CardiAQ Valve Technologies, Inc. v. Neovasc Inc.

708 F. App'x 654
CourtCourt of Appeals for the Federal Circuit
DecidedSeptember 1, 2017
Docket2017-1302, 2017-1513
StatusUnpublished
Cited by5 cases

This text of 708 F. App'x 654 (CardiAQ Valve Technologies, Inc. v. Neovasc Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CardiAQ Valve Technologies, Inc. v. Neovasc Inc., 708 F. App'x 654 (Fed. Cir. 2017).

Opinion

Taranto, Circuit Judge.

This is an action brought by CardiAQ Valve Technologies, Inc. against Neovasc Inc." and Neovasc Tiara Inc. (jointly, Neo-vasc). Founded by cardiac surgeon Dr. Ar-shad Quadri, and soon joined by engineer Brent Ratz, CardiAQ set out to create a mitral-valve implant that could be delivered to the heart by catheter rather than open-heart surgery — a transcatheter mi-tral valve implant (TMVI). After developing several prototypes, CardiAQ engaged Neovasc to help with assembly of an aspect of the device. The joint work ended after about one year, but during that year, *657 Neovasc secretly launched its own TMVI project. Neovasc eventually secured a patent on its TMVI, U.S. Patent No. 8,579,-964, without naming anyone from CardiAQ as co-inventors. Both firms are today continuing their efforts to develop, test, and secure permission to market their TMVTs.

In this action, brought in the District of Massachusetts, CardiAQ alleged, as most relevant for purposes of this appeal, that Neovasc had misappropriated several of CardiAQ’s trade secrets and that Dr. Qua-dri and Mr. Ratz should be added as co-inventors on Neovasc’s patent. At trial, CardiAQ grouped its allegedly misappropriated trade secrets into six categories. The jury found misappropriation by Neo-vasc as to three of them, and it awarded $70 million in damages to CardiAQ, which the district court later enhanced by 30%, to $91 million. CardiAQ Valve Techs., Inc. v. Neovasc Inc., No. 14-CV-12405-ADB, 2016 WL 6465411, at *3, *5-7 (D. Mass. Oct. 31, 2016). The district court held that CardiAQ had also shown by clear and convincing evidence that its employees were entitled to be named as co-inventors on the ’964 patent. Id. at *15-19. The court denied CardiAQ’s motion for injunctive relief in part; specifically, it refused to require Neovasc to suspend its TMVI project for eighteen months. Id. at *7-10. On Neovasc’s appeal as to inventorship, misappropriation, and damages, and Car-diAQ’s cross-appeal as to the denied in-junctive relief, we agree with the district court’s well-reasoned decisions and affirm.

I

CardiAQ was formed in 2006 by Dr. Quadri and Mr. Ratz with the goal of developing a prosthetic mitral heart valve that could be implanted via a catheter entering the body through a small incision in the patient’s leg, making open-heart surgery unnecessary. The TMVI device consists of a metal frame to which valve leaflets made from animal tissue are sewn. In June 2009, Neovasc contacted CardiAQ to advertise its pericardial tissue products and services. Shortly thereafter, CardiAQ engaged Neovasc to provide the tissue leaflets and sew them to CardiAQ’s experimental frames. Both parties signed a nondisclosure agreement.

Neovasc supplied CardiAQ with animal tissue leaflets until April 2010. During the time the firms worked together, CardiAQ disclosed detailed information about at least three of its prototypes, called Rev. C, Rev. D, and Rev. E, to Mr. Randy Lane, the principal Neovasc employee in the collaboration. In October 2009, after receiving confidential information from CardiAQ, Mr. Lane started developing a TMVI for Neovasc. The Chief Executive Officer of Neovasc decided that Neovasc should not tell CardiAQ it had begun work on a competing design, and Neovasc kept its project secret from CardiAQ while they worked together. Mr. Lane continued to work on both projects simultaneously.

In May 2009, shortly after the collaboration ended, Neovasc filed a provisional patent application that ultimately issued as the ’964 patent, which describes and claims a TMVI with many of the same features as CardiAQ’s design. Neovasc plans to market its device under the brand name “Tiara.” 1 CardiAQ discovered that Neovasc was developing its own device in December 2011, when Neovasc’s patent application was published. The ’964 patent issued in November 2013. CardiAQ brought this suit against Neovasc in June 2014, seeking cor *658 rection of inventorship under 35 U.S.C. § 256 and damages and injunctive relief for, among other things, misappropriation of trade secrets and breach of the nondisclosure agreement.

Following a trial, the jury found that Neovasc had breached the non-disclosure agreement but did not award any damages for that breach. It found that Neovasc had misappropriated trade secrets described in three of the six categories defined in the jury instructions (Trade Secrets 4-6) and awarded CardiAQ $70 million in damages for the misappropriation. When Neovasc moved for a new trial as to liability and damages (it did not seek judgment as a matter of law), the district court denied the motions. CardiAQ, 2016 WL 6465411, at *10-14. The court also ordered Mr. Quadri and Mr. Ratz to be added to the ’964 patent as co-inventors, id. at *15-19; enhanced CardiAQ’s trade-secrets damages award by $21 million, id. at *5-7; and denied CardiAQ’s request to enjoin Neovasc from working on Tiara for eighteen months, id. at *7-9. The district court later calculated and awarded pre-judgment and post-judgment interest. CardiAQ Valve Technologies, Inc. v. Neovasc Inc., No. 14-cv-12405-ADB, 2017 WL 215961, at *1-3 (D. Mass. Jan. 18, 2017).

Neovasc appeals from the final judgment and post-trial rulings. Specifically, it challenges the co-inventorship ruling and the district court’s refusal to grant a new trial on the misappropriation of Trade Secrets 4-6 and the damages found by the jury. CardiAQ cross-appeals the denial of an injunction requiring Neovasc to suspend its TMTVT program for eighteen months.

Because the inventorship claim under 35 U.S.C. § 256 “aris[es] under ... [an] Act of Congress relating to patents,” we have jurisdiction over this appeal, including the pendent state-law claims. 28 U.S.C. § 1295(a)(1); see BBA Nonwovens Simpsonville, Inc. v. Superior Nonwovens, LLC, 303 F.3d 1332, 1336 (Fed. Cir. 2002).

II

A

The overall determination of co-in-ventorship is a legal one that we review de novo, but it is based on factual findings reviewed for clear error when, as in this case, made by the district court. Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352, 1362-63 (Fed. Cir. 2004); Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 1460 (Fed. Cir. 1998). To prevail under 35 U.S.C. § 256

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708 F. App'x 654, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cardiaq-valve-technologies-inc-v-neovasc-inc-cafc-2017.