The case related to Biedermann Motech’s patented polyaxial screw technology, which improves spinal stabilization. Biedermann sued Medtronic in 2001, alleging that three of the defendant’s screws infringed its US patent No. 5,207,678, which it had licensed to DePuy.
Medtronic initially won in a lower court. On appeal, the Court of Appeals for the Federal Circuit (CAFC) remanded the case to the district court, requesting that it consider whether the patent is infringed under the doctrine of equivalents. In September, a Massachusetts jury found Medtronic guilty of infringement and ordered the company to pay $226.3 million in damages to the plaintiffs.
Medtronic argued that if the product infringed under the doctrine of equivalents, it should be deemed invalid, as it would necessarily be ensnared by prior art. The Court reserved the issue to be decided in a post-trial evidentiary hearing. However, Judge Edward Harrington yesterday ruled in favour of the patent owner.
The Court also found that Medtronic had deliberately copied Biedermann’s invention, based on evidence of previous failed attempts to create a dissimilar one.
One of Medtronic’s arguments drew on the Supreme Court’s ruling in KSR v Teleflex, which Medtronic contended had significantly lowered the bar for determining the obviousness of a patent. It argued that under the new formulation of obviousness, Biedermann’s patent was invalid.
The Court disagreed with Medtronic’s interpretation of KSR, and in yesterday’s decision held that: “This Court notes that the bright-lined standard the defendants appear to be promoting is not consonant with KSR’s broader teaching, which suggests that flexibility and common sense, rather than rigidity and formalism, should drive the obviousness determination.”
A hearing on Biedermann and DePuy’s motion for a permanent injunction to stop Medtronic from manufacturing or selling the infringing products is scheduled for December 19.
A spokesman for Medtronic said that the company is ready to market a non-infringing screw it has been designing if the injunction is granted: “There will be no disruption of supply for surgeons who need these screws. If the injunction is issued, steps are in place to make the new screw available immediately.”
Luke Dauchot of Kirkland & Ellis, who served as lead counsel for Biedermann, said: “We feel we’re entitled to a permanent injunction. Biedermann feels quite pleased that the fundamental innovation of its patent was validated by the district court and that they recognized the evidence of Medtronic copying the invention.”
Also significant was the damages award in the case, which included $120 million in compensation for lost sales and $77 million for the category of “pull-through sales”, or “sales of other products that occur as a result of new customer relationships that are established through the use by surgeons of the patented product”, according to a transcript.
In a statement released after the September 27 jury verdict was announced, Pete Wehrly, senior vice-president and president of the Spine and Biologics business unit at Medtronic, said that the company was disappointed by the jury’s verdict.
“We appreciate the time and effort that the jury put into this case but we respectfully disagree and we will appeal. We respect the intellectual property rights of others, and will vigorously defend ourselves.”
