Free Response to Motion - District Court of Colorado - Colorado

Case 1:04-cv-01769-MSK-CBS

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Case No. 04 - cv - 1769 - MSK - CBS A MAJOR DIFFERENCE, INC., a Colorado corporation, Plaintiff, vs. ERCHONIA MEDICAL, INC., an Arizona corporation, ERCHONIA MEDICAL LASERS, L.L.C., an Arizona limited liability company, and ERCHONIA PATENT HOLDINGS, L.L.C., an Arizona limited liability company, Defendants. ______________________________________________________________________________ ERCHONIA PATENT HOLDINGS, LLC, an Arizona limited liability company; ERCHONIA MEDICAL INC., an Arizona corporation, Counterclaimants and Third-Party Plaintiffs, vs. A MAJOR DIFFERENCE, INC., a Colorado corporation, ROBERT E. MORONEY, an individual, ROBERT E. MORONEY, L.L.C., a Colorado limited liability company, MIKI SMITH, an individual, KMS Marketing, Incorporated, a Colorado corporation, and STARGATE INTERNATIONAL INC., a Colorado corporation, Counterdefendant and Third-Party Defendants. ______________________________________________________________________________ ERCHONIA'S RESPONSE TO PLAINTIFF'S MOTION IN LIMINE TO PRECLUDE ARGUMENT AND EVIDENCE RELATING TO INFRINGEMENT BASED ON THE DOCTRINE OF EQUIVALENTS ______________________________________________________________________________ Defendants Erchonia Medical, Inc., Erchonia Medical Lasers, L.L.C., and Erchonia Patent Holdings, L.L.C. ("Erchonia"), by their undersigned counsel, submit the following Response to

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Plaintiff A Major Difference, Inc.'s Motion in Limine to Preclude Argument and Evidence Relating to Infringement Based on the Doctrine of Equivalents: I. In the event the Court adopts Erchonia's proposed construction of "wand," the issue of infringement under the Doctrine of Equivalents is moot. The issue involving the Doctrine of Equivalents presented by Plaintiff's motion in limine concerns the factual issue of whether and how the optical arrangement in the Accused Devices is "attached" to the "wand," so as to infringe Claim 1(c) of the `473 patent. Specifically, the issue is the manner by which the optical assemblies in the wand part of the Accused Devices are secured to the wand. There are two different versions of the wand assembly at issue; in the first version, shown below as Figure 1, a retaining lip is formed on the inside, forward portion of the wand; a "puck" slides into the wand's forward end and sits flush against the lip. Figure 1

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The puck is connected to threaded rods at its base. The puck has holes into which the laser diode modules are inserted; the laser diode modules are secured to the puck by set screws. The laser diode modules include the optical arrangement, which is a series of lenses and apertures. The back of the wand is sealed by a base plate, which is held in place by fasteners that screw into nuts at the base of the threaded rods. The second version of the wand, shown in Figure 2 below, uses a slightly different puck, which has a machined end portion. A retaining ring is secured to the machined end side of the puck with set screws. Figure 2

The laser diode modules slide into the holes in the puck, captured at the forward end by a glass window at the end of the retaining ring, and at the rear end by a washer held in place by a screw. The laser diode modules do not actually touch the puck, but are secured in place by the holes

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in the puck, the glass window, and the washer and screw. Because the Court has construed "attached" to mean "fastened, secured, or joined to the wand directly," the issue under the Doctrine of Equivalents is whether the method by which the optical arrangement in the Accused Devices is secured or connected to the "wand" is substantially equivalent to being "fastened, secured, or joined to the wand directly," such that the Accused Devices infringe the `473 patent under the Doctrine of Equivalents rather than literally. If, as requested by Erchonia in its Supplemental Markman Brief, the Court construes the term "wand" in Claim 1 of the `473 patent to mean "a lightweight, handheld device that directs the output of the laser energy sources," then the Doctrine of Equivalents will not be an issue in this case. To the extent "wand" is construed to encompass the entire handheld device, then the optical arrangement in the Accused Devices is clearly "attached" to the wand in the sense of being "fastened, secured, or joined to the wand directly." Erchonia will be able to establish literal infringement of its patent and will not need to rely on the Doctrine of Equivalents. If, on the other hand, the Court accepts AMD's argument that "wand" in Claim 1 of the `473 patent means only a hollow metal tube, then the issue is whether the particular method by which the optical arrangement in the Accused Devices is "attached" to the wand is substantially equivalent to being "fastened, secured, or joined to the wand directly." II. Erchonia has adequately disclosed its theories and evidence regarding infringement under the Doctrine of Equivalents. Plaintiff's major complaint appears to be that Erchonia did not adequately disclose the basis for its theory of infringement under the Doctrine of Equivalents. However, the legal theory and factual basis for Erchonia's theory of infringement under the Doctrine of Equivalents were fully set -4-

