Case 5:00-cv-20905-RMW Document 3865 Filed 10/08/2008 Page 1 of 106

1 Gregory P. Stone (State Bar No. 078329)
Steven M. Perry (State Bar No. 106154)
2 Sean Eskovitz (State Bar No. 241877)
MUNGER, TOLLES & OLSON LLP
3 355 South Grand Avenue, 35 `h Floor
Los Angeles, California 90071-1560
4 Telephone: (213) 683-9100
Facsimile: (213) 687-3702
5 Email: gregory. stone@mto. corn;
steven.perry@mto. com ; sean. eskovitz@mto. corn
6 McKOOL SMITH PC
Peter A. Detre (State Bar No. 182619)
7 Carolyn Hoecker Luedtke (State Bar No. 207976)
Jennifer L. Polse (State Bar No. 219202)
8 MUNGER, TOLLES & OLSON LLP
560 Mission Street, 27 th Floor
9 San Francisco, California 94105
Telephone: (415) 512-4000
10 Facsimile: (415) 512-4077
Email: peter. detre@mto. cam;
11 carolyn. luedtke@mto. com ; jen.polse@mto.com
Rollin A. Ransom (State Bar No. 196126)
SIDLEY AUSTIN LLP
555 West Fifth Street, Suite 4000
Los Angeles, California 90013-1010
Telephone: (213) 896-6000
Facsimile: (213) 896-6600
Email: rransom@sidley. com
Pierre J. Hubert (Pro Hac Vice)
Craig N. Tolliver (Pro Hac Vice)
300 West 6th Street, Suite 1700
Austin, Texas 78701
Telephone: (512) 692-8700
Facsimile: (512) 692-8744
Email: phubert@mckoolsmith. corn;
ctolliver@mckoolsmith. corn

12 Attorneys for RAMBUS INC.

13 UNITED STATES DISTRICT COURT
14 NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION
15
16 HYNIX SEMICONDUCTOR, INC., et al., CASE NO.: CV 05-20905 RMW
17 Plaintiffs, RAMBUS INC.'S STATEMENT OF
RECENT DECISION
18 vs.
19 RAMBUS INC.,
20 Defendant.
21
22

23
24

25
26

27
28
RAMBUS'S STATEMENT OF RECENT DECISION
CV 05-20905 RMW


Case 5:00-cv-20905-RMW Document 3865 Filed 10/08/2008 Page 2 of 106

1 Pursuant to Civil Local Rule 7-3(d), Rambus respectfully submits for this Court's
2 consideration the Federal Circuit's recent decision in Broadcom Corp. v. Qualcomm, Inc., _ F.3d
3 2008 WL 4330323 (Fed. Cir. Sept. 24, 2008), which affirmed the permanent injunction issued
4 by the Central District of California, see Slip Op., No. 05-CV-467-JVS-RNB (C.D. Cal. Dec. 31,
5 2007). The Federal Circuit and District Court opinions in Broadcom are attached, respectively, as
6 Exhibits A and B. In addition, Rambus submits, as Exhibit C, a recent decision by the District
7 Court for the District of Massachusetts issuing a permanent injunction in Amgen, Inc. v. F.
8 Hoffmann-La Roche Ltd., _ F. Supp. 2d 2008 WL 4452454 at *45-64 (D. Mass. Oct. 2,
9 2008) (Young, J.).

10 These decisions bear on several arguments advanced by Rambus in its pending Motion for
11 Additional Damages and Equitable Relief and the Reply brief in support of that motion.
12
DATED: October 8, 2008 MUNGER, TOLLES & OLSON LLP
13 SIDLEY AUSTIN LLP
McKOOL SMITH P.C.
14

15
By: /s/ Gregory P. Stone
16 GREGORY P. STONE
17 Attorneys for RAMBUS INC.
18
19
20

21

22

23
24

25
26

27
28
1
RAMBUS'S STATEMENT OF RECENT DECISION
CV 05-20905 RMW
Case 5:00-cv-20905-RMW Document 3865 Filed 10/08/2008 Page 3 of 106

Exhibit A
Case 5:00-cv-20905-RMW Document 3865 Filed 10/08/2008 Page 4 of 106

Westlaw
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11 1 Patents 291 €101(2)

Broadcom Corp. v. Qualcomm Inc.
C.A.Fed.,2008.
Only the Westlaw citation is currently available.
United States Court of Appeals,Federal Circuit.
BROADCOM CORPORATION, Plaintiff-Ap-
pellee,
v.
QUALCOMM INCORPORATED, Defendant-Ap-
pellant.
Nos. 2008-1199, 2008-1271, 2008-1272.
Sept. 24, 2008.
Background: Owner of patents relating to wireless
voice and data communications on cellular tele-
phone networks brought infringement action
against competitor. After a jury found against com-
petitor, the United States District Court for the
Central District of California, James V. Selna,
denied competitor's post-trial motions and entered a
permanent injunction against competitor. Competit-
or appealed.
291 Patents
291IV Applications and Proceedings Thereon
291 k l O l Claims
291k101(2) k. Construction in General.
Most Cited Cases
Term "digital signal processor (DSP) controller
controlling said plurality of processing units," in
patent relating to video compression technology on
cell phone devices, did not require a global control-
ler.
121 Patents 291 X324.5
291 Patents
291 XII Infringement
291XI1(C) Suits in Equity
291 k324 Appeal
291k324.5 k. Scope and Extent of Re-
view in General. Most Cited Cases
Patent claim construction is a question of law that
an appellate court reviews de novo.

Holdings: The Court of Appeals, Linn, Circuit 13J Patents 291 X72(1)
Judge, held that:
291 Patents
(1) purported prior art patent did not invalidate pat-
29111 Patentability
ent relating to video compression technology on
291II(D) Anticipation
cell phone devices as an anticipatory reference;
291k72 Identity of Invention
(2) substantial evidence supported jury's finding
that competitor infringed patent claiming a 291k72(1) k. In General. Most Cited
Cases
"telephone" having circuitry allowing it to
A patent is invalid as anticipated if every limitation
"selectively couple" to two networks;
(3) district court did not err in instructing jury, on in a claim is found in a single prior art reference.
induced patent infringement claim, to consider all 141 Patents 291 X101(2)
of the circumstances;
(4) substantial evidence supported jury ' s verdict 291 Patents
that competitor induced infringement of patents; 291IV Applications and Proceedings Thereon
and 291k101 Claims
(5) district court did not abuse its discretion in issu- 291k101(2) k. Construction in General.
ing permanent injunction against competitor. Most Cited Cases
Term "simultaneously participate," in patent relat-
Affirmed in part, reversed in part, and remanded.
ing to technology allowing cell phones to simultan-
eously participate on multiple wireless networks us-

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ing a single transceiver, referred to interleaved
communications.
151 Patents 291 X66(1.14)
291 Patents
291II Patentability
291II(D) Anticipation
291 k63 Prior Patents
291 k66 Operation and Effect
291k66(1.14) k. Electricity, Elec-
tronics, and Radio. Most Cited Cases
Purported prior art patent did not invalidate patent
relating to video compression technology on cell
phone devices as an anticipatory reference; patent
owner presented evidence that lab notebook of a
deceased inventor demonstrated conception of
claimed invention, and that the invention was con-
structively reduced to practice prior to the purpor-
ted prior art patent.
161 Patents 291 X324.1
291 Patents
291 XII Infringement
291 XII(C) Suits in Equity
291k324 Appeal
291k324.1 k. In General. Most Cited
Cases
A party may not introduce new patent claim con-
struction arguments on appeal or alter the scope of
the claim construction positions it took below;
moreover, litigants waive their right to present new
claim construction disputes if they are raised for the
first time after trial.
171 Patents 291 €312(6)
291 Patents
291 XII Infringement
291 XII(C) Suits in Equity
291k312 Evidence
291 k312(3) Weight and Sufficiency
291 k312(6) k. Particular Matters,
Sufficiency as To. Most Cited Cases
Substantial evidence supported jury's finding of in-
fringement of patent claiming a "telephone" having
circuitry allowing it to " selectively couple" to two
networks having different bandwidth characterist-
ics, in light of evidence showing that accused
phones incorporating alleged infringer's software
included an interface circuit that selectively
coupled to public switched telephone network
(PSTN) or the internet.
181 Federal Courts 170B €x846
170B Federal Courts
170BVIII Courts of Appeals
170BVIII(K) Scope, Standards, and Extent
I70BVIII(K)5 Questions of Fact, Verdicts
and Findings
170Bk846 k. Substantial Evidence.
Most Cited Cases
In reviewing factual issues for substantial evidence,
the inquiry is whether a reasonable jury, given the
record before it viewed as a whole, could have ar-
rived at the conclusion it did.
191 Federal Courts 170B 822
170B Federal Courts
170BVIII Courts of Appeals
170BVIII(K) Scope, Standards, and Extent
170BVIII(K)4 Discretion of Lower Court
I70Bk822 k. Conduct of Trial in Gen-
eral. Most Cited Cases
Federal Courts 170B X847
170B Federal Courts
170BVIII Courts of Appeals
17OBVIII(K) Scope, Standards, and Extent
17OBVIII(K)5 Questions of Fact, Verdicts
and Findings
170Bk847 k. Verdicts in General.
Most Cited Cases
Legal standards given to the jury are reviewed
without deference to the trial court, whereas the
jury's resolution of factual disputes are reviewed to
determine whether there is substantial evidence to
support them.

"0 2008 Thomson Reuters/West. No Claim to Orig. US Gov. Works.

Case 5:00-cv-20905-RMW Document 3865 Filed 10/08/2008 Page 6 of 106
Page 3
F.3d ----, 2008 WL 4330323 (C.A.Fed.)

(101 Patents 291 X324.5 Cases

District court did not err in instructing jury, on in-
291 Patents duced patent infringement claim, to consider all of
29 I X I I Infringement the circumstances, including whether alleged in-
291XII(C) Suits in Equity fringer sought the advice of counsel as to non-
291k324 Appeal infringement; opinion-of-counsel evidence, along
291 k324.5 k. Scope and Extent of Re- with other factors, may have reflected whether the
view in General. Most Cited Cases alleged infringer knew or should have known that
its actions would cause another to directly infringe.
Patents 291 €'324.60
(131 Patents 291 €312(8)
291 Patents
291 XII Infringement 291 Patents
291XII(C) Suits in Equity 291 XII Infringement
291k324 Appeal 29I XII(C) Suits in Equity
29Ik324.60 k. Determination and Dis- 291k312 Evidence
position of Cause. Most Cited Cases 291k312(3) Weight and Sufficiency
Court of Appeals for the Federal Circuit reviews 291k3 I2(8) k. Participation, Intent,
the legal sufficiency of jury instructions on an issue and Contributory Infringement. Most Cited Cases
of patent law without deference to the district court; While inducement of patent infringement requires
it also reviews jury instructions in their entirety and more than just intent to cause the acts that produce
only orders a new trial when errors in the instruc- direct infringement, and also requires that the al-
tions as a whole clearly mislead the jury. leged infringer knowingly induced infringement
and possessed specific intent to encourage another's
(111 Patents 291 €259(1)
infringement, this intent may be established through
291 Patents circumstantial evidence; moreover, the requisite in-
29I XII Infringement tent to induce infringement may be inferred from
29IXII(A) What Constitutes Infringement all of the circumstances.
291k259 Contributory Infringement; In-
(14( Patents 291 €312(8)
ducement
291k259( 1 ) k. In General. Most Cited 291 Patents
Cases 291XII Infringement
In order to prevail on an inducement claim for pat- 291 XII(C) Suits in Equity
ent infringement, the patentee must establish first 29 I k312 Evidence
that there has been direct infringement, and second
29I k312(3) Weight and Sufficiency
that the alleged infringer knowingly induced in- 291k312(8) k. Participation, Intent,
fringement and possessed specific intent to encour- and Contributory Infringement. Most Cited Cases
age another's infringement. Substantial evidence supported jury's verdict that
alleged infringer induced infringement of patents
(12( Patents 291 €.-314( )
relating to wireless voice and data communications
291 Patents on cellular telephone networks; totality of circum-
291 XII Infringement stances presented in the evidence showed alleged
29IXII(C) Suits in Equity infringer's failure to investigate, to explore design
291 k3 I4 Hearing around approaches, to take remedial steps, and to
291k314(1) k. In General. Most Cited seek legal advice.

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(151 Patents 291 €_?312(3.1) Cited Cases

District court did not abuse its discretion in issuing
291 Patents permanent injunction against alleged infringer of
291 XII Infringement patents relating to wireless voice and data commu-
29 I WO Suits in Equity nications on cellular telephone networks; patent
291k312 Evidence owner provided evidence of irreparable harm, des-
291k312(3) Weight and Sufficiency pite the fact that it did not currently practice the in-
291k312(3.1) k. In General. Most ventions, estimating monetary damages would have
Cited Cases been difficult, and sunset provision ameliorating
the negative effects on alleged infringer mitigated
Patents 291 X312(8)
the harm to the public.
291 Patents
(181 Federal Courts 170B 814.1
291201 Infringement
291XII(C) Suits in Equity 170B Federal Courts
291k312 Evidence 170BVIII Courts of Appeals
291k312(3) Weight and Sufficiency 170BVIII(K) Scope, Standards, and Extent
291k312(8) k. Participation, Intent, 170BVIII(K)4 Discretion of Lower Court
and Contributory Infringement. Most Cited Cases 170Bk814 Injunction
A patentee may prove direct infringement or in- 170Bk814.1 k. In General. Most
ducement of infringement by either direct or cir- Cited Cases
cumstantial evidence; there is no requirement that An appellate court reviews a district court's de-
direct evidence be introduced, nor is a jury's prefer- cision to grant an injunction and the scope of that
ence for circumstantial evidence over direct evid- injunction for abuse of discretion.
ence unreasonable per se.
Patents 291 €'328(2)
(161 Patents 291 € 312(1.1)
291 Patents
291 Patents 29IXIII Decisions on the Validity, Construction,
291 XII Infringement and Infringement of Particular Patents
291 XII(C) Suits in Equity 291 k328 Patents Enumerated
291k312 Evidence 291 k328(2) k. Original Utility. Most
291 k312(1) Presumptions and Burden Cited Cases
of Proof
291 k3 I2(1.1) k. In General. Most Patents 291 € 328(2)
Cited Cases
The drawing of inferences, particularly in respect of 291 Patents
an intent-implicating question, is peculiarly within 291XII1 Decisions on the Validity, Construction,
the province of the fact finder that observed the and Infringement of Particular Patents
witnesses in patent infringement case. 291k328 Patents Enumerated
291k328(2) k. Original Utility. Most
1171 Patents 291 X317 Cited Cases

291 Patents Patents 291 e=>328(2)

291 XII Infringement
291XII(C) Suits in Equity 291 Patents
291k3 17 k. Permanent Injunction. Most 291XlII Decisions on the Validity, Construction,

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Case 5:00-cv-20905-RMW Document 3865
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and Infringement of Particular Patents
291k328 Patents Enumerated
291k328(2) k. Original Utility. Most
Cited Cases
5,550,895, 6,385,244. Cited.
5,657,317, 6,389,010. Valid and Infringed.
6,847,686. Invalid and Not Infringed.
Appeal from the United States District Court for the
Central District of California in case no.
05-CV-467, Judge James V. Selna.
William F. Lee, Wilmer Cutler Pickering Hale and
Dorr LLP, of Boston, MA, argued for plaintiff-ap-
pellee. With him on the brief were Richard W.
O'Neill, Joseph J. Mueller, and Lauren B. Fletcher;
and James L. Quarles, III, of Washington, DC. Of
counsel was Heath A. Brooks, of Washington, DC.
Evan R. Chesler, Cravath, Swaine & Moore LLP,
of New York, NY, argued for defendant-appellant.
With him on the brief were Richard J. Stark and
Andrei Harasymiak. Of counsel on the brief were
Carter G. Phillips and Stephen B. Kinnaird, Sidley
Austin LLP, of Washington, DC, and Richard T.
Mulloy and Stanley J. Panikowski, DLA Piper U.S.
LLP, of San Diego, California.
Richard McMillan, Jr., Crowell & Moring, LLP, of
Washington, DC, for amicus curiae, Sprint Nextel
Corporation. With him on the brief were Kathryn L.
Clune, Brian M. Koide, and Nathaniel Grow.
Before LINN, FRIEDMAN, and PROST, Circuit
Judges.
LINN, Circuit Judge.
*1 Qualcomm Incorporated ("Qualcomm") appeals
from a jury's determination that Qualcomm in-
fringed U.S. Patents No. 6,847,686 ("the '686 pat-
ent"), No. 5,657,317 ("the '317 patent"), and No.
6,389,010 ("the '010 patent"), owned by Broadcom
Corporation ("Broadcom"). Qualcomm also appeals
from the district court' s issuance of a permanent in-
junction against Qualcomm. Because the district
court erred in its construction of claim 3 of the '686
C 2008 Thomson Reuters/West. No Claim to Orig. US Gov. Works.
Filed 10/08/2008 Page 8 of 106
Page 5
patent, we reverse the jury's determination of in-
fringement of that patent and conclude that claim 3,
as properly construed, is invalid. Because the dis-
trict court did not err in construing the claims of the
'317 patent, and because substantial evidence sup-
ports the jury's determinations of infringement and
validity of the '317 and '010 patents, we affirm the
judgment of infringement of the '317 and '010 pat-
ents, and the injunction as it pertains to those pat-
ents.
I. BACKGROUND
Broadcom and Qualcomm compete in the market
for chipsets used in mobile radio devices such as
cell phone handsets. The technology at issue in this
appeal relates to wireless voice and data communic-
ations on cellular telephone networks. The relevant
technology is currently found in so-called third-
generation ("3G") baseband processor chips. Base-
band processor chips enable a cell phone ' s basic
communication functions, along with other features
such as graphics, multimedia, data transfer, and
custom applications. The 3G chips sold by Broad-
com, Qualcomm, and others replace older and less
capable second-generation ("2G") chips, which in-
clude code division multiple access ("CDMA")
chips and global system for mobile communications
("GSM") chips. The 3G CDMA replacement is
known as CDMA2000, while the 3G GSM replace-
ment is known as wideband CDMA ( "WCDMA").
These 3G technologies are generally incompatible
with each other, and thus both cell phone handsets
and cell phone service provider networks are de-
signed to work with only one of these two compet-
ing standards. Both standards, however, provide en-
hanced functionality over their 2G predecessors,
particularly in the area of multimedia and multiple
network products.
The products accused of infringing Broadcom's pat-
ents include baseband chips designed to work in
cell phones in conjunction with 3G networks, in-
cluding both CDMA2000 and WCDMA, although
this appeal primarily relates to CDMA2000 chips.

Case 5:00-cv-20905-RMW Document 3865
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Also at issue is Qualcomm's software, which Qual-
comm has licensed exclusively to Sprint. QChat al-
lows the use of push-to-talk ("PTT") technology
much like a walkie-talkie on CDMA2000 networks.
Although Broadcom markets 3G chips, it does not
currently sell any CDMA2000 chips, it has not sold
any WCDMA chips for use in United States cell
phones, and it does not offer a chip implementing a
PTT feature.
Broadcom's '686 patent relates to video compres-
sion technology on cell phone devices. Claim 3, the
only claim at issue, depends from claim 1, and is
directed to a "digital signal processor" ( "DSP").
Broadcom accused Qualcomm's WCDMA and
CDMA2000 baseband processor chips of infringing
this claim. The '317 patent relates to technology al-
lowing cell phones to simultaneously participate on
multiple wireless networks using a single transceiv-
er. The relevant claims on appeal are directed to
"radio units" having "transceivers" capable of
"simultaneous" participation on multiple RF net-
works. Broadcom asserted that Qualcomm's
CDMA2000 chips infringed these claims by interfa-
cing with both the lx network (for traditional voice
communications) and the EV-DO network (for data
and related applications including PTT functional-
ity in QChat). Finally, the '010 patent claims a
"telephone" having circuitry allowing it to
"selectively couple" to two networks having differ-
ent bandwidth characteristics. Broadcom asserted
the several claims of the '010 patent against Qual-
comm's CDMA2000 chips implementing the QChat
PTT feature. Broadcom argued that that traditional
voice calls couple to the telephone network, while
calls initiated with the QChat feature are routed
through the Internet, a distinct network.
*2 The district court issued a claim construction or-
der prior to trial in which it construed the contested
terms of Broadcom's patents pursuant to Markman
v. Westview Instruments, Inc., 517 U.S. 370. 372,
116 S.Ct. 1384, 134 L.Ed.2d 577 (1996).Broadcom
Corp. v. Qualcomm Inc., No. 05-CV-467 (C.D.Cal.
Sept. 11, 2006) ("Claim Construction Order ")
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Page 6
Following a trial, the jury found that Qualcomm
directly infringed and induced infringement of
claim 3 of the '686 patent and claims 1, 6, 9, and 12
of the '317 patent, either literally or under the doc-
trine of equivalents; that Qualcomm directly in-
fringed, induced infringement of, and contributed to
the infringement of claims 1, 2, 3, and 7 of the '010
patent, either literally or under the doctrine of equi-
valents; and that all of these claims were not inval-
id. The jury further found that Qualcomm had will-
fully infringed all three patents in suit. It awarded
damages of approximately $20 million. Qualcomm
filed post-trial motions for judgment as a matter of
law under Rule 50(b) of the Federal Rules of Civil
Procedure or a new trial under Rule 59(a). The dis-
trict court denied relief, denying Qualcomm's mo-
tions in their entirety. Broadcom Corp. v. Qual-
comm Inc., No. 05-CV-467 (C.D.Cal. Aug. 10,
2007) ("JMOL Opinion ").
Ten days after the district court's denial of Qual-
comm's post-trial motions, this Court released its
decision in In re Seagate Technology, LLC, 497
F.3d 1360 (Fed.Cir.2007) (en bane). Given the po-
tential impact of Seagate on the willfulness determ-
ination previously made by the jury, the district
court sua sponte invited a motion for reconsidera-
tion of its denial of Qualcomm's request for a new
trial on willfulness and of its award of enhanced
damages. Upon considering the arguments presen-
ted, the district court vacated the willfulness verdict
and directed Broadcom to file an election
" indicating whether it wishe [d] to accept the liabil-
ity and damages verdicts or proceed to a new trial
on all issues, including willfulness. "Broadcom
Corp. v. Qualcomm Inc., No. 05-CV-467, slip op. at
9 (C.D.Cal. Nov. 21, 2007). Broadcom elected to
accept the liability and damage verdicts rather than
proceed to a new trial on all issues.
The district court then held a bench trial on the top-
ic of injunctive relief and subsequently entered a
permanent injunction against Qualcomm on all
three patents, although it provided "sunset" provi-
sions allowing continued sales pursuant to a man-
Case 5:00-cv-20905-RMW Document 3865
--- F.3d ----, 2008 WL 4330323 (C.A.Fed.)
datory royalty through January 31, 2009. Broadcom
Corp. v. Qualcomm Inc., No. 05-CV-467 (C.D.Cal.
Dec. 31, 2007) ("Injunction Opinion"). On Febru-
ary 5, 2008, the district court issued an amended in-
junction, Broadcom Corp. v. Qualcomm Inc ., No.
05-CV-467 (C.D.Cal. Feb. 5, 2008) ("First
Amended Injunction"), and on March 13, 2008, it
again amended and re-issued the injunction, Broad-
com Corp. v. Qualcomm Inc., No. 05-CV-467
(C.D.Cal. Mar. 13, 2008) ("Second Amended In-
junction"). Finally, on March 24, 2008, the district
court entered judgment pursuant to Federal Rule of
Civil Procedure 54(b).Broadcom Corp. v. Qual-
comm Inc., No. 05-CV-467 (C.D.Cal. Mar. 24,
2008).
*3 Qualcomm appealed from the First Amended In-
junction, the Second Amended Injunction, and the
Rule 54(b) judgment entering the jury's infringe-
ment verdicts. We granted unopposed motions to
consolidate these three appeals on April 1, 2008,
and April 11, 2008. We have jurisdiction over the
appeal from the Rule 54(b) judgment pursuant to 28
U.S.C. 3 1295(a)(1), and we have jurisdiction over
the appeals from the interlocutory injunctions pur-
suant to 28 U.S.C. § 1292(c)(1).
II. DISCUSSION
Qualcomm presents numerous arguments regarding
claim construction, infringement, and validity, as
well as various contentions regarding the necessity
of a new trial and the propriety of the district
court's permanent injunction. We address each in
turn.
A. The '686 Patent
[1] Claim 3, the only asserted claim of the '686 pat-
ent, depends from claim 1, the patent's only inde-
pendent claim, which recites:
A digital signal processor for processing a multiple
frame video digital signal, comprising:
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Page 7
a DSP controller,
a plurality of processing units connected to said
DSP controller for processing said multiple frame
video digital signal; and at least one storage unit,
wherein each of said processing units is connec-
ted to at least one of said at least one storage
units, said DSP controller controlling said plural-
ity of processing units, wherein said DSP control-
ler, said plurality of processing units, and said at
least one storage unit are on a single chip.
Dependent claim 3 additionally recites "[t]he digital
signal processor according to claim I wherein each
of said processing units operates according to a dif-
ferent program command. "Although the claims
make no reference to a "global controller," the dis-
trict court construed the claim term "DSP controller
controlling said plurality of processing units" as
follows: "The DSP controller, either independently
or under the direction of a global controller, distrib-
utes control instructions to be executed by the plur-
ality of processing units. A global controller is re-
quired" J.A. at 2251 (emphasis added). It is undis-
puted that the Texas Instruments TMS320C80 chip
and its documentation ("C80 chip") would invalid-
ate claim 3 as an anticipatory reference if the claim
is construed not to include a "global controller"
limitation.
[2] Qualcomm contends that the district court im-
properly imported the "global controller" limitation
into claim 1 (and, thus, claim 3) of the '686 patent
and that the C80 chip anticipates this claim. Qual-
comm argues that the claim language is directed
solely to DSPs, and that the specification and fig-
ures of the patent clearly distinguish between DSPs
and global controllers. Qualcomm had argued that
the DSP controller term should be construed as
"[u]nder the direction of a global controller, the
DSP controller controls units that process
data. "J.A. at 550. Broadcom responds that the dis-
trict court merely construed the claim terms in light
of the specification, which discusses how the
"[g]lobal controller ... controls and schedules ... the
digital signal processor," '686 patent col.7 11.9-11,
Case 5:00-cv-20905-RMW Document 3865
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and that to ignore the "global controller" would
render claim 1 invalid even with respect to generic
prior art discussed in the specification. Claim con-
struction is a question of law that we review de
novo. Cvbor- Corp. v. FAS Techs., Inc., 138 F.3d
1448, 1454 (Fed.Cir.1998) (en bane).
*4 We agree with Qualcomm. There is no basis for
importing the "global controller" limitation into
claim 1. The claims make no reference to an extern-
al global controller, and we find no justification for
adding limitations related to the more general video
encoding device discussed in the specification
when the claims are written to encompass only a
specific element of that device. The claims recite
only three DSP elements, including a DSP control-
ler, a plurality of processing units, and at least one
Figure 8 similarly illustrates the global controller as
lying outside the bounds of the DSP. Figures 3 and
4 also identify the global controller and the digital
signal processor as discrete and separate compon-
ents.
While the specification does contemplate the pos-
sibility of a global controller, the claims of the '686
patent are directed solely to the DSP. As this court
has noted, "each claim does not necessarily cover
every feature disclosed in the specification. When
the claim addresses only some of the features dis-
closed in the specification, it is improper to limit
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storage unit. ' 686 patent col.16 11.6-21. The spe-
cification similarly provides that the DSP includes
only these three components. E.g., id. col.4 11.44-49
("The digital signal processor includes a DSP con-
troller, a plurality of processing units, ... and at
least one storage unit.... The DSP controller con-
trols the plurality of processing units. "). The illus-
trations provided in the specification further bolster
our conclusion that the global controller is separate
and distinct from the DSP. For example, Figure 7,
reproduced below, places the global controller out-
side of the lines defining the DSP.
the claim to other, unclaimed features. " Ventana
Med. Sys., Inc. v. Biogenex Labs„ Inc., 473 F.3d
1173, 1181 (Fed.Cir.2006). While the '686 patent
claims only the DSP, it is a continuation of another
application-sharing the same specification-now is-
sued as U.S. Patent No. 6,385,244 ("the '244 pat-
ent"). The '244 patent has two independent claims.
One claims "a video encoding system including ... a
video encoding device ... the video encoding device
comprising:... a global controller ... [and] a digital
signal processor, connected to said global control-
ler." '244 patent claim 1. The other claims "[a]

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video camera comprising: .., a video encoding
device ... comprising ... a global controller ... [and]
a digital signal processor, connected to said global
controller,"Id. claim 7. While the global controller
limitation influences the scope of the '244 patent
claims, we find no basis for importing it to the DSP
claims of the '686 patent.
Broadcom also contends that the claim cannot be
construed without the global controller limitation
FIG. 2
PRIOR MT
*5 [3]"A patent is invalid as anticipated if every
limitation in a claim is found in a single prior art
reference,"lkvstrom v. TREX Co., 424 F.3d 1136.
1149 (Fed.Cir.2005). Because Broadcom has not
demonstrated that "every limitation" of claim 1 is
found in this reference, its self-invalidating argu-
ment must fail. For example, Broadcom does not
even allege that the generic prior art DSP refer-
enced in the patent is implemented "on a single
chip" as required by the claims. Moreover, "[w]hile
we have acknowledged the maxim that claims
should be construed to preserve their validity, we
have not applied that principle broadly.... Instead,
we have limited the maxim to cases in which the
court concludes, after applying all the available
tools of claim construction, that the claim is still
ambiguous."Phillips v. AWH Corp., 415 F.3d 1303,
1327 (Fed.Cir.2005) (en bane) (internal citation and
quotation marks omitted); see also Tate Access
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because claim 1 otherwise would be
" self-invalidating" based on generic prior art dis-
closed in the specification. Broadcom points to Fig-
ure 2 of the '686 patent-labeled "PRIOR ART"-to
support this argument.
Floors, Inc. v. Interface Architectural Res., Inc.,
279 F.3d 1357, 1372 (Fed.Cir.2002) (noting that
"where claim language is clear we must accord it
full breadth even if the result is a claim that is
clearly invalid").
Accordingly, we modify the district court's claim
construction to remove the requirement of a "global
controller," reverse the jury verdict of infringement
as to the '686 patent, and hold claim 3 invalid as an-
ticipated by the C80 chip. See Akamai Techs., Inc.
v. Cable it Wireless Internet Servs., Inc., 344 F.3d
1 186, 1194-95 (Fed.Cir.2003).
B. The '317 Patent
The jury found that Qualcomm infringed claims 1,
6, 9, and 12 of the '317 patent. These claims do not
meaningfully differ for purposes of this appeal.

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Claim I recites, with disputed terms emphasized:
A radio unit for operation in a communication
system having a plurality of RF communication
networks comprising:
a transceiver capable of participating on the plur-
ality of RF communication networks;
a memory device which stores a plurality of com-
munication protocols, each communication pro-
tocol governing radio operation on one of the
plurality of RF communication networks;
a control processor coupled to the transceiver and
the memory device, the control processor select-
ing from the memory device ones of the plurality
of communication protocols to enable the trans-
ceiver to simultaneously participate on corres-
ponding ones of the plurality of RF communica-
tion networks; and
the control processor managing the simultaneous
use by the transceiver of the selected ones of the
plurality of communication protocols.
Qualcomm argues that the district court improperly
construed the "simultaneously participate" limita-
tion in all of the relevant claims of the ' 317 patent,
that there is no evidence of infringement under a
correct construction, and that the '317 patent is in-
valid under the district court's claim construction. It
also argues that the district court erred in not con-
struing the "networks" limitation, and that substan-
tial evidence does not support the jury's infringe-
ment verdict under a correct construction.
1. "Simultaneously Participate"
*6 [4] Claims 1, 6, 9, and 12 of the '317 patent all
require a radio unit with a transceiver that can
" simultaneously participate" on two or more wire-
less networks. The district court construed this
claim term as "[t]aking part in communications
with two or more networks either actively or in
sleep-mode during the same period of time. "Claim
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Construction Order at 12 (emphasis added). Qual-
comm argues, as it did to the district court, that
"simultaneously participate" requires the claimed
transceiver to be capable of communicating on mul-
tiple networks at the same instant in time. Broad-
com defends the district court's claim construction
as supported by the specification, which it contends
distinguishes between "simultaneous" and "fully
simultaneous."
The district court reasoned that "because the '317
patent claims a radio unit with a single transceiver,
and because a single transceiver cannot achieve full
communication with two networks at the same
time, Qualcomm's construction could mean that the
patent would not perform its stated function. Ac-
cordingly, the Court agree[d] with Broadcom that
the construction `during the same period of time'
most accurately construes the meaning of the term
simultaneous."Claim Construction Order at 12; see
Cordis Corp. v. Medtronic Ave, Inc., 511 F.3d
1157, 1 174 (Fed.Cir.2008) (noting that "a construc-
tion that renders the claimed invention inoperable
should be viewed with extreme skepticism").
The claim language itself provides little insight as
to the meaning of "simultaneous," and each party
argues that the specification supports its own inter-
pretation. Qualcomm contends that the specifica-
tion distinguishes between "simultaneous participa-
tion," for communications taking place at the same
instant in time, and "multiple participation," for in-
terleaved communications taking place over the
same period of time. See, e.g., '317 patent col.12
11.42-46 ("Although the use of a plurality of built-in
radio transceivers could be used so as to permit
simultaneous participation by a single device,
factors of cost, size, power and weight make it de-
sirable to only build-in a single radio transceiver
capable of multiple participation."). Broadcom ar-
gues that the specification distinguishes between
" simultaneous" or "multiple" participation and
"fully simultaneous" participation, and that only the
latter denotes non-interleaved communications tak-
ing place at the same instant in time. See, e.g., id.

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col.13 11.1-4 ("In communication environments
wherein fully simultaneous participation does not
exist or is not desired, transmitter circuitry might be
shared for participation in both [networks]."). We
do not find these arguments to be helpful because
the use of these terms in the specification is incon-
sistent at best.
*7 The block labeled 3273 represents an instance of
two networks, represented as timelines 3253 and
3255, seeking to communicate with the same device
at the same time. The specification discussion per-
taining to block 3273 provides the following:
"Block 3273 ... illustrates a situation where the
master encounters a communication conflict.... If
the master has two radio transceivers, the master
can service both networks. If, however, the master
only has one radio transceiver, the master chooses
to service one network based on network priority
considerations."Id. col.53 11.42-50. While this lan-
guage indicates that multiple transceivers may be
used to avoid such conflict (and the attendant inter-
leaving process), the specification as a whole re-
peatedly clarifies that the invention is directed to
wireless communications solutions utilizing a
single transceiver. For example, in the section
labeled "Technical Field," the specification states
that "[t]he present invention relates generally to
local area networks used for transmitting and re-
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We turn then to Figure 34 of the '317 patent, as re-
produced below, which has been at the center of
much debate, both at the district court and on ap-
peal.
ceiving information and more particularly to a sin-
gular radio using multiple communication proto-
cols for servicing corresponding multiple radio loc-
al area networks."Id. col.l 1.65-col.2 1.3 (emphasis
added). Moreover, as the district court noted, "both
parties concede that the patent discloses a device
with one transceiver."Claim Construction Order at
12. Based on this context, we agree with the district
court that the claim term "simultaneous participa-
tion" refers to interleaved communications.
Because Qualcomm only argues that there can be
no infringement under its proposed construction,
but does not argue non-infringement under the dis-
trict court's construction, we affirm the jury's in-
fringement verdict.
[5] Qualcomm further argues, however, that even
under the district court's construction of
" simultaneously participate," it introduced a prior
art reference that anticipates the relevant claims of

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the '317 patent. That reference, U.S. Patent No.
5,550,895 ("Burson"), discloses a system allowing
a telephone to operate in both cordless and cellular
networks. While the parties dispute whether or not
this reference discloses "simultaneous participa-
tion" in these different networks, Broadcom addi-
tionally argued at trial that it could antedate the
Burson reference, and thus that Burson is not prior
art capable of anticipating the '317 patent. Specific-
ally, Broadcom argued that the September 1989 lab
notebook of a deceased inventor, Ronald Mahany,
demonstrated conception of the claimed invention,
and that this invention was constructively reduced
to practice in May 1993 and November 1993 patent
applications. If true, these facts permit Broadcom to
antedate the Burson reference, which was filed in
December 1993-subsequent to both the lab note-
book and the 1993 patent applications. See gener-
ally Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572,
1577 (Fed.Cir.1996). Having been presented with
the deceased inventor's lab notebook, the patent ap-
plications, and the testimony of a co-inventor, a
coworker, and Broadcom's expert, the jury rejected
Qualcomm's invalidity contentions.
*8 Qualcomm argues that neither the lab notebook
nor the 1993 patent applications disclose every lim-
itation of the asserted claims. Qualcomm relies on
our recent holding in PowerOasis, Inc. v. T-Mobile
USA, Inc., 522 F.3d 1299, 1305 (Fed.Cir.2008)
(holding that once a defendant established prior art
anticipating the asserted claims, "the burden was on
[the patentee] to come forward with evidence to the
contrary"), and argues that Broadcom failed to
carry its burden at trial in demonstrating entitle-
ment to a filing date prior to that of the Burson ref-
erence. We disagree. The record shows that Broad-
com' s expert provided detailed testimony at trial ex-
plaining his basis for concluding that each limita-
tion of the accused claims was present in the 1989
lab notebook, and that he had gone through the
same analysis with respect to the 1993 patent ap-
plications. See J.A. at 1507-11. Although Qual-
comm focuses on the 1993 patent applications on
appeal, it failed to ask Broadcom's expert any ques-
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Page 12
tions about these applications at trial, and its own
expert did not testify on the subject. Indeed, in re-
jecting Qualcomm's post-trial motions, the district
court noted that Broadcom's witnesses "presented
an unrebutted picture of Mahany's conception at
least as early as September 1989 based on Ma-
hany's notebooks and constructive reductions to
practice in May 1993."JMOL Opinion at 9
(emphasis added). Therefore, based on the unrebut-
ted evidence of record, we affirm the jury's verdict
that the Burson reference does not invalidate the '
317 patent as an anticipatory reference. See John-
ston v. IVAC Corp., 885 F.2d 1574, 1581
(Fed.Cir.1989) (noting that " [a]ttorneys' argument
is no substitute for evidence").
2. "Networks"
Qualcomm further argues that the district court er-
roneously failed to construe the term "networks"
and thus left an issue of claim construction to the
jury. See 02 Micro Intl Ltd. v. Beyond Innovation
Tech. Co., 521 F.3d 1351, 1362 (Fed.Cir.2008)
("When the parties present a fundamental dispute
regarding the scope of a claim term, it is the court's
duty to resolve it."). Qualcomm contends that
"network" should be construed as "a plurality of
network devices," rather than "protocols," and that
no substantial evidence supports a finding of in-
fringement because lx and EV-DO are not separate
networks, but merely distinct protocols. Broadcom
responds that Qualcomm waived this argument by
not presenting it to the district court until after the
jury had returned a verdict. Qualcomm first raised
this argument in its post-trial motions, and the dis-
trict court held that "Qualcomm waived any
claimed error by virtue of its failure to offer a pro-
posed construction at or prior to trial."JMOL Opin-
ion at 2 n. 1 (citing Abbott Labs. v. Syntron Biore-
search, Inc., 334 F.3d 1343, 1352 (Fcd.Cir.2003)).
[6] We agree that Qualcomm cannot be allowed to
create a new claim construction dispute following
the close of the jury trial. " [A] party may not intro-
duce new claim construction arguments on appeal

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or alter the scope of the claim construction posi-
tions it took below. Moreover, litigants waive their
right to present new claim construction disputes if
they are raised for the first time after trial."Conoco,
Inc. v. Energy e Envtt. Intl, LC., 460 F.3d 1349,
1358-59 (Fed.Cir.2006) (internal citations omitted).
Qualcomm's eleventh-hour attempt to litigate a
newly minted claim construction controversy falls
squarely within our holding in Eli Lilly & Company
v. Aradigrn Corporation, where a party "never re-
quested that the district court construe any terms in
[the relevant claim] and never offered a construc-
tion of [that claim], " but rather "[o]nly after the
presentation of all of the evidence to the jury ...
even suggest[ed] that claim construction might be
helpful to determine the proper scope of the
claimed invention."376 F.3d 1352, 1360
(Fed.Cir.2004). As in Eli Lilly, we hold that Qual-
comm has waived its right to request a construction
of "networks" and that Qualcomm has thereby im-
plicitly conceded that the meanings of "networks"
is clear and not in need of construction. Id. Qual-
comm ' s reliance on our recent holding in 02 Micro
is misplaced. Unlike in 02 Micro, where the parties
disputed the proper construction of a term at a pre-
trial Markman hearing, 521 F.3d at 1362, Qual-
comm here has failed to offer its proposed con-
struction of "networks" at or prior to trial, and we
reject such arguments raised for the first time after
the jury verdict.
C. The '010 Patent
*9 [7] Qualcomm also argues that substantial evid-
ence does not support the jury's verdict of infringe-
ment with respect to the '010 patent. The jury found
that Qualcomm directly infringed, induced infringe-
ment of, and contributed to the infringement of
claims 1, 2, 3, and 7 of the '010 patent. Claim 1 is
representative and recites, with the relevant portion
emphasized:
A telephone for use with a first network having a
predetermined allocated bandwidth and a second
network having a variable bandwidth, the tele-
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phone comprising: an interface circuit that select-
ively couples to the first and second networks,
the first and second networks operating substan-
tially independent of one another;
a user interface;
processing circuitry, coupled to the user inter-
face and the interface circuit, that directs the
interface circuit to select one of the first and
second networks;
a microphone capable of being selectively
coupled to the first and second networks via the
interface circuit; and
an analog to digital converter that is coupled by
the interface circuit between the microphone
and the second network under the control of the
processing circuitry when the second network
is selected;
wherein the processing circuitry responds to
the user interface to determine which of the
first and second networks to select.
The accused products include CDMA2000 cell
phones with the QChat PTT feature. Using this
technology, cell phone users can choose to either
place a regular voice call, which is routed to the
public switched telephone network ("PSTN")
through the 1x network, or they may use the PTT-
i.e., QChat-feature, which routes calls through the
Internet using the EV-DO network when the user
pushes a separate QChat button on the phone. This
QChat PTT feature allows the cell phone to be used
like a walkie-talkie. At trial, Broadcom successfully
argued that these facts demonstrate that users of
these phones selectively couple to the PSTN and
the Internet-the "first and second networks" for
purposes of this patent.
On appeal, Qualcomm argues that allegedly in-
fringing cell phones using the QChat software do
not "selectively couple" to either the PSTN or to
the Internet because these phones do not "couple"
to any network through a physical electrical con-

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nection, but rather communicate wirelessly and ex-
clusively with the CDMA2000 infrastructure
through either the Ix or EV-DO protocols. Accord-
ing to Qualcomm, it is then the CMDA2000 net-
work equipment that "selectively couples" with
either the PSTN or the Internet. It contends that be-
cause the claims require "an interface circuit that
selectively couples " to both networks, and because
the circuits inside the cell phones only prepare data
and voice packets for transmission, there can be no
infringement.
Broadcom responds that the circuitry in the phone
is the beginning of the electrical pathway to either
network (the PSTN or the Internet) and that the
presence of intermediaries between the cell phone
and the destination networks should not affect in-
fringement because the '010 patent does not require
a direct connection. It further notes that the patent
itself explicitly contemplates the use of wireless
networks. See, e.g., '010 patent col.l 11.41-44
(noting that "this invention relates to the intelligent
routing of packetized voice communication
between telephones and radio terminals through
wireless and hardwired channels in a data pro-
cessing network" (emphasis added)); id. col.2
11.52-56 ("An object of the invention is to provide a
method and apparatus wherein seamless voice and
data communication is provided among both roam-
ing devices within wireless portions of a communic-
ation network and stationary devices within hard-
wired portions of the network."(emphasis added)).
Even if the claims required a direct or physical con-
nection, however, Broadcom also argues that it
presented substantial evidence of infringement un-
der the doctrine of equivalents.
*10 [8] The term "selectively couples" was not
construed by the district court because the parties
agreed to let the ordinary meaning control. In-
fringement was presented to a jury, whose verdict
we review for substantial evidence. See Dawn
Equip. Co. v. Ky. Farms Inc., 140 F.3d 1009, 1014
(Fed.Cir.1998). " In reviewing factual issues for sub-
stantial evidence, the inquiry is whether a reason-
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Page 14
able jury, given the record before it viewed as a
whole, could have arrived at the conclusion it
did. "Id. Here, the jury was presented with more
than adequate evidence upon which it could have
concluded that phones incorporating Qualcomm's
QChat software included "an interface circuit that
selectively couples" to either the PSTN or the Inter-
net. Undisputed testimony at trial established that
phones using the QChat software distinguish
between digitalized voice data being sent to the
PSTN and to the Internet by packaging data into
"voice frames" for traditional phone calls over the
PSTN or by packing this data into "voice packets"
for transmission over the Internet. E.g., J.A. at
2106-07. It is further undisputed "that the chip dif-
ferentiates between voice frames and voice packets
in determining which network to communicate
with.".IMOL Opinion at 15. Qualcomm's own ex-
pert admitted that "[t]here is an interface circuit in-
side the phone, so the interface circuit inside the
phone itself does this framing or packetizing, and
sends it out over a single air interface using two
different protocols."J.A. at 2107. Broadcom's ex-
pert explained to the jury that "[s]elective coupling
doesn't mean that it has to be directly connec-
ted.... It just means that the coupling is electrically
prepared within that interface circuit so that by the
time the work of the network begins they can go to
a proper destination. "Id. at 1393-94.
Although Broadcom's expert stated that "selectively
couple" means "connected electrically," that is, that
"[t]here is an electrical pathway to either the first or
the second network,"id . at 1373, he also testified
that "the coupling ... doesn't mean that it has to at-
tach the [sic] connect physically right next to each
other,"id. at 1397.He further testified that "the in-
terface circuit is within the phone" and that it "is
electrically coupled to the first and the second net-
work" where these networks are the PSTN and the
Internet. Id. Taken as a whole, this record provides
substantial evidence to support a reasonable jury's
conclusion that Qualcomm infringed the '010 pat-
ent.

