means for attaching the body to a head.

An infringement analysis involves two steps. Jé&M Corp. v.
Harley-Davidson, Inc., 269 F.3d 1360, 1366 (Fed. Cir. 2001).
First, the court must, as a matter of law, determine the scope and
meaning of the claims through claim construction. Id. Second, the
properly construed claims must be compared to the allegedly~
infringing device. Id. A means-plus-function claim limitation,
such as the one challenged here, is subject to the requirements of
35 U.S.C. § 112, 1 6. Odetics, Inc. v. Storage Tech. Corp., 185
F.3d 1259, 1266 (Fed. Cir. 1999). “Literal infringement of a §
112, Y 6 limitation requires that the relevant structure in the
accused device perform the identical function recited in the claim
and be identical or equivalent to the corresponding structure in
the specification.” Id. at 1267. Whether an accused device meets
the requirements for equivalence under § 112, I 6 is a question of
fact. Id. at 1268.

The function here is not in dispute: a means for fixedly
attaching a head to a body. However, the parties raise a question
of material fact as to the rest of the § 112, I 6 test: the “way”
the structures in the ‘706 Patent and the accused device fulfill
the function (if at all), and the “result.” See Odetics, 185 F.3d
at 1267. Zimmer argues that the integrated body~neck offered in

its product is structurally and functionally different from the


surgeries than modular prostheses, and that modular prostheses are
used in both primary and revision surgeries. This would argue in
favor of a broader definition of the relevant market than the one
suggested by Zimmer. Zimmer does not provide evidence from which
a jury could reasonably find that its narrow definition of the
relevant market is correct. DePuy’s motion for summary judgment on
Zimmer’s antitrust counterclaim is granted.
Vv.

Zimmer's last motion seeks a ruling from this court as to its
obligations under a license for products under the ‘706 Patent
which it has allegedly obtained through the purchase of another
company, as well as the effects of that license on DePuy’s
potential remedies for infringement.

Zimmer does not allege that it is the direct holder of the
license. As far as I can determine from the record, that license
is still the property of one of the corporate entities, all of
whose capital stock Zimmer now owns directly or indirectly. Putting
aside for the moment the question of whether Zimmer has standing to
assert the license as a defense, there is a constitutional
impediment to the court attempting to decide the question Zimmer
raises.

DePuy argues that the rulings Zimmer seeks would constitute an
advisory opinion. Article III of the United States Constitution

requires that a genuine case or controversy must exist before I may

20


misuse and Zimmer’s antitrust counterclaim are granted. Zimmer’s
motions in limine with respect to its obligations under a license

and possible remedies are denied.

ENTER ORDER:

L£L_F 4h

Elaine E. Bucklo
United States District Judge

Dated: November 2, 2004

22


DePuy has somehow admitted invalidity. Title 35 U.S.C. §
271 (d) (3) specifically provides that

No patent owner otherwise entitled to relief for

infringement . . . shall be denied relief or deemed

guilty of misuse or illegal extension of the patent right

by reason of his having done one or more of the

following: . . . (3) sought to enforce his patent rights

against infringement or contributory infringement . .

I decline to infer any patent misuse from DePuy’s litigation
history. DePuy’s motion for summary judgment on Zimmer’s
affirmative defense of patent misuse is granted.

DePuy also argues that summary judgment should be granted in
its favor on Zimmer's counterclaim of antitrust law violations
because Zimmer is unable to prove monopoly power on the part of
DePuy.

The offense of monopoly under § 2 of the Sherman Act has two

elements: (1) the possession of monopoly power in the relevant

market and (2) the willful acquisition or maintenance of that

power as distinguished from growth or development as a

consequence of a superior product, business acumen, or

historic accident.
Goldwasser v. Ameritech Corp., 222 F.3d 390, 396-97 (7% Cir. 2000)
(citing Eastman Kodak Co. v. Image Tech. Serv., Inc., 504 U.S. 451,
481 (1992)). Defining the relevant market is an essential
prerequisite to a showing of monopoly power. Golan v. Pingel
Enter., Inc., 310 F.3d 1360, 1369 (Fed. Cir. 2002). Such a market

has two components: a relevant product market and a relevant

geographic market. Id. Zimmer, who bears the burden of proof,

17


qualify as “printed publications,” and that there is insufficient
evidence of publication and distribution date,

Zimmer, as the proponent of the publication bar, must show by
clear and convincing evidence that the document in question was
sufficiently available to the public more than one year before the
date of application. Northern Telecom, Inc. v. Datapoint Corp.,
908 F.2d 931, 936 (Fed. Cir. 1990).