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forth in Erchonia's response to Plaintiff's motion for summary judgment of noninfringement at pages 13-18 (Doc. 164). Plaintiff has no grounds to complain of any prejudice from alleged late disclosure, since Erchonia's theory and facts, including supporting evidence, have been fully disclosed to Plaintiff, both in Erchonia's response to Plaintiff's motion for summary judgment of noninfringement and in its supplemental response to Plaintiff's Interrogatory No. 3 (Doc. 164, Ex.18). Plaintiff further complains that Erchonia's theory of infringement under the Doctrine of Equivalents is not sufficiently set forth in the Final Pretrial Order, and that Erchonia should for this reason be precluded from arguing or offering evidence to support its theory of infringement under the Doctrine of Equivalents. However, a patent infringement claim encompasses two different theories of infringement: literal infringement and infringement under the doctrine of equivalents. See Warner-Jenkinson Co. v. Hilton Davis Chem Co., 520 U.S. 17, 21 (1997). The evidence that Erchonia will offer to support its theory of literal infringement is the same evidence it will offer to support its theory of infringement under the Doctrine of Equivalents, namely the design and construction of the "wand" in each of the Accused Devices. This evidence will be offered not only through the testimony of Stargate's Brian Bell and Erchonia's expert Dr. Greivenkamp, but also through a physical demonstration by disassembling the wand. The evidence of design and construction of the "wand" and the manner by which the optical arrangement is "attached" to the wand thus will necessarily be the same both for literal infringement and infringement under the Doctrine of Equivalents. The issue for infringement under the Doctrine of Equivalents is whether the optical arrangement is attached "directly" to the wand or whether it is attached in a manner that is substantially

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equivalent to being attached "directly" to the wand. Under the Doctrine of Equivalents, an accused device that does not literally infringe on the claim of a patent may nonetheless infringe if it performs substantially the same function in substantially the same way to achieve substantially the same result as each element of the claimed invention. Overhead Door Corp. v. Chamberlain Group, Inc., 194 F.3d 1261, 1270 (Fed. Cir. 1999). Because the evidence of the structure of the "wand" in the Accused Devices is the same for both literal infringement and infringement under the Doctrine of Equivalents, the issue of infringement under the Doctrine of Equivalents is largely a matter of argument on the three tests for equivalence, function, means, and result. This argument, as Erchonia explained in its response to Plaintiff's summary judgment motion, is as follows: Function performed. The first step in the analysis is whether the structure in the accused device performs substantially the same function as the equivalent structure in the `473 patent. The structure at issue is the method by which the optical arrangements are secured within the puck and the method by which the puck is secured to the wand (see Figure 2). The function performed by this structure is the fastening or securing of the optical assemblies to the wand. Because the purpose of this structure is to secure the optical assemblies within the wand, it serves an equivalent function to a method of "direct" attachment to the wand, such as the set screws that secure the optical assemblies to the wand in the original version of the device (see Figure 1). Means by which function is performed. The means by which this function is performed is shown in Figure 2. The optical arrangements attached to the laser diode modules are held in place by a screw connecting the diode assemblies to the puck and by the puck itself, which fits snugly into a shoulder in the hollow metal casing, and which is secured at one end by two threaded rods fastened

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to the end plate and at the other end by the capture ring and glass window, which also serves to hold the optical arrangements in place. This means is substantially equivalent to the set screws that fastened the optical arrangements to the hollow metal casing in the original version of the wand (see Figure 1). A reasonable jury could find this method of securing the optical assemblies to the metal casing substantially equivalent to a method of direct attachment. Result achieved. The result achieved by the Accused Devices' method of securing the optical assemblies to the wand assembly shown in Figure 2 is substantially the same as fastening, securing, or joining them to the hollow metal tube or casing directly, whether with set screws as in the earlier version or by some other means of direct attachment. The evidence at trial will show that the optical arrangements remain securely fastened inside the wand, do not move, and do not fall out. Plaintiff simply assumes that the outline of Erchonia's infringement case in the Final Pretrial Order is limited to literal infringement, but nothing in the Final Pretrial order expressly limits Erchonia's theory to literal infringement, particularly where Erchonia's counterclaim and third-party claim for patent infringement are not expressly limited to literal infringement, but necessarily encompass infringement under the Doctrine of Equivalents as well. See Revlon Consumer Prods. Corp. v. Estee Lauder Cos., 2003 U.S. Dist. Lexis 13004 at *118 (S.D.N.Y. 2003); Liquid Dynamics Corp. v. Vaughan Co., 2002 U.S. Dist. Lexis 14102 at *25 (N.D. Ill. 2002), vacated on other grounds, 355 F.3d 1361 (Fed. Cir. 2004). Indeed, the Federal Circuit has held that the District Court must always conduct an infringement analysis under the doctrine of equivalents in determining whether infringement has occurred. See ACTV, Inc. v. Walt Disney Co., 346 F.3d 1082, 1093 (Fed. Cir. 2003); Apex, Inc. v. Raritan Computer, Inc., 325 F.3d 1364, 1378 (Fed. Cir. 2003); Wright

