Jury Verdict Against Boston Scientific for $42 Million For Infringement of Patent on Biodegradable Drug-Releasing Implant
On January 31st, 2023, a jury awarded $42 million to medical device company TissueGen in a patent infringement case against Boston Scientific for infringement of U.S. Patent No. 6,596,296, titled “Biodegradable Drug-Releasing Implant.” The ’296 patent relates to a drug releasing biodegradable fiber implant which allows for controlled delivery of therapeutic agents.
The verdict comes after a five-year long dispute between the parties. The Board of Regents of the University of Texas System and TissueGen sued Boston Scientific for infringement of the ’296 patent in November 2017. TissueGen received an exclusive license to the ’296 patent from the University of Texas in 2003.
TissueGen’s infringement case concerned Boston Scientific’s SYNERGY™ technology. Boston Scientific reportedly previously received FDA approval for its SYNERGY™ Bioabsorbable Polymer Drug-Eluting Stent System in 2015. The SYNERGY™ system is alleged to be absorbed shortly after drug elution is complete at three months to eliminate the long-term polymer exposure.
In the first phase of the trial, the jury found that the patent at issue was valid and that Boston Scientific had infringed the patent. In the second phase of the trial, the jury further found that Boston Scientific’s infringement was willful and awarded the plaintiffs $42 million in lost royalties.
Dr. Kevin Nelson, the founder of TissueGen, had allegedly met the Boston Scientific executives in a symposium in 2009 where he told them about the patented technology. Dr. Nelson is a named inventor on the ’296 patent and is reported to have invented the technology while he was an employee of the University of Texas.
TissueGen is a medical device company that reportedly has a portfolio of patents on drug delivery technology. It was founded in 2000. Boston Scientific is a worldwide medical device company founded in 1979. Boston Scientific recently announced that it generated net sales of $3.242 billion during the fourth quarter of 2022.
Medical device innovations and IP: A strategy is everything.
Bringing a medical device to market relies on a broad understanding of IP, explain Sabing Lee and Kregg Koch of Knobbe Martens.
The original version of this article was published by Life Sciences IP Review. Click here to view that article.
The medical device industry is driven by innovation, where great ideas are developed into successful businesses and products to improve patient care and outcomes. As patent attorneys, we witness many different pathways to innovation and guide IP strategies for innovators of all types. From garage start-ups that become global industry leaders to incubators and university-funded research programs, innovation has no common starting point.
One certainty exists, though. A properly executed IP strategy, tailored to the medical device industry, is critical for protecting innovation, creating company value and ultimately supporting the commercialization of products that will benefit patients.
Sources of Medical Device Innovation
One common starting point for medical device innovation is the physician. Many new innovations start from individual practitioners, such as a surgeon or other specialist who works first-hand with the types of devices that he or she improves upon.
Whether orthopedic, cardiovascular, neurological, or other, physicians with first-hand experience in the causes of medical conditions, the outcomes from devices and treatments, and the implementation of the devices and treatments are often the best equipped to recognize a need for improvement and to foster innovation. This is the reason why a significant number of medical devices come from or are developed in consultation with physicians.
Medical device innovation is an iterative process, and a significant amount of engineering work is needed to translate an initial concept into a viable product. Some physicians are garage inventors themselves, building prototypes using household parts or buying and assembling components into something that can be tested in trials.
Frequently, physicians seek out partnerships with engineers who can assist in this process, and many important medical technologies have resulted from the physician-engineer collaboration. Engineers themselves are also often inspired by new medical ideas and will seek out the clinical perspectives of a physician to refine and improve upon these ideas.
Protecting IP is especially important to the solo inventor, who often starts with only an idea and needs to secure some degree of protection, typically with a provisional patent application, before disclosing the idea to others.
Solo inventors and early-stage companies should also take care in securing ownership rights to their inventions when seeking the help of others. Non-disclosure agreements, while helpful in maintaining confidentiality, do not typically include IP assignment clauses. Without an IP assignment agreement, the solo inventor runs the risk that one of their collaborators improves upon the invention and claims ownership of the improvement for themselves.
While many innovations are the result of spontaneous inspiration, incubators, who form another important group of innovators, follow a more structured process. Incubators are organizations, including university-sponsored entities (sometimes called biodesign programs), that usually comprise individuals having orthogonal skill sets and backgrounds that form a multi-disciplinary team.
