Opposition Brief — St. Jude Medical, Inc. v. Cardiac Pacemakers, Inc.

| Supreme Count US ~ |

(3) FILED

APR 4 - 2005

No. 04-1171 OFFICE OF THE CLERK

IN THE

Supreme Court of the United States

ST. JUDE MEDICAL, INC.,

PACESETTER, INC., AND VENTRITEX, INC.,

Petitioners,

V.

CARDIAC PACEMAKERS, INC.,

GUIDANT SALES CORPORATION, ELI LILLY AND COMPANY,

and ANNA MIROWSKI,

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Federal Circuit

RESPONDENTS’ BRIEF IN OPPOST1LION

JOHN R. SCHAIBLEY, ITI J. MICHAEL JAKES

BAKER & DANIELS Counsel of Record

300 North Meridian Street KARAF. STOLL

Suite 2700 MICHAEL V. O’SHAUGHNESSY

Indianapolis, IN 46204 FINNEGAN, HENDERSON,

| (317) 237-1283 FARABOW, GARRETT

& DUNNER, L.L.P.

ARTHUR I. NEUSTADT 901 New York Avenue, N.W.

OBLON, SPIVAK, Washington, D.C. 20001

MCCLELLAND, MAIER & (202) 408-4000

NEUSTADT, P.C.

1940 Duke Street

Alexandria, VA 22314

(703) 413-3000

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April 4, 2005 Counsel for Respondents

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QUESTIONS PRESENTED

l. Is the question presented as framed by Petitioners

based upon mischaracterizations of the record and the

opinions below?

= Should this Court review the Court of Appeals’

correct conclusion that the District Court's grant of a new

trial on a specific issue constituted an abuse of discretion

under the circumstances of this particular case?

wih «

PARTIES TO THE PROCEEDING BELOW AND

RULE 29.6 STATEMENT

The parties are Petitioners, St. Jude Medical, Inc.,

Pacesetter, Inc., and Ventritex, Inc., and Respondents,

Cardiac Pacemakers, Inc., Guidant Sales Corporation, Eli

Lilly and Company, and Anna Mirowski.

Pursuant to Supreme Court Rule 29.6, Respondents

State that Guidant Corporation is the parent corporation of

Cardiac Pacemakers, Inc., which is the parent corporation of

Guidant Sales Corporation. Mirowski Family Ventures,

L.L.C., is the successor in interest to Anna Mirowski. There

are no publicly held companies that own 10 percent or more

of the stock of Guidant Corporation, Eli Lilly and Company,

or Mirowski Family Ventures, L.L.C.

vO

- iii -

TABLE OF CONTENTS

QUESTIONS PRESENTED..................cec.ccesscsoseseseseseoee i

PARTIES TO THE PROCEEDING BELOW AND

ULE 29.6 STATEMENT. ...0cccccccccscsscacsassccesseecsccesescees li

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RESPONDENTS' BRIEF IN OPPOSITION................ ]

STATEMENT OF THE CASE................c.ccscceccccesesessese ]

SUMMARY OF ARGUMENT ..............ccccecesesseseseeeees 8

REASONS FOR DENYING THE WRIT .....0.0.0........ 10

I. THE INTERLOCUTORY DECISION BELOW

PRESENTS NO QUESTION OF GENERAL

ath nies sisdsceseasthechshisbensaccknénnsdanscesson 10

Il. THE FEDERAL CIRCUIT APPLIED

ESTABLISHED PRINCIPLES OF LAW.................. 14

A. District Court Decisions Granting

New Trials Are Routinely Reviewed For

AbUs6 OF DISCTOIOR ....0.......0.0ccccccsescossesereeses 14

-1V-

B. The Federal Circuit Properly

Reviewed the District Court's New Trial

Order Under the Abuse of Discretion

& The Opinion Below Does Not Create a

Split Among the Circuits, and There Is No

Basis to Invoke this Court's Supervisory

Il. THE COURT OF APPEALS CORRECTLY

REVERSED THE DISTRICT COURT'S GRANT OF

PARTI WR aiiinsctesitnicinsiasacsinsninibabanaincasania eines 20

IV. THE PETITION'S MISCHARACTERIZATIONS

WARRANT DENIAL OF DISCRETIONARY

- V ~

TABLE OF AUTHORITIES

FEDERAL CASES

Cases

Arizona v. Washington,

BSG AIS. GT CET) isisivarssasvicnnsnensninsnnshantiananciniatemeiaties 15

Brotherhood of Locomotive Firemen & Enginemen v.

