Judges: Gajarsa (author), Linn, Moore (dissenting)

[Appealed from D. Or., Judge Brown]

In Acumed LLC v. Stryker Corp., Nos. 06-1260, -1437 (Fed. Cir. Apr. 12, 2007), the Federal Circuit affirmed the district court’s findings of infringement and willfulness, but vacated the permanent injunction issued against Stryker Corporation (“Stryker”) and remanded the case for reconsideration in light of the Supreme Court’s decision in eBay Inc. v. MercExchange, LLC, 126 S. Ct. 1837 (2006). Acumed LLC (“Acumed”) is the assignee of U.S. Patent No. 5,472,444 (“the ’444 patent”), which includes disclosure and claims directed to an orthopedic nail for treatment of fractures in the humerus (the upper arm bone, which ends in the shoulder ball at the top and the elbow joint at the bottom). Orthopedic surgeons use orthopedic nails, like the patented invention, to treat fractures of the upper part of the humerus by excavating a hole through the shoulder ball and down the longer part of the bone, inserting the nail into the hole, then fixing it in place using bone screws that pass through holes in the nail. The surgeons also secure pieces of the shoulder ball bone to each other and the nail using screws.

Stryker began selling a humeral nail in the United States in early 2004, and Acumed sued Stryker in April 2004, alleging that Stryker willfully infringed the claims of its ’444 patent.

After trial, the jury found that Acumed’s asserted claims were valid, literally infringed, and that Stryker’s infringement was willful. The district court denied Stryker’s motion for judgment notwithstanding the verdict, awarded Acumed damages enhanced by 50% for willful infringement, and permanently enjoined Stryker from selling its accused orthopedic nail in the United States. Stryker appealed.

On appeal, the Federal Circuit upheld the district court’s claim construction and its finding of infringement. Concerning the meaning of “curved shank,” Stryker argued that this limitation should have been construed by the district court to mean a shank that has “a nonangular continuous bend,” rather than the district court’s broader interpretation of a shank that “has a bend or deviation from a straight line without sharp corners or sharp angles.” Slip op. at 6.

Stryker argued that the ’444 patent specification discloses that the curved shape of the invention permits the nail to be inserted into a cavity formed by a broach, and further discloses that objects having angled bends or small radius curves do not pass through their own envelope on insertion and are not well-suited to insertion into a broached hole. In light of this disclosure, Stryker asserted that “curved shank” should be construed to have Stryker’s narrower definition. The Federal Circuit disagreed, calling Stryker’s construction of “curved shank” an improper “attempt to import a feature from a preferred embodiment into the claims,” id. at 7, characterizing the ’444 patent disclosure of the nail’s usability with a broaching tool as being “merely a feature of a preferred embodiment.” Id. at 8. The Court also noted that a dependent claim would be rendered identical in scope to an independent claim if Stryker’s construction were adopted. Despite Stryker’s argument that the district court’s construction is insufficiently definite, the Court noted that sound claim construction need not always purge every shred of ambiguity. Calling the district court’s construction of “curved shank” correct, the Court held that the jury’s finding that Stryker’s nail possesses the “curved shank” is supported by substantial evidence.

The Federal Circuit also upheld the district court’s construction of “transverse holes.” Stryker argued that “transverse holes” should be limited to holes that are perpendicular to the nail shaft because every description of the transverse holes in the ’444 patent contemplates perpendicular holes. While the Court agreed that all of the transverse holes disclosed in the ’444 patent are perpendicular holes, the Court also viewed Stryker’s construction as an improper attempt to narrow the claims based on characteristics of a preferred embodiment. The Federal Circuit also noted that Acumed used both “transverse” and “perpendicular” in the specification of the ’444 patent in a distinguishable manner, which provides intrinsic evidence that Acumed knew the difference and chose to use the broader term “transverse” in the claims.

Concerning “angularly offset,” Stryker did not challenge the district court’s definition that holes having axes that are “angularly offset” means that “the axes of the . . . holes are spaced apart from each other, an angle is formed by the axes of any two such holes when viewed in two dimensions from the butt end or from the side, and the axes are not aligned in a parallel orientation.” Id. at 15. Rather, Stryker argued that its accused nail does not fall within this definition. The Federal Circuit disagreed and held that the jury’s finding that Stryker’s nail embodies the “angularly offset” claim limitation is supported by substantial evidence. The Court countered Stryker’s argument that its nail does not include an angle formed between two holes because its hole axes are neither parallel nor form angles with respect to one another in three dimensions, by noting that when viewed in two dimensions, the hole axes of Stryker’s nail form angles with respect to one another and thus fall within the district court’s construction of “angularly offset.”

Further, the Federal Circuit upheld the district court’s finding of willful infringement despite an opinion letter of patent counsel concluding that Stryker’s accused orthopedic nail would not infringe the ’444 patent. The Court relied on the fact that two patent attorneys had strongly discouraged Stryker from marketing its nail in the United States. Stryker argued that an opinion letter of competent patent counsel concluding that Stryker’s nail would not infringe the ’444 patent should preclude a finding of willfulness. However, the Federal Circuit noted that favorable opinions of counsel do not provide absolute protection against a finding of willfulness.

Concerning Stryker’s request to overturn the district court’s grant of an injunction, the Federal Circuit noted that the Supreme Court’s recent eBay decision requires application of the traditional four-factor test when evaluating a request for permanent injunction against a patent infringer and remanded the issue.

Despite Acumed’s argument that the facts found by the district court could serve as independent support for the injunction regardless of eBay, the Court declined to weigh the evidence, holding that reconsideration of the four-factor test is an issue for the district court. In a dissenting opinion, Judge Moore disagreed with the majority’s affirmance of the district court’s finding that the term “transverse holes” does not require holes that are perpendicular and its finding of literal infringement. Judge Moore stated that the district court had erred by beginning its claim construction inquiry by looking to dictionary definitions of “hole” and “transverse,” and selecting the broadest of two dictionary definitions of “transverse” after finding no express disavowal of the broader definition in the specification of the ’444 patent. According to Judge

Moore, this is contrary to the guidance of Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005) (en banc), which holds that a claim term should be construed as having “the meaning that the term would have to a person of ordinary skill in the art . . . in the context of the entire patent, including the specification.” Judge Moore asserts that, contrary to the guidance of Phillips, the district court appeared to be using the methodology expressed in Texas Digital Systems, Inc. v. Telegenix, Inc., 308 F.3d 1193, 1201-02 (Fed. Cir. 2002), which Phillips repudiates as placing too much reliance on extrinsic evidence, such as dictionaries, treatises, and encyclopedias, rather than on intrinsic evidence, such as the patent specification.