CAS Medical (NSDQ:CASM) won a round in a legal battle with Covidien‘s (NYSE:COV) Nellcor patient monitoring subsidiary over technology used to measure oxygen levels in the brain, after a federal judge in Michigan tossed a breach-of-contract claim against CasMed.
Nellcor sued CasMed in late 2011, alleging that its Branford, Conn.-based rival broke their deal settling a patent infringement lawsuit by protesting the validity of the patent, the "’065 patent," during a re-examination by the U.S. Patent & Trademark Office.
In July 2012, Nellcor filed a motion for summary judgment, asking Judge Sean Cox of the U.S. District Court for Eastern Michigan to bar CasMed from further participating in the re-examination, court documents and regulatory filings show. Cox shot down that bid and another Nellcor motion to reconsider, according to court documents, and stayed the damages phase of the case relating to the breach of contract charge.
In June of this year, Cox granted a motion by CasMed to toss the breach of contract claim, ruling that the patent office’s re-examination of the patent is distinct from the patent itself.
"The court finds that the pending amended claims in the pending merged reissue/reexamination proceeding were not part of [the patent]. Therefore, the court finds that CAS did not breach the settlement agreement by filing the protest challenging the validity of those claims," Cox wrote. "In patent law, the ‘065 patent is a specific document issued by the USPTO after a lengthy examination process. … A patent is very different from a patent application or even for that matter claims pending in a reexamination proceeding, which are not enforceable property rights. A patent application is merely an application, or request, for a new patent."
Cox also granted CasMed’s bid for attorney’s fees related to the breach of contract claim, according to the documents. The court is still deliberating the remaining 3 counts in the lawsuit, after a series of hearings in July.