A recent New Jersey Law Journal story by Michael Riccardi, “Medical Device Makers’ Patent Infringement Battle Yields $13M Fee Award” reports that a Newark, New Jersey, federal judge has awarded $13.8 million in fee and costs to Zimmer Inc. after it came out the victor in a 13-year patent infringement battle with Howmedica Osteonics Corp.
U.S. District Judge William Walls made the award to Zimmer as the prevailing party after four patents that Howmedica claimed were infringed were found to be invalid. The patents, all carrying the title “non-oxidizing medical implant,” concern irradiating and heating polymers used in medical implants in order to extend the usable life of those implants. The suit said Zimmer sold products that infringed on Howmedica’s patents.
Walls granted Zimmer $13,296,559 in fees, which is nearly all the $13.5 million it sought, and granted the entire $513,258 in costs that the company sought. But he rejected outright Zimmer’s request for $1.01 million in expert fees and for $5.8 million in prejudgment interest.
Walls awarded fees and costs after finding the litigation met the standard for an “exceptional case.” The judge said that standard was met for a variety of reasons. Among them was that an individual who testified before a patent examiner in the case on behalf of Howmedica, Aiguo Wang, failed to disclose at trial that he was an employee of that company. Walls also found that the case was exceptional because Howmedica failed to withdraw its infringement claims once it knew they were baseless, and the judge cited “selective disclosure of data and evasive responses” to a patent examiner by Howmedica.
Howmedica, for its part, argued that is had simply lost “11 years of hard-fought litigation between sophisticated competitors” over groundbreaking medical implants.
Walls ruled in 2007 that three of the patents were invalid, and the U.S. Court of Appeals for the Federal Circuit affirmed his ruling in 2010. In 2009, Zimmer sought a re-examination of claims in the fourth patent, and the U.S. Patent and Trademark Office rejected the claims in that patent.
Howmedica, a maker of orthopedic devices, was acquired in 1998 by Stryker Corp. of Kalamazoo, Michigan. It claimed in the suit that Zimmer infringed its process for irradiating and heat-treating medical implant materials. Although this process was not novel, Howmedica claimed that its process of heating the materials at 50 degrees celsius for 144 hours was superior to similar methods. But Howmedica withheld key information from federal patent examiners during the course of the litigation, prompting their patents to be invalidated, according to court documents.
Zimmer, a maker of medical devices now known as Zimmer Bionet, is based in Warsaw, Indiana.
Howmedica has indicated that it will appeal the final judgment to the U.S. Court of Appeals for the Federal Circuit, according to court documents.
Zimmer was represented by lawyers from Kirkland & Ellis, Latham & Watkins and Tompkins, McGuire, Wachenfeld & Barry of Roseland, New Jersey. Walls said the Am Law 50 average was an appropriate basis for evaluating the hourly rates claimed by counsel from Kirkland & Ellis and Latham & Watkins, citing the highly specialized area of law, the expertise required and what he termed the “exorbitant” $2 billion in damages sought by Howmedica in the case. Some Kirkland & Ellis lawyers charged as much as $1,295 per hour, but Walls said, “The court also finds any billing rate over $900 to be unreasonable,” and he cut three lawyers down to that rate—Mark Pals, Bryan Hales and David Callahan.
Walls issued an order in the case announcing his ruling on April 24, but the reasons for his ruling were unknown until he unsealed a 39-page opinion on Wednesday.
Lawyers representing Zimmer did not return calls about the fee award. Nor did lawyers at Gibbons in Newark and at McAndrews, Held & Malloy in Chicago, who represented Howmedica. Representatives at Howmedica and at Zimmer also did not return calls about the case.