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In so holding, we reject Qualcomm ' s additional
contentions that Broadcom has presented a post-tri-
al claim construction in contravention of our hold-
ing in Hewlett-Packard Company v. Mustek Sys-
tems, Incorporated, 340 F.3d 1314, 1320-21
(Fed.Cir.2003). As we discussed in connection with
the "network" limitation of the ' 317 patent, supra,
we agree that "where the parties and the district
court elect to provide the jury only with the claim
language itself, and do not provide an interpretation
of the language in the light of the specification and
the prosecution history, it is too late at the JMOL
stage to argue for or adopt a new and more detailed
interpretation of the claim language and test the
jury verdict by that new and more detailed inter-
pretation."Hewlett-Packard, 340 F.3d at 1321. Un-
like the patentee in Hewlett-Packard, however,
Broadcom has not argued for a new claim interpret-
ation. The evidence shows that users of the QChat
feature press a specific button for the express pur-
pose of establishing a PTT connection with another
user. In doing so, QChat users expressly choose
whether to connect through the Internet using the
PTT feature, or to place traditional voice calls
through the PSTN. Qualcomm has not provided
convincing evidence that the ordinary meaning of
"selectively couples " requires a direct or physical
connection, and the jury was entitled to credit the
substantial evidence discussed above, as general as
it may be, in rendering a verdict in favor of Broad-
com.
D. New Trial
*11 Qualcomm argues that the pre-Seagate jury in-
structions, which prompted the district court to set
aside the willfulness verdict based essentially on
Qualcomm ' s not having obtained non-infringement
opinion letters, also require us to overturn the indir-
ect infringement verdicts predicated on specific in-
tent necessary to find inducement under DSU Med-
ical Corporation v. JMS Company, 471 F.3d 1293
(Fed.Cir.2006) (en banc in relevant part). Qual-
comm contends that it did not obtain non-
infringement opinions because it had procured in-
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validity opinions for each relevant patent, although
it elected not to waive attorney-client privilege and
rely on those opinions. Qualcomm also argues that
the indirect infringement verdicts are unsupported
by substantial evidence. In the event we accept
these contentions, Qualcomm further asserts that
we must vacate the damages awards related to the
'317 and '010 patents because the damages were
based solely on indirect infringement activities. Fi-
nally, it argues that because damages and infringe-
ment issues have interwoven factual underpinnings,
retrial should be permitted with respect to all is-
sues.
Broadcom responds that the district court emphas-
ized the same DSU specific intent standard on
which Qualcomm relies, and that the disputed in-
structions regarding opinion-of-counsel letters
properly identified such evidence as one factor to
consider within the totality of the circumstances.
Broadcom contends that opinion-of-counsel letters
remain relevant to the intent inquiry of our induce-
ment precedent, and that Seagate addressed neither
the admissibility of evidence concerning an alleged
infringer's failure to obtain non-infringement opin-
ions, nor the standard for establishing intent to in-
duce infringement. Broadcom further argues that
circumstantial evidence in the record provides sub-
stantial evidence to support the jury' s verdict of in-
duced infringement.
[9][10]"Legal standards given to the jury are re-
viewed without deference to the trial court, whereas
the jury's resolution of factual disputes are re-
viewed to determine whether there is substantial
evidence to support them."Dawn Equip., 140 F.3d
at 1014. "This court reviews the legal sufficiency of
jury instructions on an issue of patent law without
deference to the district court. This Court reviews
jury instructions in their entirety and only orders a
new trial when errors in the instructions as a whole
clearly mislead the jury."DSLI 471 F.3d at 1304
(internal quotation marks and citation omitted). We
turn first to the legal standard.
[11]"In order to prevail on an inducement claim,

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the patentee must establish `first that there has been
direct infringement, and second that the alleged in-
fringer knowingly induced infringement and pos-
sessed specific intent to encourage another's in-
fringement.' " ACCO Brands, Inc. v. ABA Locks
Mfr. Co., 501 F.3d 1307, 1312 (Fed.Cir.2007)
(quoting Minn. Mining & Mfg. Co. v. Chemque,
Inc., 303 F.3d 1294, 1304-05 (Fed.Cir.2002)). The
relevant standard for establishing the intent element
of inducement was clarified by this Court in DSU,
471 F.3d at 1304-06 (en banc in relevant part). In
DSL; we upheld a jury instruction providing that
"[t]he defendant must have intended to cause the
acts that constitute the direct infringement and must
have known or should have known tha[t] its action
would cause the direct infringement." Id. at 1305.In
so doing, we held that "inducement requires evid-
ence of culpable conduct, directed to encouraging
another's infringement, not merely that the inducer
had knowledge of the direct infringer's
activities." Id. at 1306 (citing Metro-Gold-
. Inc. v. Grokster, Ltd, 545 U.S.
913, 936-37, 125 S.Ct. 2764, 162 L.Ed.2d 781
(2005)). We further noted that "[t]he plaintiff has
the burden of showing that the alleged infringer's
actions induced infringing acts and that he knew or
should have known his actions would induce actual
infringements." DSU, 471 F.3d at 1306 (quoting
Manville Sales Corp. v. Paramount Sys., Inc., 917
F2d 544, 553 (Fed.Cir.1990)).
*12 In this case, the district court instructed the
jury, inter alia, as follows:
In order to establish active inducement of in-
fringement, it is not sufficient that the company
that is allegedly induced to infringe itself directly
infringes the claim. Nor is it sufficient that
QUALCOMM was aware of the act(s) that al-
legedly constitute the direct infringement. Rather
you must find that QUALCOMM specifically in-
tended to cause direct infringement of the '317,
'010, and/or @686 patents, in order to find in-
ducement of infringement. That is, you must find
QUALCOMM is aware of the patent, knows or
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Page 16
should have known that the encouraged acts con-
stitute infringement of the patent, and has an in-
tent to cause the encouraged acts.
J.A. at 2194-95 (emphases added). This instruction
is entirely consistent with our guidance in
DSU.Qualcomm objects, however, to the instruc-
tion that followed it:
When considering whether Qualcomm knew of
should have known that the induced actions
would constitute infringement, in the totality of
the circumstances, you may consider all of the
circumstances, including whether or not Qual-
comm obtained the advice of a competent
lawyer.I will explain the significance of advice of
counsel in more detail in a moment.
Id. at 2195 (emphasis added). Following this in-
struction, the district court instructed the jury as to
contributory infringement, and then, in the context
of instructions pertaining to willfulness, the district
court instructed the jury as follows:
In considering whether QUALCOMM acted in
good faith, you should consider all the circum-
stances, including whether or not QUALCOMM
obtained and followed the advice of a competent
lawyer with regard to infringement. The absence
of a lawyer's opinion, by itself, is insufficient to
support a finding of willfulness, and you may not
assume that merely because a party did not ob-
tain an opinion of counsel, the opinion would
have been unfavorable. However, you may con-
sider whether QUALCOMM sought a legal opin-
ion as one factor in assessing whether, under the
totality of the circumstances, any infringement by
QUALCOMM was willful.
Id. at 2199-2200 (emphasis added). This instruction
comports with our holding in Knorr-Bremse
Systeme Fuer Nut?fahrzeuge, GmbH v. Dana Corp.,
where we held that there is not "a legal duty upon a
potential infringer to consult with counsel, such that
failure to do so will provide an inference or eviden-
tiary presumption that such opinion would have
been negative."383 F.3d 1337, 1345 {Fed.Cir.2004)
(en bane).

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[12] Qualcomm argues, however, that the district
court erred in allowing the inducement verdicts to
stand in light of its instruction to consider failure to
obtain an opinion of counsel as a factor in determ-
ining whether Qualcomm had the requisite level of
intent to induce infringement of Broadcom ' s pat-
ents. Qualcomm ' s argument essentially rests on the
proposition that Seagate altered the standard for es-
tablishing the intent element of inducement. Qual-
comm contends that because in Seagate we
"abandon[ed] the affirmative duty of due care " to
avoid infringement and "reemphasize[d] that there
is no affirmative obligation to obtain opinion of
counsel,"497 F.3d at 1371, and because specific in-
tent is a stricter standard than the "objective reck-
lessness " standard adopted in Seagate, evidence not
probative of willful infringement cannot be probat-
ive of specific intent to induce infringement. That
is, Qualcomm argues that opinion-of-counsel evid-
ence is no longer relevant in determining the intent
of an alleged infringer in the inducement context.
We disagree.
*13 Although Qualcomm is correct that there is no
affirmative duty to seek opinion of counsel regard-
ing infringement, and that it is improper to allow an
"adverse inference or evidentiary presumption that
such an opinion would have been
unfavorable,"Knorr-Bremse, 383 F.3d at 1346, it is
incorrect in arguing that Seagate altered the state of
mind requirement for inducement. Our en bane
holding in DSU remains the relevant authority on
that point. Despite Qualcomm's assertion that the
intent standard for inducement is higher than that
for willful infringement, a lack of culpability for
willful infringement does not compel a finding of
non-infringement under an inducement theory.
Qualcomm's argument reflects a misunderstanding
of our holding in DSU.
hile inducement "requires more than just in-
tent to cause the acts that produce direct infringe-
ment," and also requires "that the alleged infringer
knowingly induced infringement and possessed
specific intent to encourage another's infringe-
© 2008 Thomson ReuterslWest. No Claim to Orig. US Gov. Works.
Filed 10/08/2008 Page 20 of 106
Page 17
ment,"DSU, 471 F.3d at 1306, this intent may be
established through circumstantial evidence, see
id.Moreover, "[t]he requisite intent to induce in-
fringement may be inferred from all of the circum-
stances."Water Teehs. Corp. v. Calco, Ltd., 850
F.2d 660, 669 (Fed.Cir.1988). Additionally, we
noted in DSU that this intent may be established
where an alleged infringer who "knew or should
have known his actions would induce actual in-
fringements," is shown to have induced infringing
acts through his actions. 471 F.3d at 1306
(emphasis added) (adopting the same two-part test
articulated in Manville, 917 F2d at 553). That is,
the "affirmative intent to cause direct infringe-
ment,"id., required by DSU may be shown-just as
the jury was instructed in DSU itself-by establish-
ing first that the defendant "intended to cause the
acts that constitute the direct infringement," and
second that the defendant "kn[ew] or should have
known [that] its action would cause the direct in-
fringement,"DSU, 471 F.3d at 1305. Because opin-
ion-of-counsel evidence, along with other factors,
may reflect whether the accused infringer "knew or
should have known" that its actions would cause
another to directly infringe, we hold that such evid-
ence remains relevant to the second prong of the in-
tent analysis. Moreover, we disagree with Qual-
comm's argument and further hold that the failure
to procure such an opinion may be probative of in-
tent in this context. It would be manifestly unfair to
allow opinion-of-counsel evidence to serve an ex-
culpatory function, as was the case in DSU itself,
see 471 Fad at 1307, and yet not permit patentees
to identify failures to procure such advice as cir-
cumstantial evidence of intent to infringe. Accord-
ingly, we find no legal error in the district court's
jury instructions as they relate to inducement.
Thus, the district court did not err in instructing the
jury to consider "all of the circumstances, " nor in
instructing the jury to consider-as one factor-
whether Qualcomm sought the advice of counsel as
to non-infringement. Even if the instructions had
been legally incorrect, Qualcomm failed to suggest
any alternative instructions. To the extent that

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Qualcomm argues that the district court should
have stressed other factors relevant to Qualcomm's
intent to induce infringement, it should have sug-
gested such instructions to the district court. See
NTP, Inc. v. Research In Motion, Ltd., 418 F.3d
1282, 1311-12 (Fcd.Cir.2005) (noting that altering
a jury verdict based on erroneous jury instructions
requires a party to demonstrate, inter alia, that "it
requested alternative instructions that would have
remedied the error").
*14 [14][15][16] Furthermore, we agree with
Broadcom that substantial evidence supports the
jury's verdict of induced infringement. Qualcomm
seems to argue that the jury's verdict cannot stand
because Broadcom failed to produce direct evid-
ence of intent to induce infringement. That is not
the law. "A patentee may prove direct infringement
or inducement of infringement by either direct or
circumstantial evidence. There is no requirement
that direct evidence be introduced, nor is a jury's
preference for circumstantial evidence over direct
evidence unreasonable per se. " Liquid Dynamics
Corp. v. Vaughan Co., 449 F.3d 1209, 1219
(Fed.Cir.2006) (internal citation omitted).
Moreover, "[t]he drawing of inferences, particularly
in respect of an intent-implicating question ... is pe-
culiarly within the province of the fact finder that
observed the witnesses."Rolls-Royce Ltd. v. GTE
Vaieron Corp., 800 F.2d 1101, 1110
(Fcd.Cir.1986); see also Fuji Photo Film Co. v.
Jazz Photo Corp., 394 F.3d 1368, 1378
(Fcd.Cir.2005) (declining to disturb jury 's verdict
because intent to induce infringement "is a factual
determination particularly within the province of
the trier of fact").
Qualcomm does not dispute that it was on notice of
Broadcom's patents and infringement contentions.
And it concedes that it "worked closely with its
customers to develop and support the accused
products, and that Qualcomm did not make changes
to those products or give its customers [instructions
regarding how to avoid infringement] after this law-
suit was filed."Appellant's Supplemental Br. at
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Filed 10/08/2008 Page 21 of 106
Page 18
20-21. Qualcomm also fails to identify evidence in
the record to counter the district court's related ob-
servations pertaining to willfulness: "[T]he totality
of the circumstances presented in the evidence sup-
ports the jury's findings: a failure to investigate, a
failure to explore design around approaches, a fail-
ure to take remedial steps-and, of course, a failure
to seek legal advice. This was sufficient for the jury
to infer a lack of good faith."JMOL Opinion at 8.
Although Qualcomm stresses that it did obtain
opinions of counsel regarding invalidity of the pat-
ents in suit, it concedes that the district court prop-
erly excluded this fact from evidence in light of
Qualcomm' s decision not to waive privilege with
respect to these opinions.
Taken as a whole, this record provides substantial
evidence to support the jury's verdict and is consist-
ent with our precedent. See, e.g., Golden Blount,
Inc. v. Robert H. Peterson Co., 438 F.3d 1354,
1364 n. 4 (Fed.Cir.2006) (noting that it was
"undisputed that Peterson had notice of the patent
... and that Peterson provided [an] instruction sheet
to customers directing them to perform specific acts
leading to the assembly of infringing devices, from
which the district court could draw an inference of
intent"); Mentor H/S, Inc. v. Med. Device Alliance,
Inc., 244 F.3d 1365, 1379 (Fed.Cir2001)
(upholding a jury verdict of induced infringement
where the defendant was aware of the patent yet
chose to continue selling products designed spe-
cifically for use in an infringing manner, where it
was apparent that the jury discredited the defend-
ant's assertion that it relied upon a non-in-
fringement opinion letter in good faith). Thus, we
will not disturb the jury's inference that Qualcomm
possessed the specific intent necessary to induce
the infringement of Broadcom's patents.
*15 Because we do not agree that a new trial on in-
ducement is warranted, we need not consider Qual-
comm's arguments regarding liability and damages
issues allegedly interwoven with the inducement
claim.

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E. Permanent Injunction
[17] Finally, Qualcomm argues that Broadcom is
not entitled to the permanent injunction issued by
the district court. Qualcomm asks us to vacate the
injunction against Qualcomm CDMA2000 products
based on the four-factor test outlined in eBay Inc. v.
MercExchange, L.L.C., 547 U.S. 388, 126 S.Ct.
1837, 164 L.Ed.2d 641 (2006). Qualcomm argues
that because Broadcom makes WCDMA chips, not
CDMA2000 products like Qualcomm, it could not
have established irreparable injury from Qual-
comm' s sale of CDMA2000 chips. Similar argu-
ments are made with respect to the QChat software,
because Broadcom does not offer a PTT product.
Qualcomm contends that Broadcom's license agree-
ment with Verizon demonstrates that monetary
remedies may adequately compensate it for in-
fringement injuries. It further argues that the dis-
trict court clearly erred in balancing the hardships
because the injunction will disrupt Qualcomm ' s on-
going business model with CDMA carriers and be-
cause the sunset provisions do not allow sufficient
time to develop design-around technology. Finally,
Qualcomm contends that the public interest factor
should weigh in its favor because of the risk to
downstream carriers that rely on Qualcomm's
CDMA2000 technology, especially carriers like
Sprint that will suffer significant disadvantages as
compared to Verizon, which has a license with
Broadcom. An amicus brief filed by Sprint presents
similar arguments, and primarily contends that the
district court should have considered an ongoing
royalty in product areas in which Broadcom does
not participate, such as PTT technology and
CDMA2000 chips in general. See Paice LLC v.
Toyota Motor Corp., 504 F.3d 1293, 1314
(Fed.Cir.2007) (noting that "[u]nder some circum-
stances, awarding an ongoing royalty for patent in-
fringement in lieu of an injunction may be appro-
priate").
Broadcom responds that the district court took the
factors identified by Qualcomm into account and
found persuasive several public statements by
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Page 19
Qualcomm and its downstream customers indicat-
ing that design-arounds were in the works, suggest-
ing that the impact of the injunction was not critic-
al. Broadcom argues that-irrespective of whether it
sells identical products or chipsets under the same
protocols-it competes indirectly with Qualcomm
based on the nature of the market, and that Qual-
comm has admitted that fact in other contexts. It
contends that its business model of generally not li-
censing its patent portfolio favors injunctive relief,
and that its license with Verizon was designed to
ameliorate the impact of an injunction and in any
case cannot be compared to a license with a direct
competitor like Qualcomm. It also argues that sun-
set provisions' allowance of infringement for up to
twenty months after the jury verdict adequately ad-
dresses concerns related to the balance of hardships
and public interest.
*16 [18]"[W]e review a district court's decision to
grant an injunction and the scope of that injunction
for abuse of discretion. "Joy Techs., Inc. v. Flakt,
Inc., 6 F.3d 770, 772 (Fed.Cir.1993).
According to well-established principles of
equity, a plaintiff seeking a permanent injunction
must satisfy a four-factor test before a court may
grant such relief. A plaintiff must demonstrate:
(1) that it has suffered an irreparable injury; (2)
that remedies available at law, such as monetary
damages, are inadequate to compensate for that
injury; (3) that, considering the balance of hard-
ships between the plaintiff and defendant, a rem-
edy in equity is warranted; and (4) that the public
interest would not be disserved by a permanent
injunction.
eBav, 547 U.S. at 391. Here, the district court
provided a well-reasoned and comprehensive opin-
ion addressing injunctive relief, in which it accoun-
ted for the unique issues presented by the various
patents and the infringing products and each of the
factors re-affirmed in eBay. We address each factor
in turn.
Case 5:00-cv-20905-RMW Document 3865
--- F.3d ----, 2008 WL 4330323 (C.A.Fed.)
1. Irreparable Injury
Qualcomm argues that because Broadcom does not
sell or plan to sell CDMA2000 chips, it cannot al-
lege harm resulting from Qualcomm's CDMA200
chip sales and that Broadcom's arguments on this
point amount to no more than speculative, unsub-
stantiated assertions of harm. Similarly, Qualcomm
argues that Broadcom's lack of a PTT product pre-
cludes a finding of irreparable injury stemming
from the sale of products featuring the QChat soft-
ware. Qualcomm also argues that Broadcom's li-
cense to Verizon-a COMA carrier-undermines its
claim of irreparable injury.
Broadcom argues that Qualcomm itself has admit-
ted that it competes indirectly with Broadcom, des-
pite offering different technology in its chipsets.
Broadcom also contends that the district court cor-
rectly considered Broadcom's general policy of not
licensing its patents and the harm that would ensue
from a compulsory license to its most significant
competitor. Broadcom further argues that it entered
into a license agreement with Verizon, in part, to
minimize the potential impact of an injunction to
third parties or consumers while Qualcomm designs
around Broadcom's patents.
The district court found that this factor weighed in
favor of an injunction with respect to both the '317
and '010 patents. Injunction Opinion at 10, 15. It re-
mains an open question "whether there remains a
rebuttable presumption of irreparable harm follow-
ing eBay, "Amado v, Micros/di Corp.. 517 F.3d
1353, 1359 n. I (Fed.Cir.2008), but the district
court did not abuse its discretion in finding irrepar-
able injury here even if Broadcom benefits from no
such presumption. The district court explained that
the evidence at trial demonstrated that
[t]he market for baseband chips is unlike the typ-
ical market for consumer goods where competit-
ors compete for each consumer sale, and the com-
petition is instantaneous and on-going.... Compet-
ition for sales is not on a unit-by-unit basis, but
rather competition is characterized by competing
© 2008 Thomson Reuters/West. No Claim to Orig. US Gov. Works.
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Page 20
for "design wins " for the development and pro-
duction of cell phones which will embody the
proposed chip.... In this kind of a market, the ex-
clusion has a competitive effect on a firm even if
it does not have an immediately available
product.
*17 Injunction Opinion at 5-6. And as identified by
Broadcom, Qualcomm has previously conceded this
indirect competition. E.g„ J.A. at 7785 n. 7 ("Any
cell phone customer who has chosen between, e.g.,
Cingular (GSM) and Verizon (COMA) service
knows that handsets and thus chipsets do compete
and thus `substitute' across standards.").
Thus, Broadcom provided evidence of irreparable
harm, despite the fact that it does not currently
practice the claimed inventions. This result is con-
sistent with eBay, in which the Supreme Court cau-
tioned that "traditional equitable principles do not
permit such broad classifications" as presuming
that a patentee cannot establish irreparable harm
based on a patentee's "willingness to license its pat-
ents" or "its lack of commercial activity in practi-
cing the patents."547 U.S. at 393;see also Rite-Hite
Corp. v. Kelley Co., 56 F.3d 1538, 1547
(Fed,Cir.1995) (en bane) (noting that "[t]here is no
requirement in this country that a patentee make,
use, or sell its patented invention" (citing Conti
Paper Bag Co. v. E. Paper Bag Co., 210 U.S. 405,
424-30, 28 S.Ct. 748, 52 L.Ed. 1122 (1908))). Al-
though we recently upheld a district court's denial
of a permanent injunction where the patentee "had
attempted to prove irreparable injury by alleging ir-
reparable harm to his exclusive licensee, rather than
himself," we noted that "patent owners that license
their patents rather than practice them `may be able
to satisfy the traditional four-factor test' for a per-
manent injunction."Voda v. Cordis Corp., 536 F.3d
1311, 1329 (Fed.Cir.2008) (first emphasis added)
(quoting eBay, 547 U.S. at 393). Reliance on Voda
is misplaced in this case because Broadcom does
not rely on harm to others, but rather alleges that its
own commercial activities will be irreparably in-
jured by Qualcomm's infringing activity. As such,

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the district court did not abuse its discretion in find-
ing that allowing Qualcomm to sell CMDA2000
chips implementing Broadcom's patented features
would harm Broadcom's efforts to market WCDMA
solutions. See Injunction Opinion at 15.
2. Lack of Adequate Remedy at Law
As with the irreparable injury prong of the analysis,
the district court found that this prong weighed in
favor of an injunction with respect to all of the in-
fringed patents. Id. at 11, 17.Qualcomm relies
primarily on the Verizon license agreement as evid-
ence that Broadcom can be adequately compensated
by monetary damages. Broadcom responds that the
Verizon agreement provided many non-monetary
benefits to Broadcom, such as the formation of a
strategic business alliance, and that a license to
Qualcomm's customer is of limited probative value
as to its willingness to enter into a similar such
agreement with its direct competitor.
We agree with Broadcom that the district court did
not abuse its discretion here, particularly in light of
its findings that "the structural nature of a `design
win' market favors a finding that monetary dam-
ages are inadequate."Id. at 16.We also agree that
the Verizon license has little bearing on the effect
of a compulsory license to a direct competitor, par-
ticularly in light of these market realities. Addition-
ally, while Broadcom's damages expert testified
that any comparison of Qualcomm's lost profits
based on an injunction to Broadcom's potential gain
would be "almost pure speculation at this point,"
J.A. at 3217, this difficulty in estimating monetary
damages reinforces the inadequacy of a remedy at
law. Cf. Jacobsen v. Katzer, 535 F.3d 1373, 2008
WL 3395772, at *6 (Fed. Cir. Aug 13, 2008)
(noting, in the copyright license context, that
"because a calculation of damages is inherently
speculative, these types of license restrictions might
well be rendered meaningless absent the ability to
enforce through injunctive relief").
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Page 21
3. Balance of Hardships
*18 The district court acknowledged the harm in-
flicted on Qualcomm through a permanent injunc-
tion, but held that "with a sunset provision which
ameliorates the negative effects on Qualcomm, the
balance of hardships favors Broadcom" with re-
spect to the '317 patent. Injunction Opinion at 16. It
found this factor to be neutral regarding the '010
patent. Id. at 10.At the outset, we note that "[o]ne
who elects to build a business on a product found to
infringe cannot be heard to complain if an injunc-
tion against continuing infringement destroys the
business so elected. " Windsurfing Int'l, Inc. v. AMP,
Inc., 782 F.2d 995, 1003 n. 12 (Fed.Cir.1986). We
agree with the district court that Qualcomm should
not be permitted to prevail on a theory "that suc-
cessful exploitation of infringing technology
shields a party from injunctive relief,"Injunction
Opinion at 16, but in any event we find this factor
to be neutral at best in light of the district court's
carefully constructed sunset provisions. The district
court provided for a twenty-month sunset provision
from the date of the May 2007 jury verdict. See id.
at 12, 18.This does not amount to an abuse of dis-
cretion, particularly in light of the district court's
finding that "the time line from a `win' to actually
bringing the product to the consumer is about 18
months,"id. at 5, and in light of the fact that Qual-
comm could have-and in fact may have-begun
design-around efforts upon receipt of the complaint,
which Broadcom filed more than two years prior to
the jury verdict.
4. Public Interest
The district court found that although it is generally
in the public interest to uphold patent rights, see
generally Rite-Hite, 56 F.3d at 1547,"an immediate
permanent injunction would adversely affect the
public" with respect to the '010 patent, Injunction
Opinion at 9, and that "an immediate permanent in-
junction would adversely affect network carriers
and handset manufacturers that currently employ
chips which infringe the '317 Patent in their


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--- F.3d ---- Page 22
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products,"id. at 17.However, the district court held

that the aforementioned sunset provisions "balance[
] the policy of protecting the patentee's rights
against the desirability of avoiding immediate mar-
ket disruptions."Id. at 18.We agree that the sunset
provisions mitigate the harm to the public and that
the district court did not abuse its discretion in fash-
ioning a remedy that protects Broadcom's rights
while allowing Qualcomm time to develop non-
infringing substitutes. See Verizon Servs. Corp. v.
Foliage Holdings Corp., 503 F.3d 1295, 1311 n. 12
(Fed.Cir.2007) (noting that a sunset provision
would have allowed time for an infringer to imple-
ment non-infringing substitutes).

***

In sum, the district court did not abuse its discretion

in issuing the permanent injunction against Qual-
comm. However, we reverse the injunction and
damages award as they pertain to the '686 patent
and remand to the district court so that the injunc-
tion and damages may be adjusted in light of our
reversal of the jury verdict of infringement.

HI. CONCLUSION

*19 For the above reasons, we conclude that the

district court erred in construing claim 3 of the '686
patent, which we hold is invalid under the proper
construction; that substantial evidence supports the
jury's findings of infringement and validity as to the
'317 and '010 patents; and that the district court did
not abuse its discretion in issuing a permanent in-
junction. Thus, its judgment is

AFFIRMED-IN-PART, REVERSED-IN-PART, and

REMANDED.

C.A.Fed.,2008.
Broadcom Corp. v. Qualcomm Inc.
--- F.3d ----, 2008 WL 4330323 (C.A.Fed.)

END OF DOCUMENT

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Exhibit B


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Case 8:05-cv-00467-JVS-RNB Document 996 Filed 12/31/2007 Page 1 of 24

6
UNITED STATES DISTRICT COURT
7
CENTRAL DISTRICT OF CALIFORNIA
8

10
CASE NO:

11
BROADCOM CORPORATION, SACV 05-467 JVS (RNBx

12
Plaintiff,
MEMORANDUM OF DECISION RE
13
v. INJUNCTIVE RELIEF
14

15
QUALCOMM INCORPORATED,
16
Defendant.
17

18

19
This action was brought by Broadcom Corporation ("Broadcom") against
20
Qualcomm Incorporated ("Qualcomm") for alleged infringement of United States
21
Patents 5,657,317 ("317 Patent"), 6,847,686 ("686 Patent"), and 6,389,010
22
("`010 Patent"), each owned by Broadcom. After a four-week trial, the jury
23
returned verdicts in favor Broadcom for direct infringement and inducing
24
infringement, and on other theories. (Docket No. 868.) Following post-trial
25
motions and a motion for reconsideration in light of In re Seagate Technology,
26
LLC, 497 F.3d 1360 (Fed. Cir. 2007), the verdicts on the direct infringement and
27

28 1


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Case 8:05-cv-00467-JVS-RNB Document 996 Filed 12/31/2007 Page 2 of 24

1 induced infringement claims stand.' (Minute Order, Aug. 10, 2007, Docket No.
2 805; Minute Order, Nov. 21, 2007, Docket No. 983.)
3

4 On August 14-16, 2007, the Court conducted an evidentiary hearing on

5 injunctive relief, and thereafter invited the parties to submit proposed findings of
6 fact and conclusions of law. Both parties now ask the Court to grant equitable

7
relief, but take different approaches. Broadcom proposes that the Court impose a

8
mandatory license on a limited set of Qualcomm products which infringe the `686
and `317 Patents for a "sunset period" of 18 months, but otherwise and thereafter
9
enjoin infringement of these patents. With regard to the `010 Patent, Broadcom
10
proposes an immediate permanent injunction with no exception. Qualcomm
11
invites the Court to impose a mandatory license in an amount treble the reasonable
12
royalty implicitly found by the jury in its award of damages under each patent;
13
with the exception of certain products which infringe the `868 Patent, no injunctive
14
relief would issue.
15

16
With resolution of the injunctive relief issues delayed because of the
17
intervening motion for reconsideration in light of Seagate, the Court now enters its
18
ruling. The Court first summarizes the applicable standards, and then turns to the
19
patents in issue. Because to the `010 Patent presents separate and unique
20 considerations, the Court treats that patent first, and then the remaining patents.
21

22 Today the Court enters a Permanent Injunction which permits Qualcomm to

23 continue infringement of the patents in suit for a "sunset period" ending January
24

25
' On reconsideration, the Court determined that the jury's findings of wilfulness could
26 not stand, and offered Broadcom the opportunity to retry all claims, or to simply accept the
verdicts on the direct infringement and inducement claims. (Minute Order, Nov. 21, 2007,
27 Docket No. 983, at p. 9.) Broadcom chose the latter course. (Docket No. 984.)
28 2


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31, 2009 on the condition of payment of a mandatory royalty and thereafter enjoins
2 all infringement of the patents in suit.
3
4 I. Legal Standard.
5

6 Any discussion of the grant of injunctive relief in a patent case, necessarily

7 begins with the Supreme Court's recent affirmation of the traditional requirements
for injunctive relief in eBay Inc. v. MercExchange, L.L.C., U.S. _, 126 S.Ct.
8
1837, 1839 (2006):
9
10
According to well-established principles of equity, a plaintiff seeking a
11
permanent injunction must satisfy a four-factor test before a court may grant
12
such relief. A plaintiff must demonstrate: (1) that it has suffered an
13
irreparable injury; (2) that remedies available at law, such as monetary
14
damages, are inadequate to compensate for that injury; (3) that, considering
15
the balance of hardships between the plaintiff and defendant, a remedy in
16
equity is warranted; and (4) that the public interest would not be disserved
17
by a permanent injunction.
18
19 As the court noted, "These familiar principles apply with equal force to disputes
20 arising under the Patent Act." (Id.)
21

22 The grant or denial of permanent injunctive relief is committed to the

23 equitable discretion of the Court. (Id.)
24

25 In fashioning injunctive relief, the Court has the power under appropriate
26 circumstances to permit continued infringement upon on-going payment of a
27 mandatory royalty. Paice LLC v. Toyota Motor Corp., 504 F.3d 1293, 1314 (Fed.
28 3


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1 Cir. 2007).
2

3 II. Characteristics of the Market for Chips for Cellular Communications.

4

5 The Court finds that there are three factors in the market for cellular

6 communications chips which affect the analysis here. First, Broadcom and

7
Qualcomm are competitors. Second, competition in the main is based on "design
wins," rather than discrete sales. Third, Broadcom and Qualcomm have important
8
but different licensing strategies for maximizing the value of their patent
9
portfolios.
10

11
A. Competitors.
12

Both Broadcom and Qualcomm offer baseband chips for

telecommunications, and characterize each other, both in internal documents and in
public documents, as competitors. But the observation requires qualification.

The evidence at trial identified two generations of chips: 2G chips for GSM
networks and 3G chips for WCDMA and CMDA networks. Each generation
19 offers greater function, but there is also competition across generations. 2 Both
20 Broadcom and Qualcomm offer GSM and WCDMA chips. Only Qualcomm
21 currently offers CDMA chips which support the EV-DO network. Broadcom and
22 Qualcomm compete for increasingly popular needs for multimedia products and
23 multiple network products.
24

25
2 This competition also occurs at the handset level when a consumer chooses among
26 competing network carriers offering 2G and/or 3G technology in their cell phone offerings (for
example Cingular with GSM vs. Verizon with CDMA).
27

28 4


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1 That Broadcom does not currently offer plug-for-plug replacements for

Qualcomm's CDMA chips may affect the degree of competition, but it does not
3 change the fact that both firms compete in the same market. The same could be
4 said of those instances where a competitive Broadcom offering might consist of
5 less desirable, multiple-chip solutions to replace a single Qualcomm chip.

The significance of competition is that Broadcom is exploiting, and has the

7
ability to exploit, its intellectual property by bringing products to market which
8
will benefit consumers. Its patent portfolio is not a sterile one which sits idle, even
9
if it does not currently have products offering each of the patents in suit.
10

11
B. The Form of Competition.
12

1
The market for baseband chips is unlike the typical market for consumer
14
goods where competitors compete for each consumer sale, and the competition is
15
instantaneous and on-going. The principal customers for chips in cell phones are
16
the cell phone manufacturers and the network carriers. Competition for sales is not
17
on a unit-by-unit basis, but rather competition is characterized by competing for
18 "design wins" for the development and production of cell phones which will
19 embody the proposed chip. The evidence at trial indicated that the time line from a
20 "win" to actually bringing the product to the consumer is about 18 months. In the
21 interim, the customer requirements which fostered competition have been met.
Rather than unit-by-unit competition which is essentially granular, the competition
is episodic.

