Docket No. 2013-1576
LOURIE, DYK, REYNA
March 2, 2015
Brief Summary: Finding of the asserted claims of Warsaw’s 5,860,973 patent not invalid (infringement was not in dispute), the asserted claims of Warsaw’s 6,945,933 infringed under DOE (validity was not in dispute), and NuVasive’s 7,470,236 patent infringed (counterclaim; validity was not in dispute) affirmed. Warsaw found not to be entitled to lost profits award since it was not “itself selling”. Decision regarding the royalty remanded to determine value of patented technology and ongoing royalty decision vacated and remanded because the original award “includes a lost profits component”.
Summary: This appeal relates to the DC’s (jury) finding of the asserted claims of Warsaw’s 5,860,973 patent not invalid (infringement was not in dispute), the asserted claims of Warsaw’s 6,945,933 infringed under DOE (validity was not in dispute), and NuVasive’s 7,470,236 patent infringed (counterclaim; validity was not in dispute). The jury awarded damages for each infringement finding and the DC set ongoing royalty damages. Warsaw’s ‘973 patent claims are directed to oversized spinal implants capable of lateral insertion which NuVasive argued were anticipated or obvious in light of two prior art references (spinal implants used in the art and a US patent). No error was found with the conclusion of no anticipation or obviousness since Warsaw was able to show the references “were not ‘capable’ of lateral insertion” (no FDA approval, “intended for anterior or posterior insertion”, “ill-suited for lateral insertion”). NuVasive’s argument that the ‘973 claims were indefinite were rejected under the Nautilus standard (US 2014). Warsaw’s ‘933 patent is directed to instruments and methods for minimally invasive tissue retraction during surgery. The jury found the asserted claims infringed under the DOE, which the FC affirmed since “Warsaw submitted substantial evidence that the differences between the accused device and the patented technology are insubstantial.” NuVasive’s ‘236 patent is directed to a method for detecting the presence of and measuring the distance to a nerve during surgery. The FC affirmed the finding of infringement, rejecting PHE arguments because it was “too late…to argue for or adopt a new and more detailed interpretation of the claim language and test the jury verdict by that new and more detailed interpretation” (Hewlett-Packard, FC 2003). NuVasive challenged the award of lost profits relating to the ‘973 and ‘933 patents, which are not practiced by Warsaw but licensed to a practicing party. A patentee is entitled to lost profits (Rite-Hite, FC 1995; Ply-America, FC 2004 (patentee may not claim lost profits of a related company)) or a reasonable royalty (Aqua Shield, FC 2014). Since Warsaw did not show the “fixations” it sold to the licensee “had no independent function” (could “not establish a functional relationship”) and it was not “itself selling”, it was not entitled to lost profits. Warsaw was found to be entitled to a reasonable royalty but the issue was remanded for a new trial to determine a reasonable royalty based on “the value of the patented technology”. And the decision regarding the ongoing royalty to Warsaw was vacated and remanded because the original award “includes a lost profits component”.