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Medical Tech., Inc. v. Osteonics Corp., 122 F.3d 1440, 1445 (Fed. Cir. 1997); Conroy v. Reebok Intl., Ltd., 14 F.3d 1570, 1576-77 (Fed. Cir. 1994). Plaintiff relies on several Federal Circuit decisions which stand for the principle that "The evidence and argument on the doctrine of equivalents cannot merely be subsumed in plaintiff's case of literal infringement," see nCube Corp. v. SeaChange Intl., Inc., 436 F.3d 1317, 1325 (Fed. Cir. 2006); Texas Instr., Inc. v. Cypress Semiconductor Corp., 90 F.3d 1558, 1566-68 (Fed. Cir. 1996); Lear Sigler, Inc. v. Sealy Mattress Co., 873 F.2d 1422, 1425 (Fed. Cir. 1989); but see National Presto Indus., Inc. v. West Bend Co., 76 F.3d 1185, 1191 (Fed. Cir. 1996), but the procedural posture of these decisions makes them distinguishable from the situation here. In Lear Sigler, the issue was whether the evidence at trial was sufficient to support a verdict of infringement under the Doctrine of Equivalents. There the evidence presented on infringement under the Doctrine of Equivalents was sparse; the only possible evidence presented on infringement by equivalents came in the cross-examination of one of the defense witnesses. This evidence was vague and did not discuss infringement in terms of the claim elements. Because the evidence was not sufficient to establish the necessary elements of infringement under the Doctrine of Equivalents, the Federal Circuit held that there was insufficient evidence to support the jury's finding that the patent was infringed under the Doctrine of Equivalents. See id., 873 F.2d at 1427 In Texas Instruments, the district court granted JMOL for the defendant on the claim for infringement under the Doctrine of Equivalents based on the plaintiff's failure to present sufficient evidence of infringement by equivalents. The plaintiff presented "merely generalized testimony as to overall similarity," which "cannot support a finding that the differences were `insubstantial.'" Id.,

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90 F.3d at 1568. In nCube, the plaintiff argued infringement under the Doctrine of Equivalents in what appeared to be an afterthought to its theory of literal infringement. "During trial nCube did not raise separate and distinct arguments for infringement under the doctrine of equivalents, and elicited no expert testimony on this subject." Id., 436 F.3d at 1325. The plaintiff nevertheless argued that the evidence supporting literal infringement also supported a finding of infringement under the Doctrine of Equivalents, but the Federal Circuit rejected this argument, holding that the lack of additional evidence or argument by the plaintiff on the doctrine of equivalents did not support the finding it urged. In contrast, in National Presto v. West Bend, the Federal Circuit rejected the defendant's contention that the plaintiff did not present "sufficiently explicit witness testimony" and "linking attorney" argument on the elements of infringement under the Doctrine of Equivalents, on the ground that "proof of equivalency is not a matter of formula, but of evidence appropriate to the case." Id., 76 F.3d at 1191. The court, id., cited Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 609 (1950) for the principle that "the criterion of equivalency is substantial sameness of the patented invention and the accused composition, and that while substantial identity of function, way, and result may be probative of equivalency, evidence to show equivalency `is not the prisoner of a formula.'" See also GTE Prods. Corp. v. Kennametal, Inc., 772 F. Supp. 907, 917 (W.D. Va. 1991) (plaintiff who presented evidence of infringement by equivalents entitled to jury instruction on Doctrine of Equivalents notwithstanding defendant's contention that there was no argument by counsel that tied the evidence together).

