Bard Peripheral Vasc, et al v. WL Gore & Associates, et al, No. 2:2003cv00597 - Document 942 (D. Ariz. 2009)
Court Description: ORDER granting 852 Motion for Prejudgment Interest; granting 854 Motion to Supplement; granting 855 Motion to Amend/Correct; granting in part and denying in part 856 Motion for Permanent Injunction; granting 918 Motion for Leave to File. W ithin 15 days of this Order, after having met and conferred, the Parties shall file a joint proposed schedule for the Courts approval. Any proposed schedule must be consistent with the dictates of the instant Order. The Court further notes that the issue of supplemental damages will be decided based on the Parties briefs, along with any exhibits.Signed by Judge Mary H Murguia on 3/31/09.(KSP)
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Bard Peripheral Vasc, et al v. WL Gore & Associates, et al 1 Doc. 942 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 14 15 Bard Peripheral Vascular, Inc. And David) ) Goldfarb, M.D., ) ) Plaintiff, ) ) vs. ) ) ) W.L. Gore & Associates, Inc., ) ) Defendant. ) ) No. CV-03-0597-PHX-MHM ORDER 16 17 18 Currently pending before the Court are Plaintiffs’ Motion for Prejudgment Interest 19 Under 35 U.S.C. § 284 (Dkt.#852.), Motion to Amend the Judgment to Provide for 20 Supplemental Damages Under 35 U.S.C. § 284 (Dkt.#855.), Motion for Supplemental 21 Discovery (Dkt.854.), Motion for Permanent Injunction Under 35 U.S.C. § 283 to Enjoin 22 Gore From Further Infringement of the Goldfarb Patent or, in the Alternative, Imposition of 23 an Ongoing Royalty (Dkt.#856.), and Defendant’s Motion for Leave to File Motion to File 24 Surreply. (Dkt.#918.) 25 I. Motion Prejudgment Interest Under 35 U.S.C. § 284 26 There are three issues that the Court must address with respect to Plaintiffs’ request 27 for prejudgment interest under 35 U.S.C. § 284: (1) whether this case is appropriate for 28 prejudgment interest; (2) if granted, what the interest rate should be set at; and (3) whether Dockets.Justia.com 1 that rate should be simple or compounded. See Bio-Rad Labs., Inc. v. Nicolet Instrument 2 Corp., 807 F.2d 964, 969 (Fed. Cir. 1986). 3 Upon a finding of patent infringement, 35 U.S.C. § 284 states that the district court, 4 shall adequately compensate the plaintiff by adding “interest and costs as fixed by the court” 5 to the jury verdict. “[P]rejudgment interest should ordinarily be awarded absent some 6 justification for withholding such an award.” General Motors Corp. v. Devex Corp., 461 7 U.S. 648, 657, 76 L. Ed. 2d 211, 103 S. Ct. 2058 (1983). Interest is awarded from the time 8 infringement began until the entry of judgment. See, e.g., Bio-Rad Laboratories, Inc. v. 9 Nicolet Instrument Corp., 807 F.2d 964, 967 (Fed. Cir. 1986). For purposes of determining 10 prejudgment interest, infringement began immediately after the Goldfarb patent was issued. 11 The appropriate interest rate to apply for prejudgment interest is committed to the 12 district court’s discretion. Laitrram Corp. v. NEC Corp., 115 F.3d 947, 955 (Fed. Cir. 1997). 13 In the instant case, Plaintiffs argue that the prejudgment interest rate should be awarded at 14 the Arizona statutory rate of 10%. Plaintiffs cite case law which suggests that because the 15 calculation of the rate of prejudgment interest is not unique to patent law, the law of the 16 regional circuit should apply, Go Med. Indus., Ltd. v. Inmed Corp., 472 F.3d 1264, 1272 17 (Fed. Cir. 2006), and in the Ninth Circuit, there is a preference for using the forum state’s 18 statutory interest rate. See, e.g. In re Hayes Microcomputer Prods., Inc. Patent Litig., 766 19 F. Supp 818, 824 (N.D. Cal. 1991); Brooktree Corp. v. Adv. micro Devices, Inc., 757 F. 20 Supp. 1101, 1103 (S.D. Cal. 1990). 21 Defendant responds by arguing that in the Ninth Circuit there is not a strong 22 preference for using state rates for setting prejudgment interest on federal claims. See 23 Brooktree, 757 F. Supp. at 1103 (“the state statutory rate is not controlling in the context of 24 a suit based on a federal claim”). Defendant also notes that Plaintiffs failed to cite a patent 25 infringement case that applied the Arizona’s statutory rate of 10%. Defendant notes that the 26 cases relied upon by Plaintiff, In re Hayes and Brooktree, were California cases where that 27 state’s statutory prejudgment interest rate was chosen at the request of the defendant, to avoid 28 the imposition of a higher interest rate. Gore instead urges the Court to use the post-2- 1 judgment interest rate of 28 U.S.C. § 1961, using either the 3-Month or a 1-Year Treasury 2 Bill Rate. Defendant cites Ninth Circuit case law holding, “the interest rate prescribed for 3 post-judgment interest under 28 U.S.C. § 1961 is appropriate for fixing the rate of pre- 4 judgment interest unless the trial judge finds, on substantial evidence, that the equities of that 5 particular case require a different result.” Grosz-Solomon v. Paul Revere Life Ins. Co., 237 6 F.3d 1154, 1164 (9th Cir. 2001). 