Flexuspine, Inc. v. Globus Med., Nos. 2017-1188, 2017-1189, 2018 U.S. App. LEXIS 1280 (Fed. Cir. Jan. 19, 2018) (Before Prost, C.J., Clevenger, and Dyk, J.) (Opinion for the court, Prost, C.J.).
This appeal revolves around the jury verdict form. The form included a stop instruction, which told the jury not to consider invalidity defenses unless first finding infringement. Globus failed to object to the instruction at any point prior to the jury’s deliberations.
Upon reviewing the verdict form delivered by the jury the district court determined that the jury had not filled out the verdict form correctly. The jury answered “no” to all parts of Question 1 regarding infringement, but did not heed the verdict form’s stop instruction and continued to answer Questions 2 and 3 (the questions pertaining to invalidity and damages). The jury form indicated that the jury found the claims invalid, and no damages should be awarded.
The district court instructed the jury to return to deliberations with a blank verdict form, and to return a verdict consistent with both questions asked and the district court’s written instructions on the verdict form. The jury returned a new verdict, which found the claims not to be infringed and, which did not address invalidity. At this point, Globus lodged its first formal objection.
The district court entered final judgment that Globus did not infringe any of the asserted claims of the patents-in-suit.
Globus filed a Rule 59(e) motion asking that the judgment be amended to include the jury’s invalidity verdict, which the court denied. Globus also filed a Rule 50(b) motion for judgment as a matter of law on invalidity. The court dismissed Globus’s invalidity counterclaims without prejudice and denied the Rule 50(b) motion as moot. Globus appealed.
The Federal Circuit applies the law of the Regional Circuit to review a Rule 59(e) motion to alter or amend a judgment – here Fifth Circuit law. The Fifth Circuit generally reviews denial of a Rule 59(e) motion for abuse of discretion, except for reconsideration of a question of law, which is reviewed de novo.
Globus argued on appeal that: (1) the district court was not authorized to direct the jury to further consider its verdict because the first verdict was not inconsistent; (2) even if the jury’s verdict answers were inconsistent with the verdict form, they were not inconsistent with the jury instructions; and (3) the court improperly found waiver of Globus’s right to a jury trial on its invalidity counterclaims based on the lack of objection to the verdict form.
Under Fifth Circuit law, a jury answering questions in violation of a stop instruction is sufficient to render the verdict internally inconsistent. Thus, the district court was entitled to refuse entry of the judgment on invalidity. The district court also has discretion to determine when a series of answers submitted by a jury is not clear and requires resubmission to a jury. As a result, the Federal Circuit declined to disturb the district court’s proper exercise of its discretion.
Globus next argued that the jury instructions did not actually preclude the jury from deciding invalidity if it found non-infringement, and could be read as allowing the jury to resolve both issues. According to Globus, the jury properly resolved the conflict between the jury instructions provided by the court and verdict form’s stop instruction by deciding non-infringement and invalidity. Globus concluded that under both the Seventh Amendment and Fifth Circuit law, the district court was required to adopt the jury’s verdict.
This argument was similarly rejected by the Federal Circuit. Once again the Federal Circuit explained that the district court has discretion to determine when a series of answers submitted by a jury is not clear and requires resubmission to the jury. The verdict form unambiguously submitted validity to the jury only as an affirmative defense. This entitled the court to find that the jury’s answers were in conflict with the clear instructions on the face of the form, requiring resubmission, whether or not those answers may have been consistent with oral instructions. Further, there is no Seventh Amendment violation when an inconsistent verdict is resubmitted. Moreover, Globus waived any objection by failing to timely object to further jury deliberations.
Globus also argued that the district court violated Globus’s Seventh Amendment rights, by improperly finding that it had waived its right to a jury on its invalidity counterclaims by failing to object to the verdict form. The Federal Circuit disagreed, explaining the district court “did not deprive Globus of its right to a jury trial outright, it merely declined to submit its counterclaims to this jury.”
The district court properly determined from Globus’s lack of objection to the verdict form, prior to deliberations, that Globus submitted invalidity to the jury only as an affirmative defense, not a counterclaim. Moreover, the district court dismissed Globus’s invalidity counterclaims without prejudice; those claims survived for Globus to assert another day.
Finally, Globus appealed the denial of its Rule 50(b) motion as being moot. The Fifth Circuit reviews the denial of a Rule 50(b) motion de novo. The Federal Circuit uses the “abuse of discretion” standard to review a district court’s decision to dismiss, without prejudice, an invalidity counterclaim challenging a patent that it concludes was not infringed. But in this case, the district court clarified that Globus’s invalidity clams were affirmative defenses, not counterclaims, and were not submitted to the jury. Accroding to the Federal Circuit, Globus did not timely object, and therefore waived its right during the trial to have the jury consider those claims. In these circumstances it is within the discretion of a district court to dismiss counterclaims without prejudice.
Once the court dismissed Globus’s invalidity counterclaims without prejudice, invalidity was no longer a live issue amenable to being decided as a matter of law. Ultimately, according to the Federal Circuit, the district court properly denied Globus’s Rule 50(b) invalidity motion as moot.