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In this case, in contrast, trial has not yet been held, and thus it would be inappropriate for the Court to preclude Erchonia from offering evidence of infringement under the Doctrine of Equivalents based on an appellate standard that reviews evidence after it has already been presented at trial. Plaintiff is, in essence, asking the Court to preclude evidence based on the kind of formulaic approach rejected in National Presto without first having given Erchonia the opportunity to present it. As shown above, however, Erchonia has both the evidence and the argument necessary to establish prima facie proof of infringement under the Doctrine of Equivalents; this theory is not a mere afterthought in this case. Where a party offers evidence and argument relevant to the Doctrine of Equivalents, the Court must give it an opportunity to prove infringement under the Doctrine of Equivalents. Wright Medical Tech., Inc. v. Osteonics Corp., 122 F.3d 1440, 1445 (Fed. Cir. 1997); Green v. Snavely Forest Prods. Co., 2006 U.S. Dist. LEXIS 19895 at *11-*13 (D.S.C. 2006); Massachusetts Inst. of Tech. v. Lockheed Martin Global Telecommuns., Inc., 251 F. Supp.2d 1006, 1011 (D. Mass. 2003). III. Expert testimony is unnecessary under Rule 702 to determine infringement under the Doctrine of Equivalents. As for Plaintiff's argument that Erchonia does not have expert testimony to support its claim for infringement under the Doctrine of Equivalents, such expert testimony was disclosed with Erchonia's response to Plaintiff's motion for summary judgment of noninfringement. Moreover, "Expert testimony is not required to prove infringement under the doctrine of equivalents." Medtronic Navigation, Inc. v. Brainlab Medizinische Computersystems GMBH, 417 F. Supp.2d 1188, 1211 (D.Colo. 2006). This particularly true here, where the issue of whether the optical arrangement in the Accused Devices is "attached" to the wand in a manner that is substantially equi-10-

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valent to being "fastened, secured, or joined to the wand directly" is simple enough that it can easily be understood by a layperson, such that expert testimony on this issue is not required under Fed.R.Evid. 702. As shown above at pages 2-7, none of this requires expert testimony to understand. IV. Conclusion. For the foregoing reasons, Erchonia respectfully requests that Plaintiff A Major Difference, Inc.'s Motion in Limine to Preclude Argument and Evidence Relating to Infringement Based on the Doctrine of Equivalents be DENIED. Respectfully submitted this 6th day of November, 2006, s/ John R. Mann John R. Mann [email protected] Charles R. Ledbetter [email protected] Valerie A. Garcia [email protected] KENNEDY CHILDS & FOGG, P.C. 1050 17th Street, Suite 2500 Denver, Colorado 80265 (303) 825-2700 (303) 825-0434 FAX Richard L. Gabriel [email protected] David O. Seeley [email protected] HOLME ROBERTS & OWEN LLP 1700 Lincoln St., Suite 400 D.C. Box No. 07 Denver, Colorado 80203 Telephone: (303) 861-7000 Telecopier: (303) 866-0200

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Ira M. Schwartz [email protected] DECONCINI MCDONALD YETWIN & LACY, P.C. 7310 N. 16th Street, Suite 330 Phoenix, Arizona 85020 (602) 282-0500 Attorneys for Defendants Erchonia Medical, Inc., Erchonia Medical Lasers, L.L.C., and Erchonia Patent Holdings, L.L.C.

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CERTIFICATE OF SERVICE The undersigned certifies that on this 6th day of November, 2006, a true and correct copy of the foregoing ERCHONIA'S RESPONSE TO PLAINTIFF'S MOTION IN LIMINE TO PRECLUDE ARGUMENT AND EVIDENCE RELATING TO INFRINGEMENT BASED ON THE DOCTRINE OF EQUIVALENTS was electronically filed with the Clerk of Court using the CM/ECF system, which will send notification of such filing to the following e-mail addresses: Robert R. Brunelli, Esq. [email protected] Benjamin J. Lieb, Esq. [email protected] SHERIDAN ROSS P.C. 1560 Broadway, Suite 1200 Denver, CO 80202 Richard L. Gabriel, Esq. [email protected] David Seely, Esq. [email protected] HOLME ROBERTS & OWEN LLP 1700 Lincoln St., Suite 400 Denver, CO 80203 Ira M. Schwartz, Esq. [email protected] DECONCINI MCDONALD YETWIN & LACY, P.C. 7310 N. 16th St., Suite 330 Phoenix, AZ 85020 : s/ John R. Mann John R. Mann KENNEDY CHILDS & FOGG, P.C. 1050 17th Street, Suite 2500 Denver, Colorado 80265 (303) 825-2700 (303) 825-0434 FAX [email protected]

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