Junker v. Medical Components, Inc.

Case: 21-1649 Document: 53 Page: 1 Filed: 02/10/2022
United States Court of Appeals
for the Federal Circuit
______________________
LARRY G. JUNKER,
Plaintiff-Appellee
v.
MEDICAL COMPONENTS, INC., MARTECH
MEDICAL PRODUCTS, INC.,
Defendants-Appellants
______________________
2021-1649
______________________
Appeal from the United States District Court for the
Eastern District of Pennsylvania in No. 2:13-cv-04606-
MSG, Judge Mitchell S. Goldberg.
______________________
Decided: February 10, 2022
______________________
JAMES D. PETRUZZI, The Petruzzi Law Firm, Houston,
TX, argued for plaintiff-appellee. Also represented by
LAURA MAUPIN, Maupin Redman, Livingston, TX.
ALFRED W. ZAHER, I, Montgomery McCracken Walker
& Rhoads LLP, Philadelphia, PA, argued for defendants-
appellants. Also represented by JOSEPH MONAHAN.
______________________
Before DYK, REYNA, and STOLL, Circuit Judges.
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2 JUNKER v. MEDICAL COMPONENTS, INC.
STOLL, Circuit Judge.
Larry G. Junker, the named inventor of U.S. Design
Patent No. D450,839, sued Medical Components, Inc. and
Martech Medical Products, Inc. (collectively, “MedComp”)
for infringement of the sole claim of the D’839 patent. The
parties filed cross-motions for summary judgment, debat-
ing whether a letter sent before the critical date was a com-
mercial offer for sale of the claimed design, rendering the
claim invalid under the on-sale bar, 35 U.S.C. § 102(b).
The district court granted Mr. Junker’s motion for sum-
mary judgment of no invalidity under the on-sale bar. The
district court thereafter held a bench trial on several re-
maining issues in the case, including MedComp’s remain-
ing invalidity challenges, infringement, and damages. The
court again ruled in Mr. Junker’s favor. The court rejected
each of MedComp’s invalidity challenges, found that each
of the accused products infringed the D’839 patent claim
and that the infringement was willful, and awarded
Mr. Junker $1,247,910 in damages under 35 U.S.C. § 289,
which allows recovery of an infringer’s profits from sale of
the infringing products.
MedComp appeals the district court’s summary judg-
ment of no invalidity under the on-sale bar, the judgment
of infringement, and the damages award. For the reasons
below, we agree with MedComp that the pre-critical date
letter was a commercial offer for sale. Because there is no
dispute that the claimed design was ready for patenting,
we reverse the district court’s summary judgment of no in-
validity. We therefore do not reach the remaining issues
on appeal.
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JUNKER v. MEDICAL COMPONENTS, INC. 3
BACKGROUND
I
The D’839 patent, at the heart of the dispute on appeal,
is titled “Handle for Introducer Sheath,” and includes a sin-
gle claim for “[t]he ornamental design for a handle for in-
troducer sheath, as shown and described.” D’839 patent,
claim. Figure 1 shows a perspective view of the claimed
design (represented with solid lines):
Id. Fig. 1. Mr. Junker filed the application that led to the
D’839 patent on February 7, 2000. Thus, the critical date
for analyzing the on-sale bar under § 102(b) 1 is February 7,
1999, one year before the filing date.
1 Congress amended § 102 when it enacted the
Leahy–Smith America Invents Act (AIA). Pub. L.
No. 112–29, § 3(b)(1), 125 Stat. 284, 285–87 (2011). How-
ever, because the application that led to the D’839 patent
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4 JUNKER v. MEDICAL COMPONENTS, INC.
A
Mr. Junker started working in the medical device in-
dustry in the 1970s. In the late 1970s, Mr. Junker started
his own company for purchasing and reselling catheter
kits. These kits typically included a needle, syringe, guide-
wire, and introducer sheath that were used for inserting a
catheter into the vein of a patient. Mr. Junker’s company
also designed and manufactured some components in the
kits, including the introducer sheath. In the mid-1980s,
Mr. Junker began developing a new design for the intro-
ducer sheath based on his experience observing catheter-
insertion procedures. Mr. Junker focused on the design for
the introducer sheath’s handle, eventually settling on a
handle with large, rounded Mickey-Mouse-shaped ears
that made it easier for doctors to grasp the introducer
sheath during catheter-insertion procedures. The handle
was designed such that the sheath could be peeled apart
into two pieces when removing the sheath while leaving
the catheter in place in the patient’s body. These products
are referred to as “peelable,” “peel-away,” or “tearaway” in-
troducer sheaths.
