Promega Corp. v. Novagen, Inc. (6 F. Supp. 2d 1037, 1997)

OPINION AND ORDER

CRABB, District Judge.

TABLE OF CONTENTS

I. STATEMENT OF CASE AND HOLDING.1039

II. EVIDENCE ADDUCED AT TRIAL.1041

A. Background.1041

B. Plaintiffs Claimed Inventions.1042

C. State of the Art of Protein Synthesis in October 1991 .1044

D. Person of Ordinary Skill in the Art.1045

E. Prior Art References.1045

1. Content.1046

2. Pelham .1046

3. Coen .1046

4. Stueber.1046

5. Perara and Lingappa.1047

6. Spirin and Baranov Papers.1047

7. Baranov Patent Application.1047

F. Plaintiffs Development of its Patents.1048

G. The Craig Paper.1048

H. Defendant’s Development of its Products.1049

I. Expert Witnesses.1049

J. Expert Opinions.1050

1. Bishop.1050

2. Anderson.1051

3. Mierendorf.1052

4. Dimond.1053

5. Jagus.1055

III. FACTS RELATING TO ALLEGATION OF INEQUITABLE CONDUCT.1056

IV. OPINION.1059

A. Inequitable Conduct.1059

B. Obviousness.1062

1. Coen reference.1064

a. Obviousness of independent claims.1064

b. Obviousness of dependent claims over Coen.1065

2. Stueber reference.1066

3. Perara and Lingappa reference.1066

4. Baranov patent application .1067

a. Obviousness of independent claims over Baranov.1067

b. Obviousness of dependent claims over Baranov.1069

C. Secondary Considerations.1071

D. Conclusion.1072

V. ORDER.1072

I. STATEMENT OF CASE AND HOLDING

Plaintiff Promega Corporation filed this civil action, alleging that defendant Novagen, Inc. was infringing plaintiffs rights under two patents for biotechnological inventions relating to protein synthesis, United States Patents Nos. 5,324,637 (’637) and 5,492,817 (’817), by manufacturing and selling a product called “Single Tube Protein System 2” or “STP2.” The STP product is designed for scientists engaged in research involving the synthesis of protein for the study of genes, gene expression and gene function. The product allows researchers to perform the two critical steps of translating DNA into messenger RNA and then transcribing the messenger RNA into protein in one single tube reaction. The ability to couple the two steps allows researchers to synthesize protein with much greater ease and speed, thus enabling them to undertake more studies and to test a greater number of hypotheses about gene function and expression.

In developing its product, defendant purchased a similar product known as TNT that had been manufactured by plaintiff, “deconstructed” the TNT to determine how it was produced and then essentially copied the TNT product. Such a procedure is not objectionable unless the TNT product is covered by a valid patent. Plaintiff believes it is: it has two patents that cover the product and that are presumed valid by virtue of their issuance by the United States Patent and Trademark Office. It has sued defendant for infringement. Defendant contends that neither of plaintiffs patents, ’637 or ’817, was valid for one or more of the following reasons. 1) Every element of every claim of plaintiffs patents could be found in public documents published before plaintiff applied for its ’637 patent in October 1991 (anticipation), 35 U.S.C. § 102; 2) prior art references taught or suggested to persons of ordinary skill in the art of developing kits such as STP and TNT the inventive concepts of the claims of the ’637 and ’817 patents (obviousness), 35 U.S.C. § 103; 3) plaintiff engaged in inequitable conduct in the prosecution of the ’637 patent. In addition, defendant denies that its STP2 product infringed the claims of plaintiffs patents.

After conducting discovery, the parties filed cross-motions for summary judgment on the validity, enforceability and infringement of the ’637 and ’817 patents. In an order entered February 28, 1997, I held, among other things, that defendant’s sale of STP2 and the protocol of defendant’s product infringed a number of the claims of both the ’637 and the ’817 patents, but, because there were disputed issues of fact, I denied summary judgment on whether plaintiff had engaged in inequitable conduct and whether certain prior art references anticipated or rendered plaintiffs patent claims obvious.

With the only issues left for resolution at trial being defendant’s affirmative defenses of anticipation, obviousness and inequitable conduct, defendant presented its evidence first. At the close of defendant’s case-in-chief, plaintiff moved pursuant to Fed. R.Civ.P. 50(a) for judgment as a matter of law. The motion was granted in part: defendant’s anticipation claims were dismissed in full on the ground that the evidence was insufficient to support a jury finding that any of the prior art references always and necessarily resulted in a coupled transcription-translation reaction so as to anticipate plaintiffs invention inherently. Certain of defendant’s obviousness claims were left for the jury to decide. The jury determined that four prior art references (known as “Bara-nov,” “Coen,” “Stueber” and “Perara and Lingappa”) each rendered obvious the independent claims of plaintiffs patents (claims 1, 34 and 68 of the ’637 patent and claims 1 and 13 of the ’817 patent), that the Baranov reference rendered obvious the dependent claims of the ’637 patent directed to specific concentrations of magnesium, potassium or ribonu-cleotide triphosphates, or NTPs, (claims 3, 4, 8,17, 37, 38, 48, 49 and 51) and that the Coen reference rendered obvious dependent claims 12, 13, 48 and 49 of the ’637 patent, but did not render obvious dependent claims 11 and 46 of that patent. Earlier in the trial, I determined as a matter of law that plaintiff had not engaged in inequitable conduct when it submitted the Second Declaration of Dr. Gregory Beckler to the patent office.

After trial, defendant filed a motion pursuant to Fed.R.Civ.P. 52, asking the court to reverse its decision on its inequitable conduct ruling with respect to the Second Declaration of Dr. Beckler, on the ground that Beckler’s trial testimony showed that plaintiff submitted his second declaration with the intent to deceive the patent examiner. For its part, plaintiff renewed its motion for judgment as a matter of law on defendant’s obviousness claims and filed another motion seeking a new trial or other appropriate relief under Fed.R.Civ.P. 59, contending that the evidence adduced at trial was insufficient to support the jury’s determination that the patents at issue were invalid for obviousness.

