NeuroGrafix v. Brainlab, Inc. (Fed. Cir. 2019)

McDonnell Boehnen Hulbert & Berghoff LLP

McDonnell Boehnen Hulbert & Berghoff LLP

One person's attempt at judicial economy can be another person's impermissible shortcut, and when it arises in the context of a summary judgment motion of noninfringement, it can amount to legal (or at least procedural) error on appeal. Such is the case in NeuroGrafix v. Brainlab, Inc., decided last week by the Federal Circuit in the context of multidistrict litigation over magnetic image resonance (MRI) technology.

The case at bar arose when NeuroGrafix sued Brainlab for infringement of U.S. Patent No. 5,560,360; because NeuroGrafix concomitantly sued several other entities using (or producing) MRI technology, the cases were consolidated in the District of Massachusetts for pretrial activities. The '360 patent is directed to "methods and systems for creating detailed images of neural tissues by using diffusion tensor imaging (DTI)" (a particular application of MRI technology). As explained in the opinion, certain biological tissues behave differentially with regard to water diffusion. Water diffusion in white matter in brain, for example, is anisotropic, meaning that diffusion along one axis (the long axis of an axon) is easier than diffusion along the cross-sectional axis. Gray matter is isotropic; water diffusion rates cannot be distinguished based on direction. These differences provide the basis for the claimed invention, wherein "pulsed magnetic field gradients are applied in two orthogonal (perpendicular) directions in a region containing the nerve tissues for which a precise image is sought." In some tissues the directions to be interrogated are known from the nature of the tissue, while in others informative perpendicular directional pairs are determined empirically. The differences noted above between isotropic and anisotropic tissues (or portions of tissues) "can be identified and visually differentiated from the surrounding structures by determining the areas of greater relative anisotropy."

This technology was claimed in representative claim 36 of the '360 patent:

36. A method of utilizing magnetic resonance to determine the shape and position of a structure, said method including the steps of:
(a) exposing a region to a magnetic polarizing field including a predetermined arrangement of diffusion-weighted gradients, the region including a selected structure that exhibits diffusion anisotropy and other structures that do not exhibit diffusion anisotropy;
(b) exposing the region to an electromagnetic excitation field;
(c) for each of said diffusion-weighted gradients, sensing a resonant response of the region to the excitation field and the polarizing field including the diffusion-weighted gradient and producing an output indicative of the resonant response; and
(d) vector processing said outputs to generate data representative of anisotropic diffusion exhibited by said selected structure in the region, regardless of the alignment of said diffusion weighted gradients with respect to the orientation of said selected structure; and
(e) processing said data representative of anisotropic diffusion to generate a data set describing the shape and position of said selected structure in the region, said data set distinguishing said selected structure from other structures in the region that do not exhibit diffusion anisotropy.

NeuroGrafix sued based on direct infringement (35 U.S.C. § 271(a)) and inducement of infringement (35 U.S.C. § 271(b)), and Brainlab counterclaimed for a declaratory judgment of invalidity. After consolidation, the Massachusetts Court granted-in-part Brainlab's motion for summary judgment that NeuroGrafix was estopped by an earlier settlement agreement with one of Brainlab's suppliers (Siemens) and for NeuroGrafix's literal infringement allegations against individual medical practitioners, for failure to provide any of the exemplary medical practitioner defendants had actually used Brainlab's products. After NeuroGrafix's unsuccessful attempt to amend its complaint to name Brainlab as a literal infringer, the Massachusetts Court granted Brainlab's second summary judgment motion of noninfringement "that users of the software do not commit direct infringement and therefore Brainlab could not be liable for induced infringement." The basis for the purported lack of literal infringement was that users of Brainlab's product do not satisfy the "selected structure" limitation and the "do not exhibit the diffusion anisotropy" limitation. With regard to the former limitation, Brainlab argued that the process of "selection" meant that a user knows the "existence and location" of whatever structure was interrogated before practicing the other limitations of the claimed methods. Brainlab's product was not used in this way, according to its motion, but rather its software "automatically generates all tracts that intersect a certain volume, like a tumor, if they meet certain criteria," and those tracts "are not visible until after [its] software has been run." Brainlab also argued that this limitation applied only to peripheral nerves, while its software was limited in application to brain. Finally with regard to the anisotropy limitation, its construction required zero diffusion anisotropy which is not a property of gray matter in the human brain upon which its MRI-based methods were directed.

These arguments convinced the MDL Court, which granted summary judgment, although rejecting all of Brainlab's arguments. Instead, the Court determined Brainlab was entitled to summary judgment because NeuroGrafix had not shown any evidence that users used the software in an infringing matter (there being "nothing in the record showing that either Brainlab or any of its customers actually uses [its software] in the manner hypothesized by Neuro[G]rafix"). The Court also held that it was possible to use Brainlab's software in ways that did or did not infringe. Finally, the Court (albeit in a footnote) held that Brainlab did not induce infringement (outside Brainlab's "no induced infringement without literal infringement" argument) because NeuroGrafix had not provided evidence to permit the Court to infer "an affirmative intent to infringe."

