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Stryker Corp. v. Zimmer, Inc.

United States Court of Appeals, Federal Circuit

March 23, 2015

STRYKER CORPORATION, STRYKER PUERTO RICO, LTD., STRYKER SALES CORPORATION, Plaintiffs-Appellees
v.
ZIMMER, INC., ZIMMER SURGICAL, INC., Defendants-Appellants, ZIMMER ORTHOPAEDIC SURGICAL PRODUCTS, Defendant

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[Copyrighted Material Omitted]

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SHARON A. HWANG, McAndrews, Held & Malloy, Ltd., of Chicago, Illinois, argued for plaintiffs-appellees. With her on the brief were GREGORY J. VOGLER, DEBORAH A. LAUGHTON, and CAROLINE A. TEICHNER.

DONALD R. DUNNER, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, of Washington, DC, argued for defendants-appellants. With him on the brief were KARA F. STOLL and GARTH D. BAER. Of counsel was BENJAMIN THOMAS SIROLLY.

Before PROST, Chief Judge, NEWMAN and HUGHES, Circuit Judges.

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ON PETITION FOR PANEL REHEARING

Per Curiam.

ORDER

A petition for rehearing en banc was filed by appellees Stryker Corporation, Stryker Sales Corporation and Stryker Puerto Rico, Ltd. and a response thereto was invited by the court and filed by appellant Zimmer Surgical, Inc. and Zimmer, Inc. This was followed by Stryker Corporation, Stryker Sales Corporation and Stryker Puerto Rico, Ltd.'s Motion for Leave to File a Reply in Support of its Petition for Rehearing. The motion was granted. The petition, response, and reply were referred to the panel that heard the appeal.

It Is Ordered That:

(1) Appellees' petition is granted by the panel for the limited purpose of clarifying the discussion of the standard of review of the objective reckless prong of willful infringement.

(2) The previous opinion in this appeal issued December 19, 2014 and reported at Stryker Corp. v. Zimmer, Inc., 774 F.3d 1349 (Fed. Cir. 2014) is withdrawn and replaced with the revised opinion accompanying this order.

OPINION

Prost, Chief Judge.

Zimmer, Inc., Zimmer Surgical, Inc., and Zimmer Orthopaedic Surgical Products (collectively " Zimmer" ) appeal from the final judgment of the United States District Court for the Western District of

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Michigan that U.S. Patent Nos. 6,022,329 (" '329 patent" ), 6,179,807 (" '807 patent" ), and 7,144,383 (" '383 patent" ) were valid and willfully infringed. For the reasons stated below, we affirm the jury's findings that the patents were valid and infringed, and the jury's award of damages to plaintiff-appellees Stryker Corporation, Stryker Puerto Rico, Ltd., and Stryker Sales Corporation (collectively " Stryker" ). However, we reverse the district court's judgment that Zimmer's infringement was willful, and, accordingly, we vacate its award of treble damages. Finally, we vacate and remand the district court's finding of exceptional case and its award of attorneys' fees.

I

The patents at issue concern pulsed lavage devices. Pulsed lavage devices deliver pressurized irrigation for certain medical therapies, including orthopedic procedures and cleaning wounds. The particular devices at issue in this case are portable, battery powered, and handheld. They include both suction and discharge tubes, so they both spray fluid from an external source and also suction off fluid and debris. These devices represent an improvement over older pulsed lavage systems that required a central power source and external mechanical pumps, which meant that they needed to be wheeled around the hospital.

Stryker and Zimmer are the two main competitors in the orthopedic pulsed lavage device market. Stryker began bringing battery-powered, handheld pulsed lavage devices to the marketplace in 1993. That same year, Stryker filed the application which eventually gave rise to the patents at issue. In February 2000, the first of these patents, the '329 patent, issued. Later that year Stryker sued another manufacturer, Davol Inc., for infringement. That suit settled in 2001, and Davol took a license on the '329 patent. The '807 patent subsequently issued in January 2001, and the '383 patent issued in December 2006.

Zimmer introduced its first portable pulsed lavage device, the Var-A-Pulse, in 1996. In 1998, Zimmer began to develop a new design, which came to market soon thereaf-ter as the Pulsavac Plus range of products. Zimmer's Pulsavac Plus products achieved a peak of $55 million in annual sales in late 2007, before they were withdrawn from the marketplace due to a product recall, after which sales resumed in December 2008.

In 2010, Stryker sued Zimmer, alleging that Zimmer's Pulsavac Plus devices infringed various claims of the '329, '807, and '383 patents. The district court granted partial summary judgment in favor of Stryker, finding infringement of the '807 and '383 patents' asserted claims. The question of whether Zimmer infringed the single asserted claim of the '329 patent, as well as Zimmer's invalidity defenses against all of the asserted claims, went to trial. The jury found that the products infringed claim 2 of the '329 patent and that all the asserted claims were valid. The jury also awarded $70 million in lost profits. It further found that Zimmer had willfully infringed all three patents. The jury also found that Stryker had marked substantially all of its products that commercially embodied the patents in suit during the period it sought damages, pursuant to 35 U.S.C. § 287(a).

In August 2013, the district court issued an order rejecting Zimmer's motions for judgment as a matter of law (" JMOL" ) on various issues, affirming the jury's verdict, awarding trebled damages for willful infringement, finding an exceptional case and thus awarding attorneys' fees to Stryker, and imposing a permanent injunction.

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The district court subsequently entered final judgment pursuant to its order.

Zimmer appeals. We have jurisdiction under 28 U.S.C. ...


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