Bangor & Aroostook R. Co.,

SOD UB. SEF CRI GT ) inceicnsnscanssscniscnnserantsnsnintespamaienacnmmasais 13

Dixon v. Comm'r of Internal Rev.,

DIG F.36 TCE COCA, BRIS) wresineriscaccsnercsaccerinemeamactapess 17

Estelle v. Gamble,

SID UB Se CG tinct 13

Fierro v. Johnson,

197 F350 147 COUR GO, BBG 8) cciidisccetiimmcnancn 18

Gasperini v. Center for Humanities, inc.,

SiS US. CES CEG iscccsnstimsinacenicnonaenes 15

Geach sited

Hamilton-Brown Shoe Co. v. Wolf Bros. & Co.,

7 DAD US. Z31 CGI wcrieviessnnsrsscsnaisnsinaennaniiasiassanisiapcmenians 13

Harre v. A.H. Robins Co., Inc.,

F350 F.2G SSB1 Ch Ge... FRB svisnstrstsctcie recievers 18

Hazel-Atlas Glass Co. v. Hartford Empire Co.,

SEE US. ZOO COG ovsencsssstentitnthiantahanissceinenvtcinemmammenel 19

Hewitt v. B.F. Goodrich Co.,

F3S FAG USS4 CAR Cae, BD wvcssscccrssncsnvscasessicnacinsaens 18

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Massey v. Gulf Oil Corp.,

Fw Fs DE COR GA, CD cwsassiccncienininsidiciainaganscniiaded 17

NLRB v. Hendricks County Rural Electric Membership

COND, SIS Us Ti CaP piitinilensstetsisanctingeiieaieiiantacmnens 12

Payton v. Abbott Labs.,

TO) PoE BEE GRABS, Fi tincinicceeicnincetenielaiin 18

Pearson v. First NH Mtg. Corp.,

MID FG FO CGE GA, Tee icnaiinisiteetaiisitesenicsennaeainiinlindadiaiaen 18

Pounders v. Watson,

FEN aie FG GOUT Pnsssscnsshctiinittiiainpinaiisiptieainciiiadimiaiaiuaate 11

Pumphrey v. K.W. Thompson Tool Co.,

Ge E.G BABS CO Cae, Bee sicisacsasentstconideineeataedadianas 17

Rice v. Sioux City Memorial Park Cemetery, Inc.,

FD UD. FO (WiC ccscrnctncciiinisiaistiaasasicciaieiiaiiaaiaddaaad 12

Ross v. Moffitt,

SET UB. GEG CRG Pp ccecsesciiisiacitisiutinestiiarsiinsiamipuimaauaniniaa 10

Rudolph v. United States,

FTO DB. BED CRG iccatiniuinsinisiniasisciipipiiicaial ae 11

Texas v. Mead,

ES U.S. BOGE CIGD i cersccensinsstiiticiscaaitamnipiiaieieiiaamenian 12

United States v. Buck,

Zak F.36 1550 ChGe Ce, Be cntistaneeeas 18

United States v. Johnston,

y RE ee Tl, . ar mere BR 12

SS Llrl—

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United States v. Sanchez,

SE Fe BE GB ae, i iccsctccntnsseninccnsactnccinnminscconnasi 19

United States v. Shaffer Equip. Co..,

AD FB re Ge Gs BID crarncctesetncsttesnecennnrncciennicemeenes 18

Virgin Islands Hous. Auth. v. David,

74h we pw Te Lo ey) eee daenitcipeiaelumsenabias 18

Williams v. City of Valdosta,

gm Ye) | , + : Se Ore 17

Rules

Seppanens Catast PBC 1O.....cccccceccsecssccsvcsssccessscnscosessconsssscssscncsese 10

RESPONDENTS' BRIEF IN OPPOSITION

Respondents, Cardiac Pacemakers, Inc. ("CPI"),

Guidant Sales Corporation ("GSC"), Eli Lilly and Company

(Lilly"), and Anna Mirowski, Plaintiffs-Appellants in the

proceedings below, urge the Court to deny the Petition for

Writ of Certiorari to review the judgment of the United

States Court of Appeals for the Federal Circuit entered on

August 31, 2004.

STATEMENT OF THE CASE’

CPI, GSC, and Lilly commenced this action in 1996

against St. Jude Medical, Inc., et al. (collectively "St. Jude")

for infringement of four patents, including U.S. Patent Nos.

4,407,288 (the '288 Patent) and 4,316,472 (the '472 Patent).

The '288 Patent, which expired in 2003, relates to improved

implantable cardiac defibrillators (ICDs) capable of

detecting a heart arrhythmia (abnormal heart rate) and

correcting the occurrence. The '288 Patent embodies an

invention of Dr. Mieczyslaw Mirowski and his colleagues

for multi-mode operation whereby the ICDs can administer

successive, alternative modes of therapy, including pacing

and cardioversion to correct an arrhythmia. This multi-mode

design offers advanced life-saving technology that now

serves as the platform for all commercially viable products

implanted in patients today. Despite the impact the

' Petitioners distort the record, mischaracterize the opinion

below, and make inaccurate assertions. Accordingly, Respondents have

undertaken here to provide the Court with an accurate Statement of the

Case.

a

Mirowski innovation played within the industry, St. Jude

defended against CPI's infringement claims by alleging that

Dr. Mirowski's patented innovations were obvious in light of

the prior art and failed to disclose the best mode of

operation.

During the two-week trial, the parties presented

voluminous evidence, including expert testimony, relating to

the infringement and validity of the asserted patents.

Dr. Bourland served as one of CPI's expert witnesses. The

Petition attempts to obfuscate, however, the fact that Dr.

Bourland testified at trial only with respect to infringement

of the '288 Patent, and did not testify on validity of the '288

Patent.” (E.g. 122a)

As set forth in the District Court's opinion, Dr.

Bourland testified falsely about the work he had done as an

expert in another patent case, Moore v. Medtronic, involving

similar technology. Specifically, during his deposition, Dr.

Bourland testified that he did not prepare expert rerorts in

the Moore case when, in fact, he had (123a); and at trial Dr.

Bourland falsely denied previous expert witness experience

in a patent case. (128a)

During the trial St. Jude moved for sanctions to

remedy Dr. Bourland's false testimony and the District Court

imposed sanctions. Contrary to St. Jude's suggestion (Pet. at

2 St. Jude asserts that "CPI elected not to have Dr. Bourland

testify on obviousness at trial because, contrary to his sworn testimony,

Dr. Bourland had in fact been retained as an expert in the Medtronic

patent litigation ... he had in fact prepared an expert report in that case;

and ... Dr. Bourland's Moore report in fact directly contradicted the

theory of non-obviousness advanced by CPI at trial." (Pet. at 4) (citing

122a, 133a-134a) The Petition's citations to the record do not support

this accusation, and St. Jude's charge is simply wrong.

~ e

5), the District Court did not "simply advise the jury that

{t]he report Dr. Bourland prepared in [the Moore case]

should have been disclosed ... to the defendants in this case

well before trial."". In fact, the court further sanctioned CPI

by permitting St. Jude to publish and read to the jury the

contrasting portions of Dr. Bourland's report. (143a-144a)

Additionally, the District Court instructed the jury that the

false testimony should be considered "in evaluating Dr.

Bourland's credibility, that is the credibility of all of Dr.

Bourland's testimony." (144a (quoting Trial Tr. at 2890-91))

During closing arguments, St. Jude's attorney was further

permitted to emphasize “the actions the court had taken and

the inconsistencies between Dr. Bourland's positions in the

two cases." (144a) In short, St. Jude had a field day at trial

with the Bourland deception and Dr. Bourland's report in the

Moore case. :

Subsequent to Dr. Bourland's falsehoods being

revealed and explored, the jury returned a verdict that St.

