Baldassare Vinti, Proskauer09.08.16
Over the past eight years, there has been an uptick in patent litigation in the United States. Between 2008 and 2015, the annual number of new patent cases for all technology classes dramatically increased from 2,644 filings in 2008 to 5,804 filings in 2015.1 Medical device patent litigation has followed the same general trend.
Between 2008 and 2015, the annual number of new medical device patent cases increased from 177 to 303 filings.2 Annual filings for 2016 are projected to increase to 325 total.3
Patent cases can mean significant judgments for owners of medical device patents. In the last three years alone, hundreds of millions of dollars have been awarded to owners of medical device patents, including:
A reasonable royalty is often defined as payment that a patent holder and the infringer would have agreed to in a hypothetical negotiation taking place at the time prior to when the infringement first began. The jury (or judge in a bench trial) is to consider all the facts known and available to the parties at the time the infringement began. In most cases, the following 15 factors, known as the Georgia Pacific factors,11 are considered in the reasonable royalty determination:
While medical device patents offer their owners the potential for significant awards of damages, calculating those damages may not be a simple matter, given the many factors to consider. Indeed, patent attorneys routinely work with valuation experts to assess the value of patents in both the licensing and enforcement context, taking into consideration the legal factors addressed above. When owners of medical device patents seek to receive compensation for their intellectual property, it is important to consult with an experienced patent litigator early in the process to ensure that all appropriate avenues are considered without prejudicing the patent owner’s right to receive fair and full consideration for its patents.
References
Baldassare Vinti is a partner in the Patent Law and Intellectual Property Groups at Proskauer. His practice focuses on litigating patent, false advertising, and technology cases in federal and state courts, as well as before the International Trade Commission. He can be reached at bvinti@proskauer.com.
Note: Daniel Werb, associate at the firm, assisted in the preparation of this article.
Between 2008 and 2015, the annual number of new medical device patent cases increased from 177 to 303 filings.2 Annual filings for 2016 are projected to increase to 325 total.3
Patent cases can mean significant judgments for owners of medical device patents. In the last three years alone, hundreds of millions of dollars have been awarded to owners of medical device patents, including:
- Award of $389M for infringement of patents relating to prosthetic valves4
- Award of $38M for infringement of patents relating to implantable medical devices5
- Award of $35M for infringement of patents relating to soft tissue grafts6
- Award of $29M for infringement of patents relating to systems and methods for attaching soft tissue to bone7
- Award of $16M for infringement of patents relating to spinal implants8
A reasonable royalty is often defined as payment that a patent holder and the infringer would have agreed to in a hypothetical negotiation taking place at the time prior to when the infringement first began. The jury (or judge in a bench trial) is to consider all the facts known and available to the parties at the time the infringement began. In most cases, the following 15 factors, known as the Georgia Pacific factors,11 are considered in the reasonable royalty determination:
- Royalties received by the patent owner for the licensing of the actual patent(s)-in-suit
- Rates paid for other comparable patents
- Nature and scope of comparable licenses
- Patent owner’s established licensing policy
- Commercial relationship between the patent owner and licensee, such as whether they are competitors in the same territory in the same line of business
- Effect of selling the patented product on sales of collateral products
- Duration of the patent and the license
- Established profitability, commercial success, and current popularity of the product made under the patent
- Utility and advantages of the patented product over the old devices
- Nature and benefits of the patented invention
- Extent of use of the invention
- Customary royalty rates in comparable businesses
- Portion of the realizable profit credited to the invention as distinguished from non-patented elements
- Opinion of qualified experts
- Amount that patent-holder and infringer would have agreed upon (at the time the infringement began) if both had been reasonably and voluntarily trying to reach an agreement
- There was demand for the patented product
- There are no non-infringing substitutes
- The patent owner had the manufacturing and marketing capability to actually exploit the demand absent the infringing conduct
- The amount of profit the patentee would have made absent the infringing conduct12
While medical device patents offer their owners the potential for significant awards of damages, calculating those damages may not be a simple matter, given the many factors to consider. Indeed, patent attorneys routinely work with valuation experts to assess the value of patents in both the licensing and enforcement context, taking into consideration the legal factors addressed above. When owners of medical device patents seek to receive compensation for their intellectual property, it is important to consult with an experienced patent litigator early in the process to ensure that all appropriate avenues are considered without prejudicing the patent owner’s right to receive fair and full consideration for its patents.
References
- New Patent Cases, DOCKET NAVIGATOR ANALYTICS (https://www.docketnavigator.com/stats). These total filings numbers include filings in U.S. District Courts and the International Trade Commission.
- New Patent Cases, DOCKET NAVIGATOR ANALYTICS (https://www.docketnavigator.com/stats). These total filings numbers include filings in U.S. District Courts and the International Trade Commission, and are limited to the following U.S. Patent Classifications: 128 Surgery; 600 Surgery; 601 Surgery: Kinesitherapy; 602 Surgery: Splint, Brace, or Bandage; 604 Surgery; 606 Surgery; 607 Surgery: Light, Thermal, and Electrical Application; 351 Optics: Eye Examining, Vision Testing and Correcting; 433 Dentistry; 623 Prosthesis (i.e., Artifical Body Member), Parts Thereof, or Aids and Accessories Therefor.
- Id.
- Edwards Lifesciences LLC et al v. Medtronic Corevalve LLC et al, No. 12-cv-23 (D. Del.) (ECF No. 176)
- Greatbatch Ltd. v. AVX Corp. et al, No. 13-cv-723 (D. Del.) (ECF No. 176)
- LifeNet Health v. LifeCell Corp., No. 2:13cv486 (E.D. Va.) (ECF No. 395)
- KFX Medical Corp. v. Arthrex, Inc., No. 11-cv-1698 (S.D. Cal.) (ECF No. 288)
- Depuy Synthes Products, LLC v. Globus Medical, Inc., No. 11-cv-652 (D. Del.) (ECF No. 420)
- 35 U.S.C. § 284
- Id.
- Georgia-Pac. Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970), modified sub nom. Georgia-Pac. Corp. v. U.S. Plywood-Champion Papers, Inc., 446 F.2d 295 (2d Cir. 1971), cert. denied, 404 U.S. 870 (1971).
- Panduit Corp. v. Stahlin Bros. Fibre Works, 575 F.2d 1152 (6th Cir. 1978).
- 35 U.S.C. § 284.
Baldassare Vinti is a partner in the Patent Law and Intellectual Property Groups at Proskauer. His practice focuses on litigating patent, false advertising, and technology cases in federal and state courts, as well as before the International Trade Commission. He can be reached at bvinti@proskauer.com.
Note: Daniel Werb, associate at the firm, assisted in the preparation of this article.