Bos. Scientific Corp. v. Nevro Corp.
| Decision Date | 20 September 2021 |
| Docket Number | Civil Action No. 16-1163-CFC CONSOLIDATED |
| Citation | 560 F.Supp.3d 837 |
| Parties | BOSTON SCIENTIFIC CORP. and Boston Scientific Neuromodulation Corp., Plaintiffs, v. NEVRO CORP., Defendant. |
| Court | U.S. District Court — District of Delaware |
Brian Farnan, Michael Farnan, FARNAN LLP, Wilmington, Delaware; Michael Kahn, Caitlin Olwell, Erica Holland, Andrew Schreiber, Svetlana Pavlovic, Brooks Kenyon, AKIN GUMP STRAUSS HAUER & FELD LLP; New York, New York; Anthony Pierce, C. Rash, Rachel Elsby ; AKIN GUMP STRAUSS HAUER & FELD LLP; Washington, District of Columbia; Steven Maslowski, Jason Weil, AKIN GUMP STRAUSS HAUER & FELD LLP, Philadelphia, Pennsylvania; Matthew Wolf, Edward Han, Marc Cohn, Amy DeWitt, ARNOLD & PORTER KAYE SCHOLER LLP, Washington, District of Columbia; Dina Hayes, ARNOLD & PORTER KAYE SCHOLER LLP, Chicago, Illinois; Thomas Carmack, ARNOLD & PORTER KAYE SCHOLER LLP, Palo Alto, California Counsel for Plaintiff Boston Scientific Corp. and Boston Scientific Neuromodulation Corp.
Rodger Smith, Michael Flynn, Lucinda Cucuzzella, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, Delaware; Bradford Badke, Ching-Lee Fukuda, Sona De, Sharon Lee, Ketan Patel, Julie Hsia, SIDLEY AUSTIN LLP, New York, New York; Thomas Broughan, SIDLEY AUSTIN LLP, Washington, District of Columbia; Erik Fountain, SIDLEY AUSTIN LLP, Dallas, Texas; Nathan Greenblatt, SIDLEY AUSTIN LLP, Palo Alto, California Counsel for Defendant Nevro Corp.
Plaintiffs Boston Scientific Corporation and Boston Scientific Neuromodulation Corporation (collectively, Boston Scientific) accused Defendant Nevro Corporation in both the original Complaint (D.I. 1) and the operative First Amended Complaint (D.I. 13) of infringing, among other patents, U.S. Patent Numbers 7,437,193 (the #193 patent) and 8,644,933 (the #933 patent). The asserted claims of the #193 patent, titled "Microstimulator Employing Improved Recharging Reporting And Telemetry Techniques," cover certain electronic medical devices that are configured to be implanted beneath a patient's skin for tissue stimulation to prevent and/or treat various disorders. The asserted claims of the #933 patent, titled "Techniques For Controlling Charging Of Batteries In An External Charger And An Implantable Medical Device," cover technology for controlling the charging of batteries used with such devices. Boston Scientific alleges that Nevro's Senza System, a high frequency spinal cord stimulator
, and Nevro's inducement of health care providers and patients to use that system infringe the asserted claims of the asserted patents. Boston Scientific also alleges that Nevro's infringement was and is willful. Pending before me is Nevro's motion for "summary judgment of no willfulness with respect to the alleged infringement" of the #193 and #933 patents. D.I. 673.
A court must grant summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Material facts are those "that could affect the outcome" of the proceeding. Lamont v. New Jersey , 637 F.3d 177, 181 (3d Cir. 2011). "[A] dispute about a material fact is genuine if the evidence is sufficient to permit a reasonable jury to return a verdict for the non-moving party." Id. (internal quotation marks omitted). A non-moving party asserting that a fact is genuinely disputed must support such an assertion by: "(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations, ... admissions, interrogatory answers, or other materials; or (B) showing that the materials cited [by the opposing party] do not establish the absence ... of a genuine dispute ...." Fed. R. Civ. P. 56(c)(1). The non-moving party's evidence "must amount to more than a scintilla, but may amount to less (in the evaluation of the court) than a preponderance." Williams v. Borough of West Chester, Pa. , 891 F.2d 458, 460–61 (3d Cir. 1989).
Section 284 of the Patent Act "gives district courts the discretion to award enhanced damages against those guilty of patent infringement." Halo Elecs., Inc. v. Pulse Elecs., Inc. , 579 U.S. 93, 136 S. Ct. 1923, 1935, 195 L.Ed.2d 278 (2016). The statute provides that "the court may increase the damages up to three times the amount found or assessed." 35 U.S.C. § 284. Although the Court in Halo intentionally "eschew[ed] any rigid formula for awarding enhanced damages under § 284," 136 S. Ct. at 1934, the Court held that the legal principles "developed over nearly two centuries of application and interpretation of the Patent Act ... channel the exercise of [the district court's] discretion" and "limit[ ] the award of enhanced damages to egregious cases of misconduct beyond typical infringement," id. at 1935. Thus, enhanced damages awards under § 284 are available only in "egregious cases" of misconduct that involve more than "typical" infringement. Id. As the Court explained, the enhanced damages award provided by § 284 was "designed as a ‘punitive’ or ‘vindictive’ sanction for egregious infringement behavior ... [that] has been variously described in [the Court's] cases as willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate." Id. at 1932.
