Warsaw Orthopedic, Inc. v. NuVasive, Inc.

• Citation: 118 U.S.P.Q.2d 1792,824 F.3d 1344
• Decision Date: 03 June 2016
• Docket Number: 2013-1576,2013-1577.
• Parties: Warsaw Orthopedic, Inc., Plaintiff/Counterclaim Defendant–Appellant, Medtronic Sofamor Danek USA, Inc., Counterclaim Defendant–Appellant, Medtronic Puerto Rico Operations Co., Medtronic Sofamor Danek Deggendorf, GMBH, Counterclaim Defendants, v. NuVasive, Inc., Defendant/Counterclaimant–Cross–Appellant
• Court: U.S. Court of Appeals — Federal Circuit

824 F.3d 1344

118 U.S.P.Q.2d 1792

Warsaw Orthopedic, Inc., Plaintiff/Counterclaim Defendant–Appellant

Medtronic Sofamor Danek USA, Inc., Counterclaim Defendant–Appellant

Medtronic Puerto Rico Operations Co., Medtronic Sofamor Danek Deggendorf, GMBH, Counterclaim Defendants

v.NuVasive, Inc., Defendant/Counterclaimant–Cross–Appellant

2013-1576

2013-1577.

United States Court of Appeals, Federal Circuit.

Decided: June 3, 2016

Luke Dauchot, Kirkland & Ellis LLP, Los Angeles, CA, for plaintiff/counterclaim defendant-appellant, counterclaim defendant-appellant. Also represented by Alexander Fraser Mackinnon, Nimalka R. Wickramasekera, Sharre Lotfollahi ; John C. O'Quinn, Liam Patrick Hardy, Jason M. Wilcox, William H. Burgess, Washington, DC.

Deanne Maynard, Morrison & Foerster LLP, Washington, DC, for defendant/counterclaimant-cross-appellant. Also represented by Brian Robert Matsui ; Ryan Malloy, Los Angeles, CA; Frank Scherkenbach, Fish & Richardson, P.C., Boston, MA; Craig E. Countryman, Michael Ari Amon, Todd Glen Miller, San Diego, CA; Michael J. Kane, Minneapolis, MN; Paul David Tripodi II, Wilson, Sonsini, Goodrich & Rosati, P.C., Los Angeles, CA; Michael T. Rosato, Seattle, WA.

Before Lourie, Dyk, and Reyna, Circuit Judges.

Concurring opinion filed by Circuit Judge Reyna

.

Dyk

, Circuit Judge.

This case returns to this court on vacatur and remand from the Supreme Court, “for further consideration in light of Commil USA, LLC v. Cisco Systems, Inc. , ––– U.S. ––––, [135 S.Ct. 1920, 191 L.Ed.2d 883 (2015)

].” Medtronic Sofamor Danek USA, Inc. v. NuVasive, Inc. , ––– U.S. ––––, 136 S.Ct. 893, 193 L.Ed.2d 785 (2016) (Mem.). On remand, we reaffirm the district court's judgment with respect to U.S. Patent No. 7,470,236 (“the '236 patent”) and reinstate our earlier judgment in other respects.

Background

The vacated decision, Warsaw Orthopedic, Inc. v. NuVasive, Inc. , 778 F.3d 1365 (Fed. Cir. 2015)

, began as a patent infringement suit by Warsaw Orthopedic, Inc. and a related company, Medtronic Sofamor Danek USA, Inc., (“MSD”)¹ against NuVasive, Inc. (“NuVasive”). NuVasive counterclaimed for infringement of its patent, U.S. Patent No. 7,470,236 (“the '236 patent”). Only our decision with respect to the '236 patent is affected by the Supreme Court's remand. That aspect of our decision affirmed a jury verdict of infringement, holding that the asserted claims of NuVasive's '236 patent were directly infringed by users of MSD's “NIM–Eclipse” device and that MSD induced this infringement. Id. at 1369, 1373, 1379.

Our opinion issued on March 2, 2015. The Supreme Court decided Commil

shortly thereafter, on May 26, 2015. 135 S.Ct. at 1920. MSD subsequently petitioned for certiorari in this case, requesting that the Court grant certiorari, vacate, and remand (“GVR”) on the basis that our court did not correctly apply the test for induced infringement under 35 U.S.C. § 271(b) articulated in Commil and the Court's earlier decision in Global–Tech Appliances, Inc. v. SEB S.A. , 563 U.S. 754, 131 S.Ct. 2060, 179 L.Ed.2d 1167 (2011)

. MSD contended that while the jury had been properly instructed as to the standard of induced infringement set out in Commil, NuVasive had failed to prove that MSD had the requisite knowledge to induce infringement. MSD did not raise any issue concerning a belief in patent invalidity, the Supreme Court in Commil having held that a belief in patent invalidity is not a defense to inducement. 135 S.Ct. at 1928. The Supreme Court granted certiorari and issued its GVR order on January 19, 2016.

We recalled our mandate and reopened the case on March 3, 2016. We requested supplemental briefing from MSD and NuVasive on “the question of what action this court should take on remand from the Supreme Court ‘for further consideration in light of Commil

....’ ” March 2, 2016, Order, ECF No. 93. We now consider what action is appropriate in this case in light of the Supreme Court's remand.