The fact that at any given moment that a firm may not be offering a product
which embodies a particular patent takes on a different significance in such an
episodic market. A successful firm not only wins a sale, but by doing so also
28 5


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1 procures a blocking position that immunizes it for a period of time from

2 competitive products which may be brought to market following the "design win." 3
3 In this kind of a market, the exclusion has a competitive effect on a firm even if it
4 does not have an immediately available product.
5

6
C. Broadcom's and Qualcomm's Licensing Practices.

7
Broadcom has pursued a policy of not generally licensing its patents. The
8
film has determined that it best protects its intellectual property through the patent
9
system, and then by maintaining tight control over its property. But there are
10
exceptions.
11

12
Broadcom has used licensing as a tool to settle pending or threatened
13
litigation, but has generally done so through portfolio-wide cross-licenses. It has
14
not licensed key technology on a patent-by-patent basis.
15

16
Earlier this year, Broadcom entered into a license agreement with Verizon
17 covering the patents in suit here plus several related patents. (PTX 2002.) Verizon
18 is not a competitor of Broadcom, and the purpose of the license to was allow
19 Verizon to have handsets built to its specifications which would otherwise infringe
20 Broadcom's patents. Two aspects of the agreement distinguish it. First, part of the
21
22 'As Qualcomm notes in its proposed Finding of Fact No. 58:

23 Once an OEM [handset manufacturer] has selected the baseband chip around
which a particular handset model will be built, other chip manufacturers no longer
24 have an opportunity to compete for sales of baseband chips for inclusion in that
handset model.
25

26 This is not necessarily untoward, in the same sense that the antitrust laws recognize that all
contracts impose restraints, but not necessarily unreasonable restraints violative of the antitrust
27 laws.
28 6


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1 consideration which Verizon offered was withdrawal of its opposition to a

proceeding before the International Trade Commission which involved related
3 patents. Second, the parties agreed to pursue a strategic business alliance.
4

5 The parties agreed to a $6 per handset royalty with a $200 million cap over

6 the life of the agreement. While the agreement is a substantial one, it is also not

7
typical.

8
Qualcomrn has taken a different approach to its patent portfolio. Licensing
9
is a major part of its business strategy. Licensing revenues produce over half its
10
profits and a third of its revenues. Qualcomm has licensed its portfolio more than
11
140 times. In litigation, including litigation with Broadcom, and in public filings,
12
Qualcomm has repeatedly stressed the commercial importance of enforcing its
13
patent rights through injunctive relief where it is unable to license.
14

15
The common thread is that each firm's patent portfolio has substantial value,
which each has chosen to exploit in a different fashion.

The `010 Patent.

Through hardware and associated software, the `010 Patent facilitates a

Push-to-Talk ("PTT") function in cell phones. Qualcomm infringes the patent
22 through its QChat software in combination with its MSM baseband chips.
23 Following several years of joint development work with Qualcomm, Sprint intends
24

25
'To be sure, the ultimate fruits on such an alliance are not easy to predict at the outset,
26 and the work of a joint Broadcom-Verizon task force may well cease after the one year
commitment. But it is nevertheless significant that one of the major network carriers has chosen
27 Broadcom's technology and chosen to pursue projects of mutual benefit.

28 7


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1 to offer QChat-based PTT service beginning in 2008. Broadcom's and

2 Qualcomm's proposals are in stark contrast, and invite the Court to chose between
3 a permanent injunction and an on-going mandatory royalty with no injunction.
4

5 For the reasons set forth below, the Court adopts a thirteen-month "sunset"

6
provision with a payment of a royalty, after which Qualcomm will be permanently
enjoined from infringing the patent. The Court considers the factors which govern
7
the grant of relief.
8

9
A. Public Interest.
10

11
The issue of the public interest is the most salient consideration with respect
12
to the appropriateness of injunctive relief under the `010 Patent. The record
13
indicates that Sprint, a major provider of cell phone service in the United States,
14
has spent over $2 billion in upgrading its network, partially in anticipation of
15
bringing its QChat-based PTT service to market in 2008. These efforts have
16
included modification of more than 20,000 cellular telephone towers. One of the
17 main reasons why Sprint incurred the expenses to upgrade its net work to EV-DO
18 revision A was to support QChat.
19

20 The PTT service is a cutting edge service. The availability of such a service
21 is highly desired by consumers and of benefit to them. QChat has technological
22 advantages over other services, including scalability, reduced call setup latency,
and increased reliability. It is not a "small component" in the analysis for
24 injunctive relief. eBay, 126 S.Ct. at 1842 (Kennedy, J., concurring).
25

26 Broadcom argues that an injunction would not adversely affect the public
27 because there are alternative services. Presently, Sprint offers a similar service
28 8


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known as iDEN which it obtained through its acquisition of NexTel. Sprint

currently has 20 million subscribers for this service. However, the iDEN network
3 is facing capacity constraints unless it trades increased capacity for degraded
4 service.
5

6
It is generally in the public interest to uphold patent rights. Rite-Hite Corp.
v. Kelley Co., Inc., 56 F.3d 1538, 1547 (Fed. Cir. 1995) (en banc). However, the
7
Court finds that an immediate permanent injunction would adversely affect the
8
public because it would remove a beneficial, cutting-edge service from the reach of
9
millions of consumers. This factor weighs against the grant of such relief.
10

11
B. Irreparable Injury.
12

13
Broadcom does not presently offer a product embodying the technology of
14
the `010 Patent, but its current designs provide for "hooks" which will support
15
PTT. The Court agrees with Qualcomm that Broadcom is not likely to suffer any
16
immediate irreparable injury in terms of direct replacement sales. However, this
17 overlooks the fact that one need not necessarily be a direct competitor in order to
18 secure an injunction. eBay, 126 S.Ct. at 1840; Commonwealth Scientific and
19 Industrial Research Organisation v. Buffalo Technology Inc., 492 F.Supp. 2d 600,
20 605 (E.D. Tex. 2007). Moreover, one needs to take into account the exclusionary
21 effect on future competition inherent in the "design-win" nature of the market s
22 This factor may favor Qualcomm in the short run, but also favors Broadcom over
23 the long run. In addition, there is injury to Broadcom's right to enforce its
24 exclusionary right to manage its patent portfolio in accordance with its chosen
25 strategy. Hybritech Inc. v. Abbott Laboratories, 849 F.2d 1446, 1456 (Fed. Cir.
26
5 This is so even if Broadcom does not have present plans to offer a product embodying
27 the `010 patent.
28 9


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1 1988); MGM Well Services, Inc. v. Mega Lift Systems, LLC, 505 F.Supp. 2d 359,
378-79 (S.D. Tex. 2007); Novozymes A/S v. Genencor Int'l, Inc., 474 F.Supp. 2d
3 592, 612 (D.Del. 2007).
4

5 The Court finds that this factor tips in favor of the grant of an injunction.
6

7 C. Balance of Hardships.

8
Broadcom points to no immediate hardships other than denial of its right to
9
control its patent and the effect on its ability to compete with the products which it
10
does offer. However, Broadcom would also sustain harm in its ability to compete
11
meaningfully in design competitions to the extent it may wish to exploit the `010
12
Patent. That said, the possibility of immediate economic hardship appears modest
13
on the present record.
14

Qualcomm notes that an injunction would affect its relationships with Sprint
and handset manufacturers, its so-called OEM customers, and that, even with a
sunset provision, would cost Qualcomm over $200 million in revenues. But one
must keep in mind that the loss stems from the fact of infringement. In addition,
Qualcomm asserts that the prospect for development of "design arounds" for the
`010 Patent are uncertain. However, the Court gives little credit to this disclaimer
21 in light of the technical talent which Qualcomm possesses and the obvious
22 advantage to Qualcomm in the present context of doubting its own capabilities.
23

24 The Court finds that this factor is neutral.

25

26 D. Adequacy of Monetary Compensation.

27

28 10


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1 Broadcom has long had a policy of not licensing its patent portfolio outside
2 the context of resolving litigation or entering into cross licenses. The grant of an
3 injunction under the `010 Patent would preserve its business strategy.
4

5 On the other hand, Qualcomm points to two major considerations that

6 suggest that Broadcom's own conduct with respect to the `010 Patent, as well as

7 each of the patents in suit, demonstrates that monetary compensation is adequate.

First, Broadcom has offered to license Qualcomm the technology in issue here,
8
albeit as part of a larger cross-licensing scheme. Second, after the return of the
9
jury verdict, Broadcom agreed to license the patents in issue here to Verizon,
10
another major cellar services provider.
11

12
Broadcom discounts this evidence, and in the Court's view, for good reason.
13
A willingness to licence a competitor as part of a broad cross-license arrangement
14
where resolution of litigation is a major incentive is not the same as the willingness
15
to grant a competitor, who is also the dominant firm in at least the CDMA portion
16
of the communications chip market, a license which will only serve to improve
17
unilaterally the competitor's position. Moreover, even where there is "a pattern of
18 granting licenses," the need for injunctive relief is not necessarily negated.
19 MercExchange, L.L.C. v. eBay, Inc., 500 F.Supp.2d 556, 571 (E.D. Va. 2007).
20
21 The Verizon license is not informative. Venzon is a customer not a
22 competitor, and Verizon' s desire to avoid prospective infringement claims in light
23 of the jury's verdict is obvious.
24

25 This factor tips in favor of Broadcom.

26

27

28 11


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1 E. Remedy.

3 The Court believes the that public interest considerations represent the
4 dominant factor in the analysis of the `010 Patent. While the Court has considered
5 the other factors, they do not outweigh the conclusion that the public interest
6 would not be served by the grant of an immediate permanent injunction under the

7
`010 Patent. Nevertheless, Broadcom is entitled to relief.

8
In fashioning relief, the Court takes note that there is existing PTT
9
technology in the market place, and that if required to do so Qualcomm could
10
simply disable the infringing features of its chips which support QChat. The Court
11
also notes that the design cycle is about 18 months. The evidence at the hearing on
12
injunctive relief indicated that while Qualcomm had not previously explored
13
"design arounds" to avoid infringement, it began that task promptly after the jury
14
returned its verdict on May 29, 2007. From this, the Court concludes that
15
consumers would never be entirely deprived of PTT technology, and that there is a
16
reasonably definable window within which Qualcomm can cure the infringing
17
aspects of its QChat products. The logic of an 18-month window is also confirmed
18
by Qualcomm proposed sunset period for its infringing `686 chip offered for
19 WCDMA applications. (Qualcomm [Proposed] Order, ¶'J 1(c) iv))
20
21 Accordingly, the Court orders that Qualcomm may continue to trade in the
22 infringing devices through January 31, 2009. This amounts to a 20-month sunset
23 provision from the date of the May 2007 jury verdict. Given the delays in
24 resolving the injunctive relief issues and the fact that Qualcomm has already
25 embarked on "design around" efforts, the Court finds that a January 2009 sunset
26 date is reasonable.
27

28 12


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1 Within the framework of a sunset provision, the Court must determine how
2 to define the scope of permissible sales: by handsets incorporating the infringing
3 products or by the infringing products themselves. ' The Court believes that a
4 limitation based on handsets available on May 29, 2007 would have an adverse
5 effect on network carriers and handset manufacturers that would be adverse to

6
consumers and the public interest. The Court believes that a preferable definition
is to limit the scope of permissible sales to infringing products for which
7
Qualcomm had in fact made sales as of May 29, 2007 and to customers to whom
8
Qualcomm had sold the infringing products as of the same date. This definition
9
acknowledges third-party reliance and investment based on the availability of
10
QChat technology,' but curtails further exploitation of the infringing products.
11
12
From the date of the verdict through the termination of the sunset period,
13
Qualcomm shall pay a mandatory royalty.' Qualcomm proposes a separate royalty
14
rates for its infringing products and for associated QChat software licenses
15
(Qualcomm [Proposed] Order, '[N 5(b), (c).); Broadcom has not made a proposal
16
consistent with its view that only a permanent injunction will suffice. As
17 suggested by Paice, 504 F.3d at 1314, the Court believes that the parties ought to
18 have an opportunity to negotiate. ' By February 29, 2008, the parties shall either
19

20
'In its proposed relief under the `686 and `317 Patents, Broadcom defines the permissible
21 scope in terms of handsets incorporating infringing products.

22 'Sprint handset suppliers have a number of handsets in development using chips

infringing the `010 patent which have not been brought to market which would otherwise be
23 excluded.

24 'While mandatory royalties may be disfavored, Commonwealth Scientific, 492 F.Supp.

2d at 604-05; Transocean Offshore Deepwater Drilling, Inc. v. GlobalSantaFe Corp., 2006 WL
25 3813778 at *5 (S.D. Tex. Dec. 27, 2006), Broadcom itself recognizes the legitimacy of such a
royalty in the context of a sunset scenario.
26
"This is particularly so for the `010 Patent in view of the fact that the trial record
27 encompass no evidence of a reasonable royalty on infringing products.

28 13


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1 file a proposed stipulated amendment to the Permanent Injunction which the Court
2 enters today setting forth an agreed royalty or set of royalties, or present
3 simultaneous opening briefs on the issue of the appropriate mandatory royalty and
4 simultaneous reply briefs ten days thereafter.
5

6 IV. The `317 and `686 Patents.

7
The Court considers injunctive relief under the `317 and `686 Patents
8
together because the analysis is similar for both. 10
9

10
A. The Patents.
11

12
The `317 Patent teaches a baseband chip that facilitates cellular
13
communications on two networks simultaneously, and reliable handoff of
14
communications between networks. The leading example of this technology is
15
Verizon's service which is based on two networks, lx and EV-DO. The record
16
establishes that these are important functions in cellular communications.
17

18 The `686 Patent teaches a chip that provides high performance video
19 functionality for cell phones operating on 2G and 3G networks. The ability to
20 transmit video rapidly is a popular consumer feature, and only likely to become
21 more popular as the technology is applied more widely to new demands such as
22 video conferencing.
23

24 The capabilities offered by both the `317 and `686 Patents are important
25 features in the phones which employ the technology. This is so even if a typical
26

27 °See Qualcomm's Proposed Finding of Fact, Section VII.

28 14


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1 handset encompasses far more components; they are not merely suspect "small
component[s]." eBay, 126 S.Ct. at 1842 (Kennedy, J., concurring)
3

4 The Court turns to the factors governing the grant of injunctive relief.
5

6 B. Irreparable Harm

8
Broadcom claims irreparable harm to its right to control the licensing of its
intellectual property. It cannot claim harm to sales of CDMA chips because it
9
currently does not offer such chips, nor can it claim harm from allowing
competitive products with the video functions of the `686 Patent where again it
does not offer a product which exploits the patent. But Broadcom can claim other
forms of competition in the marketplace which would be adversely affected. See
Section II.A, supra. Specifically, Broadcom's ability to compete with product
offerings in the WCDMA market would be affected if Qualcomm is allowed to
offer Broadcom's patented features which would be significant in choosing
16
between WCDMA solutions and CDMA solutions.
17

18
This factor weighs in favor of Broadcom.
19

20 C. Balance of Hardships.,
21

22 The hardship of a mandatory license to Broadcom lies mainly in the effect

23 on its licensing policy and the its ability to compete on the basis of the chips it does
24 offer.
25

26 Qualcomm's claim of hardship rests principally on revenues and profits it

27

28 15


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1 would lose if it were forced to cease sales of the infringing products. " The
2 argument as made here borders on a contention that successful exploitation of
3 infringing technology shields a party from injunctive relief, and the more
4 successful it is, the more it should be shielded.' Smith & Nephew, Inc. v. Synthes
5 (U.S.A.), 466 F.Supp. 2d 978, 984 (W.D. Tenn. 2006). The overall financial
6 impact on Qualcomm as an on-going business is modest, and has been publicly

7 discounted by Qualcomm itself. Black & Decker, Inc. v. Robert Bosch Tool Corp.
2006 WL 3446144 at *4 (N.D. Ill. Nov. 29, 2006). Moreover, the chips which
8
would be affected by an injunction represent only a portion of Qualcomm's
9
product line.
10

11
The time frame which one adopts affects the assessment of this factor. The
12
balance would likely favor Qualcomm if an immediate permanent injunction were
13
entered. However, with a sunset provision which ameliorates the negative effects
on Qualcomm, the balance of hardships favors Broadcom.

D. Adequacy of Monetary Relief. ,

For several reasons, the Court finds that monetary relief would not be
adequate to protect Broadcom's interest in the `317 and `686 Patents. First, the
right to exclude is difficult to value. Second, as discussed above, the structural
nature of a "design win" market favors a finding that monetary damages are
22 inadequate. Third, it is difficult to measure the impact of infringing Qualcomm
23

24 "As Broadcom points out, the risk of lost revenue and income of the magnitude
projected by Qualcomm's expert Brian Napper was not disclosed to the public prior to the
25 verdict through Qualcomm's SEC filings, nor in the 8-K which Qualcomm filed after receiving
Broadcom's opening injunction brief.
26
'This view must, of course, be tempered by the relative significance of the infringing
27 components in the end product.
28 16


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1 sales for the CDMA networks on Broadcom's sales of chips for GSM and
2 WCDMA networks. Black & Decker, 2006 WL 3446144 at 5.
3
4 As discussed above (Section III.D), Broadcom's past licensing practices do
5 not support a finding that monetary relief is adequate.

6
7
The Court finds that this factor favors the grant of injunctive relief.

8
D. The Public Interest.
9

10
Generally, the public interest is served by enforcing intellectual property
rights. Abbott Laboratories v. Andrx Pharmaceuticals, Inc., 452 F.3d 1331, 1348
(Fed. Cir. 2006); MGM Well Services, 505 F.Supp. at 2d 379-80.

With respect to multimedia solutions, the record establishes that Qualcomm

has currently available chips in its "Value" and "Multimedia" platforms not subject
to a finding of infringement. Other firms also offer chips with multimedia
capability. But this is not an immediate solution for network carriers and handset
18 manufacturers which have or are in the process of incorporating chips which
19 infringe the `686 Patent.
20
21 Qualcomm is currently the principal provider of chips which support the 1x
22 and EV-DO networks in a significant way. 13 The implementation of an immediate
23 permanent injunction would adversely affect network carriers and handset
24 manufacturers that currently employ chips which infringe the `317 Patent in their
25 products.
26
'There is evidence that Via Technologies offers a CDMA lx chip and that EoNex offers
27 EV-DO baseband chips.
28 17


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1 By virtue of the license which it negotiated after the verdict, Verizon will be
2 able to continue offering EV-DO technology. However, other carriers, including
3 Sprint, Alltel, and U.S. Cellular, have made investments to upgrade their networks
4 in anticipation of complementary infringing products, and would potentially be
5 harmed if an immediate injunction were issued.
6

7 The Court finds that an immediate permanent injunction would adversely

8
affect the public interest, but that those negative effects are substantially
ameliorated with a sunset provision. A sunset provision balances the policy of
9
protecting the patentee's rights against the desirability of avoiding immediate
10
market disruptions.
11

12
F. Remedy.
13

14
Taking into account the factors outlined in eBay, the Court finds that a
15
combination of a postponed permanent injunction and an interim mandatory
16
royalty for continued infringement of the `317 and `686 Patents provides a remedy
17
which is both reasonable and equitable.
18

19
Sunset Provision. The Court finds a window of continued permitted
20 infringement through January 31, 2009 provides an appropriate balance between
21 Broadcom's rights and the protection of third-party network carriers, handset
22 manufacturers, and consumers. The window is an approximately 20-month period
23 extending from the date of the jury's May 29, 2007 verdict. The length of the
24 window is justified by both the period from a "design win" to introduction of a
25 product containing a chip in the market-about 18 months-and the length of the
26 product cycle for products once introduced-also about 18 months. Here, as well,
27 the logic of an 18-month window is validated by Qualcomm's proposed sunset
28 18


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1 period for its infringing `686 chips offered for WCDMA applications. (Qualcomm
[Proposed] Order, ¶¶ 1(c)(iv).) Moreover, it should be noted that the task for
3 Qualcomm is not development of designs from scratch, but modification of
4 existing designs.
5

6 For reasons discussed in connection with the `010, the Court finds that the

7
scope of permitted sales is best defined by infringing products which were in fact

8
sold on or before May 29, 2007 to the prior or existing customers for those
products on that date. 14 A second issue arises with respect to the `686 Patent:
9
Should permitted sales be limited to handsets capable of operating on a CDMA 1 x-
10
EV-DO network, as proposed by Broadcom? In essence, Broadcom would exclude
11
sales for WCDMA networks for which it in fact presently competes. In contrast to
the CDMA market, there are numerous competitors in the WCDMA market
besides Qualcomm, including Texas Instruments, Nokia, Freescale, Infineon, and
others. The Court finds the proposed limitation reasonable. 15

Royalty Rate. The Court finds that the starting point for each patent is the
reasonable royalty rate which the jury implicitly accepted in calculating its damage
18 awards under the two patents. 16 The Court also finds that trebling is appropriate in
19
20
' Motorola and other manufacturers have handsets in development incorporating
21 infringing chips which would be excluded from introduction into the market if the sunset
provision were limited to handsets publicly available on May 29, 2007.
22
'Indeed, Qualcomm recognizes the difference in proposing a sunset provision for the
23 WCDMA chips as opposed to an open-ended mandatory license for chips used in CDMA
applications. (Qualcomm [Proposed] Order, ¶J 1(c)(iv); Qualcomm Proposed Finding of Fact
24 No. 212.)

25 ''At trial, Broadcom's expert Michael Wagner ("Wagner") testified that a reasonable
royalty rate for the `317 Patent would be 1.5% and for the `686 Patent would be 2%. The Court
26 believes that Wagner's analysis was consistent with the Georgia-Pacific factors, and
independently finds these rates proper. Georgia-Pacific Corp. v. U.S. Plywood Corp. , , 318
27 F.Supp. 1116, 1120 (S.D. N.Y. 1970). Qualcomm suggests that comparison of the amount of
28 19


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1 the context of a forced license grant to a competitor. By definition, any

infringement by Qualcomm after May 29, 2007 is wilful, and carried out with a full
3 knowledge of, and in spite of, Broadcom's patent rights. This warrants the
4 maximum enhancement of damages permitted by the law. 35 U.S.C. § 284. In
5 effect, during the sunset period, Broadcom would have the economic equivalent of

6 a judgment with a maximum enhancement for wilfulness. Thus, the royalty for the

7
`317 Patent would be 4.5% and the royalty for the `686 Patent would be 6%.

8
The Court rejects two refinements proposed by the parties. First, the Court
sees no reason to use a reduced percentage rate applied to Qualcomm's
international sales as a surrogate for a reasonable royalty due on domestic sales.
(Qualcomm [Proposed] Order, ¶¶ I(c)(iv), 5(a).) Both sides' experts had no
trouble at trial computing and/or critiquing a royalty directly on domestic
13
activities.
14

15
Second, the Court rejects Broadcom's proposed imposition of an additional
16
royalty of 6% on the sale price of the handsets which contain Qualcomm chips
17
infringing the `317 Patent. To the extent that Broadcom bases a handset royalty on
Qualcomm's SULA license, the Court finds that the SULA license covers far more
than a single patent, and does not represent an analogous situation. While the
parties differ on the mathematics, the Court finds that such a royalty would account
for an excessive portion of the revenues from chips infringing the `317 Patent.

The Court does not find the royalty scheme under the Verizon agreement
24

25
damages the jury awarded and Wagner's testimony should lead to the conclusion that the `686
26 rate supported by Wagner should be reduced by one-fifth because the jury found that only four
of the five claims had been infringed. The Court finds that the rate of 1.5% is reasonable
27 without regard to the number of claims infringed.

28 20


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1 instructive. While the royalty is nominally $6 per handset, the cap of $200 million
2 makes the figure elusive assuming even the most modest success of Verizon's
3 introduction of handsets using the licensed patents. 17 Indeed, Qualcomm estimates
4 the effective rate will in practice prove to be about $1 per handset. Moreover, the
5 Verizon agreement covers not just one patent, nor just the patents in suit here, but
rather three other patents as well.

7
V Verizon Adjustment.
8

9
The Verizon Agreement allows Verizon to introduce products into the
10
United States that would be subject to the `686, `317, and `010 Patents, and absent
11
Broadcom's grant of a license, would infringe. Qualcomm proposes that
12
importation of infringing handsets under the Verizon Agreement should be
13
excluded from the payment of sunset royalties. (Qualcomm [Proposed] Order, !NI
14
5(a), 5(b).) The form of injunction proposed by Broadcom does not take into
account the Verizon Agreement, although Broadcom Vice President and Deputy
General Counsel Mark Brazeal testified to an intent to ensure harmony between
that agreement and any injunction in this proceeding. Broadcom's Proposed
Findings of Fact contemplate a series of activities which Qualcomm could
undertake for Verizon under the umbrella of the license. (Broadcom's Proposed
Findings of Fact, TJ 136. 137.)
21

22 The Court believes that the Permanent Injunction should explicitly take into
23 account the Verizon Agreement in terms of calculating sunset royalties and in
24

25
" Although the agreement contemplates events which could terminate the agreement prior
26 to reaching the $200 million cap, thus establishing the royalty at $6 per handset actually sold,
that prospect seems far less likely than the sale of handsets continuing long after the $200
27 million cap is satisfied.
28 21


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terms of identifying activities which Qualcomm may lawfully undertake in

assisting Verizon under the Verizon Agreement. Accordingly, by February 29,
3 2008, the parties shall either file a proposed stipulated amendment to the
4 Permanent Injunction which the Court enters today dealing with any necessary
5 modification to the Permanent Injunction in light of the Verizon Agreement, or
6 present simultaneous opening briefs on the issue and simultaneous reply briefs ten
7 days thereafter. If the parties believe that another mechanism would be preferable

8 to resolving this issue in the absence of agreement, they are free propose such an
alternative by way of a joint report.
9

10
VII. Technical Matters.
11
12
Qualcomm has expressed concern that Broadcom's proposed injunction
13
would exceed the appropriate territorial limits of enforcement under the patent law.
14
The Permanent Injunction adopted today specifically excludes activities which
15
have no effect on the manufacture, use, importation, sale and/offering of `686
16
Infringing Products, `317 Infringing Products, or `010 Infringing Products, as
17
defined in the Peitnanent Injunction, in the United States. Permanent Injunction, §
18
IV; Johns Hopkins University v. CellPro, Inc., 152 F.3d 1342, 136-67 (Fed. Cir.
19 1998).
20

Qualcomm also expresses concern that Broadcom's proposed injunction will

22 inhibit legitimate "design around" efforts. The Court agrees that "design around"
23 efforts are legitimate, and are to be encouraged. Cross Medical Products, Inc. v.
24 Medtronic Sofamor Danek, Inc., 480 F.3d 1335, 1347 (Fed. Cir. 2007); Larson v.
25 Carson Pirie Scott & Co., 946 F.2d 1534, 1538 (Fed. Cir. 1991). The Court has
26 adopted a provision in the Peitnanent Injunction for express permission to conduct
27 "design around" efforts, including importation of infringing devices to facilitate
28 22


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1 that process. (Permanent Injunction, § V.)

3 VIII. Post-Judgment Procedures.

4

5 ualcomm proposes a procedure for resolving future disputes with regard to

6
"design arounds" which Qualcomm may develop to avoid infringement of the

7
patents in suit, including the appointment of a Special Master. (Qualcomm
[Proposed] Order, '119-13.) Broadcom opposes the concept on the ground that this
8
Court is in the best position to assess whether any proposed modifications avoid
infringement. Abbott Laboratories v. Apotex, Inc.,, 455 F.Supp. 2d 831, 832 (N.D.
Ill. 2006) (Posner, Circuit Judge, sitting by designation). To be sure, the Court has
construed the claims and heard the evidence in this case.

13
While the Court believes that any contempt proceeding ought to proceed
14
before this Court, the Court sees merit in the appointment of a Special Master with
15
expertise in chip technology to consider, in the first instance, what are likely to be
16
technologically complex solutions to avoid infringement.
17

18
The Court directs the parties to meet and confer, and to file a joint report
19
with the Court no later than February 29, 2008 regarding procedures to deal with
20 "design around" compliance. In the absence of agreement, either party may
21 thereafter move the Court on regular notice for the adoption of procedures to deal
22 with "design arounds."
23 ///
24 ///
25 /l/
26

27

28 23


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1 IX. Conclusion.
2

3 The Court finds that Broadcom is entitled to equitable relief (a) in the form a
4 mandatory royalty determined here by the Court, or in the case of the `010 Patent
5 to be determined, to be paid by Qualcomm for infringement after May 29, 2007 for

6 a limited sunset period, through January 31, 2009, and (b) after January 31, 2009

7
in the form of a permanent injunction enjoining infringement of each of the patents
in suit.
8