Jude did not infringe the '288 Patent. At the same time, the

jury found that St. Jude infringed the '472 Patent and

awarded CPI $140 million in damages. The jury also

rejected St. Jude's invalidity defenses regarding both patents.

After trial, the District Court permitted St. Jude to

conduct post-trial discovery relating to Dr. Bourland's false

testimony. Dr. Bourland ultimately explained that he

“thought that would be a violation of the confidentiality

agreement" in another case. (127a) (quoting post-trial

deposition).° Y

> The District Court remarked that this professed excuse for

deliberately lying about the Moore report was “of dubious credibility,"

but did not specifically decide whether this "asserted but ill-considered

excuse is honest or not. . . ."_ (128a)

The District Court did not conclude that CPI and its

attorneys had been "complicit" in Dr. Bourland's false

testimony (Pet. at 6) or that CPI committed a "fraud" upon

the Court. (Pet. passim) To the contrary, it expressly found

that "The court ultimately does not disbelieve the lawyers'

testimony that they failed to recognize Dr. Bourland's

deception." (149a) (finding that the lawyers "failed to put

the pieces together.") St. Jude's charges are at odds with the

District Court opinion. The District Court rejected reliance

on Rule 60(b)(3), observing Rule 60(b)(3) "authorizes relief

from judgment for ‘fraud . . . misrepresentation, or other

misconduct of an adverse party’, the Seventh Circuit has

made clear that the misconduct must be attributable to a

party. * * * This Court is not invoking Rule 60(b)(3). . . ."

(151a-152a n.44) (invoking Rule 59 instead).* The District

Court also did not find that CPI acted in bad faith (see, e.g.

152a; see also 154a n.46)° and specifically acknowledged

"CPI's failure to recognize [Dr. Bourland's deception]."

(152a n.44)

* It is plain that the District Court's comment on CPI's

knowledge, quoted out of context by the Pet. at 6, was a reference to its

"collective," i.e. constructive knowledge (139a) ("when the knowledge of

different CPI lawyers is viewed collectively, CPI knew at the time of Dr.

Bourland's trial testimony that it was false.") (emphasis added) St. Jude's

quote omits the emphasized portion. While the District Court did

criticize "CPI's collective negligence" in failing to recognize and correct

the Bourland deception (140a), it ultimately found that the lawyers

“failed to put the pieces together." (149a)

Significantly, the District Court also expressly stated: “In

light of the bad faith requirement in Chambers, 501 U.S. 32 at 49-50, the

Court's conditional award and the award of post-trial fees and expenses

relating to Dr. Bourland are not based on the Court's inherent power."

(154a n. 46) St. Jude does not raise the conditional award in this Court,

and CPI has already paid the award of post-trial fees and expenses

relating to Dr. Bourland. This statement makes plain that the District

Court made no finding of bad faith against CPI.

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=.

The District Court set aside the jury's award and

entered judgment as a matter of law that, contrary to the

unanimous jury verdict, both the '472 and '288 Patents were

invalid. The court thus vacated the jury's verdict that St.

Jude infringed the '472 Patent, thereby denying CPI the jury's

award of $140 Million in damages. As another sanction, the

District Court awarded St. Jude fees for post-trial discovery

and briefing of the issues relating to Dr. Bourland's false

testimony. CPI was therefore required to pay St. Jude

$376,917.63. CPI has complied with this sanction and paid

the imposed fees.

As an additional sanction, the District Court granted a

new trial. The grant of a new trial was the alternative relief

St. Jude sought after trial to remedy the Bourland deception.

St. Jude principally sought an order striking Dr. Bourland's

testimony from the trial evidence (which the District Court

recognized "would call for judgment as a matter of law for

St. Jude on all infringement claims"). (142a) In the

alternative, St. Jude sought a new trial on all issues upon

which it did not prevail at trial. Jd. The District Court itself

recognized that sanctions must be proportionate to the

conduct giving rise to them. (148a) The District Court

rejected St. Jude's motion to strike Dr. Bourland's testimony.

Finding that striking Dr. Bourland's testimony would be "too

severe in this situation," the District Court stated that "the

remedy can be tailored more closely to the harm caused,

which would be the need for a new tral." (150a)

The District Court, however, did not conclude that a

new trial was called for on all issues; rather, the District

Court decided that a new trial is called for on "most issues"

as to which Respondents prevailed. (150a) (concluding that

the double patenting defense to the '472 Patent and the issue

of infringement of claim 1 of the '472 Patent were issues for

Ye

which a new trial was not appropriate.) (150a) For example,

the District Court explicitly stated that the issue of

infringement of claim 1 of the '472 Patent was unaffected by

Dr. Bourland's testimony because it depended exclusively

upon claim construction. (See id.)

Respondents appealed the District Court's judgment

only with respect to the '288 Patent, arguing that the District

Court committed reversible error by vacating the jury verdict

and entering judgment as a matter of law that the '288 Patent

was invalid. Respondents further argued that the District

Court erred in performing its claim construction, thus

rendering the jury's verdict of noninfringement improper.

Thus, Respondents did not appeal any issue that had even

been arguably "tainted" by Dr. Bourland's false testimony.

In its responsive brief on appeal below, St. Jude

raised the additional issue of whether the District Court's

order conditionally granting a new trial was within the

District Court's discretion. St. Jude contended that Dr.

Bourland repeatedly lied, did so deliberately, and did so on

matters that went to the heart of the case and to the heart of

his credibility. Respondents responded by noting that Dr.

Bourland did not testify with respect to any issue on appeal.

Rather, Respondents lost at trial on the '288 infringement

issue that Dr. Bourland addressed.

