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Lifenet Health v. Lifecell Corporation

United States District Court, E.D. Virginia, Norfolk Division

February 4, 2015

LIFENET HEALTH, Plaintiff,
v.
LIFECELL CORPORATION, Defendant.

OPINION AND ORDER

HENRY COKE MORGAN, Jr. Senior District Judge.

This matter is before the Court on Defendant LifeCell Corporation's ("Defendant" or "LifeCell") Motion for a Finding of Laches under Rule 52(c). Doc. 417. A hearing was held on January 28, 2015. Ruling from the bench, the Court DENIED the Motion, and now issues this Opinion and Order explaining its reasoning in further detail.

1. PROCEDURAL HISTORY

On September 6, 2013, Plaintiff LifeNet Health ("Plaintiff' or "LifeNet") filed a one-count Complaint, alleging that Defendant infringed U.S. Patent No. 6, 569, 200 ("the '200 Patent"). Doc. 1. An eleven-day jury trial commenced on November 3, 2014. On November 18, 2014, the jury returned a verdict in favor of Plaintiff, finding that Defendant's Strattice, Al loDerm RTU, Conexa, and GraftJacket RTU products infringed claims 1, 2, 3, 4, 7, 8, and 10 of the '200 Patent, and that said claims were not invalid as anticipated, obvious, or for lack of enablement. Doc. 369. The jury found that Plaintiff was entitled to a lump sum royalty of $34, 741, 971. Id . On November 20, 2014, judgment was entered in that amount, in addition to Plaintiffs costs of action. Doc. 395.

On December 18, 2014, Defendant moved for a finding of laches under Federal Rule of Civil Procedure 52(c). Doc. 417. Plaintiff filed its opposition on January 2, 2015. Doc. 430. Defendant filed its reply brief on January 8, 2015. Doc. 435.

2. LEGAL STANDARD

"If a party has been fully heard on an issue during a nonjury trial and the court finds against the party on that issue, the court may enter judgment against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue." Fed.R.Civ.P. 52(c). The judgment "must be supported by findings of fact and conclusions of law as required by Rule 52(a)." Id . Although this was a jury trial, because laches is an equitable remedy and cannot be considered by the jury, Rule 52(c) is the proper mechanism by which the Court can make a finding of laches. I/P Engine, Inc. v. AOL Inc., 915 F.Supp.2d 736, 740 (E.D. Va. 2012). "The application of the defense of laches is committed to the sound discretion of the trial court." A.C. Aukerman Co. v. R.L. Chaides Const. Co., 960 F.2d 1020, 1032 (Fed. Cir. 1992).

3. FINDINGS OF FACT

In ruling on this Motion, the Court makes the following factual findings, which are supported by the testimony heard and exhibits admitted during the course of this trial.

On June 13, 2007, Katrina Ruth e-mailed a press-release announcing a new product by LifeCell to LifeNet employees JingSong Chen, Silvia Chen, Xiaofei Qin, and Dr. Lloyd Wolfinbarger, Jr. The body of the release read in its entirety:

LifeCell Corp., a maker of tissue repair products, said Wednesday it received marketing clearance from the Food and Drug Administration for a tissue graft made from pigs.
The news sent the shares up $6.96, or 31.2 percent, to $29.25 in premarket trading.
The agency cleared LifeCell's Strattice tissue matrix, a soft tissue repair product that can be used in breast reconstruction and hernia repair. The product complements the company's AlloDerm tissue repair product, which is derived from human skin.
"Commercialization of Strattice will allow us to expand our business into global markets, which was extremely difficult with our human-derived products, " said Paul Thomas, LifeCell ...

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