DATED: December 31, 2007

JAMES V. SELNA
13
UNITED STATES DISTRICT JUDGE
14

15
16

17

18
19

20
21

22

23

24

25

26

27

28 24
Case 5:00-cv-20905-RMW Document 3865 Filed 10/08/2008 Page 51 of 106

Exhibit C
 Case 5:00-cv-20905-RMW Document 3865
- F.Supp.2d
- F.Supp.2d ----, 2008 WL 4452454 (D.Mass.)
H Leora Ben-Ami, Manvin Mayell, Matthew McFarlane,
Amgen, Inc. v. F. Hoffman-La Roche Ltd.
D.Mass.,2008.
Only the Westlaw citation is currently available.
United States District Court,D. Massachusetts.
AMGEN, INC., Plaintiff,
v.
F. HOFFMANN-LA ROCHE LTD., Roche Diagnostics
GmbH, and Hoffmann-La Roche Inc., Defendants.
Civil Action No. 05-12237-WGY.
Oct. 2, 2008.
Aaron R. Hand, Adam Arthur Bier, Andy H. Chan, Ber-
rie R. Goldman, Christian E. Mammen, Craig H. Case-
beer, Darcy A. Paul, David M. Madrid, Deborah E.
Fishman, Geoffrey M. Godfrey, Jon B. Dubrow, Katie
J.L. Scott, Krista M. Carter, Lloyd R. Day, Jr., Mario
Moore, Rebecca J. Wais, Renee Dubord Brown, Robert
M. Galvin, Susan M. Krumplitsch, Lauren M. Papen-
hausen, Day Casebeer Madrid & Batchelder LLP, Cu-
pertino, CA, Andrew Kumamoto, Firasat Ali, Mary
Boyle, Michelle E. Moreland, Terrence P. McMahon,
William G. Gaede, Ill, McDermott Will & Emery LLP,
Palo Alto, CA, Bobby R. Burchfield, Jon B. Dubrow,
Raymond A. Jacobsen, Richard W. Smith, McDermott
Will & Emery, LLP, Washington, DC, Cullen N.
Pendleton, Jennifer E. Flory, Jeremy D. Protas, Kevin
M. Flowers, Mark lzraelewicz, Matthew C. Nielsen,
Sandip H. Patel, Thomas I. Ross, Michael F. Borun,
Marshall Gerstein & Borun LLP, Michael F. Borun,
Marshall, O'Toole, Gerstein, Murray & Borun, Chicago,
IL, D. Dennis Allegretti, Michael R. Gottfried, Chris-
topher S. Kroon, Patricia R. Rich, Duane Morris LLP,
Dana M. McSherry, Daniel A. Curto, James M. Fraser,
Joshua A. Munn, Lauren M. Papenhausen, Michael
Kendall, Nicole A. Longton, Peter M. Acton, McDer-
mott, Will & Emery LLP, Boston, MA, Darrell G. Dot-
son, Erica S. Olson, Kimberlin L. Morely, Monique L.
Corday, Sandip H. Patel, Wendy A. Whiteford, Amgen
Inc., Thousand Oaks, CA, William Diaz, McDermott
Will & Emery LLP, Irvine, CA, for Plaintiff.
Aaron Stiefel, Alfred H. Heckel, Christopher T. Jagoe,
Sr., Howard Suh, Jeanna Wacker, Krista M. Rycroft,
2008 Thomson Reuters/West. No Clai to Orig. US Gov. Works.
Filed 10/08/2008 Page 52 of 106
Page 1
Monica Contreras, Patricia A. Carson, Peter Fratangelo,
Richard A. De Sevo, Thomas F. Fleming, Kaye Scholer
LLP, New York, NY, Aton Arbisser, Julian Brew, Kaye
Scholer LLP, Los Angeles, CA, David L. Cousineau,
Mark S. Popofsky, Kaye Scholer LLP, Kathleen Mc-
Dermott, Sonnenschein Nath & Rosenthal LLP, Wash-
ington, DC, George W. Johnston, Nancy Dilella, Patri-
cia Rocha-Tramaloni, Hoffmann-La Roche Inc., Law
Department, Nutley, NJ, Julia Huston, Robert L. Kann,
Erik Paul Belt, Joel R. Leeman, Keith E. Toms, Kim-
berly J. Seluga, Lee C. Bromberg, Nicole A. Rizzo
Smith, Robert M. Asher, Timothy M. Murphy,
Bromberg & Sunstein LLP, Boston, MA, for Defend-
ants.
MEMORANDUM AND ORDER
YOUNG, District Judge.
*1 Amgen Inc. ("Amgen") sought declaratory relief to
prevent F. Hoffmann-LaRoche Limited, Roche Dia-
gnostics GmbH, and Hoffmann-La Roche Inc.
(collectively, "Roche") from marketing a drug that in-
fringes U.S. Patent Nos. 5,441,868, 5,547,933,
5,618,698, 5,621,080, 5,756,349, and 5,955,422. These
patents relate to Amgen's recombinant erythropoietin
("EPO"), a naturally occurring protein that stimulates
the production of red blood cells. Amgen, Inc. v.
Hoechst Marion Roussel, Inc.. 3 F.Supp.2d 104, 106
(D.Mass.l998). The jury found for Amgen across the
board, upholding the validity of the claims-in-suit for
the '422, '933, '868, '698, and '349 patents and finding
that Roche literally infringed all of the claims-in-suit
except for claim 12 of the '933 patent, which it found
infringed by the doctrine of equivalents. Jury Verdict
[Doc. No. 1542] at 2-3. The Court writes to explain its
rulings on various pre-trial motions for summary judg-
ment, specifically its findings and rulings that the Am-
gen patents survive Roche's obviousness-double patent-
ing contentions, to resolve various post-trial motions,
and to explain the decision to grant Amgen's request for
a permanent injunction.
 Case 5:00-cv-20905-RMW Document 3865
F.Supp.2d ----
F.Supp.2d ----, 2008 WL 4452454 (D.Mass.
Due to the sheer number the Court will not be able to
address every motion. Fl`^ 1 Therefore, all motions not
already granted and not resolved herein are denied.
After explaining the grant of summary judgment on the
issue of obviousness-type double patenting, the Court
will address post-trial motions in three groups: validity,
infringement, and injunctive relief. Regarding validity,
the Court will write to explain three decisions. Primar-
ily, the Court concluded that the source "purified from
mammalian cells grown in culture" limits claim 1 of the
'422 patent. As shall be discussed, the undisputed record
revealed that none of the prior art, including the Gold-
wasser study, satisfied this limitation. Second, sufficient
evidence supported the jury's finding that the term
"human erythropoietin," found in claim 1 of the '422
patent and claims 3, 7, and 9 of the '933 patent, is not
indefinite, even though the specifications do not specify
whether the glycoprotein described therein would be
165 or 166 amino acids in length.
Next, the Court will write to explain its grant of sum-
mary judgment to Amgen with respect to infringement
of claim 1 of the '422 patent, see Electronic Order Au-
gust 28, 2007, and the decision to uphold the jury's find-
ing that Roche literally infringed claim 3 of the '933
patent. See Jury Verdict at 2. As shall be discussed be-
low, Amgen patented recombinant EPO by reference to
a specific amino acid sequence. See Amgen, Inc. v. F.
Hoffmann-La Roche Ltd., 494 F.Supp.2d 54, 63
(D.Mass2007) [hereinafter "Amgen Markman"].
Pegylation-the chemical reaction that attaches PEG to
EPO via a single bond to form CERA, the active in-
gredient in MIRCERA-does not alter EPO's amino acid
sequence. See Trial Ex. 53, Roche's Biologic License
Application at 00004027 [hereinafter "Roche BLA"].
The attachment of PEG to EPO does not place MIR-
CERA beyond the boundary of the claims because "the
specification expressly contemplates that additional mo-
lecules may be attached to `human
erythropoietin.' "Amgen Markman, 494 F.Supp.2d at 63
(emphasis omitted). Thus, any minor modification of
EPO that does not alter the specific amino acid se-
quence-such as the displacement of a single hydrogen
atom-is immaterial and does not preclude a finding of
infringement.
=© 2008 Thomson Reuters est. No Claim to Orig. US Gov. Works.
Filed 10/08/2008 Page 53 of 106
Page 2
*2 Finally, Amgen has satisfied all four factors neces-
sary for a permanent injunction set forth in eBav Inc. v.
MercExchange, L.L.C., 547 U.S. 388, 126 S.Ct. 1837,
164 L.Ed.2d 641 (2006). Failure to issue a permanent
injunction would cause irreparable, immeasurable harm,
for which there is no adequate remedy at law. Given
that Roche infringes Amgen's valid patents, and in light
of the harms that will be discussed, the balance of hard-
ships clearly favors Amgen. Moreover, the Court has
concluded that "the public interest would not be dis-
served by a permanent injunction."Id. at 391.The record
compiled over the course of a four-day evidentiary pro-
ceeding reveals no benefit to patient health or the public
coffers so great as to outweigh the public's interest in a
robust patent system.
I. BACKGROUND
"Erythropoiesis, the production of red blood cells, oc-
curs continuously throughout the human life span to off-
set cell destruction." '422 Patent col. 5 11. 41-43. "EPO
is a protein hormone" that regulates erythropoiesis.
Lodish Decl. [Doc. No. 513] ¶ 13. Produced in the kid-
neys, EPO circulates in the blood stream, id. ¶ 15, and,
"[l]ike a key in a lock,"id. ¶ 14, binds with EPO recept-
ors located on erythroid progenitor cells in the bone
marrow, id. 17.When EPO binds to the EPO receptor
it "initiate[s] the signaling pathway that ultimately leads
to red blood cell production."Id. 24.Red blood cells,
of course, contain hemoglobin, the body's vehicle for
transporting oxygen. Id. ¶ 15. " Tn healthy humans, the
amount of EPO in circulation in the bloodstream is ex-
quisitely regulated to produce just the required numbers
of red cells."Id. Diseases or disorders affecting the kid-
neys often result in an EPO deficit, which leads to a low
level of red blood cells, a condition generally referred to
as anemia. Amgen Inc. v. Hoechst Marion Roussel, Inc.,
314 F.3d 1313, 1321 (Fed.Cir.2003) [hereinafter "Am-
FN2
gen II "] .
For some time preceding the 1980s, the medical com-
munity believed that the introduction of additional EPO
into a patient's bloodstream could combat the effects of
anemia by stimulating the production of additional red
blood cells. See id.Nevertheless, a generation of re-
 Case 5:00-cv-20905-RMW Document 3865
--- F.Supp.2d
F.Supp.2d ----, 2008 WL 4452454 (D.Mass.)
searchers grappled with how to introduce exogenous
EPO into the bloodstream of anemic patients. Id. Some
of America's most accomplished researchers believed
they could isolate and purify EPO that had exited the
body in urine. Id. Others attempted to obtain EPO from
plasma. Id. These approaches proved "unsuccessful be-
cause such recovery employed techniques that were
complicated, yet still resulted in a low-yield, high-
impurity, or unstable EPO end product. Similar attempts
using antibody techniques failed because of difficulty in
providing for the large-scale isolation of quantities of
EPO from mammalian sources sufficient for further
analysis, clinical testing, or therapeutic use. "Id.
(internal citation omitted). As of 1984, mass production
of erythropoietin from recombinant DNA was not pos-
sible. Amgen, Inc. v. Hoechst Marion Roussel, Inc., 457
F.3d 1293, 1303-04 (Fcd.Cir.2006) (hereinafter "Amgen
IV").
*3 In this case, Roche's anticipation defense focused on
a clinical study supervised by Dr. Eugene Goldwasser.
Dr. Goldwasser' s study, which began in 1979-1980, at-
tempted to treat three anemic patients with EPO purified
from human urine. Amgen, Inc. v. Hoechst Marion
Roussel, Inc., 126 F.Supp.2d 69, 111 (D.Mass.2001)
[hereinafter "Amgen I"]. The results of the Goldwasser
study were mixed and are still a matter of dispute.
While experts debate whether and to what extent an in-
crease in reticulocyte count may be attributed to Dr.
Goldwasser's urinary EPO, Dr. Goldwasser, who char-
acterized the study as a failure, has admitted that the
study did not actually increase patient hematocrit, the
primary indicator of health benefits for erythropoiesis-
stimulating agents ("ESAs").Id. at 111-12.Moreover,
due to a shortage of urine from aplastic anemia patients,
the study never expanded beyond the three patients. Id.
at 112.
In 1983, a team of Amgen researchers led by Dr. Fu-
Kuen Lin identified a means of producing recombinant
erythropoietin. Amgen IV 314 F.3d at 1321. Rather than
attempting to obtain EPO from natural sources such as
human urine, Lin identified human and monkey EPO
and was "able to determine the entire DNA sequence of
human EPO and from that, its predicted amino acid se-
© 2008 Thomson Reuters/West. No Claim to Orig. US Gov. Works.
Filed 10/08/2008 Page 54 of 106
Page 3
quence."Id. at 1321-22.Next, Lin generated an expres-
sion vector FN3 that he could inject into a host Chinese
hamster ovary ("CHO ") cell and that would yield a pro-
tein with the amino acid sequence of human EPO. Id.
Because the protein has the requisite amino acid se-
quence, it performed the key-in-lock function of EPO
and stimulated erythropoiesis.
Amgen's recombinant EPO revolutionized the treatment
available for anemia and other blood disorders. See id.
at 1321 .To say that the cluster of patents protecting
EPO in the United States has been a financial boon to
Amgen would be like observing that Standard Oil had
done pretty well in the oil business. See Amgen I, 126
F.Supp.2d at 77 (noting that EPOGEN, the first com-
mercial embodiment of Amgen's patents, is one of the
most successful blockbuster drugs in the history of the
American pharmaceutical industry). Of course, Rocke-
feller never figured out how to produce a limitless sup-
ply of his product in a petri dish.
A. PRODUCTION AND PATENTING OF EPO
Example 10 of the patent's specification FN4 discloses
the method for producing EPO. The process begins with
the:
transfection (introduction) of exogenous DNA into
host [CHO] cells. The CHO host cell, using its own
transcription machinery, FN5 then expresses human
rEPO in abundance, which then accumulates in the
host cell cytoplasm or in the culture media. ['933 pat-
ent] col. 37, lines 43-49. The rEPO so recovered has
the same or similar amino acid sequences and biolo-
gical properties as naturally occurring human EPO,
but differs in its "glycosylation," i.e., in the patterns
of branched carbohydrate chains that attach to the
protein. [Id.] col. 10, lines 34-41.
*4 Amgen II, 314 F.3d at 1321-22 (footnote supplied
Of utmost importance to this case is the protein this pro-
cess produces. Graphically depicted, the protein, also
referred to as a polymer or a polypeptide, resembles a
loosely coiled chain. Pl.'s Stat. Mat. Facts [Doc. No.
512] at 1. Every protein is comprised of a specific
 Case 5:00-cv-20905-RMW Document 3865
F.Supp.2d
F.Supp.2d ----, 2008 WL 4452454 (D.Mass.
amino acid sequence; each amino acid represents a link
in the chain. See id. at 1-2.The term "amino acid se-
quence " refers to the order in which each of the particu-
lar amino acids are linked to form the protein.
SeeBRUCE ALBERTS ET AL., MOLECULAR BIO-
LOGY OF THE CELL 140 (4th ed.2002).
Perhaps the best way to understand the manner in which
a specific amino acid sequence represents a particular
protein is by analogy. While the English language has
an alphabet of 26 letters, there are twenty amino acids.
See ' 422 Patent col. 1 11. 63-67. As particular letter
combinations in a certain order form a word in the Eng-
lish language, each unique sequence of amino acids
forms a different protein. Just as "cat" cannot be spelled
c-t-a, the desired protein may only be expressed if the
amino acids are in order. Depending upon the type of
cell that generates the protein, human EPO consists of
165 or 166 amino acid residues. F 6 Pl.'s Stat. Mat.
Facts [Doc. No. 512] at 1-2. The precise order of the
amino acid sequence is critical because "even a single
change in the amino acid sequence of the [EPO protein]
or receptor can inhibit binding" and prevent the stimula-
tion of erythropoiesis. Lodish Decl. ¶ 14.
Also critical to this case is the manner in which these
amino acids bond. Each amino acid is bookended by a
carbon-terminal ("c-terminal ") on one end and a nitro-
gen-terminal ("n-terminal") on the other. The term
"n-terminal" refers to a configuration of a nitrogen atom
bonded to two or three hydrogen atoms.
ALBERTS,supra, at 131.In the case of EPO, the nitro-
gen in the n-terminal is bonded to two hydrogen atoms.
See Pl.'s Stat. Mat. Facts ¶ 26. A c-terminal is a similar
configuration with a carbon atom serving as the base,
and, in the case of EPO, oxygen and hydrogen atoms at-
tached. See id.
When amino acids bond together to form a protein, the
n-terminal of one bonds with the c-terminal of another.
See id.The bond formed between the carbon from the c-
terminal and the nitrogen from the n-terminal of the two
amino acids is a peptide bond. ALBERTS,supra, at
132.The bonding process results in the displacement of
one or two hydrogen atoms from the n-terminal and an
oxygen or an oxygen and a hydrogen atom from the c-
© 2008 Thomson Reuters/West. No Claim to Orig. US Gov. Works.
Filed 10/08/2008 Page 55 of 106
Page 4
terminal. See Pl.'s Stat. Mat. Facts ¶ 26. These bonds
are replicated at every spot where one amino acid at-
taches to another along the sequence. At the end, the
first amino acid retains an unbonded n-terminal, while
the final amino acid has an unbonded c-terminal. Id. ¶ 2
After the protein is produced in the ribosome, it is
secreted into the endoplasmic reticulum where it under-
goes glycosylation, a process where sugars attach to the
polypeptide backbone. ALBERTS,supra, at 702.When a
protein is formed in a mammalian host cell, it is called a
glycoprotein. Lodish Decl. ¶ 20. The EPO protein has
four sites where chains of carbohydrates (sugar
residues) can be attached, and three of these sites are n-
terminals. Id.
*5 Glycosylation can affect inter alia a protein's three-
dimensional structure. SeeALBERTS,supra, at
702."The three dimensional structure of a protein re-
flects its primary structure (amino acid sequence), sec-
ondary structure (localized folding of parts of the poly-
peptide chain), and tertiary structure (long-range fold-
ing)." Lodish Decl. 1118. Amgen's patents teach EPO by
reference to recombinant EPO's primary structure
without mentioning the other aspects of structure poten-
tially affected by glycosylation.
B. AMGEN CLAIMED ITS PATENTS BY REFER-
ENCE TO EPO'S AMINO ACID SEQUENCE
Amgen obtained a total of seven product and process
patents by reference to the amino acid sequence. As the
Court noted in claim construction, "[t]he patent itself is
silent as to ... any structural characteristic beyond the
required amino acid sequence."Amgen Markman, 494
F.Supp.2d at 63. The specification:
does not define "erythropoietin" by reference to the
presence or absence of any attached molecules, such
as the carbohydrate that can be attached to EPO pro-
teins for glycosylated EPO. In fact, the specification
expressly contemplates that additional molecules may
be attached to "human erythropoietin." By implica-
tion, therefore, those additional molecules are not part
of the amino acid structure that comprises the claimed
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product.
Id. (internal citation omitted). It follows that modifica-
tions not affecting the amino acid sequence are imma-
terial.
C. THE MARKET FOR ERYTHROPOIESIS STIM-
ULATING AGENTS ("ESAS")
Since obtaining its patents, Amgen has developed two
drugs to treat anemia and anemia-related diseases, EPO-
GEN and Aranesp. Anemia can result from excessive
loss of blood, from chemotherapy in cancer patients
(because some chemotherapeutic agents destroy not
only cancer cells, but also the bone marrow where blood
cell formation occurs), and from chronic kidney disease
("CKD"), a progressive decline in kidney function lead-
ing to the buildup of waste products in the blood.
Bernheim Expert Rep. ¶ 25. Patients with 85-95% loss
of kidney function are said to experience end-stage kid-
ney failure, commonly called end-stage renal disease
("ESRD"). Chertow Expert Rep. 1116-17.
Available in the United States since the 1960s, dialysis
removes waste products in the blood of ESRD patients
whose kidneys cannot perform that function on their
own. Id. ¶ 18.Although dialysis cleanses a patient's
blood, it does not aid production of erythropoietin. Id.
While the development of dialysis treatments in the
1960s likely extended the lives of many ESRD patients,
the anemia in these people persisted, resulting in symp-
toms of weakness, fatigue, and lack of energy, requiring
either patient acceptance of continued morbidity or
some form of treatment. Id.; Fishbane Expert Rep. ¶ 20.
Recombinant EPO met the previously unmet needs of
CKD and ESRD patients for an erythropoiesis stimulat-
ing agent.
*6 In 1989, Amgen launched epoetin alfa, or EPOGEN,
which served both CKD and ESRD patients. In the mid-
1990s, Amgen developed a second-generation ESA,
darbepoetin alfa, branded Aranesp. Bernheim Expert
Report ¶ 35. The key difference between these drugs is
how frequently patients must take them. For patients re-
ceiving epoetin alfa (EPOGEN) two to three times per
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week and switching to Aranesp, the label provides that
Aranesp be administered either subcutaneously or intra-
venously once weekly. For patients initiating treatment
for correction of anemia, the recommended dosing is
also one administration per week. For maintenance pa-
tients who had been receiving EPOGEN once per week,
however, the label provides that Aranesp can be admin-
istered once every two weeks. Fishbane Expert Rep. ¶
24. Although the Aranesp label does not provide for less
frequent dosing than once every two weeks, for some
CKD patients there is off-label usage at once per
month.Id.; Chertow Expert Rep. 1119.
Anemia drugs are sold in two markets, CKD and ERSD,
based upon patient need. In the United States, Amgen
markets Aranesp primarily for use in the CKD market
segment and markets EPOGEN primarily for use by ES-
RD patients. Remedy Trial Tr. vol. I [Doc. 1737] at
44-46; Berheim Expert Rep. ¶ 37. With the exception of
Johnson & Johnson, which obtained limited market
entry via a license agreement, Amgen, by virtue of its
patents, has a monopoly over both markets. In 2006, an-
nual net sales of Aranesp in the United States were over
$2,800,000,000, greater than those of EPOGEN and the
Johnson & Johnson drug, Procrit, which each had annu-
al sales of approximately S2,400,000,000. Bernheim
Expert Rep. ¶ 37.
D. PRODUCTION OF MIRCERA
Roche sought to break Amgen ' s monopoly by introdu-
cing MIRCERA into the market of ESAs. CERA, the
active ingredient in MIRCERA, is an acronym for Con-
tinuous Erythropoietin Receptor Activator, referring to
the fact that CERA has a longer half-life than either
darbepoetin alfa (Aranesp) or epoetin alfa (EPOGEN or
Procrit). Fishbane Expert Rep. ¶ 30. While Aranesp has
been approved only for dosing every two weeks, MIR-
CERA received FDA approval to provide correction of
anemia with once-every-two-week dosing and to main-
tain stable hemoglobin levels with once-monthly or
once-every-two-week dosing in all CKD patients. As
shall be described below, Roche formed MIRCERA by
attaching a sugar to EPO in order to extend the protein's
half-life in the body.
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1. The active ingredient in MIRCERA, CERA, is
formed via a chemical reaction that bonds PEG to
EPO
MIRCERA is the branded name for methoxy polyethyl-
ene glycol-epoetin beta. Epoetin beta, the starting in-
gredient for CERA, is a protein that is materially indis-
tinguishable from the EPO in EPOGEN or Aranesp. See
Lodish Decl. 41 ("Roche's manufacturing process for
producing the recombinant EPO in [CERA] closely
tracks the teachings of Example 10 of Amgen's
[p]atents. "). Like Amgen' s EPO, epoetin beta is a re-
combinant EPO formed by injecting DNA encoding hu-
man EPO into a CHO cell. Id. ¶ 42 (citing Ex. 8 at ITC-
R-BLA-000046667). And, like Amgen's EPO, "[t]he
resulting glycosylated human EPO polypeptide product
contains the identical amino acid sequence as naturally
occurring human EPO."Id. ¶ 47.
*7 In order to form CERA, Roche subjects epoetin beta
to a chemical reaction with a polyethylene glycol poly-
mer ("PEG"), id. ¶ 48, attaching PEG to epoetin beta at
one of "9 potential pegylation sites on human EPO-the
N-terminal amino group [or one of] the 8 epsilon-amino
groups of lysines."Id. ¶ 52.The net result of the reaction
is "a single bond between one carbon atom of [the PEG]
molecule and one amino nitrogen of EPO."Id. ¶
50.According to Roche's own analysis, pegylation does
not affect epoetin beta's amino acid sequence, glyc-
osylation, or carbohydrate structure. Trial Tr. at 2743;
see also Lodish Decl. 53. Prior to marketing or this
litigation, Roche referred to CERA as peg-EPO. See
Trial Tr. at 2738-40.
Pegylation-the attachment of PEG to a protein-is a fa-
miliar technique in the pharmaceutical and cosmetic in-
dustry. Pl.'s Stat. Undisp. Mat. Facts ¶ 40. In theory, the
addition of PEG, an inert polymer, to a therapeutic pro-
tein, such as EPO, can expand the drug's life in the body
and reduce levels of toxicity, allowing for extended dos-
ing intervals. Id. '11 1139-40; Lodish Decl. ¶ 31. The tech-
nique was first employed as early as 1977, and EPO is
only one of a number of human proteins that have been
pegylated. Lodish Decl. 1130.
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Page 6
Ih OBVIOUSNESS DOUBLE PATENTING
Since the inception of the Republic, our patent system
"has been about the difficult business `of drawing a line
between the things which are worth to the public the
embarrassment of an exclusive patent, and those which
are not."'Bonito Boats, Inc. v. Thunder Craft Boats,
Inc., 489 U.S. 141, 148, 109 S.Ct. 971, 103 L.Ed.2d 118
(1989)(quoting 13 WRITINGS OF THOMAS JEFFER-
SON 335 (Memorial ed.1904)). Codified at 35 U.S.C.
102(a)-(b), the novelty requirement reflects Con-
gress's determination that the public will not pay the
dear price of a 17-year monopoly for information that is
already available to the public. See id."The nonobvioun-
ess requirement extends the field of unpatentable mater-
ial beyond that which is known to the public under §
102, to include that which could readily be deduced
from publicly available material by a person of ordinary
skill in the pertinent field of endeavor. "Id. at 150.Obvi-
ousness double patenting ("ODP ") is a judicially de-
vised species of obviousness that prevents inventors
from over-extending the term of exclusivity by patent-
ing subtle variations of the same device. Applied Mater-
ials, Inc. v. Advanced Semiconductor Materials Am.,
Inc., 98 F.3d 1563, 1568 (Fed.Cir.1996).
At summary judgment, Roche invoked ODP, averring
that the claims-in-suit were obvious over claim 10 of
the '016 patent because it contained the term
"erythropoietin from a mammalian cell culture super-
natant fluid. " See Mem. Supp. Sum. J. of ODP Over '016
[Doc. No. 491] at 1-2; see also Mot. Summ. J. Of ODP
Over '016 [Doc. 490]. Amgen then moved for summary
judgment of no ODP over both the '016 and '008 patents
[Doc. No. 498]. Without explanation, the Court denied
Roche's motion for summary judgment but granted Am-
gen's cross-motions for summary judgment for no obvi-
ousness-type double patenting on the eve of trial. The
Court now writes to explain that decision.
*8 The Court determined that the two-way test was ap-
plicable to the '016 claims because the '016 patent dis-
closed a follow-on invention that issued after the under-
lying claims due to a restriction order imposed by the
Patent and Trade Office ("PTO"). Applying the two-
way test, the claims-in-suit were not obvious over claim
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10 of the '016 patent because the metes and bounds of
the claim are readily discernable without reference to
the specification and are clearly drawn to a seven-step
process for purifying EPO. Claim 10 is clearly not
drawn to the protein itself or to the process of its pro-
duction. In addition, because the order in which Am-
gen's patents issued was a function of a restriction re-
quirement imposed by the PTO, and because the claims
at issue are consonant with those restrictions, the claims
of the '933, '422, and '349 patents are immune from
ODP over the '008 patent under the terms of 35 U.S.C. §
121.
A. THE LEGAL FRAMEWORK
An ODP inquiry is comprised of two steps. "First, as a
matter of law, a court construes the claim in the earlier
patent and the claim in the later patent and determines
the differences. Second, the court determines whether
the differences in subject matter between the two claims
render the claims patentably distinct."Eli Lilly and Co.
v. Barr Labs., Inc., 251 F.3d 955, 968
(Fed.Cir.2001)(internal citations omitted). Defendants
who seek to invalidate a particular claim via ODP must
prove by clear and convincing evidence that the original
claim and the allegedly duplicative claim are not pat-
entably distinct. Symbol Techs., Inc. v. Opticon, Inc.,
935 F.2d 1569, 1580 (Fed.Cir.1991). It is also important
to note that where the metes and bounds are discernable
from the face of the claim, the ODP inquiry focuses on
what is claimed without reference to the disclosure. See
General Foods Corp. v. Studiengesellschaft Kohle nabH,
972 F.2d 1272, 1281 (Fed.Cir.1992)("[T]he disclosure
of a patent cited in support of a double patenting rejec-
tion cannot be used as though it were prior art, even
where the disclosure is found in the claims. ") (emphasis
in original).
1. The "One-Way" and "Two-Way" Tests
There are two ways that a court can conduct the ODP
analysis. In most cases, courts employ a "one-way " test
where the court compares the claims according to the
order in which the patents issued. "A later claim that is
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not patentably distinct from an earlier claim in a com-
monly owned patent is invalid for obvious-type double
patenting."Eli Lilly, 251 F.3d at 968. If the scope of the
application and the patent claims is not identical, the
court must ask whether the later patent's claim defines
merely an obvious variation of the earlier patent ' s claim.
See In re Goodman, 11 F.3d 1046, 1052 (Fed.Cir.1993).
Although the one-way test applies in the large majority
of cases, the Federal Circuit created a "two-way" test
that applies in a narrow set of circumstances. In re
Berg, 140 F.3d 1428, 1432 (Fed.Cir.1998).
*9 The two-way test is a response to the reality that the
Patent Office is perennially underfunded and slow. See
id.These indisputable facts cause various anomalies, in-
cluding the issuance of patents in an order other than
that which the inventor intended. In rare cases, quirks in
the application process may cause a patent covering a
subsequently conceived follow-on invention to issue be-
fore the patent covering the underlying invention. The
two-way test seeks
to prevent rejections for obviousness-type double pat-
enting when the applicants filed first for a basic in-
vention and later for an improvement, but, through no
fault of the applicants, the PTO decided the applica-
tions in reverse order of filing, rejecting the basic ap-
plication although it would have been allowed if the
applications had been decided in the order of their fil-
ing.
Id. Where patents have issued out of order, the exam-
iner will employ the one-way test, but "the examiner
also asks whether the patent claims are obvious over the
application claims. If not, the application claims later
may be allowed."Id. In this case, Amgen asks the Court
to apply the two-way test.
The determination of whether the one-way or two-way
test applies is matter of law. Id. The two-way test must
be used if: (1) the applicant could not have filed both
claims together in the earlier-filed application; and (2)
the applicant did not cause the later filed claim to issue
first by delaying examination of the earlier-filed claim
during the period when both applications were pending
before the PTO (the "co-pendency period"). See, e.g., In
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re En^ert, 124 F.3d 1458, 1461 (Fed.Cir.1997); Engin-
eered Prods. Co. v. Donaldson Co., 225 F.Supp.2d
1069, 1 111 (N.D.lowa 2002), vacated in part on other
grounds,149 Fed.Appx. 979 (Fed.Cir.2005).
2. The Safe Harbor Provision, 35 U.S.C. § 121
The two-way test is not the only mechanism devised to
protect inventors from inadvertent inequities arising
from the PTO's application process. Congress enacted a
safe harbor, codified at 35 U.S.C. § 121, which
provides:
If two or more independent and distinct inventions are
claimed in one application, the Director may require
the application to be restricted to one of the inven-
tions. If the other invention is made the subject of a
divisional application which complies with the re-
quirements of section 120 of this title it shall be en-
titled to the benefit of the filing date of the original
application. A patent issuing on an application with
respect to which a requirement for restriction under
this section has been made, or on an application filed
as a result of such a requirement, shall not be used as
a reference either in the Patent and Trademark Office
or in the courts against a divisional application or
against the original application or any patent issued
on either of them, if the divisional application is filed
before the issuance of the patent on the other applica-
tion.
B. THE PROSECUTION HISTORY REVEALS
THAT THE PTO, NOT AMGEN, DICTATED THE
ORDER OR FORM IN WHICH ITS PATENTS IS-
SUED
*10 Dr. Lin filed U.S. Patent Application No.
06/675,298 on November 30, 1984. See Moore Decl.
[Doc. No. 501] Ex. H-1, U.S. Patent Application No.
06/675,298, at AM670167625. On June 20, 1985, two
other Amgen researchers, Drs. Lai and Strickland, filed
U.S. Patent Application No. 06/747,119. Claim 10 of
the '119 application is drawn to a specific seven-step
process for purifying recombinant EPO. See Lodish De-
cl. [Doc. No. 502] ¶ 48. The claim does not describe a
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product or teach a process for producing EPO from
mammalian cells. Lodish Decl. ¶ 44. It is undisputed
that Drs. Lai and Strickland did not conceive of the pro-
cess described in the '119 application until after Dr. Lin
filed the '298 application. See Strickland Decl. [Doc.
No. 503]I¶ 11-16.
On July 3, 1986, shortly after Drs. Lai and Strickland
filed the '119 application, the PTO imposed a restriction
requirement on the '298 application. Pursuant to 35
U.S.C. § 121, the PTO mandated that Amgen divide the
claims in the '298 application into distinct groups based
on subject matter: I) polypeptides; II) DNA; III) plas-
mids; IV) cells; V) pharmaceutical composition; and
VI) assay. See Lodish Decl. ¶ 17.
As a result of the restriction requirement, Amgen elec-
ted to allow its DNA (restriction Group II) claims to
proceed to examination in the '298 application. Id. ¶
20.All of the elected claims fit into restriction Group II.
See Lodish Decl. ¶ 25. In addition, on October 23, 1987,
Amgen filed two divisional applications, U.S. Patent
Application Nos. 07/113,178 and 07/113,179. All of the
claims in the '178 and ' 179 applications were taken from
the '298 application. See Pl.'s Stat. Undisp. Mat. Facts
[Doc. No. 500] ¶¶ 4-5. The '178 application contained
claims drawn to a polypeptide (restriction Group I) and
a pharmaceutical composition (restriction Group
VI).See Moore Decl. Ex. I, U.S. Patent Application No.
07/113,178, at AM-ITC 00941037-45, AM-ITC
00941076-77; Moore Decl. Ex. H-8, Office Action, July
3, 1986, at 2. The '179 application included claim 1
from the '298 application, which was placed in restric-
tion Group I. See Moore Decl. Ex. J, U.S. Patent Ap-
plication No. 07/113,179 at AM-ITC 004539820-90,
AM-ITC 00454000-01; Moore Decl. Ex H-8, Office Ac-
tion, July 3, 1986, at 2.
On May 19, 1987, while Amgen and the PTO were still
sorting Amgen's applications into restriction groups,
Drs. Lai and Strickland's '119 application issued as U.S.
Patent No. 4,667,016. Pl.'s Stat. Undisp. Mat. Facts9.
The '298 application issued as U.S. Patent No.
4,703,008, but not until October 27, 1987, see id. ¶ 1,
four days after Amgen filed the '178 and '179 applica-
tions, see id. ¶¶ 4-5.The '178 and '179 applications sub-

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sequently issued as the '933, '349, and '422 patents. The
claims in these patents are not drawn to restriction
Group II. See Lodish Decl. 26-34.
C. THE COURT GRANTED AMGEN'S MOTION
FOR SUMMARY JUDGEMENT AND DENIED
ROCHE'S BECAUSE THERE WAS NO GENUINE
ISSUE OF MATERIAL FACT THAT THE
CLAIMS-IN-SUIT WERE NOT INVALID FOR
ODP OVER THE '016 PATENT CLAIMS
*11 Roche moved for summary judgment on the ground
that claim 10 of Drs. Lai and Strickland's '016 patent
rendered the claims-in-suit obvious because claim 10
contains the term "recombinant erythropoietin from a
mammalian cell culture supernatant fluid."See Def.'s
Mem. Supp. Sum. J. at 1-2. As shall be explained, the
Court must employ the two-way test in evaluating this
claim because the '016 patent was a subsequently con-
ceived follow-on invention that issued before the
claims-in-suit due to the PTO's imposition of the 1986
restriction requirement. Under the two-way test, it is
clear that claim 10 of the '016 patent and the claims-
in-suit are not identical in scope. They are in fact drawn
to very different subject matter, and the differences are
not merely obvious variations.
As a threshold matter, it is important to note that when
deciding a motion for summary judgment, the Court
"must view the evidence presented through the prism of
the substantive evidentiary burden."Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 254, 106 S.Ct. 2505, 91
L.Ed.2d 202 (1986). Here, Roche bears the burden of
proving ODP by clear and convincing evidence, "a
heavy and unshifting burden." Symbol Techs., 935 F.2d
at 15SO. Moreover, since the PTO-on two separate occa-
sions-rejected Roche's ODP argument and determined
that Dr. Lin's claims are patentably distinct from the
'016 claims, Roche bears an even heavier burden in
proving ODP based on the '016 claims. See Amgen I,
126 F.Supp.2d at 105 (Where the asserted grounds for
invalidity were reviewed by the PTO, "the challenger
has the added burden of overcoming the deference that
is due to a qualified government agency presumed to
have properly done its job.") (internal quotation omit-
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ted). Roche cannot overcome that burden.
I. The two-way test applies in evaluating whether the
claims-in-suit are invalid over the claim 10 of the
'016 patent
While courts generally apply the "one-way" test, the
Federal Circuit has recognized special circumstances in
which the "two-way" test is to be applied.Eli Lilly, 251
F.3d at 968-969. The two-way test should apply where
an underlying claim and a follow-on claim issue in re-
verse order through no fault of the patentee. See In re
Berg, 140 F.3d at 1432. In order to apply the two-way
test, the Court must determine that Amgen (1) could not
have filed the '119 application together with the '298 ap-
plication and (2) did not cause the '016 patent to issue
first by delaying examination of the '298 application
during the co-pendency period. See 1 / ; see also In re
Emert, 124 F.3d at 1461:Ergiii i ri d Prods., 225
F.Supp.2d at 1111. The Court was satisfied that both of
these criteria were met.
As noted above, the first filing involved Lin's invention
of recombinant EPO as described in the '298 applica-
tion. See Moore Decl. Ex. H-1, U.S. Patent Application
No. 06/675,298, at AM670167625. Even though the
'016 patent issued prior to the claims in suit, the undis-
puted record reveals that Lai & Strickland's EPO puri-
fication process was a subsequently conceived follow-
on invention. See Strickland Decl. 111 11-16. Thus, it
was impossible for Amgen to have filed claim 10 of the
'016 patent as part of Lin's November 30, 1984 ' 298 ap-
plication that gave rise to the claims-in-suit. Roche does
not dispute this fact, but contends that it is sufficient
that the '016 claims and Dr. Lin's claims could have
been combined together in a continuation-in-part applic-
ation filed some time after Dr. Lin's earlier filed '298
application. See Def.'s Mem. Supp. Sum. J. at 14. This
argument rests on Roche's contention that the '119 ap-
plication (from which the '016 patent claims priority)
constitutes the "earlier filed application." The undis-
puted facts, however, are that the claims-in-suit claim
priority from the '298 application. Thus, Dr. Lin 's '298
application, filed November 30, 1984, is the one
deemed "earlier filed" as compared to the '119 applica-
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Lion, which was not filed until June 20, 1985. See35
U.S.C. § 120. Therefore, the first requirement of the
two-way test is satisfied.
*12 Second, Amgen did not delay examination of Dr.
Lin's earlier-filed ' 298 application during the
"co-pendency" period or cause the later-filed '016 pat-
ent to issue before Dr. Lin's patents-in-suit. Dr. Lin's
'298 application was filed on November 30, 1984.
Moore Decl. Ex H-1, U.S. Patent Application No.
06/675,298, at AM67067625. The patents-in-suit issued
between 1996 and 1999. SeeU.S. Patent No. 5,547,933
{issued August 20, 1996); U.S. Patent No. 5,756,349
(issued May 26, 1998); U.S. Patent No. 5,955,422
(issued September 21, 1999). The '119 application was
filed on June 20, 1985, and the ' 016 patent issued on
May 19, 1987. SeeU.S. Patent No. 4,667,016. Thus, the
relevant co-pendency period is from June 20, 1985 (the
'016 filing date) to May 19, 1987 (the '016 issuance
date). During the co-pendency period, Amgen did not
request or receive any extensions of time to prosecute
Dr. Lin's '298 application, nor did it delay examination
of the '298 application in any other manner to cause the
'016 patent to issue first. Instead, the record suggests
that Amgen made efforts to accelerate examination of
the '298 application. See, e.g., Moore Decl. Ex. H-5, Pe-
tition to Make Special. Thus, it was the PTO, not Am-
gen, that caused the later-filed '016 patent to issue be-
fore Dr. Lin's ' 298 application.
The Court therefore will apply the two-way test.
2. Roche's argument that the '016 patent discloses
"purified recombinant EPO" fails because ODP ana-
lysis is confined to an examination of the claim
At its essence the ODP inquiry asks: "Is the same inven-
tion being claimed twice?"Gen. Foods, 972 F.2d at
1278. Claim 10 of the '016 patent is drawn to a seven-
step process for recovering a purified recombinant EPO.
Claim 10 does not purport to teach the production of re-
combinant EPO. Lodish Decl. ¶ 44. "Recombinant
erythropoietin " is a different invention than the recov-
ery process taught in claim 10. The Court must there-
fore conclude that the scope of claim 10 is not identical
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to the scope of the claims-in-suit. See In re Goodman,
1 1 F.3d at 1052. Despite Roche's urging, the Court can-
not conclude that these differences are obvious.
Roche's argument that claim 10 is obvious over the
claims-in-suit because it contains the term "recombinant
erythropoietin" is premised on the fatally flawed as-
sumption that the Court must look to '016 patent spe-
cification-including the earlier teachings of Dr. Lin ' s
own patent application as incorporated by reference in
the '016 specification-as though they both constituted
prior art to Dr. Lin's '298 patent claims. To the contrary,
the Federal Circuit has made clear that "[d]ouble patent-
ing is altogether a matter of what is claimed."Gen.
Foods, 972 F.2d at 1277. "[T]he disclosure... cannot be
used as though it were prior art, even where the disclos-
ure is found in the claims." Id. at 1281 {emphasis in ori-
ginal); see also In re Braat, 937 F.2d 589, 594 n. 5
(Fed.Cir.1991). As the Court of Customs & Patent Ap-
peals explained in In re Aldrich, 55 C.C.P.A. 1431, 398
F.2d 855 (C.C.P.A.1968):
*13 Obviousness-type double patenting rejections ...
are based on the premise that an applicant is claiming
no more than an obvious variation-which would be
obvious to anyone of ordinary skill in the art-of an in-
vention on which a patent has already been granted....
To that end, patent claims are looked to only to see
what has been patented, the subject matter which has
been protected, not for something one may find to be
disclosed by reading them.
Id. at 859.
Thus, the '016 patent and Dr. Lin's application incorpor-
ated therein are not prior art for purposes of the two-
way ODP analysis. In fact, Dr. Lin's patent applications
were not publicly disclosed or available as prior art as
of the date of the Lai & Stickland EPO purification in-
vention reflected in the ' 016 patent (the legally relevant
date for the ODP analysis). As far as the ordinarily
skilled artisan at the time was concerned, there was no
"recombinant erythropoietin."
Nevertheless, in support of its argument that the Court
ought look to the specification, Roche relies on Geneva
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- F.Supp.2d ----, 2008 WL 4452454 (D.Mass.)
Pharmaceuticals, Inc. v. GlaxoSmithKline PLC, 349
F.3d 1373 (Fed.Cir 2003). In Geneva the Federal Cir-
cuit analyzed the claims' scope and utility by looking
not only to the claims themselves but also to the spe-
cifications. The Federal Circuit explained:
[T]his court does not consider the Fleming claim in a
vacuum, as a simple compound, without considering
the compound's disclosed utility Standing alone,
that claim does not adequately disclose the patentable
bounds of the invention.Therefore, this court exam-
ines the specifications of both patents to ascertain any
overlap in the claim scope for the double patenting
comparison. A person of ordinary skill in the art re-
viewing the disclosure of the Fleming patent would
recognize a single use for potassium clavulanate, ad-
ministration to patients to combat bacteria that pro-
duce [beta]-lactamase.... The Fleming patent discloses
no other use. The '720 patent simply claims that use
as a method.
Id. at 1385 (emphasis added)(internal citations omitted).
Geneva is inapposite. Here, unlike Geneva, the limita-
tions adequately set forth the metes and bounds of the
claim. And it is clear that the claim is drawn to a partic-
ular purifying recombinant EPO that has already been
produced. The claim does not describe the polypeptide
or the process by which it is made. Geneva is inapplic-
able because the sole utility of the '016 patent is purify-
ing EPO for the patents in suit. In fact, even if Roche is
right that the '016 and the current patents literally over-
lap-all mentioning EPO-it does not follow that the pat-
FN7
ents in suit are the "single use" for EPO.
Thus, claim 10 and the claims-in-suit are patentably dis-
tinct. On the basis of this conclusion, the Court denied
Roche's motion for summary judgment on ODP [Doc.
No. 490] with respect to the '016 patent and granted
Amgen' s [Doc. No. 498].
D. THE COURT GRANTED AMGEN'S CROSS
MOTION FOR PARTIAL SUMMARY JUDG-
MENT OF NO ODP OVER THE CLAIMS IN THE
'008 PATENT BECAUSE AMGEN WAS EN-
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TITLED TO THE SAFE HARBOR CODIFIED AT
35 U.S.C. § 121
*14 The third sentence of 35 U.S.C. § 121 provides:
A patent issuing on an application with respect to
which a requirement for restriction under this section
has been made, or on an application filed as a result
of such a requirement, shall not be used as a reference
either in the Patent and Trademark Office or in the
courts against a divisional application or against the
original application or any patent issued on either of
them, if the divisional application is filed before the
issuance of the patent on the other application.
The applicability of this safe harbor provision is matter
of law. "In addition to the express requirements of sec-
tion 121, [the Federal Circuit has] construed the statute
to require consonance: the applicant must maintain the
line of demarcation between the independent and dis-
tinct inventions that prompted the restriction require-
ment."Pfzzer, Inc. V. Teva Pharms. USA, Inc.,518 F.3d
1358, 1359 (Fed.Cir.2008). Thus, the Court must de-
termine 1) whether the three applications at issue were
in fact filed in response to a PTO imposed restriction re-
quirement; and 2) whether Amgen remained faithful to
the restriction requirements. As set forth below, the
Court concludes that Amgen has satisfied both the stat-
utes strictures as well as the consonance requirement.
1. Amgen filed the '178 and '179 applications in re-
sponse to the PTO-imposed restriction requirement
After the PTO imposed the 1986 restriction require-
ment, Amgen restricted the claims prosecuted in Dr.
Lin's '298 application to one invention (Lin's DNA
claims), which ultimately issued as the '008 patent. It
filed two divisional applications, the ' 178 and ' 179,
which ultimately issued as the '933, '422, and '349 pat-
ents. The undisputed evidence shows that both the '178
and '179 applications were filed as a result of the PTO's
1986 restriction requirement. Thus, Amgen has met its
burden with respect to the first part of the safe harbor
inquiry. The Court now considers whether Amgen
maintained consonance.