With respect to the Lima LTO brochures, DePuy relies on the
arguments for excluding the declaration and deposition of Mr.
Lualdi rejected above. The Lualdi deposition provides evidence
that at least 1,000 of the brochures were printed and that those
brochures were distributed to medical professionals and at European
scientific meetings and conventions more than a year prior to
August 15, 1985. DePuy’s motion to strike and exclude the Lima LTO
Brochures for lack of proof of timeliness and extent of publication
is denied.

I agree, however, with DePuy’s argument that the evidence
regarding publication of the Kotz brochure does not provide
a sufficient basis upon which to invalidate the ‘706 Patent under
the printed publication bar. Zimmer offers the testimony of Al
Zarnowski, a representative for Howmedica, the corporation that
produced the Kotz brochure. Mr. Zarnowski was designated as a Rule
30(b) (6) witness for Howmedica, allowing him to testify not only

from his personal knowledge but also as to matters “known or


claim, and a configuration with an integrated body-neck may well be

an equivalent structure. Zimmer’s motion for summary judgment that

its ZMR Hip System does not infringe the ‘706 Patent is denied.
II.

Zimmer also moves for summary judgment on the ground that the
‘706 Patent is invalid in light of prior art not disclosed to the
Patent Office. DePuy counters with a cross-motion, seeking
exclusion of the alleged prior art as a matter of law.

A.

As a preliminary matter, DePuy moves to exclude a declaration
by Gabriele Lualdi, Mr. Lualdi’s deposition testimony from earlier
litigation by DePuy over the ‘706 Patent, and certain brochures,
referred to as the “Lima LTO brochures” or “Lima brochures” which
are the subject of Mr. Lualdi’s declaration and deposition. DePuy
argues that all three evidentiary sources should be excluded as
hearsay; if not, DePuy argues they should be excluded as untimely
disclosed.

While the declaration and deposition of Mr. Lualdi may
potentially be excluded from trial, Rule 56 provides that I may
consider affidavits and depositions in addition to the pleadings
and certain other materials when considering a motion for summary
judgment. Feb. R. Civ. P. 56(c, €); Oto v. Metro. Life Ins. Co., 224
F.3d 601, 604-05 (7% Cir. 2000). I may also consider properly

authenticated documents, such as the Lima LTO brochures which are


integrated head-neck and separate neck options offered within the
specifications of the ‘706 Patent. DePuy offers testimony that any
differences are insubstantial, bringing the Zimmer device within
the range of § 112, @ 6 equivalents. This question of fact is
normally for the jury.

Zimmer argues, however, that DePuy has disclaimed the
integrated body-neck and cannot therefore now claim that such a
structure is within the scope of the ‘706 Patent. Claims may not
be expanded to include structures that were disclaimed, expressly
or implicitly. Scimed Life Sys., Inc. v. Adv. Cardiovascular Sys.,
Inc., 242 F.3d 1337, 1345 (Fed. Cir. 2001). DePuy never expressly
disclaimed an integrated body-neck structure, but noted the
disadvantages of that option as compared to DePuy’s preferred
option of a separate neck. DePuy’s language merely points out the
advantages of its preferred embodiment of its invention, rather
than stating that prior embodiments were unsuited for or unable to
perform the function. This is neither an explicit nor an implied
disclaimer. Clearstream Waste Systems, Inc. v. Hydro Action, Inc.,
206 F.3d 1440, 1444 (Fed. Cir. 2000) (means-plus-function language
may cover prior art rather than only an inventive structure
disclosed in the patent, even though the patent critically
distinguishes the prior art). The ‘706 Patent is not limited
solely to a configuration with a separate neck; a configuration

with an integrated head~neck is explicitly within the scope of the


claims that the relevant product market is the “modular revision
hip prosthesis” market.’