Mr. Junker, however, did not have the proper machin-
ery to manufacture the product. He began reaching out to
other companies to handle the actual manufacture of his
new design. Eventually, in 1998, Mr. Junker developed a
business relationship with James Eddings, the founder of
a medical device company called Galt Medical. At their
first meeting in August 1998, Mr. Junker and Mr. Eddings
entered into a non-disclosure agreement (Mr. Junker on
behalf of his company and Mr. Eddings on behalf of Galt),
after which Mr. Junker told Mr. Eddings about his new de-
sign for the introducer sheath handle. The next month, in
September 1998, Mr. Eddings informed Mr. Junker that
was filed before March 16, 2013, the pre-AIA § 102 applies.
See id. § 3(n)(1), 125 Stat. at 293.
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JUNKER v. MEDICAL COMPONENTS, INC. 5
Galt could manufacture Mr. Junker’s product. Around this
same time, Mr. Eddings also founded a new company,
Xentek Medical, to develop, manufacture, and sell teara-
way introducer sheath products.
Over the course of the next several months, Mr. Junker
and Mr. Eddings continued to discuss Mr. Junker’s new de-
sign. Mr. Eddings enlisted the help of an engineer, Richard
Gillespie, to sketch out Mr. Junker’s proposed design. Af-
ter some back and forth, Mr. Gillespie provided Mr. Junker
with a sketch of the design. This sketch, however, was
lacking the handles with Mickey Mouse ears that Mr. Jun-
ker had envisioned. In a fax dated December 16, 1998,
Mr. Junker relayed his critiques of the sketch to Mr. Ed-
dings, noting the absence of larger, rounded portions on the
handle and providing a rough sketch of his design as he
had imagined it. Mr. Eddings asked Mr. Gillespie to mod-
ify the sketch accordingly. In January 1999, Mr. Eddings’
company, Xentek, developed and provided to Mr. Junker a
prototype of the product that included all of the features of
his design, including (importantly) a handle with Mickey
Mouse ears.
B
In early January 1999, Mr. Eddings, through Xentek,
began communicating with Boston Scientific Corporation
regarding a peelable introducer sheath product. In re-
sponse to a request from Boston Scientific, on January 8,
1999, Xentek sent Boston Scientific a letter detailing bulk
pricing information for variously sized peelable introducer
sheath products. The letter stated:
Thank you for the opportunity to provide this quo-
tation for the Medi-Tech Peelable Sheath Set.
When we first received this request for quotation
we were under the mistaken impression that you
wanted the exact configuration as the drawing that
was provided which would have required extensive
tooling expense. Subsequently, we have learned
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6 JUNKER v. MEDICAL COMPONENTS, INC.
that this is not the case and are pleased to submit
this quotation for a product of our design.
...
The principals of Xentek Medical have extensive
experience in the design, development and manu-
facture of this type of medical device. If you should
have any specific dimensional requirements this
product could generally be tailored to your specifi-
cations.
J.A. 1572.
The January 8, 1999 letter also included a price chart
(shown below), and specified that the “prices are for ship-
ment in bulk, non-sterile, FOB [free on board] Athens,
Texas on a net 30-day basis”:
J.A. 1573. Mr. Eddings concluded the letter by noting his
appreciation for “the opportunity to provide this quotation”
and that he “look[ed] forward to discussing [Boston Scien-
tific’s] requirements in person.” Id.
Mr. Eddings sent additional letters to Boston Scientific
in January and February 1999.
II
In 2013, Mr. Junker sued MedComp, accusing four of
MedComp’s products of infringing the claimed design.
MedComp, in response, raised affirmative defenses of inva-
lidity, unenforceability, and noninfringement and filed
counterclaims seeking a declaratory judgment that the
claimed design is invalid, unenforceable, and not infringed.
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JUNKER v. MEDICAL COMPONENTS, INC. 7
Following several years of discovery, in 2017, the par-
ties filed cross-motions for summary judgment on several
issues, including, as relevant here, invalidity under the on-
sale bar. The crux of the parties’ disagreement was
whether the January 8, 1999 letter from Xentek to Boston
Scientific—which was sent before the critical date—was a
commercial offer for sale of a product embodying the
claimed design. The district court held that it was not as a
matter of law. See Junker v. Med. Components, Inc., CIVIL
ACTION No. 13-4606, 2019 WL 109385, at *10 (E.D. Pa.
