Biomet To Challenge Federal Court Decision
July 28, 2016 at 4:25 p.m.
Biomet Inc., Warsaw, intends to challenge a decision by the U.S. Court of Appeals for the Federal Circuit.
They will take the case to the U.S. Supreme Court, if necessary.
Today, Biomet announced the Federal Circuit Court reinstated the $20 million punitive damage award against Biomet, which was given to Raymond G. Tronzo by the U.S. District Court in the Southern District of Florida. The Court also affirmed the compensatory damages award of $520.
The District Court had reduced the punitive damage award to $52,000. The Federal Circuit Court's decision was based principally on procedural grounds, but included a finding that a relationship of 38,000 to 1 between the punitive award and the compensatory award was legally permissible.
Biomet believes this result conflicts with controlling law including decisions of the U.S. Supreme Court.
In Biomet's challenge, Biomet will seek reconsideration by the Federal Circuit Court and, if necessary, seek a review of the case by the U.S. Supreme Court.
Notwithstanding Biomet's intention to appeal the decision, the company intends to record a $20 million charge plus legal expenses and post-judgment statutory interest against pre-tax earnings for its third quarter ending Feb. 28 to reflect the Court's decision. This is a one-time financial event and does not affect the ongoing sales of any of Biomet's product lines.
"We are astounded by the court's decision and we will pursue all available appeals, including, but not limited to, an appeal to the United States Supreme Court, if necessary," said Dane A. Miller, president and CEO of Biomet.
According to Daniel F. Hann, senior vice president and general counsel for Biomet, the case started in 1987 but was dismissed and then refiled in 1991.
In January 1996, a South Florida jury returned a verdict on the patent infringement case. The patent was on a thin acetabular cup.
The Florida jury held Biomet liable for $50 million. The judge, Hann said, immediately reduced the amount to $36 million. Biomet appealed the decision to the appellate court, which reversed the amount to zero. The appellate court also remanded the patent and remanded the case back to the trial court for the judge to review a state law claim that was made.
On remand, the judge found Tronzo had compensatory damages of $520. Punitive damages are calculated by multiplying the compensatory damages by 100, Hann said, as was established by the U.S. Supreme Court in a case that is known as the "BMW case," he said.
Tronzo appealed that decision to the appellate court again. The appellate court found in Biomet's favor and denied Tronzo a new trial but reinstated the $20 million punitive damages for Tronzo as originally awarded by a jury.
"We firmly believe," said Hann, "the appellate court erred in its decision on the law." He said under the BMW case, "this decision is clearly unconstitutional in our view."
The punitive to compensatory award should be 100 to 1, Hann said, not 38,000 to 1 as the appellate court allowed.
"We firmly believe this decision is wrong and unconstitutional under the BMW case and will appeal it to the U.S. Supreme Court if necessary," said Hann.
Biomet has 14 days to file a petition to the appellate court to reconsider their decision. After 30 to 90 days, Biomet will learn if the appellate court will grant the petition.
If the appellate court does not rule in Biomet's favor, Biomet will file an appeal to the U.S. Supreme Court, Hann said.
He said, "The Supreme Court has the discretion to accept or deny our case." He said they will know in approximately six months if the Supreme Court will hear the appeal. The Supreme Court could then take up to a year to hear and make a decision on the case.
Hann said it is important to note that the patent was found to be invalid and continues to be invalidated. He also said the decision is a one-time event and does not affect Biomet's current or future product lines.
Biomet and its subsidiaries design, manufacture and market products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy, including reconstructive and fixation devices, electrical bone growth stimulators, orthopedic support devices, operating room supplies, general surgical instruments, arthroscopy products, spinal implants, bone cements, bone substitute materials, craniomaxillofacial implants and dental reconstructive implants and associated instrumentation.
Headquartered in Warsaw, Biomet and its subsidiaries currently distribute products in more than 100 countries. [[In-content Ad]]
Biomet Inc., Warsaw, intends to challenge a decision by the U.S. Court of Appeals for the Federal Circuit.
They will take the case to the U.S. Supreme Court, if necessary.
Today, Biomet announced the Federal Circuit Court reinstated the $20 million punitive damage award against Biomet, which was given to Raymond G. Tronzo by the U.S. District Court in the Southern District of Florida. The Court also affirmed the compensatory damages award of $520.
The District Court had reduced the punitive damage award to $52,000. The Federal Circuit Court's decision was based principally on procedural grounds, but included a finding that a relationship of 38,000 to 1 between the punitive award and the compensatory award was legally permissible.
Biomet believes this result conflicts with controlling law including decisions of the U.S. Supreme Court.
In Biomet's challenge, Biomet will seek reconsideration by the Federal Circuit Court and, if necessary, seek a review of the case by the U.S. Supreme Court.
Notwithstanding Biomet's intention to appeal the decision, the company intends to record a $20 million charge plus legal expenses and post-judgment statutory interest against pre-tax earnings for its third quarter ending Feb. 28 to reflect the Court's decision. This is a one-time financial event and does not affect the ongoing sales of any of Biomet's product lines.
"We are astounded by the court's decision and we will pursue all available appeals, including, but not limited to, an appeal to the United States Supreme Court, if necessary," said Dane A. Miller, president and CEO of Biomet.
According to Daniel F. Hann, senior vice president and general counsel for Biomet, the case started in 1987 but was dismissed and then refiled in 1991.
In January 1996, a South Florida jury returned a verdict on the patent infringement case. The patent was on a thin acetabular cup.
The Florida jury held Biomet liable for $50 million. The judge, Hann said, immediately reduced the amount to $36 million. Biomet appealed the decision to the appellate court, which reversed the amount to zero. The appellate court also remanded the patent and remanded the case back to the trial court for the judge to review a state law claim that was made.
On remand, the judge found Tronzo had compensatory damages of $520. Punitive damages are calculated by multiplying the compensatory damages by 100, Hann said, as was established by the U.S. Supreme Court in a case that is known as the "BMW case," he said.
Tronzo appealed that decision to the appellate court again. The appellate court found in Biomet's favor and denied Tronzo a new trial but reinstated the $20 million punitive damages for Tronzo as originally awarded by a jury.
"We firmly believe," said Hann, "the appellate court erred in its decision on the law." He said under the BMW case, "this decision is clearly unconstitutional in our view."
The punitive to compensatory award should be 100 to 1, Hann said, not 38,000 to 1 as the appellate court allowed.
"We firmly believe this decision is wrong and unconstitutional under the BMW case and will appeal it to the U.S. Supreme Court if necessary," said Hann.
Biomet has 14 days to file a petition to the appellate court to reconsider their decision. After 30 to 90 days, Biomet will learn if the appellate court will grant the petition.
If the appellate court does not rule in Biomet's favor, Biomet will file an appeal to the U.S. Supreme Court, Hann said.
He said, "The Supreme Court has the discretion to accept or deny our case." He said they will know in approximately six months if the Supreme Court will hear the appeal. The Supreme Court could then take up to a year to hear and make a decision on the case.
Hann said it is important to note that the patent was found to be invalid and continues to be invalidated. He also said the decision is a one-time event and does not affect Biomet's current or future product lines.
Biomet and its subsidiaries design, manufacture and market products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy, including reconstructive and fixation devices, electrical bone growth stimulators, orthopedic support devices, operating room supplies, general surgical instruments, arthroscopy products, spinal implants, bone cements, bone substitute materials, craniomaxillofacial implants and dental reconstructive implants and associated instrumentation.
Headquartered in Warsaw, Biomet and its subsidiaries currently distribute products in more than 100 countries. [[In-content Ad]]