DePuy argues that Zimmer has not met its burden on this issue,
primarily because Zimmer has presented no expert testimony
regarding the relevant market. While the Seventh Circuit has yet
to address this issue, a number of other circuits have held that
expert testimony is required as a matter of law on the complex
economic question of what constitutes a relevant market. See,
e.g., Bailey v. Allgas, Inc., 284 F.3d 1237, 1246 (11% Cir. 2002);
Morgan, Strand, Wheeler & Biggs v. Radiology, Ltd., 924 F.2d 1484,
1490 (9 Cir. 1991); Military Servs. Realty, Inc. v. Realty
Consultants of Va., Ltd., 823 F.2d 829, 832 (4% Cir. 1987). But
see General Indus. Corp. v. Hartz Mountain Corp., 810 F.2d 795 (8%
Cir. 1987); Bacchus Indus., Inc. v. Arvin Indust., 939 F.2d 887,
894 (10 Cir. 1991).

Even without adopting the rule of other circuits which require
expert testimony, Zimmer cannot withstand summary judgment. To
survive summary judgment, Zimmer must present “admissible evidence
that is sufficient for a jury to find that the proposed relevant
market[] [is] accurate.” Menasha Corp. v. News America Mktg. In-
Store, Inc., 238 |F. Supp. 2d 1024, 1033 (N.D. Ill. 2003). A

relevant market is defined by “the reasonable interchangeability of

7 Zimmer claims that the relevant geographic market is the
United States; DePuy does not challenge that claim.

i 18


DePuy’s motion to exclude Mr. Lualdi’s declaration and
deposition, and the Lima LTO brochures for untimeliness of
production is denied.

B.

Zimmer’s motion for summary judgment argues that the ‘706
Patent is invalid because prior art —- the Lima LTO brochures, a
brochure referred to by the parties as the “Kotz brochure”, and
excerpts from a book by Dr. Edmund Yee~Su Chao — not disclosed to
the Patent Office either anticipated or made obvious the invention
claimed by the ‘706 Patent. DePuy’s cross-motion asks the court to
rule as a matter of law that the Lima LTO brochures and the Kotz
brochure are not prior art to the ‘706 Patent. DePuy also argues
that, to the extent any of Zimmer's sources are prior art, Zimmer
has not shown that the ‘706 Patent was not anticipated or made
obvious by them.

Zimmer argues that the ‘706 Patent should be held invalid
because of the “printed publication” bar, found in 35 U.S.C. § 102.
Section 102 states:

A person shall be entitled to a patent unless -

(b) the invention was patented or described in a printed

publication in this or a foreign country ... more than one

year prior to the date of the application for patent in the

United States.

Zimmer and DePuy agree that the relevant date under the

statute is August 15, 1985. DePuy argues that the Lima LTO

brochures and another brochure, called “the Kotz brochure,” do not


‘Mine Onder Form (06/77)

United States District Court, Northern District of Mlinois

Name of Assigned Judge Elaine E. Bucklo Sitting Judge if Other
or Magistrate Judge than Assigned Judge
CASE NUMBER 02 C 4023 DATE 11/2/2004
CASE Depuy, Inc. vs. Zimmer Holdings, Inc., et al.
TITLE
{in the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION: of the motion being presented.}

DOCKET ENTRY:

ay) QO Filed motion of ( use listing in “Motion” box above.}

(2) Q Brief in support of motion due :

@)| a Answer brief to motion due. » Reply to answer brief due :

@) O Ruling/Hearing on set for at

() oO Status hearing{held/continued to] [set for/re-set for] on set for at

(()) Q Pretrial conference{held/continued to] (set for/re-set for] on set for at .

@M:; a Trial{set for/re-set for) on at

(8) : Qo [Bench/Jury trial) [Hearing] held/continued to at

go O This case is dismissed [with/without] prejudice and without costs(by/agreement/pursuant to]

} OOFRCP4(m) (ClLocal Rule 41.1 OFRCP41(a)(1) OO FRCP41(a)(2).

