Smith & Nephew (NYSE:SNN) saw its $85 million patent win against Arthrex Inc. overturned this week, after an Oregon judge ruled that Arthrex didn’t infringe on SNN’s surgical anchor patents.
The latest round in the 7-year-old patent lawsuit found that "no reasonable jury could possibly find that Arthrex infringed in this case," including via indirect infringement.
"While we are very pleased with the Judge’s ruling, we are perplexed by S&N’s continued attempt to compete in the courtroom rather than the marketplace," Arthrex general counsel John Schmieding said in prepared remarks. "Arthrex would much rather apply its resources towards advancing innovation and life changing technologies."
“We’re disappointed in the court’s latest ruling,” SNN spokesman Joe Metzger told BusinesWeek. “We are reviewing the decision and expect to appeal and request reinstatement of the jury’s verdict.”
This is the dispute’s 4th round. SNN won $20.5 million in a June 2008 ruling that Arthrex willfully infringed the patents. After a court of appeals 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.
This week, Judge Michael Mosman of the U.S. District Court for Oregon overturned that decision, granting Arthrex judgment as a matter of law but nixing its bid for a new trial. Mosman also denied SNN’s request for enhanced damages, an injunction and a judgment of willful infringement that could have tripled the original damages.
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.
For "purely pragmatic reasons," the court used SNN’s definition during the trial, but indicated that it would be "likely post-trial to simply say that that construction isn’t correct and that no rational jury could have found for Smith& Nephew under Arthrex’s construction, and direct the verdict to Arthrex," should SNN prevail.
"Arthrex is hopeful that S&N agrees with this sentiment, will forgo an appeal and move on to more productive pursuits," the company wrote in a press release.
The two 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.