The Federal Circuit saw through St. Jude's lengthy

argumentation concerning Dr. Bourland. It concluded that

the District Court committed error, reinstated the unanimous

jury verdict of validity of the '288 Patent, and further

reversed the District Court's conditional grant of a new trial

on validity of the '288 Patent as an abuse of discretion. In

the opinion below, the Federal Circuit conducted a detailed

and careful analysis of validity issues pertaining to the '288

Patent in reversing the District Court's JMOL and in its

“Rielle Caleta

4.

assessment that the evidence was sufficient to support the

jury's verdict of validity of the '288 Patent.

The Federal Circuit acknowledged and applied the

well-established abuse of discretion standard in reviewing

the District Court's decision to grant a new trial as an

additional sanction for Dr. Bourland's testimony. (13a) In

light of the entirety of the circumstances, the Federal Circuit

concluded that the District Court's decision to vacate the jury

verdict and grant a conditional new trial “exceeded the

court's discretionary authority." (13a) In its petition for

rehearing and rehearing en banc below, St. Jude

acknowledged that "the pane! appear[ed] to have concluded

that the misconduct affected only infringement, not validity."

(Pet. for Reh g at 5)°

In its rehearing petition, St. Jude rehashed its

previous arguments that it is entitled to a new trial on

validity of the '288 Patent because of Dr. Bourland's false

testimony on other matters. (Pet. for Reh'g at 7) St. Jude

also argued that the jury was unable to consider Dr.

Bourland's misconduct and his prior report, and that the

Federal Circuit's reinstatement of the jury verdict conflicted

with established law. (Pet. for Reh'g at 8, 10) The Federal

Circuit denied St. Jude's petition without dissent.

° Moreover, in a tuling (which St. Jude does not challenge here)

overturning yet another sanction “unrelated to the false testimony of

([Bourland]," the Court of Appeals concluded that the “new trial here

ordered is unrelated to the witness' deception.” (20a)

ie

SUMMARY OF ARGUMENT

"Strong and bitter words indicate a weak cause."

--Victor Hugo

The Petition is replete with strong and bitter words,

but it fails to present any issue worthy of review by this

Court. The Petition raises no constitutional issue, important

question of federal law, or conflict among the circuits.

Rather, St. Jude has resorted to fabricating an issue by

misstating the facts, overstating the law, and

mischaracterizing the trial record. St. Jude's

disappointment with the Federal Circuit's decision, however,

cannot change the fact that this case does not warrant review.

St. Jude asserts that: This is “the first time in the |

history of the Republic that a federal appellate court has held

that a federal district court lacks the discretionary authority

to order a new trial as a remedy and sanction for prejudicial

misconduct committed by a litigant's witness and attorneys."

(Pet. at 9) This statement is certifiably inaccurate. The

Federal Circuit, of course, did not hold that a district court

lacks discretion to grant a new trial. It simply held there was

no conduct that was prejudicial relating to the '288 validity

verdict. The court correctly applied the well-established

abuse of discretion standard of review in reversing the

District Court's improper conditional order for a new trial on

this issue. The Federal Circuit properly recognized the

limitations of the District Court's authority to grant a new

trial and concluded that, under the circumstances, it had

indeed "exceeded the court's discretionary authority." (13a)

St. Jude attempts to create the false impression that

Dr. Bourland's false testimony went “unredressed" (Pet. at

27) and infected the jury verdict on '288 validity. However,

the District Court actually imposed mumerous severe

-9.

sanctions to address any taint actually created by Dr.

Bourland's testimony. Moreover, St. Jude sidesteps the

crucial fact that Dr. Bourland did not even testify at trial with

respect to the issue St. Jude is seeking to have re-tried.

Given that Dr. Bourland did not testify at trial on validity, it

is plain that his deception could not have affected the

validity verdict.

If this Court were to grant certiorari, it would find

itself in the role of wading through St. Jude's factual

distortions, only to find that the Federal Circuit correctly

applied established principles of law and reversed a district

court's grant of a new trial that simply went too far. The

Federal Circuit panel saw through the smokescreen and

unanimously rejected St. Jude's argument. Upon a petition

for rehearing and rehearing en banc, the Federal Circuit

declined to rehear, without dissent, St. Jude's arguments.

This case presents no question warranting this Court's

attention. The decision below involves the application of

settled principles to the facts of this particular case, and the

decision below is supported by sound reasoning. There is no

reason to hold a new trial on the validity of the '288 Patent, a

patent which expired two years ago. The interlocutory

nature of the case at this stage also counsels against granting

review. In sum, the Petition does not present any issue

worthy of this Court's consideration or even remotely

suitable for this Court's certiorari jurisdiction. Hyperbole is

no substitute for a certworthy question.

-10-

REASONS FOR DENYING THE WRIT

I. THE INTERLOCUTORY DECISION BELOW

PRESENTS NO QUESTION OF GENERAL

IMPORTANCE

St. Jude raises no issue sufficient to invoke

discretionary review. See Ross v. Moffitt, 417 U.S. 600, 616-

17 (1974) (stating that Supreme Court review "is

discretionary and depends on numerous factors other than

the perceived correctness of the judgment we are asked to

review.") St. Jude merely seeks review of the Federal

Circuit's application of established law. This Court generally

declines to hear cases, such as this, where "the asserted error

consists of erroneous factual findings or the misapplication

of a properly stated rule of law." Sup. Ct. R. 10., Moreover,

"a petition for a writ of certiorari will be granted only for

compelling reasons." Jd. St. Jude presents no such

compelling reason. The Federal Circuit's review of the

District Court's grant of a new trial under the "abuse of

discretion" standard properly comports with settled doctrine,

and it would be a waste of this Court's resources to wade into

the record to decide whether a second trial should be held on

the validity of a patent which has expired.

This is a complex, fact-intensive patent infringement

action in which the Court of Appeals panel unanimously held

that the District Court abused its discretion in granting a new

trial on the issue of validity. The Federal Circuit conducted

a detailed analysis of validity issues. The Federal Circuit

correctly understood that the Bourland testimony did not

taint the validity verdict, and hence, could not have been a

proper basis for ordering a new trial on validity. The

Petition in this case essentially asks this Court to conduct its

own assessment of the record. The fact-bound nature of the

a

inquiry is evident from the Petition itself.