The ease is now before the court on the motions of both parties. I conclude that defendant has not shown any reason to reverse the determination that plaintiff did not engage in inequitable conduct but that plaintiff has shown that the jury’s verdict on obviousness cannot stand. No reasonable jury could have found by clear and convincing evidence that the claims of plaintiffs ’637 and ’817 patent are made obvious by any one of the Stueber, Coen, or Perara and Lingap-pa papers or the Baranov patent application.

To give a fair picture of the evidence that was before the jury, it is necessary to set it out in considerable detail. The essential question in deciding a motion for judgment as a matter of law is whether the evidence the jury could have believed in reaching its verdict was substantial enough to support its findings. Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565, 1573 (Fed.Cir. 1986). The question is not what the court might have believed, but what the jury could reasonably have determined. Id.

II. EVIDENCE ADDUCED AT TRIAL

A. Background

As all television watchers now know, every cell in every living organism contains DNA, the master copy of all the genetic information in the cell. Each gene contains information that can be used to synthesize a single, specific protein that has a particular purpose in the body. It might serve as a part of the structure of the cell, for instance, or as an enzyme to make the other chemical constituents of cells. This protein must be synthesized continuously in order to enable the organism to stay alive.

In the protein synthesis process, the DNA serves as the template for making messenger RNA, which is the intermediary between the DNA and the protein. The protein is actually a sequence of amino acids that join together and fall into a particular structure determined by the RNA, which is carrying the “message” of the sequence of nucleotides found in the DNA. The amino acids join to create a peptide bond; many peptide bonds make up a polypeptide; a polypeptide is a denatured form of protein made up of a strung out series of amino acids bound by peptides. For the purpose of this case, a protein has been defined as a full-length polypeptide that comes off the ribosome and folds correctly. (The ribosome is an intracellular particle consisting of several RNA molecules and proteins involved in protein synthesis; its function is to synthesize polypeptide chains having amino acid sequences specified by the genetic code of the messenger RNA.) The process of copying the message of the DNA is known as “transcription”; the process of making new protein from the transcript is known as “translation.”- Transcription must precede translation.

Broadly speaking, living organisms are either prokaryotic or eukaryotic. (A third kind has been identified but is irrelevant to this case.) Prokaryotic organisms such as bacteria have cells with no nucleus. Euka-ryotic organisms have cells that have a nucleus. In the cells of prokaryotic organisms, the two processes of transcription of the DNA into RNA and the translation of the RNA into protein occur in one place: within the cytoplasm. In eukaryotes, by contrast, transcription of RNA from DNA incurs within the nucleus where the DNA is contained and translation of the RNA into protein takes place outside the nucleus, within the cytoplasm.

Replicating the natural process of protein synthesis within the laboratory (in vitro, literally, in a glass) is a complex task requiring the reproduction of the conditions that are present in nature (in vivo). Plaintiff claims as its invention a method and a kit for enabling scientists to synthesize protein by performing in one test tube both the process of transcription (copying a particular DNA onto a messenger RNA) and that of translation (converting the information from the messenger RNA into a sequence of amino acids that form a protein). Laboratory transcription and translation is not a new concept; it has been practiced for many years in various forms. Plaintiffs patents claim methods of doing coupled transcription and translation in a eukaryotic cell-free extract and a kit for performing the coupled reaction.

Plaintiff does not claim to have invented the idea of transcribing and translating DNA to make protein, but to have made the process more reliable, faster and easier by enabling both transcription and translation to occur simultaneously in one reaction within a test tube. Its claimed inventive concept is the discovery that a researcher can do transcription and translation in a single test tube if the amount of magnesium in the reaction is kept within a certain range. Plaintiff argues that until this invention, no one had either identified the critical significance of magnesium to a coupled reaction or determined the optimal range of magnesium concentration.

For the first stage of transcription of DNA to messenger RNA to occur, it is necessary to have a template DNA, for the hard copy of the genetic information; an enzyme or polymerase, which is a protein of complicated structure that recognizes a particular sequence called the promoter on the DNA and begins copying there; precursor nucleotides (ribonucleotide triphosphates) that are the building blocks of the RNA; and an ionic environment that includes salt (a two-component compound) and more complicated salts, such as magnesium. Having sufficient magnesium is essential to the transcription reaction. The magnesium tends to be bound up by the nucleotides in the reaction, which are the precursors for the RNA. Without an excess of magnesium, the nucleotides will soak up the magnesium, leaving none for the enzymes that need magnesium as a cofactor for activation. The transcription process begins as the polymerase scans and recognizes a starting place on the DNA and then copies that DNA, putting nucleotides into transcript or messenger RNA until the polymerase comes to a DNA-sequence that tells it to stop. At that point, the transcript of the gene is terminated.

For translation to occur, it is necessary to have messenger RNA; the ribosome machinery, which is generally in the form of a lysate made from wheat germ or rabbits (a lysate is a mixture of substances formed by cells that have been destroyed or dissolved; another name for these lysates is “cell free extract”); amino acids delivered to the ribosome (transfer RNA); nucleotides for an energy source; and an ionic environment that includes magnesium. The lysates all contain some amount of magnesium but until plaintiff made what it claims to be its discovery, most people did not measure how much might be in any particular lysate; they were concerned primarily with the amount of added, magnesium (the exogenous magnesium rather than the endogenous magnesium).

A researcher who performs transcription and translation cannot just look at the final product and know whether RNA has been transcribed or protein has been produced. In order to evaluate the outcome, the researcher must start with a radioactive nucleotide. If this nucleotide is incorporated into the string of RNA, the researcher can confirm the synthesis of RNA by measuring the incorporation of the radioactive nucleotide into the product, using a machine that measures radioactivity. In the same way, by using a radioactive amino acid in the translation mixture, the researcher can check for the presence of that radioactive amino acid in the resulting product to determine whether any protein has been produced. To determine what protein has been produced, the researcher uses a procedure called electrophoresis, in which denatured proteins are loaded into a hole in a gel and the gel is put into an electric field. The gel is a sieve, made up of many different sized holes. Small proteins will make their way through the gel quickly; larger ones will move more slowly because their way will be blocked by some of the smaller holes, requiring them to move sideways to find a big hole. The researcher exposes the gel to an x-ray film to produce a picture for analysis. Knowing that each amino acid has a different molecular weight, the researcher can add the sizes of each amino acid and predict the size of the resulting protein. If the bands shown on the x-ray turn out to be the size predicted, that is an indication that the right kind of protein is being produced.

