On Wednesday, July 12th, Chief Judge Robert J. Jonker of the U.S. District Court for the Western District of Michigan (W.D. Mich.) entered a final judgment and permanent injunction after remand in the patent infringement case which has played out between Kalamazoo, MI-based medical tech firm Stryker Corporation (NYSE:SYK) and Warsaw, IN-based medical device company Zimmer Biomet Holdings (NYSE:ZBH). The final judgment awards $248.7 million to Stryker after it proved that Zimmer Biomet had willfully infringed on patents covering a surgical cleaning wand.
The final judgment and permanent injunction follows the U.S. Supreme Court’s decision last June in Stryker Corp. v. Zimmer Inc. (consolidated with Halo Electronics, Inc. v. Pulse Electronics, Inc.) to vacate and remand a previous decision of the Court of Appeals for the Federal Circuit (Fed. Cir.). In that December 2014 decision, the Fed. Cir. panel of Prost, Newman and Hughes affirmed part of the original holding from W.D. Mich that Stryker’s patents were valid and infringed but reversed a judgment that the infringement was willful, vacating an award of trebled damages.
In the consolidated Halo and Stryker cases, the Supreme Court struck down a standard from 2007’s In re: Seagate Technology, decided at the Fed. Cir. In Seagate, the Fed. Cir. created a two-part test for determining when enhanced damages under 35 U.S.C. §284 that required a patent owner: A) to “show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent;” and B) to clearly demonstrate that the risk of infringement “was either known or so obvious that it should have been known to the accused infringer.” The Supreme Court’s ruling found that this test was inconsistent the statute in Section 284.
The damages awarded to Stryker in the final judgment entered into the W.D. Mich. court include $70 million in lost profits; pursuant to Section 284 findings of willfulness, this lost profits award is also trebled to $210 million in the final judgment. Other damages include: supplemental damages of $2.35 million for the period between December 1st, 2012, through February 28th, 2013; supplemental damages of $3.76 million for the period from March 1st, 2013, through June 30th, 2013; attorney’s fees of $8 million plus pre-judgment interest calculated at a rate of 3.83 percent; and pre-judgement interest of $11.17 million on the jury award and supplemental damages up through February 2013.