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2. Amgen satisfied the consonance requirement
As noted above, claims in a divisional application are
only immune from an obviousness-type double patent-
ing rejection when strict consonance exists between the
earlier restriction requirement and the claims later pro-
secuted.Bristol-My ers Squibb Co. v. Pharmachemie
B. V.., 361 F.3d 1343, 1348 (Fed.Cir.2004); Geneva
Pharms., Inc. v. GlaxoSmithkline PLC, 349 F.3d at
1381;Gerber Garment Tech., Inc. v. Lectra Sys., Inc.,
916 F.2d 683, 688 (Fed.Cir.1990)."Consonance requires
that the line of demarcation between the `independent
and distinct inventions' that prompted the restriction re-
quirement be maintained.... Where that line is crossed
the prohibition of the third sentence of Section 121 does
not apply."Gerber, 916 F.2d at 688. "[N]ew or amended
claims in a divisional application are entitled to the be-
nefit of [section] 121 if the claims do not cross the line
of demarcation drawn around the invention elected in
the restriction requirement."Symbol Techs., 935 F.2d at
1579. In delineating the scope of the groups, the proper
point of reference is the actual restriction groupings
(i.e., the substance of the claims in each restriction
group), not the examiner's written descriptions thereof.
Texas Instruments Inc. v. ITC, 988 F.2d 1165, 1179
(Fcd.Cir.1993).
*15 Here, the '933, '349 and '422 patent claims are con-
sonant with the PTO's 1986 restriction requirement. See
Pl.'s Rep. Br. Supp. Sum. J. No ODP [Doc. 676] at
3-12. Under 135 U.S.C. 121, the 1986 restriction re-
quirement mandated that Amgen confine its inventions
to the following groups:
I. Claims 1-13, 16, 39-41, 47-54 and 59, drawn to
polypeptide, classified in Class 260, subclass 112.
II. Claims 14, 15, 17-36, 58 and 61-72, drawn to
DNA, classified in Class 536, subclass 27.
III. Claims 37-38, drawn to plasmid, classified in
Class 435, subclass 240.
IV. Claims 42-46, drawn to cells, classified in Class
435, subclass 240.
V. Claims 55-57, drawn to pharmaceutical composi-
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tion, classified in Class 435, subclass 177.
VI. Claim 60, drawn to assay, classified in Class 435,
subclass 6.
Lodish Decl. Ex. E-1, '298 Prosecution, Paper 8 at 2.
Amgen elected claims falling within restriction Group II
for further examination in the '298 application. See Lod-
ish Decl. ¶ 20. Amgen then filed the '178 and '179 ap-
plications by submitting a copy of the '298 application
as originally filed) and canceling certain of the '298
claims so that only subsets of those claims were in-
cluded in the '178 and '179 applications as filed. See
Moore Decl. Ex. P-1, PATENT AND TRADEMARK
OFFICE, MANUAL OF PATENT EXAMINING PRO-
CEDURE § 201.06(a) (5th Ed.1983) (outlining regula-
tions for " [c]ontinuing or divisional application[s] for
invention disclosed in a prior application"). In keeping
with the 1986 restriction requirement and the election of
Group II, Amgen canceled all claims belonging to
Group II and selected only claims belonging to the non-
elected restriction groups for filing in the '178 and '179
applications. The '178 application as filed contained ori-
ginal claims 1-13, 16, 39-41, 47-49, and 55-57, which
the PTO had assigned to restriction Groups I and V. See
Moore Decl. Ex. I, U.S. Patent Application No.
07/113,178, at AMITC 00941037-45, AM-ITC
00941076-77; Moore Decl. Ex H-8, Office Action, July
3, 1986, at 2. The '179 application as filed contained
original claim 1, which the PTO had assigned to restric-
tion Group I. See Moore Decl. Ex. J, U.S. Patent Ap-
plication No. 071113,179 at AM-ITC 004539820-90,
AM-ITC 00454000-01; Moore Decl. Ex H-8, Office Ac-
tion, July 3, 1986, at 2.
The Court is satisfied that Amgen complied with the re-
striction requirements. To begin, the '298 claims, which
issued as the '008 patent, fall within elected Group II.
Lodish Decl. ¶ 25. Moreover, the claims-in-suit fall
within the scope of the non-elected restriction groups.
'933 claims 1-8 (EPO glycoproteins and glycoprotein
products) are drawn to "polypeptide"; '933 claims 9-14
and '422 claims 1-2 (pharmaceutical compositions and
methods of using same) are drawn to "pharmaceutical
composition"; and '349 claims 1-7 (vertebrate cells for
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producing EPO and processes for using same) fall with-
in the scope of Group IV because they are drawn to
"cells." See id. 1 ''[ 26-34.None of these claims cross the
line of demarcation drawn around the elected Group H.
See id.
*16 Roche argues that Amgen cannot avail itself of sec-
tion 121's safe harbor because its prosecutions were not
consonant with the restriction requirement. First, Roche
contends that Amgen broke consonance by prosecuting
claims from Group I and Group V in a single applica-
tion. Def.'s Mem. Opp. Sum. J. Of No ODP [Doc. No.
568] at 2. Similarly, Roche maintains that during the
prosecution of the '422 patent Amgen broke consonance
by combining claims from Group V and Group VII in
the same application. Id. In addition, Roche avers that
Amgen vitiated the restriction requirement by claiming
a "non-naturally occurring glycoprotein " in claim 7 of
the '933 patent. See id. Finally, Roche contends that Am-
gen violated the restriction requirement by converting
verbrate cell claims into a process claim during the pro-
secution of the '349 patent. Id. The process claims of the
'349 patent, Roche argues, belong in the elected Group
H. See id.
To begin, Roche's argument that Amgen broke conson-
ance by including claims in multiple restriction groups
in the same application lacks legal foundation. Under
Roche's theory, Amgen was required to maintain strict
consonance by filing a divisional application for claims
within each restriction group. Roche cites no case for
this proposition. The reason they are unable to do so is
that the available Federal Circuit precedent indicates
that "new or amended claims in a divisional application
are entitled to the benefit of [section] 121 if the claims
do not cross the line of demarcation drawn around the
invention elected in the restriction requirement."Symhol
Techs., 935 F.2d at 1579. Roche does not allege that the
'933 or '422 claims blurred the line of demarcation
around the elected Group II. Thus, the Court cannot
conclude that the '422 and '933 forfeited the shelter
provided by section 121.
Roche's claim that the '933 patent broke consonance by
claiming a non-naturally occurring glycoprotein is also
unpersuasive. Roche argues that the only polypeptides
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that satisfy the strictures of Group I are those that are
isolated from a natural source; the "non-naturally occur-
ring glycoprotein" taught in claim 7, Roche emphasizes,
can only be obtained with recombinant DNA. Roche
maintains that once Amgen modified gylcoprotein with
"non-naturally occurring" the claim was no longer
drawn to a polypeptide (Group I), but instead to a DNA
sequence (Group II). Were the Court ' s examination con-
fined solely to the Examiner's written description of the
groups, Roche's argument would have considerable
force. The relavant line of demarcation, however, is
"the grouping restriction actually imposed by the exam-
iner." Texas Instruments, 988 F2d at 1179. Roche does
not dispute that the Examiner assigned some claims to
Group I that were from non-naturally occurring sources.
Thus, the Court cannot conclude that the inclusion of
the term "non-naturally occurring" broke consonance.
*17 Finally, Roche contends that Amgen broke conson-
ance by separating the ' 349 patent into Group IV.
Roche maintains that the '349 patent belongs in Group
H because Amgen added claim 7, a claim drawn to the
recombinant process of using vertebrate cells to produce
EPO. Roche is mistaken. As noted above, restriction
Group II was comprised of claims drawn to DNA, while
Group IV was drawn to cells. Lodish Dec1. fiR 23, 29.
The mere addition of a process claim does not transform
a Group IV claim into a Group H claim. As Amgen
notes, "only 4 of the 35 claims assigned to Group II
were process claims."Pl.'s Rep. Br. Supp. Sum. J. No
ODP at 9. Moreover, the common feature of the Group
II claims is that they "require[ ] a specific, purified, and
isolated DNA sequence, encoding either human or mon-
key erythropoietin or an analog polypeptide related to
erythropoietin in both structure and function."Lodish
Decl. T 21. Claims 1-3, referenced in the process taught
in claim 7, merely require that the EPO DNA in the ver-
tebrate cells "be transcriptionally controlled by
`non-human DNA sequences.' " Lodish Decl. ; 30. In
short, because the focus remains on the cells, the inclu-
sion of claim 7 does not cause the ' 349 claim to stray
over the line of demarcation into Group H.
Accordingly, on the record before the Court, there were
no genuine issues of fact to be decided and, thus, the
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Court granted Amgen's motion for summary judgment
and held that Section 121"insulates the ensuing patents
from the charge of double patenting."Applied Materials,
98 F.3d at 1568.
Given these rulings, the Court believed that it had put
paid to the ODP issues in this case. The Court was
wrong. After extensive argument during the final pre-
trial conference, Roche convinced the Court that there
remained genuine issues of material fact for trial upon
what the parties came to call Roche's theories 3 and 4.
E. FINDINGS AND RULINGS AFTER TRIAL
And so the trial came. The Court was somewhat sur-
prised (and concerned) that Roche focused heavily in its
opening to the jury on double patenting issues, as
though this were some sort of equitable defense.
1. Jury or Non-jury?
After careful reflection, the Court ruled on September 7,
2007 that obviousness double patenting ought not be
submitted to the jury. "Determining what is patented by
correct claim interpretation is essential to [the] determ-
ination of obviousness-type double patenting
issues."Gen. Foods, 972 F.2d at 1279 (capitalization
altered). It is the Court's role, not the jury 's, to determ-
ine the metes and bounds of the claimed inventions. See
Markman v. Westview Instruments, Inc., 517 U.S. 370,
384-91, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). Ac-
cordingly, because "[d]ouble-patenting is altogether a
matter of what is claimed, " Gen. Foods, 972 F.2d at
1277, obviousness-type double patenting is an issue for
the Court. Other district courts have agreed, ruling that
decisions regarding the ODP defense should be made by
a judge, not a jury. See, e.g., Engineered Prods., 313
F.Supp.2d at 993 ("[T]he double-patenting defense will
be tried to the court because it is a question of law."),
Applera Corp. v. MI Research Inc., 363 F.Supp.2d 261,
262 (D.Conn.2005) (explaining that the Court reached
"findings of fact and conclusions of law" regarding
ODP based upon, inter alia, deposition testimony not in-
troduced at trial as well as evidence submitted at trial).
For these reasons, the Court here concluded that the
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ODP issue presented a matter for the Court.
*18 After conducting hearings outside the presence of
the jury, the Court carefully reviewed both ODP argu-
ments that Roche put forward on the basis of the entire
trial record. For purposes of simplicity the Court and
the parties referred to these arguments as theories num-
ber 3 and 4. The Court presents its findings and rulings
below.
2. Roche's Theory Number 3
Roche's theory number three argues that the asserted
'868 and '698 claims are invalid for ODP over the '008
claims. The parties agree that the safe harbor provision
delineated in section 121 does not apply to these claims.
See, e.g., Resp. to Roche's Proposed Findings and Con-
clusions [Doc. 1628] T 5. In order for section 121 to ap-
ply, the '868 and ' 698 patents would have to derive from
a patent application that was subject to a restriction re-
quirement; furthermore, the claims of the '868 and the
'698 patents would have to address an invention distinct
from the elected invention prosecuted by way of the ori-
ginal application. See, e.g., Gerber, 916 F.2d at 688.
Here, however, both the '008 claims and the asserted
claims of the ' 868 and '698 patents fall within Group II
of the PTO' s 1986 Restriction Requirement. Therefore,
because section 121 does not apply as between patents
that contain claims belonging to the same restriction
group, no safe harbor protection exists.
When a claim is not immunized from allegations of ob-
viousness-type double-patenting due to section 121, the
question becomes whether the defendant has met its
burden of proving the ODP defense. As with other af-
firmative defenses of invalidity, the defendant bears the
burden of proving ODP by clear and convincing evid-
ence. Symbol Techs., 935 F.2d at 1580.
As described part IILA, the ODP analysis entails two
steps. First, the Court construes the claims and determ-
ines whether there are any differences. Eli Lilly, 251
F.3d at 968. Second, to the extent that differences exist,
the Court must determine whether the distinctions are
sufficient to render the claims patentably distinct. Id.


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The Court wi11 consider the '868 patent first:

'008 claims 2, 4, 6, 7, 25, 27 '868 claims 1-2

2. A purified and isolated DNA sequence consisting I. A process for the production of glycosylated
essentially of a DNA sequence encoding human erythropoietin polypeptide having the in vivo biolo-
erythropoietin. gical property of causing bone marrow cells to in-
crease production of reticulocytes and red blood cells
comprising the steps of: (a) growing, under suitable
nutrient conditions, mammalian host cells trans-
formed or transfected with an isolated DNA se-
quence encoding human erythropoietin; and (b) isol-
ating said glycosylated erythropoietin polypeptide
therefrom.
4. A procaryotic or eucaryotic host cell transformed 2. The process according to claim 1 wherein said
or transfected with a DNA sequence according to host cells are CHO cells.
claim 1, 2 or 3 in a manner allowing the host cell to
express erythropoietin.
6. A procaryotic or eucaryotic host cell stably trans-
formed or transfected with a DNA vector according
to claim 5.
7. A purified and isolated DNA sequence consisting
essentially of a DNA sequence encoding a poly-
peptide having an amino acid sequence sufficiently
duplicative of that of erythropoietin to allow posses-
sion of the biological property of causing bone mar-
row cells to increase production of reticulocytes and
red blood cells, and to increase hemoglobin synthesis
or iron uptake.
[23. A procaryotic or eucaryotic host cell trans-
formed or transfected with a DNA sequence accord-
ing to claim 7 ... in a manner allowing the host cell
to express said polypeptide.)
25. A transformed or transfected mammalian host
cell according to claim 24.
27. A transformed or transfected CHO cell according
to claim 25.
fected in such a way "to allow possession of the biolo-
*19 Roche argues that the '008 claims provided: (1) a gical property" of erythropoietin, which is (5) stimulat-
"mammalian host cell" (2) that is "transformed or trans- ing red blood cell formation, or "causing bone marrow
fected" (3) with "a purified and isolated DNA sequence cells to increase production of reticulocytes and red
consisting essentially of a DNA sequence encoding a blood cells."Def.'s Mem. on ODP [Doc. 1550] at 14-15.
polypeptide having an amino acid sequence sufficiently Roche reasons that claim 1 of the '868 patent therefore
duplicative of that of erythropoietin."Roche further as- simply tells one skilled in the art to "take the cells that
serts that ' 008 claims provide that (4) the cell is trans-

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were claimed in the '008 patent and grow them, let
[ting] them do what they normally do."Id. at 15
(quoting testimony of Dr. Lowe). Similarly, Roche as-
serts that claim 2 of the '868 patent, which specifically
contemplates using CHO cells, is obvious given the fact
that the ' 008 patent also claimed the use of CHO cells.
Id.
Amgen, on the other hand, argues that the differences
between the patents are "several" and "significant." Pl.'s
Mem. on No ODP [Doc. 1310] at 40. In particular, Am-
gen asserts that the '868 patent claims (1) processes for
making (2) isolatable quantities of a glycosylated EPO
polypeptide (3) having the in vivo biological activity of
causing bone marrow cells to increase production of re-
ticulocytes and red blood cells, while the claims of the
' 008 patent claim only certain DNA molecules and cer-
tain cells transformed or transfected with said DNA mo-
lecules. Id. (asserting that, unlike the '868 patent, the
'008 patent does not "claim a process for producing any-
thing").
In other words, Amgen explains, "the '008 claims are
directed to purified and isolated DNA sequences and
cells into which such DNA sequences have been intro-
duced. In contrast, the '868 claims I and 2 are process
claims that recite the steps required to produce a glyc-
osylated polypeptide having specified
characteristics."Id. at 41 (emphasis added)."Unlike the
asserted claims of the '868 patent, none of the '008
claims require: (I) that the recited host cell actually ex-
press any EPO polypeptide; (2) that the recited host cell
actually express a glycosylated EPO polypeptide; (3)
that the host cell be capable of producing an isolatable
amount of a glycosylated EPO polypeptide; and (4) that
any glycosylated EPO isolated from cells grown in cul-
ture have the stated in vivo function."Id. These differ-
ences, according to Amgen, render the '868 claims dis-
tinct from the '008 claims.
The Court agrees. Simply having the starting material
(which is reflected in the '008 patent) and knowing that,
in theory, it can be used to create proteins is not the
equivalent of having an actual process that successfully
does so. See id. at 40 (quoting testimony of Dr. Lodish).
Roche has failed to meet its burden of demonstrating by
clear and convincing evidence that no patentable differ-
ence exists between the '008 and '868 patents. Accord-
ingly, the Court finds that the '868 claims are not anti-
cipated by the '008 patent and rules that the '868 claims
are different from the claims of the '008 patent.
*20 The Court now considers the ODP allegations with
regard to the '698 patent:

'008 claims 2, 4, 6, 7, 25, 27 '698 claims 6-9

2. A purified and isolated DNA sequence consisting
essentially of a DNA sequence encoding human
erythropoietin.
4. A procaryotic or eucaryotic host cell transformed
or transfected with a DNA sequence according to
claim 1, 2 or 3 in a manner allowing the host cell to
express erythropoietin.
6. A process for the production of a glycosylated
erythropoietin polypeptide having the in vivo biolo-
gical property of causing bone marrow cells to in-
crease production of reticulocytes and red blood cells
comprising the steps of: (a) growing, under suitable
nutrient conditions, vertebrate cells comprising amp-
lified DNA encoding the mature erythropoietin
amino acid sequence of [figure] 6, and (b) isolating
said glycosylated erythropoietin polypeptide ex-
pressed by said cells.
7. The process of claim 6 wherein said vertebrate
cells further comprise amplified marker gene DNA.

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6. A procaryotic or eucaryotic host cell stably trans- 8. The process of claim 7 wherein said amplified
formed or transfected with a DNA vector according marker gene DNA is Dihydeofolate reductase
to claim 5. (DHFR) gene DNA.
7. A purified and isolated DNA sequence consisting 9. The process according to claims 2, 4, and 6
essentially of a DNA sequence encoding a poly- wherein said cells are mammalian cells.
peptide having an amino acid sequence sufficiently
duplicative of that of erythropoietin to allow posses-
sion of the biological property of causing bone mar-
row cells to increase production of reticulocytes and
red blood cells, and to increase hemoglobin synthesis
or iron uptake.
[23. A procaryotic or eucaryotic host cell trans-
formed or transfected with a DNA sequence accord-
ing to claim 7 ... in a manner allowing the host cell
to express said polypeptide.]
25. A transformed or transfected mammalian host
cell according to claim 24.
27. A transformed or transfected CHO cell according
to claim 25.
The parties basically reiterate the arguments made with later-claimed invention is patentably distinct and there-
regard to the '868 patent. See Def.'s Mem. on ODP at fore not invalid for ODP) if that invention as a whole
17; Pl.'s Mem. on No ODP at 44. The Court's reasoning would not have been obvious over the earlier-claimed
is likewise similar. Of particular importance to the invention to a person of ordinary skill in the art at the
Court are the two additional limitations included in the time just before the later-claimed invention was made.
'698 claims: (1) the requirement of "amplified DNA en- See id.Here, the credible evidence shows, and the Court
coding the mature erythropoietin sequence of [figure] so finds, that each invention claimed in the '868 and
6" and (2) the requirement of "amplified marker gene '698 asserted claims is patentably distinct from each in-
DNA." No such requirements are present in the '008 vention claimed in the '008 patent. Thus, the Court re-
claims. And, like with the '868 claims, '698 process is jects Roche's Theory Number 3 ODP defense. In other
designed to produce a glycosylated in vivo biologically words, Roche's argument that the '008 patent renders the
active EPO product. To be able to produce such a asserted claims of the '868 and '698 patents obvious be-
product from cells containing multiple copies of EPO cause, once one skilled in the art had possession of the
DNA would have been novel to one skilled in the art at EPO DNA sequence, growing the cells and culturing
the time of the invention (even if the skilled artisan had them to obtain a protein with the characteristics claimed
possession of the product claimed in the '008 patent). in the '868 and '698 patents required no inventive effort
Accordingly, the Court rules that the '698 is a different in 1983 or 1984 is rejected. The PTO found the '868 and
process than the product obtained from the '008 patent. '698 claims patentably distinct from those in the '008
patent, and this Court agrees.
*21 The second step in the ODP analysis, after identify-
ing the differences between the claims at issue, is to de- The Court also finds unpersuasive Roche's argument
termine whether those differences in subject matter that judicial estoppel applies to prevent Amgen from
render the later-issued claim patentably distinct from making arguments, when defending against the ODP al-
the earlier-issued claim. In re Metoprolol Succinate legations, that Roche asserts are inconsistent with Am-
Patent Litig., 494 F.3d 1011, 1016 (Fed.Cir.2007). A gen's prior representations to the PTO. See Def.'s Mem.

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 Case 5:00-cv-20905-RMW Document 3865
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on ODP at 24. In particular, Roche asserts that because
Amgen stated that the '008, '868, and '698 patents are
manifestations of a single invention, it is now barred
from asserting that the relevant claims are patentably
distinct. Id. at 24-25.
T]he doctrine of judicial estoppel prevents a litigant
from pressing a claim that is inconsistent with a posi-
tion taken by that litigant either in a prior legal proceed-
ing or in an earlier phase of the same legal
proceeding."InterGen N.V. v. Grina, 344 F.3d 134, 144
(1st Cir.2003) (citing Pegram v. Herdrich, 530 U.S.
211, 227 n. 8, 120 S.Ct. 2143, 147 L.Ed.2d 164 (2000)).
The doctrine's primary purpose is to safeguard the in-
tegrity of the courts by preventing parties from manipu-
lating the machinery of the judicial system. See New
Hampshire v. Maine, 532 U.S. 742, 749-50, 121 S.Ct.
1808, 149 L.Ed.2d 968 (2001); United States v. Levas-
sear. 846 F.2d 786, 792 (1st Cir.1988). Judicial estoppel
also applies to arguments and positions presented to the
PTO from which the patentee gained a benefit. See
Lampi Corp. v. American Power Prods., Inc., 228 F.3d
1365, 1377 (Fed.Cir.2000) (applying judicial estoppel
to proceedings before PTO when doing so was dictated
by the law of the circuit from which the case origin-
ated); Porte/a-Gonzalez v. Secretary of the Navy, 109
F.3d 74, 78 (1st Cir.1997) ("Equitable doctrines of es-
toppel apply in administrative and judicial fora, and a
party cannot take one position in [a] ... administrative
proceeding and then disclaim it in a subsequent suit
arising out of the agency proceedings.") (internal cita-
tion omitted); see also Analog Devices, Inc. v. Linear
Techs. Corp., 479 F.Supp.2d 202, 212
(D.Mass.2007)(Harrington, J.).
*22 Two requirements must be satisfied in order to in-
voke judicial estoppel. First, the prior position must be
directly inconsistent with the present position. Faigin v.
Kelly, 184 F.3d 67, 82 (1st Cir.1999); see also Levas-
seur, 846 F.2d at 794. Second, the responsible party
must have succeeded in persuading a court to accept its
prior position. See Faigin, 184 F.3d at 82 (explaining
party being estopped must succeed utilizing inconsistent
position); Lydon v. Boston Sand & Gravel Co., 175 F.3d
6, 13 (1st Cir.1999) (same). Courts also often inquire as
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to whether judicial acceptance of a party's initial posi-
tion conferred a benefit on that party. See, e.g.. Patriot
Cinemas, Inc. v. General Cinemas Corp., 834 F.2d 208,
213 (1st Cir.1987); Levasseur, 846 F.2d at 793.
In this case, Roche fails to satisfy the first requirement.
Roche has put forward virtually innumerable arguments
in support of the idea that Amgen has taken inconsistent
positions. See Def.'s Mem. on ODP at 24-33. After care-
ful review of each and every one of these arguments as
well as its supporting documents, however, the Court
finds that no actual inconsistency exists.
The first alleged contradiction concerns Amgen's state-
ments to the PTO made in the context of the '096 and
'097 interferences. Id. at 27-30.Roche cites a paragraph
entitled "Summary of Lin ' s Positions" from a brief Am-
gen filed in connection with the '097 interference, in
which Amgen stated:
While the count is directed to a process for preparing
in vivo biologically active EPO using a mammalian
host cell transfected or transformed with an isolated
DNA sequence encoding human EPO [i.e., the pro-
cess patent claims], and the litigation was directed to
the purified and isolated DNA sequence and host cells
transfected or transformed thereby [i.e., the '008 DNA
claims], it is evident that these are only different
manifestations of the same invention.... Clearly, the
whole purpose and intent of the purified and isolated
DNA sequence encoding human EPO (and host cells
transfected therewith) at issue in the litigation was to
express in vivo biologically active human EPO.
Stated otherwise, the process language of the Lin pat-
ent claims at issue in the litigation ("encoding human
EPO" ) [see '008 patent claims] is, for all intents and
purposes, a description of the present count.
Def.'s Mem. on ODP at 27 (quoting Brief for the Senior
Party Lin, Interference No. 102,097, dated July 29,
1991, at 25-26). Roche asserts that these statements in-
dicate that Amgen acknowledged that the patents at is-
sue all reflect a single invention, contrary to its repres-
entations to this Court. See id. at 25.
At first blush, this argument seemed compelling. When
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the statement is put in the context of the whole interfer-
ence, however, an entirely different coloration emerges.
Roche's quote omits the reference to the adverse party
in the interference: Fritsch. A detailed reading of the
'097 Lin brief reveals that Amgen was referring to
Fritsch ' s position in order to prove that, even under
Fritsch's own theory, Amgen had priority. In other
words, Amgen was saying to the Interference Board that
(1) given Fritsch's own admissions and (2) taking into
account Judge Saris' decision in Amgen, Inc. v. Chugai
Pharrn. Co., No. 87-2617-Y, 1989 WL 169006
(D.Mass. December 11, 1989), Fritsch would never be
able to establish that he had invented the Process Count
before Lin. This is not the equivalent of adopting
Frisch's reasoning, as Roche asserts, see Def.'s Mem. on
ODP at 27; instead, Amgen simply was pointing out
that even if Fritsch's arguments were credited Fritsch
would still lose.
*23 Roche also asserts that Amgen contradicts itself
here because Amgen indicated it did not consider "in
vivo biological activity to provide a patentable distinc-
tion over the EPO DNA sequence," which is inconsist-
ent with Amgen's arguments to this Court. See Def.'s
Mem. on ODP at 27-33. Roche again relies upon the
theory that Amgen adopted Fritsch's arguments and ad-
mitted that, once a skilled artisan had the DNA se-
quence, the new claims would be obvious. As explained
above, however, a detailed reading of the Lin's '097 in-
terference reveals that Amgen was putting forward all
the information regarding priority of invention, not ad-
opting this obviousness theory.
Finally, a third alleged contradiction, which initially
caught the Court's attention, also ultimately fails. Roche
asserts that Amgen's arguments in the ' 096 and '097 in-
terferences are the basis upon which the interference
Board relied when ruling that Amgen's work "relating to
expression of the EPO gene in mammalian host cells
and isolation of the resulting glycoprotein product in-
volved [nothing] more than the exercise of ordinary
skill by practioners in the field."Id. at 32.Roche reasons
that the Interference Board ' s conclusion demonstrates
that Amgen itself advocated that there was "nothing
novel or inventive in making glycosylated biologically
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active EPO."Id. Nowhere, however, does the Interfer-
ence Board's decision address the issue of obviousness;
rather, its decision appears driven by the issue of prior-
ity and Fritsch's concession, not any argument by Am-
gen.
As mentioned, Roche's memoranda are full of other al-
leged inconsistencies. For the purposes of this decision,
however, the Court is satisfied with mentioning the
most compelling ones. As for the rest, the Court has
taken them into account but, failing to see factual or
legal merit in them, summarily denies them.
3. Roche's Theory Number 4
Roche's last attempt to invalidate the '933, '422, and
'349 patents rests on the contention that they would
have been obvious to one skilled in the art over the
claims of the '868 and '698 patents and that any distinc-
tions between the claims of the former and latter group
are not patentable. Def.'s Mem. on ODP at 4. If Amgen
is eligible to invoke the safe harbor provision of 35
U.S.C. § 121, Roche would be unable to succeed on this
theory. In order to benefit from the protection offered
by section 121, it must be true both that (a) the '933,
'422, and '349 patents arose from an application that
was the result of a PTO restriction requirement, and (b)
the claims of those patents are consonant with the re-
striction requirement. Gerber, 916 F.2d at 687-88.
The first of these requirements has already been ad-
dressed in this decision. In granting partial summary
judgment, this Court ruled that the '933, '422, and '349
patents were filed as a result of the 1986 restriction re-
quirement.
With regard to consonance, in issuing the 1986 restric-
tion requirement, the examiner broke the claims put
forth in the '298 application into six groups:
*24 I. Claims 1-13, 16, 39-41, 47-54 and 59, drawn to
polypeptide, classified in Class 260, subclass 112.
II. Claims 14, 15, 17-36, 58 and 61-72, drawn to
DNA, classified in Class 536, subclass 27.
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III. Claims 37-38, drawn to plasmid, classified in
Class 435, subclass 240.
IV. Claims 42-46, drawn to cells, classified in Class
435, subclass 240.
V. Claims 55-57, drawn to pharmaceutical composi-
tion, classified in Class 435, subclass 177.
VI. Claim 60, drawn to assay, classified in Class 435,
subclass 6
Because these inventions are distinct for the reasons
given above and have acquired a separate status in the
art because of their recognized divergent subject mat-
ter, restriction for examination purposes as indicated
is proper.
Lodish Decl. Ex. E-1, '298 Prosecution, Paper 8 at 2.
"Restriction [of the application] to one of the[se six] in-
ventions [was] required under 35 U.S.C. § 121."Id. Am-
gen accordingly selected the Group II claims for contin-
ued examination in the '298 application. Moore Decl.
Ex. H-8, Office Action, at AM-ITC 00952502. The oth-
er, non-elected claims were cancelled from the applica-
tion. Id. Although Amgen initially elected all of the
Group II claims, which included DNA, host cell, and
process claims, for further prosecution in the '298 ap-
plication, it also later cancelled the process claims after
it became apparent that the PTO would not allow issu-
ance of those claims based on In re Durden, 763 F2d
1406 (Fed.Cir.1985). Moore Decl. Ex. H-13, Office Ac-
tion, at AM-ITC 00952592; id.Ex. H-I4, Examiner In-
terview Summary Record, at AM-ITC 00952596; id.Ex.
H-15, Applicant's Amendment and Reply, at AM-ITC
00952599. On October 27, 1987, Dr. Lin's '298 applica-
tion issued as the '008 patent. Consistent with Amgen 's
election to have Group II claims examined in the ' 298
application, all of the '008 patent claims fall within the
scope of restriction Group II.
On October 23, 1987, Amgen filed two new applica-
tions: the '178 application and the '179 application. Dur-
ing prosecution of the these applications, as well as sub-
sequent applications leading to the patents-in-suit, Am-
gen canceled claims, amended claims, and added new
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claims. As a result, the issued claims in the patents-
in-suit are not identical to the original claims filed in
the '178 and '179 applications. All of the claims of the
'933, '349, and '422 patents, however, fall within the
scope of the non-elected restriction groups: the '933 pat-
ent claims fall within the scope of restriction Groups I
and V, the '422 patent claims fall within restriction
Group V, and the '349 patent claims fall within restric-
tion Group IV. None of the claims in these patents fall
within the scope of restriction Group II, which was pro-
secuted to issuance in the '008 patent. In contrast, the is-
sued claims of the '868 and '698 patents fall within the
scope of restriction Group II.
Roche does not seem to contest these factual findings.
In its memoranda, however, Roche argues two proposi-
tions. First, in order for section 121 to apply, Roche as-
serts that each of the patents at issue-the '933, '422, and
' 349, as well as the '868 and '698 patents-must have
arisen from applications filed as a result of a restriction
requirement. Def.'s Mem. on Consonance [Doc. 1548]
at 3-5. Second, Roche argues that the '868 and '698 pat-
ents did not maintain consonance with the restriction re-
quirement, defeating Amgen's ability to invoke section
121. Id. at 7-8.The premise underlying both arguments
is that the two section 121 prerequisites must be satis-
fied both by the allegedly invalid patent and by the pat-
ent asserted as the ODP reference. Id. at 3.
*25 Based on the plain language of section 121, the
Court agrees with Roche's first premise: that the prior
art, as well as the allegedly invalid patent, must have
arisen from applications filed as a result of a restriction
requirement. Section 121 states that "a patent issuing on
an application with respect to which a requirement for
restriction ... has been made, or [issuing] on an applica-
tion filed as a result of such a requirement, shall not be
used as a reference against" the divisional application,
the original application, or any patent issuing therefrom.
35 U.S.C. § 121. In other words, section 121 cannot be
invoked to remove a patent as prior art unless that pat-
ent issued from an application subject to a restriction re-
quirement or an application as a result of that restric-
tion.
The fact that Roche has correctly identified the limits
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imposed by section 121 on immunized prior art,
however, does not help its cause. This Court concluded
at the time it granted summary judgment, as it does
now, that the ' 178 and '179 applications were filed as a
result of a restriction requirement. See supra part II.D.1.
The '868 patent issued from the '179 application; ac-
cordingly, it is among those pieces of prior art to which
section 121 may apply.
The '698 patent, however, issued from the ' 381 applica-
tion, which was a continuation of the '179 application.
The scope of prior art immunized by section 121 non-
etheless appears to extend to the '698 patent. The Feder-
al Circuit has, when applying section 121 to allegedly
invalid patents, permitted its protections to be extended
to patents issuing from applications that were continu-
ations of applications filed as a result of a restriction re-
quirement. See, e.g., Symbol Techs., 935 F.2d at
FN8
1579-80: Applied Materials, 98 F.3d at 1567-69.
There is no apparent reason why the same rule should
not apply on the other side of the equation.
The Court also rejects Roche's late-arising argument
that the '868 and '698 patents must have maintained
consonance with the '008 patent in order to be removed
as a reference for the '933, '342, and '433 patents. As an
initial matter, none of the cases cited by Roche expli-
citly require this be the case. Indeed, although Roche
asserts that "case law makes clear that consonance is
relevant to determining whether a patent may be used as
a reference," Def.'s Mem. on Consonance at 6, it fails to
cite any cases standing for this alleged rule immediately
thereafter. See id. Instead, it attempts to reach this con-
clusion in a roundabout way by citing later to three
cases-Applied Materials, Symbol Technologies, and
Geneva Pharmaceuticals-that stand for the proposition
that consonance is maintained "as long as the amended
claims preserved the Examiner's demarcation between
claim groups."Id. In Geneva Pharmaceuticals, however,
the court did not analyze consonance with regard to the
relevant patents because it concluded that the restriction
requirement failed sufficiently to delineate the subject
matter such that consonance could be assessed. See
Geneva Pharms., 349 F.3d at 1381-82. This case thus
does not advance Roche's argument even implicitly.
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*26 The Court finds another case relied upon by Roche,
Applied Materials, quite instructive, but not in the way
Roche would hope. In Applied Materials, the Federal
Circuit analyzed the validity of a patent, the '609 patent,
issuing from a divisional application resulting from a
restriction requirement by reference to two other pat-
ents. One reference patent, the '712 patent, issued from
the original parent application upon which the restric-
tion was imposed. See Applied Materials, Inc. v. Ad-
vanced Semiconductor Materials Am., Inc., 1994 WL
362005, at *2 (N.D.Cal.1994). The second reference
patent, the '496 patent, issued from a second divisional
application. See Applied Materials, 98 F.3d at 1567.
When determining the applicability of section 121, the
court focused its consonance analysis on the allegedly
invalid patent as opposed to the reference patents, see
id. at 1568-69, and ultimately concluded that
"consonance was not violated, for the process claims
[reflected in the challenged '609 patent] remained in the
separate patents from the apparatus claims [reflected in
the '496 and '712 patents],"id at 1568.
While the Applied Materials court looked to the two
reference patents to determine whether they covered the
same material as the allegedly invalid '609 patent, not-
ably it did not ask whether the '496 patent maintained
consonance with the '712 patent. This is of particular in-
terest given two facts: (I) the '712 and '496 patent both
covered "apparatus" claims and (2) the '496 patent was
subject to a terminal disclaimer. SeeU.S. Patent No.
4,047,496. Terminal disclaimers, of course, are used to
overcome double patenting rejections. See, e.g., Eisai
Co. v. Dr. Reddv's Laboratories, Ltd., 533 F.3d 1353,
1360 (Fed.Cir.2008) (noting patent applicants
"routinely overcome" ODP rejections by filing a ter-
minal disclaimer). Indeed, the effective date of the '496
patent's disclaimer, November 30, 1988, indicates that it
was designed to resolve double patenting concerns
arising from the '712 patent. See Applied Materials,
1994 WL 362005, at *I (noting '712 patent expired in
1988); U.S. Patent No. 3,623,712 (noting issuance date
of November 30, 1971). The only reason, meanwhile,
that a terminal disclaimer would be required is if section
121 did not immunize the '712 patent as a reference for
double patenting, suggesting that the '496 patent did not
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FN9
maintain consonance with the '712 parent.
In any event, the Applied Materials court applied sec-
tion 121 and upheld the district court ' s determination
that the '609 patent was not invalid for double patenting
over both the '712 patentand the '496 patent.Applied
Materials, 98 F.3d at 1569. In doing so, it indicated that
the relevant inquiry-to the extent that the substance of
the reference art determines whether section 121 may
apply-is whether the allegedly invalid patent and the
reference art adhere to the restriction set forth by the
PTO by covering distinct inventions, not whether the
reference art maintains consonance with the parent it
shares with the allegedly invalid patent. See id. at
1568 (finding it sufficient that the allegedly invalid pat-
ent covered process claims while reference patents
covered apparatus claims).
*27 The facts of the instant case, of course, are not so
different from Applied Materials.It is undisputed that
the claims of '933, '422, and ' 349 patents do not cover
anything that falls within restriction Group II. Mean-
while, the '868 and '698 patents contain only Group II
claims. Accordingly, consonance was not violated, to
borrow the phrasing of Applied Materials, because the
Group II claims remained in separate patents from the
claims of other restriction groups.
Because the '933, '422, and '349 patents issued as the
result of a restriction requirement and maintain conson-
ance with that restriction requirement, they fall within
the protection of section 121. Similarly, because the
'868 and '698 patents issued from applications filed as
the result of a restriction requirement and do not share
subject matter with the ' 933, '422, and '349 patents, the
'868 and '698 patents are immunized as prior art. Ac-
cordingly, the Court declines to find the '933, '422 and
'349 patents invalid for ODP.
. POST-TRIAL JUDGMENT AS MATTER OF
LAW
A. THE LEGAL FRAMEWORK
Roche, having lost before the jury, moves for judgment
as matter of law ("JMOL") and for a new trial. The
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JMOL is the modern equivalent of a motion for judg-
ment notwithstanding the verdict. See Svngenta Seeds,
Inc. v. Delta Cotton Co-op., Inc., 457 F.3d 1269. 1274
n. I (Fed.Cir.2006)."Federal Rule of Civil Procedure
50(a)(I) provides that a court may grant a motion for
JMOL only where there is no legally sufficient eviden-
tiary basis for a reasonable jury to find for the non-
movant."Paice LLC v. Toyota Motor Corp., 504 F.3d
1293, 1303 (Fed.Cir.2007) (internal quotation marks
omitted).
This Court will apply First Circuit standards in review-
ing the motions for a new trial. See Z4 Techs.. Inc. v.
Microsoft Corp., 507 F.3d 1340, 1347 (Fed.Cir.2007)
(reviewing the refusal of a motion for a new trial ac-
cording to the regional circuit standard). Under Federal
Rule of Evidence 59(a)(1), "a `new trial may be granted
... for any of the reasons for which new trials have ...
been granted in actions at law in the courts of the
United States."'Fernandez v. Leonard, 963 F.2d 459,
468 n. 13 (1st Cir.1992)."District courts 'may set aside
a jury's verdict ... only if [it] is so clearly against the
weight of the evidence as to amount to a manifest mis-
carriage of justice."'Rivera Castillo v. Autokirey, Inc.,
379 F.3d 4, 13 (1st Cir.2004).
B. VALIDITY
Section 282 of the Patent Act, 35 U.S.C., states, "A pat-
ent shall be presumed valid."This is far more significant
than a true evidentiary presumption, cf.Fed.R.Evid. 301;
section 282 shifts to the party challenging the patent the
burden of proving invalidity by clear and convincing
evidence. Scanner Techs. Corp. v. ICOS Vision St's.
Corp., 528 F.3d 1365, 1380 (2d Cir.2008). Under no
circumstance is that burden to be borne by the patent
holder. Id. The presumption of validity codified in sec-
tion 282 reflects Congress's judgment that the Patent
and Trademark Office's decision to issue a patent is en-
titled to some deference. See Purdue Pharma L.P. v.
Foulding, Inc., 230 F.3d 1320, 1329 (Fed.Cir.2000); see
also United States v. Budd, 144 U.S. 154, 161, 12 S.Ct.
575, 36 L.Ed. 384 (1892). In the instant case, Roche as-
serted a number of invalidity defenses including anticip-
ation, obviousness, indefiniteness, and non-enablement.
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Below, the Court focuses on Roche's assertion that
claim 1 of the '422 patent was anticipated by the Gold-
wasser study as well as Roche's contention that the term
"human erythropoietin" is fatally indefinite.
*28 A claim is anticipated if every limitation is present
in a single device in the prior art. Finisar Corp. v. Dir-
ecTV Group, Inc., 523 F.3d 1323, 1334 (Fed.Cir.2008)_
As shall be discussed below, Roche's anticipation chal-
lenge centered upon its assertion that claim 1 of the '422
patent was anticipated by the Goldwasser study. Roche
could not as matter of law meet its burden of proving
anticipation because "purified from mammalian cells
grown in culture" limits claim 1 while the EPO used in
the Goldwasser study was purified from human urine.
The definiteness requirement is derived from section
112, paragraph 2 of the Patent Act, which provides that
"[t]he specification shall conclude with one or more
claims particularly pointing out and distinctly claiming
the subject matter which the applicant regards as his in-
vention."32 U.S.C. § 112. The touchstone of the defin-
iteness requirement is whether a person having ordinary
skill in the art at the time of the application would be
able to discern the scope of the claim. See Exxon Re-
search & Eng'g Co. v. United States, 265 F-3d 1371,
1375 (Fed.Cir.2001). As the Court shall explain below,
the term "human erythropoietin" is sufficiently definite,
even though the specification does not specify whether
EPO' s amino acid sequence was I to 165 or 1 to 166.
1. The Court properly concluded that claim 1 of the
'422 patent was not anticipated because "purified
from mammalian cells grown in culture" limits the
claim and the prior art was purified from urine
Roche contends that it is entitled to judgment as matter
of law or, in the alternative, a new trial because a reas-
onable jury would have been forced to conclude that
claim 1 of the '422 patent is invalid as anticipated by the
prior art. Claim 1 of the '422 patent teaches:
A[1] pharmaceutical composition comprising a[2]
therapeutically effective amount of [3] human eryth-
ropoietin and a[4] pharmaceutically acceptable dilu-
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ent, adjuvant or carrier, wherein said erythropoietin is
[5] purified from mammalian cells grown in culture.
'422 patent col. 38 11. 36-41 (emphasis supplied). At
claim construction, the Court concluded that each of the
numbered elements limited the claim, including the
product's source, "purified from mammalian cells
grown in culture."The undisputed record revealed that
none of the allegedly anticipatory prior art was
"purified from mammalian cells grown in culture."The
Court therefore granted Amgen's motion for a directed
verdict on the validity of claim 1 of the '422 patent on
the ground that "Roche [ ] failed ... to prove by clear
and convincing evidence as to the '422 patent claim 1
that it was anticipated...." Trial Tr. at 1380.
Roche asserts that "Amgen had the burden at trial to
`convincingly show' that the source limitation imparts
novel structure to an otherwise non-novel
product."Defs Post Tr. Br. at 50. Roche's proffered rule
is contrary to the fundamental principle that a defendant
must demonstrate "by clear and convincing evidence
that each and every element of the claimed invention"
was present in the prior art. Zenon Envtl., Inc. v. US.
Filter Corp., 506 F.3d 1370, 1379 (Fed.Cir.2007).
Moreover, it is contrary to Markman v. Westview Instru-
ments, Inc., 517 U.S. 370, 387, 116 S.Ct. 1384, 134
L.Ed.2d 577 (1996), which makes clear that issues of
claim construction are within the exclusive province of
the Court. In addition, the rule contravenes the pre-
sumption of validity codified at 35 U.S.C. § 282 by
shifting the burden of persuasion to Amgen. While a
patentee seeking to have a source or process limit a
claim may be required to come forward with evidence
during claim construction, once that burden is satisfied,
as it was in this case, then the patentee need not re-
prove at trial what he has already demonstrated to the
patent office and court.
a. "Purified from mammalian cells grown in culture "
limits claim I
*29 At claim construction, the Court noted that "as has
long been recognized by the Federal Circuit, source or
process limitations can and do serve to define the struc-
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Lure of a claimed product where such limitations are the
best means to distinguish a claimed product over prior
art."Amgen Markman, 494 F.Supp.2d at 65 (citing In re
Luck, 476 F.2d 650, 653 (C.C.P.A.1973)). As "Dr. Lin
has testified[,] at the time, `the only way [to] character-
ize [his claimed] product is by the way they were mak-
ing [it].' Accordingly, the Court deem[ed] it appropriate
to include the `source limitation' in a product claim."Id.
(internal citation omitted)(first two alterations in origin-
al). The Federal Circuit has upheld this construction in a
related case. See Amgen II, 314 F.3d at 1329 (noting
that " `purified from mammalian cells grown in culture'
in claim 1 clearly limits the source of the EPO used in
the claimed `pharmaceutical composition' "). The Court
held that "purified from mammalian cells grown in cul-
ture" means "obtained in substantially homogeneous
form from the mammalian cells, using the word from in
the sense that it originates in the mammalian cells,
without limitation to it only taking it directly out of the
interior of the cells, which have been grown in the in
vitro culture."Id. The Court's decision that the source
limits the claim in this case was consistent with the
Court's conclusions in Amgen I, where the Court ob-
served distinctions between the claimed recombinant
EPO and the urinary EPO employed in the Goldwasser
study. See Amgen I, 126 F.Supp.2d at 124-27.
One critical distinction between EPO extracted from ur-
ine and synthetically engineered EPO is that the urinary
EPO has been exposed to enzymes and bodily processes
that may hinder its efficacy for future use. In Amgen I,
the Court noted differences in glycosylation and specif-
ic activity, which may also reflect recombinant EPO ' s
resistance to degradation in the human body:
As disclosed in Column 28 of the patent ... according
to Western blot and SDS-PAGE analyses, "the CHO-
produced EPO material had a somewhat higher mo-
lecular weight than the COS-1 expression product
which, in turn, was slightly larger than the pooled
source human urinary extract."[U.S. Patent No.
5,955,422] at [col.] 28[11.] 38-41. Amgen scientists
then treated the proteins with neuraminidase, which
removes the sialic acids from the protein. Id. at [col.]
28[11.] 42-43. Following neuraminidase treatment, the
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COS-1 and CHO recombinant products had approx-
imately equal apparent molecular weights, but were
both nonetheless larger than the resulting asialo hu-
man urinary extract. See id. at [col.] 28[11.] 42-46.
Amgen then treated the CHO and human urinary
products with endoglycosidase F, which removes not
only sialic acids, but also any other carbohydrate
chains attached to the protein. Id. at [col.] 28[11.]
46-48. Amgen scientists discovered that the CHO and
urinary products were "substantially homogenous
products having essentially identical molecular
weight characteristics."Id. at [col.]28 [II.] 49-50. The
conclusion to be drawn from this series of tests is that
the difference in the apparent molecular weights of
recombinant and urinary EPO products on SDS-
PAGE and Western blot is explained by differences in
glycosylation between the two types of EPO gly-
coproteins. In light of this data reported in Column
28, one skilled in the art in 1983 would understand
that the recombinant proteins are glycosylated differ-
ently than the naturally-occurring protein, and that
these differences can be revealed by running an SDS-
PAGE and doing a western blot as described here.
*30 Amgen I, 126 F.Supp.2d at 125 (some internal cita-
tions and quotation marks omitted).
In addition, evidence suggests that recombinant and ur-
ina EPO glycosilate at different rates:
[i]n the final paragraph of Column 28, Amgen dis-
closed the results of another set of experiments inten-
ded to show differences in glycosylation between re-
combinant and urinary EPO products. '422 patent at
[col.] 28[11.] 51-67. Amgen performed "carbohydrate
analyses " in order to identify the individual monosac-
charide sugar residues present on both the EPO de-
rived from CHO cells and derived from urine. See id.
[I]n this experiment the glycoprotein is taken and hy-
drolyzed in the presence of acid ... and that cleaves
the bonds between the amino acids, cleaves the bonds
between the individual sugar residues.... [A]II the sug-
ars then are present unlinked to each other as indi-
vidual monosaccharides. They can be labeled and
separated by some chromatographic method. So that,
 Case 5:00-cv-20905-RMW Document 3865
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say the sialic acids are separated from the N-
acetylglucosamines and Fucose and so forth.
Once all of the sugars are separated and identified,
their relative distribution can be calculated. In partic-
ular, one type of sugar is designated as one, and the
other sugars are compared by their abundance in rela-
tion to the standardized sugar. In the nomenclature of
the patent specification, one can identify the carbo-
hydrate constitution values expressed as molar ratios
of the carbohydrates in the product. Id. at [col.]
28[11.] 56-58. Using this method, the patent reveals
that the recombinant EPO product contains a higher
ratio of N-acetylneuraminic acid (.998) than the urin-
ary EPO product (.930).Id. at [col.] 28[11.] 56-66. This
difference in the carbohydrate constitution values
between the recombinant and urinary EPO glycopro-
teins is "consistent with the Western blot and SDS-
PAGE analysis described above."Id. at [col.] 28[11.]
66-67.
Id.(internal indentation of block quote omitted)(footnote
omitted) (alterations in second paragraph in original).
It is significant that the source is what enables mass
production and commercial viability. If a drug manufac-
turer sought to produce the naturally occurring EPO in
the Goldwasser study, the manufacturer would have to
scour the world for aplastic anemia patients whose urine
was susceptible to purification according to the Miyake
method. Then the producer would have to contract with
enough patients willing to provide quantities of urine
sufficient to meet the vast demand for anemia drugs,
thereby transforming the company into a glorified urine
collection agency. Of course, it is unlikely that this ever
could have happened because as Dr. Baron informed the
FDA "twice, in 1985 and 1987," the requisite type of
urine was in such short supply that it prevented even
limited three-patient studies like those he had conducted
with Dr. Goldwasser. Def.s' Post Tr. Br. at 47. Part of
the genius of Amgen's EPO is that it does not depend on
a scarce resource.
b. Issues pertaining to claim construction may not be
submitted to the jury
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*31 Once the Court made its determination at claim
construction, there is no precedent that permits courts to
treat source limitations differently than other limita-
tions. See In re Luck, 476 F.2d at 653 ("[P]roduct
claims may include process steps to wholly or partially
define the claimed product. To the extent these process
limitations distinguish the product over the prior art,
they must be given the same consideration as traditional
product characteristics.")(internal citation omitted). Re-
quiring a patentee to prove to a jury that a source limits
a claim inverts the role of judge and fact-finder during
trial in patent litigation. It has long been established that
"[q]uestions of construction are questions ... for the
judge, not questions of fact for the jury."See Markman,
517 U.S. at 387 (quoting A. Walker, Patent Laws § 189,
at 173 (3d ed. 1895)). Requiring a patentee to prove to a
jury that a source limits his claim plainly subverts the
longstanding division of responsibility the Supreme
Court clarified in Markman.See id. at 384-391.
To be sure, certain issues subsumed in claim construc-
tion questions resemble questions of fact. See id. at
389-90.For instance, here, the Court confronted the
question of whether and to what extent structural dis-
tinctions between urinary and recombinant EPO are at-
tributable to recombinant EPO's source. Resolution of
this issue required not only examination of the patent
and the prosecution, but also expert opinion. But the
mere fact the issue requires a court to make credibility
determinations does not mean that those questions must
be submitted to a jury. Id. at 387 ("[M]atters of claim
construction, even those aided by expert testimony, are
questions for the court[.]").
c. Saddling patentees with a burden of proof at trial is
contrary to 35 US C. j 282
Section 282 of the Patent Act mandates that the burden
of proof shall fall on the "party asserting [ ]
invalidity." 35 U.S.C. § 282. Because the source limits
Claim I of the '422 patent, it is entitled to a presump-
tion of validity that must be overcome with clear and
convincing evidence. As the Supreme Court explained
in 1892:
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-