The Court of Appeals opinion plainly presents no

question of general importance meriting this Court's review.

Indeed, the tell tale signs that this case is not certworthy are

found in the Petition itself.’ The Petition's suggestion that

summary disposition may be appropriate signifies that this

case presents no question of general importance. The

Petition points out there is "scant reference" to Dr. Bourland

in the Court of Appeals opinion (Pet. at 15) and the Petition

engages in speculation concerning the basis of the Court of

Appeals’ holding. (Pet. at 15-17) On its face, the Court of

Appeals opinion announces no general rule in conflict with

the decisions of this Court or any other court and it is absurd

to suggest that the "scant reference" in the decision below on

this issue will do anything to undermine "50 years of

accepted federal practice." (Pet. at 17) Instead, this case

merely involves the application of settled principles of law to

the facts of a particular case. This is the very model of a

question whose "review would be of no importance save to

the litigants themselves." Rudolph v. United States, 370 U.S.

269, 270 (1962) (vacating improvident grant of certiorari).°

This Court has frequently cautioned that: "[W]e do

not grant a [writ of] certiorari to review evidence and discuss

specific facts." United States v. Johnston, 268 U.S. 220, 227

7 Notwithstanding St. Jude's protestations to the contrary,

review in this case would at most “amount to mere error correction.”

(Pet. at 22) As demonstrated infra, however, there plainly is no error to

correct.

8

This case in no way resembles Pounders v. Watson, 521

U.S. 982, 991 (1997) (per curiam) upon which the Petition attempts to

rely. (Pet. at 21) In Pounders, the Court of Appeal's ruling “introduced

uncertainty into routine proceedings" of many trial courts within the

Court of Appeals’ jurisdiction. /d.

.12-

(1925); accord NLRB v. Hendricks County Rural Electric

Membership Corp., 454 U.S. 170, 177 n.8 (1981); Texas v.

Mead, 465 U.S. 1041, 1043 (1984) (Stevens, J., respecting

the denial of certiorari). Doing so in this case would be

particularly inappropriate given that the ‘288 Patent has

expired. This Court should not expend its resources to

determine whether a new validity trial should be held on an

expired patent.” The application of the settled principles of

law to the facts of this particular case can only have interest

to particular litigants. However, this Court does not "sit for

the benefit of the particular litigants." Rice v. Sioux City

Memorial Park Cemetery, Inc. 349 U.S. 70, 74 (1955).

% The '288 Patent expired in 2003. Hence, the Petition's

argument about the effect of a first ruling of patent validity, (Pet. at 24)

not only is doctrinally flawed, but rings hollow in this case.

-%3-

The interlocutory posture of the case also counsels

against this Court's grant of discretionary review. Indeed,

lack of finality may "of itself alone" provide "sufficient

ground for the denial" of certiorari. Hamilton-Brown Shoe

Co. v. Wolf Bros. & Co., 240 U.S. 251, 258 (1916); see also

Brotherhood of Locomotive Firemen & Enginemen v.

Bangor & Aroostook R. Co., 389 U.S. 327, 328 (1967)

(denying certiorari "because the Court of Appeals remanded

the case, [and thus] is not yet npe for review by this Court");

Estelle v. Gamble, 429 U.S. 97, 114 (1976) (Stevens, J.

dissenting) ("this Court's . . . normal practice of denying

interlocutory review"). St. Jude is not seeking review of the

Federal Circuit reversal of the District Court's JMOL of

invalidity of the '288 Patent, and the case has been remanded

for a trial on infringement and damages pertaining to the '288

Patent. In the event that Petitioners were to prevail below on

noninfringement grounds, the issue of the validity of the now

expired '288 Patent (whether or not technically moot) would

not be of consequence even to Petitioners.

-14-

II. THE FEDERAL CIRCUIT APPLIED

ESTABLISHED PRINCIPLES OF LAW

As a preliminary matter, the Federal Circuit, of

course, did not hold that a district court “lacks the

discretionary authority to order a new trial." (Pet. at 9)

Rather, recognizing the abuse of discretion standard of

review, the Federal Circuit clearly held that the District

Court exceeded its discretion. (13a) Putting the

mischaracterization of the Federal Circuit's actual opinion

aside, appellate courts have repeatedly invoked the power of

review to monitor and reverse a district court's new trial

order, even where the new trial was granted as a sanction for

misconduct.

A. District Court Decisions Granting New

Trials Are Routinely Reviewed For Abuse of

Discretion

St. Jude argues that the decision of the Federal

Circuit conflicts with the "unbroken line of authority" that

district courts enjoy “inherent discretionary authority" to

"sanction and remedy litigation abuses." (Pet. at 9) While

courts inherently possess the discretionary authority to

sanction and remedy litigation abuses, that “inherent

discretionary authority" is neither unlimited nor immune

from appellate review.

The very cases cited by St. Jude hold that appellate

courts are entrusted with the obligation to review a district

court's “inherent discretionary authority" for an abuse of

discretion. Whereas St. Jude selectively notes that the

district courts must be afforded discretion in granting new

trials, it fails to recognize the importance of the related

admonition that "surely there must be an upper limit" on the

discretionary authority of the District Courts. Gasperini v.

"=

Center for Humanities, Inc., 518 U.S. 415, 435 (1996)

(citation omitted). In short, the appellate courts "have an

obligation to satisfy themselves that, in the words of Mr.

Justice Story, the trial judge exercised ‘sound discretion" in

granting relief. Arizona v. Washington, 434 U.S. 497, 514

(1978). The cases relied upon by St. Jude reflect an

"unbroken line of authority" that the federal appellate courts

are charged with the authority to reverse a district court's

decision respecting a new trial where the court has exceeded

its discretionary authority. That is exactly what the Federal

Circuit did in this case.

B. The Federal Circuit Properly Reviewed the

District Court's New Trial Order Under the

Abuse of Discretion Standard

The Federal Circuit plainly and _ properly

acknowledged that the District Court's new trial order must

be reviewed for an abuse of discretion. (13a) Thus, the

Federal Circuit conducted its review under the appropriately

stated rule of law.