Incubators often include physicians, engineers, scientists, and business professionals.
Federal Circuit Upholds Lower Court Decision in Par Pharmaceutical, Inc. v. Eagle Pharmaceuticals, Inc.
By Rory Lootsma
(August 18, 2022) The Federal Circuit has affirmed that Eagle Pharmaceuticals, Inc. did not infringe Par Pharmaceutical, Inc. patents, easing Eagle’s path to market a generic competitor to Par’s Vasostrict®
product. Par had alleged that Eagle’s abbreviated new drug application (ANDA) infringed U.S. Patent Nos. 9,744,209 and 9,750,785, both titled “Vasopressin formulations for use in treatment of hypotension.” An example molecular structure is shown here:
Some of Par’s arguments had alleged that because the pH of Eagle’s products would be so close to Par’s claimed ranges for pH, inevitable drift in pH would occur over time, causing infringement. In affirming, Chief Judge Moore explained that the District Court had not committed clear error in finding otherwise. The infringement inquiry “begins and ends” with Eagle’s ANDA specification, so predicting future drift cannot show infringement.
Thus, the Federal Circuit upheld the District Court’s decision against Par Pharmaceutical and affirmed the finding of no infringement. The Federal Circuit’s decision is available here.
WTO Agrees to Partial Patent Waiver for COVID-19 Vaccines
On June 16, 2022, the World Trade Organization (WTO) agreed to a partial waiver of intellectual property rights related to COVID-19 vaccines. The agreement came on the heels of an all-night negotiating session. The agreement followed years of proposals and negotiations among the WTO members.
Ultimately, the WTO members agreed to a waiver that was limited to “the subject matter of a patent required for the production and supply of COVID-19 vaccines.” The United States had previously expressed its support for a vaccine-only TRIPs waiver. Previous proposals by South Africa and India also included COVID-19 tests and treatments, as well as including access to trade secrets.
The agreement allows member countries to “authorize the use of the subject matter of a patent … without the right holder’s consent through any instrument available in the law of the Member.” However, any country making such a waiver must provide “adequate remuneration” to the patent holder.
WTO Director-General Ngozi Okonjo-Iweala praised the agreement: “[N]ow we have something in hand,” “[i]t’s really exciting now to go to those factories that are starting to set up all over the developing world and start to work with them about how this will actually be made real.”
However, the agreement did not meet with universal praise. Indian Trade Minister Piyush Goyal stated:
[W]hat we are getting is completely half baked and it will not allow us to make any vaccines. They have no intentions of allowing therapeutic and diagnostics and if at all they try to say that we are the cause for its collapse, I think we should unanimously speak to the world and tell them that no, ideally we want a holistic solution including therapeutic and diagnostics.
Pharmaceutical industry organizations also criticized the WTO agreement, as did some members of the U.S. Congress.
The full text of the agreement is available on the WTO’s website.
Niazi’s Patent Survives on Appeal: Federal Circuit Reverses In Part Lower Court’s Decision
On April 11, 2022, Niazi Licensing Corporation (“Niazi”) succeeded in part in its appeal at the Federal Circuit in Niazi Licensing Corporation v. St. Jude Medical S.C. Inc. Niazi’s lawsuit alleged that St. Jude Medical S.C. Inc.’s (“St. Jude”) CPS telescoping catheter system infringed U.S. Patent No. 6,638,268, entitled “Catheter to Cannulate the Coronary Sinus” (the “‘268 patent”).
The district court determined that the terms “resilient” and “pliable” in the claims rendered all but one claim of the ‘268 patent indefinite and, therefore, invalid. However, the Federal Circuit reversed the district court’s holding and instead found that, although the terms may be broad, they are not uncertain. The Federal Circuit held that intrinsic record and extrinsic evidence are sufficient to inform a skilled artisan of the meanings of the terms with reasonable certainty. The court sent the case back to the district court to resolve any outstanding questions of whether St. Jude infringed the claims and whether St. Jude’s remaining invalidity defenses are applicable.
The Federal Circuit’s complete decision is available here.
Intellectual Property Cases Dominate 2016 Verdict Awards
According to the annual Top 100 Verdicts report by ALM’s VerdictSearch, five jury verdicts for Intellectual Property cases cracked the top 10 with a sixth breaking into the top 25 verdicts of 2016. While the amounts do not account for judicial reductions, offsets or appeals, the report indicates that the more than $4.67 billion in total jury awards from the top 6 IP verdicts alone show that intellectual property cases dominated the Top 100 in terms of total dollars awarded.