(10) i au [Other docket entry) Defendants’ motions for summary judgment (115 & 119) are denied.
| Plaintiff's motions for summary judgment (124, 128 and 137) are granted. Plaintiff's motion for partial
|; summary judgment (134), and plaintiff's motion to strike (162) are denied. The docket clerk is directed
| toterminate docket entries, 195-1, 196-1, 201-1 and 202-1 as moot. Pretrial order will be due by 11/30/04;
| and response to any motions in limine by 12/14/04. Status hearing set for 12/10/04 at 10:00 a.m. Enter

Memorandum Opinion and Order. i]

(11) ‘7 (For further detail see order attached to the original minute order.]

t
' tices mailed by judge's taf
‘Notified counsel by telephone.

i
Dacketing to mail notices.
Mail AO 450 form.

notices required, advised in open court.
notices required.

Copy to judge/magistrate judge.
i
} courtroom
MPI deputy’s
a initials

Date/time received in: 14
central Clerk’s Office



the contested claims. Id. Anticipation is a question of fact.
Id.

DePuy argues that neither source teaches the “different size
and shape” limitation and therefore neither source anticipates the
‘706 Patent. Zimmer argues in response that all three sources
reflect the different size and shape limitation. Both parties
present credible evidence regarding the teachings of the alleged
prior art, raising a question of fact for a jury to decide.

DePuy also argues that Zimmer has failed to offer any evidence
of motivation and therefore cannot establish a prima facie case of
obviousness. A patent is invalid for obviousness if the teachings
of the patent would have been obvious to a person having ordinary
skill in the relevant art, given the existence of the prior art.
Beckson, 292 F.3d at 725. To prevent the use of hindsight in
evaluating obviousness, the party challenging the patent must show
a motivation to combine or move beyond the prior art. Id. at 727-
28. While Zimmer provides evidence suggesting that it would not
have been difficult to move beyond the prior art to the teachings
of the ‘706 Patent, it provides no evidence as to any motivation
for doing so. Zimmer’s motion for summary judgment on the grounds
of invalidity is denied.

III.
Zimmer asserts an affirmative defense of inequitable conduct

by DePuy. DePuy moves for summary judgment on this defense,

il


reasonably available to the organization.” Fed. R. Civ. P.
30(b) (6). Even with this expanded basis for testifying, Mr.
Zarnowski’s testimony is not sufficiently clear and convincing to
allow the Kotz Brochure as a printed publication under § 102 or to
support a grant of summary judgment in favor of Zimmer. Mr.
Zarnowski testified as to his assumptions about the printing and
distribution of the Kotz brochure, but did not support those
assumptions with either personal knowledge or knowledge gained from
examining Howmedica’s records or questioning other Howmedica
employees. Assumptions such as these do not provide clear and
convincing evidence of date and extent of publication. See, e.g-,
AT&T Corp. v. Microsoft Corp., No. 01-C4872, 2004 WL 292321, at *6
(S.D.N.Y. Feb. 17, 2004); Aluminum Co. of Amer. v. Reynolds Metal
Co.,. No. 88-C6019, 1989 WL 165064, at *3-4 (N.D. Ill. Dec. 21,
1989) (evidence that document might have been available to the
public insufficient). DePuy’s motion for summary judgment that the
Kotz brochure is not a printed publication under § 102 is granted.

Zimmer argues that the ‘706 Patent was anticipated or made
obvious by the Lima LTO brochures and the Chao excerpt. Patents
are presumed valid; Zimmer must show facts establishing invalidity
by facts supported by clear and convincing evidence. 35 U.S.C. §
282; Beckson Marine, Inc. v. NFM, Inc., 292 F.3d 718, 725 (Fed.
Cir. 2002). To show that a patent was anticipated by prior art,

Zimmer must show that the prior art contained every limitation of

10


authenticated by Mr. Lualdi’s testimony. Scott v. Edinburg, 346
F.3d 752, 760 n.7 (7TM Cir. 2003). For purposes of this motion, I
decline to exclude the Lualdi declaration and deposition testimony
on the ground of hearsay.