Discussion

I

The only question here is whether there was substantial evidence for the jury to conclude that MSD induced infringement of NuVasive's '236 patent

. The Supreme Court's decision in Commil reaffirmed and clarified the Court's earlier decision in Global–Tech on the standard for inducement under § 271(b) but did not change the law. See

Commil , 135 S.Ct. at 1927–28. Commil, like Global–Tech, held that proof of induced infringement requires not “only knowledge of the patent” but also “proof the defendant knew the [induced] acts were infringing.” Id. at 1926, 1928. Commil, in reaffirming Global–Tech, also necessarily reaffirmed that willful blindness can satisfy the knowledge requirement for active inducement under § 271(b) (and for contributory infringement under § 271(c) ), even in the absence of actual knowledge. Global–Tech , 131 S.Ct. at 2070.

Global–Tech

also held that knowledge of infringement can be inferred from circumstantial evidence. Id . at 2071–72. In this respect, Global–Tech affirmed the Supreme Court's and our court's earlier precedents, which held that the “requisite intent to induce infringement may be inferred from all of the circumstances.” Broadcom Corp. v. Qualcomm Inc. , 543 F.3d 683, 699 (Fed. Cir. 2008) (quoting Water Techs. Corp. v. Calco, Ltd. , 850 F.2d 660, 669 (Fed. Cir. 1988) ); see also

MGM Studios Inc. v. Grokster, Ltd. , 545 U.S. 913, 936, 939–940, 125 S.Ct. 2764, 162 L.Ed.2d 781 (2005) (applying the inducement standard of patent law in a copyright context and holding that circumstantial evidence demonstrated an “unmistakable” “unlawful objective” to induce infringement); Lucent Techs., Inc., v. Gateway, Inc. , 580 F.3d 1301, 1322 (Fed. Cir. 2009) (“A plaintiff may ... prove the intent element through circumstantial evidence, just as with direct infringement....”); Fuji Photo Film Co., Ltd. v. Jazz Photo Corp. , 394 F.3d 1368, 1377 (Fed. Cir. 2005) (“A patentee may prove intent through circumstantial evidence.”); Water Techs. , 850 F.2d at 660 (“While proof of intent is necessary, direct evidence is not required; rather, circumstantial evidence may suffice.”).

II

The '236 patent

is directed to a method for detecting the presence of and measuring distance to a nerve during surgery. Warsaw , 778 F.3d at 1372. The patented method requires sending a series of electrical pulses that gradually increase in strength until a pulse reaches sufficient strength to elicit a nerve response. Id. Proximity to the nearest nerve is proportional to the strength of the pulse that elicited the response. Id.

NuVasive asserted claims 1, 5, and 9 of the '236 patent, of which claim 1 is representative. Claim 1 is reproduced in full in our earlier opinion, id. but only one limitation, the “stopping” step, is relevant to this case on remand. The “stopping” step of claim 1 is step (c), which requires “increasing the intensity level of said stimulus signal until said predetermined neuro-muscular response is elicited by said stimulus pulse and stopping the emission of said stimulus signal immediately after said predetermined neuro-muscular response is detected.” '236 patent col. 17 ll. 56–60. In the earlier appeal we held that substantial evidence supported the jury's finding of direct infringement of claim 1 of the '236 patent by surgeons using MSD's device, the “NIM-Eclipse.” Id. at 1373. That determination is not reopened by the Supreme Court's remand.

The district court concluded that the “stopping” step—specifically, the claim term, “stopping the emission of said stimulus signal immediately after said predetermined neuro-muscular response is detected”—did not need to be construed and consequently did not provide the jury with any construction (although the court did construe the embedded term “stimulus signal,” as discussed below). In determining whether the NIM–Eclipse met the “stopping” step, the jury was required to apply the “plain meaning to a person of ordinary skill in the art at the time of the invention.” J.A. 206.

There is no dispute that the jury was correctly instructed as to the standard for induced infringement under Global–Tech

(and Commil ). The jury was instructed that it was NuVasive's burden to prove that “the alleged infringer knew or was willfully blind to the fact that the induced acts constituted patent infringement of at least one patent claim,” in addition to the other elements of induced infringement. J.A. 213. MSD does not dispute that the jury was correctly instructed as to the relevant claim limitations of the '236 patent and as to NuVasive's burden to prove infringement by a preponderance of the evidence.

Thus, the question before us now is a limited one: whether the jury was presented with substantial evidence that MSD knew (or was willfully blind to the fact) that it was instructing doctors to infringe the '236 patent

. MSD acknowledges that its “challenge is to the sufficiency of the evidence that it indirectly infringed.” Appellants' Supp. Br. at 14. In the earlier appeal we did not address that question explicitly, stating only that “[t]here was evidence that MSD was aware of the patent prior to the litigation and that MSD specifically taught doctors to use the product during the surgical procedures in an infringing manner.” Warsaw , 778 F.3d at 1373. We now address the question. We must sustain the jury's verdict if there was substantial evidence before the jury to support an inference that MSD knew (or was willfully blind to the fact) that doctors' use of its device infringed the '236 patent.

III

MSD argues that no reasonable jury could have inferred from the evidence before it that MSD had knowledge of (or was willfully blind to) its customers' infringement of the '236 patent

. However, here we conclude that there was substantial evidence that MSD's infringement position was objectively unreasonable and that the jury, based on this evidence, could reasonably have concluded that MSD had knowledge (or was willfully blind to the fact) that it was infringing.

The central premise of MSD's non-infringement...