The publication ranked Idenix‘s $2.54 billion royalty share of Gilead Sciences‘ profits from two blockbuster hepatitis C drugs as the #1 IP verdict and #3 overall on its list of “Top 100 Verdicts of 2016.” According to the report, Idenix successfully asserted that Gilead willfully infringed Idenix’s patents relating to an antiviral compound used in the treatment of hepatitis C, resulting what commentators have stated is the largest patent infringement verdict in U.S. history.
The second highest IP verdict in VerdictSearch’s 2016 list, $940 million (including $700 million in punitive damages), went to medical software company Epic Systems in what commentators have said is one of the largest trade-secrets verdicts on record. According to the report, Epic successfully asserted that Tata misappropriated information related to Epic’s health care software.
The #3 and #4 IP verdicts of 2016 according to VerdictSearch, $625 million and $302 million, respectively, went to technology patent-holder VirnetX for infringement of four of VirnetX’s internet security patents infringement by several Apple products, including iPhones and iPads.
Merck won the 5th largest IP verdict of the year according to VerdictSearch, a $200 million award against Gilead. The report noted that Gilead Sciences v. Merck & Co. involved infringement of different patents relating to the same drug compound as the Idenix case. The case was filed by Gilead as a declaratory judgment action, but Merck & Co. won on its counterclaim.
CardiAQ‘s $70 million win in CardiAQ Valve Technologies, Inc. v. Neovasc Inc. was listed in VerdictSearch as the #6 IP verdict and tied for #21 overall. As noted in a previous post here, according to the report, 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.
According to the report, the 11 IP verdicts in the top 100 totaled approximately $4.8 billion, more than a threefold increase from 2015, when the total was $1.43 billion.
Spineology Sues Wright Medical Technology
Spineology, Inc. sued Wright Medical Technology, Inc. (Wright Medical) in the United States District Court for the District of Minnesota . Spineology’s complaint alleges that Wright Medical’s X-REAM percutaneous expandable reamer infringes one or more claims of U.S. Patent No. RE42,757 (the ‘757 patent), which is entitled “Expandable Reamer” and was reissued on September 27, 2011. The suit includes claims for direct, induced, contributory, and willful infringement.
In support of its claim of willful infringement, Spineology alleges that it sold fifty of its own expandable reamers to Wright Medical in 2006, but did not convey any license to the ‘757 patent along with that sale. The complaint states that Spineology sent a cease-and-desist letter in 2014, which attached the ‘757 patent, requesting that Wright Medical stop selling its X-REAM product because the product was covered by the ‘757 patent. After Wright Medical continued selling its product, Spineology filed the current suit.
According to its website, Minnesota-based Spineology is focused on developing methods and products that not only treat spinal ailments, but also reduce the invasiveness of spine surgery for patients, aid the surgeon in overcoming the hurdles of minimally invasive surgery, and minimize the burden of healthcare expense.
According to its website, Tennessee-based Wright Medical is a specialty orthopaedic company that provides extremity and biologic solutions that enable clinicians to alleviate pain and restore their patients’ lifestyles.
Wright Medical Technology Files for Inter Partes Review of Orthophoenix Patents
On June 6, 2014, Wright Medical Technology, Inc. (“WMT”) filed first and second petitions with the Patent Trial and Appeal Board requesting inter partes review of both U.S. Patent No. 6,440,138 (“the ‘138 Patent”) to Reiley et al., and U.S. Patent No. 6,863,672 (“the ‘672 Patent”) to Reiley et al. According to the ‘672 Patent’s New Application Transmittal at page 9, the ‘672 Patent is a divisional of the ‘138 Patent.
According to the U.S. Patent and Trademark Office assignment database, the ‘138 and ‘672 Patents were previously assigned to Kyphon Inc., which was acquired by Medtronic in 2007 for $3.9 billion. The database also includes a recorded assignment, executed on April 25, 2013, from Medtronic, Inc., Kyphon SARL, and Warsaw Orthopedic, Inc. to Orthophoenix, LLC. Orthophoenix’s signatory was Erich Spangenberg (listed as the CEO). Spangenberg is also the owner and founder of IPNav, according to IPNav’s website. IPNav describes itself as a patent monetization firm.