DePuy argues that these documents, proffered as proof of prior
art, should be excluded, regardless of their admissibility, because
they were untimely disclosed. DePuy first relies on Judge
Lindberg’s oral statement of February 20, 2003, that evidence
timely disclosed is “in” and evidence untimely disclosed is “out.”
However, both parties continued to disclose documents and depose
witnesses until well after the official close of discovery on
February 5, 2003. More importantly, Zimmer clearly identified Mr.
Lualdi and the documents he identified at his deposition in a
supplemental answer to interrogatories prior to the scheduled close
of discovery.

DePuy’s claim that it has been prejudiced by untimeliness of
disclosure is belied by the record. The Lualdi Deposition was taken
on February 11, 1997 by the defendant in the case of DePuy, Inc. v.
Biomet, Inc. That litigation was also brought for alleged
infringement of the ‘706 Patent. Lawyers for DePuy were present at
the Lualdi Deposition and cross-examined the deponent at length.
Deposition Tr., Exhibit E to Elizabeth A Werner’s Declaration in
Support of Zimmer’s Memorandum in Opposition to DePuy’s Motion for

Partial Summary Judgment on the Lima LTO Brochures.


issue an opinion. See, e.g. Continental Casualty Co. v. Southern
Co., 284 F. Supp. 2d 1118, 1121 (N.D. Ill. 2003). A genuine case
or controversy

Must be definite and concrete, touching the legal relations of

parties having adverse interests. It must be a real and

substantial controversy admitting of specific relief through

a decree of a conclusive character, as distinguished from an

opinion advising what the law would be upon a hypothetical set

of facts.
Id. (citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240-41
(1937)).

While no bright line exists to separate genuine controversies
from advisory opinions, the ruling Zimmer seeks is more consistent
with the latter. Zimmer asks: if it holds this license, and if
Zimmer’s product is held to infringe the ‘706 Patent, and if Zimmer
refuses to mark its product or pay DePuy royalties, what then
happens under the terms of the license? This sort of hypothetical
situation leads to the advisory opinions I must avoid under Article
III. JZimmer’s motion is denied.

VI.

For the reasons stated in this opinion, Zimmer’s motions for
summary judgment of noninfringement and invalidity of U.S. Patent
No. 5,370,706 are denied. DePuy’s motion to exclude consideration
of evidence by Gabriele Lualdi and the Lima LTO brochures is
denied. DePuy’s motion to exclude consideration of evidence of the

Kotz brochure is granted. DePuy’s motion for summary judgment on

Zimmer’s affirmative defenses of inequitable conduct and patent

21


the light most favorable to the non-moving party and draw all
reasonable and justifiable inferences in favor of that party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

I.
The claims that DePuy alleges Zimmer has infringed are as
follows:

1.1. A kit for the assembly of a modular bone joint prosthesis
for the replacement of a head, neck, and adjacent portions of
a bone, the kit comprising at least two stems, with each stem
sized for insertion into a cavity of the bone, at least two
bodies, with each body sized to replace a portion of the bone,
and with each body configured to be joined in fixed attachment
to one of the at least two stems, at least two head members,
with each head member sized to replace a head portion of the
bone, and means for fixedly attaching one of the at least two
head members to one of the at least two bodies.

11. The Kit of claim 1, wherein one of the at least two stems
has a different size and shape as another of the at least two
stems.

12. The Kit of claim 1, wherein one of the at least two bodies
has a different size and shape as another of the at least two
bodies.

13. The Kit of claim 11, wherein one of the at least two
bodies has a different size and shape as another of the at
least two bodies.

Zimmer argues that its product has no “means for fixedly

attaching” a head to a body, as specified by claim 1. DePuy

1 DePuy argues that it only alleges Zimmer to have infringed
claims 11-13, not claim 1. However, claims 11-13 are dependent on
claim 1, and dependent claims are not infringed unless the claim on
which they depend has been infringed. 35 U.S.C. § 112, § 4%
Jeneric/Pentron, Inc. v. Dillon Co., 205 F.3d 1377, 1383 (Fed. Cir.
2000).



Under Zimmer’s offered evidence, a jury could not find clear
and convincing evidence of an intent to deceive. DePuy’s motion
for summary judgment on Zimmer’s defense of inequitable conduct is
granted.

Iv.