7 Given the exclusivity of the jurisdictional grant that Congress has provided to the 8 Federal Circuit, the Ninth Circuit has never had the opportunity to address the use of 9 Arizona’s prejudgment interest statute in the context of the Patent Act. However, the Federal 10 Circuit has previously recognized that district courts are free to apply their forum state’s 11 prejudgment interest statute in the context of patent claims. See e.g., Gyromat Corp. v. 12 Champion Spark Plug Co., 735 F.2d 549, 551, 557 (Fed. Cir. 1984). With respect to whether 13 the Court should apply the postjudgment interest rate under 28 U.S.C. § 1961, the Court 14 notes that there are significant policy differences between a claimant’s prejudgment and 15 postjudgment compensation. As Plaintiff notes in their briefing, the policies that underlie an 16 award of prejudgment interest focuses on adequately compensating a plaintiff who has lost 17 the ‘time value’ benefit of its capital. Once the jury makes a finding of infringement, the 18 infringing defendant has been reduced to no more than a borrower who has received the 19 undeserved benefit of using the monies of the rightful patent holder free and clear of interest. 20 An award of prejudgment interest therefore seeks to rectify that error in order to make the 21 claimant whole. See General Motors Corp. v. Devex Corp., 461 U.S. 648, 655 n.10 (1983) 22 (noting that a prejudgment interest award should not “undercompensate” the rightful holder 23 of the patent, thereby creating a “windfall to the infringer and creat[ing] an incentive to 24 prolong litigation”). The T-Bill rate, particularly in this recent nationwide economic 25 downturn, provides a substantially lower rate of return to a prudent investor. The T-Bill rate 26 does have its advantages though. In exchange for receiving a lower rate of return, an investor 27 receives the benefit of having the stability of the federal government standing behind its 28 investment. -3- 1 In the context of patent infringement, the T-Bill rate is often inappropriate, as its 2 lower rate of return has the potential to result in a windfall profit for the wrongful interloper, 3 who would have the benefit of using the patent holder’s money without fully compensating 4 him for its use. As the Northern District of Indiana has noted, “no one would make a long- 5 term, voluntary loan [to an infringer] at the T-Bill rate.” Grain Processing Corp. v. Am. 6 Maize-Prods. Co., 893 F. Supp. 1386, 1396 (N.D. Ind. 1995), rev. on other grounds, 108 F.3d 7 1392 (Fed. Cir. 1997). 8 Thus, given the historically low rate of return on the T-Bill, the Court finds that the 9 equities do not justify using the T-Bill rate in the instant case. The Court will therefore 10 impose a 10% prejudgment interest rate on the jury’s damages award, pursuant to Arizona 11 law. See A.R.S. § 44-1201. However, recognizing that the Court is using a rate calculation 12 that is higher than the T-Bill rate proffered by Defendant, in the interest of equity, 13 prejudgment interest shall not be compounded. The prejudgment interest rate shall instead 14 be set at ‘simple interest rate.’ This decision is also consistent with Arizona state case law, 15 which has been hesitant to compound its statutory prejudgment interest rate. See Westberry 16 v. Reynolds, 653 P.2d 379, 384 (Ariz. App. 1982); Fairway Builders, Inc. v. Malouf Towers 17 Rental Co., 603 P.2d 513, 538 (Ariz. App. 1979) 18 Lastly, Plaintiffs are to also receive pre-judgment interest on their attorneys fees at the 19 same 10% simple interest rate under the Arizona statute. Such an award comports with the 20 policies of prejudgment interest awards under the Patent Act, since Plaintiffs’ have lost of 21 the use value of their money over the course of this litigation by retaining legal counsel. On 22 the other hand, the Court will not exercise its discretion to provide Plaintiffs with 23 prejudgment interest on their supplemental damages, since supplemental damages only relate 24 to damages that have accrued after the much more recent verdict date. 25 II. 26 27 Motion for Supplemental Damages Under 35 U.S.C. § 284 & Motion for Supplemental Discovery Under the Patent Act, a finding of infringement requires the Court to award damages that are “adequate to compensate” the plaintiff. 