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LIFESCAN, INC. v. CAN-AM CARE CORP.

May 20, 1994

LIFESCAN, INC., a California corporation, Plaintiff,
v.
CAN-AM CARE CORP., a New York corporation, Defendant.


WARE


The opinion of the court was delivered by: JAMES WARE

On April 29, 1994, the Court held a hearing regarding Defendant's motions for summary judgment. Based upon all pleadings filed to date, as well as on the oral argument of counsel, the Court orders as follows.

 I. BACKGROUND

 Plaintiff Lifescan, Inc. ("Lifescan") is in the business of manufacturing and selling One Touch Brand blood glucose meters for home use by persons with diabetes. In order to use the meter, the patient must insert a one-time usable strip into the meter, apply a drop of blood onto the strip and place the strip in the meter. The meter then "reads" the strip and determines the patient's blood glucose level.

 Lifescan markets and sells both the meters and the test strips. Lifescan has obtained United States Patent Nos. 4,935,346 *fn1" and 5,049,487, *fn2" in June of 1990 and September of 1991, respectively. Both patents specify methods of using the blood glucose meters.

 Lifescan first introduced its meters in 1987. The packaging on Lifescan's meters between 1987 and 1992 did not contain any reference to either of Lifescan's patents. In October of 1992, Lifescan began marking the applicable patent numbers on both its boxes of meters and strips. In April of 1993, Lifescan also began placing a sticker on the outside of its meter boxes which stated:

 
Contents covered by one or more of the following U.S. patents: 4,976,724, 5,059,394 and Des. 318,331.
 
CAUTION: Use of the monitoring device contained herein is protected under U.S. Pat. Nos. 4,935,346 and 5,049,487. Purchase of the device does not give a license to practice these patents. Such a license is automatically granted when the device is used with the enclosed, or separately purchased ONE TOUCH test strips. No other test strip supplier is authorized to grant such a license. Other patents pending.

 In June of 1993, Can-Am began selling its Quick Check One test strips, designed for use in Lifescan's meters. Lifescan immediately filed a complaint against Defendant Can-Am Care Corporation ("Can-Am") arising from Can-Am's manufacture and sale of blood glucose test strips. In September of 1993, the Court heard and denied Life Scan's motion for entry of a preliminary injunction which sought to prohibit Can-Am from continuing to sell its test strips.

 Lifescan's complaint alleges that, through the manufacture and sale of its test strips, Can-Am infringes Lifescan's patents, both directly and by inducing infringement, and engages in false advertising and unfair competition. Can-Am denies the allegations and has filed a cross-complaint alleging that Lifescan engages in anti-competitive conduct through its marketing of both the meters and the test strips.

 Can-Am has filed three separate motions for partial summary judgment, each of which relates to the issue of whether Lifescan granted an unrestricted, implied license to all users of its meters such that the meters may be used in conjunction with any test strip and that such use would not be found to constitute an infringement of Lifescan's patents. Each of these motions is addressed separately below.

 II. LEGAL STANDARDS

 In addressing Can-Am's motions for summary judgment, the court proceeds pursuant to the mandates of Rule 56(c) of the Federal Rules of Civil Procedure, which provide that summary judgment shall be rendered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. The purpose of summary judgment is to avoid a trial where there is no genuine factual issue and the moving party is entitled to judgment as a matter of law. ...


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