Addressing whether a defendant waived submission of its invalidity counterclaims to a jury by failing to object to the verdict form submitting invalidity as an affirmative defense, the US Court of Appeals for the Federal Circuit affirmed the district court’s refusal to enter judgment of invalidity and its dismissal of invalidity counterclaims without prejudice. Flexuspine, Inc. v. Globus Med., Inc., Case Nos. 17-1188; -1189 (Fed. Cir., Jan. 19, 2018) (Prost, CJ).

Flexuspine filed a complaint alleging that Globus infringed five patents. Globus in turn asserted invalidity counterclaims for each patent and requested a jury trial on its counterclaims. As a result of inter partes review proceedings and summary judgment motions, only two patents remained for trial. Both parties submitted proposed special verdict forms. Flexuspine’s included a “stop instruction,” which instructed the jury that if it answered negatively on infringement, it should stop and not answer the questions on invalidity and damages. Globus’s proposed verdict form did not include the stop instruction.

At the charge conference, the district court adopted Flexuspine’s proposed special verdict form including a “stop instruction.” Globus did not object. After deliberating, the jury returned a verdict, answering “no” to all questions regarding infringement. But the jury did not stop, instead answering questions finding the claims invalid and awarding $0 in damages. The district court instructed the jury to deliberate again with a new (blank) verdict form and to follow the written instructions on the verdict form. Thereafter, the jury returned a verdict finding the claims not infringed but left the remaining questions unanswered. At this point, Globus lodged a formal objection.

The district court entered final judgment of non-infringement but did not address invalidity in its judgment. Globus filed motions under Rule 59(e) requesting the judgment be amended to include the jury’s invalidity verdict, and under Rule 50(b) requesting judgment as a matter of law on invalidity. The district court denied Globus’s Rule 59(e) motion and dismissed its invalidity counterclaims without prejudice. Globus appealed.

The Federal Circuit affirmed. The Court rejected Globus’s argument that the district court’s judgment must be amended under Rule 59(e) to reflect the jury’s finding of invalidity on the first verdict form. The Court explained that the jury, in ignoring the “stop instruction,” rendered an internally inconsistent verdict, which the district court had discretion to resubmit to the jury for further consideration. The Federal Circuit also found that the district court properly found from Globus’s lack of objection to the verdict form that “Globus submitted the issue of invalidity to the jury only as an affirmative defense, not as a counterclaim.”

Finally, the Federal Circuit affirmed the district court’s decision to dismiss as moot Globus’s invalidity counterclaims without prejudice and to deny its Rule 50(b) motion for judgment as a matter of law on invalidity. The Court explained that the district court had in effect concluded that the invalidity counterclaims were not before the jury by resubmitting the special verdict form, and therefore Globus waived its right to try the invalidity counterclaims in the case. The Court found that the district court was within its discretion in dismissing the invalidity counterclaims without prejudice under those circumstances.

Practice Note: This case underscores the importance of crafting a special verdict form tailored to the issues in the case before the verdict form goes to the jury. Failure to object to the verdict form and to alert the district court to its inadequacy can result in a party waiving its right to submit a counterclaim to the jury.