CHF’s Medical Device Is Chased From The Market

Posted on | May 7, 2008 | No Comments

2008-1335 Chase Medical v. CHF Technologies
ND/TX 3:04-cv-2570

Defendant CHF appeals from the final judgment entered by Judge Barbara Lynn on the jury’s verdict that CHF willfully infringed 2 Chase patents.  The court doubled the award under § 284, awarded attorneys’ fees, and entered a permanent injunction against sales of CHF’s Blue Egg product.

Chase’s patents are directed to a surgical technique known as left ventricular reconstruction or restoration (LVR)–essentially a procedure for excluding dead/damaged heart tissue.  It is also sometimes referred to as a Dor procedure. 
Infringement and validity arguments turned on the claim term "shaper," referring to an object placed within the ventricle to maintain the correct shape prior to closing.   Chase alleged that CHF’s Blue Egg is a shaper, although CHF argued that it was a "sizer" used to maintain the correct volume of the ventricle.

Trial and JMOL.  CHF argued that the prior art–including research by Dr. Dor–disclosed inserting a balloon into the ventricle to maintain sufficient volume.  According to CHF, Chase got its claims by taking advantage of a novice examiner who did not fully understand the art.  CHF also argued that the prosecution history and other evidence showed that the "shaper" concept was not inventive and did not distinguish over the prior art.  Neither the jury nor Judge Lynn was persuaded.

CHF also argued that there was insufficient evidence at trial to establish that the Blue Egg was in fact a "shaper."  Again, Judge Lynn was not persuaded. 

Finally, the jury awarded approximately $300,000 in actual damages.  The court rejected CHF’s challenge to this amount based on faulty market share assumptions.

Final Judgment.  The court applied the Read v. Portec factors and concluded that doubling the award was appropriate.  The court found CHF was aware of Chase’s comparable product and patents but ignored them and had no reasonable, good faith belief that it did not infringe.  The court was also influenced by CHF’s marketing material which initially touted the "shaper" capabilities of the Blue Egg, but which references and descriptions were later removed–the court viewed this as attempted concealment.  The court also found CHF "motivated to harm"–marketing to the same small group (200) of LVR cardiac surgeons as did Chase.  However, the court found CHF’s willful infringement was not "so egregious or blatant" as to justify treble damages.

The court also awarded post-judgment interest, costs, and attorneys’ fees.  On the latter, applying Fifth Circuit law, it used a lodestar analysis to determine that plaintiff was entitled to approximately $1.5 million.  An interesting discussion as to whether the attorneys’ fees award was too large based on the amount recovered–the court concluding that 2.5x was not excessive, noting cases of 6x.  Also, the court noted that injunctive relief was sought and obtained and needed to be considered as part of plaintiff’s success.

Documents:

2008-1335_Final_Judgment.pdf

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