Howmedica Osteonics v. Wright Medical Technology

• Decision Date: 02 September 2008
• Docket Number: No. 2007-1363.,2007-1363.
• Citation: 540 F.3d 1337
• Parties: HOWMEDICA OSTEONICS CORP., Plaintiff-Appellant, v. WRIGHT MEDICAL TECHNOLOGY, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

540 F.3d 1337

HOWMEDICA OSTEONICS CORP., Plaintiff-Appellant, v. WRIGHT MEDICAL TECHNOLOGY, INC., Defendant-Appellee.

No. 2007-1363.

United States Court of Appeals, Federal Circuit.

September 2, 2008.

William L. Mentlik, Lerner, David, Littenberg, Krumholz & Mentlik, LLP, of Westfield, NJ, argued for plaintiff-appellant. With him on the brief were Roy H. Wepner and Paul H. Kochanski. Of counsel on the brief was Joel M. Silverstein, Stern & Kilcullen, LLC, of Roseland, NJ.

L. Norwood Jameson, Duane Morris LLP, of Atlanta, GA, argued for defendant-appellee. With him on the brief were Matthew C. Gaudet, of Atlanta, GA, Anthony J. Fitzpatrick and Christopher S. Kroon, of Boston, MA, and Samuel W. Apicelli, of Philadelphia, PA. Of counsel was Shawn D. Sentilles, Wright Medical Technology, Inc., of Arlington, TN.

Before DYK and PROST, Circuit Judges, and HOCHBERG, District Judge.^*

DYK, Circuit Judge.

Plaintiff-Appellant Howmedica Osteonics Corporation ("Howmedica") appeals from a final judgment of noninfringement in this patent infringement action against defendant-appellee Wright Medical Technology, Inc. ("Wright"). Under the district court's claim construction of the term "femoral component including at least one condylar element," the parties stipulated that the accused product did not infringe the asserted patent claims. Because we conclude that the construction of this claim term was incorrect, we cannot sustain the stipulated judgment. Furthermore, because we agree with the district court that Howmedica did not release its infringement claim as part of an earlier settlement agreement, Wright's asserted alternative ground for affirmance does not support the judgment. Accordingly, we vacate the judgment of noninfringement, and remand to the district court for further proceedings consistent with this opinion.

BACKGROUND

I

Both parties develop, manufacture, and sell orthopedic implants for use in the reconstruction of various joints of the human body. Howmedica is the owner of U.S. Patent No. 5,824,100 ("the '100 patent"), which is directed to an artificial knee prosthesis or implant used to replace part or all of a patient's knee joint. Claim 15, the only independent claim asserted in this action, provides in full:

In a knee prosthesis for replacing the natural knee, the knee prosthesis having a femoral component and a tibial component, the tibial component including a bearing member and the femoral component including at least one condylar element for confronting and engaging the bearing member to accomplish articulation of the knee prosthesis throughout a range of flexion, including a primary range of flexion between a hyperextended position and a flexed position, the engagement between the condylar element of the femoral component and the bearing member of the tibial component ordinarily taking place at a contact area along articular surface areas of the condylar element and the bearing member, the improvement comprising:

anterior-posterior surface profile contours along the condylar element and the bearing member, the anterior-posterior surface profile contour along the condylar element having an essentially constant anterior-posterior articular radius throughout the articular surface area of the condylar element which contacts the bearing member during articulation throughout the primary range of flexion, the anterior-posterior articular radius having an origin lying generally along a line extending laterally between the medial and lateral collateral ligament attachment points on the femur of the natural knee.

'100 patent col. 6 l.58-col. 8 l.3 (emphases added). Claim 18, which depends from claim 15, is also at issue in this litigation. Claim 18 describes: "The improvement of claim 15 wherein the hyperextended position is at about -15° in the range of flexion, and the flexed position is at about 75° in the range of flexion." Id. col. 8 ll.8-10.

The knee joint is the point of connection between the lower end of the femur (thigh bone) and the upper end of the tibia (shin bone). In a natural knee, the lower end of the femur includes two rounded, generally smooth projections of bone called condyles, which engage with the upper end of the tibia. As pictured below, the femoral component (22) of the prosthesis described in claim 15 replaces a portion of the natural femur, including one or both condyles. A prosthesis is called "unicondylar" if it replaces only one condyle of the natural femur, and "bicondylar" if it replaces both natural condyles. The condylar element or elements (54) of the femoral component articulate against a "bearing member" (64), part of the "tibial component" (24) of the prosthesis, which is surgically implanted to replace an upper portion of the tibia.