Although " § 284 allows district courts to punish th[is] full range of culpable behavior," id. at 1933, in the vast majority of patent cases filed today, claims for enhanced damages are sought based on allegations of willful misconduct—so much so that, even though the words "willful" and "willfulness" do not appear in § 284, plaintiffs and courts more often than not describe claims for enhanced damages brought under § 284 as "willful infringement claims." Indeed, some parties and courts refer to such claims as willful infringement "causes of action" even though § 271 of the Patent Act, which creates causes of action for direct, induced, and contributory infringement, does not mention or suggest such a thing as "willful infringement."1
The fact that willfulness is the most common type of misconduct alleged by plaintiffs who invoke § 284 makes sense, as willful conduct "serve[s] as [the] floor for culpable behavior that may incur enhanced damages." Robert L. Harmon, Cynthia A. Homan & Laura A. Lydigsen, Patents and the Federal Circuit, § 17.3(a), at 1378 (13th ed. 2017). It also explains the Court's statement in Halo that enhanced damages under § 284 "should generally be reserved for egregious cases typified by willful misconduct." 136 S. Ct. at 1934 (emphasis added).
In assessing the egregiousness of a defendant's conduct for § 284 purposes, "culpability is generally measured against the knowledge of the [defendant] at the time of the challenged conduct." Id. at 1933. The Court in Halo rejected the Federal Circuit's requirement announced in In re Seagate Technology, LLC , 497 F.3d 1360 (Fed. Cir. 2007) (en banc), that a patentee show "objective recklessness" in order to prove willful misconduct for § 284 purposes. Id. The Court reasoned that the "objective recklessness" test insulated many of the most culpable infringers from § 284 ’s punitive sanctions because it made dispositive invalidity and non-infringement defenses asserted at trial even if the infringer had not acted on the basis of those defenses or was even aware of them. Id. In the Court's words: "Under that standard, someone who plunders a patent—infringing it without any reason to suppose his conduct is arguably defensible—can nevertheless escape any comeuppance under § 284 solely on the strength of his attorney's ingenuity." Id. Thus, the Court held that, in cases where the asserted basis for enhanced damages is willful misconduct, it is "[t]he subjective willfulness of [the] patent infringer, intentional or knowing, [that] may warrant enhanced damages, without regard to whether his infringement was objectively reckless." Id.
The Court's "intentional or knowing" clause makes clear that willful infringement is—at a minimum—knowing infringement. This standard is consistent with the Supreme Court's holding in Global-Tech Appliances, Inc. v. SEB S.A. , 563 U.S. 754, 131 S.Ct. 2060, 179 L.Ed.2d 1167 (2011), that "induced infringement under § 271(b) requires knowledge that the induced acts constitute patent infringement." Id. at 766, 131 S.Ct. 2060. Since § 284 enhanced damages are available in cases of induced infringement, see, e.g. , Barry v. Medtronic, Inc. , 914 F.3d 1310, 1335–36 (Fed. Cir. 2019) ; SynQor, Inc. v. Artesyn Techs., Inc. , 709 F.3d 1365, 1385 (Fed. Cir. 2013) ; ACCO Brands, Inc. v. ABA Locks Mfrs. Co. , 501 F.3d 1307, 1314 (Fed. Cir. 2007) ; Metabolite Labs., Inc. v. Lab. Corp. of Am. Holdings , 370 F.3d 1354, 1371 (Fed. Cir. 2004), and since, under Halo , § 284 ’s enhanced damages award is reserved only for egregious cases, it would seem incongruous if not illogical to require a lesser showing of culpability for enhanced damages under § 284 than for induced infringement under § 271(b). And, indeed, the Federal Circuit emphasized in SRI International, Inc. v. Cisco Systems, Inc. , 930 F.3d 1295 (Fed. Cir. 2019) that under Halo enhanced damages are available only if a showing of something more than intentional or knowing infringement is made:
As the Supreme Court stated in Halo , "[t]he sort of conduct warranting enhanced damages has been variously described in our cases as willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate." While district courts have discretion in deciding whether or not behavior rises to that standard, such findings "are generally reserved for egregious cases of culpable behavior." Indeed, as Justice Breyer emphasized in his concurrence, it is the circumstances that transform...
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