Jan. 4, 2019). In so holding, the district court determined
that the letter was a preliminary negotiation, not a definite
offer. Id. The court specifically focused on the fact that the
letter thrice uses the word “quotation” and concludes with
an invitation to further discuss specific requirements. Id.at *9–10. The district court acknowledged that the letter
included numerous, specific, commercial terms (such as
payment terms, shipment terms, and delivery conditions),
supporting a conclusion that the letter was a commercial
offer for sale. The court ultimately determined, however,
that the presence of these terms did not outweigh the other
language in the letter suggesting that Xentek and Boston
Scientific were engaged in preliminary negotiations. Id.
at *10. The district court accordingly granted Mr. Junker’s
motion for summary judgment of no invalidity under the
on-sale bar.
The case then proceeded to trial on the remaining is-
sues, namely MedComp’s remaining invalidity defenses,
the questions of infringement and willfulness, and dam-
ages. As to invalidity, the district court determined that
MedComp had failed to prove, by clear and convincing evi-
dence, invalidity of the claimed design based on any of its
various asserted theories. Junker v. Med. Components,
Inc., CIVIL ACTION No. 13-4606, 2021 WL 131340, at *1
(E.D. Pa. Jan. 14, 2021). It also found that Mr. Junker had
demonstrated, by a preponderance of the evidence, that
each of the accused products infringed the claimed design,
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8 JUNKER v. MEDICAL COMPONENTS, INC.
and that the infringement was willful. Id. The district
court awarded Mr. Junker $1,247,910 in disgorged profits
under 35 U.S.C. § 289. Id. No enhanced damages were
awarded in connection with the willfulness finding.
MedComp appeals. We have jurisdiction under
28 U.S.C. § 1295(a)(1).
DISCUSSION
I
We begin and end with MedComp’s challenge to the
district court’s summary judgment of no invalidity under
the on-sale bar. We review the district court’s summary
judgment under the law of the regional circuit, here the
Third Circuit. See SRI Int’l, Inc. v. Cisco Sys., Inc.,
930 F.3d 1295, 1306 (Fed. Cir. 2019). “The Third Circuit
reviews a grant of summary judgment de novo, applying
the same standard as the district court.” Id. (citing Gonza-
lez v. Sec’y of Dep’t of Homeland Sec., 678 F.3d 254, 257
(3d Cir. 2012)). Summary judgment is appropriate when,
drawing all justifiable inferences in the nonmovant’s favor,
there exists no genuine issue of material fact and the mo-
vant is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986).
II
A patent claim is invalid under § 102(b) if “the inven-
tion was . . . on sale in this country, more than one year
prior to the date of the application for patent in the United
States.” Section 102(b)’s on-sale bar is triggered if, before
the critical date, the claimed invention was both (1) the
subject of a commercial offer for sale and (2) ready for pa-
tenting. Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 67–68
(1998). “Whether the on-sale bar applies is a question of
law based on underlying factual findings.” Meds. Co.
v. Hospira, Inc., 827 F.3d 1363, 1371 (Fed. Cir. 2016) (en
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JUNKER v. MEDICAL COMPONENTS, INC. 9
banc). We review the ultimate determination of whether a
claim is invalid under the on-sale bar de novo. Id.The material facts here are not in dispute. The parties
agree that the January 8, 1999 letter speaks for itself.
They also agree that the products described in the letter
embody the claimed design. And they agree that the
claimed design was ready for patenting. The question be-
fore us is therefore a simple one: Whether the January 8,
1999 letter is a commercial offer for sale of the claimed de-
sign, or merely a quotation signaling the parties were en-
gaged in preliminary negotiations. Because the facts are
not disputed, we review the question of whether this par-
ticular communication constitutes a commercial offer for
sale (a question of law) without deference. See In re Kollar,
286 F.3d 1326, 1329 (Fed. Cir. 2002); see also, e.g., Linear
Tech. Corp. v. Micrel, Inc., 275 F.3d 1040, 1049–52
(Fed. Cir. 2001). For the reasons below, we hold that the
letter is a commercial offer for sale of the claimed design.
In making this determination, we look to the specific
facts and circumstances presented in this case, “apply[ing]
traditional contract law principles” along the way. Merck
& Cie v. Watson Lab’ys, Inc., 822 F.3d 1347, 1351 (Fed. Cir.
2016) (quoting Allen Eng’g Corp. v. Bartell Indus., Inc.,
299 F.3d 1336, 1352 (Fed. Cir. 2002)). “Only an offer which
rises to the level of a commercial offer for sale, one which
the other party could make into a binding contract by sim-
ple acceptance (assuming consideration), constitutes an of-
fer for sale under § 102(b).” Id. at 1351 (quoting Grp. One,
Ltd. v. Hallmark Cards, Inc., 254 F.3d 1041, 1048
(Fed. Cir. 2001)). To help guide our determination of
whether a given communication rises to the level of a com-
mercial offer for sale, we often rely on resources such as the
Uniform Commercial Code, Restatement (Second) of Con-
tracts, and other similar treatises. See, e.g., Meds. Co.,
827 F.3d at 1375–76 (discussing Uniform Commercial
Code); Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc.,
855 F.3d 1356, 1365 & n.5 (Fed. Cir. 2017) (citing favorably
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10 JUNKER v. MEDICAL COMPONENTS, INC.