B. Plaintiffs Claimed Inventions

On October 11, 1991, plaintiff applied for a patent on coupling transcription and translation in one reaction; on- March 10, 1992, the patent examiner rejected nearly all the claims for the stated reason that they were anticipated by the Baranov et al. patent application and obvious over Baranov, in view of Suzuki. Plaintiff responded that Baranov did not teach a batch reaction, but the examiner was unconvinced and rejected the application a second time. Plaintiff appealed the rejection to the Patent Office Board of Appeals and Interferences, but withdrew its appeal in February 1994 and filed a continuation application, limiting its claims to batch reactions. Eventually, on June 28, 1994, the ’637 patent issued. The relevant claims read as follows:

I. A method for coupling transcription and translation in a cell-free extract derived from cells from the group consisting of plant and animal cells in a static reaction to produce protein, said method comprising

adding a DNA template to said extract, adding ribonucleotide triphosphates to said extract,

adding a RNA polymerase to said extract, and

adding a sufficient amount of a magnesium salt to said extract to raise the magnesium concentration to a level where RNA is transcribed from said template DNA and the RNA translates into said protein.

3. The method of claim 2 wherein said final magnesium concentration is about 2.5 mM [millimolar] to about 3.5 mM.

4. The method of claim 2 wherein said final magnesium concentration is about 2.6 mM to about 3.0 mM.

8. The method of claim 2 wherein the potassium concentration of said lysate is adjusted to about 40 mM to about 100 mM.

II. The method of claim 2 wherein said polymerase is selected from the group consisting of SP6, T7 and T3 RNA polymerases.

12. The method of claim 2 wherein said polymerase is selected from the group consisting of SP6, T7 and T3 RNA polymerases.

13. The method of claim 12 wherein a polymerase promoter sequence is located at one end of said multiple cloning region. 17. The method of claim 2 wherein 0.4 mM of each of said ribonucleotide triphosphates are added to said lysate.

34. A method for producing protein from a DNA template having a specific polymerase promoter sequence through coupled transcription and translation in a batch reaction, said method comprising the steps of preparing a solution of eukaryotic cell-free extract of cells selected from the group consisting of plant and animal cells, modifying said extract solution with sufficient concentrations of said template DNA having a specific polymerase promoter sequence, ribonucleotide triphosphates, amino acids and a polymerase corresponding to said promoter sequence of said template DNA, and adding a sufficient amount of a magnesium salt to said extract solution to raise the final magnesium concentration to a level where RNA is transcribed from said DNA template and said RNA translates into protein.

37. The method of claim 36 wherein said final magnesium concentration is about 2.5 mM to about 3.5 mM.

38. The method of claim 36 wherein said final magnesium concentration is about 2.6 mM to about 3.0 mM.

48. The method of claim 36 wherein said DNA template has a multiple cloning region.

49. The method of claim 48 wherein a polymerase promoter sequence is located at one end of said multiple cloning region.

51. The method of claim 36 wherein 0.4mM of each of said ribonucleotide triphosphates are added to said solution.

68. A kit for producing protein from a DNA template through coupled transcription and translation, said kit comprising the following components adapted to be used in a batch reaction: eukaryotic cell-free extract of cells selected from the group consisting of plant and animal cells, ribonucleotide triphosphates, RNA polymerase, and magnesium salt at a concentration whereby RNA is transcribed from DNA and RNA translates into protein.

In February 1996, plaintiff was granted its ’817 patent. The relevant claims of that patent read as follows:

1. A method for coupling transcription and translation in a eukaryotic cell-free extract to produce protein in a static reaction comprising the steps of:

adding a DNA template to the extract;

adding ribonucleotides triphosphates to the extract;

adding a RNA polymerase to the extract; and

adding a sufficient amount of magnesium salt to the extract to raise the magnesium concentration to a level where RNA is transcribed from the DNA template and RNA translates into protein.

3. The method of claim 1 wherein the RNA polymerase is selected from the group consisting of SP 6, T7 and T3 RNA polymerases.

13. A kit for producing protein from a DNA template through coupled transcription and translation, said kit comprising the following components adapted to be used in a batch reaction: eukaryotic cell-free extract, ribonucleotide triphosphates, RNA polymerase, and magnesium at a concentration whereby RNA is transcribed from the DNA template and RNA translates into protein.

The specifications of both the ’637 and the ’817 patents teach that the critical component in successful coupling of transcription and translation in eukaryotic systems is the concentration of magnesium ions in the reaction mixture. Magnesium occurs naturally in most rabbit reticulocyte lysates, typically in the range of 1.6 to 5 mM. Production of protein does not occur when magnesium concentrations present in the standard lysate are left unchanged. The inventive concept claimed in the ’637 patent is that the control of the magnesium concentration makes the difference between the success and failure of the coupled transcription and translation reaction. The meaning of “coupled transcription and translation” has been construed as covering any reaction in which “any” simultaneous transcription and translation occurs. Order of Feb. 28,1997 at 78.

C. State of the Art of Protein Synthesis in October 1991

Before plaintiff applied for a patent in October 1991, the state of the art for doing protein synthesis of eukaryotic DNA was to perform two separate sequential batch reactions, each optimized for its particular purpose of transcription or translation. Researchers tried various forms of optimization, such as using more magnesium in the first reaction than in the second or raising the temperature for the first reaction and lowering it for the second.

When researchers do separate transcription and translation reactions, they do a first reaction in which DNA is transcribed into RNA in a transcription reaction. They then add RNA from the transcription reaction to a second reaction for translation. Plaintiff marketed two-step transcription and translation kits for some time before filing the patent application that became the ’637 patent.

