UPDATED Dec. 4, 2014, with comment from Covidien and Johnson & Johnson.
A federal appeals court today overturned the $177 million awarded to Covidien (NYSE:COV) last year in its long-running patent infringement battle with Johnson & Johnson‘s (NYSE:JNJ) Ethicon Endo-Surgery subsidiary.
Judge Janet Bond Arterton had ruled that Ethicon Endo-Surgery infringed 6 claims in 3 patents held by Covidien’s corporate predecessors, Tyco Healthcare and U.S. Surgical Corp., with products including its Autosonix and LCS ultrasonic scalpels (Covidien’s competing products include its Harmonic Shears, according to the court documents).
Today the U.S. Court of Appeals for the Federal Circuit vacated the damages award, ruling that Arterton got part of her decision right but erred in other portions, according to court documents.
"The district court properly held that the Ethicon prototype anticipates 26 of the asserted claims because Ethicon conceived of the prototype before Tyco’s January 1997 conception date and diligently reduced it to practice without abandoning, suppressing, or concealing it thereafter," Chief Judge Sharon Prost wrote for the 3-judge panel. "The district court improperly held that the Ethicon prototype could not be considered prior art … and erred in finding that the curved blade claims and dual [cam] claims would not have been obvious.”
As a result of that reversal, Prost wrote, the appeals court vacated the damages award to Covidien. Company spokesman John Jordan told MassDevice.com today via email that Covidien is "disappointed" with the ruling.
"Covidien is considering its options. Following a 2012 trial, the lower court had determined that Ethicon infringed certain claims of Covidien’s patents, but this latest ruling declared those patent claims invalid. As a leading innovator of surgical products, Covidien stands behind its developments and intellectual property," Jordan wrote.
Johnson & Johnson spokeswoman Ann Leibson told us, also via email, that the company is pleased with the ruling and "confident in our innovation and grateful to the many surgeons and associates around the world that helped develop the successful Harmonic Ace+ platform."
"Our number 1 priority is maintaining access and choice for surgeons and their patients and today’s decision enables us to continue to meet the needs of our customers," Leibson wrote.
In October, Covidien won an an injunction barring sales of Ethicon’s Harmonic Ace +7 shears from another federal judge in Connecticut, Judge Janet Hall, who declined to stay that proceeding pending the outcome of the Federal Circuit appeal in the 1st lawsuit. J&J has also appealed the injunction.