In [patent cases], the respect due to patent, the pre-
sumptions that all the preceding steps required by the
law had been observed before its issue, the immense
importance and necessity of the stability of titles de-
pendent upon these official instruments, demand that
the effort to set them aside, to annual them, or to cor-
rect mistakes in them, should only be successful when
the allegations on which this is attempted are clearly
stated, and fully sustained by proof.
United States v. Budd, 144 U.S. 154, 161, 12 S.Ct. 575,
36 L.Ed. 384 (I 892)(quoting United States v. Maxwell
Land-Grant Co., 121 U.S. 325, 381, 7 S.Ct. 1015, 30
L.Ed. 949 (1887)).
Because the source claim delineates the scope of Am-
gen' s patent, it is entitled to the same presumption of
validity due any product limitation. Roche's approach
would eviscerate the presumption by forcing Amgen to
come forward with evidence to establish novelty. Feder-
al Circuit precedent is to the contrary. See Stratofle.x,
Inc. v. Aeroquip Corp., 713 F.2d 1530, 1534
(Fed.Cir.1983). Once applied, the presumption of valid-
ity may not be diminished. Id.
*32 Neither 35 U.S.C. § 282 nor any precedent provides
a basis for shifting the burden to the patent-holder dur-
ing trial. Nevertheless, Roche insists that "Amgen had
the burden at trial to `convincingly show' that the
source limitation imparts novel structure.... " Roche has
taken the words "convincingly show " from In re
Moeller, 28 C.C.P.A. 932, 117 F.2d 565, 567
(C.C.P.A.1941), a 1941 opinion of the Court of Cus-
toms and Patent Appeals.In re Moeller, however, dealt
with an appeal from the Board of Appeals of the United
States Patent and Trademark Office. The significance of
this fact is that Moeller was a patent applicant and did
not enjoy a presumption of validity.
Roche's other cited authority, SmithKline Beecham
Corp. v. Geneva Pharms., Inc., No. 99-CV02926, 2002
U.S. Dist. LEXIS 25275 (E.D. Pa Dec. 20, 2007), an
unpublished opinion from the District Court for the
Eastern District of Pennsylvania, is similarly unpersuas-
ive. Roche avers that SmithKline"implicitly recogniz[es]
that the patentee bears the burden " of demonstrating
that a source limits a claim. Def.'s Post Tr. Br. at 50.
The truth is the district court in SmithKline did not ap-
ply the burden to either party, much less suggest that a
patentee must demonstrate that a source limits a claim
at trial. Id. at *19-21.
In short, there is no reason for this Court to eschew the
ordinary presumption of validity. The Court therefore
concludes the source limitation in Claim 1 of the '422
patent is entitled to a presumption of validity that Roche
failed to rebut.
d. Roche could not prove anticipation of claim 1 of the
'422 patent with clear and convincing evidence because
the prior art was purified from the urine of aplastic an-
emia patients
"Invalidity based on `anticipation,' 35 U.S.C. § 102, re-
quires that the identical invention was known or its ex-
istence would reasonably have been known to a person
of ordinary skill in the field...."SmithKline Beecham
Corp. v. Apotex. Corp., 403 F.3d 1328, 1330
(Fed.Cir.2005). In order to prevail at trial, Roche had to
demonstrate a particular piece of prior art anticipated
each element of claim 1. In re Omeprazole Patent Litig-
ation, 483 F.3d 1364, 1371 (Fed.Cir.2007). It is undis-
puted that neither "Dr. Goldwasser ' s study [nor any oth-
er allegedly anticipating prior art] involve[d] an EPO
purified from mammalian cells grown in culture, which
is ... required by Claim I of the ' 422 patent."Amgen I,
126 F.Supp.2d at 140-41. Therefore, the Court will not
reverse its directed verdict for Amgen on Roche's de-
fense of anticipation as to claim 1 of the '422 patent.
Nevertheless, Roche contends it is entitled to judgment
as matter of law because Amgen failed to meet its
"heavy burden" of demonstrating that "purified from
mammalian cells grown in culture" imparts novelty.
Def.'s Post Tr. Br. at 52. Roche avers this is so because
the limitation is so vague that it embraces a myriad of
hypothetical EPO structures that might be "structurally
indistinguishable ... from human urinary EPO."Id. at
360.Therefore, according to Roche, any distinctions
between human and urinary EPO that are caused by dif-
ferences in purification techniques cannot establish nov-

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 Case 5:00-cv-20905-RMW Document 3865
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elty.
*33 As this Court has outlined, Roche bears the burden
of proving that Dr. Goldwasser's EPO was in fact
identical to the EPO described in claim 1 of the ' 422
patent. The mere fact that some mammalian cell puri-
fied in some manner in some culture might produce
some glycoprotein structurally similar to Dr. Gold-
wasser's EPO hardly proves anticipation by clear and
convincing evidence.
e. The Court's conclusion is consistent with Federal
Circuit's dicta in Amgen IV and the holding of SmithK-
line
The Court' s conclusion that the source limits the claim
is consistent with Federal Circuit precedent as well as
dicta in the Federal Circuit's opinion in the related TKT
ation. As the Federal Circuit observed in Amgen
II,"a claimed product shown to be present in the prior
art cannot be rendered patentable solely by the addition
of source or process limitations. " 314 F.3d at 1354 n. 20.
It is also true, however, that source and process limita-
tions may impart novel structure to a product claim.
SmithKline, 439 F.3d at 1319 ("If those product-
by-process claims produced a different product than that
disclosed in the [prior art], there would be an argument
that the [prior art] disclosure did not anticipate."). As
discussed above, the source helps to distinguish recom-
binant EPO from the prior art. The distinctions between
urinary and recombinant EPO dictate that the rule artic-
ulated in Amgen II does not apply.
It is also worth noting that the Court's construction of
this term has twice been appealed, and in neither case
has the Federal Circuit held that this Court erred in con-
cluding that the source limits the claim. See Amgen II,
314 F.3d at 1329-30. In Amgen II, the Federal Circuit
explained:
As to the '422 patent, the limitation "purified from
mammalian cells grown in culture" in claim 1 clearly
s the source of the EPO used in the claimed
"pharmaceutical composition. " The limitation only
speaks to the source of the EPO and does not limit the
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Page 27
process by which the EPO is expressed. Rather, the
claim is broadly drawn to a "pharmaceutical composi-
tion" having certain elements, one of those being EPO
"purified from mammalian cells in culture."This read-
ing is in line with the district court's construction....
Id. at 1329.The Court expanded on its view in a foot-
note: "We do not hold that these limitations lack mean-
ing, only that they mean just what they say. Accord-
ingly, they limit only the source from which the EPO is
obtained, not the method by which it is produced."Id. at
1330 n. 5.
In sum, the Court's grant of summary judgment on the
issue of anticipation of claim 1 of the '422 patent was
proper because "purified from mammalian cells grown
in culture" limits the claim and because the prior art
was derived from human urine.
2. The jury's finding that claim I of the '422 patent
and claims 3, 7, and 9 of the '933 patent are not in-
definite is based on sufficient evidence
*34 Roche argues that even if "purified from mammali-
an cells grown in culture" limits the claim, claim 1 of
the '422 patent as well as claims 3, 7, and 9 of the '933
patent are indefinite because "the breadth of the claim
term `human erythropoietin ' makes it impossible to de-
termine what is and what is not within the claim."Def. ' s
Post Tr. Br. at 108. Although Roche concedes that Am-
gen offered expert evidence on this point at trial, Roche
contends that Dr. Lodish's opinion was a "tortured ex-
planation," contradicted by Roche's expert, Dr. Flavell.
Id. Because the Court is not permitted to re-weigh evid-
ence, and because Dr. Lodish's testimony provided a
sufficient basis for a reasonable jury to conclude Roche
failed to prove indefiniteness by clear and convincing
evidence, Roche' s motion for judgment as matter of law
or a new trial must be denied.
Plaintiffs seeking to invalidate a patent for indefinite-
ness face a difficult burden. Not only must they prove
their claims by clear and convincing evidence, the de-
gree of definiteness required for a given claim varies
depending upon the state of the art. PharmaStem Thera-
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peutics, Inc. v. ViaCell, Inc., 491 F.3d 1342, 1373 *35 According to Dr. Lodish, Example 10 of the spe-
(Fed.Cir.2007). The Federal Circuit has recognized that cification "inherently demonstrates 165 amino acid
"in fields of new and evolving knowledge, that the EPO."Id. at 2314.Example 10 provides instructions for
claims can be no more precise than the knowledge in making EPO. "In other words, if a person skilled in the
the field permits. "Id. Simply put, where knowledge is art followed Example 10, they would be in possession
still evolving, a patentee will be held to a lower stand- of a 165 amino acid human EPO."Id. Qualified scient-
ard. "[I]f the meaning of the claim is discernible, even ists of the time would know the product was EPO be-
though the task may be formidable and the conclusion cause "[t]he human EPO produced in Example 10 of Dr.
may be one over which reasonable persons will dis- Lin's patents has the I to 165 amino acid [sequence] re-
agree, ... [the] claim [is] sufficiently clear to avoid in- cited in Figure 6."Id. at 2313.
validity on indefiniteness grounds."Exxon Research &
Using Figure 6 as a demonstrative, Dr. Lodish showed
Eng'g Co. v. United States, 265 F.3d 1371, 1375
the jury how a skilled worker in 1984 would have un-
(Fed.Cir.2001). As will be discussed below, credible ex-
derstood that portion of the specification to describe hu-
pert testimony in this case suggests that the term
man EPO. It is important to note, however, that Dr.
"human erythropoietin" was as exacting as could have
Lodish did not explain "human erythropoietin " by refer-
been expected given the state of scientific knowledge at
ence to a particular number of amino acids:
the time.
Figure 6 describes first of all the DNA sequence of
Amgen presented sufficient evidence from which the
the human EPO gene. And that is this series of As,
jury could have concluded "a skilled artisan could
G's, and C's just running from left to right in rows.
[have] discern[ed] the boundaries of the claim based on
And one skilled in the art at the time, and Dr. Lin did,
the claim language [and] the specification ... as well as
could deduce from this DNA sequence, the sequence
her knowledge of the relevant art area."Halliburton En-
of the EPO protein. And what is indicated above cer-
ergv Servs. v. M-ILLC5I4, 514 F.3d 1244, 1249-50
tain of these three base units, these are the triplets or,
(Fed.Cir.2008). Amgen presented the testimony of Dr.
as it were, codons. Here is a GCC that specifies the
Lodish who, in addition to being a well-qualified ex-
first amino acid alanine.
pert, was a person skilled in the art during the relevant
time period. Dr. Lodish testified:

[`Human erythropoietin]' quite certainly is definite.

One of skill in the art reading the patent would under-
stand very clearly what human EPO is and what is
within the fence of the patent defining human EPO
and what would be out.... It was as precise as the sub-
ject matter allows.
Trial Tr. at 2324.
Dr. Lodish explained, "human erythropoietin " is
"described in many places " in the patent. Id. at
2306.For example, "Figure 6 ... describes the deduced
amino acid sequence of human erythropoietin; and im-
portantly, Example 10 in the patent describes how using
this EPO DNA, introducing it into mammalian cells ...
will ... release into their growth medium human
EPO."Id. at 2306.
And then above it in the three letter code, ALA stands
for alanine. And the plus 1 above the alanine specifies
that its the first amino acid in this ultimately 166 pro-
tein....
And just reading along you can see the sequence, the
deduced amino acid sequence from the DNA and the
correct deduced amino acid sequence of the EPO
polypeptide.
***
Again, you can see [now referring to Figure 6E] were
talking at the end or the carboxyl-terminus of the
EPO protein. Again, the DNA sequence that specifies

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other amino acids, and it ends in this AGA, which
specifies the arginine at 166, which is the one that
may or may not be cleaved off when the protein is
made.
Id. at 2319-20.
Roche rests its argument on the testimony of its expert,
Dr. Flavell, who opined that "[t]he patent specification
contemplates dozens of `polypeptides of the invention'
that fall within the scope of `human erythropoietin,' in-
cluding mutants, analogs and allelic variants. "Def.' s
Post Tr. Br. at 68. Thus, Roche contends that, faced
with a panoply of possible polypeptides, one skilled in
the art would not be able to discern the meets and
bounds of "human erythropoietin." Id.
Roche is mistaken. As Amgen correctly observes, "none
of these polypeptides [to which Dr. Flavell refers] on
their face fall within the scope of the claim term `human
erythropoietin.' " Pl.'s Post Tr. Opp. Br. [Doc. 1649] at
127. That the specification may refer to other amino
acid sequences is irrelevant. See35 U.S.C. 112, ¶ 2
("The specification shall conclude with one or more
claims that particularly pointing out and distinctly
claiming the subject matter which the applicant regards
as his invention.").
*36 Although Roche's argument seems to be premised
on the notion that the Court is required to accept the
opinion of its experts and disregard Amgen's testimony,
the present procedural posture requires the opposite.
SeeFed.R.Civ P. 50(a)(1) (stating that the Court may not
disturb the jury 's verdict unless "a reasonable jury
would not have a legally sufficient evidentiary basis to
find for the [Amgen]"); see also Comark Comm., Inc. v.
Harris Corp., 156 F.3d 1182, 1190 (Fed.Cir.1998)
(observing that "it is not the function of the courts to re-
weigh the evidence presented to the jury."). That Dr.
Flavell may have offered a contrary opinion is of little
moment because the jury could-and apparently did-
believe Dr. Lodish. Thus, Dr. Flavell's disputed testi-
mony does not provide the Court with the authority to
set aside the jury's verdict.
a. The fact that Example 10 does not specify that human
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EPO could consist of 1 to 165 or 1 to 166 amino acids
does not render "human erythropoietin " indefinite
In addition to Dr. Flavell's opinion, Roche emphasizes
that "the only information available as of November
1984 was that human EPO had 166 amino acids."Def.'s
Post Tr. Br. at 68. Thus, according to Roche, the patent
does not put those skilled in the art on notice that hu-
man EPO could be either be a sequence of 1 to 165 or 1
to 166, "but not sequences of 164 or 167 amino
acids."Id.
To begin, Roche's focus on the number of amino acids
is misplaced. The Court' s construction of the term
"human erythropoietin " does not require an amino se-
quence of a precise length. See Amgen Markman, 494
F.Supp.2d at 64 (construing "human EPO" as "[a] pro-
tein having the amino acid sequence of human EPO,
such as the amino acid sequence of EPO isolated from
human urine"). Instead, the Court has held that EPO is
best understood by reference to the order in which the
particular amino acids are linked. It is perfectly consist-
ent with the claim that Example 10 could produce a pro-
tein of either 165 or 166 amino acids. So long as one
skilled in the art in 1984 could identify that protein as
human EPO, the term is sufficiently definite.
In explaining how one skilled in the art would have un-
derstood "human erythropoietin, " Dr. Lodish testified
that it was best understood by reference to the sequence
of amino acids-the "series of As, G's, ... and C's just
running from left to right in rows."Trial Tr. at 2319. As
he explained, whether the EPO amino acid sequence has
165 or 166 amino acids depends on the cell in which it
is produced. See id. at 2315.Although all mammalian
cells produce 166 EPO, "[s]ome cells ... have an en-
zyme, that is, a kind of machine that cuts off that last
amino acid, discards it. So what remains is the first
165...."Id. at 2315.
Roche does not dispute that EPO is either 165 or 166
amino acids in length. Nor did it present any evidence
that any person skilled in the art now or then actually
thought that EPO consisted of 164 or 167 amino acids.
Nor does it argue that a person skilled in the art follow-
ing the instructions in Example 10 would produce any-
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thing other than human EPO. At bottom, however, the
procedural posture dictates that the Court may only con-
sider whether Amgen presented sufficient evidence to
support the jury's conclusion. Dr. Lodish's testimony
provides just that.
C. INFRINGEMENT
*37 In order to prove infringement, a plaintiff must
demonstrate that an accused device embodies all limita-
tions of the claim either literally or by the doctrine of
equivalents. TIP Sys., LLC v. Phillips & Brooks/Glad-
, 529 F.3d 1364, 1379 (Fed.Cir.2008). Where,
as in this case, a product embodies all limitations,
merely adding elements to an otherwise infringing
device will not enable the infringer to escape liability.
See A.B. Dick Co. v. Burroughs Corp., 713 F.2d 700.
703 (Fed.Cir.1983).
1. The Court's grant of summary judgment of in-
fringement as to claim 1 of the '422 patent was prop-
er because MIRCERA contains EPO
At every stage of the litigation, and now in its post-trial
motions, Roche's core theory for evading infringement
has been that MIRCERA does not contain EPO because
CERA, the active ingredient in MIRCERA, is a solitary
and stable molecule with distinct chemical properties.
CERA is formed through pegylation, a chemical reac-
tion where methyoxy-polyethylene glycol ("PEG") is
connected via a single bond to epoetin beta. See Trial
Ex. 53, Roche BLA at 00004027. Epoetin beta is made
from "EPO-producing [CHO] cells (DN2-3 3 cells)
[that] contain an exogenous DNA sequence encoding
the mature erythropoietin amino acid sequence of Fig-
ure 6 of Lin's patents spanning from positions +1
through +166."Pl.'s Mem. Supp. Summ. J. Infringe, of
'422 Claim 1, '933 Claim 3, and '698 Claim 6 [Doc. No.
510] at 5 ("Pl.'s Mem. Supp. Summ. J."). It is undis-
puted that epoetin beta fits within the parameters of
Amgen's product and process patents. See Trial Ex. 53,
Roche BLA at 00004027. Roche emphasizes, however,
that once pegylation is completed, the resulting product,
CERA, does not contain EPO. Roche now seeks to
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overturn the Court's grant of summary judgment on
claim 1 of the '422 patent, see Electronic Order, August
28, 2007, based on this single molecule theory.
Roche's single-molecule theory is flawed for two reas-
ons. First, Roche's assertion that MIRCERA does not
contain EPO is belied by its internal communications
and representations to the FDA. Second, Amgen paten-
ted EPO by reference to the glycoprotein 's amino acid
sequence. Pegylation merely attaches a sugar, via a
single carbon bond, to a recombinant glycoprotein with
the patented amino acid sequence; it does not alter the
patented properties of EPO.
a. Roche 's internal documents and representations to
the FDA con' 9rm that "peg-EPO " contains EPO
Prior to marketing its drug and this litigation, Roche re-
ferred to the active ingredient in MIRCERA as
"peg-EPO" in internal communications. See Trial Tr. at
2738-40. This name reflected Roche's view that not
only did peg-EPO contain EPO, but also that pegylation
did little if anything to alter the properties of epoetin
beta. At trial, Dr. Adrienne Farid, Roche's "project man-
ager for peg-EPO, " Trial Tr. at 2738, testified to intern-
al communications describing peg-EPO as "comprised
of human erythropoietin which is mono-pegylated,"id.
at 2740.According to a 1999 memo entitled
"Description of peg-EPO," Trial Ex. 61, "[b]oth EPO
and peg-EPO have identical amino acid sequence and
composition."Trial Tr. at 2741. "The only difference in
the composition of native and modified proteins is due
to the formation of an amide bond between the amino
group of EPO and the peg molecule at the point of at-
tachment."Id. at 2742.Roche's analysis indicated that
pegylation did not affect epoetin beta's amino acid se-
quence, glycosylation, or carbohydrate structure. Id. at
2743.
*38 Roche's internal communications were consistent
with its representations to the FDA. In its BLA, which
the FDA requires for human testing, Trial Tr. at 2611,
Roche emphasized that pegylation did not alter epoetin
beta. Roche stated that "[b]oth EPO starting material[,
epoetin beta,] and R00503821[, CERA,] have the
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F.Supp.2d Page 31
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identical amino acid sequence and composition of the omitted).

carbohydrate moiety."See Trial Ex. 53, BLA at
00004027. Thus, "[t]he patent itself is silent as to ... any structural
characteristic beyond the required amino acid se-
In short, Roche's internal communications as well as its quence."Id. The Court's claim construction makes clear
representations to the FDA are in tension with Roche ' s that the focus of this claim element is the amino acid se-
assertions that CERA does not contain EPO. quence. Roche could not avoid summary judgment be-
cause it could not produce evidence from which a reas-
onable jury could conclude that pegylation altered
b. Amgen patented recombinant EPO by reference to its
EPO's amino acid sequence.
amino acid sequence, and pegylation does not alter that
sequence Roche asks the Court to enter a judgment in its favor on
the basis of its theory that once pegylation has occurred,
At claim construction, both parties agreed that claim l's
the process cannot be reversed and the product is a
"human erythropoietin" limitation described a particular
stable, single molecule. Roche's assertion is contested
amino acid sequence that mirrored the amino acid se-
by Amgen expert Dr. Les Benet, who testified that PEG
quence of EPO found in human urine. See Amgen Mark-
and EPO separate in the body after administration. Trial
man, 494 F.Supp.2d at 63. Thus, the Court construed
Tr. at 2610. But even presuming that Roche's assertion
the limitation as follows: "Human erythropoietin: A
about reversibility is correct as a matter of fact, the per-
protein having the amino acid sequence of human EPO,
manency of the bond does not save Roche.
such as the amino acid sequence of EPO isolated from
human urine."Id. at 64. *39 "It is fundamental that one cannot avoid infringe-
ment merely by adding elements if each element recited
In an effort to avoid summary judgment, Roche pointed
in the claims is found in the accused device."A.B. Dick,
to structural differences between EPO and peg-EPO.
713 F.2d at 703. As the Federal Circuit reasoned by
Roche's argument, for example, that "the Lin specifica-
analogy in A.B. Dick, an infringer could not avoid liab-
tion does not disclose the substitution of hydrogen from
ility by incorporating a patented pencil into a complex
human EPO's lysine residues or N-terminal residues" is
machine. See id.More to the point, just because the pen-
irrelevant to infringement because the substitution does
cil cannot be removed from the complex machine, it
not affect the amino acid sequence. Def.'s Mem. Opp.
does not follow that the manufacturer has circumvented
Summ. J. Infringe of '422 Claim 1, '933 Claim 3, and
infringement. See id.Regardless of whether the effects
'698 Claim 6 [Doc. No. 588] at 4-6. Tellingly, Roche
of pegylation can be reversed, Roche is infringing be-
sought to include structural limitations in claim 1 at the
cause epoetin beta retains its distinct amino acid se-
claim construction. The Court rejected Roche's request
quence through pegylation.
because
Roche's attempts to distinguish A.B. Dick remain as un-
[t]he specification does not define "erythropoietin" by
persuasive as they were at the time the Court granted
reference to the presence or absence of any attached
summary judgment. In an effort to convince the Court
molecules, such as the carbohydrate that can be at-
that A.B. Dick is not applicable, Roche relied on Eli
tached to EPO proteins for glycosylated EPO. In fact,
Lilly and Co. v. American Cyanamid Co., 82 F.3d 1568
the specification expressly contemplates that addi-
(Fed.Cir.1996). In that case, Eli Lilly, the owner of pat-
tional molecules may be attached to "human eryth-
ents describing the popular antibiotic Cefaclor, sought a
ropoietin." By implication, therefore, those additional
preliminary injunction to prevent importation of an al-
molecules are not part of the amino acid structure that
legedly infringing drug. Id. at 1569-70.The district court
comprises the claimed product.
denied the injunction based on a factual determination
Amgen Markman, 494 F.Supp.2d at 63 (internal citation that Ceflacor and the allegedly infringing product

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"differ significantly in their structure and properties, in- lecule. See id. at G:16. The glycosylation process does
cluding their biological activity."Id. at 1571.In uphold- not alter EPO's patented primary structure, its amino
ing the district court ' s decision, the Federal Circuit acid sequence. The active ingredient in CERA, EPO, is
wrestled with the meaning of "material change" in the an expression of the same amino acid sequence taught
context of the Process Patent Amendments Act of 1988. in Amgen's patents. Therefore, the summary judgment
See id. at 1571-78.Although it concluded that the dis- of infringement was proper.
trict court did not err in holding that Eli Lilly was un-
likely to succeed on its infringement claim, its investig-
2. The Court's conclusion that "purified from mam-
ation into the meaning of "material change" was incon-
malian cells grown in culture" limits claim 1 of the
clusive. Id. at 1578.
'422 patent does not affect the Court's grant of sum-
It is difficult to conceive how Eli Lilly could be read to mary judgment with respect to infringement
stand for any legal proposition that conflicts with A.B.
Per the preceding discussion, the Court has concluded
Dick. A.B. Dick merely states that the addition of ele-
that "purified from mammalian cells grown in culture"
ments will not preclude a finding of infringement so
limits claim 1 of the '422 patent. Roche argues that if
long as all of the elements of the underlying claim are
this is so, then Amgen could not, as matter of law,
met. See A.B. Dick, 713 F.2d at 703. Furthermore, in
demonstrate Roche met this limitation for the purposes
this case, the Court does not confront the fundamental
of literal infringement. Roche argued summary judg-
question addressed-and ultimately left unanswered-in
ment was inappropriate because "CERA is a chemically
Eli Lilly, which is the meaning of "material change."
synthesized product" that cannot be made from mam-
The Eli Lilly decision turned on the district court's con-
malian cells. Def.'s Mem. Opp. Summ. J. at 9. This is
clusion that the accused product did not infringe. Here,
undoubtedly true because CERA is generated through
the facts cut against Roche. To the extent that Eli Lilly
pegylation. The problem is that Roche relies on the the-
is applicable here, it merely highlights the principle that
ory that CERA is a single molecule that does not con-
questions of infringement raise issues of fact appropri-
tain EPO. The single-molecule theory reflects Roche's
ately decided on a case-by-case basis. The Court does
flawed but unwavering belief that it is entitled to judg-
not doubt that the substitution of one chemical group for
ment as matter of law if it can characterize CERA as a
another within a drug, whether in Eli Lilly or any hypo-
molecule. The theory has no sound basis in law or sci-
thetical drug patent case, could provide a basis for a
ence, and this Court and the jury have rejected it time
finding of non-infringement. But that is not the case
and again. As discussed above, EPO is the main in-
here. In this case, the addition of PEG to EPO replaces a
gredient for CERA. Roche did not-and could not-deny
single hydrogen atom with a single carbon atom. Be-
that epoetin beta was "made from mammalian cells
cause the amino acid sequence remains unaltered, this
grown in culture."Therefore, summary judgment was
displacement does not enable Roche to avoid infringe-
appropriate.
ment.
Nevertheless, Roche maintains that "if the source limit-
*40 In short, Roche's argument that CERA constitutes a
ation imparts some unique structure, then Amgen had to
single molecule that cannot be broken down into smal-
prove that unique structure existed in MIRCERA. "Post
ler parts is untenable because, it is contrary to its own
Trial Hr'g Tr. [Doc. 1676] at 31. There is no doubt that
admissions, good science, and common sense. A mo-
an infringement plaintiff must prove all elements, in-
lecule is merely a group of atoms joined together by co-
cluding source and process limitations. See BMC Res..
valent bonds, such that the group of atoms is stable and
Inc. v. Paymentech, L.P., 498 F.3d 1373, 1378
retains a neutral electrical charge. ALBERTS,supra, at
(Fed.Cir.2007). But it is quite a different proposition to
G:9, G:23. Peg-EPO is a glycosylated protein because
require patentees to prove not only that the limitation is
the pegylation process adds a sugar to a protein mo-
met, but also that the inclusion of the limitation results

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in the same expression as the preferred embodiment. from mammalian cells grown in culture.
Roche has failed to offer any legal support for its con-
'422 patent col. 38 11. 36-40.
tention that Amgen was required to do so in this case.
Claim 12 of the '933 patent describes:
It is true that certain structural distinctions between re-
combinant EPO and urinary EPO are attributable to the
A pharmaceutical composition comprising an effect-
source. But the structural differences are merely evid-
ive amount of a glycoprotein product effective for
ence that the source limits the claim; they are not them-
erythropoietin therapy according to claim 7 and a
selves limitations. Once the Court has concluded that
pharmaceutically acceptable diluent, adjuvant or car-
the source limits the claim, there is no reason why such
rier.
a limitation ought not be treated like other limitations.
As stated above, epoetin beta satisfied the limitation. '933 patent col. 39 1. 10-col. 40 1. 2.
Therefore, the Court's grant of summary judgment was
appropriate. Roche maintains that "for the jury verdict to be intern-
ally consistent one must conclude that the jury found
that MIRCERA does not have `an effective amount ...
3. The Court's grant of summary judgment in favor effective for erythropoietin therapy' of the glycoprotein
of Amgen on claim 1 of the ' 422 patent will stand
product according to claim 7, and/or that MIRCERA is
notwithstanding the jury's verdict regarding claim
not `a pharmaceutical composition comprising ... a
12 of the '933 patent pharmaceutically acceptable diluent, adjuvant or earri-
er."Def. ' s Post Tr. Br. at 144 (emphasis omitted). Since
*41 The jury found all of the claims of the patents in
the Court construed the terms the same way for each
suit literally infringed with the exception of claim 12 of
patent, Roche contends that the failure to find literal in-
the '933 patent, which it found infringed by the doctrine
of equivalents. Following the trial, on October 30. 2007, fringement of claim 12 of the '933 patent is inconsistent
with the Court 's grant of summary judgment in favor of
the Court granted Roche 's motion for judgment notwith-
Amgen with regard to infringement of claim 1 of the
standing the verdict with respect to this claim because,
'422 patent. Id. The remedy Roche proposes is that the
at trial, Amgen failed to "identify claim by claim the
Court reverse its summary judgment ruling and grant
equivalent means-way-result. " Scheduling Conference
Tr. [Doc. 1736] at 4. Roche alleges that the jury's ver- summary judgment for Roche. Id. at 145.
dict of infringement by the doctrine of equivalents re-
Roche's argument rests on a faulty legal premise. The
quires the Court to reverse its grant of summary judg-
mere fact that a jury verdict could, in theory, appear to
ment in favor Amgen on literal infringement of claim 1
be inconsistent with a grant of summary judgment does
of the '422 patent. Assuming arguendo that there are
not require a court to reconsider its pretrial ruling be-
theoretical inconsistencies between the court 's pre-trial cause the determinations are made on different records
ruling and the jury verdict, there is simply no require-
at different stages of the litigation and according to dif-
ment that this Court reverse its summary judgment de-
ferent legal standards.
termination because Roche's claim that MIRCERA does
not contain EPO has no sound basis in the record. The sole case Roche cites in support of its position,
Therma-Tru Corp. v. Peachtree Doors Inc., 44 F.3d 988
Again, claim 1 of the 422 patent teaches:
(Fed.Cir.1995), is inapplicable. In Therrna-Tru, the Fed-
A pharmaceutical composition comprising a thera- eral Circuit reversed a district court ' s post-trial factual
finding because it was contrary to facts found by the
peutically effective amount of human erythropoietin
and a pharmaceutically acceptable diluent, adjuvant jury. Id. at 994, 996.Although the district court was em-
powered to make certain findings under its equitable au-
or carrier, wherein said erythropoietin is purified
thority, the Federal Circuit reasoned that the district

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court's findings in Therma-Tru deprived the plaintiff of
its right to trial by jury under Beacon Theatres, Inc. v.
T4'estover, 359 U.S. 500. 510-11, 79 S.Ct. 948, 3
L.Ed.2d 988 (1959).See Therma-Tru, 44 F.3d at
994-95.Beacon Theaters explains that "when equitable
claims are joined with legal claims and have factual
questions in common, the judge's determination of the
equitable claims can not deprive the litigants of their
right to a jury trial on factual questions."Therrna-Tru,
44 F.3d at 994-95 (citing Beacon Theaters, 359 U.S. at
510-11). Thus, "[w]hen a party has a right to a jury trial
on an issue involved in a legal claim, the judge is ...
bound by the jury's determination of that issue as it af-
fects his disposition of an accompanying equitable
claim. "Id. at 995 (quoting Gut:willer v. Fenik, 860 F.2d
1317, 1333 (6th Cir.1988))(internal quotation marks
omitted).
*42 There is a critical distinction between Therma-Tru
and the instant case that explains why the reasoning of
Beacon Theaters does not apply here. The judicial de-
termination in Therma-Tru was factual finding that fol-
lowed a trial. By contrast, the grant of partial summary
judgment in this case was a ruling as matter of law
made prior to trial. See IPXL Hoh -rr s, TL.C. v.
Amazon.com, Inc., 430 F.3d 1377, 13/0 (1,d.Cir.2005)
(noting that the Federal Circuit "review[s] de novo ..,
whether the prevailing party is entitled to judgment as a
matter of law"). While the district court in Therma-Tru
made factual findings, "at the summary judgment stage
the judge's function is not himself to weigh the evidence
and determine the truth of the matter but to determine
whether there is a genuine issue for trial."Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505.
91 L.Ed.2d 202 (1986). This is significant because the
determinations were made on records that are different
in kind. Here, the Court's grant of summary judgment
was based on the undisputed record at the time the
parties filed dispositive motions prior to trial, rather
than based on evidence adduced at trial and also
weighed by a jury. In short, the facts and constitutional
concerns that compelled the Federal Circuit's decision
in Therma-Tru are not present in this case.
More importantly, Roche fails to illuminate any ground
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for reversal that actually pertains to the Court' s grant of
summary judgment on claim 1 of the ' 422 patent. The
Court granted summary judgment for Amgen because
the Court concluded that a reasonable jury would be
forced to conclude that CERA literally infringed all the
limitations of the claim. At this stage, Roche has merely
repeated its claims that MIRCERA does not contain
EPO. This argument has been rejected because it belied
by the record.
4. The jury's finding of infringement with respect to
claim 3 of the '933 patent was supported by suffi-
cient evidence and was proper as matter of law
In order for the jury's verdict to stand, Amgen must
have provided evidence from which a jury could have
concluded that Roche's product infringed each of the
limitations of claim 3 of the '933 patent. The claim
teaches:
A non-naturally occurring glycoprotein product of the
expression in a mammalian host cell of an exogenous
DNA sequence comprising a DNA sequence encoding
human erythropoietin said product possessing the in
vivo biological property of causing bone marrow cells
to increase production of reticulocytes and red blood
cells.
'933 patent col. 38 11. 26-31.
Roche seeks to overturn the jury's finding of infringe-
ment on the '933 patent on two grounds. Primarily,
Roche asks for a new trial, contending that the jury's
verdict was without support in the record. Second,
Roche claims that it is entitled to judgment as matter of
law because the undisputed record reveals that pegyla-
tion displaces a hydrogen atom in epoetin beta. See
Def.'s Post Tr. Br. at 140. Thus, Roche maintains that
this minute alteration entitles it to a judgment of non-
infringement. As shall be discussed below, however, the
jury's verdict finds ample support in the record.
Moreover, Roche's request for judgment as matter of
law is premised on a misunderstanding of the law with
respect to infringement. Amgen need not prove MIR-
CERA's EPO is identical down to the precise number of