The constant-radius geometry of the condylar element described by claim 15 furthers several goals: it allows "increased areas of contact between the condylar elements" and the tibial components "for lowered stress in the material of the bearing member during articulation of the knee prosthesis"; it facilitates "a better balance of the tension in the collateral ligaments of the knee"; it "enables a higher degree of conformity between the condylar elements and the bearing member for reduced stresses during normal activity"; it simplifies the configuration of the components, allowing easier manufacturing; and it "enables exemplary performance and increased reliability over an extended service life." Id. col. 1 ll.48-62.

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

II

The '100 patent issued on October 20, 1998. Howmedica did not immediately bring suit against Wright on the '100 patent. However, Howmedica in 1997 had commenced two lawsuits in New Jersey against Wright alleging infringement of U.S. Patent Nos. 5,192,324 ("the Kenna patent") and 5,133,772 ("the Hack patent"). In 1999, Howmedica filed a third lawsuit against Wright in New Jersey, alleging infringement of U.S. Patent No. 4,892,549 ("the Figgie patent"). At the same time, a lawsuit filed in 1991 by Wright's predecessor against Howmedica, alleging infringement of U.S. Patent No. 4,474, 177 ("the Whiteside patent"), was pending in Massachusetts.

In April 1999 the parties initiated settlement negotiations directed to resolving the four pending actions. These negotiations took place between Thomas Patton (Wright's President and Chief Executive Officer), Ned Lipes (Howmedica's President), Alfred Zarnowski (Howmedica's Senior Director of Intellectual Property), and the two parties' outside patent counsel. The parties reached an agreement at a meeting on November 15, 1999. Wright's counsel was responsible for drafting a written agreement reflecting the negotiations. At this point the parties contemplated that they would execute a single written agreement.

On November 23, 1999, Wright's counsel explained to Howmedica's counsel that they had "broken the settlement into two separate agreements since Wright Medical says this is required to comply with generally accepted accounting practices." J.A. at 978. One agreement, the New Jersey agreement, covered the Kenna, Hack, and Figgie patent lawsuits. The second agreement, the Massachusetts agreement, covered the Whiteside patent lawsuit. The two draft agreements sent to Howmedica by Wright included nearly identical mutual releases, which stated:

Howmedica Osteonics hereby releases and forever discharges Wright Medical ... from any and all manner of claims, controversies, demands, damages, causes of action, or suits, that Howmedica Osteonics has, have had, or may have against Wright Medical ... upon or by reason of or relating to any acts or omissions made by Wright Medical ... on or before the effective date of this Agreement, including, but not limited to, any and all claims and counterclaims that were or could have been asserted by Howmedica Osteonics in the lawsuit.

J.A. at 574 (draft Massachusetts agreement) (emphases added); see also J.A. at 586 (draft New Jersey agreement containing substantively identical language).¹

In response to the draft agreements, Howmedica objected to the release provision of the Massachusetts agreement as being "too broad" and therefore not accurately reflecting the parties' agreement. J.A. at 389. Howmedica explained that, "[a]s drafted, Howmedica Osteonics would be releasing and discharging Wright Medical from claims involving patents owned by Howmedica Osteonics and other claims having nothing to do with any of the matters currently in dispute between the parties." Id. However, Howmedica did not separately object to the identical provision in the New Jersey agreement, although it did request other changes to that draft. In response to Howmedica's objection, Wright's counsel struck the words "including, but not limited to, any and all claims and counterclaims" from the release provision of the Massachusetts agreement. As revised, the Massachusetts release provision covered only claims or controversies "that were or could have been asserted" in the Whiteside patent lawsuit. See id. at 382. The "including, but not limited to" language was not stricken from the release provision of the New Jersey agreement, a redlined version of which was sent to Howmedica along with the revised Massachusetts agreement. The language of the New Jersey agreement was never conformed to the language of the Massachusetts agreement. Both settlement agreements were executed as of December 21, 1999.

III

On March 10, 2000, less than three months after the execution of the releases, Howmedica filed this action against Wright, alleging infringement of the '100 patent by Wright's ADVANCE® Total Knee System. Wright responded, asserting affirmative defenses of noninfringement and invalidity, and also filed a counterclaim seeking a declaration that the '100 patent was invalid and not infringed. Wright did not initially include an affirmative defense based on the release provision in the New Jersey...