The ‘138 Patent is entitled “Structures and Methods for Creating Cavities in Interior Body Regions.” According to the ‘138 Patent, it relates to tools that carry structures that are deployed inside bone and, when manipulated, cut cancellous bone to form a cavity. Figure 1 of the ‘138 Patent, described as a side view of a rotatable tool having a loop structure capable of forming a cavity in tissue, with the loop structure deployed beyond the associated catheter tube, is shown below left:
The ‘672 Patent is also entitled “Structures and Methods for Creating Cavities in Interior Body Regions.” According to the ‘672 Patent, it relates to tools that carry structures that are deployed inside bone and, when manipulated, cut cancellous bone to form a cavity. Figure 27 of the ‘672 Patent, described as a side view of a vertebra with the tool deployed to cut cancellous bone by moving the blade structure in a linear path to form a cavity, is shown below right:
The petition regarding the ‘138 Patent relies on a single prior art reference: U.S. Patent No. 5,015,255 to Kuslich, which the petition alleges was not before the Examiner during prosecution of the ‘138 patent. The petition seeks review of Claims 1-26 (all claims) of the ‘672 Patent and requests cancellation of each Claim. By contrast, the petition regarding the ‘672 Patent relies on two separate prior art references: U.S. Patent No. 5,439,464 to Shapiro and U.S. Patent No. 6,371,968 to Kogasaka et al. The petition alleges that neither prior art reference was before the Examiner during prosecution of the ‘672 Patent. The petition seeks review of Claims 1-12 (all claims) of the ‘138 Patent and requests cancellation of each Claim.
The petitions disclose that Orthophoenix has sued WMT in the U.S. District Court for the District of Delaware. Orthophoenix, LLC v. Wright Medical Tech., Inc., Civil Action No. 13-10007-LPS (D. Del.). Orthophoenix filed its complaint on June 5, 2013 alleging direct and indirect patent infringement of both the ‘138 and ‘672 Patents (the “Patents in Suit”) by WMT.
Smiths Medical ASD, Inc. Sues Rocket Medical plc on Embryo Replacement Catheter Technology
On July 3, 2013, Smiths Medical ASD, Inc. sued Rocket Medical plc in the United States District Court for the District of Massachusetts. Smiths Medical’s complaint alleges that Rocket Medical’s embryo replacement catheters infringe U.S. Patent No. 8,092,390 entitled “Medico-Surgical Devices.”
The Abstract of the ‘390 Patent describes a catheter in which “[g]as bubbles of a diameter in the range of 5µ to 10µ are incorporated into the thickness of the wall of the shaft by adding gas during extrusion. The bubbles are selected to increase the visibility of the catheter under ultrasound imaging whilst still enabling material flowing along the catheter to be seen.” Figure 2 from the ‘390 Patent is shown below:
Smiths Medical is a division of Smiths Group plc, which is headquartered in London. According to their website, Smiths Medical supplies a variety of medical devices for hospital and home use. Rocket Medical is also headquartered in the UK, and according to their website manufactures a range of single use medical devices. The complaint and patent at issue are available here.
AngleFix Tech, LLC Sues Wright Medical Technology, Inc.
On June 10, 2013, AngleFix Tech, LLC sued Wright Medical Technology, Inc. in the Western District of Tennessee. AngleFix’s complaint alleges that Wright Medical’s plate and screw systems for bone fixation infringe U.S. Patent No. 6,955,677 entitled “Multi-Angular Fastening Apparatus and Method for Surgical Bone Screw/Plate Systems.” The accused systems include the Claw, Claw II, Charlotte Claw, Ortholoc, Ortholoc 3Di, and Ortholoc 3Di2.
The complaint states that the ‘677 Patent was the result of the inventor’s “desire to capture bone fragments during orthopedic surgery that would otherwise evade locking screws set at a single fixed angle.” The Abstract of the ‘677 Patent describes an apparatus including a fastener and a fastener receiving member that “enables the fastener to be affixed to the fastener receiving member at a variable insertion angle selected by the user.” Figure 3 from the ‘677 Patent is shown below:
AngleFix is based in North Carolina and holds an exclusive license to the ‘677 Patent from the University of North Carolina. AngleFix sued NuVasive, Inc. on the same patent in the Southern District of California earlier this year.
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