Stryker Corporation v. Zimmer, Inc.

837 F.3d 1268, 120 U.S.P.Q. 2d (BNA) 1266, 2016 U.S. App. LEXIS 16646, 2016 WL 4729504
Court of Appeals for the Federal Circuit·Decided September 12, 2016·No. 2013-1668·Published·Cited by 26 cases

Opinion

PROST, Chief Judge.

This case returns to us on remand from the Supreme Court of the United States. Halo Elecs., Inc. v. Pulse Elecs., Inc., — U.S. —, 136 S.Ct. 1923, 195 L.Ed.2d 278 (2016). In the original appeal, Zimmer, Inc., Zimmer Surgical, Inc., and Zimmer Orthopaedic Surgical Products (collectively “Zimmer”) appealed from the final judgment of the United States District Court for the Western District of Michigan that U.S. Patent Nos. 6,022,329 (“’329 patent”), 6,179,807 (“’807 patent”), and 7,144,383 (“’383 patent”) were valid and willfully infringed.

We affirmed the jury’s findings that the patents were valid and infringed, and the jury’s award of damages to plaintiff-appel-lees Stryker Corporation, Stryker Puerto Rico, Ltd., and Stryker Sales Corporation (collectively “Stryker”). Stryker Corp. v. Zimmer, Inc., 782 F.3d 649, 653 (Fed.Cir. 2014). However, applying the then-controlling test for willful infringement and enhanced damages under In re Seagate Technology, LLC, 497 F.3d 1360 (2007) (en banc), we reversed the jury’s willfulness finding and vacated the associated award of treble damages and attorneys’ fees. Stryker Corp., 782 F.3d at 660-62.

Stryker petitioned for rehearing en banc, which this court denied. Stryker then filed a petition for a writ of certiorari in the Supreme Court. The Supreme Court *1271 granted certiorari to determine whether the Seagate test regarding willfulness and enhanced damages was consistent with the Patent Act. Halo Elecs., Inc., 136 S.Ct. at 1928.

In its decision, the Supreme Court determined that the Seagate test “unduly confines the ability of district courts to exercise the discretion conferred on them.” Id. at 1935. Because we decided the willfulness question under the Seagate framework, the Supreme Court vacated our pri- or decision and remanded the case for further proceedings. Id. at 1935-36.

On remand, we recalled our mandate and reopened the case. Because Halo was limited to the questions of willfulness and enhanced damages, it left the judgments on other issues 'undisturbed. For the reasons stated below, we therefore reaffirm the jury’s Endings that Stryker’s patents were valid and infringed. In light of the new willfulness standard articulated by the Supreme Court, we'also affirm the jury’s Ending of willful infringement. However, we vacate and remand the district court’s award of treble damages. Finally, we vacate and remand the district court’s finding that this was an exceptional cáse and its award of attorneys’ fees.

I

The patents at issue concern pulsed lavage devices. Pulsed lavage devices deliver pressurized irrigation for certain medical therapies, including orthopedic procedures and cleaning wounds. The particular devices at issue in this case are portable, battery powered, and handheld. They include both suction and discharge tubes, so they both spray fluid from an external source and also suction off fluid and debris. These devices represent an improvement over older pulsed lavage systems that required a central power source and external' mechanical pumps, which meant that they needed to be wheeled around the hospital.

Stryker and Zimmer are the two main competitors in the orthopedic pulsed lavage device market. Stryker began bringing battery-powered, handheld pulsed lavage devices to the marketplace in 1993. That same year, Stryker filed the application which eventually gave rise to the patents at issue. In February 2000, the first of these patents, the ’329 patent, issued. Later that year Stryker sued another manufacturer, Davol Inc., for infringement. That suit settled in 2001, and Davol took a license on the ’329 patent. The ’807 patent subsequently issued in January 2001, and the ’383 patent issued in December ,2006.

Zimmer introduced its first portable pulsed lavage device, the Var-A-Pulse, in 1996. In 1998, Zimmer began to develop a new design, which came to market soon thereafter as the Pulsavac Plus range of products. Zimmer’s Pulsavac Plus products achieved a.peak of $55 million in annual sales in late 2007 before they were withdrawn. from the marketplace due to a product recall, after which sales resumed in December 2008.

In 2010, Stryker sued Zimmer, alleging that Zimmer’s Pulsavac Plus devices infringed various claims of the ’329, ’807, and ’383 patents. The district court granted partial summary judgment in- favor of Stryker, finding infringement of the ’807 and ’383 patents’ asserted claims. The question of whether Zimmer infringed the single asserted claim of the ’329 patent, as well as Zimmer’s invalidity defenses against all of the asserted claims, went to trial. The jury found that the products infringed claim 2 of the ’329 patent and that all of the asserted claims were valid. The jury also awarded $70 million in lost profits. It further found that Zimmer had willfully infringed all three patents. The *1272 jury also found that Stryker had marked substantially all of its products that commercially embodied the patents-in-suit during the period it sought damages, pursuant to 35 U.S.C. § 287(a).

In August 2013, the district court issued an order rejecting Zimmer’s motions for judgment as a matter of law (“JMOL”) on various issues, affirming the jury’s verdict, awarding trebled damages for willful infringement, finding the case exceptional and thus awarding attorneys’ fees to Stryker, and imposing a permanent injunction. The district court subsequently entered final judgment pursuant to its order.

Zimmer appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

II

We turn first to Zimmer’s appeal on the issues of claim construction, infringement, and validity.

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Stryker Corporation v. Zimmer, Inc., 837 F.3d 1268, 120 U.S.P.Q. 2d (BNA) 1266, 2016 U.S. App. LEXIS 16646, 2016 WL 4729504 (Fed. Cir. 2016).

837 F.3d 1268 (Stryker Corporation v. Zimmer, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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