35 U.S.C. § 284. Accordingly, Plaintiffs 28 -4- 1 are entitled to a full and fair accounting, which would include Gore’s sales of the Goldfarb 2 patent from June 30, 2007 until the imposition of a permanent royalty by the Court. Because 3 “[s]upplemental damages are calculated consistent with the damages awarded in the jury 4 verdict, TiVo, Inc. v. Echostar Comm’ns Corp., 2006 US Dist. LEXIS 64291, at *7 (E.D. 5 Tex. Aug. 17, 2006), Plaintiffs request that the Court award supplemental damages in the 6 form of both lost profits and a 10% reasonable royalty. Defendant concedes that Plaintiffs 7 are entitled to a reasonable royalty rate and lost profits for the period after the verdict and up 8 until the clerk’s entry of judgment of July 30, 2008; however, Defendant opposes 9 supplemental damages based on lost profits beyond the date of judgment. Defendant argues 10 that in the Pretrial Order, Plaintiffs only sought compensation in the form of a compulsory 11 license for the period after judgment, (Dkt.#525 at 75), and therefore, any claim to 12 compensation in the form lost profits for the period after judgment has been waived. Plaintiff 13 disputes this allegation. 14 The language at issue in the Pretrial Order reads as follows: “17. If Plaintiffs are not 15 entitled to a permanent injunction, the royalty to be applied to infringing products post- 16 judgment.” Id. Plaintiffs argue that this sentence does not amount to a waiver of lost profits, 17 but only indicates that if the Court should rule against them on the injunction issue, Plaintiff 18 would be entitled to a hearing to establish the rate of a compulsory license. The Court agrees 19 with Plaintiffs interpretation of the Pretrial Order, and cannot find that post-judgment lost 20 profits have been waived. Thus, the accounting of supplemental damages shall include 21 supplemental post-judgment, lost profits damages. 22 Gore also requests that the Court hold Plaintiffs’ Motion in abeyance pending the 23 outcome of its eventual appeal before the Federal Circuit. Gore has cited several patent cases 24 where this has been done. See, e.g., Itron, Inc. v. Benghiat, 2003 WL 22037710, at *16 (D. 25 Minn. Aug. 29, 2003); Maxwell v. J. Baker, Inc., 879 F. Supp. 1007, 1011-12 (D. Minn. 26 1995); Eolas Techs., Inc. v. Microsoft Corp., 2004 U.S. Dist. LEXIS 534, at *30 (N.D. Ill. 27 Jan. 14, 2004). Gore also cites a non-patent Ninth Circuit case, where the panel did not take 28 issue with the district court’s decision to preserve the accounting determination pending -5- 1 appeal—but the Ninth Circuit did so without directly addressing the issue. Barrows v. 2 Hickel, 447 F.2d 80, 83-84 (9th Cir. 1971). Plaintiffs reply to Gore by arguing that to delay 3 the ultimate calculation of damages would needlessly drag out the proceeding, among other 4 things. The Court finds that in the interests of judicial economy and fairness to the Parties, 5 the supplemental damages determination must be completed prior to Gore’s eventual appeal, 6 if one is to be taken. Although the damages issues might be somewhat “complicated,” as 7 Gore suggests, complexity alone does not justify such a delayed course of action. The Court 8 will therefore grant Plaintiffs’ request for supplemental damages, pending its ability to 9 accurately calculate the appropriate amount of supplemental damages. 10 There is some dispute as to how the Court should calculate supplemental damages and 11 what procedural steps must to be taken before it may do so. With respect to supplemental 12 damages calculations, Defendant argues that the jury did not apply a 10% royalty to all of 13 Gore’s sales not subject to lost profits. This is because Dr. Leonard proffered a royalty base 14 of $1.27 Billion, which would have provided Plaintiffs with $127.6 Million in royalties. 15 Gore notes that the jury returned a verdict of $83.5 Million in royalties, which corresponds 16 to a $835 Million royalty base. Gore requests that the Court use a royalty base that would 17 roughly correspond with what the jury actually awarded, rather than what the Parties argued 18 for at trial. The Court notes that this argument, while present in Defendant’s brief, was 19 underdeveloped. The Court will therefore take up the issue of a proper supplemental 20 damages calculation once the Parties have provided supplemental briefing on this issue–as 21 described below. With respect to discovery, Plaintiffs have requested that Gore should 22 provide discovery on unit sales for lost profits products during the relevant time period, plus 23 revenues for reasonable royalty products. Plaintiffs have further requested that its expert, Dr. 24 Leonard, should be able to provide an affidavit with supplemental damages calculations. 