DePuy seeks summary judgment on Zimmer’s affirmative defense
of patent misuse’ and its counterclaim for violation of the
antitrust laws. To the extent that the motion deals with the
misuse defense, both parties engage in a largely irrelevant debate.

DePuy’s contention is that to withstand summary judgment on
the defense and the counterclaim, Zimmer must raise a material

issue of fact with respect to both a relevant market and DePuy’s

or distributed before August 15, 1985. But even if it were prior
art, while Zimmer’s argument with respect to the Kotz Brochure is
that it was well-known in the industry, it provides no evidentiary
support for that statement. Inventors Bolesky and Smith testified
that they did not see the Kotz Brochure until after the ‘706 Patent
issued. Zimmer notes that inventor Charles Whitcraft, in his
deposition, stated that he had seen the Kotz brochure sometime “in
the past.” Mr. Whitcraft’s deposition was taken November 20, 2002.
While his statement proves he saw the Kotz brochure before the date
of the deposition, it does not prove that he saw it prior to the
issuance of the ‘706 Patent. Finally, Zimmer points out that
attorney William R. Coffey stated in his deposition that if he had
known about the Kotz brochure, he would have submitted it. This
statement certainly does not prove that Mr. Coffey knew of the
brochure and intentionally failed to submit it; if anything, it
tends to prove the opposite.

4 Zimmer styles its patent misuse pleading as a counterclaim.
However, patent misuse is an affirmative defense, not a
counterclaim. See, e.g., B. Braun Med., Inc. v. Abbott Labs, 124
F.3d 1419, 1427-28 (Fed. Cir. 1997).

14


argued that DePuy was guilty only of “inequitable conduct” in
obtaining the patent. The argument based on “fraudulent
procurement” comes too late (long after the close of discovery),
and is outside the pleadings. It is also not supported by the
record.

In Part III above, I granted DePuy’s motion for summary
judgment on Zimmer’s affirmative defense of inequitable conduct
because of Zimmer’s failure to raise a material issue of fact with
respect to intent to mislead the patent office. That defense
requires that its proponent show by clear and convincing evidence
that the patentee had knowledge of material prior art references
which it withheld from the patent examiner. Zimmer’s opposition to
the inequitable conduct motion did not meet that standard of proof.
The threshold test for evidence of fraudulent procurement is even
higher. See Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d
1059, 1070 (Fed.Cir. 1998).

The evidence on which Zimmer relies in opposing summary
judgment on patent misuse is largely the same evidence on which it
relied in opposing summary judgment on the issue of inequitable
conduct. The only other matter to which it refers is likewise
inadmissible: DePuy brought law suits against three third parties
for infringement of the ‘706 Patent which were settled by DePuy
granting licenses to those defendants after the defendants put the

validity of the patent in issue. Zimmer argues that by this conduct

16


facts and claims of the parties except as may be necessary for an
understanding of the rulings set forth below.

The ‘706 Patent concerns a hip replacement prosthesis system
consisting of multiple pieces which can be interchangeably fitted
together to form an appropriately~sized prosthesis. DePuy alleges
that Zimmer’s ZMR Hip System, which also consists of a multiple-
piece hip prosthesis system, infringes the ‘706 Patent.

Before the court are the following motions: Zimmer seeks
summary judgment on the alternative grounds that its system does
not infringe the ‘706 Patent and that the Patent is invalid.
DePuy’s cross-motions for partial summary judgment ask this court
to rule as a matter of law that the ‘706 Patent is not invalid on
the basis of two pieces of prior art, that Zimmer cannot establish
its defense of inequitable conduct, and that Zimmer cannot
establish its defense of patent misuse or its antitrust
counterclaim. DePuy also moves to strike and exclude from evidence
certain documents which Zimmer offers as proof that the ‘706 Patent
is invalid for anticipation and obviousness. Zimmer asks this
court to rule on certain issues relating to licensing and remedies.

