C. Plaintiffs Fail to Demonstrate Willful Infringement
Here, Plaintiffs have not met their burden of proof of showing willfulness by clear and
convincing evidence. Nor can they. Plaintiffs have not shown by any degree of clear and convincing
evidence that Insmed did not reasonably believe it did not infringe any valid claims of the ’414 patent.
In fact, shortly after Insmed learned of the ’414 patent—and well before the start of this litigation in
December 2004—it obtained an opinion from a partner at a well-reputed law firm, Dr. Beth Burrous at
Foley & Lardner, that the claims of the ’414 patent were invalid under 35 U.S.C. § 112 for lack of
enablement and lack of written description support. DTX 1302. These are the precise defenses upon
which Insmed is relying in defense to the allegations in this suit. The fact those defenses are
sufficiently disputed to have required a trial on the merits demonstrates that they are far from baseles
and that it was more than reasonable for Insmed to rely on those defenses. Insmed also obtained an
opinion at that time that it did not infringe the claims of the ’414 patent. DTX 1304.
Plaintiffs insinuate that the opinion itself was somehow not well-supported are baseless. In Mr.
McCaslin’s trial testimony on November 15, 2006, the line of questioning attempted to focus on
whether Mr. MCaslin reviewed the ’414’s file history, whether he had prepared an outline of invalidity,
whether the opinion was performed in anticipation of litigation, whether he hired a consultant to carry
out the process of the ’414 patent, and who the qualifications of the examiner. [Rough 11/15/2006 Tr. at
16-19.] These factors, however, fail to satisfy the burden of proving willfulness. In fact, many of these
alleged facts are not even required by the law for proving willfulness. Mr. McCaslin was not proffered
to demonstrate whether Insmed reasonably relied on the opinion of counsel.
Dr. Backman’s criticisms of the opinion should be rejected as he is not an attorney and is,
therefore, not qualified to opine of the quality of Dr. Burrous legal analysis. The argument that the
opinion cannot be relied upon because Dr. Burrous did not retain an expert and is not herself a person of
ordinary skill in the art is baseless and unsupported by any legal authority.
Moreover, any implication that Celtrix and Insmed’s negotiations for a license from Genentech
was somehow indicia of a belief in infringement was contradicted by Dr. Sommer’s testimony that he
traveled the globe to “seek money” to pay for various programs at Celtrix and that there were many
more companies beside Genentech with whom they were trying to do business. [Trial Tr. at 1154-55.]
In fact, Dr. Sommer specifically declared that his discussions with Genentech were not because he felt
there was infringement, but only to raise money. [Trial Tr. at 1154-55.] Moreover, the license
negotiations were nothing more or less than standard business negotiations companies typically engage
in as a form of mutual assurance and insurance. [Trial Tr. at 1157-58; PTX 183.] The underlying basis
of these negotiations was not in furtherance of a belief of infringement. [Trial Tr. at 1154-55.]
Most importantly, it is now nearly impossible for Plaintiffs to prove its case on willful
infringement of the ’414 patent. Having dropped most of the Insmed witnesses from whom they had
intended to proffer facts concerning Insmed’s belief of non-infringement and invalidity of the ’414
patent, Plaintiffs cannot affirmatively meet their prima facie burden of proving that “Insmed had no
reasonable basis for believing that its alleged product or method did not infringe the patent or that the
patent was invalid.” Model Patent Jury Instruction for the N.D. California §B.4.2b (Enablement). For
their proof of willfulness, Plaintiffs had apparently intended to call Messrs. Geoffrey Allan (Insmed
CEO), Ronald Gunn (Insmed CFO) and Glen Kelly (Director of IP) in their case in chief to proffer
evidence regarding Insmed’s “belief.” Plaintiffs have, however, elected to drop these witnesses from
their case in chief. The only Insmed representative they called and question on this issue of Insmed’s
belief was Dr. Andreas Sommer, but they elicited limited testimony from Dr. Sommer on this point.
None of Dr. Sommer’s testimony indicated that Insmed did not have a good faith belief that it did not
infringe any valid claim of the ’414 patent. With no testimony or adequate proof of Insmed’s “belief,”
Plaintiffs’ claim of willful infringement of the ’414 patent is without evidentiary support.
The totality of circumstances weighs against any showing of willful infringement. Simply put,
Plaintiffs have failed to make a prima facie case that they can establish willful infringement as to the
‘414 patent by clear and convincing evidence. Accordingly, JMOL on the issue of willful infringement
of the ’414 patent is appropriate.
III. CONCLUSION
Based upon the foregoing, judgment as a matter of law should be entered in Defendant’s favor
consistent with the foregoing arguments.
Dated: November 16, 2006 HOWREY LLP
By: /s/ Rick Chang
Attorneys for Defendants
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