25 Plaintiffs state that if Gore disputes the calculations, it may depose him and file a response 26 brief, to which Plaintiffs would reply. Gore has responded by arguing that Plaintiffs’ 27 discovery request is over broad and should be denied to the extent it seeks anything more 28 than Gore’s unit and dollar sales and IMS data. -6- 1 The Court hereby directs the Parties to meet and confer in an attempt to work out or 2 at least narrow their differences concerning the scope of discovery. Within 15 days of this 3 Order, after having met and conferred, the Parties shall file a joint proposed schedule for the 4 Court’s approval. If the Parties cannot resolve the differences before submission, they should 5 so indicate and concisely describe their respective positions. Any proposed schedule must 6 be consistent with the dictates of the instant Order. The Court further notes that the issue of 7 supplemental damages will be decided based on the Parties briefs, along with any exhibits. 8 III. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Motion for a Permanent Injunction or, in the Alternative, Imposition of an Ongoing Royalty Plaintiff argues that Gore sells two types of infringing products. The first are products for which Bard sells an alternative, nearly identical counterpart—these are what Plaintiff refers to as “Counterpart Products.” The Counterpart Products include PROPATEN grafts, INTERING grafts, cardiovascular patches, and other variations of those grafts and patches. The second group of products are made up of items for which Bard does not currently offer an alternative in the marketplace—these are “Non-Counterpart Products.” The NonCounterpart Products include Gore’s VIABAHN stent-grafts, EXCLUDER stent-grafts, TAG stent-grafts, VIATORR stent-grafts, ACUSEAL patches, as well as other products. Plaintiffs ask the Court to enjoin Gore from producing and selling the Counterpart Products, NonCounterpart Products, and from any further development of infringing products—including products for which it lacks or is presently seeking FDA approval. In the alternative, Plaintiffs ask the Court to levy a compulsory license on any of Gore’s infringing products for which an injunction would be inappropriate. The Parties have filed a voluminous amount of briefing on the Court’s docket related to the instant motion. This is not entirely surprising, given the practical consequences that a permanent injunction would have on Gore and Bard’s future business operations. Even though the Parties efforts have resulted in somewhat complicating the issue, the legal analysis that must guide the Court’s decision is straightforward and when applied correctly to the instant facts, can compel only one result. 28 -7- 1 35 U.S.C. § 283, confers on courts hearing disputes over patents the right to “prevent 2 the violation of any right secured by patent, on such terms as the court deems reasonable.” 3 Because the “essential attribute of a patent grant is that it provides a right to exclude 4 competitors from infringing the patent,” Acumed LLC v. Baxter Int’l, Inc., 2008 WL 928496, 5 *2 (N.D. Cal. 2008), “courts have granted injunctive relief upon a finding of infringement 6 in the vast majority of patent cases.” Fresenius Med. Care Holdings, Inc. v. Baxter Int’l, Inc., 7 2008 WL 928496, at *3 (N.D. Cal. Apr. 4, 2008) (quoting eBay, Inc. v. MercExchange, 8 L.L.C., 547 U.S. 338, 395 (2006) (Roberts, C.J., concurring)). However, the ease and 9 frequency with which trial courts have historically granted injunctions in patent cases was 10 often at odds with traditional principles of equity, which has long held that injunctive relief 11 is an “extraordinary” remedy. See Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 12 (1982) (“courts of equity should pay particular regard fo the public consequences in 13 employing the extraordinary remedy of injunction”). These apparent inconsistencies came 14 to a head in the case of eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 338, 395 (2006). In 15 eBay, the Supreme Court struck down the Federal Circuit’s long standing rule that a patentee 16 is presumptively entitled to a permanent injunction against infringement. Id. at 392. The 17 Supreme Court explained that district courts must exercise discretion when weighing an 18 injunction in a patent case, and the exercise of such discretion must be guided by the same 19 traditional four factor test that courts sitting in equity have used for centuries to determine 20 the appropriateness of injunctive relief. See eBay, 547 U.S. at 395 (Roberts, C.J., 21 concurring). This test is familiar to the Court, and involves the following factors: (1) whether 22 plaintiff has suffered irreparable harm; (2) there is no adequate remedy at law; (3) the balance 23 of hardships favors injunction; and (4) the public interest favors imposing an injunction. In 24 the instant case, factors two and four dominate the Court’s inquiry; both weigh heavily 25 against imposing an injunction. 