Big Suits: Biedermann

An inch-long screw can cause a lot of damage. In September a federal jury found that medical device maker Medtronic, Inc., had infringed a patent on a spinal surgery screw marketed by DePuy, a unit of Johnson & Johnson. Medtronic was ordered to pay J&J $226.3 million.

J&J had licensed the screw technology from German medical device maker Biedermann Motech GmbH and marketed the product under the name Vertex. In 2001, DePuy sued Medtronic in federal district court in Boston for patent infringement.

This fall’s verdict came in Medtronic’s second round in federal district court over the Vertex screws. In 2004 another jury ordered it to pay $24.3 million to DePuy and Biedermann, after it found that another Medtronic screw infringed on a Biedermann patent.

That case seemed to have resolved challenges to the Vertex patent in Medtronic’s favor: The company ordered a summary judgment ruling that the Vertex screw (and three others) did not infringe Biedermann’s patent.

DePuy and Biedermann appealed to the Federal Circuit. In November 2006 the court agreed that Medtronic had not literally infringed the patent, but sent the case back for trial to determine if Vertex infringed under the doctrine of equivalents. (The doctrine of equivalents is applied when two inventions have substantially similar functions and obtain the same results.) Medtronic appealed to the U.S. Supreme Court, but it declined to hear the case.

Trial in the current suit began in Boston in early September. Lawyers for DePuy and Biedermann argued that the two companies should be compensated not only for an estimated $149 million in direct losses attributable to Vertex sales, but also for missed opportunities to sell other products. According to an economist called as a DePuy expert witness, the two companies missed out on $77.2 million in related sales.

Medtronic’s lawyers argued that the Vertex screw should not be considered substantially similar. Moreover, Medtronic argued, even if it had infringed the Biedermann patent, it did not owe the companies lost profits because Medtronic could have come up with a noninfringing alternative. The company called the related sales damages argument purely speculative.

The jury awarded all damages requested. Medtronic wants the court to dismiss the award, arguing that if the patent is broad enough to capture Medtronic’s products under the doctrine of equivalents, then it is invalid because of prior art.

For Biedermann Motech GmbH (Schwenningen, Germany)

Kirkland & Ellis (Chicago): Luke Dauchot, Greer Shaw and associates James Rodriguez and Kamran Salour (Los Angeles). Biedermann approached Kirkland after a win in a similar case against Medtronic. The firm served as cocounsel.

For DePuy Spine, Inc. (Raynham, Massachusetts)

In-house: At J&J: assistant general counsel Catherine Smith.

Jones Day (Cleveland): Calvin Griffith and associates John Evans, Thomas Goots, Isaac Molnar, Patrick Norton, and Tracy Stitt. The firm, which served as cocounsel, had represented DePuy in similar cases since the 1990s.

Nutter, McClennen & Fish (Boston): Scott Erlich and Joseph Shea.

For Medtronic, Inc. (Minneapolis)

In-house: Vice president and deputy general counsel for litigation Janice Symchych and special counsel Stephen Phillips.

Dewey & LeBoeuf (New York): Robert Auchter, Kenneth Freeling, Dirk Thomas and associate Andre Bahou (Washington, D.C.): Brian Erickson (Austin). The lawyers moved to one of Dewey & LeBouef’s precursor firms, Dewey Ballentine, from Robins, Kaplan, Miller & Ciersi prior to the trial this summer.

Robins, Kaplan, Miller & Ciersi (Minneapolis): David Marder (Boston).

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