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hydrogen atoms; rather, the question is whether MIR-
CERA's EPO deviates from claim 3 of the '933 patent. It
does not.
a. The jury 's finding of infringement is supported by the
record
*43 Roche argues that no reasonable jury could have
concluded that MIRCERA is "a product of ... expression
in a mammalian host cell" because "CERA is a chemic-
ally synthesized compound that is created in a laborat-
ory" with a "substantially different ... structure and
function from a product of the recited process."Def.'s
Post Tr. Br. at 140 (internal quotation marks omitted).
According to Roche, the undisputed evidence demon-
strates that MIRCERA does not contain "the product of
the expression of a DNA sequence encoding human
erythropoietin" because pegylation alters the amino acid
sequence. Id. Even if the amino acid sequence is not
altered, Roche contends that the undisputed displace-
ment of a hydrogen atom with a carbon atom results in
"differences between the carbohydrates" requiring a
finding of non-infringement. Def.s Post Tr. Rep. Br. at
5-6.
Amgen offered ample evidence that pegylation did not
alter the amino acid sequence of epoetin beta. Because
claim 3 of the '933 patent describes a product by refer-
ence to a specific amino acid sequence, alterations that
do not affect the amino acid sequence are immaterial.
I. Amgen offered evidence that pegylation did not alter
epoetin beta's amino acid sequence or carbohydrate
structures
For all of the reams of paper devoted to overturning the
jury's verdict with respect to the '933 patent, Roche con-
cedes that Amgen's experts provided testimony that
pegylation does not change the amino acid sequence of
epoetin beta. Def.'s Post. Tr. Rep. Br. at 6. This conces-
sion is consistent with the record, which reveals ample
evidence from which the jury could have concluded that
pegylation did not alter the amino acid sequence. For
example, Dr. Lodish testified:
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Q. In your opinion, does the removal of [the hydro-
gen] atom change the amino acid sequence?
A. No.
Q. Why?
A. Because it's the same amino acid before and after
and, as I testified, in particular, the linkage between
alanine and peg, say, at the beginning of the protein,
it's the identical linkage that alanine would have to
other amino acids inside the protein. And despite that
linkage or not, we still call it an alanine. It's what one
skilled in the art calls amino acids. It's the same
amino acid....
Trial Tr. at 2528-29. Dr. Torchellin opined that peg-
EPO had the "identical amino acid sequence and com-
position of carbohydrate moiety which relates to the
structure. The structure is the same."Id. at 2664.
Dr. Torchillin's testimony confirmed what the Court
already noted about Roche's representations to the FDA:
Q. Now, Doctor, based upon your review of [Roche's
submission to the FDA], did Roche tell the FDA that
the amino acid sequence of EPO was changed by the
pegylation?
A. Quite opposite. It exactly say that identical amino
acid sequence [sic]. And by the way, this is exactly
the way I see it.
Trial Tr. at 2730.
The Court concludes Amgen provided sufficient evid-
ence from which the jury could have concluded that
MIRCERA infringed claim 3 of the '933 patent because
pegylation does not alter epoetin beta's amino acid se-
quence. Furthermore, testimony from Amgen's experts
indicated that pegylation does not alter the carbohydrate
structure. That Roche may have offered evidence to the
contrary is beside the point. So long as there is evidence
to support the jury's verdict, the Court is not free to
reach a different outcome. See Rivera Castillo, 379 F.3d
at 13.
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b. Amgen need not demonstrate infringement to an un-
claimed level of speccity
*44 Roche still believes it is entitled to judgment as
matter of law even if pegylation does not alter the
amino acid sequence or carbohydrate moiety because
Amgen cannot prove that the EPO in MIRCERA is
identical to the product of the process described in
claim 3 of the '933 patent. According to Roche, the fact
that pegylation replaces a hydrogen atom with a carbon
atom is sufficient to preclude a judgment of infringe-
ment. The legal premise of Roche's argument is that
plaintiffs seeking to prove infringement of a product-
by-process claim must demonstrate that the accused
product is identical to the product of the patented pro-
cess.
Infringement liability is found where an accused device
falls precisely within the scope of a claim as delineated
by the limitations. See TIP Sys., LLC, 529 F.3d at 1379.
The law does not require Amgen to prove identity to an
unclaimed level of specificity. Thus, variations such as
the displacement of a single hydrogen atom, which do
not deviate from the scope of at least one claim limita-
tion, are immaterial. To hold otherwise would require
inventors to claim their inventions with atomic spe-
cificity and would entitle infringers to a patent merely
because they were able to make the same product, sans
a single atom, via the claimed process.
Here, the Court construed claim 3 as:
a glycoprotein (not occurring in nature) that is the
product of the expression FNI 1 in a mammalian host
cell of a DNA sequence that does not originate in the
genome of the host, and which contains the genetic
instructions (or a DNA sequence) encoding human
erythropoietin.
Amgen Markman, 494 F.Supp.2d at 71-72 (footnote in
original)
The product of this process described above is, of
course, a glycoprotein comprised of the patented se-
quence of 165 amino acids. The Court ' s construction
makes clear that the patent's focus is the glycoprotein's
© 2008 Thomson Reuters/West. No Claim to Orig. US Gov. Works.
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amino acid sequence. The very reason for this claim is
to describe a process for making a product with "genetic
instructions. " It is not concerned with the particular
charge or precise number of carbohydrates, so long as
the glycoprotein has a DNA sequence that is exogenous
to the mammalian host cell and that "encodes human
erythropoietin." It follows that modifications that do not
affect the amino acid sequence do not deviate from the
claim.
I. The cases Roche cites are inapplicable and unper-
suasive
There is no precedent requiring the Court to depart from
basic patent principles in the context of product-
by-process claims. Roche marshals three cases in sup-
port of its exact identity theory: Litton Systems, Inc. v.
Honeywell, Inc., 140 F.3d 1449 (Fed.Cir.1998), South-
wall Technologies, Inc. v. Cardinal IG. Co., 54 F.3d
1570 (Fed.Cir.1995), and Johnston v. IVAC Corp., 885
F.2d 1574 (Fed.Cir.1989). There is simply no way to
read any of these cases as departing from the general
rule that otherwise immaterial distinctions will not pre-
clude a finding of infringement in the context of a
product-by-process claim.
*45 In each case, Roche seizes on the Federal Circuit's
use of the word "exactly" to describe the all-elements
requirement. See Litton, 140 F.3d at 1454 ("Literal in-
fringement requires that the accused device contain
each limitation of the claim exactly; any deviation from
the claim precludes a finding of literal infringement.");
Southwall Techs., 54 F.3d at 1575 ("To establish literal
infringement, every limitation set forth in a claim must
be found in an accused product, exactly."); .Johnston,
885 F.2d at 1577 ("To establish infringement of a pat-
ent, every limitation set forth in a claim must be found
in an accused product or process exactly or by a sub-
stantial equivalent.").
Context is everything. Here it is fatal to Roche. These
statements Roche quotes are not even in reference to
product-by-process claims. That the Federal Circuit has
employed "exactly" on approximately three occasions
in the context of a boilerplate recitation of the all-
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elements requirement is by no means illustrative of a
transformation in patent law. The '933 patent makes no
claim to a specific number of hydrogen atoms, and Am-
gen's experts opined that Roche's EPO did not deviate
from the claim terms despite the hydrogen displace-
ment. Thus, it is entirely plausible, as the jury found,
that the EPO in MIRCERA satisfies the requirement
that "every limitation set forth in a claim must be found
in an accused product, exactly."Southwall Techs., 54
F.3d at 1575.
Having concluded that the jury's findings will stand and
that the Court will not reverse its rulings with respect to
validity and infringement of claim 1 of the '422 patent,
Roche's motion for judgment as matter of law [Doc. No.
1618] and its motion for a new trial [Doc. No. 1618] are
DENIED.
IV. INJUNCTIVE RELIEF
As the Supreme Court recently reiterated, a party seek-
ing a permanent injunction following a judgment of in-
fringement must demonstrate:
(1) that it has suffered an irreparable injury; (2) that
remedies available at law, such as monetary damages,
are inadequate to compensate for injury; (3) that, con-
sidering the balance of hardships between the
[parties], a remedy in equity is warranted; and (4) that
the public interest would not be disserved by a per-
manent injunction.
eBay Inc. v. MercExchange, L.L.C. 547 U.S. 388, 391,
126 S.Ct. 1837, 164 L.Ed2d 641 (2006).
The Supreme Court's decision in eBay, which over-
turned the Federal Circuit's "general rule" that injunc-
tions should issue when a plaintiff has won a judgment
of infringement, see id. at 393-94, generated a flurry of
speculation about whether district courts would depart
from established norms in patent cases.
In the present case, the Court thought initially that the
FDA's approval of MIRCERA and the competition it
would give Amgen's products indicated rather strongly
that the public interest would be served by allowing its
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introduction, upon terms, into the United States pharma-
ceutical market. To test this initial impression, the Court
held extensive evidentiary hearings, appointed a special
master and technical advisor, and carefully weighed the
public interest.FN 12 In fact, the Court's initial impres-
sion does not withstand a reflective and detailed analys-
is.
*46 While eBay has allowed courts to decline requests
for injunctive relief where the plaintiff is a "patent
troll," eBay has changed little where a prevailing
plaintiff seeks an injunction to keep an infringing com-
petitor out of the market. This case is no exception to
that trend. As shall be outlined below, the first three
eBay factors strongly favor a permanent injunction be-
cause Roche's entry into the ESA market would cause
immense, immeasurable, irreparable harm, with the bal-
ance of the hardships falling on Amgen. In addition, the
public interest would not be disserved by an injunction
because there is no solid evidence that patients or the
public coffers will suffer significant harm if the status
quo is maintained. In this case, the public's interest in a
robust patent system that maintains incentives for phar-
maceutical innovation outweighs the highly speculative,
de minimis benefits that might occur as the result of a
denial of an injunction.
A. EBAY HAS CHANGED LITTLE WHERE FAIL-
URE TO GRANT INJUNCTIVE RELIEF WOULD
PERMIT A COMPETITOR TO ENTER THE
MARKET
In eBay, a jury concluded that eBay, a popular on-line
auction site, infringed MercExchange's "business meth-
od patent for an electronic market designed to facilitate
the sale of goods between private individuals by estab-
lishing a central authority to promote trust among parti-
cipants."547 U.S. at 390-91. MercExchange was a com-
pany that those familiar with the industry would charac-
terize as a "patent troll." Patent trolls are "nonpracticing
entities" who "do not manufacture products, but instead
hold ... patents, which they license and enforce against
alleged infringers. " Taurus IP v. DairnlerChrysler Corp.,
519 F.Supp.2d 905, 911 (W.D.Wis.2007). The district
court refused the request for an injunction, reasoning
 Case 5:00-cv-20905-RMW Document 3865
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that the " `plaintiffs willingness to license its patents'
and `its lack of commercial activity in practicing the
patents' would be sufficient to establish that the patent
holder would not suffer irreparable harm if an injunc-
tion did not issue.' " eBay, 547 U.S. at 393 (quoting
MercExchange L.L.C., v. eBay, Inc., 275 F.Supp.2d.
695, 712 (E.D.Va.2003)). The Federal Circuit reversed,
"articulat[ing] a `general rule, ' unique to patent dis-
putes, `that a permanent injunction will issue once in-
fringement and validity have been adjudged."'Id. at
393-94 (quoting MercExchange L.L.C., v.
401 F.3d 1323, 1338 (Fed.Cir.2005)).
The Supreme Court vacated on the ground that "neither
court below correctly applied the traditional four-factor
framework that governs the award of injunctive
relief."Id. at 394.The Court reiterated that plaintiffs
seeking an injunction must satisfy the four-factor in-
quiry. Id. at 391. Categorical rules, the Court reasoned,
contravened the Patent Act's remedial provision, which
"expressly provides that injunctions `may' issue `in ac-
cordance with the principles of equity.-Id. at 392
(quoting 35 U.S.C. 283).
*47 The Supreme Court does not appear to have inten-
ded eBay to be pathbreaking precedent. The bare-bones
majority opinion did little more than remind courts that
they must exercise discretion in accordance with the
framework Congress approved. See id. at 394.The Court
did not even take a "position on whether permanent in-
junctive relief should or should not issue in [that] par-
ticular case."Id. The two concurrences emphasized the
importance of looking to historical practice when im-
posing injunctive relief. Chief Justice Roberts, joined by
Justices Scalia and Ginsburg, emphasized that the ma-
jority opinion "rightly rest[ed] on the proposition that `a
major departure from the long tradition of equity prac-
tice should not be lightly implied."'Id. at 395 (Roberts,
C.J., concurring). The Chief Justice explained:
From at least the early 19th century, courts have gran-
ted injunctive relief upon a finding of infringement in
the vast majority of patent cases. This "long tradition
of equity practice" is not surprising, given the diffi-
culty of protecting a right to exclude through monet-
ary remedies that allow an infringer to use an inven-
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tion against the patentee 's wishes-a difficulty that of-
ten implicates the first two factors of the traditional
four-factor test.
Id.
Joined by Justices Stevens, Souter, and Breyer, Justice
Kennedy agreed with the Court and the Chief Justice
that "historical practice ... is most helpful and instruct-
ive when the circumstances of a case bear substantial
parallels to litigation the courts have confronted be-
fore."Id. at 396 (Kennedy, J., concurring). He sugges-
ted, however, that district courts "should bear in mind
that in many instances the nature of the patent being en-
forced and the economic function of the patent holder
present considerations quite unlike earlier cases."Id. He
warned that 'lain industry has developed in which firms
use patents not as a basis for producing and selling
goods but, instead, primarily for obtaining licensing
fees. For these firms, an injunction ... can be employed
as a bargaining tool to charge exorbitant fees to com-
panies that seek to buy licenses to practice the
patent."Id. at 396 (internal citation omitted).
History, Justice Kennedy indicated, was not on the side
of patent trolls like MercExchange. "[I]njunctive relief
may have different consequences for the burgeoning
number of patents over business methods, which were
not of much economic and legal significance in earlier
times. The potential vagueness and suspect validity of
some of these patents may affect the calculus under the
four-factor test."Id. at 397.He concluded that "equitable
discretion over injunctions, granted by the Patent Act, is
well suited to allow courts to" take account of such cir-
cumstances before issuing an injunction. Id
The Supreme Court's narrow decision and emphasis on
history appear to have had their intended effect. Where
failure to grant an injunction would allow a competitor
to enter the market, district courts have continued to is-
sue injunctions. A recent study reveals that since
eBay,"with two exceptions, permanent injunctions is-
sued in all twenty-six cases where courts found direct
competition between a plaintiff and the in-
fringer."Douglas Ellis et al., The Economic Implications
(and Uncertainties) of Obtaining Permanent Injunctive
 Case 5:00-cv-20905-RMW Document 3865
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--- F.Supp.2d ----, 2008 WL 4452454 (D.Mass.)
Relief after eBay v. AIercExchange, 17 FED. CIR. B.J.
437, 442-43 (2008). The two exceptions proved the
rule. In "Innogenetics, N. V. v. Abbott Laboratories,
[512 F.3d 1363 (Fed.Cir.2008) ], the Federal Circuit re-
versed the district court's grant of a permanent injunc-
tion because the damages awarded at trial presumably
contemplated a hypothetical license for the life of the
patent-at-issue (not just for pre-trial infringement)."Id.
at 443.In "Praxair, Inc. v. ATMI, Inc., [479 F.Supp.2d
440 (D.Del.2007) ] the district court ... did not issue a
permanent injunction because the plaintiff did not
provide sufficient evidence of lost sales, lost profits,
and/or lost market share."Id.
B. THE FIRST THREE EBAY FACTORS
STRONGLY FAVOR PERMANENT INJUNCTIVE
RELIEF FOR AMGEN
*48 It is easy to understand why courts have continued
to issue injunctions where the infringer will become a
direct competitor. Here, were the Court were to deny
Amgen's request for a permanent injunction, Roche
would enter the ESA market as Amgen's competitor.
The vast majority of Roche sales would be to the exclu-
sion of Amgen sales, resulting in lost profits, market
share, and good will. Amgen's economic expert, Pro-
fessor B. Douglas Bernheim, testified that:
through market share erosion, Amgen would lose con-
siderable revenues. I think that there's a tremendous
amount of uncertainty as to exactly what the market
share penetration would be, how much revenue ...
Amgen would therefore lose. But despite the uncer-
tainty about the specific magnitude, I think that we
can be quite confident from the record that the losses
would be extremely large.
Remedy Trial Tr. vol. 1 at 103.
Moreover, Roche's entry into the market, despite a judg-
ment of infringement, could encourage other would-be
infringers to attempt to gain access, resulting in signi-
ficant litigation expenses and uncertainty about the
value of Amgen 's patents. Simply put, the value of the
patents at issue, which are admittedly "the foundation of
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Amgen's business," see Pl.'s Mem. Supp. Perm. Inj.
[Doc. 1578] at 12, would be greatly diminished. Am-
gen' s stock price would fall along with its ability to at-
tract investment for research and development. In addi-
tion, producing and marketing MIRCERA would enable
Roche to develop infrastructure that would make Roche
a viable competitor not only in the ESA market, but also
in markets for future drugs.
In view of these potentially immense and unquantifiable
harms, the Court concludes that failure to enter a per-
manent injunction would result in irreparable harm for
which monetary damages are inadequate. Furthermore,
because Amgen's patents are valid, enforceable, and in-
fringed, and in light of the potential harms described
above, there can be little doubt that the balance of hard-
ships favors Amgen. Thus, the first three eBay factors
strongly favor an injunction. The Court now turns to the
fourth and final eBay factor, the public interest.
C. The public interest would not be disserved by a
permanent injunction
Entering the remedy phase, the Court identified two as-
pects of the public interest that might be affected by a
decision to keep MIRCERA off the market. Primarily,
the Court wanted to be sure that Amgen adequately sat-
isfied the current demand for ESAs. Were it the case
that MIRCERA could aid a number of patients not
presently served by EPOGEN or Aranesp, then injunct-
ive relief denying them access to the life-altering effects
of recombinant EPO would disserve the public interest.
Second, it seemed that Amgen's virtual monopoly on
the ESA market might be unduly burdensome on Medi-
care and the public coffers, and Roche's entry might
mitigate the deleterious consequences. Of course, the
public derives significant benefits from the innovation
generated by the economic incentives in our patent sys-
tem. Because the first three factors strongly favored an
injunction and in light of the public interest in a robust
patent system, the Court recognized that the evidence of
harm to patients and Medicare would need to be fairly
compelling. After a four-day hearing on injunctive re-
lief, the Court was satisfied that the public interest
would not be disserved by maintaining the status quo in
 Case 5:00-cv-20905-RMW Document 3865
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the ESA market.
*49 Below, the Court will balance three factors: patient
health, Medicare savings, and the public's interest in a
robust patent system. First, although an additional
choice would undoubtedly benefit patients and doctors,
it is not clear that MIRCERA offers an advantage so ap-
preciable that it would justify abrogation of Amgen's
monopoly privilege. Any conclusions regarding a poten-
tial savings to Medicare are too speculative to justify
the denial of a permanent injunction. In fact, the warped
economic incentives created by Medicare reimburse-
ment and speculation about changes in regulation mean
that MIRCERA's presence on the market might actually
result in more expensive drugs for consumers. Finally,
any marginal health or economic benefits would be out-
weighed by the potential harm to the incentives for in-
novation underlying the patent system. In short, the
Court cannot conclude that granting a permanent in-
junction disserves the public interest.
1. Although doctors and patients would probably be-
nefit from additional choice, it is not clear that MIR-
CERA offers significant clinical advantages over
Aranesp
As outlined in the background section, MIRCERA re-
ceived FDA approval to provide correction of anemia
with once-every-two-week dosing and to maintain
stable hemoglobin letters with once monthly or once-
every-two-week dosing in all CKD patients. Roche's
and Amgen's experts debated the effectiveness of MIR-
CERA when given monthly. In the opinion of Roche ' s
expert, Dr. Steven Fishbane, the data from clinical trials
establish non-inferiority of MIRCERA in efficacy when
compared to the currently available ESAs, as well as
that MIRCERA has a comparable safety profile to the
currently available ESAs. Fishbane Expert Rep. ¶¶ 58,
74. In addition to concluding that Roche's studies estab-
lish non-inferiority of MIRCERA as compared to cur-
rently available ESAs, Dr. Fishbane concluded that
"MIRCERA's ability to maintain a safe and stable
hemoglobin level over time is not clinically inferior to
the hemoglobin stability achieved with presently avail-
able ESAs, such as EPOGEN and ARANESP."Id. ¶ 75
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(using plus/minus lg/dL criterion).
Amgen's expert John Lubina disputed Fishbane's con-
clusions regarding hemoglobin stability of MIRCERA
and claimed that plots of weekly mean hemoglobin re-
veal increased hemoglobin variability associated with
MIRCERA treatment, particularly during the titration
phase of the Phase III trials. Lubina Expert Rep. ¶¶ 87,
93. Moreover, patients treated with peg-EPO
(MIRCERA) statistically have a significantly greater
likelihood of premature withdrawals from treatment rel-
ative to patients treated with reference drugs.Id. '['[ 91,
100.
The half-life of a medicine is a measure of the amount
of time a therapy is available to be used by the body.
Dr. Fishbane claims that, for intravenous administra-
tion, the half-life of MIRCERA (134 hours) is signific-
antly longer than that for Aranesp (25.3 hours) or EPO-
GEN (6.8 hours); with subcutaneous administration, the
half-lives are estimated at 139, 48.4, and 19.4 hours for
MIRCERA, Aranesp, and EPOGEN, respectively. Un-
like Aranesp and EPOGEN, whose half-lives when ad-
ministered intravenously are considerably shorter than
when administered subcutaneously, MIRCERA's half-
life is essentially unaffected by route of administration.
Fishbane Expert Rep. ¶¶ 30, 130, 132.
*50 While the longer half-life of MIRCERA underlies
its FDA approval for once-monthly dosing for CKD
maintenance patients, the Roche and Amgen experts
differed in how they interpreted and evaluated the less
frequent dosing requirement for MIRCERA. According
to Amgen's expert Dr. Glenn Chertow, because ESRD
patients already typically receive hemodialysis at a dia-
lysis center three times weekly via arteriovenous fistula
or graft (native and artificial connections between arter-
ies and veins) or large intravenous catheter, and because
these blood lines can also be used efficiently to admin-
ister epoetin alfa (EPOGEN) simultaneously three times
weekly, there is little benefit to the patient or provider
to switching to the less frequent dosing associated with
use of MIRCERA. Chertow Expert Rep. ¶¶ 25-26; see
also Remedy Trial Tr. vol. 2 [Doc. 1738] at 310-11.
Moreover, the more frequent administration may in fact
be preferable as it can facilitate more rapid and precise
 Case 5:00-cv-20905-RMW Document 3865
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titration, which may be particularly important for ESRD
patients having comorbidities. Chertow Expert Rep.
32; see also id. ¶¶ 25-26.On the other hand, more fre-
quent dosing involves more time spent ordering, prepar-
ing, administering, and recording ESA treatments and
thereby creates greater opportunities for making dosing
or medication errors. Fishbane Expert Rep. ¶¶ 140, 143,
156. In addition, the less frequent dosing of MIRCERA
relative to EPOGEN and Aranesp for patients on dialys-
is frees up time for dialysis center staff, particularly
nurses. Fishbane Expert Rep. ¶ 141; Remedy Trial Tr.
vol. 3 [Doc. 17391 at 532; Remedy Trial Tr. vol. 4 [Doc.
17401 at 641-42.
For ESRD patients not going to dialysis centers three
times weekly for hemodialysis treatment but instead re-
ceiving home dialysis or peritoneal dialysis, any bene-
fits from more intense monitoring associated with
thrice-weekly dialysis center visits are not available. In-
stead, for these patients, there may well be a conveni-
ence benefit to less frequent dosing with subcutaneously
administered MIRCERA, particularly for those for
whom travel times or mobility is an issue. Fishbane Ex-
pert Rep.'[ 138. Similarly, for CKD anemia patients not
on dialysis, the less frequent once-every-two-weeks or
once-monthly dosing with MIRCERA-as opposed to
thrice-weekly dosing with Procrit or once weekly dos-
ing with Aranesp-is likely to provide benefits in the
form of increased convenience and less travel time. See
id. ¶ 153; Remedy Trial Tr. vol. 4 at 616-18. Moreover,
for patients receiving an ESA via the subcutaneous
route of administration, the less frequent administration
with MIRCERA implies less patient discomfort from
the fewer number of injections. Fishbane Expert Rep. ¶¶
139, 150; Remedy Trial Tr. vol. 4 at 656-58. In sum,
while for many ESRD patients receiving thrice-weekly
dialysis the potential convenience of less frequent dos-
ing on MIRCERA may not be important, for their pro-
viders and nurses it would reduce administration efforts
and perhaps medication errors. For CKD patients,
however, particularly for those patients whose time
value and traveling expenses are large, the availability
of a more convenient, less frequent dosing regimen
could constitute a substantial improvement in quality of
life and perhaps even an improved treatment adherence
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and health outcome.
*51 Other benefits of permitting MIRCERA to enter the
market would be expanding the armamentarium with
which doctors treat CKD patients with anemia, some of
whom exhibit poorly understood idiosyncratic re-
sponses, and reducing the vulnerability to manufactur-
ing problems that exists by virtue of the fact that Am-
gen is the sole manufacturer of all ESAs marketed in the
United States: EPOGEN, Procrit, and Aranesp. Fish-
bane Expert Rep. ¶¶ 164-166; Remedy Trial Tr. vol. 4
at 622-23; see also Fishbane Supp. Expert Rep. 1151. As
to the first issue, Dr. Rebecca Schmidt testified that it is
a common albeit poorly understood phenomenon that
some patients respond better with one seemingly similar
medication than another. Remedy Trial Tr. at 622-23.
While it is impossible to predict with any confidence
just how large the overall clinical benefits from entry by
MIRCERA into the United States market would be, it is
possible they could be considerable.
In contrast, Amgen 's expert, Dr. Glenn Chertow argued
that:
The medical need in the case of anemia is to prevent
transfusion and to restore the hemoglobin concentra-
tion to a level sufficient to maintain adequate energy,
strength, and to prevent symptoms such as breathless-
ness and conditions such as heart failure. And those
needs are adequately met by existing ESAs or eryth-
ropoiesis stimulating agents.
Remedy Trial Tr. vol. 3 at 421-22. More generally, Dr.
Chertow concluded that "Roche's clinical studies, as set
forth in its regulatory filings, fail to demonstrate that its
peg-EPO product satisfies any unmet medical need in
the treatment of anemia associated with chronic kidney
disease."Chertow Expert Rep. ¶ 21. In terms of dosing
frequency, Chertow notes that although off-label and
not approved by the FDA, the established ESAs on the
U.S. market are already "clinically used at longer dos-
ing intervals than the intervals that are FDA approved in
the labels."Remedy Trial Tr. vol. 3 at 424-26.
Regarding hemoglobin variability, Dr. Chertow testified
that "the individuals who were treated with peg-EPO re-
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lative to those treated with epoetin alfa and dareopoetin,
established ESAs, were, for instance, threefold more
likely to experience a hemoglobin excursion above 14
grams per deciliter ... which as I noted earlier are asso-
ciated with adverse clinical events."Remedy Trial Tr.
FNI3
vol. 3 at 451. Moreover, during the titration phase
of the Phase III studies there was a statistically signific-
ant greater mortality rate for subjects treated with
pegEPO versus those treated with established ESAs,
Remedy Trial Tr. vol. 3 at 455, although by the end of
the study the likelihood of death was "roughly the
same" in peg-EPO treated subjects and subjects treated
with the reference ESAs. Id. at 455-56.During cross-
examination, Dr. Chertow acknowledged that, in ap-
proving MIRCERA for the treatment of anemia due to
chronic renal failure, the FDA stated that its evaluation
of product safety data for MIRCERA "did not reveal
particular safety issues that were unexpected for a mem-
ber of the ESA class when used for this specific indica-
tion."Id. at 465;see also Remedy Trial Tr. vol. 4 at 649
(providing testimony of Dr. Fishbane to same effect).
*52 Dr. Fishbane testified that hemoglobin variability
has been quantified in the relevant scientific literature
"as large movements of hemoglobin, one and a half to
two and half, three grams of hemoglobin."Remedy Trial
Tr. at 647. This quantification of variability is consider-
ably larger than that discussed and emphasized by Dr.
Chertow, which apparently ranged from 0.3 to 0.5
grams. Fishbane Supplemental Report ¶ 56-57. When
asked whether he had seen any such variability in the
Phase III study patients, Dr. Fishbane responded that
"1789 patients studied in the Phase III program, and
with this big a primary power analysis, there was no
evidence of variability with MIRCERA compared to the
comparators."Remedy Trial. Tr. vol. 3 at 647. The im-
plication is that while Chertow's findings on greater
hemoglobin variability may be statistically significant,
they are not clinically relevant. See Fishbane Supp. Rep.
55-58.
Dr. Fishbane notes that because the titration period is a
dose-finding exercise designed to find the correct dose
of the experimental drug for a particular patient, find-
ings from the titration period are not examined to de-
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termine effects of the drug. Rather, the proper period for
assessing drug effects is the evaluation phase, which is
also known as the assessment phase.Id. ¶ 25.Because
physicians have more experience with dosing of estab-
lished ESAs, one should expect that those patients re-
ceiving MIRCERA would have greater hemoglobin
variations during the titration period. Dr. Fishbane
stated:
As the patients who are continuing on the older drug
are not titrating-the correct dose for that patient is
already known and the patient is receiving it-any
comparisons between results of patients taking the ex-
perimental drug with patients taking the older drug is
not an equivalent comparison and has no scientific
merit.
Id. ' 26.
a. Findings with respect to patient health
Obviously, the Roche and Amgen experts differ in their
interpretations and evaluations of the clinical, conveni-
ence, and quality of life attributes of MIRCERA relative
to the currently available ESAs. Nevertheless, one set of
facts is clear and warrants particularly strong considera-
tion. Although clinical studies in support of a Biologics
License Application at the United States Food and Drug
Administration or at the European Medicinal Evaluation
Agency frequently involve several thousand patients, it
often takes many years before the medical community
learns how new therapies are to be used safely and ef-
fectively, for what patients and at what doses, and con-
ditions under which their use is not advised. As physi-
cian/patient experience accumulates and scientific evid-
ence evolves, the benefit/risk calculation underlying
treatment often shifts as well.
For example, while EPOGEN was launched in 1989 and
Aranesp in 2001 in the U.S., major changes in treatment
guidelines and FDA product labeling for these ESAs
were still emerging as late as 2007. These included re-
ducing the hemoglobin treatment upper range target to
12 <<mu>>g/dL and warning that dosing to achieve tar-
get hemoglobin of greater than 12 <<mu>>g/dL in-
 Case 5:00-cv-20905-RMW Document 3865
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creases the risk for: (1) death and serious cardiovascular
events; (2) shortened time to tumor progression in pa-
tients with advanced head and neck cancer receiving ra-
diation therapy; (3) increased deaths attributed to dis-
ease progression in patients with metastatic breast can-
cer receiving chemotherapy; and (4) increased risk of
death in patients with active malignant disease not un-
der treatment with chemotherapy or radiation therapy.
Bernheim Expert Rep. 11 39. Some of these new FDA
treatment guidelines took the form of product label
black box warnings, which are the strongest warnings
the FDA can issue short of ordering product withdrawal
from the U.S. market. Fishbane Supp. Rep. ¶ 17. In ad-
dition, after reviewing data on its ESAs at the request of
the FDA, in 2007 Amgen removed a number of quality-
of-life claims from its product label. Id. T 14; Remedy
Trial. Tr. vol. 3 at 473-75.
*53 Given that both the FDA and the European Medi-
cines Agency have approved MIRCERA as safe and ef-
fective for the treatment of anemia in patients with
chronic renal failure, it seems likely that some patients
might well benefit from MIRCERA being on the market
as an additional element in the physicians' armamentari-
um due to clinical, convenience, and quality-of-life con-
cerns. Nevertheless, with major changes in recommen-
ded treatment modalities still occurring many years
after the initial product launch for currently available
ESAs, it is also plausible that, were MIRCERA allowed
to be marketed in the United States, information and
consensus on its risk/benefit profile relative to those of
EPOGEN, Procrit, and Aranesp would also evolve and
change, perhaps substantially. See Remedy Trial Tr.
vol. 1 at 157-58. Hence, it is difficult if not impossible
to predict with any reasonable level of confidence what
the net clinical, convenience, and quality-of-life bene-
fits of Mircera will be relative to those of the existing
ESAs.
2. The Court cannot conclude that MIRCERA would
reduce Medicare costsFN 14
As shall be outlined below, the record does not support
a finding that MIRCERA would reduce Medicare costs;
indeed, prices may actually rise.
© 2008 Thomson Reuters/West. No Claim to Orig. US Gov. Works.
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a. A primer on how Medicare calculates its reimburse-
ment rate for ERSD drugs
Medicare is the dominant payor in the ERSD market
and plays a very important albeit less dominant role in
the CKD market. Because ERSD patients regardless of
age are generally eligible for coverage by Medicare Part
B beginning in the fourth month of dialysis treatment,
Medicare Part B is the dominant payor for EPOGEN.
Amgen expert Professor Douglas Bernheim estimates
that, in 2006, Medicare Part B accounted for 75% of
EPOGEN sales in the United States, while other govern-
mental payors included Medicaid (2%), the Veterans'
Administration and Department of Defense (1%), and
other public health services (2%). Together, govern-
mental purchasers comprised approximately 80% of
EPOGEN sales, while commercial payors accounted for
the remaining 20%. Bernheim Expert Rep. ¶ 46, Fig. 4.
Medicare is also a large purchaser of Aranesp. In 2006,
Medicare accounted for 41% of Aranesp sales. Id. T 46,
Fig. 5.
Medicare ' s method of paying for ESRD drugs, which
are separately billable under Part B, has changed several
times in recent years. Under provisions of the Medicare
Prescription Drug, Improvement and Modernization Act
of 2003 ("MMA"), the basis on which Medicare Part B
reimbursement of most physician-dispensed drugs was
changed, effective January 1, 2004, from 95% of the
Average Wholesale Price ("AWP," a list price) to 85%
of the April 1, 2003 AWP. Patricia Danzon, Gail R. Wi-
lensky, and Kathleen E. Means, Alternative Strategies
for Medicare Payment of Outpatient Prescription
Drugs-Part B and Beyond, 11 AM. J. MANAGED
CARE 173, 173 (2005). Beginning January 1, 2005,
Medicare Part B reimbursement for single-source
(primarily on-patent originator) drugs became 106% of
their two-quarter lagged average sales price ("ASP") or
their current wholesale acquisition cost ("WAC "),
whichever is lower. Id. The ASP is intended to repres-
ent the volume-weighted, average manufacturer sales
price net of rebates and discounts to all United States
purchasers excluding sales that are exempt from the
Medicaid best price calculation and those to other feder-
al purchasers. Id, see also Bernheim Expert Rep. ¶ 49.
 Case 5:00-cv-20905-RMW Document 3865
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*54 Rebates and discounts incorporated into the ASP
calculation include volume discounts, prompt payment
discounts, cash discounts, free goods that are contingent
on any purchase requirement, chargebacks, and rebates
(other than rebates under the Medicaid drug rebate pro-
gram).See42 C.F.R. § 414.804(a)(2). Because some dis-
counts and rebates are determined on an annual basis,
the manufacturer is instructed to calculate the quarterly
ASP by adding up the relevant data for the most recent
12-month period, dividing this by the relevant sales sub-
ject to the ASP reporting requirement for the same
12-month period, and applying that percentage to the
current quarter sales as the price concession for the
quarter for which the ASP is being submitted. Id. §
414.804(a).
Rebate payments can also be deferred to time periods
after they are earned; specifically, rebates affect ASP
calculations by reference to when they are paid, not
earned. A consequence of this is the phenomenon
known as "rebate overhang," in which rebates are
earned in a quarter "t" but are not paid until, say,
quarter t + 2. The payment of the rebate increases the
price concession for quarter t + 2 (and three subsequent
quarters, because ASP is calculated as a four-quarter
moving average) but has no impact on the net ASP in
quarter t or quarter t + 1. See Bernheim Expert Rep. II
113-14. As discussed below, this dynamic aspect of re-
bates and price concessions in ASP calculations has
strategic pricing implications for drug manufacturers,
including both incumbents and potential entrants.
ASP levels are calculated and then publicly posted each
quarter. The published ASP price for quarter t repres-
ents the average sales price lagged two quarters, i.e.,
from quarter t-2. U.S. GOV'T ACCOUNTABILITY
OFFICE, END-STAGE RENAL DISEASE: BUND-
LING MEDICARE'S PAYMENT FOR DRUGS WITH
PAYMENT FOR ALL ESRD SERVICES WOULD
PROMOTE EFFICIENCY AND CLINCIAL FLEXIB-
12, at ht-
ILITY available
tp://www.gao.govlnew.items_td0777.pdf (last visited
Sept. 9, 2008). Because the calculation of an average
sales price requires a sales history, a different methodo-
logy must be employed for new drugs or biologicals.
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The Centers for Medicare and Medicaid Services
("CMS") has specified that, for new drugs and biologic-
als approved for marketing in the United States, the
payment allowance is 106% of the WAC or, if the WAC
is not published, the invoice price. See, e.g., Centers for
Medicare and Medicaid Services, Change Request 5646
(June 15, 2007), at 4, available at ht-
tp://www.cms.hhs.gov/Transmittals/downloads
R1270CP.pdf (last visited Sept. 2, 2008). Put simply,
for the first two quarters for which a new drug is sold,
the ASP is computed as 106% of the WAC, or invoice
pricing if the WAC is not published. Beginning in the
third calendar quarter of its first year of U.S. sales,
however, the drug's published ASP represents the aver-
age sales price lagged two quarters.
b. Medicare 's current method for calculating reim-
bursement rates provides an incentive to pharmaceutic-
al companies selling ESAs to keep their prices high
*55 In undertaking an appropriate economic analysis of
the effect MIRCERA's entry might have on the ESA
market, Professor Bernheim explained that one must
"begin with an understanding of the institutional frame-
work within which competition is taking place, an un-
derstanding of the incentives that creates, [and] an un-
derstanding of how the organizations are intending to
respond to those incentives. "Remedy Trial Tr. vol. 1 at
106. Bernheim identified three ways in which the mar-
ket for ESAs, characterized by "ASP-based competi-
tion," differs from traditional "plain vanilla competi-
tion." Id. at 107-08.First, in textbook market competi-
tion, end user consumers make choices. In prescription
drug markets, however, physicians and providers, not
patients, generally make product choices. Id. at
108.Second, while in textbook market competition end
users pay directly for products they consume, in the
ESA market end users pay at most only a relatively
small proportional co-payment, and it is Medicare and
third-party payors that bear most of the direct burden.
Id. at 108-09.Third-and perhaps most important-in text-
book market competition end users attempt to satisfy
their needs at minimum cost. Under ASP-based compet-
ition, however, providers are drawn to the drugs that of-
fer the largest difference between the amount a provider