NeuroGrafix moved for reconsideration before the MDL Court as well as the District Court after remand to consider Brainlab's counterclaim of invalidity. That District Court (Northern District of Illinois) denied the motion, dismissed Brainlab's counterclaim, and entered judgment. This appeal followed.

The Federal Circuit reversed, in an opinion by Judge Taranto joined by Judges Newman and O'Malley. The basis for this decision was essentially procedural: the MDL Court had granted summary judgment for NeuroGrafix's purported evidentiary failures under circumstances where NeuroGrafix, as non-movant, had no burden to produce evidence because Brainlab argued its software was incapable of infringing (based on its construction of the "selected structure" limitation). The opinion cites the several iterations of this argument in Brainlab's motion, arguments, and expert testimony. In opposition, NeuroGrafix had argued that Brainlab's software could be practiced in an infringing manner, asserting Brainlab's advertisements, and the MDL Court eventually agreed that Brainlab's software could be used in an infringing and non-infringing manner. "That showing was sufficient for NeuroGrafix to defeat summary judgment," according to the Federal Circuit's opinion, because it raised a genuine issue of material fact and "[e]vidence of actual infringing uses" were not necessary. After all, the opinion recites, "[a] court cannot grant summary judgment on a ground that was neither asserted by the movant nor made the subject of judicial action under Rule 56(f) that gave the nonmovant proper notice of the ground and of the obligation 'to come forward with all of her evidence,'" citing Celotex Corp. v. Catrett, 477 U.S. 317, 326 (1986). "The MDL court's ruling was contrary to those basic principles in that it granted summary judgment against NeuroGrafix for its failure to come forward with evidence to answer a non-infringement ground that had not been asserted and of which it had not been given proper notice," according to the opinion.

That the Court's grounds for reaching this decision are substantially procedural is further evidenced by it mentioning, in the next judicial breath, that NeuroGrafix cannot sustain a claim for literal infringement based merely on Brainlab's software being "capable of" infringing; NeuroGrafix must establish uses of the software that actually infringes," according to the opinion. As for the MDL court (and the impermissibility of judicial economy as the basis for its decision), the opinion states:

[T]he motion being considered by the district court in this case was one structured and limited by the movant. The court was not free to look down the road and consider what the non-movant might need to establish to survive a differently structured, well-supported motion.

For similar reasons, the opinion disapproved the MDL Court's "apparent holding that Brainlab's advertisements and manual do not induce infringement as a matter of law." Brainlab's argument, that "Brainlab cannot induce infringement of the asserted claims of the '360 patent" because "[a]bsent direct infringement, there can be no induced infringement" does not support the MDL Court's conclusion that "the relevant Brainlab materials merely suggested that an infringing use was possible rather than instructing how to use the software in an infringing manner," according to the panel, and "[t]o the extent that this conclusion was an independent basis for the MDL court's grant of summary judgment," the Federal Circuit reversed the lower court's summary judgment grant.

But while the judicial economy sauce may not be proper for the MDL Court goose, it is perfectly appropriate for the Federal Circuit gander with regard to the proper construction of the claim term "selected structure." The judicial logic to this dichotomy is supported by the logic that, ultimately the question can come before the Court for de novo review so the question might as well be decided now. Based on the evidence before it (and in the absence of any claim construction below), the panel concluded that "to 'select[] [a] structure' is simply to choose it as a subject for placement into the claimed process that starts with exposing a region to a magnetic field, proceeds to sensing a resonant response, and continues as claimed." The Court based this construction on the plain meaning of the claim, the use of the term "select" in the specification, and the Court's perception of how the MDL Court considered the meaning of this term in rejecting Brainlab's argument that the selected structure needed to be known beforehand. While laboring on this construction, the opinion also rejects claim construction arguments asserted by both parties. For Brainlab, the panel rejected the argument that "tracks all fibers in an area cannot perform the method, because the tracking is not limited to a particular selected structure" as being inconsistent with the plain meaning of claim 36. For NeuroGrafix, the panel rejected its "always infringes" contention that "selected structure" is equivalent to "region," which the opinion states "is the polar opposite of Brainlab's never-infringes contention, and [] is equally wrong" and "contradicts the claim language" because claim 36 uses these terms distinctly differently.

NeuroGrafix v. Brainlab, Inc. (Fed. Cir. 2019)
Panel: Circuit Judges Newman, O'Malley, and Taranto
Opinion by Circuit Judge Taranto

Additional Disclaimer: MBHB represented NeuroGrafix before the U.S. District Court for the Northern District of Illinois. To the extent that this case summary contains any opinions, the opinions would be of Dr. Noonan and not NeuroGrafix or MBHB.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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