In briefing and oral argument below, St. Jude and

CPI presented the facts relating to Dr. Bourland's false

testimony. The parties advised the Federal Circuit of the

nature of Dr. Bourland's false testimony, the extent to which

it was revealed to the jury, the numerous corrective sanctions

imposed by the District Court, and the verdict rendered by

the jury. Upon considering the entire record before it,

including the fact that Dr. Bourland did not testify on the

issue of validity, the Court of Appeals concluded: "In these

circumstances the conditional grant of a new trial exceeded

-16-

the [district] court's discretionary authority, and is vacated."

10

(13a)

ct. The Opinion Below Does Not Create a Split

Among the Circuits, and There Is No Basis to

Invoke this Court's Supervisory Powers

The Federal Circuit's decision to vacate the District

Court's new trial order conforms harmoniously with

decisions in other circuits. St. Jude attempts to create a

conflict where none exists by brandishing string citations and

baldly asserting that the Federal Circuit's decision "squarely

and unaccountably conflicts" with established precedent. St.

Jude's contention, however, disregards the context and actual

holdings of the cited cases.

St. Jude declares that the appellate courts have all

recognized that: 1) the district courts have virtually

unreviewable inherent discretion to grant new trials; and

2) the courts of appeals "lack the institutional competence to

second-guess a district court order granting a new trial to

remedy misconduct." (Pet. at 18) St. Jude contends that the

Federal Circuit's decision constitutes a departure from Hazel-

Atlas and “the decisions of literally every other circuit." (Pet.

at 15) St. Jude's argument not only mischaracterizes this

10 The brevity of the Federal Circuit's treatment of this issue is

understandable and appropriate given that Dr. Bourland's testimony at

trial was immaterial to the issues on appeal; hence, the Court of Appeals

correctly deemed it was not worthy of extended analysis. The “scant

reference to Dr. Bourland" (Pet. at 15) by the Federal Circuit puts the

Bourland misconduct in proper perspective in the appeal. The Petition's

criticism of the Federal Circuit opinion for failing to discuss what

Petitioners regard as the "enormity of his misconduct" (id.) simply fails

to put the misconduct in the proper perspective in light of the issues of

the appeal.

xs

case, but ignores the actual thrust of the cited cases. St.

Jude's exaggerated rhetoric is necessary to invoke the cases

that it cites. However, St. Jude's citations are largely

inapplicable in light of the actual basis and nature of the

District Court's opinion, which did not find Respondents

guilty of fraud and did not order a new trial on all issues, but

rather recognized that the remedy needed to be tailored to the

harm caused.'’ While St. Jude purports to champion

appellate deference to district courts, it does not faithfully

portray the District Court opinion below or give due regard

to the principles it espoused.

Case law establishes that an appellate court

necessarily possesses the "institutional competence" to

review a district court's grant of a new trial for an abuse of

discretion, and that an appellate court may, and wiil, reverse

a district courts grant of a new trial unde: appropriate

circumstances. See e.g., Williams v. City of Valdosta, 689

F.2d 964, 976 (11th Cir. 1982) (holding that "the trial court

abused its discretion in granting a new trial in the

alternative."). Indeed, the cases show that the appellate

courts more closely monitor such decisions where a new trial

has been granted. For example, the Fifth Circuit has

recognized that: "Our review of an order granting a motion

for new trial is somewhat broader than review of an order

denying a motion for new trial." Massey v. Gulf Oil Corp.

508 F.2d 92, 94 (5th Cir. 1975) cert. denied 423 U.S. 838

(1975); accord Hewitt v. B.F. Goodrich Co., 732 F.2d 1554,

11

Many of the authorities cited by the Petition, see, e.g.,

Dixon v. Comm'r of Internal Rev., 316 F.3d 1041 (9th Cir. 2003);

Pumphrey v. K.W. Thompson Tool Co., 62 F.3d 1128 (9th Cir. 1995),

cert. denied 516 U.S. 1158 (1996), are inapposite in view of the fact that

the District Court was "not invoking Rule 60(b)(3)" (15a n.44), and the

District Court did not find that Respondents committed a fraud on the

court.

~ i.

1556 (11th Cir. 1984). ("When the tnal court grants a new

trial our review is broader and requires a_ stringent

application of the [abuse of discretion] standard.").

Ultimately, the cases cited by St. Jude merely stand

for the unremarkable settled principle that federal appellate

courts may review a district court's decision for an abuse of

discretion, and under appropriate circumstances, reverse.'*

In this regard, the Petition's excessive use of pointless string

cites is ultimately counterproductive. The citations merely

show there is no confusion in the lower courts concerning

the standard and certainly the brief discussion of this issue in

the Court of Appeals' opinion below cannot reasonably be

anticipated to create any such confusion.'°

1 See Pearson v. First NH Mtg. Corp., 200 F.3d 30, 42

(1st Cir. 1999) (holding that bankruptcy court abused its discretion);

Virgin Islands Hous. Auth. vy. David, 823 F.2d 764, 766-67

(3rd Cir. 1987) (reversing judgment of district court); United States v.

Shaffer Equip. Co., 11 F.3d 450, 462-63 (4th Cir. 1993) (vacating district

court judgment as providing “relief far beyond the harm caused,” and

stating that a district court's "inherent power" must be exercised with

“restraint."); Fierro v. Johnson, 197 F.3d 147, 155 & n.16

(5th Cir. 1999), cert. denied 530 U.S. 1206 (2000) (noting, inter alia,

perjury of single witness insufficient to establish fraud on court); United

States v. Buck, 281 F.3d 1336, 1343 (10th Cir. 2002) (reviewing for

abuse of discretion and stating that "not only was there no abuse of

discretion in the denial, but granting relief on this record would have

been an abuse" and observing there was no deliberate misconduct by the

attorneys and relief based on fraud must be based on intentional

misconduct); Harre v. A.H. Robins Co., Inc., 750 F.2d 1501, 1503

(11th Cir. 1985) (reversing denial of Rule 60(b)(3) motion.). In Payton

v. Abbott Labs., 780 F.2d 147, 152 (1st Cir. 1985), the court remarked

that: “/n the past, the district court's exercise of discretion was virtually

unreviewable." (emphasis added). St. Jude omits the emphasized

language from its snippet quotation of Payton. See Pet. at 18.

