Free Letter - District Court of Delaware - Delaware

Case 1:07-cv-00190-SLR Document 174 Filed O9/05/2008 Page 1 012
RIAYTON Sr
Kelly E. Faman
302-651 -7705
Faman@r|f.com
September 5, 2008
VIA E-FILING
The Honorable Sue L. Robinson
United States District Court
J. Caleb Boggs Federal Building
844 North King Street
Wilmington, DE 19801
Re: Siemens Medical Solutions USA, Inc. v. Saint-Gobain Ceramics and Plastics, Inc.,
C.A. No. 07-190
Dear Judge Robinson:
In accordance with the Court’s direction at the pretrial conference, Saint-Gobain submits
the following regarding the relevance of the manufacturing evidence Saint-Gobain intends to
present.
Saint-Gobain’s evidence respecting the manufacturing advantages of LYSO over LSO,
including evidence in the testimony of its expert witnesses Kenneth McClellan and Joel Karp,
will show that LYSO offers (1) reduced manufacturing costs attributable both to the lower
melting point of LYSO (providing energy savings as well as diminished attrition of the
components used for crystal growth, including the expensive iridium crucibles and ceramic
furnaces used in the process) as well as a superior worldwide infrastructure for the constituent
yttrium oxide powder (providing lower raw material cost as well as reduced issues associated
with material impurities in the crystal) and (2) production of high quality material with greater
uniformity of light output per crystal boule (resulting in greater cost efficiency in the
manufacturing process as well as an increased yield of high quality crystal per growth). Notably,
in U.S. Patent 6,624,420 (under which Saint-Gobain manufactures and sells its f’reLude 420
LYSO crystals as licensee), the inventors set forth in the Specification that LYSO was designed,
among other things, to address the higher melting point of LSO, its higher manufacturing cost
and the insufhciency of the then-current material purity of lutetium oxide to guarantee consistent
high light yield. United States Patent No. 6,624,420, at col. 4:1-32.
These manufacturing advantages are linked to the performance properties of LYSO and
establish that these differences between LYSO and LSO are not insubstantial. This evidence is,
therefore, relevant to infiingement and also the question of the amount of damages to which
Siemens would be entitled in the event of a tinding in its favor on infringement. See, e. g.,
Sfimfold Mfg. C0. v. Kirrkecxd Indus., Inc., 932 F.2d 1453, 1458-1459 (Fed. Cir. 1991) (affirming
district court award of damages reflecting mintafapturing advantage). In Slimfold, for example,
(?{p“% S1quare I 920 North King Street I Wilmington, DE 19801 I Phone: 302-651-7700 I Fax: 302-651-7701
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Case 1:07-cv-00190-SLR Document 174 Filed O9/05/2008 Page 2 ot 2
The Honorable Sue L. Robinson
September 5, 2008
Page 2
the district court had awarded plaintiff both royalty damages and damages reilecting "all profits
that [defendant] Kinkead realized in the form of manufacturing cost savings? Id. at 1458. On
appeal, plaintiff argued that the district court’s royalty damages award was erroneous. The
Federal Circuit disagreed, noting that it appeared "that the district court awarded such a small
royalty rate because the advantage of the Ford invention was primarily a manufacturing
advantage (for which the district court awarded damages separately) and did not greatly increase
the value of the entire door." Id. at 1459.
Accordingly, Saint-Gobain should be entitled to present its evidence on infringement and
also -- because the manufacturing properties of LSO and LYSO bear at least on the value of the
respective compounds -- to rebut the analysis of Siemens’ damages expert, Ms. Woodford.
Siemens’ in limine objections should therefore be overruled.
Respectfully,
Kelly E. Farnan (#4395)
KEF/th
cc: Jack B. Blumenfeld, Esq. (by e-mail and hand delivery)
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