Barry v. Medtronic, Inc.

• Decision Date: 25 January 2017
• Docket Number: CIVIL ACTION No. 1:14–cv–104
• Citation: 230 F.Supp.3d 630
• Parties: Mark BARRY, M.D., Plaintiff, v. MEDTRONIC, INC., Defendant.
• Court: U.S. District Court — Eastern District of Texas

230 F.Supp.3d 630

Mark BARRY, M.D., Plaintiff,

v.MEDTRONIC, INC., Defendant.

CIVIL ACTION No. 1:14–cv–104

United States District Court, E.D. Texas, Beaumont Division.

Signed January 25, 2017

Sean P. DeBruine, Dan Johnson Law Group, San Francisco, CA, Dario Alexander Machleidt, Kilpatrick Townsend & Stockton LLP, Seattle, WA, David Clay Holloway, Kilpatrick Townsend & Stockton LLP, Atlanta, GA, Erwin Lee Cena, Kilpatrick Stockton LLP, San Diego, CA, Laura Kathryn Mullendore, Kilpatrick Townsend & Stockton LLP, Denver, CO, for Plaintiff.

Scott J. Bornstein, Allan A. Kassenoff, Cassandra A. Adams, John Edward Handy, Julie P. Bookbinder, Richard Charles Pettus, Zahra Alexis Smith, Greenberg Traurig, LLP, New York, NY, Aimee Marie Housinger, Mary–Olga Lovett, Greenberg Traurig LLP, Houston, TX, Clyde Moody Siebman, Siebman Burg Phillips & Smith LLP, Sherman, TX, Elizabeth Siebman Forrest, Siebman, Burg, Phillips & Smith LLP, Plano, TX, Eric Fletcher, Wilmer Cutler Pickering Hale & Dorr, Boston, MA, for Defendant.

ORDER REGARDING DEFENDANT'S MOTIONS FOR JUDGMENT AS A MATTER OF LAW

Ron Clark, United States District Judge

Plaintiff Dr. Mark A. Barry brought suit, asserting that Defendant Medtronic, Inc. indirectly infringed two patents relating to a system and method of aligning spinal vertebrae to correct for common spinal deformities likes scoliosis. The jury returned a verdict that was adverse in all respects to Medtronic, which timely moved for judgment as a matter of law ("JMOL") on several grounds.¹ Dkt. 406; see also Tr. at 1605–1629 (oral motions after Dr. Barry rested); Tr. at 1920–1962 (oral motions at close of evidence) (collectively, "Oral JMOL Motion").²

Medtronic claims that it is entitled to JMOL on the issue of induced infringement, overseas infringement, willfulness, damages, and invalidity. Dkt. 406; Oral JMOL Motion. Medtronic also claims that the patents are unenforceable under the doctrine of inequitable conduct. Dr. Barry opposes Medtronic's Motions for JMOL and inequitable conduct claims. Dr. Barry claims that he is entitled to enhanced damages based on the jury finding of willfulness.

In this Order, the court addresses Medtronic's motions for JMOL.³ The court grants Medtronic's motions for judgment as a matter of law solely with regard to overseas infringement under Section 271(f)(1) and the corresponding damages award, because there was insufficient evidence to support a jury verdict in Dr. Barry's favor on that issue or the corresponding jury award based on overseas infringement. All other motions for JMOL are denied.

I. PROCEDURAL HISTORY

On February 18, 2014, Dr. Barry sued Medtronic, alleging infringement of U.S. Patent No. 7,670,358 ("the '358 Patent") and U.S. Patent No. 8,361,121 ("the '121 Patent"),⁴ two patents issued to and owned by Dr. Barry himself. The court conducted a Markman hearing on November 10, 2015 and issued an order construing disputed claim terms (Dkt. 122).

Issues of infringement, invalidity, and damages were tried to a jury between November 3, 2016, and November 11, 2016. The jury returned a verdict adverse to Medtronic in all respects. Dkt. 411. The jury found as follows:

a) Claims 4 and 5 of the '358 patent and claims 2, 3, and 4 of the '121 patent were directly infringed. Answer to Question No. 1, Dkt. 411 (Jury Verdict), at p. 2;

b) Medtronic actively induced the direct infringement of claims 4 and 5 of the '358 patent and claims 2, 3, and 4 of the '121 patent. Answer to Question No. 2, Dkt. 411, at p. 3;

c) Medtronic supplied or caused to be supplied from the United States all or a substantial portion of the components of the systems claimed in claims 2, 3, and 4 of the '121 patent and actively induced others to combine those components outside of the United States in a way that would infringe if such combination occurred within the United States. Answer to Question No. 3, Dkt. 411, at p. 4;

d) Medtronic's infringement with respect to the '358 patent and the '121 patent was willful. Answer to Question No. 4, Dkt. 411, at p. 5;

e) The jury did not find that any of the asserted claims of the '358 patent or the '121 patent were invalid due to public use. Answer to Question No. 5, Dkt. 411, at p. 6;

f) The jury did not find that any of the asserted claims of the '358 patent were invalid due to prior sale. Answer to Question No. 6, Dkt. 411, at p. 7;

g) The jury did not find that any of the asserted claims of the '358 patent or the '121 patent were invalid due to prior invention. Answer to Question No. 7, at pp. 8–9 (parts (a) and (b) pertain to the '358 patent ; parts (c) and (d) pertain to the '121 patent ).

h) The jury awarded Dr. Barry damages in the following amounts (Answer to Question No. 9, Dkt. 411, at p. 10):

i. For infringement of the '358 patent within the U.S.: $15,095,970.00;

ii. For infringement of the '121 patent within the U.S.: $2,625,210.00;

iii. For infringement of the '121 patent outside the U.S.: $2,625,210.00.

