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U.S. Court of Appeals for the Federal Circuit has struck down a jury award of approximately $36.6 million previously entered against Biomet Inc., in favor of Raymond Tronzo, a West Palm Beach, Fla., orthopedic surgeon.
The unanimous decision, by three judges in an Appellate Court for Patent Appeals, comes after nearly five years of litigation.
"You can't ask for a greater patent appeal victory than this," said Dane A. Miller, Ph.D., president and CEO of Biomet. "The judges did leave behind a state claim having to do with whether we had an obligation to tell Tronzo not to get a patent in the first place."
If the state decides there is a liability against the company, awards to Tronzo would be to cover costs Tronzo might have been exposed to in filing for a patent.
Tronzo alleged Biomet stole his patent for use in its product, the Mallory/Head finned acetabular cup, a replacement hip component.
Tronzo had worked with Biomet in product development during the early 1980s, Miller said.
In the mid-1980s, two other doctors working with Biomet, Mallory and Head, developed the acetabular cup Biomet markets.
Tronzo approached the company regarding the design and subsequently filed for and was awarded a patent.
The Sept. 1 decision reverses findings made on Sept. 10, 1993, by a judge of the U.S. District Court for the Southern District of Florida, who entered a judgment and permanent injunction which concluded Tronzo's claim was valid and was willfully infringed upon by the company. The court held Tronzo was entitled to damages of $5.3 million, plus costs and accrued interest.
On Sept. 20, 1993, the company filed an appeal.
On May 13, 1994, the briefing at the Court of Appeals for the Federal Circuit was completed.
In January 1996, a jury entered a verdict in Tronzo's favor, awarding him approximately $55 million on his patent and state law claims.
On Oct. 29, 1996, the U.S. District Court for the Southern District of Florida entered a judgment that implemented a reduced jury verdict, awarding $30.2 million to Tronzo on his state law claims, including compensatory damages of approximately $7.1 million, punitive damages of $20 million and prejudgment interest.
The trial court dismissed, with prejudice, Tronzo's claims based on unjust enrichment. The trial court denied the company's motion challenging the validity of Tronzo's patent. Tronzo was awarded an additional $6.3 million judgment for patent infringement, including a 50 percent enhancement based on willfulness. The trial court also granted an injunction prohibiting future manufacture, use, promotion or sale in the United States of the finned version of the Mallory-Head acetabular cup.
The Federal Circuit Court's recent decision struck down that jury award and accepted Biomet's position on all patent issues, finding the patent claims asserted by Tronzo were invalid and could not have been infringed upon by Biomet.
The Federal Circuit Court upheld the district court's findings of liability on Tronzo's state law claims.
Miller said the U.S. Patent and Trademark Office did its job. The person filing for a patent is expected, as the inventor, to be the expert on the invention and to provide all related material. Certain "prior art" was omitted from Tronzo's filing, the Federal Circuit Court found.
With the decision, the injunction previously entered against Biomet on the Mallory/Head finned acetabular cup no longer stands, and all damages assessed against Biomet have been vacated.
The Mallory-Head finned acetabular cup accounted for a relatively small portion of the company's annual sales.
"We know we have been honorable and honest and fair-dealing despite what may have been said about us in the courtroom," Miller said. "We did nothing wrong and we were guilty of nothing."
Biomet's domestic and foreign subsidiaries file for about 20 patents a year and have several hundred registered patents.
Biomet and its subsidiaries design, manufacture and market products used primarily by orthopedic medical specialists in both surgical and non-surgical therapy, including reconstructive and fixation devices, electrical bone growth stimulators, orthopedic support devices, operating room supplies, spinal implants, general surgical instruments, arthroscopy products, bone cements, bone substitutes and craniomaxillofacial implants and instruments.
Headquartered in Warsaw, Biomet and its subsidiaries currently distribute products in approximately 100 countries.
