Federal Circuit No. 2013-1668
Stryker and Zimmer are the two largest players in the pulsed lavage device market. Stryker asserted three patents (the ‘329, ‘807, and ‘303 patents) against Zimmer. Following a jury trial, the district court found all asserted claims to be valid and infringed, and further found the infringement to be willful. Accordingly, the district court awarded treble damages. On appeal, the Federal Circuit affirmed the district court's findings of validity and infringement, but reversed the finding of willful infringement. For that reason, the Federal Circuit vacated the district court's award of treble damages.
In order for infringement to be found willful, the patentee must show by clear and convincing evidence that (1) the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent, and (2) if this objectively high risk is found, that the objectively high risk was either known or so obvious that it should have been known to the accused infringer. This objective recklessness finding is reviewed de novo.
For each of the asserted claims, the Federal Circuit held that Zimmer presented reasonable defenses. Specifically, with respect to the '329 patent, Stryker relied on a broad interpretation of the claim term, "handle," and based on this broad interpretation, was able to persuade the jury that the sole asserted '329 claim was infringed. Although the jury was not persuaded by this argument, the argument was found to not be unreasonable. Next with the '807 patent, Zimmer presented an argument that the patent was anticipated and invalid. The finding balanced on whether frictionally connected items are "secured or fastened." Again, although the jury was not persuaded by this argument, the argument was found to not be unreasonable. Finally, with regard to the '383 patent, Zimmer presented arguments that the claim was invalid based on a combination of references that corresponded to a PTO rejection of similar claims in a pending application. Although this was not found to be sufficient clear and convincing evidence to support a finding of invalidity, it was held to be a reasonable case that the '383 patent's asserted claims were obvious and invalid.
The Federal Circuit concluded that the district had erred by not undertaking an objective assessment of Zimmer’s defenses. As Zimmer presented reasonable defenses for each of the asserted claims, Zimmer's infringement was not objectively reckless, and thus could not support a finding of willfulness. Accordingly, the district court's award of treble damages was vacated.