Before October 1991, researchers could use commercial products based on bacterial systems for synthesizing message from DNA, as well as procedures or protocols (the scientific version of a recipe) for doing such reactions. The researchers would make up a transcription reaction consisting of nucleotides; ions, including magnesium; a DNA template; and a RNA polymerase. The resulting transcription would continue for a matter of hours. When it was done, the researchers could extract the RNA, that is, purify it, before adding it to the translation reaction. Alternatively, they could add a small portion of the transcription reaction to the translation reaction, as described in the instructions published by Boehringer Mannheim, a company that, like plaintiff, manufactured a number of kits for performing transcription or translation. The instructions for one of the Boehringer Mannheim kits (exh. # 1065) advised researchers that a small amount of undiluted transcription reaction would stimulate translation efficiently when added to the translation reaction. The company advised researchers that they could run a transcription reaction, take some of the product and add it to Boehringer Mannheim’s rabbit reticulocyte lysate and produce protein. The company cautioned, however, that as the amounts of the transcription reaction increased, translational activity tended to decline, for two reasons:

firstly 1 [microliter] of the transcription reaction contains about the amount of RNA that is needed for efficient translation in the lysate. Large amounts of RNA have been shown to reduce translation. Secondly, the transcription reaction contains [magnesium chloride], 6 mmol/1, and m7G(5')G, 500 ¡xmol/1. Both reagents have also been shown to reduce translational activity when their concentrations are increased in the [translation reaction],

Boehringer Mannheim recommended adding EDTA to the transcription reaction before adding a small amount of the transcription reaction to the translation reaction. (EDTA binds up magnesium, leaving less free magnesium when the transfer of the transcription product is made to the translation system.)

Coupled transcription-translation systems were available or known in 1990 for proka-ryotic (no nucleus) systems and for vaccinia core (a DNA virus). Around 1990-91, persons skilled in the art thought that transcribing and translating required two separate batch operations and that if researchers failed to optimize either reaction, they would not get as much protein.

In 1990-91, plaintiff produced and sold a two-reaction kit (which is still available). If a researcher were to put both batches into the same test tube at the same time the reaction would not work because the ionic conditions are different for each step. The optimum magnesium concentration for the first reaction is six millimolar; the optimum for the second reaction is around two millimolar.

Researchers encountered certain problems in performing two-step reactions, particularly if they followed the procedure of extracting RNA before beginning the translation process. RNA is very susceptible to degradation by RNase, an enzyme that is ubiquitous in laboratories; the compounds needed for purifying the RNA away from the protein are caustic; and the linearizing of the DNA using a restriction enzyme is time-consuming.

Researchers have been interested in finding a way to combine the two steps of transcription and translation in a coupled (one-step) eukaryotic protein synthesis system since the early seventies. Their interest increased in the middle and late seventies, when the first cloning plasmids came into existence and researchers were able to clone copies of messenger RNA that existed within cells. (Plasmids are pieces of DNA found naturally in certain bacteria that can be cut to insert a protein, thereby enabling the researcher to study the expression of the gene as the plasmid replicates itself in the bacterial cells.) Around this same time, two-step reactions were developed for protein expression in eukaryotic extracts. The early versions used E. coli or RNA polymerase and eukaryotic translation extracts; researchers performed a separate transcription reaction and then transferred the messenger RNA into a translation reaction. In the early eighties, the development of phage polymerases had a strong effect on transcription reactions. Unlike E. coli RNA polymerase, which recognized not only the promoter in front of the gene to be studied but promoters in front of other genes, the phage polymerases were extremely specific for their promoters and had high transcriptional activity.

D. Person of Ordinary Skill in the Art

The “art” is the design of products such as the TNT kit that plaintiff sells to researchers to enable them to perform coupled, single batch transcription and translation. The person of ordinary skill in this art is one who has either a doctoral degree or a bachelor’s degree plus several years of experience in the field of molecular biology.

E. Prior Art References

Plaintiff cited a number of references in its patent application, including a patent application by Baranov et al. (Russian PCT patent application, W091/02076 (European Patent No. 0593757A1), an article by Spirin, Baranov and others in the journal Science, vol. 242, pp. 1162-1164 (1988); an article by Baranov et al. in the journal Gene, vol. 84, pp. 463-66 (1989)); and others. Plaintiff did not cite any articles by Coen, Stueber or Perara and Lingappa. (Defendant contends that these previously published articles and patent application would have taught or suggested to the person of ordinary skill in the art both that transcription and translation reactions could be performed in one step and the optimum magnesium concentration for making a one step reaction possible and effective, thus making plaintiffs invalid under 38 U.S.C. § 103, which prohibits obtaining a patent “if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.” Defendant argued also that plaintiffs failure to cite Coen, Stueber and Perara and Lingappa in its patent applications rendered its patents invalid but this argument was rejected in the February 28 order.)

1. Content

As early as 1977, it was known that genes of the influenza virus RNA could be transcribed and translated from RNA using nuclease-pretreated rabbit reticulocyte lysate (that is, lysate pretreated to remove any messenger RNA so as to make the lysate highly sensitive to exogenous messenger RNA). A 1977 article by Content (exh. # 1021) describes the process as using a concentration of magnesium intermediate between the optimum for transcription and that for translation, or between five millimolar for translation and 1.5 to two millimolar for transcription. The Content article made no reference to transcribing DNA.

2. Pelham

Around 1978, an article by Pelham (exh. # 1048) discussed a coupled transcription and translation system for vaccinia cores. The reaction starts with the transcription of viral DNA and ends with protein. A scientist reading the article would understand when working with vaccinia cores that if a system for making messenger RNA is provided, messenger RNA can be translated in the same tube in which transcription takes place. According to the article, the transcription mix was incubated for 45 minutes and then diluted fivefold into a translation mix prepared as for coupled synthesis but lacking the magnesium-balanced nucleotide triphosp-hates contained in the transcription system. Pelham taught the addition of actinomycin D to inhibit transcription.