Williston on Contracts (4th ed. 2013), Restatement (Sec-
ond) of Contracts (1981), and Corbin on Contracts (1999)),
aff’d, 139 S. Ct. 628 (2019). “In determining whether an
offer [has been] made[,] relevant factors include the terms
of any previous inquiry, the completeness of the terms of
the suggested bargain, and the number of persons to whom
a communication is addressed.” Restatement (Second) of
Contracts § 26 cmt. c (1981).
With this background in mind, we turn to the language
in the January 8, 1999 letter. As stated on the face of the
letter, Xentek was directly responding to a “request for
quotation” from Boston Scientific, and the letter was ad-
dressed to Boston Scientific alone. J.A. 1572. This signals
that the letter was not an unsolicited price quotation or in-
vitation to negotiate, but rather a specific offer to Boston
Scientific to take further action. See Restatement (Second)
of Contracts § 26 cmt. c (explaining that a relevant factor
for determining whether an offer is made is “the number of
persons to whom a communication is addressed”).
The letter also contains a number of necessary terms
typical for a commercial contract. For instance, the letter
specifies that the prices provided are for “shipment in bulk,
non-sterile.” J.A. 1573. Thus, the letter provides specific
delivery conditions—the product will be shipped in “bulk”
and will be “non-sterile.” The letter further specifies that
shipment will be “FOB Athens, Texas.” Id. FOB (which
stands for free on board) is a standard commercial term
used to allocate the risks and responsibilities of the buyer
and seller with respect to delivery, payment, and loss of the
product. See Free on Board, Black’s Law Dictionary
(11th ed. 2019). The letter also provides a payment term,
“net 30-day basis,” J.A. 1573, meaning that payment is due
in full within 30 days of delivery.
Finally, and importantly, Xentek’s letter specifies mul-
tiple different purchase options for its peelable sheath
products. For example, the letter offers 5,000 sets of size
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JUNKER v. MEDICAL COMPONENTS, INC. 11
4F-6F Medi-Tech Peelable Sheath at a price of $4.45 per
set and offers discounted prices if the purchase quantity is
increased (e.g., the price per set decreases to $4.25 for
10,000 sets of the same size sheath, $4.05 for 25,000, and
$3.95 for 50,000). The letter also offers Boston Scientific
the option to purchase two additional sizes of Xentek’s
Medi-Tech Peelable Sheath Set—7F-8F and 11F—with
similarly discounted pricing as the purchase quantity in-
creases.
While the letter concludes with an invitation to further
discuss Boston Scientific’s specific requirements in person,
“expressing a desire to do business in the future does not
negate the commercial character of the transaction then
under discussion.” Cargill, Inc. v. Canbra Foods, Ltd.,
476 F.3d 1359, 1370 (Fed. Cir. 2007). The completeness of
the relevant commercial sale terms in the letter itself sig-
nals that this letter was not merely an invitation to further
negotiate, but rather multiple offers for sale, any one or
more of which Boston Scientific could have simply accepted
to bind the parties in a contract. 2
We have determined that communications with simi-
larly complete and definite commercial terminology were
commercial offers for sale within the meaning of § 102(b).
For example, in Merck, we disagreed with the district
court’s determination that a certain fax did not rise to the
level of a commercial offer for sale of the claimed invention.
The fax specified a product, set forth the price of the prod-
uct ($25,000 per kilogram), the location for delivery (the
buyer’s research and development center), payment terms
2 We also note that subsequent communications be-
tween Xentek and Boston Scientific after the critical date
used the exact same commercial terms, providing some in-
dication that these terms were definite, not in flux. See,
e.g., J.A. 1577 (February 16, 1999 letter from Xentek to
Boston Scientific).
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12 JUNKER v. MEDICAL COMPONENTS, INC.
(net 60 days), and the amount to be purchased (two kilo-
grams, with the option to purchase additional product).
822 F.3d at 1349. We explained that this was not just “an
unsolicited price quote sent to numerous potential custom-
ers.” Id. at 1351 (citing Restatement (Second) of Contracts
§ 26 cmt. c). Rather, the “fax was sent in direct response to
[the buyer’s] request to purchase two kilograms” of the
product. Id. We also found it highly relevant that the fax
“provid[ed] essential price, delivery, and payment terms.”