13

St. Jude's discussion of case law involving fraud in the

patent process, Pet. at 24-26, is also flawed on multiple levels. It is

sufficient to observe that the cases upon which St. Jude attempts to rely —

-19-

Nor is it unprecedented for appellate courts to vacate

new trial orders predicated upon false testimony. In cases

where something far more precious that corporate profits are

at stake, courts reverse such orders where the false testimony

did not affect the verdict. For example, in United States v.

Sanchez, 969 F.2d 1409 (2d Cir. 1992), on remand, 813 F.

Supp. 241 (S.D.N.Y. 1993), appeal after remand, 35 F.3d

673 (1994), cert. denied, 514 U.S. 1038 (1995), the district

court, concluding that certain testimony of police constituted

perjury, set aside the jury's conviction and entered an order

granting a new trial. The Second Circuit reversed the district

court's decision and ordered reinstatement of the jury's

conviction. The court held that even if the testimony were

perjured, “it could not be said that the jury probably would

have acquitted in the absence of the false testimony." 969

F.2d at 1415 (alternative holding). On remand, the

defendant argued that the prosecutors had knowingly used

the perjured testimony. Although the district court stated it

believed there should be a new trial due to the knowing use

of perjured testimony, the district court held that the

appellate court's mandate prohibited retrial. See 35 F.3d at

677. On appeal, the Second Circuit affirmed the denial of a

new trial and reiterated its holding. Id. at 677-78.

Suffice it to say, this case hardly marks "the first time

in the history of the Republic" that a federal appellate court

has vacated a new trial order predicated on false testimony.

This Court surely does not need to reevaluate the weighing

of this issue in the context of this action.

cases dealing with fraud (inequitable conduct) in the prosecution of

patent applications — are simply inapposite. Moreover, even a cursory

examination of Hazel-Atlas Glass Co. v. Hartford Empire Co.,

322 U.S. 238 (1944) reveals it bears no resemblance to the facts of this

case.

i.

Ill. THE COURT OF APPEALS CORRECTLY

REVERSED THE DISTRICT COURT'S GRANT OF A

NEW TRIAL

The Court of Appeals correctly reversed the grant of

a new trial on validity of the '288 Patent. Although St. Jude

maintains that "it is of no moment . . . that Dr. Bourland did

not testify affirmatively on obviousness at the trial," (Pet. at

17) that is exactly the central problem with St. Jude's

argument. Dr. Bourland did not testify at trial on validity

and thus, a fortiori, his deception could not have infected the

jury's verdict on validity. At most, had the supposed full

extent of Dr. Bourland's deception been presented to the jury,

it would have merely permitted St. Jude to brand him as

more of a liar, causing the jury to discount his testimony

even further. But that testimony only related to infringement

with respect to the '288 Patent, and the jury found against

CPI on infringement of the '288 Patent. Thus, St. Jude won

in front of the jury on the only issue that Dr. Bourland

addressed concerning the '288 Patent, and the non-

infringement judgment was reversed on grounds entirely

unrelated to Dr. Bourland's testimony (the District Court's

erroneous claim construction). Accordingly, even if the full

extent of the deception had been presented and Dr. Bourland

had been entirely discredited, it would be irrational to

surmise that the validity verdict would have been any

different. '

'4 The full hearing included St. Jude's extensive use of the

Moore report at trial. As the District Court explained: "Dr. Bourland's

report in the Moore case offered an extensive basis for impeaching his

testimony in this case. It also offered an extensive basis for attacking

CPI's defense of the validity of the '472 and ‘288 Patents." (131a) While

the District Court excused St. Jude from its tactical decision to make

little use of the Moore report in its cross-examination of Dr. Bourland

twenty-four hours after receiving the Moore report (135a), St. Jude had

x 2

Fundamentally, however, an irrational verdict is

exactly what St. Jude is advocating. St. Jude contends that

the jury could have concluded not only that Bourland was a

liar but also that CPI's “entire case should fail because of its

knowing presentation of such lies." (Pet. at 18)'° Thus, St.

Jude is actually arguing that the jury should have been able

to invalidate a U.S. Patent not because it was obvious, but

because of misconduct by an expert witness retained by CPI

(the exclusive licensee) who testified on a different issue.

(See Pet. at 21) In effect, St. Jude is arguing that it should

have had the right to inflame the passions of the jury on a

discrete legal issue with a matter that was immaterial to that

legal issuc. The prospect is absurd, yet there is no other

reason to have a new trial on validity. St. Jude had a full and

fair hearing on validity that was untainted by Dr. Bourland's

misconduct. The jury found the '288 Patent valid, and the

Federal Circuit reviewed the evidence and found it sufficient

to sustain that verdict.

plenty of time to prepare its demonstrative exhibits and use the Moore

report against CPI on the various issues in the case. Bourland first

testified on June 14; St. Jude displayed and argued its demonstrative

exhibits on the Moore report thirteen days later, on June 27. (144a; Trial

Tr. 2891-95) Moreover, the District Court opinion points out that the

attorney who had prepared to cross-examine Dr. Bourland had an outline

already prepared on validity issues and decided not to explore validity

issues with Dr. Bourland on the stand when he did not testify regarding

validity. See id. Under these circumstances, it is plain that at trial St.

Jude had the best of both worlds on the obviousness issue — Dr. Bourland

had not testified at trial on validity, and St. Jude was permitted to use and

did use the Moore report against CPI at trial.

'S Once again, St. Jude mischaracterizes the record; the

District Court found that CPI did not, in fact, recognize the Bourland

deception. See supra at 4.

FE ESE ett ee

22.

The lack of merit in St. Jude's position is manifest.