3. Coen

An article by Coen et al. (exh. # 1089), published in 1977, describes a linked transcription and translation procedure in which a transcription reaction using E. coli RNA polymerase is optimized and a small portion of the transcript product is taken out and diluted into a translation reaction optimized for translation. Coen shows a concentration of ten millimolar magnesium acetate for the transcription reaction and only two millimo-lar magnesium in the translation reaction. It is unclear from Coen whether the two milli-molar magnesium in the translation reaction is added magnesium or magnesium carried over from the transcription reaction into the translation reaction. Coen shows the four nucleotide triphosphates at a half millimolar in the transcription reaction and an unknown amount in the translation reaction equal to 20 percent of whatever was left over in the transcription reaction, with no nucleotides added. Coen adds EDTA (a magnesium binding chemical) in an apparent attempt to bind some of the magnesium coming from the transcription reaction. The transcription-translation system is described as linking. There is no reference to coupling and no reference to transcription taking place in the translation reaction.

4. Stueber

In a 1984 article, Stueber et al. (exh. # 1062) described an accurate and efficient two-step synthesis of single proteins from cloned DNA sequences in a test tube. The transcription process uses a template DNA with a promoter derived from bacterial viruses, an RNA polymerase derived from E. coli bacteria, with a buffer and in the presence of 10 millimolar magnesium acetate, other ions, four nucleotides, spermidine, and DTT, plus a ribonuelease inhibitor to prevent degradation of RNA. Stueber reported that after the transcription reaction had run for 20 minutes, he put the mixture on ice to cool it and then used some of it in a translation assay, using a translation system derived from wheat germ (wheat germ lysate) and 2.8 millimolar magnesium acetate in addition to whatever magnesium was in the wheat germ lysate. The translation process continued for 60 minutes. No transcriptional inhibitor was added. Stueber said nothing in the paper about transcription occurring during the translation reaction and included no data to show that there would have been transcription in the second reaction.

Stueber’s paper focused on the separate transcription reaction and the use of T5 RNA polymerase promoter with E. eoli RNA polymerase in an optimized transcription reaction. Stueber added the nucleotide ATP to the translation reaction after it started; the nucleotides GTP, CTP and UTP were carried over from the transcription reaction. He did the two reactions at different temperatures: 37 degrees C. for transcription; 25 degrees C. for translation.

5. Perara and Lingappa

In an 1985 article, Perara and Lingappa (exh. # 1050) described a two-step transcription and translation process using rabbit reti-culocyte lysate (made according to a procedure reported by Merrick) as the translation machine. The authors used DNA templates and a bacteriophage promoter. The transcription reaction was conducted for 60 minutes, after which a portion of the volume was transferred to a translation reaction without the addition of any transcriptional inhibitor. Perara and Lingappa reported .2 millimolar magnesium chloride in the reaction mixture. Id. at 2294. The reference does not inform a reader of the total magnesium concentration and it does not report any transcription occurring in the translation reaction.

Perara and Lingappa used two separate transcription and translation reactions, with both reactions optimized for the particular functions they were to perform. Like Stue-ber, Perara and Lingappa did the two reactions at different temperatures (40 degrees C. for transcription; 24 degrees C. for translation).

6. Spirin and Baranov Papers

In a 1988 paper in the journal Science, Spirin, Baranov and others wrote about a continuous flow translation system they had developed and which they said was a new method of doing in vitro translation that overcame problems that had existed for 20 years in the art of in vitro translation. The system involved adding messenger RNA to a prokaryotic extract, rather than using DNA templates. According to the authors, their continuous flow translation system enabled protein synthesis to continue for long periods of time.

In a 1989 article in Gene, Baranov and Ryabova wrote about the use of rabbit reticu-locyte eukaryotic extract for continuous translation. This was not a coupled system because it did not transcribe RNA. Instead, the RNA was added to a continuous translation system. Again, the system enabled protein synthesis to continue for a long time (as long as 90 hours) and produced about 5,000 times as much protein as other methods.

7.Baranov Patent Application

An international version of a Russian patent application by Baranov and others in the Spirin group was published in February 1991 (exh. # 1109). The application disclosed a continuous flow reaction for obtaining polypeptides in a cell-fi*ee system of coupled transcription and translation in both prokaryotic and eukaryotic extracts, conducted in a single reaction vessel. Baranov et al. took a cell-free extract such as rabbit reticulocyte lysate; a DNA template; nucleotides (the precursors to make RNA); amino acids (the precursors to make proteins); RNA polymerase; magnesium and other salts and placed all the ingredients into a reaction vessel, which was hooked up to a system that allowed new nucleotides, amino acids and magnesium to come into the system and subtracted spent, free agents, the derivatives, unused reagents and the protein product. Baranov described several different examples of the use of the system. Example 4 used rabbit reticulocyte lysate as the translation machinery, with RNA polymerase from bacteriophage SP6. The purpose of the continuous flow process is to remove products from the reactor through a semipermeable membrane while adding substrates simultaneously in order to maintain their original concentration. According to Example 4, 1.5 micromolar of magnesium was added at the outset. The example does not describe the preparation of the reticulocyte lysate used in the experiment. The patent application does not describe any batch reactions.

F. Plaintiffs Development of its Patents

Gregory Beckler was the project leader of a research team at the plaintiff company that included Tom Van Oosbree, John Van Her-wynen and Dave Titus. The team worked unsuccessfully for over a year trying to develop Baranov’s continuous flow system as a commercial product. It undertook continuous flow experiments in an Amicon 8 MC stirred cell unit that has a hole for adding the feed solution (buffer A) into one chamber of the unit. The incubation mixture goes through another hole and the stir bar is activated to help force solutions through the membrane in order to remove spent ingredients and product. The unit is kept in a cold room because the product coming out into the tubes must be kept at 4 degrees C. The stirred cell unit keeps the actual incubation mixture at a much higher temperature (34 degrees C. for rabbit reticulocyte lysate).

The team experienced problems trying to replicate the Baranov continuous flow reaction. Because the reactions are fairly viscous, the membranes would clog, preventing the reaction from maintaining a constant volume. It took several hours until the proteins from the extract would stop coming out in the fractions coming off the continuous flow system. Plaintiff was never able to obtain the results reported in Baranov, although the team tried other devices and technologies and experimented with changing the variables from the amounts suggested. At best, the protein production never exceeded by very much what could be produced in a standard two-batch reaction; at worst, it was non-existent. Plaintiff abandoned work on the continuous flow project in March 1991.

