The following is a summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit for the week ending March 6, 2015. Evan Woolley and Michele Glessner prepared this edition.
Infringement: Doctrine of Equivalents: Generally
Infringement: Contributory and Induced Infringement: Generally
Remedies: Damages: Lost Profits
Remedies: Damages: Reasonable Royalty
Warsaw Orthopedic, Inc., et al. v. NuVasive, Inc., Nos. 13-1576, -1577 (Fed. Cir. (S.D. Cal.) Mar. 2, 2015). Opinion by Dyk, joined by Lourie and Reyna.
The Federal Circuit affirmed the judgment of the U.S. District Court for the Southern District of California regarding infringement and validity, but vacated the jury’s damages award and remanded for a new damages trial because the verdict intermingled lost profits and reasonable royalties.
Plaintiff Warsaw Orthopedic, Inc. (“Warsaw”) asserted U.S. Patent No. 5,860,973 (“the ’973 patent”) and U.S. Patent No. 6,945,933 (“the ’933 patent”) against defendant NuVasive, Inc. (“NuVasive”). NuVasive counterclaimed against Warsaw and its related company Medtronic Sofamor Danek USA, Inc. (“MSD”) for infringement of U.S. Patent No. 7,470,236 (“the ’236 patent”). The jury found that the ’973 patent was not proved invalid (infringement was not contested), that the ’933 patent was infringed, and that the ’236 patent was infringed. Damages were awarded for each. Warsaw filed a motion for supplemental damages and a permanent injunction with respect to the ’973 and ’933 patents and also filed a motion for judgment as a matter of law (“JMOL”) or a new trial with respect to the jury’s finding of infringement of the ’236 patent. NuVasive filed a motion for JMOL or a new trial regarding the finding of no invalidity of the ’973 patent, its infringement of the ’933 patent, and the lost profits damages awarded to Warsaw. All of the motions were denied, and they were all appealed.
The Federal Circuit affirmed on the issues concerning validity and infringement. The court rejected NuVasive’s argument that the ’973 patent was invalid as anticipated or rendered nonobvious by two prior art references or that it was indefinite because the dimensions of the implant depended on the dimensions of a patient’s vertebrae. In so doing, the court held that the district court properly looked to the preamble of the claim for clarification of the type of implant claimed and further held that the claims were not indefinite because the general dimensions of vertebrae are known.
The Federal Circuit also rejected NuVasive’s arguments that it did not infringe the ’933 patent, holding that substantial evidence supported the infringement verdict under the doctrine of equivalents. With respect to MSD’s arguments that it did not infringe the ’236 patent, the Federal Circuit again affirmed the lower court, holding that MSD’s position was contrary to the claim construction (which MSD did not challenge). The Federal Circuit also held that there was substantial evidence supporting MSD’s liability for induced infringement because it trained doctors specifically on infringing implementations.
At trial, Warsaw presented evidence as to both lost profits and reasonable royalties (as alternatives). The jury awarded Warsaw $101,196,000 in damages for “Lost Profit Damages (with royalty remainder).” The Federal Circuit vacated the damages award, holding that it was impossible to tell whether the jury gave both lost profits and reasonable royalties for the same sales (which is impermissible) and that Warsaw was not entitled to any lost profits, as Warsaw did not practice any of the patents. Also, Warsaw’s licensing of the patents to MSD, Medtronic Puerto Rico Operations Co., and Medtronic Sofamor Danek Deggendorf GmbH constituted lost profits of another entity, which could not be claimed. The Federal Circuit also held that Warsaw could not recover lost profits for decreased sales of fixations because the sales were not recoverable convoyed sales; rather, the fixations could be used in many applications other than infringing spinal implant surgeries. The Federal Circuit also held that it was improper to consider “true-up” payments to Warsaw from its related entities for lost profits because it was unclear what amount of the payments actually related to the patents at issue.
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