Id. Because the fax “contained all the required elements to
qualify as a commercial offer for sale,” we reversed the dis-
trict court’s determination that the claims were not invalid
under the on-sale bar. Id. at 1351, 1355.
In a similar vein, in Cargill, we agreed with the district
court that the relevant letter was a commercial offer for
sale. That letter was sent to confirm a request for a certain
amount of canola oil. 476 F.3d at 1369. The letter “explic-
itly set[] forth an amount of oil to be delivered . . . , at a
specified unit price, and under a standard contract desig-
nation, FOB (free on board).” Id. We explained that this
was “powerful evidence of a sales transaction,” id., and ac-
cordingly affirmed the district court’s summary judgment
of invalidity under the on-sale bar.
Here, as in Merck and Cargill, the letter—which speci-
fies multiple sized products for sale, different bulk pricing
options available for each product, payment terms (net 30-
day basis), and delivery terms and conditions (bulk ship-
ment, non-sterile, FOB)—contains all the required ele-
ments to qualify as a commercial offer for sale. That is
sufficient to invoke § 102(b)’s on-sale bar.
Mr. Junker argues that the letter omits essential
terms—which size product is being purchased and in what
quantity—and, therefore, the letter is not an offer that
could be made into a binding contract by simple ac-
ceptance. Appellee’s Br. 15. We are not persuaded. The
standard Mr. Junker proposes—that the offer must specify
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JUNKER v. MEDICAL COMPONENTS, INC. 13
the exact amount of product the buyer desires to qualify as
an offer for sale—is too stringent. Under § 102(b), the
question is merely whether there is an offer for sale. As
explained above, the letter here offers for sale multiple
sizes of products with tiered pricing depending on the num-
ber of sets desired. That there were multiple offers does
not mean that there was no offer to be accepted. And that
the letter does not specify the exact amount Boston Scien-
tific desires likewise does not mean that there is no offer to
be accepted. Rather, the letter comprises multiple differ-
ent offers that Boston Scientific could have accepted by
simply stating, for example, “We’ll take 5,000 sets of the
4F-6F Medi-Tech Peelable Sheath” or “10,000 sets of the
11F Medi-Tech Peelable Sheath.”
Mr. Junker also argues, as the district court deter-
mined, that the January 8, 1999, letter was merely a price
quotation inviting further negotiations, not a definite offer.
Appellee’s Br. 15–16, 19. To be sure, the fact that the letter
uses the word “quote” three times is an important fact sup-
porting the district court’s conclusion that the letter is a
quotation, not a definite offer. See Restatement (Second)
of Contracts § 26 cmt. c. (“[T]he word ‘quote’ is commonly
understood as inviting an offer rather than as making one,
even when directed to a particular customer.”). This fact
makes the question before us closer than in either Merck or
Cargill. “But just as the word ‘offer’ does not necessarily
mean that an offer is intended, so the word ‘quote’ may be
used in an offer.” Restatement (Second) of Contracts § 26
cmt. c. While the precise label used for a given communi-
cation is relevant, it is not controlling. Rather, the terms
of the communication must be considered in their entirety
to determine whether an offer was intended, or if it was
merely an invitation for an offer or further negotiations. A
quotation typically leaves many terms necessary to a con-
tract—such as place of delivery, payment terms, and the
like—unexpressed. Corbin on Contracts § 2.5, at 157
(2018); accord Restatement (Second) of Contracts § 26
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14 JUNKER v. MEDICAL COMPONENTS, INC.
cmt. c (explaining that a quote “may omit the quantity to
be sold, time and place of delivery, terms of payment, and
other terms”). Where, however, “the quotation . . . contains
detailed terms,” as is the case here, “it may well be deemed
an offer.” Corbin on Contracts § 2.5, at 161. For the rea-
sons above, we conclude that the specificity and complete-
ness of the commercial terms in the letter outweigh the
three references to “quotation” and mention of possible fu-
ture discussions. Taken as a whole, the overall language
of the letter signals Xentek’s intent to make a commitment
and invite Boston Scientific to act rather than merely ne-
gotiate.
CONCLUSION
We have considered the parties’ remaining arguments
and find them unpersuasive. For the foregoing reasons, we
agree with MedComp that the January 8, 1999 letter was
a commercial offer for sale of the claimed design. Because
the parties do not dispute that the invention was ready for
patenting, we reverse the district court’s summary judg-
ment of no invalidity. The effect of our determination ren-
ders the sole claim of the D’839 patent invalid and we
therefore need not reach MedComp’s remaining arguments
on appeal.
REVERSED