Stryker Corp. v. Zimmer, Inc.

• Citation: 114 U.S.P.Q.2d 1187,782 F.3d 649
• Decision Date: 19 December 2014
• Docket Number: No. 2013–1668.,2013–1668.
• Parties: STRYKER CORPORATION, Stryker Puerto Rico, Ltd., Stryker Sales Corporation, Plaintiffs–Appellees v. ZIMMER, INC., Zimmer Surgical, Inc., Defendants–Appellants. Zimmer Orthopaedic Surgical Products, Defendant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

782 F.3d 649

114 U.S.P.Q.2d 1187

STRYKER CORPORATION, Stryker Puerto Rico, Ltd., Stryker Sales Corporation, Plaintiffs–Appellees

v. ZIMMER, INC., Zimmer Surgical, Inc., Defendants–Appellants.Zimmer Orthopaedic Surgical Products, Defendant.

No. 2013–1668.

United States Court of Appeals, Federal Circuit.

Decided: Dec. 19, 2014.

Revised Opinion Issued: March 23, 2015.

Sharon A. Hwang, McAndrews, Held & Malloy, Ltd., of Chicago, IL 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 Stoll and Garth Baer. Of counsel was Benjamin Thomas Sirolly.

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

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 v. Zimmer, Inc. , 774 F.3d 1349 (Fed.Cir.2014) is withdrawn and replaced with the revised opinion accompanying this order.

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 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 thereafter 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.

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

Zimmer appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

II

We turn first to Zimmer's appeal on the issues of claim construction, infringement, and validity.

Claim construction is an issue of law that we review de novo. Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 744 F.3d 1272, 1276–77 (Fed.Cir.2014) (en banc). In construing a claim term, we look at the term's plain and ordinary meaning as understood by a person of ordinary skill in the art. Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed.Cir.2005) (en banc). There is an exception to this general rule when a patentee sets out a definition and acts as her own lexicographer. Thorner v. Sony Computer Entm't Am., LLC, 669 F.3d 1362, 1365 (Fed.Cir.2012). Infringement is a question of fact. Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1309 (Fed.Cir.2009). Invalidity by reason of anticipation under 35 U.S.C. § 102 is a question of fact. Atlas Powder Co. v. Ireco, Inc., 190 F.3d 1342, 1346 (Fed.Cir.1999). Invalidity by reason of obviousness under 35 U.S.C. § 103 is a legal conclusion based on underlying facts. Allergan, Inc. v. Sandoz Inc., 726 F.3d 1286, 1290 (Fed.Cir.2013). Zimmer has the burden to prove invalidity by clear and convincing evidence. Galderma Labs., L.P. v. Tolmar, Inc., 737 F.3d 731, 736 (Fed.Cir.2013).

On the issues of infringement and validity that the jury decided, Zimmer appeals the district court's denials of its motion for JMOL. Generally, a district court grants JMOL and sets aside the jury's verdict if it “finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.” Fed.R.Civ.P. 50(a). We apply the law of the regional circuit to our review of the district court's grant or denial of a motion for JMOL. ClearValue, Inc. v. Pearl River Polymers, Inc., 668 F.3d 1340, 1343 (Fed.Cir.2012). The Sixth Circuit reviews the district court's decision on a motion for JMOL de novo. Barnes v. City of Cincinnati, 401 F.3d 729, 736 (6th Cir.2005). “Judgment as a matter of law may only be granted if, when viewing the evidence in a light most favorable to the non-moving party, giving that party the benefit of all reasonable inferences, there is no genuine issue of material fact for the jury, and reasonable minds could come to but one conclusion in favor of the moving party.” Id.

For the reasons stated below, we affirm the district court's judgment on the various defenses of non-infringement and invalidity that Zimmer raises across the three asserted patents. However, we also find that each of these defenses was not unreasonable.

The '329 Patent

The only asserted claim of the '329 patent, claim 2, describes features of a “pulsed irrigation surgical hand-piece.” According to this claim, the handpiece comprises a “hollow housing,” which includes a “handle,” and, in relevant part in this case, “an electric motor spaced between the top and bottom of said handle and located in said handle ” adjacent to an irrigation tube within the housing. '329 patent col. 22 ll. 5–7 (emphases added). Zimmer contends that this limitation is critical for the purposes of infringement because, as indicated by the arrows below, the motor in its accused Pulsavac Plus device is not located in the handle—rather, it is located in the “nub” of the handpiece, the protrusion behind the barrel.

Appellees' Br. 11 (red arrows added).

During claim construction, Zimmer took the position that no construction was necessary and that the claim term “handle” could be understood as having its plain and ordinary meaning to a person of ordinary skill in the art. Stryker Corp. v. Zimmer, Inc., No. 10–1223, 2012 WL 333814, at *3–4 (W.D.Mich. Feb. 1, 2012), ECF No. 106 (“Claim Construction Order ”). Stryker proposed to construe the term “handle” as “a portion of a device designed to be held by a hand or hands.” Id. The district court adopted Stryker's proposed construction.

Stryker argued that nothing in the patent's specification otherwise limited the meaning of “handle,” and that its definition for “handle” was consistent with general dictionaries. Zimmer argued that Stryker's express construction of the term, however, was too broad and read out the specification's consistent distinction between the “handle” and “barrel” portions of the claimed device.

The '329 patent generally...