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4 March 2015Americas

Federal Circuit wipes $100m damages award in Medtronic case

The US Court of Appeals for the Federal Circuit has overturned a $100 million damages sum awarded to Medtronic Sofamor Danek (MSD) in a long-fought patent case between the medical device maker and San Diego-based NuVasive.

In a unanimous decision handed down on Monday (March 2), Circuit Judges Lourie, Dyk and Reyna upheld the US District Court for the Southern District of California’s findings of invalidity and infringement concerning the three patents at issue.

However, the court overturned the damages award.

Warsaw Orthopedic and MSD sued medical devices company NuVasive in October 2008, alleging infringement of two US patents—5,860,973, which covers oversized spinal implants, and 6,945,933, which protects methods and devices for carrying out minimally invasive surgery on the spine.

Warsaw owns the two patents and licenses them to Medtronic Sofamor Danek Deggendorf and Medtronic Puerto Rico Operations, which make and then sell the products to MSD, paying it a royalty. MSD then sells these to hospitals and surgeons.

NuVasive filed a counterclaim against Warsaw and MSD, accusing them of infringing its 7,470,236 US patent, which relates to neuromonitoring during surgery.

The Californian district court jury found in September 2011 that Warsaw’s ‘973 patent was valid, that its ‘933 patent was infringed by NuVasive, and that the ‘236 patent was infringed by Warsaw and MSD. It awarded damages of more than $100 million to Warsaw and $660,000 to NuVasive.

After the trial, both parties filed motions for judgment as a matter of law or a new trial on the patents at issue, both of which were denied. Warsaw also sought supplemental damages and a permanent injunction to stop the infringement.

Warsaw appealed against the court’s subsequent decision to deny it supplemental damages and a permanent injunction, and also argued that the court had erred in determining that it and MSD had infringed the ‘236 patent.

NuVasive cross-appealed to challenge the court’s finding that the ‘973 patent was valid and that it had infringed the ‘933 patent. It also challenged the calculation of damages for its infringement of the Warsaw patent.

In its decision on Monday, the Federal Circuit affirmed the district court’s decision on infringement and invalidity of the patents, but overturned Warsaw’s damages award and remanded the case for a new trial on damages.

“We are pleased with today’s legal ruling,” said Alex Lukianov, NuVasive’s chairman and chief executive, speaking on the day of the decision.

“This provides greater clarity on the process moving forward and affirms our view that Medtronic had been awarded an excessive amount of damages. By limiting the damages to only a reasonable royalty, we believe our overall exposure in this phase of the litigation has been reduced from the current amount we have accrued. We look forward to the upcoming re-trial.”

A spokesperson for Medtronic told LSIPR that it was pleased that the appeals court upheld the original finding of infringement of its patents, though added: “We remain confident that the retrial will return an award that is appropriate to the damages we are seeking in this case. Medtronic is committed to vigorously protecting our IP.”

Warsaw could not be reached for comment.

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