Bonutti Skeletal Innovations, LLC v. Globus Med. Inc.

• Decision Date: 15 June 2015
• Docket Number: CIVIL ACTION NO. 14-6650
• Court: U.S. District Court — Eastern District of Pennsylvania
• Parties: BONUTTI SKELETAL INNOVATIONS, LLC, Plaintiff, v. GLOBUS MEDICAL INC., Defendant.

BONUTTI SKELETAL INNOVATIONS, LLC, Plaintiff, v. GLOBUS MEDICAL INC., Defendant.

CIVIL ACTION NO. 14-6650

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

June 15, 2015

FOR PUBLICATION

OPINION

I. INTRODUCTION

In this intellectual property dispute, Plaintiff Bonutti Skeletal Innovations, LLC ("Bonutti"), the owner of numerous patents relating to orthopedic implants, alleges that defendant Globus Medical Inc. ("Globus"), a maker of spinal implants, has infringed six of its patents. Specifically, Bonutti asserts patent infringement claims under a variety of rubrics with respect to Patent Nos. 6,099,531 (the "'531 patent"), 6,423,063 (the "'063 patent"), 7,001,385 (the "'385 patent"), 8,486,066 (the "'066 patent"), 8,690,944 (the "'944 patent"), and 8,795,363 (the "'363 patent") (collectively, "the Asserted Patents"). Now before the Court is Globus' Motion to Dismiss Claims of Joint, Indirect, and Willful Infringement. The Court held oral argument on the motion on May 12, 2015.

II. BACKGROUND

Plaintiff Bonutti is the assigned owner of the six Asserted Patents: the '531 patent, titled "Changing Relationship Between Bones"; the '063 patent, titled "Changing Relationship Between Bones"; the '385 patent, titled "Joint Spacer With Compartment For OrthobiologicalMaterial"; the '066 patent, titled "Spacer"; the '944 patent, titled "Wedge Apparatus for Use in Operating on a Bone"; and the '363 patent, titled "Wedge Apparatus for Use in Operating on a Bone." Compl. ¶¶ 6-11; id. Exs. A-F. Dr. Peter M. Bonutti, an orthopedic surgeon, is the named inventor for all six patents, which disclose claims "relate[d] to novel bone spacers and related novel surgical methods that Dr. Bonutti invented." Compl. ¶ 15.

Defendant Globus is a maker of spinal implants. Mot. at 1. According to the First Amended Complaint (the "Complaint"),¹ Globus manufactures, sells, and distributes instructional materials for spinal spacers that infringe one or more of Bonutti's patents. These products include the Globus Medical CALIBER, CALIBER-L, COALITION, COLONIAL, CONTINENTAL, FORGE, FORTIFY, FORTIFY I PEEK, FORTIFY I-R, INDEPENDENCE, INTERCONTINENTAL, MONUMENT, NIKO, RISE, SIGNATURE, SUSTAIN ARCH, SUSTAIN LARGE, SUSTAIN MEDIUM, SUSTAIN-O, SUSTAIN SMALL, and TRANSCONTINENTAL spinal spacers and related instruments. See Compl. ¶¶ 19, 36, 49, 60, 74, 88. Bonutti alleges that Globus: (1) directly infringed, on a theory of joint liability, unspecified method claims in the '531 and '063 patents (Counts I and II); and (2) indirectly infringed unspecified claims in all six patents on both an induced infringement and contributory infringement theory (Counts I-VI). Finally, Bonutti alleges that Globus' infringement was willful (Counts I-VI).² Globus moves to dismiss these claims.

III. LEGAL STANDARD

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "In light of Twombly, 'it is no longer sufficient to allege mere elements of a cause of action; instead a complaint must allege facts suggestive of [the proscribed conduct].'" Great W. Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 177 (3d Cir. 2010) (quoting Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)). Consistent with the Supreme Court's rulings in Twombly and Iqbal, the Third Circuit requires a two-step analysis when reviewing a Rule 12(b)(6) motion. Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217, 219 (3d Cir. 2010). First, a court should separate the factual and legal elements of a claim, accepting the facts and disregarding the legal conclusions. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). Second, a court should determine whether the remaining well-pled facts sufficiently show that the plaintiff "has a 'plausible claim for relief.'" Id. at 211 (quoting Iqbal, 556 U.S. at 679).

