Patent victory: Federal court reverses $85M jury verdict against Arthrex Inc.

A federal court judge has reversed an $85 million patent infringement verdict against North Naples-based Arthrex, Inc.

The decision of the U.S. District Court in Portland, Ore. essentially dismisses a 2004 patent infringement lawsuit filed by Smith Nephew over suture anchors.

“In a case like this ... we’re steadfast in our belief that we don’t infringe,” said John Schmieding, general counsel for Arthrex.

Smith Nephew filed the patent infringement suit against Arthrex in January 2004 over a patent for shoulder-damage repair devices. The lawsuit claimed Arthrex infringed on a patent for SutureTalk and PushLock anchors.

Those sutures, Schmieding said, are used in arthroscopic shoulder surgery throughout the world. The suit went to trial in federal court in Oregon in June.

The jury at the time issued an $85 million judgment against Arthrex in the case. But Schmieding said in a release Monday a judge reversed the decision last week stating “under the correct construction of the patent, no reasonable jury could find that Arthrex infringed on the case.”

The court also denied Smith Nephew’s request for enhanced damages, an injunction and a willful infringement.

“We’re that much closer to finality,” Schmieding said.

Last week’s decision can be appealed by Smith Nephew.

“We are reviewing the decision and we do fully expect to appeal and request reinstatement of the jury’s verdict,” said Joe Metzger, a spokesman for Smith Nephew.

While product patent lawsuits may be common, Frank Fodale, a patent law professor at Ave Maria School of Law, said how often they occur often depends on the industry. Some industries, like phramacuetical, are more vigilant in defending their patents, than others, Fodale said.

Schmieding told the Daily News in June that companies use financial and legal force “to keep new technology innovation out of the marketplace.” Arthrex spends millions yearly defending its more than 200 patents, he said at the time.

Schmieding said Monday the Smith Nephew suit was unique, particularly because of the number of times the two sides went before a judge.

“Nothing has been normal about this case. Having a mistrial, where it was apparent we were going to win; having a second trial and now having a third trial,” he said. “Normally we like to ... ensure we don’t go to litigation.”

While Arthrex may have cleared a hurdle in the Smith Nephew case, the company could be gearing up to go to court in another patent infringement case.

The judge’s decision comes about six months after a federal appeals court overturned a $4.71 million patent infringement verdict against Arthrex.

In that case, the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. reversed a 2010 verdict in June that found Arthrex infringed on the EndoButton knee surgery fixation device held by Smith Nephew’s endoscopy division. The court said there was insufficient evidence to support the verdict.

On Thursday, Arthrex filed a patent infringement case of its own against Parcus Medical LLC in the U.S. District Court for the Middle District of Florida in Fort Myers. The suit claims the Wisconsin-based company infringed on two Arthrex patents — the first deals with “suture anchor instrumentation for use during arthroscopic surgeries” while the second involves suture anchors for use during those surgeries.

The infringement suit comes after Arthrex filed a lawsuit against Parcus in March 2010. That suit centers around allegations of breaches of the nondisclosure agreements two former Arthrex employees signed not to disclose trade information secrets.

Parcus Medical LLC was founded in 2007 by Mark Brunsvold and Dennis Donnermeyer, both former Arthrex employees, to compete with Arthrex in manufacturing and selling medical devices, like sutures and instruments used by orthopedic surgeons.

That case was scheduled to go to mediation earlier this year, but Schmieding said the suit is still proceeding.

That’s not uncommon Fodale said because of “the nature of the suit.” Patent infringement suits usually take a while to reach a resolution. Fodale said that’s because they are usually complicated and “almost always appealed.”

Schmieding declined to comment on the newly filed infringement suit.

Connect with Jenna Buzzacco-Foerster at www.naplesnews.com/staff/jenna-buzzacco

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