Summary judgment is appropriate where the record and
affidavits, if any, show that there is no genuine issue of material
fact and that the moving party is entitled to judgment as a matter
of law. Lexington Ins. Co. v. Rugg & Knopp, 165 F.3d 1087, 1090

(7 Cir. 1999); Fep. R. Civ. P. 56(c). I must construe all facts in


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

DEPUY, INC., a Delaware
corporation,

Plaintiff,

v. No. 02 C 4023
ZIMMER HOLDINGS, INC., a

Delaware corporation, and
ZIMMER, INC., a Delaware

corporation,

DOCKETED
NOV 0 3 2008

Defendants.

Plaintiff Depuy, Inc. (“DePuy”) alleges that defendants Zimmer
Holdings, Inc. and Zimmer, Inc. (collectively, “Zimmer”) have
infringed its patent No. 5,370,706 (the“‘706 Patent”). The then
pleaded claims and defenses of the parties and the court’s initial
construction of the patent claims invoked are set forth in my
published memorandum opinion and order, DePuy, Inc. v. Zimmer
Holdings, Inc., 276'F. Supp. 2d 910 (N.D. Ill. 2003). On March 12,
2004, I entered a! minute order granting DePuy’s motion for
reconsideration ofa portion of my prior opinion insofar as it
dealt with construction of the limitation “different size and
shape” as used in the ‘706 Patent. I also granted leave to Zimmer
to file a supplemental amended answer, affirmative defenses and

counterclaims in response to the complaint. I will not restate the

AN


arguing that Zimmer cannot prove the intent element of the defense.
To establish the defense of inequitable conduct, Zimmer must prove
(1) the existence of material prior art; (2) DePuy’s knowledge of
the prior art and its materiality; and (3) DePuy’s failure to
disclose that prior art with intent to mislead. Fox Indus. Inc. v.
Structural Preservation Sys., 922 F.2d 801, 803 (Fed. Cir. 1991).

Zimmer states that DePuy knew of and failed to disclose the
Kotz brochure, the Lima LTO brochures, and Dr. Chao’s book.
However, Zimmer only specified the Kotz brochure when it pleaded
the affirmative defense; it did not mention the other two pieces.
Inequitable conduct must be pleaded with particularity, pursuant to
Rule 9(b). FED. R. Civ. P. 9(b); Safe Bed Tech. Co. v. KCI USA,
Inc., No. 02-C0097, 2003 WL 21183948, at *2 (N.D. Ill. May 20,
2003). As Zimmer only specified the Kotz brochure in its pleading,
but for the fact that DePuy raised all three references itself in
furtherance of its own motion for summary judgment, I would not
consider the other two references on this motion. They do not
alter the result.

Although Zimmer makes much of the fact that in certain cases,
courts have found inequitable conduct on the basis of indirect or
circumstantial evidence, the cases it cites for that proposition
were all ones in which the court found, on the basis of admissions
or undisputed evidence, that the parties responsible for

prosecuting the subject patent applications had actual knowledge of

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monopoly power within that market. DePuy further points out that
Zimmer has not proffered any expert evidence. Zimmer argues that
DePuy fraudulently procured the ‘706 Patent and that, therefore, no

proof need be tendered on either issue, fraudulent procurement®

being a form of misuse in and of itself: i.e., . . . “it amounts to
extend[ing] the economic effect [of the patent] beyond the scope of
the patent grant.” Zimmer Memorandum in Opposition at 5, quoting
from C.R. Bard, Inc. v. M3 Systems, Inc., 157 F.3d 1340, 1372 (Fed.
Cir. 1998). Zimmer further contends that if proof of market power
is required, it may be found in the testimony of DePuy’s own
witnesses, including its experts.

With respect to the affirmative defense of patent misuse, no
analysis of market evidence is necessary, but not for the reason
Zimmer suggests. The record shows that prior to filing the
supplemental amended answer and counterclaims (“supplemental
amended answer”) on March 17, 2004, Zimmer filed three other
iterations of an answer to the complaint. In none of its
responsive pleadings, including the supplemental amended answer,
does Zimmer allege that the ‘706 Patent was “fraudulently

procured.” On the contrary, Zimmer has consistently pleaded and

% Emphasis added.

§ Answer and Affirmative Defenses filed June 27, 2002; Answer
and Amended Affirmative Defenses filed July 16, 2002; and Amended
Answer, Affirmative Defenses and Counterclaims filed October 22,
2002.

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