In April 1991, after attending a meeting at which Spirin presented the continuous flow technology, Van Oosbree tried a coupled batch reaction, using the most sensitive reporter (luciferase) available. The experiment was a failure; no protein was produced. In a later experiment, however, Van Oosbree buried the concentration of the lysate and diluted it and made more protein. At that point, the team started focusing research efforts on inhibition. By chance, Dave Thompson tried a buffer known as TA that is used for restriction enzyme digestion and found that when he used it in a two-step batch reaction, he got rid of the inhibitory effects on translation. His initial thinking was that the inhibitor that was removed was the magnesium. On June 20, 1991, Thompson succeeded in making a coupled one-batch reaction, using the TA buffer.

Between April and June 1991, a group made up of Van Oosbree, a representative from plaintiffs research and development department and another from marketing voted down Beckler’s proposal to develop a coupled batch reaction, on the ground that it was not feasible and would take too long to develop.

Earlier, on May 13, 1990, Randall Dimond, plaintiffs Chief Technical Officer, had sent an e-mail message to Van Herwynen, stating:

Neither of the eukaryotic systems has transcriptional activity. However, I think we could possibly make them into a coupled assay by adding T7 or SP6 polymerase and appropriate buffers and nucleotides, etc. Dave Mead made the observation that when he added the whole Riboprobe transcription reaction (after transcription) to Lysate he got more protein synthesis than if he just added the RNA that had been produced. He felt this probably meant that he was continuing to get transcription after the Riboprobe mix had been added to the Lysate.

Plaintiff filed its initial patent application in October 1991 and produced its first TNT system in February 1992. In the first twelve months of production, the TNT product had sales of $600,000, and in the second year, $1 million. In 1993, plaintiff received an award for having one of the 100 most innovative products for that year.

G. The Craig Paper

In a 1992 article, Craig et al. described the authors’ successful attempts to combine coupled transcription and translation in a single reaction and noted that this had not been attempted previously, “possibly because it was thought that the optimum conditions for in vitro transcription and in vitro translation are so very different that no single set of conditions could be found under which both processes would function with reasonable efficiency.” (Exh. # 61 at 4987)

H. Defendant’s Development of its Products

Defendant never made any attempt to replicate the Baranov continuous flow process or to convert it to a batch process before plaintiff applied for its patent. When Robert Mierendorf, defendant’s vice-president, directed defendant’s scientists to conduct experiments to develop the product that became STP1, he did not give them the Bara-nov patent application, but the Craig paper that was written after plaintiffs patent application was filed.

Van Oosbree worked for plaintiff from 1984 to 1992 before going to work for defendant, where he was one of the scientists assigned to develop the STP product. His experiments in conjunction with the Craig paper did not work well, so he purchased a TNT kit produced by plaintiff, measured the endogenous magnesium in the kit, determined the nucleotide concentrations and adjusted defendant’s Red Nova lysate so that it would end up with a concentration similar to the TNT product.

When defendant produced its infringing product, STP (Single Tube Protein), it touted the advantages of the product as being more convenient, faster and capable of producing higher yields than the standard in vitro transcription and translation systems. In the accompanying manual, defendant recommended 2.5 mM magnesium concentration as the final magnesium concentration (the total magnesium in the system). In an advertisement, defendant described its system as “the next generation in coupled t ranscription/translation for rapid gene analysis.”

After plaintiffs ’637 patent issued, plaintiff wrote to defendant to advise it that defendant’s STP system was infringing the claims of the patent. Defendant withdrew its product from the market. In 1994, defendant introduced a new product, now referred to as STP2. Defendant tried to design the product to avoid infringement. The product is designed for in vitro synthesis of proteins from DNA templates containing a bacteriophage T7 or SP6 RNA polymerase promoter and can be used to express proteins from supereoiled plasmids. Both systems use a two-step reaction. The kit user combines a transcription mix including ribonucleotide triphosphates, RNA polymerase and magnesium salt with a DNA template and performs a transcription reaction for 15 minutes. In this step, no simultaneous transcription and translation occur. Following the completion of the transcription reaction, the user adds a sample of the reaction products from the transcription reaction, in unpurified form, to a translation mix consisting of rabbit reticu-locyte lysate, amino acids, and nucleotides. This translation step continues for 60 minutes. The translation reaction is a static or batch reaction. During the translation reaction, there is sometimes simultaneous transcription and translation, but not always. When the ingredients are combined in the second step, the magnesium concentration is 2.74 mM.

I. Expert Witnesses

(Much of the expert witness testimony focused on the question of anticipation under 35 U.S.C. § 102, that is, whether a single prior art reference anticipated plaintiffs invention by describing every element of the invention before plaintiff invented it and applied for a patent. I concluded at the end of defendant’s case that defendant had failed to show invalidity of the patents by anticipation; for this reason, I have not summarized the witnesses’ testimony on anticipation but have limited the description of their testimony to the issues of obviousness: whether earlier published articles or the Baranov patent application taught or suggested to one of ordinary skill in the art that both transcription and translation could occur in a coupled batch reaction in a single test tube, that the total magnesium concentration was crucial to the success of a coupled reaction and that the optimum magnesium concentration that would enable such a coupled reaction to occur would be between 2.5 mM to 3.5 mM total magnesium concentration (including the magnesium in the lysate and added magnesium).)

David Bishop is a doctor of philosophy employed by the University of Oxford, Oxford, England. His life work has been the study of RNA viruses, including influenza. He has published about 800 scientific papers in the general field of molecular biology, is the editor of a monthly magazine and a reviewer of articles for a number of other journals. He is the named inventor on two patent applications involving the expression of protein synthesis in cells.

Carl W. Anderson is a senior scientist at the Brookhaven National Laboratory. He earned his Ph.D. in microbiology in 1970 and did postdoctoral work at the Cold Spring Laboratory on Long Island before joining Brookhaven in 1975.

Robert Mierendorf earned his Ph.D. in 1980, investigating the effects of hormones on transcription in cancer cells. He did postdoctoral work at the University of Wisconsin and joined plaintiff in 1984 as a senior scientist and director of research and development. While in plaintiffs employ, he led the group that did custom services for academic laboratories and others and he helped design certain products for in vitro transcription employing bacteriophage SP6 and T7 RNA polymerase. When plaintiff decided to terminate the activities of the custom service group in 1989, Mierendorf left and helped form the defendant company.

