By Samuel J. Petuchowski, a member of our Patent Practice Group
Much patent discourse
during the last decade has been driven by the perceived vulnerability
of manufacturers to patent assertion by so-called "non-practicing
entities," known as NPEs (or less charitable epithets), who own patents
but do not practice them. A Pricewaterhouse Coopers 1995-2009 patent
litigation study, The Continued Evolution of Patent Damages Law, puts the fraction of decided patent cases involving NPEs over that period at 19.4%.
While the merits of a
patent suit might be considered to rest on the simple question of
whether a party is infringing a valid patent, part of the disquietude
with NPE suits derives from the perception that NPEs have nothing to
lose because they are not in a business covered by the patents at suit.
The Federal Circuit's recent decision, in MarcTec, LLC v. Johnson & Johnson and Cordis Corporation,
is likely to change that perception. It affirms a federal trial
court's judgment against an NPE and an award of $4.9 million to cover
the attorneys' fees and expert costs incurred by the defendants.
The two patents asserted
by plaintiff MarcTec are drawn from a portfolio of over 219 U.S. and
foreign patents and 143 pending patent applications held by MarcTec,
many of which are listed on the curriculum vitae of Dr. Peter Bonutti, an Effingham, Illinois orthopedic surgeon and (obviously) a prolific inventor.
The two patents, differing
in claims but otherwise identical, are drawn to a "tubular member" (or
a "surgical device") that is implantable in the body, is expandable and
has a polymer containing a therapeutic agent bonded to it. One might
be excused for thinking that this sounds like the description of a
drug-eluting stent (or "intraluminal graft," as it is called in the
In fact, during
examination proceedings in the Patent and Trademark Office, a 1992
patent describing just such a stent was cited as prior art. To obtain
allowance of his patents, Dr. Bonutti drew a distinction between a
"stent" and a "surgical device" and remonstrated that he was claiming
not the former but the latter. He also amended his patent claims to
require that the polymer be bonded by application of heat and that the
bonded material be "non-flowable and nonadherent" at room temperature.
MarcTec's expert, Purdue
professor Paul Sojka, advanced a valiant argument that when an aerosol
strikes a surface, the droplets must heat up by an amount, and for a
(very) short duration, which he calculated. One step in the J &
J/Cordis stent-coating process involves spraying, from which MarcTec
asked the court to infer that the process was one of heat-bonding
covered by its claims. The court declined, finding that the
J&J/Cordis process involves a coating that adheres without the use
Despite the trial court's
construction of the claims in a manner that made proof of infringement
impossible, MarcTec pressed ahead with the suit.
The plaintiff's theory
that local thermodynamics might play a role in the adhesion of a polymer
to a metallic surface does not seem implausible; it is merely
irrelevant to the case, since the claim-construction ruling established
that the patents in suit did not apply to stents while the allegedly
infringing product was decidedly a stent.
Despite a Markman ruling
adverse to the plaintiff across the board, the plaintiff slogged on,
whereupon the trial court granted summary judgment in favor of the
defendants. The court also charged the costs of defendants' legal
defense and expert fees to the plaintiff because bringing a baseless or
frivolous suit may render the case "exceptional" under the patent
statute and entitle the accused infringer to costs.
On appeal, MarcTec's
argument that subjective bad faith had not been shown did not avail it,
with the Federal Circuit upholding the award of costs on grounds that
the lawsuit was objectively baseless, no doubt pour encourager les autres.
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