Blog Tag: damages

Supreme Court Makes it Easier for Medical Device Companies to Recover Enhanced Damages for Patent Infringement

The Patent Act provides that, in a case of infringement, courts “may increase the damages up to three times the amount found or assessed.”  Previously, in order to recover enhanced damages under the Patent Act, a patent owner had to show two things: (1) the infringer acted with objective recklessness and (2) the risk of infringement was either known or should have been known to the accused infringer.  Both of these elements had to be shown by the relatively high standard of “clear and convincing” evidence.

The Supreme Court’s recent decision in Halo Electronics, Inc v. Pulse Electronics, Inc. drastically changed the standard for enhanced damages and made it easier for patent owners to obtain an enhanced damages award.  The Court eliminated the objective recklessness prong and lowered the standard of proof from “clear and convincing evidence” to “preponderance of the evidence.”  The Court also adopted an abuse of discretion standard for appellate courts reviewing a district court’s decision to grant enhanced damages.

Previously, patent owners struggled to obtain enhanced damages even when they could establish that the infringer acted with bad faith.  Infringers were able to avoid enhanced damages by making a reasonable defense at trial.  Thus, the ability of a patent owner to obtain enhanced damages sometimes depended more on the ingenuity of the defendant’s attorney than the defendant’s culpability at the time of the challenged conduct.  By eliminating the objective recklessness prong, the Supreme Court refocused the analysis on the defendant’s knowledge at the time of the infringing conduct.

The Court’s new contemporaneous focus will likely influence the prelitigation conduct of patent owners and accused infringers.  Demand letters informing accused infringers of their infringement and relevant patents will likely become more common place.  Opinion letters will also likely take on an increased significance for accused infringers.  Not all instances will warrant a full-blown infringement and validity analysis but, under the new standard, accusations of patent infringement should be given prompt, thorough, and carefully documented consideration.

CardiAQ Wins $70 Million in Trade Secrets Suit

A federal jury found in favor of CardiAQ in a lawsuit filed against former service provider, Neovasc. The jury found that Neovasc breached the non-disclosure agreement between the parties, misappropriated CardiAQ’s trade secrets, and breached its duty of honest performance to CardiAQ. The jury awarded $70 million in damages for trade secret misappropriation.

CardiAQ co-founder J. Brent Ratz said in a press release that the company worked for years to develop and create the CardiAQ transcatheter mitral valve, which provides an alternative to open heart surgery. Ratz stated that:

We are proud of this foundational work and grateful that the jury recognized these contributions to the developing field of transcatheter mitral valve replacement.

According to the press release, CardiAQ hired Neovasc in 2009 to provide services for its transcatheter mitral valve replacement (TMVR) program and Neovasc signed a non-disclosure agreement. While working for CardiAQ, Neovasc started its own TMVR program without notifying CardiAQ. After discovering a Neovasc patent publication in late 2011, CardiAQ initiated this litigation in 2014 regarding Neovasc’s transcatheter mitral valve technology, including the Tiara.

According to the press release, the jury also issued advisory findings that Neovasc engaged in unfair or deceptive practices and that CardiAQ’s founders, Ratz and Dr. Arshad Quadri, contributed to the conception of Neovasc’s U.S. Patent No. 8,579,964. The judge is expected to rule later on causes of action under Massachusetts Gen. Law Ch. 93A and patent inventorship.

Edwards Lifesciences Corporation, based in Irvine, Calif., acquired CardiAQ in 2015.

CardiAQ was represented in the litigation by Knobbe Martens LLP, including lead partners John B. Sganga, Jr.  and Christy G. Lea.

Globus Argues Expert’s Faked Credentials Warrants New Trial

In 2011, DePuy-Synthes, a subsidiary of Johnson & Johnson Inc. sued Globus Medical, Inc. in the United States District Court for the District of Delaware.  In that suit, Synthes alleged that Globus had infringed three Synthes patents (U.S. Patent Nos.  7,846,207; 7,862,616; and 7,875,076) all directed to intervertebral implants.

The jury found that Synthes’ patents were valid and that three of Globus’ intervertebral implant products infringed those patents. The jury awarded Synthes $16 million in damages, representing a 15% royalty on Globus’ sales of infringing products.

In December 2014, Synthes learned that its damages expert, Richard Gering, did not have a Ph.D., as he had testified under oath.  Synthes notified the court and Globus the following day.

Globus argued in a brief, filed April 24th, 2015, that it should be granted a new trial because it is impossible to quantify how much the discredited expert’s testimony influenced the jury’s decision.  Synthes responded that because Globus did not offer evidence that the expert’s testimony itself was factually incorrect, it could not establish that a new trial is warranted.  Mr. Gering testified only on damages, and not on validity or infringement.  Therefore, Synthes argued that there is no reason to grant a new trial.