While the jury was deliberating, the parties tried the issues of inequitable conduct and laches to the bench. Prior to the return of the verdict, the court ruled on the issue of laches in favor of Dr. Barry, finding that there was insufficient evidence to support a finding that Dr. Barry unreasonably delayed in filing suit or that any alleged delay resulted in material prejudice to Medtronic. The court deferred ruling on inequitable conduct, an issue on which both parties submitted additional briefing leading up to trial and after trial. Dkts. 346 (Medtronic), 356 (Medtronic), 429 (Dr. Barry), 436 (Medtronic Opp.).

The court's order on inequitable conduct and enhanced damages will be entered separately.

II. PATENT BACKGROUND AND TECHNOLOGY

Both patents have a priority date of December 30, 2004, the day that the application which issued as the '358 Patent was filed. Each patent bears the same title, "System and Method for Aligning Vertebrae in the Ameliorating of Aberrant Spinal Column Deviation Conditions" and has the exact same specification. Dr. Barry asserted claims 4 and 5 of the '358 Patent and claims 2, 3 and 4 of the '121 patent.

Figure 1 of both patents displays the basic components of the invention as follows:

The invention permits rotation of the spinal column as a whole by a single surgeon without applying significant force to individual vertebrae. See '358 Patent, 2:39–67. It involves inserting pedicle screws into to-be-rotated vertebrae and vertebrae that are not rotated. The vertebrae to be rotated are rotated with a pedicle screw cluster derotation tool 30 (Id. at 2:32) that engages the pedicle screws inserted into the vertebrae. The spine is set by fixing the pedicle screws to pre-contoured spinal rods. See id. at 3:34–4:4. The "pedicle screw cluster derotation tool" consists of pedicle screw wrenches 32 that are made up of "a handle 34, a shaft 36, and a distal end which is configured to reversibly engage the head segment ... of a pedicle screw." Id. at 5:12–14 (emphasis in original). The patents claim, variously, a first and second pedicle screw derotation tool.

The '358 patent claims are directed towards the method for performing the derotation, and the '121 patent claims are directed to the system, or apparatus, to be used. Additionally, the '121 patent contains a "cross-linking" limitation, which refers to a cross-linking member 40 across the spine that connects what is referred to as the first and second handle means in the inventions.

III. LEGAL STANDARD FOR JUDGMENT AS A MATTER OF LAW

JMOL is appropriate where "a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue." Rule 50(a)(1) ; see also Reeves v. Sanderson Plumbing Prods . , Inc. , 530 U.S. 133, 120 S.Ct. 2097, 2109, 147 L.Ed.2d 105 (2000). The Federal Circuit reviews an appeal from a grant or denial of a motion for JMOL under the law of the regional circuit in which the appeal from the district court would usually lie. ACCO Brands, Inc. v. ABA Locks Mfr. Co. Ltd. , 501 F.3d 1307, 1311 (Fed. Cir. 2007) ; Apple, Inc. v. Samsung Elecs. Co. , 839 F.3d 1034, 1040 (Fed. Cir. 2016) (en banc). A finding in a patent case by a jury in a federal district court in the Fifth Circuit is therefore reviewed under the "substantial evidence" rule. Mettler–Toledo, Inc. v. B–Tek Scales, LLC , 671 F.3d 1291, 1294 (Fed. Cir. 2012) (applying Fifth Circuit's substantial evidence standard and affirming denial of judgment as a matter of law because substantial evidence supported jury verdict of invalidity based on obviousness); see also ACCO Brands , 501 F.3d at 1311.

"Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Eli Lilly & Co. v. Aradigm Corp. , 376 F.3d 1352, 1363 (Fed. Cir. 2004) (internal citation omitted). "Substantial evidence is not a fixed quantum of evidence: What is or is not substantial may only be determined with respect to the burden of proof that the litigant bore in the trial court." Id. at 1363. Where the party with the burden of proof by clear and convincing evidence fails to obtain a favorable finding, more will be needed to overturn the verdict. Eli Lilly , 376 F.3d at 1363.⁵ "Courts grant JMOL for the party bearing the burden of proof only in extreme cases, when the party bearing the burden of proof has established its case by evidence that the jury would not be at liberty to disbelieve and the only reasonable conclusion is in its favor." Mentor H/S, Inc. v. Med. Device All., Inc. , 244 F.3d 1365, 1375 (Fed. Cir. 2001).

In entertaining a motion for JMOL, the court must review all of the evidence in the record. Reeves , 120 S.Ct. at 2110. In doing so, "the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Id. "Credibility determinations, the weighing...