IP Watch: DePuy Awarded $226M in Patent Suit

Late last month, a federal jury in Boston ordered Medtronic Inc. ( Minneapolis) to pay $226.3 million in damages to DePuy Spine ( Raynham , MA ) , a division of Johnson & Johnson Inc. The jury found that Medtronic's Vertex line of multiaxial pedicle screws infringe, under the doctrine of equivalents, a patent licensed to DePuy.

Following the verdict, Medtronic noted that the decision is not yet final and is subject to posttrial rulings on certain Medtronic defenses. When and if the judgment is entered by the court, Medtronic reports that it will appeal.

On October 1, the U.S. Supreme Court declined to hear a Medtronic appeal related to the patent that resulted in the $226 million award. But that action doesn't preclude Medtronic's planned appeal of the jury verdict.

In announcing its intent to appeal, Medtronic noted that it had previously prevailed in the case, under an award of summary judgment from a lower trial court. In November 2006, the Federal Circuit agreed with Medtronic that there was no literal infringement of the patent, but remanded the case for trial under the doctrine of equivalents.

Prior to the remanded trial, which began on September 10, 2007, a federal court in California, in a separate suit, found the same DePuy patent to be invalid and dismissed that case, Medtronic reports. Medtronic says it was not allowed to challenge the validity of the patent in the Boston trial, and the U.S. Patent and Trademark Office has also recently initiated a reexamination of the patent, which is set to expire in July 2010.

“We are disappointed in the jury's verdict,” said Pete Wehrly, senior vice president and president of the spine and biologics business unit at Medtronic. “We appreciate the time and effort that the jury put into this case, but we respectfully disagree and we will appeal. We respect the intellectual property rights of others, and will vigorously defend ourselves.”

DePuy has indicated that it will request a permanent injunction once the judgment is final. Medtronic reports that it is in the process of phasing in a noninfringing screw design that it says has improved features and patient benefits.

PTO Clarifies New Patent Rules

On October 10, the U.S. Patent and Trademark Office (PTO) issued a memo clarifying its claims and continuations rules that go into effect November 1. The new rules are expected to have a significant impact on how companies in the IP-rich medtech industry manage and prosecute their patent portfolios.

Joseph Teja Jr., a lawyer with Wolf, Greenfield & Sacks PC (Boston), says the PTO update will have a significant impact on the U.S. patent system overall. He says the memo clears up ambiguous language that would have had harsh effects if left uncorrected. And the clarifications also help organizations that own many patents.

The main provisions of the new rules limit patent applicants to two continuing patent applications and one request for continued examination without the applicant demonstrating that additional applications are needed. Applicants will also be limited to 25 claims per application, of which no more than five may be independent claims, unless they can show why additional claims are required.

Prior to the new rules, patent applicants could file a long series of continuation applications, all claiming priority back to the filing date of an original application. This practice provided medtech manufacturers with time to develop claims and new descriptions to fully cover inventive devices. Further, as competitors brought new products to market years after the original filing, patent applicants could tailor their continuation applications and claims to cover the competing products. The new rules should limit this practice, bringing more predictability and timeliness to what each family of patents covers.

“One of the most troubling issues with the new rules was the provision in the supplementary material accompanying the new rules on ‘one more' permissible continuation in a patent-application family that was already ‘full' prior to August 21, 2007,” Teja says. “A literal reading of the provision provided a draconian result in connection with divisional applications that seemed inconsistent with the PTO's treatment of divisional applications elsewhere in the new rules.”

The new PTO notice makes clear that this result was not intended. The provision has been modified so that divisional applications and continuations of them filed anytime after August 21, 2007, will not use up the one more permissible continuing application in an already-full application family. “This will provide many applicants with additional flexibility to advance prosecution strategies that were contemplated in a much different landscape than the one we're facing now,” Teja says.

Another important clarification announcement provides relaxed notice provisions for applications pending prior to November 1, 2007.

“This update significantly softens what would have been an onerous burden for many applicants to identify related applications in their portfolio,” Teja says. “Many applicants may not have ready access to information about their portfolio necessary to comply with the notice requirements as originally published. Accordingly, this is a significant and favorable development for applicants with sizeable patent portfolios.”

The PTO memo can be read online at www.uspto.gov/web/offices/pac/dapp/opla/preognotice/clmcontclarification.pdf.

Industry IP in Brief

In addition to the above recent intellectual property developments, the following medtech IP news was announced in recent weeks.

• Earlier this month, Johnson & Johnson Inc. (J&J; New Brunswick, NJ) filed suit against medical imaging equipment maker Hologic Inc. ( Bedford, MA). In the suit, J&J's Ethicon Endo-Surgery unit claims Hologic violated four of its patents related to a tumor-detection system. Hologic has said it believes the lawsuit is without merit and intends to defend its position.

• CryoCath Technologies Inc. ( Montreal) has filed a lawsuit against CryoCor Inc. ( San Diego) in the U.S. District Court for the District of Delaware. The complaint, which seeks injunctive relief, charges CryoCor with infringement of several of CryoCath's U.S. patents related to console systems. CryoCor intends to defend itself against all allegations.

• Early this month, AngioDynamics Inc. ( Queensbury, NY) announced the denial of cross-motions for summary judgment issued in the U.S. District Court for the Northern District of California in the patent litigation brought by VNUS Medical Technologies ( San Jose) against AngioDynamics, Diomed ( Andover, MA), and Vascular Solutions ( Minneapolis). As a result of the judge's rulings, the case will now proceed to a jury trial, which is currently scheduled to commence on October 29.

• Cytomedix Inc. ( Rockville, MD) has entered into a licensing agreement with Smith & Nephew Inc. ( Memphis). Under the agreement, Cytomedix has granted to Smith & Nephew a nonexclusive license under its key patent for all applications of its autologous platelet releasate therapy, except for use in the chronic wound market.

• In mid-September, ICU Medical Inc. ( San Clemente , CA ) announced that the U.S. District Court for the Central District of California had granted ICU Medical's motion for summary judgment of noninfringement in a 2006 patent dispute filed by Medegen ( Scottsdale, AZ). Still pending are ICU Medical's counterclaims that the patent Medegen asserted against ICU Medical is invalid and unenforceable due to inequitable conduct of Medegen before the U.S. Patent and Trademark Office. ICU Medical, which is represented by Morrison & Foerster LLP ( Palo Alto, CA), reports that it intends to vigorously pursue its claims. In turn, Medegen reports that it plans to appeal the recent noninfringement judgment.

• Advanced Medical Optics Inc. (AMO; Santa Ana, CA ) has entered into a U.S. patent license agreement with Carl Zeiss Meditec AG ( Jena, Germany) , a global ophthalmic and surgical devices and instrumentation manufacturer. Within the scope of this agreement, AMO's IntraLase subsidiary has granted a nonexclusive, royalty-bearing license to Carl Zeiss Meditec to use the IntraLase patent portfolio to provide femtosecond technology for corneal surgery. Other terms of the agreement are confidential.

• In mid-September, Angiotech Pharmaceuticals Inc. (Vancouver) announced that it had reached a favorable agreement with Johnson & Johnson subsidiary Conor Medsystems (Menlo Park, CA) to settle all outstanding patent litigation with respect to Conor's CoStar paclitaxel stent. Angiotech is a corporate partner of Boston Scientific Corp. ( Natick, MA) with regard to its Taxus drug-eluting stent.

© 2007 Canon Communications LLC

Return to MX: Issues Update.