Gregory Beckler is employed as a senior research scientist in plaintiffs research and development department. He has a Ph.D. in cellular development biology and has published a number of articles in peer review journals.

Randall Dimond is plaintiffs vice president and chief technical officer. He earned a Ph.D. at the University of San Diego in 1975 and had additional training at the Massachusetts Institute of Technology in the area of in vitro protein synthesis. He joined the University of Wisconsin in 1977 as an assistant professor in the Department of Bacteriology. He left the university in 1984 to become vice president in charge of research at the plaintiff company.

Rosemary Jagus is a researcher at the Center of Marine Biotechnology, which is part of the University of Maryland. She has a Ph.D. in biochemistry and has worked at the National Institutes of Health and the University of Pittsburgh. Her research focuses on the regulation of protein synthesis.

J. Expert Opinions

1. Bishop

Bishop believes that it would have been obvious to anyone in the field to do a coupled batch reaction from reading the Baranov patent application for a continuous flow system. He would read the application as instructing the researcher to put together a volume of rabbit reticulocyte lysate and an equal volume of twofold concentration of buffer A, so that the final concentration of buffer A is onefold. In Bishop’s view, Baranov teaches that all of the ingredients listed in Baranov are present at the outset, making Baranov a batch reaction. It is only when the machine is turned on that the continuous flow reaction begins.

Bishop agrees that the way in which Bara-nov’s Example 4 is worded leaves it unclear whether the concentrations listed after the words “buffer A” are the total concentrations for the incubation mixture plus the buffer or just for the buffer. However, the application provides that the magnesium acetate concentration is maintained throughout the process and makes no such provision for any other form of magnesium, leading Bishop to think that the reference is to added magnesium and not just that in the lysate. Example 4 lists the constituents of the reaction as follows:

1 ml of the incubation mixture contains 600 (o-l of lysate from rabbit reticulocytes, o.l ml of plasmid with the gene of chloram-phenicol acetyl transferase under the promoter of SP6 polymerase obtained according to the method described (Molecular Cloning, 1989, Cold Spring Harbor Laboratory Press, ed. J. Sambrook, E.F. Fritsh, T. Maniatis, p. 1-21), 30,000 U of SP6 polymerase, 0.1 mg of pyruvate ki-nase, 50 U of the ribonuclease inhibitor from human placenta, 5 |xg of each of the protease inhibitors (leupeptin, chymotryp-sin) and « 2-macroglobulin in buffer A: 25 mM HEPES, pH 7.6, 1.5 mM MgAc2, 100 mM KAe, I mM ATP, 0.4 mM GTP, 0.4 mM CTP, 0.4 mM UTP, 0.25 mM spermi-dine, 4.0 mM dithiothreitol, 6 mM creatin phosphate, 20 p.M [35S] Met with specific radioactivity of 800 mCu/mmol, 20 pM of each of the other 19 amino acids.

Bishop reads Baranov as directing the researcher to make up one milliliter of a mixture, using 600 microliters of rabbit reticulo-cyte lysate plus enough buffer to render it the equivalent of the final concentration of buffer A.

Bishop testified that before October 1991, it was known in the art that transcription inhibitors can be added when a researcher wants to insure there is no transcription in the translation reaction and that there is no transcription inhibitor added in the second step of Perara and Lingappa or anywhere in the Stueber process. This leads him to believe that there is no difference between what these two references say and plaintiffs patent claims, with the exception of the word “coupled.” All of the ingredients for transcription are present in Stueber and in Per-ara and Lingappa and no inhibitors are present to stop transcription. On the basis of the experiments performed by defendant in preparation for trial, Bishop believes that the reactions disclosed in Coen and Perara and Lingappa would have made it obvious in 1990 to one of ordinary skill in the art to perform a two-step reaction that was coupled in the second step.

Bishop believes that the state of the art in 1990 and early 1991 was that researchers did not measure or account for the magnesium in the lysates they used.

2. Anderson

It is Anderson’s belief that in Baranov the initial mixture would include the magnesium added through buffer A (1.5 millimolar) and that this concentration would not change very much as the process continued. If the concentration within the vessel is the same as the concentration on the outside, the magnesium will not be driven out of the vessel. If the magnesium level did fall, it would not fall significantly for hours. He finds no reason to believe that the level would fall to 1.5 millimolar in 20 minutes; in 20 minutes only half of volume would have been exchanged. Thus, even if all magnesium were free to move, it would go down only to 2.5 millimolar (halfway between the three millimolar free magnesium in the reaction and the two milli-molar magnesium in the buffer). He believes Baranov would produce protein as a batch reaction.

Anderson’s opinion is that claim 1 of the ’637 patent would have been obvious to one of ordinary skill in the art at the time of the publication of Baranov patent application because it would have been obvious to convert Example 4 of the Baranov patent application from the continuous flow process to a static mode reaction to make protein. He would read Baranov as telling him to set up a reaction just as it is described for the continuous flow at the initial stages of the reaction, putting all of the components shown in Bara-nov into a test tube. Anderson believes that in light of Baranov, claim 34 of the ’637 patent would have been obvious at the time to one of ordinary skill in the art.

Anderson believes that in light of Stueber, the methods described in claims 1 and 34 of the ’637 patent would have been obvious to one of ordinary skill in the art at the time the patent application was filed. His scientific experience teaches him that transcription must occur in the Stueber translation because all the components required for transcription are present and no inhibitor is added. Also, he believes that the components of the kit claimed in claim 68 would have been obvious to one of ordinary skill in the art at the time in light of Baranov or in light of Stueber. His conclusions would be the same with respect to claims 1 and 13 of the ’817 patent. He knows of no one who tried to determine before this litigation began whether the second reaction in Stueber was coupled.

Anderson believes that the experiment Beekler performed was deficient because he did not include at least the conditions at the beginning of the reaction, specifically a reaction made up in buffer A containing 1.5 milli-molar added magnesium.

Anderson has never tried to run any continuous flow system for producing protein. He was unaware until trial that stirring went on inside the chamber in a continuous flow system.

