Appeals court overturns Arthrex win over Smith & Nephew

Smith & Nephew, Arthrex

The latest turn in a nearly decade-long legal battle between Smith & Nephew (FTSE:SN, NYSE:SNN) and Arthrex over surgical anchor patents swung Smith & Nephew’s way yesterday, when the U.S. Court of Appeals for the Federal Circuit overturned a lower court’s ruling and sent the case back for reconsideration.

The British orthopedic medical device company first sued Arthrex in 2004 for patent infringement over anchors used in shoulder repair surgery. SNN won $20.5 million in a June 2008 ruling that Arthrex willfully infringed the patents. After the appeals court overturned that decision in November 2009, the case went back to trial with a new interpretation of the terms of the patent.

A jury granted SNN an $85 million win in June 2011, finding that Arthrex was guilty of patent infringement with its SutureTak, PushLock and Bio-PushLock shoulder repair anchors.

But in December 2011, an Oregon judge ruled that Arthrex didn’t infringe on SNN’s surgical anchor patents, finding that "no reasonable jury could possibly find that Arthrex infringed in this case," including via indirect infringement.

Yesterday the Federal Circuit court overturned that decision, sending the case back to the U.S. District Court for Oregon so that Judge Michael Mosman can once again deliberate.

The case hinges on the interpretation of "lodging" and "ready to secure tissue" from the patent language. SNN maintained that the language describes a surgical anchor with resilience sufficient to keep it in the bone hole until it was tensioned, while Arthrex argued that the anchor must be able to remain in place during the entire surgical procedure. Mosman agreed with Arthrex, according to court filings.

The appeals court did not.

"Turning to the merits, we see no support in the intrinsic record to require the ‘lodging’ to ‘withstand all the forces of surgery,’" according to court documents. "In other words, the surgeon’s tug, while possibly necessary to complete the surgery, is not part of what is claimed. … Nothing in the claim language, the prosecution history, or our precedent suggests that lodging must be sufficient to withstand all the forces of surgery. Instead, lodging, as claimed, only relates to how the anchor stays in place after being initially pressed into the bone. Thus the court erred in construing the claims to require lodging to be sufficient to withstand all the forces of surgery."

“The reinstatement of the June 2011 jury award of $85 million for Arthrex’s infringement activities is affirmation of the innovation coming from Smith & Nephew,” Smith & Nephew spokesman Joe Metzger told in an email. “We will continue to defend our intellectual property rights from infringement by others.”

The 2 companies are also entangled in a second patent spat, also brought by SNN, regarding techniques for attaching anterior cruciate ligament grafts to bone. In that case, as with this one, a $4.7 million decision in favor of SNN was reversed by a jury in Oregon in June 2011.

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