Had all of the post-trial information concerning the Bourland

deception been known at the first trial, the most St. Jude

could have hoped for was that the jury would disregard all of

Bourland's testimony — a result which would have had no

effect on obviousness since Bourland did not testify on that

issue. The District Court's relevant instruction provided in

pertinent part that if “you believe a witness has knowingly

testified falsely about any significant matter, . . . you may

reject all the testimony of that witness ...." (146a)'

It is also telling that St. Jude's request for a new trial

was the alternative relief they requested due to the Bourland

testimony, and that the District Court denied the principal

relief they sought (to strike Bourland's testimony in its

entirety). Had the District Court granted their motion to

strike the Bourland testimony in its entirety, it would not

have needed to reach the alternative motion for a new trial.

And if the Bourland testimony had been stricken in its

entirety, it would of course have had no subsequent effect on

the validity verdict on the '288 Patent because Dr. Bourland

did not testify on that issue at trial. The District Court's

refusal to strike Dr. Bourland's testimony also belies St.

Jude's pronouncements about the purported severity of Dr.

Bourlanc's transgressions. While CPI in no way sec: to

condone the Bourland deception, the District Court itself

recognized that sanctions must be proportionate (148a), and

also recognized that the Bourland testimony would not call

for a new trial on all issues. (150a) The District Court flatly

stated that effectively granting judgment as a matter of law

16

Bourland's pretrial activity is similarly irrelevant. Had

Bourland's misconduct been discovered before trial, one reasonable

remedy would have been to bar him from testifying at trial. Moreover,

while in his pre-trial report and deposition Dr. Bourland did opine on

obviousness, he did not opine on best mode.

23.

for defendant by striking the Bourland testimony "would be

too severe in this situation." (150a)- The District Court

recognized that the remedy for the Bourland testimony

should “be tailored more closely to the harm caused... ."

(150a)

The Court of Appeals correctly concluded that the

District Court swept too broadly by including the ‘288

validity verdict in its new trial order. A new trial on validity

was not tailored to the harm caused by the Bourland

deception. Plainly, the District Court's provisional grant of a

new trial was overly broad in this respect. Correctly

applying the standards that the District Court itself espoused,

the jury verdict on the validity of the '288 Patent was not and

could not reasonably be considered the result of any

deception by Dr. Bourland, who did not even testify befor >

the jury concerning that issue.

IV. THE PETITION'S MISCHARACTERIZATIONS

WARRANT DENIAL OF DISCRETIONARY REVIEW

In an effort to create the illusion of injustice below,

petitioners have exaggerated and mischaracterized the

meaning and impact of the opinions below. It is ironic that

this is done for the purported reason of remedying a

deception by a witness, and it would be wrong to reward this

diatribe with the attention of a Supreme Court case.

One need look no further than the question presented

for examples of the Petition's misstatements. It asserts that

the District Court made a "finding that respondents

committed a fraud on the Court by knowingly presenting an

expert witness who deliberately lied before, during, and after

trial in order to conceal from the jury material evidence that

= 24.

contravened the verdict... ." (Pet. ati) This is a gross

mischaracterization of the District Court's findings.

The District Court did not find that CPI (let alone all

Respondents) committed a fraud.'’ St. Jude's charge is at

odds with the District Court opinion. (151a-152a n.44; see

also supra at 4) Equally baseless is the Petition's assertion

that Respondents "knowingly present[ed] an expert witness

who deliberately lied... ." (Pet. ati) The District Court

specifically acknowledged "CPI's failure to recognize [Dr.

Bourland's deception]" (152a n.44; see also i54a n.46) and

expressly found that "the court ultimately does not disbelieve

the lawyers’ testimony that they failed to recognize Dr.

Bourland's deception." (149a) (finding the lawyers "failed to

put the pieces together.")

These and other baseless and inaccurate accusations"

are unbecoming in a Petition to invoke this Court's

discretionary certiorari jurisdiction and alone constitute

sufficient reason for denying the Petition in this case, where

the result would have importance only to particular litigants

17 As Petitioners well know, there are multiple respondents in

this case. In addition to CPI, Lilly and Mrs. Mirowski were parties

below, and there was never any suggestion that either Lilly or Mrs.

Mirowski (the widow of the inventor, added as a party shortly before

trial) would have been aware of Dr. Bourland's report, much less any

suggestion that they “committed a fraud on the Court" as the Petition

irresponsibly alleges.

18 See, e.g., Pet. at 26 ("Although CPI perpetrated a massive

fraud on St. Jude, the jury, and the District Court, the Federal Circuit's

decision preserves CPI's ability to contend that it has a valid claim to the

‘288 Patent, without even the test of a fair hearing.") In fact, CPI

perpetrated no fraud, massive or otherwise, on St. Jude, the jury or the

District Court. See supra at 4. St. Jude not only has already had a fair

trial on the validity of the now expired ‘288 Patent, but the Federal

Circuit rejected their validity arguments in a detailed analysis.

15 ea tls lta a faethe niet hm

. 2% -

themselves. The Court should not encourage such

inflammatory rhetoric and overblown statements. What is

potentially destructive of the public's perception of our

judicial system (Pet. at 23) is not the decision below, but St.

Jude's misleading Petition.

CONCLUSION

For the foregoing reasons, the Petition should be

denied.

Respectfully submitted,

J. Michael Jakes

Counsel of Record

Kara F. Stoll

Michael V. O'Shaughnessy

FINNEGAN, HENDERSON,

FARABOW, GARRETT &

DUNNER, L.L.P.

901 New York Ave. NW

Washington, D.C. 20001

(202) 408-4000

John R. Schaibley Ii

Robert K. Stanley

BAKER & DANIELS

300 North Meridian Street

Indianapolis, Indiana 46204

Counsel for Respondents

Cardiac Pacemakers, Inc.,

Guidant Sales Corporation,

and Eli Lilly and Company

~ 2

Arthur I. Neustadt

OBLON, SPIVAK,

MCCLELLAND, MAIER &

NEUSTADT, P.C.

1940 Duke Street

Alexandria, VA 22314

Counsel for Respondents

Anna Mirowski and

Mirowski Family Ventures,

LLC