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is reimbursed per drug unit under Medicare (currently,
as discussed above, ASP plus 6%) and what the pro-
vider actually paid for the drug. Id. at 109.This differ-
ence is called the "cost recovery." Bernheim Expert
Rep. ¶ 72.
Therefore, unlike in a textbook competitive market
where manufacturers compete by reducing prices,
vendors in the ESA market instead focus on making
their product attractive to physicians by maximizing
their cost recovery. Remedy Trial Tr, vol. 1 at 110. This
often has the effect of encouraging pharmaceutical com-
panies to avoid reducing their prices. FN 15 In essence,
the Medicare policy of reimbursing providers on a fee-
for-service basis at a rate of ASP plus 6% gives those
providers incentives to maximize their cost-based
billing, subject to acceptable medical practice, a goal
that can be best achieved with more expensive drugs.
Given the two-quarter lagged ASP calculation for in-
cumbents and the fact that a new entrant is assigned an
ASP equal to its WAC, the above circumstances create
an incentive for new entrants to launch at prices that are
higher than those of the incumbent and that, accord-
ingly, offer a higher cost recovery to providers, which
presumably will gain the new entrant market share. As
Professor Bernheim testified, a new entrant can preserve
this initial advantage over time:
[The new entrant] could make this advantage perman-
ent by simply discounting and then maintaining their
discounts, or alternatively they could discount and
then increase these discounts somewhat through
time[.] [T]heir ASP would be declining, but [the
entrant] could manage that in a way that would allow
them to converge to an ASP that's higher than the in-
cumbent's ASP[,] thereby preserving [its] advantage.
*56 Id. at 128.
In general, Professor Bernheim opined that "there's no
reason to think that the dynamics of price cutting
[present in textbook competition] will apply" in the
ESA market. Id. at 160.Instead, product pricing will de-
pend on whether the relevant companies are focused on
the long or short term. Id. at 159-60.Specifically, the
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ASP-based market creates a "Hobson's choice" for com-
panies choosing a pricing strategy. On one hand, they
can choose to discount prices at first to gain market
share, which negatively impacts their ASP and thus
their future competitiveness. On the other, they can
charge high prices to maximize their ASP, losing mar-
ket share in the present in order to be more competitive
in the future. Id. at 160.While it is impossible to predict
with certainty what will happen, Professor Bernheim
testified that some empirical evidence exists as to which
of these paths companies might choose.
Professor Bernheim described for the Court the pricing
decisions made by drug manufacturers that sell drugs
for which Medicare reimbursement is important after
the ASP-based Medicare reimbursement system was im-
plemented in 200514 at 160-61.A search yielded two
such drugs: one for treatment of breast cancer and the
other for age-related macular degeneration. Id. at 162.In
both cases, a new entrant launched at a WAC higher
than that of the competitor's ASP. In neither case did
the addition of the new competitor to the market lead to
decreased prices. Instead, the incumbent manufacturer
maintained its ASP while the ASP for the new drug re-
mained above that. Id.; see also Bernheim Expert Rep.
¶¶ 107-11. In sum, given the incentives that exist in the
ASP-based reimbursement system that represents the
core of the ESA market, Professor Bernheim opined that
"it [is] likely that yN1 6will not get any competition driv-
ing prices down. Id. at 202-03.
c. Roche is likely to enter the market at a price higher
than that of Amgen's products and to maintain high
prices over time
The provider preference for drugs that maximize cost
recovery was a major factor considered by Roche when
formulating its MIRCERA pricing strategy. Barbara
Senich, Vice President of Marketing and Sales for
Roche, testified that launching MIRCERA with a price
that provided physicians with an adequate cost recovery
was one of three goals Roche wanted to satisfy with its
pricing strategy, the other two being (I) avoiding setting
a price so high as to jeopardize Medicare FN 17 and oth-
er coverage and (2) providing a return on Roche's in-

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vestments. Remedy Trial Tr. vol. 4 at 561-62, 567,
569-71. As explained above, one way that new entrants
can provide superior cost recovery to providers is to set
their WACs at prices that exceed the ASP of incum-
bents. Indeed, Professor Bernheim testified that his re-
view of a series of high-level Roche planning docu-
ments and his understanding of the institutional peculi-
arities of the ESA market led him to conclude that
Roche is "very likely" to "enter with a WAC that im-
plies a substantial premium on a treatment
basis."Remedy Trial Tr. vol. 1 at 130.
*57 This would not be the end of the matter, for as
Roche's Vice President of Sales and Marketing testified:
[I]f you want to maintain the net cost recovery at the
provider level you have to then decrease ... the price
or increase your discounts to those providers to keep
them whole so to speak. But those incremental dis-
counts then are reflected in your ASP two quarters
later. So you're constantly stepping down, if you will,
to maintain the net cost recovery to the providers.
And so by that alone the ASP, if you will, goes down
and that's what we call the glide path.
Remedy Trial Tr. vol. 4 at 569. Roche has expressed an
intention to do what it can to minimize the decline of its
ASP while at the same time maintaining cost recovery
for its providers. See Remedy Trial Ex. 6, MIRCERA
WAC and Pricing Meeting, February 27-28, 2007
("MIRCERA Pricing Meeting") at slide 47, 197, 206
(stating there is a "[n]eed to carefully monitor rate of
ASP decline to avoid race to the bottom-[t]his is the
Glide Path concept"). Professor Bernheim opined that,
based on his review of Roche documents and his know-
ledge of the ESA market, Roche would "execute this
glide path, this management of its initial advantage
[over Amgen], in a way that preserves that advantage
through time and maintains a relatively high
ASP."Remedy Trial Tr. at 130-31.
Roche's ability to manage its glide path to maintain a
high ASP is somewhat dependent on Amgen's pricing
decisions. If Amgen fails to reduce the ASP of Aranesp
and EPOGEN to increase cost recovery for providers,
Roche may be required to implement only minimal de-
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creases to its ASP in order to maintain its advantage,
meaning that its price would remain relatively high. On
the other hand, if Amgen responded to MIRCERA entry
by increasing discounts and rebates substantially-thus
increasing Aranesp and EPOGEN's cost recovery and
making them more competitive-Roche may be forced to
respond in a manner that generates a steeper reduction
in its ASP. See Remedy Trial Ex. 6, MIRCERA Pricing
Meeting at slide 335.
d. Amgen's competitive response to Roche is uncertain,
but there is a reasonable likelihood it would either raise
prices or maintain the status quo
Professor Bernheim concluded, based on information
obtained from Amgen and in part on the evidence
gleaned from the pricing decisions made by incumbents
offering breast cancer and macular-degeneration drugs
in similar situations in the past, that "the most likely
outcome" is that Amgen would not reduce its prices.
Remedy Trial Tr. vol. 1 at 178. Similarly, although ad-
mitting it was difficult to predict with certainty, Pro-
fessor Bernheim opined that "the most likely thing is
[that there will be] either no price erosion or some de-
gree of price erosion " with regard to Amgen's products.
Id. at 181.
In fact, Amgen has already taken a significant step to-
ward locking in a high ASP-and with it, a high reim-
bursement rate-for the life of the patent. On October 13,
2006, Amgen and Fresenius Medical Care Holdings,
Inc. entered into a sourcing and supply agreement cov-
ering from October 1, 2006 to December 31, 2011.
Remedy Trial Ex. 20, Amgen-Fresenius Sourcing and
Supply Agreement ("Supply Agreement") ¶J 1.11-1.12.
Under the terms of the agreement, Amgen is the sole
supplier of the erythropoiesis stimulating proteins
("ESPs") that Fresenius uses to treat its patients. Id. II
*58 Fresenius is a large dialysis organization that, to-
gether with another large dialysis organization called
DaVita, accounts for about two-thirds of treated ERSD
patients in the United States. Because these large dialys-
is organizations account for such a large percentage of
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the market, the prices they pay will have a significant
affect on ASP. Under the terms of the agreement, Am-
gen will be able to maximize its ASP and the corres-
ponding Medicare reimbursement rate.
Specifically, the agreement provides for an Annual In-
cremental Rebate ("AIR") Opportunity to Fresenius if
its aggregate Qualified Gross Purchases of EPOGEN
meet certain annual volume thresholds. See id.
3.1-3.2.Rebates will be calculated on a quarterly basis
but will be paid in the year or the year after they are
earned. Id. ¶ 3.2.The sum of the potential rebates for
which Fresenius may qualify during the term of the
agreement is $225 million.Id. Ex. 3.1, Discount Terms
and Conditions,'! 8.3.
The rebate scheme, however, is significantly back-
loaded. Fresenius was eligible to earn just $10,000,000
in rebates in the final quarter of 2006 and just
S25,000,000 in rebates in the years 2007, 2008, and
2009. Id. The potential rebates increase sharply there-
after to $55,000,000 in 2010 and $85,000,000 in 2011.
Id. In other words, 62.5% of the rebates are to be paid in
the final two years of the agreement just prior to the
point when the first of Amgen's patents is scheduled to
expire in 2012.
e. The Court cannot compensate othe
jr peculiarities o
the ESA market
MIRCERA's likely market entry at a price higher than
that of Amgen products is one reason it seems prices for
ESA very well may not decline. While it may seem that
the Court could encourage lower prices by directing
MIRCERA to set a launch price no higher than the
prices of the Amgen products, it is not that simple. As
Professor Bernheim testified, one reason for this is the
possibility that MIRCERA is less efficient on a dosing
basis than EPOGEN; were this true, MIRCERA would
still have an advantage. Remedy Trial Tr. vol. 1 at 157.
A second reason for this is that the court-ordered parity
could be undermined due to the existence of rebate
overhang. Id. at 188.But perhaps most importantly, put-
ting the companies on equal footing would not eliminate
the idiosyncratic dynamics of ASP-based competition,
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which do not lend themselves to the "usual dynamics of
price cutting." Id. at 160.
f Further complicating the inquiry, administrative
changes may alter companies ' incentives, making it dif-
ficult for the Court to predict the effect of MIRCERA on
the market
In considering the likely effect of MIRCERA's entry in-
to the ESA market, the Court must bear in mind that the
administrative landscape is constantly shifting and, ac-
cordingly, altering drug manufacturer incentives. In
2003, Congress instructed CMS to design and assess the
feasibility of a payment system that, instead of paying
for ERSD drugs under a separate billable rate as is done
currently, would bundle payment for these drugs with
payment for other ESRD services under a single pro-
spectively set rate. This Medicare policy change has
been endorsed by the GAO, the Medicare Payment Ad-
visory Commission, and CMS. U.S. GOV'T AC-
COUNTABILITY OFFICE, END-STAGE RENAL
FAILURE,supra, at 23.
*59 If Congress passed legislation bundling payment
for drugs with other items such as clinical laboratory
tests, the incentives facing providers of treatment for
ESRD would change dramatically. Specifically, if reim-
bursement came in the form of a predetermined bundled
amount, ERSD providers would have an economic in-
centive to purchase the ESAs and other drugs with the
lowest acquisition cost in order to create the maximum
cost recovery, which in these circumstances would be
the difference between the drug acquisition cost and the
fixed bundle reimbursement rate. Bernheim Expert Rep.
1172.
Roche generally assumed, when producing its planning
models for the launch of MIRCERA, that CMS would
implement ESRD bundling in 2010. Remedy Trial Tr.
vol. 4 at 585. Some Roche documents, however, indic-
ated it expected bundling to occur as late as 2011, while
Amgen believes it may occur as early as 2009.
Bernheim Rebuttal Rep. ' 63. One expert indicated he
expected bundling polices to be adopted "shortly." Fish-
bane Expert Rep. I; 149. In sum, there is much uncer-
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tainty about when the reimbursement scheme will
change.
While Roche and Amgen make differing assumptions
about when bundling might occur, both agree that the
impact of the switch would be substantial. Roche, for
example, believes that bundling would produce cost
pressures that would reduce ESRD dosing by 25%.
Remedy Trial Ex. 8, 2007 MIRCERA Business Plan at
slide 25.
g. Ultimately. the Court cannot conclude that MIR-
CERA 's entry into the ESA market would reduce Medi-
care costs
Professor Bernheim ultimately concluded that MIR-
CERA's market entry "would probably not lead to re-
duced Medicare reimbursement costs."Remedy Trial Tr.
vol. 1 at 201. He opined that while Amgen "may experi-
ence some price erosion, " it was "very unlikely that
Amgen's prices will go down far enough and fast
enough to overcome the higher reimbursements associ-
ated with peg-EPO and this high WAC in executing the
glide path."Id. Accordingly, potentially Medicare might
actually end up paying more, were Roche permitted to
compete, as providers switched to more-expensive
MIRCERA because it offered them a higher cost recov-
ery. See id. at 206.
Of course, the future cannot be predicted with certainty,
and even Professor Bernheim acknowledged it was
"very difficult" to assess the effects of adding a new
competitor to ASP-based competition, id. at 165-66, in
part because it is difficult to anticipate how the compan-
ies will decide between short-term versus long-term
marketing concerns (and the pricing decisions that will
result), see, e.g., id. at 176-77.At bottom, predictions
about how Amgen and Roche will compete with regard
to price are speculative.
Furthermore, Roche produced their own expert, Profess-
or Einer Elhauge, who opined that "MIRCERA entry
would lower prices and spending."Remedy Trial Tr.
vol. 4 at 669. Professor Elhauge criticized Professor
Bernheim's analysis, arguing it "really assume[s] Medi-
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care is irrational."He explained that, because Bernheim
"assumes there ' s no quality advantage to MIRCERA, "
there would be "no rational reason" for Medicare to ap-
prove reimbursement at higher prices. Id. at
676.Professor Elhauge argued that Medicare would ra-
tionally approve reimbursement at a rate higher than
that charged by Amgen only if (1) MIRCERA is "of
higher quality than Amgen's product" or (2) if Medicare
"thought, in fact, ... that [MIRCERA's] entry was going
to lead to lower prices over time [and] wanted to help
fund the entry ... to make sure that happened."Id. at
676-77.
*60 Moreover, there is the question of whether Roche
will enter into a sole sourcing agreement with DaVita as
Amgen has done with Fresenius. It appears to contem-
plate doing so; its marketing plans assume MIRCERA
will capture 100% of DaVita's ESA use by the end of
2009. Remedy Tr. Ex. 8, 2007 MIRCERA Business
Plan at slide 17. Under the terms of the Amgen-
Fresenius agreement, the majority of rebates Amgen
will provide to Fresenius will not be paid until 2010 and
2011. Because the Medicare ASP formula only takes re-
bates into account when they are paid, these contract
provisions will have the effect of delaying considerably
the decline of the Medicare-calculated ASP. In addition,
were Medicare to switch to a bundled reimbursement
system with initial rates based upon contemporaneous
ASPs, these provisions would raise the initial reim-
bursement rate and thus overall Medicare costs. Be-
cause DaVita is almost as large as Fresenius, any
delayed rebate provisions in a sole-sourcing contract
between Roche and DaVita would further delay a reduc-
tion in ASP and, accordingly, Medicare savings.
It is simply impossible to predict with certainty the ef-
fect that MIRCERA's entry would have on prices and,
accordingly, on Medicare expenditures. Making the task
even more difficult are several factors. First, historical
experiences with ESAs demonstrate it is reasonable to
expect that the information about the risk-benefit profile
of MIRCERA relative to the incumbent ESAs will
evolve and change, perhaps substantially. It is possible
that clinical studies or other sources could raise ques-
tions about the safety or efficacy of MIRCERA (or in-
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deed, any of the other ESAs), thereby changing CMS
treatment guidelines for reimbursement or leading the
FDA to issue a black box warning. This latter event,
which likely has a substantial impact on the ESA mar-
ket, has occurred multiple times within the last several
years, despite the fact that EPOGEN and Aranesp have
been on the market for some time. See Bernheim Expert
Rep. 39; Fishbane Supp. Report fill 14, 17; Remedy
Trial Tr. vol. 3 at 473-75.
Second, it is unclear when-or whether-Congress will
change the reimbursement policy for ESAs, choosing to
reimburse providers on a bundled basis. Third, there is
likely a difference between how ESAs are dosed in the
"real world" as opposed to in a clinical environment,
which affects dose conversion ratios among ESAs and,
accordingly, their relative treatment costs. As recog-
nized by Roche's Director for Strategic Pricing in the
Renal Segment:
[Drug companies] can do research or analysis of our
clinical studies ... to try and figure out what the ap-
propriate dose or dose conversion is going to be.
[U]ltimately, the dose conversion that occurs in the
marketplace is a function of the provider's experience
with the product and what they feel is appropriate for
their patients. We can model it all we want[,] and we
still may not get it right.
Bernheim Expert Rep. j 63 (quoting deposition of Son-
ders Beimfohr). Moreover, though it may be possible to
pin down the "right" dose conversion ratio for one point
in time, new information, changes in reimbursement
policies, and the issuance of label warnings may change
the dose conversion ratio, with important economic im-
plications for the various ESAs.
*61 In sum, the multiple variables present in the ESA
market as well as the incentives provided by ASP-based
competition prevent this Court from concluding that
MIRCERA's entry into the marketplace would reduce
Medicare expenditures.
h. Separation of powers considerations and Federal
Circuit precedent suggest that cheaper drugs are not a
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strong justification for refusing a permanent injunction
Medicare is regulated and administered by the elected
branches of government, and it has procedural mechan-
isms designed to keep drug prices from reaching exor-
bitant levels. See Remedy Trial Ex. 6, MIRCERA Pri-
cing Meeting at slides 83-84, 86, 90. Congress could
change the way it calculates reimbursement; as dis-
cussed above, for instance, it can choose to reimburse
on a bundled basis. It also could simply reduce reim-
bursement rates. See, e.g., Susan Adler Channick, The
Ongoing Debate Over Medicare: Understanding the
Philosophical and Policy Divides, 36 J. HEALTH L.
59, 70 (2003) (noting that, in response to "runaway cost
escalation," "Congress changed [Medicare] inpatient
hospital reimbursement in 1983 to a prospective pay-
ment system"); Joan H. Krause, Regulating, Guiding,
and Enforcing Health Care Fraud, 60 N.Y.U. ANN.
SURV. AM. L.. 241, 268 (2004) (noting Congress's au-
thority to reduce Medicare reimbursement rates). Con-
gress could also pass legislation augmenting or under-
mining incentives for innovation that affect the value of
drug patents. See, e.g., Bayh-Dole Act of 1980, 35
U.S.C. §§ 200-212 (permitting public universities to
enter into exclusive license agreements with private
companies); Drug Price Competition and Patent Term
Restoration Act, Pub.L. No. 98-417, 98 Stat. 1585
(1984) (restructuring regulations for generic drugs).
Separation of powers considerations thus dictate that,
absent a strong showing that the government is being
fleeced, courts should proceed with caution before at-
tempting to intervene on Medicare's behalf. See United
States v. Oakland Cannabis Buyers' Cooperative, 532
U.S. 483, 497, 121 S.Ct. 1711, 149 L.Ed.2d 722 (2001)
(stating that courts fashioning injunctive relief cannot
FN 18
"override Congress' policy choice[s] ").
Furthermore, even assuming MIRCERA would reduce
Medicare's costs, this is not a sufficiently strong justi-
fication for declining Amgen ' s request for an injunction.
The Federal Circuit has concluded that "selling a lower
priced product does not justify infringing a patent. Were
that to be a justification for patent infringement, most
injunctions would be denied because copiers universally
price their products lower than innovators."Payless
 Case 5:00-cv-20905-RMW Document 3865
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Sboesource, Inc., v. Reebok Int'l Ltd., 998 F.2d 985, 991
(Fed.Cir.1993); see also Pfizer, Inc. v. Teva Pbarm.
USA, Inc., 429 F.3d 1364. 1382-83 (Fed.Cir.2005)
(citing Payless when upholding a district court's grant
of a preliminary injunction even though a denial would
have led to cheaper drugs). Of course, in this case-as
explored above-there is no guarantee that allowing
MIRCERA to enter the market would lead to lower
priced drugs. It is also important to bear in mind that, as
much as Medicare may spend on ESAs per year, that
amount is a billion-dollar drop in a nearly trillion-dollar
bucket. Any savings that might occur as a result of
MIRCERA 's market entry would be a minute fraction of
Medicare's overall expenditures. Hence, Roche ' s argu-
ment that cost savings justify the denial of a permanent
injunction simply lacks force. As explored below, while
the exclusionary rights conferred with a patent may res-
ult in more expensive products, this is part and parcel of
the bargain embodied in the Patent and Copyright
Clause.
3. Permitting Roche to enter the market would un-
dermine the incentives for innovation embedded in
the Patent and Copyright Clause
*62 The Federal Circuit has "long acknowledged the
importance of the patent system in encouraging innova-
tion. Indeed, the `encouragement of investment-based
risk is the fundamental purpose of the patent grant, and
is based directly on the right to exclude.'Importantly,
the patent system provides incentive to the innovative
drug companies to continue costly development ef-
forts."Sanofi-Syntbelabo v. Apotex, Inc., 470 F.3d 1368,
1383 (Fed.Cir.2006) (quoting Patlex Corp. v. Mossing-
holy 758 F.2d 594, 599 (Fed.Cir.1985)).
The evidence in this case confirmed the Federal Cir-
cuit's evaluation of the importance of the right to ex-
clude as an incentive for investment. Amgen CEO Kev-
in Sharer characterized pharmaceutical development as
the "riskiest business that I know of in the
world."Remedy Trial Tr. vol. I at 28. "[I]t can easily
take 15 years" and a billion dollars for a company like
Amgen to discover and develop a new drug. Id. at
27.Sharer's estimate is consistent with the findings of
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the district court in Sanofi-Sythelabo, which concluded
that "the average cost of developing a blockbuster drug
is S800 million."470 F.3d at 1383. Of course, most of
these enormous investments fail to result in marketable
drugs. In his eight years at Amgen, Mr. Sharer has seen
a "hundred or more" products "close to or actually in
human testing"; only six or seven of those actually
made it to market. Remedy Trial Tr. vol. 1 at 35. In or-
der to maintain its business model and its research and
development, Amgen must be able "to demonstrate to
[its] investors that the full investment they make can be
recaptured."Id. at 37.
If the Court allowed Roche to introduce MIRCERA into
the market, perhaps a few patients would benefit, and
maybe Medicare would save a few dollars. These argu-
ments, however, could be made for almost any in-
fringing drug. Were courts to refuse injunctions on the
basis of such speculation, then pharmaceutical patents
would be worth far less than they are today because
they would no longer include a right to exclude in-
fringers from the market. The diminishing returns
would disincentivize research and development for
pathbreaking drugs by lowering the expected value of
discovery. By contrast, granting injunctions encourages
companies to devote their energies toward developing
drugs that will satisfy unmet medical needs. Were it
possible to obtain market entry by making incremental
improvements to existing drugs, it is doubtful that com-
panies designed to generate discoveries could exist.
At bottom, Roche attached a sugar to a patented protein.
As the jury concluded, this was not innovation. Of
course, Roche's efforts to modify Amgen's patented
product will not go entirely unrewarded. As it stands,
European companies such as Roche can profit from
building upon American discoveries by producing and
selling infringing products in Europe and throughout the
rest of the world. Nevertheless, the fact that Roche
"built up its manufacturing facility in [Europe] and pre-
pared to market its product was simply a risk it took
with eyes open to the" possibility that it would not be
permitted to market MIRCERA in the United States. Pf-
izer, 429 F.3d at 1382 (internal quotations and altera-
tions omitted).

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*63 As Adam Smith observed in 1776, "[i]t is not from
the benevolence of the butcher, the brewer, or the baker,
that we expect our dinner, but from their regard to their
own interest."ADAM SMITH, THE WEALTH OF NA-
TIONS,Book I, Chapter II: Of the Principle which gives
Occasion to the Division of Labour, available at ht-
tpi/www.econlib.org/library/Smith/smWNI.html . The
Court has relinquished any notion that the long-suf-
fering or terminally ill among our number may rely
upon "the benevolence of" pharmaceutical companies.
Companies like Amgen invest in risky research and de-
velopment to discover drugs like EPO because such
drugs are worth tens of billions of dollars, period. If
America is to continue to be an engine of medical in-
novation it will be because we protect the right of in-
ventors to exploit the limited monopoly granted in the
Patent Clause.
After taking evidence for four days and entertaining or-
al argument and extensive briefing, the Court cannot
conclude with any certainty that MIRCERA will save
lives or money. Failure to enter a permanent injunction,
however, would risk undermining the incentives for in-
novation that have produced, and hopefully will contin-
ue to produce, medical advances that extend and en-
hance the value of life. The Court therefore concludes
that the public interest will not be disserved by a per-
manent injunction.
D. THE PROPOSED MODIFIED INJUNCTION
WOULD NOT ADEQUATELY COMPENSATE
AMGEN AND WOULD BE INAPPROPRIATE IN
VIEW OF THE FINDINGS ABOVE
At a hearing on February 28, after Roche admitted it
would no longer voluntarily refrain from entering the
ESA market, the Court preliminarily enjoined
Roche.FN19The Court, however, indicated that it was
considering entering a permanent injunction subject to
the following conditions:
Primarily, Roche must pay a 22.5% royalty. Second,
MIRCERA must be introduced in the Medicare field
with an ASP at or less that the ASP for EPOGEN, and
the ASP must remain at or below EPOGEN's for the
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remainder of the life of Amgen's patents. Third,
Roche must provide evidence of clinical usage and
the real world dosage of MIRCERA so that the Court
accurately can determine a dose conversion factor for
MIRCERA's FDA approved indications. Fourth,
Roche must fund an independent agency that will
monitor Roche sales and account for the royalty pay-
ments. Finally, if Roche decides to enter the market
based on these conditions, regardless of the outcome
of any future litigation, Roche must agree that it will
continue to provide MIRCERA to any patient who re-
quests it, at or below the same price for which it was
authorized, so long as the patient requires.
Order and Preliminary Injunction [Doc. No. 1675] at 3.
Although a modified injunction would mitigate the irre-
parable harm to Amgen, it would still permit Roche to
gain profits, market share, and a foothold into the
American drug market to which it is simply not entitled.
Anything less than a permanent injunction would create
uncertainty about the value of Amgen's patents and po-
tentially undermine the incentives for investment and
pharmaceutical innovation. In short, the modified in-
junction could not eradicate the deleterious effects of
failing to enter an injunction altogether. As discussed at
length above, there is no evidence of medical or eco-
nomic harm compelling enough to override the public's
interest in a robust patent system. Were there evidence
of a shortfall in supply, a compulsory license or a modi-
fied injunction might be appropriate. If Amgen was un-
able or unwilling to meet the demand for ESAs, then
barring the entry of a company that could supply the
public' s needs would disserve the public interest. The
record, however, reveals that, although EPOGEN and
Aranesp are not be perfect, they adequately meet the
current demand.
*64 Furthermore, a modified injunction would be diffi-
cult to enforce and manage. Before the Court could set
and monitor an entry price for MIRCERA, it would
have to determine the real world dosing conversion ra-
tio. This is a thorny issue that would require a special
master whose conclusions would undoubtedly be dis-
puted and unsatisfying. The Court would almost cer-
tainly be called on to monitor pricing and resolve myri-

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ad disputes that would occur during the remaining life
of the patents. In short, the proposed modified injunc-
tion would result in needless, protracted involvement in
the affairs of these two companies. Should the parties
wish to reach a license agreement, they may do so. If,
however, Amgen wishes to exclude Roche from the
market, it has earned that right.
V. THE INTERLOCUTORY APPEAL
On April 9, 2008, Roche appealed this Court's entry of a
preliminary injunction. See Notice of Appeal [Doc. No.
1703]. That appeal is pending. Therefore, with respect
to the preliminary injunction, this Court is divested of
jurisdiction to act other than in aid of the appeal. See
6i/du Indus., Inc. v. United States, 511 F.3d 1348, 1350
(Fed.Cir.2008); Hybritech Inc. v. Abbott Labs., 849 F.2d
1446, 1450 (Fed.Cir.1988). Because this an inter-
locutory appeal, however, this Court retains jurisdiction
to enter the necessary findings and rulings on the judge-
tried portions of this case and to decide the pending
post-trial motions. This memorandum addresses and re-
solves these matters. Having now fully reviewed and re-
flected upon the record the Court sets forth its reasoning
relative to remedy-i.e. a permanent injunction is not
only warranted, but ought be imposed. To enter such a
declaratory judgment, however, would moot the appeal
of the preliminary injunction-an interlocutory appeal the
Court welcomed for appellate guidance. This the Court
may not do.
Accordingly, having stated its firm intention to enter
such a permanent (for the life of the patents-in-suit) in-
junction-unless resolution of the interlocutory appeal
mandates a different conclusion-the Court will order
this case administratively closed. This ought be a suffi-
ciently "final order" to allow any party to appeal at once
and seek to consolidate such appeal with that presently
pending. The Court seeks to avoid the process of ap-
peal-remand-appeal-remand that unfortunately has char-
acterized the related Amgen v. TKT/HMR litigation. See
457 F.3d at 1321-22 (Michel,
C.J.dissenting).
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VI. CONCLUSION
In sum, the jury 's verdict will stand. The Court will not
reverse its ruling on validity of claim 1 of the '422 pat-
ent because "purified from mammalian cells grown in
culture" limits the claim. Moreover, summary judgment
of infringement on claim 1 of the '422 patent was appro-
priate because MIRCERA contains an infringing form
of recombinant EPO.
The Court was on the precipice of entering a modified
injunction. On a different record, such a decision might
have been appropriate. Here, however, the uncertainties
inherent in the available clinical evidence and the
highly speculative economic projections are simply not
enough to override the public's interest in robust patent
rights that protect incentives for innovation. Unless the
Federal Circuit mandates otherwise in resolving the in-
terlocutory appeal, Roche, its agents, servants, employ-
ees, counsel, and all persons and entities acting in con-
cert therewith will be permanently enjoined for the life
of the remaining patents-in-suit, as to the claims of the
patents-in-suit found to be infringed herein, from in-
fringing those patents in any way within the United
States. The case is administratively closed pending res-
olution of the interlocutory appeal. It may be reopened
upon motion of any party thereafter.
*65 SO ORDERED.
FN1. With well over 1,000 pages of post-trial
briefing, responding to every issue would be an
inappropriate use of judicial resources. The
Court will focus on those issues that the parties
raised at the February 28 hearing. All of the
parties' remaining contentions have been con-
sidered and found wanting. Because the jury's
verdict will stand, Roche's anti-trust claims are
moot.
FN2.Amgen Inc. v. Hoechst Marion Rousell
and Transkaryotic Therapies, Inc., No.
97-10814-WGY, a related case in this session
of the Court involving the same patents,
spawned two written opinions by this Court
and two from the Federal Circuit: Amgen Inc.
 Case 5:00-cv-20905-RMW Document 3865
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-
v. Hoechst Marion Roussel Inc., 126 F.Supp.2d
69 (D.Mass.2001) ("Amgen I"); Amgen Inc. v.
Hoechst Marion Roussel Inc., 314 F.3d 1313
(Fed.Cir.2003) ("Amgen II "); Amgen Inc. v.
Hoechst Marion Roussel Inc., 339 F.Supp.2d
202 (D.Mass.2004) ("Amgen III "); Amgen Inc.
v. Hoechst Marion Roussel Inc., 457 F.3d 1293
(Fed.Cir.2006) ("Amgen IV ").
FN3. Expression vector refers to a "circular
piece of DNA. that is inserted into a host cell to
produce (or `express') a protein."Amgen II, 314
F.3d at 1321 n. 2.
FN4. All of the patents at issue share this
identical specification.
FNS. Transcription is the process wherein the
nucleotide sequence of DNA is copied onto
ribonucleic acid ("RNA").BRUCE ALBERTS
ET AL., MOLECULAR BIOLOGY OF THE
CELL 302 (4th ed.2002). RNA "is a polynuc-
leotide comprising adenine, guanine, cytosine
and uracil (U), rather than thymine, bound to
ribose and a phosphate group." '422 Patent col.
1 11. 50-52. The process of generating a protein
begins when "DNA nucleotide sequences
(genes) are `transcribed ' into relatively un-
stable messenger RNA (mRNA) poly-
mers."This mRNA then serves as a template for
the formation of the protein. Id. col. 1 11. 54-58;
see alsoALBERTS,supra, at 302.Through a
process known as "translation, " "small RNA
strands (tRNA) ... transport and align individu-
al amino acids along the MRNA strand to allow
for formation of polypeptides in proper amino
acid sequences. "Id. col. 1 11. 59-63.
FN6. In some mammalian cells, one of the 166
amino acids is removed, leaving 165.
FN7. The Federal Circuit's recent decision in
Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc.,
518 F.3d 1353 (Fed.Cir.2008), does not alter
the outcome. In Pfizer, the Federal Circuit
noted that "[t]here is nothing that prevents us
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from looking to the specification to determine
the proper scope of the claims."Id. at 1363 n. 8.
The Court reads Pfizer as consistent with
Geneva, which permitted the court to look at
the specification where the metes and bounds
were not immediately apparent. See Geneva,
349 F.3d at 1385. Here, the scope of claim 10
is clear; it claims a seven-step process for puri-
fying recombinant EPO. The claim does not
contemplate the production of recombinant
EPO.
FN8.Pfizer, Inc. v. Teva Pharmaceuticals USA,
Inc. does not invalidate this precedent. As an
initial matter, Pfizer did not name Symbol
Technologies as one of the decisions that was
possibly at odds with the Pfizer decision. See
Pfizer, 518 F.3d at 1362 (naming other cases).
Furthermore, Pfizer addressed the scope of sec-
tion 121 in the context of a continuation-in-part
application filed in lieu of a divisional applica-
tion when responding directly to a restriction
requirement. Id. at 1362.It said nothing about
what happens if an applicant files a divisional
application-which is eligible for section 121's
safe harbor-and then files a continuation ap-
plication to that divisional application.
FN9. For example, because the '868 and '698
patents, like the ' 008 patent, contain restriction
Group 11 claims, section 121 did not defeat al-
legations that the '868 and '698 patents were in-
valid for ODP over the '008 patent. See Pl.'s
Response to Def.'s ODP Briefs [Doc. 1555] at
41.
FN 10. Nothing about the third case Roche
cites, Symbol Technologies, alters this conclu-
sion. In Symbol, the reference art was a patent
issuing from the original application made sub-
ject to a restriction requirement. Symbol Techs.,
935 F.2d at 1580. The relevant question was ul-
timately whether the allegedly invalid patent
and the reference art covered distinct and sep-
arate invention. See id. at 1579-81.Of course,
because the reference art in Symbol was a pat-

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ent issuing from the original application, Sym-
bol has little to say about the question con-
fronting this Court.
FN11. Wherein expression means that gly-
coprotein was produced in a cell and recovered
from the cell culture.
FN 12. The Court is not, of course, the only dis-
trict court to explore the parameters of eBay.
See Lynne Marek, Juries may take up future
damages in patent cases,NAT'L LAW J. (Aug.
4, 2008) at 7. In fact; Judge Ron Clark of the
U.S. District Court for the Eastern District of
Texas has entered an order requiring the parties
to prepare for jury trial upon the issue of a fu-
ture royalty since "under some circumstances,
the court may award an ongoing royalty for
patent infringement in lieu of injunctive
relief."Id. This technique is not only efficient,
it recognizes the vital role of the jury as fact
finding partner. See United States v. Luisi, -
--F.Supp.2d ----, 2008 WL 2854498, *4-*12
(D.Mass. July 25, 2008).
FN 13. A hemoglobin excursion is a
"hemoglobin concentration that falls outside of
the clinically desired target rate."Remedy Trial
Tr. vol. 3 at 459.
FNI4. The Court is indebted in this section of
its memorandum to the fine work of Ernest
Berndt, an applied economics professor at the
Massachusetts Institute of Technology Sloan
School of Business, who the court appointed,
with the parties' consent, its special master and
technical advisor on the economics of the
Medicare reimbursement system. See Amgen I,
126 F.Supp.2d at 78 n. 3 (discussing the ap-
pointment of technical advisors in "complex
technical litigation "); see also MediaCom
Corp. v. Rates Tech., Inc., 4 F.Supp.2d 17,
29-30 (D.Mass.1998). While Professor Berndt
consulted with and prepared memoranda for the
Court, his engagement ended before the writing
of this opinion, and he had no participation
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therein. The analysis and conclusions are, of
course, those of the Court alone. Professor
Berndt markedly accelerated and deepened the
Court's understanding.
FN15. The fact that patients bear little to no
burden for the cost of their ESA drugs and that
they generally do not pick which drug they will
receive remove virtually any need for pharma-
ceutical companies to reduce their price to gain
market share. Instead, the primary factor con-
straining an upward trend in price is the threat
that action by government or other payors will
"change the rules of the game."Remedy Trial
Tr. vol. 1 at 112.
FN 16. Professor Bernheim did admit that there
is some degree of uncertainty in predicting the
effects on price of a new entrant in the ASP
market:
THE COURT: You 're telling me that under
this ASP system you cannot predict the price
effects of adding competitors? Stop there.
THE WITNESS: I think-
THE COURT: Is that right?
THE WITNESS: I think it's, I think it's very
difficult to do that. We have a limited found-
ation, a limited amount of evidence that can
be brought to bear on that.
THE COURT: Though in what you're calling
vanilla economics, competition is almost the
greatest good. If you compete, you know,
that's a good almost in and of itself if you
can introduce competition. That's generally
what economists think, isn 't it, generally?
THE WITNESS: Generally, yes. We think
that competition in a free market, and that's
the key point, is a good thing. But there are
recognitions in the economics literature that
competition isn't always beneficial. For ex-
ample, the phenomenon of the natural mono-
Case 5:00-cv-20905-RMW Document 3865
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poly. Competition may lead to very ineffi-
cient outcomes ....
Remedy Trial Tr. at 165-66. Ultimately,
however, he concluded the incentives present
in the ESA-market likely will induce phar-
maceutical companies to refrain from redu-
cing their prices. See id. 202-03.
FN 17. Roche analysts recognized that Medi-
care would be the largest payor for MIRCERA
and concluded that "Medicare reimbursement
is the foundation of MIRCERA busi-
ness."Remedy Trial Ex. 6, MIRCERA WAC
and Pricing Meeting, February 27-28, 2007, at
slide 109. It recognized that an unreasonably
high price, although likely to cause MIRCERA
to gain market share via a high cost recovery,
might trigger unfavorable action. See id. at
slides 86, 90.
FNIS. As the Honorable Dennis Jacobs, Chief
Judge of the Second Circuit Court of Appeals,
has explained:
[A] consequence of biased vision is the as-
sumption that if something is of great import-
ance, it can be safely left to lawyers.... As
judges, we tend to assume that adversarial
hearings and expert testimony will render the
judge omni-competent and fit to decide the
great questions, and that a legal mind is the
highest and most useful development of men-
tal capacity.... [Yet] depending on the ques-
tion, the legal mind may be insufficient or
may be inferior to the moral imagination; the
scientific method; the practical arts of heal-
ing, politics, and entrepreneurship; the
promptings of loyalty, faith, and patriotism;
and the experience and expertise found else-
where and among others. [J]udges should ac-
cept that the legal mind is not the best policy
instrument, and that lawyer-driven processes
and lawyer-centered solutions can be unwise,
insufficient, and unjust, even if our friends
and colleagues in the legal profession lead us
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that way.
See Dennis Jacobs, The Secret Life of Judges,
75 FORDHAM L.REV. 2855, 2862-63
(2007).
FN 19. Roche's potential presence in the United
States required immediate action by the Court,
yet the Court was (in February 2008) still con-
flicted. Notwithstanding the extensive hearing
on remedy, the Court then had four large car-
tons filled with unread depositions. Accord-
ingly, the Court tried to have it both ways. It
preliminarily enjoined Roche but apprised the
parties of the contours of the permanent injunc-
tion it was then considering. The Court figured
that if either party appealed it could get some
guidance from the Federal Circuit. Since then,
of course, the Court has completed its post-trial
review and reflection upon the proceedings be-
fore it. Its ultimate findings are set forth in the
text of the opinion. There is no reason to delay
its issuance.
While the Court entered the preliminary in-
junction without a complete review of the re-
cord, it has no regrets. On the day I first be-
came a judicial officer, Judge Vincent Bro-
gna gave me this sage advice: "Have the
courage of your own error."Hon. Vincent
Brogna, Justice of the Massachusetts Superi-
or Court, February 24, 1978. "This statement
is more profound than it sounds. Of course,
we must do our best to get it right and, of
course, we must not hesitate to correct our
errors. We must, however, decide.Failure to
act is oft-times as injurious to justice as judi-
cial error."William G. Young, Vanishing Tri-
als, Vanishing Juries, Vanishing Constitu-
tion, 40SUFF. U.L.REV.. 67, 93 (2006).
D.Mass.,2008.
Amgen, Inc. v. F. Hoffman-La Roche Ltd.
F.Supp.2d ----, 2008 WL 4452454 (D.Mass.)
END OF DOCUMENT