Disregarding Claim Construction Costs Medtronic Over $10 Million

Posted on | June 6, 2008 | No Comments

2008-1401 Depuy Spinal v. Medtronic Sofamor
D/MA 01-CV-10165
Judge Edward Harrington

Medtronic appeals Judge Edward Harrington’s order awarding Depuy attorney’s fees under § 285 and sanctioning Medtronic $10 million under the court’s inherent powers.

This case is related to appeal numbers 2008-1240 and 2008-1253 which cover the merits of the case.  The fee order was entered on 25 February 2008 and Medtronic filed the notice of appeal on 24 March–it is not clear from the record why it is only now being received and docketed.

The court’s awards are based on Medtronic’s abuse of advocacy during trial–repeatedly arguing and urging the jury to apply a claim construction that was inconsistent with that already decided by the Federal Circuit:

the Court does have concerns about the manner in which the defendants litigated their defense to infringement under the doctrine of equivalents. Throughout trial, the defendants demonstrated a failure to accept the claim construction governing this case. In fact, with the exception of their ensnarement argument, their defense to infringement appears to have been wholly based on an attempt to obscure, evade, or minimize the Federal Circuit’s construction of the patent-in-suit (the ‘678 patent). Even as early as the defendants’ opening statements, they essentially urged the jury to adopt an interpretation of the patent claims developed by their experts instead of the construction mandated by the Federal Circuit. This strategy continued with the testimony of defense witnesses Dr. Foley and Prof. Oxland, both of whom suggested that the ‘678 patent requires mating surfaces between the screw head and the receiver member, which, they argued, renders it substantially different from the accused products (which have non-mating surfaces that lock the screw by means of an interference fit).

Contrary to the defendants’ repeated suggestions at trial, however, the ‘678 patent does not require mating or matching surfaces. The Federal Circuit held that the ‘678 patent encompasses both surface contact between the screw head and the receiver member (in essence, mating surfaces), as well as mere edge contact between the two (which would be consistent with an interference fit). DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 469 F.3d 1005, 1014-15 (Fed. Cir. 2006), cert. denied 128 S. Ct. 58 (2007).

In response, Medtronic argued that such advocacy was "authorized" by the Federal Circuit when it remanded for a trial under the doctrine of equivalents.  The court rejected this position:

The defendants appear to be contending that if the edge contact between the screw head and the receiver member in the Vertex screws could suffice to meet the “pressed against the hollow spherically-shaped portion” limitation of the ‘678 patent, the Federal Circuit would not have remanded the case and would have resolved the issue of infringement against them as a matter of law. Indeed, the defendants almost appear to be blaming the Federal Circuit for their decision to present their ill-advised “matching surfaces” argument to the jury. The defendants’ contentions are unavailing. The Federal Circuit could not have been expected to canvass and assess all of the evidence that the defendants might adduce in their defense to infringement under the doctrine of equivalents. The Federal Circuit’s decision certainly entitled the defendants to present a defense to infringement and challenge the plaintiffs’ case, but this entitlement to put on a defense should not be interpreted as a green-light to dispense with the controlling claim construction. The only legitimate options available to the defendants were to proceed with a theory of the case that was consistent with the Federal Circuit’s claim construction or abandon a doctrine of equivalents defense and focus on ensnarement and damages. Instead, the defendants elected to proceed with a defense that threatened to mislead and confuse the jury.

The court concluded by citing another recent case in which Medtronic and its lawyers were sanctioned for similar conduct:

As Judge Richard Matsch of the District of Colorado has recently observed, “Patent law is complex and not intuitive to the average juror. Parties and counsel have an obligation to refrain from seeking to take advantage of those complexities by employing misleading strategies.” Medtronic Navigation, Inc. v. Brainlab Medizinische ComputerSystems GMBH, 98-cv-01072-RPM, 2008 WL 410413 at *9 (D. Colo. Feb. 12, 2008) (Order for Award of Attorney Fees and Costs). The defendants here clearly sought to take advantage of the technical and legal complexities inherent in this case.

The court then awarded Depuy 15% of its attorney’s fees from the date of the Federal Circuit’s mandate through the date of the verdict.  [PATracer: there is nothing in the record yet to suggest how much this is.] 

The court also used its inherent powers to sanction Medtronic:

The defendants prolonged the proceedings unnecessarily (thus unduly imposing upon the jury’s time), they sought to mislead both the jury and the Court, and they flouted the governing claim construction as set forth by the Federal Circuit. Under these circumstances, the Court concludes that it is proper to impose a penalty of ten million dollars.

More reading:

Order on Sanction and Fees

Counsel:

Depuy: Jones Day (Calvin P. Griffith, Isaac A. Molnar, Patrick J. Norton, Robert L. Canala, Robert C. Kahrl, Thomas R. Goots)
Medtronic: Robins, Kaplan, Miller & Ciresi (David E. Marder, Dirk D. Thomas, Jason R. Buratti, Lisa A. Furnald); Dewey LeBoeuf (Robert A. Auchter, Andre J. Bahou); Wilmer Hale (Lauren B. Fletcher, Mark C. Fleming, Timothy R. Shannon)

Disclaimer: Josh and I and our current firm, Renner Otto, and my prior firm, Baker & Hostetler, represent BrainLAB in the other Medtronic case cited above by Judge Harrington.

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