3. Mierendorf

Mierendorf testified that at the time plaintiff applied for its patent, researchers generally defined the appropriate amount of magnesium to use in a translation reaction as the amount added to the reaction, usually .5 to 2.5 millimolar, and not the sum of the added magnesium and the magnesium within the lysate. At the time, standard ranges for magnesium in a transcription reaction were 6 to 10 millimolar magnesium chloride.

Mierendorf testified that in 1990, it was known in the industry that coupled transcription and translation could be done in a test tube, as shown from the virus core information, the Boehringer Mannheim instructions to add some transcription directly to the translation mix and the Baranov papers describing the continuous flow system of conducting a coupled system. He believes that under the conditions described by Perara and Lingappa, the transcription reaction does not stop before it is added to the translation reaction, that transcription would continue in the translation reaction and that protein would be produced inevitably. It is his opinion that in the transcription reaction described in both Stueber and Coen, transcription would continue during step two, the translation reaction, and that the transcript made would be translated into protein.

Mierendorf believes that in 1991, a person of ordinary skill in the art would have found the claims of the ’637 and the ’817 patents obvious in light of Stueber, in light of Coen and in light of Perara and Lingappa. He admits there is no data in either the Coen or the Perara and Lingappa paper that tell the reader whether the second reaction is coupled or not. He believes that a paper by Krieg and Melton showing that 40 to 70% of the nucleotides would still be present in a Perara and Lingappa type of reaction would lead a person to believe that full-length transcript would be produced during the translation reaction in a two-step process.

In September 1996, Mierendorf oversaw a number of experiments designed to prove that transcription would occur during the translation reaction under the conditions described in Coen and in Perara and Lingappa. He concluded that the experiments proved that transcription would occur and that protein would be produced.

It is Mierendorfs opinion that in 1991, a person of ordinary skill in the art would have found it obvious from the Baranov patent application to make a coupled transcription and translation reaction in a static mode. In September 1991, in preparation for trial, he conducted experiments that demonstrate to him that if 1.5 millimolar of magnesium acetate is added to the reaction described in Baranov’s Example 4, easily detectable amounts of protein will be produced. The only difference he finds between Baranov’s Example 4 as written and claim 1 of the ’637 patent is that the patent describes a static reaction; however, Baranov can be considered a static system before the pump is turned on. It is his opinion that claims 2 to 17, 34, 35-51, 68, 69, 70, and 73-75 of the ’637 patent would have been obvious to one of ordinary skill in 1991 in light of Baranov as would claims 1, 2, 3-12, 13 and 14-16 of the ’817 patent.

Mierendorf testified that the range of magnesium concentration was between 1.6 and 4.3 mM in lysates available in 1990-91; that he would say that as a general rule of thumb for bacteriophage enzymes, it is necessary to have about 4 mM magnesium above the level that would be bound by the nucleotides so that if you had more nucleotides in the reaction, more magnesium would be required; that it is generally known that it is necessary to provide enough magnesium in the translation reaction to saturate everything that binds the magnesium and leave a little extra for the translation to occur; that in 1990-91, most people thought of the appropriate amount of magnesium in the translation reaction as the amount added to the reaction, usually in the range of .5 to 2.5 mM; and that in 1990-91, it was well known in the art that one needed to optimize the various components of the transcription and translation reactions, that is, to try different concentrations of a given component while keeping the rest the same; that generally researchers focused on optimization of magnesium and potassium; and that it was known that magnesium was very important. Mierendorf calculated the range of the magnesium concentration used in Baranov Example 4, starting with the contribution of the lysate (.96 to 3 mM), adding 1.5 mM of exogenous magnesium acetate, resulting in a magnesium concentration of 2.46 mM to 4.5 mM.

In the fall of 1994, Mierendorf wrote an article on coupled in vitro translation in which he described the Perara and Lingappa article as having shown that SP6 RNA polymerase transcription reactions could be added directly to reticulocyte lysate for the production of protein, eliminating the need to purify the RNA prior to translation. Mier-endorf went on to say that Spirin and later Craig showed that transcription and translation could be coupled; he did not ascribe such a showing to Perara and Lingappa.

In performing experiments in May 1995 to determine whether the Perara and Lingappa reference was inevitably coupled, defendant used a different lysate, gene and cap. Defendant’s researcher was Tom Van Oosbree, who had helped invent the ’637 patent while working for plaintiff. Van Oosbree produced a chimpanzee alpha-globin fusion protein, which was not the protein he tried to produce. (He started with a beta-galactosidase gene.) Van Oosbree experimented with a number of different levels of magnesium. The experiments were unsuccessful.

In additional experiments performed during the same month, defendant attempted to replicate the Perara and Lingappa experiments, using a different rabbit reticulocyte lysate, a different protein, two different polymerases and polymerase promoters, a CITE translation enhancer, a slightly more concentrated reticulocyte lysate and more added magnesium than intended by Perara and Lingappa. The results did not show full length protein. In other experiments, similar substitutions were made and the results were generally inconclusive.

In attempting to determine whether coupling would occur under the Coen conditions, Mierendorf used a different reticulocyte ly-sate, although one manufactured by a similar procedure. He did not attempt to express the same protein. He used a stronger promoter and different amounts of DTT. He believes the substitutions are acceptable and would not change the outcome of the experiments. Some of the lanes in some of the gels resulting from the experiments did not show a protein band. In Mierendorf s opinion, the absence of a band does not prove that protein was not made in the reaction. He believes the gels demonstrate that Coen is necessarily and always coupled.

Mierendorf is aware of no attempt by anyone to determine whether the two step reactions used before 1991 were coupled until he did the experiments for this case.

4. Dimond ,

Dimond does not believe that either Stue-ber, Coen or Perara and Lingappa discloses a reaction as described in Claim 1 of plaintiffs patent and that none of the reference makes the invention in Claim 1 obvious. In reading the references, he saw no indication that the second reaction (translation) was coupled. Perara and Lingappa discuss how protein got into the membrane of the cell, specifically focusing on whether the amino acid sequence would guide the protein into the membrane if the sequence were in the middle of the protein or whether the sequence had t