Willful infringement affirmed; injunction vacated in light of eBayApril 13, 2007

The Federal Circuit affirmed a finding of willful infringement against a medical device manufacturer, but vacated a permanent injunction entered based on the old injunction standard to be reevaluated by the district court in light of the Supreme Court’s decision in eBay v. MercExchange.

The infringer obtained opinions of counsel regarding infringement at two different times. Initially, two of its lawyers advised that its product would likely be found to infringe, and that that claims at issue would likely be found valid. The second time, however, one of the attorneys revised his opinion, and instead stated that not only would the product not infringe, but also that the patent was likely invalid. The infringer’s problem? The infringer filed an application with the FDA to sell the infringing device before the second opinion was given. That, among other things, led the jury to conclude that the second opinion was not relied upon, and the willful infringement finding and concomitant 50% damages increase were affirmed.

More details of the case after the jump.

Acumed is the owner of the patent in suit, which claims an orthopedic nail for treatment of fractures in the humerus, or upper arm bone. The most common type of fracture of this bone occurs when an individual falls on his or her arm, breaking the shoulder ball from the remainder of the arm bone. In these situations, orthopedic surgeons use nails to reattach the ball to the rest of the bone by inserting the nail into the bones and fixing it into place using screws that pass through the nail.

The patent in suit claims a type of such a nail, and the broadest claim, which includes the limitations at issue on appeal, requires:

  1. An elongated tapered nail for securing fractures of the proximal humerus comprising: an elongated body having a curved shank configured to occupy an upper portion of the proximal humeral shaft, and a contiguous butt portion extending proximally from the shank and configured to occupy the humeral cortex; the butt portion being shorter than the shank and defining a plurality of at least three transverse holes, each defining a hole axis, with the three hole axes angularly offset from each other, such that the holes may receive fasteners attached to fragments of the humeral cortex.

The parties disputed the three emphasized terms, but the court affirmed on all three.

With regard to both the “curved shank” and “transverse holes” limitations, the court rejected Stryker’s (the alleged infringer) arguments on the basis that they sought to import limitations from the preferred embodiments disclosed in the specification into the claims. Specifically, the preferred embodiment’s shank was curved in such a way that it largely passed through the hole that is made with a broaching tool for insertion of the nail. The court found this unpersuasive in that while the preferred embodiment was described in this way, it was not described in limiting terms. In the words of the court: “The fact that usability with a broaching tool is merely a feature of a preferred embodiment provides sufficient rounds for refusing to read ‘curved’ narrowly.”

The court reached a similar result in affirming the construction of “transverse holes.” Stryker argued that because every disclosed embodiment described the holes a perpendicular, “transverse” should be read to mean “perpendicular.” The court disagreed once again, because the disclosed embodiments were simply preferred, not exclusive. Once again, in the words of the court: “While the disclosed embodiment possesses ‘perpendicular’ holes, the claim language covers all ‘transverse’ holes—a word that does not necessarily imply right angles.” Also, in describing the preferred embodiment’s holes, the description stated that the “plurality of transverse holes [are] perpendicular to the portion of the nail axis,” thereby implying a difference between transverse and perpendicular.

Notably, Judge Moore disagreed with this construction on the basis that the district court, instead of starting with the written description for the appropriate claim construction, started with a dictionary definition of “transverse” and then compared that to the written description. According to Judge Moore, under Phillips, claim construction must always start with the specification, and starting with a dictionary definition in this case led to the wrong result. The majority responded that the Phillips decision specifically allowed the use of dictionaries, and further provided no specific time when dictionaries could or could not be consulted in the claim construction process.

The final term, “angularly offset,” was only disputed in terms of infringement, not claim construction. The term was defined as “the axes of the three holes are spaced apart from each other, an angle formed by the axes of any two such holes when viewed in two dimensions from the butt end or from the side, and the axes are not aligned in a parallel orientation.” Stryker’s argument was based on geometry: because the axes of the holes did not intersect in three dimensions, Stryker argued that they were not angularly offset. However, the claim construction specifically stated that the angles could not be parallel when viewed in two dimensions, and accordingly the court rejected this argument. Stryker’s own drawing showed that the axes were not parallel when viewed in two dimensions.

As a result, the overall finding of infringement was affirmed. Turning to the issue of willful infringement, the court also found substantial evidence supported the jury’s finding of willful infringement. This was largely because initially, two patent attorneys opined that Stryker’s product would infringe the ‘444 patent, and even in light of that advice, it continued the process of entering the U.S. market by filing its FDA application. The fact that Stryker obtained a revised opinion from one of the attorneys before its products were actually sold did not mean that substantial evidence did not exist to support the willfulness finding, as “it is for the jury, not the court, to determine the weight and credibility to be given to the evidence.” Thus, while ordinarily an opinion of counsel is a “well-grounded defense to willfulness,” because here there was evidence that Stryker did not rely upon this opinion, it did not win the day.

Finally, the court vacated the permanent injunction entered by the district court. The lower court had applied the then-appropriate standard, the so-called “general rule” that a permanent injunction should issue upon a finding of infringement. In light of the Supreme Court’s eBay decision, the Federal Circuit vacated this decision, and remanded for reconsideration and application of the four-factor injunction test from eBay.

To read the full opinion in Acumed LLC v. Stryker Corp., click here.

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