"A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief.'" Great W. Mining, 615 F.3d at 177 (quoting Twombly, 550 U.S. at 556-57 (internal quotation marks omitted)). At bottom, the question is not whether the claimant "will ultimately prevail . . . but whether his complaint [is] sufficient to cross the federal court's threshold." Skinner v. Switzer, 562 U.S. 521, —, 131 S. Ct. 1289, 1297 (2011).

IV. DISCUSSION

Globus moves to dismiss Bonutti's direct method claims, which Bonutti has alleged under 35 U.S.C. § 271(a) only with respect to the '531 and '063 patents (Counts I and II).Globus also moves to dismiss Bonutti's indirect infringement claims, which were brought with respect to all six Asserted Patents (Counts I-VI). With respect to these claims, Bonutti alleges that Globus is indirectly liable for both: (1) induced infringement, codified under 35 U.S.C. § 271(b); and, (2) contributory infringement, codified under 35 U.S.C. § 271(c). Finally, Globus moves to dismiss Bonutti's claim for willful infringement. For the reasons set forth below, the Court will grant Globus' motion.

A. Direct Infringement of Method Claims (Counts I and II)

Section 271 of the Patent Act codifies the elements of patent infringement. 35 U.S.C. § 271. Subsection (a) governs direct infringement and provides:

Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.

35 U.S.C. § 271(a). Direct infringement does not require a mental state; it is a strict liability tort. Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920, 1926 (2015). Bonutti alleges a direct method infringement claim with respect to the '531 and '063 patents. The Complaint does not allege that Globus itself performed the steps of the claimed patented methods. Rather, for both patents, Bonutti's claim is based on a theory of joint infringement, alleging "on information and belief" that Globus has "infringe[d] one or more of the method claims" by "employing, contracting with, or otherwise entering into an agency relationship with medical practitioners to perform [the infringing] procedures." Compl. ¶¶ 19, 33.

It is "axiomatic that a method claim is directly infringed only if each step of the claimed method is performed." Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1328 (Fed. Cir. 2008) (citing BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373, 1378-79 (Fed. Cir. 2007)). While direct infringement requires that a single party perform every step of the claimed method,"a defendant cannot . . . avoid liability for direct infringement by having someone else carry out one or more of the claimed steps on its behalf." Id. at 1329 (quoting BMC Resources, 498 F.3d at 1379) (internal quotation marks omitted). Accordingly, where one party can be deemed to have exercised "'control or direction' over the entire process such that every step is attributable to the controlling party, i.e., the 'mastermind,'" id. (quoting BMC Resources, 498 F.3d at 1380-81), a single party can be found liable for direct infringement even where the actions of multiple parties combine to perform every step of the claimed method. In a direct infringement case brought under a theory of joint liability, then, the issue of infringement turns on whether the defendant "sufficiently controls or directs the other parties . . . such that [the defendant] itself can be said to have performed every step of the asserted claims." Id. The "control or direction" standard is "satisfied in situations where the law would traditionally hold the accused infringer vicariously liable for the acts committed by another party that are required to complete performance of a claimed method." Id. at 1330.

Here, Globus argues, and the Court agrees, that Bonutti's direct method infringement claims fail because it did not allege any facts from which the Court could reasonably infer that Globus exercised the requisite "direction or control" over the medical practitioners who allegedly performed the infringing procedures. Bonutti does not set forth any factual allegations from which the Court could infer a relationship between Globus and medical practitioners that would require the medical practitioners to infringe the Asserted Patents. In its responsive brief, Bonutti argues that it has adequately alleged that "medical practitioners practice the claimed methods of the '531 and '063 patents by implanting the accused products on Globus' behalf [,] . . . either [because] Globus employs those medical practitioners to perform infringing medical procedures on behalf of Globus, or Globus has contracted with them to do so." Opp'n at 11. But the onlyfactual allegation in the Complaint to support this claim is Bonutti's bald assertion, quoted supra, that Globus "employ[ed], contract[ed] with, or otherwise enter[ed] into an agency relationship with medical practitioners to perform [the infringing] procedures." Compl. ¶¶ 19, 33 (emphasis added). Apart from identifying the third-party infringers as "medical professionals," Bonutti's allegations are legal rubric; they contain no factual content to support a reasonable inference that any third party medical practitioner was obligated to perform the infringing procedures through a relationship with Globus. See Global Patent Holdings, LLC v. Panthers BRHC LLC, 586 F. Supp....