26 First, with respect to the adequacy of money damages, Plaintiffs argue that Gore’s 27 usurpation of Bard’s exclusive right to use Dr. Goldfarb’s invention cannot be fixed by 28 merely allocating additional monies through a compulsory license. To support this claim, -8- 1 Plaintiffs argues that Gore has flooded the market with infringing products thereby obtaining 2 more customers and sales than Bard, that the Court cannot quantify the value related to 3 Bard’s ability to control its patented technology, that absent an injunction Bard will be 4 prevented from exploiting its own property, and if Gore is allowed to continue infringing, no 5 company will likely take a future license from Bard. The Court is unpersuaded by Plaintiffs 6 contentions. Without minimizing the harm caused by Gore’s wilful infringement, the Court 7 notes that Plaintiffs can be brought adequately whole through legal remedies. For instance, 8 to compensate Plaintiffs for past harm, the jury has already awarded Plaintiffs lost profits and 9 a 10% reasonable royalty rate. That amount currently totals more than $185 Million. At the 10 same time, to compensate Plaintiffs for future harm, the Court can impose a compulsory 11 license on the continued sales of Gore’s infringing products for the remainder of the life of 12 the Goldfarb patent. See High Tech Med. Instrumentation v. New Image Indus., Inc., 49 13 F.3d 1551, 1557 (Fed. Cir. 1995). Certainly, money damages are not the perfect remedy for 14 Plaintiffs; there is no remedy available at either law or equity that can rewrite the history of 15 Gore’s objectively reckless and wilful conduct towards Dr. Goldfarb over these past thirty 16 years. Perfection, however, is not the Court’s goal with respect to damages, adequacy is. The 17 Court is satisfied that a fair and full amount of compensatory money damages, when 18 combined with a progressive compulsory license, will adequately compensate Plaintiffs’ 19 injuries, such that the harsh and extraordinary remedy of injunction–with its potentially 20 devastating public health consequences—can be avoided. 21 To this end, and with the public health consequences of enjoining Gore from 22 producing or selling its infringing products in mind, the Court will turn to address the fourth 23 equitable factor that is required for an injunction—that the public interest must favor an 24 injunction. 25 The Court will first address the issue of Gore’s Counterpart Products. Again, these 26 products are mostly comprised of Gore’s vascular grafts and patch grafts. These are also 27 products for which Plaintiffs have been awarded damages based on lost profits. As Defendant 28 notes in its brief, Gore’s vascular grafts, which infringe on the Goldfarb patent, have a 62% -9- 1 market share, while Bard Peripheral, which rightfully produces grafts using the same patent, 2 has captured only 28% of the market. Plaintiff argues that, as demonstrated by the jury’s 3 verdict, Gore’s Counterpart Products were found to be clinically interchangeable with 4 competing Bard products, such that Bard could competently step into and capture Gore’s 5 market share without affecting product availability. See Fresenius, 2008 WL 928496, at *5 6 (“Numerous courts have granted permanent injunctions in cases involving medical devises 7 where, as here, there were alternative products already on the market or available to the 8 infringer . . .”). Evidence of such interchangeability, according to Plaintiffs, is found 9 throughout the record and in the jury instructions entitled “Lost Profits Due to Lost Sales.” 10 and “Lost Profits: Market Share.” (Dkt#769 at 65, 66.) The lost profits instruction asked the 11 jury to award damages on lost profits due to “sales the patent owner lost because of the 12 infringement.” Id. at 66. At the same time, the market share instruction stated that 13 “[p]roducts are in the same market if they are sufficiently similar to compete against each 14 other. Two products are sufficiently similar if one does not have a significantly higher price 15 than or possess characteristics significantly different than the other.” Id. at 65. Plaintiffs 16 contend that because the Court is bound by the factual determinations made by the jury, the 17 Court should impose an injunction on the production and distribution of the Counterpart 18 Products, since, as the jury determined, Bard produces clinical alternatives to Gore’s 19 Counterpart Products. See (Dkt.#770 at 22) (“Have Plaintiffs proved that it is more likely 20 than not that Bard Peripheral Vascular is entitled to damages for lost profits due to Gore’s 21 sales of surgical vascular grafts and patches inside the United States? [Jury box marked] 22 Yes.”); Beacon Theaters v. Westover, 359 U.S. 500 (1959) (“When issues common to both 23 legal and equitable claims are to be tried together, the legal issues are to be tried first, and the 24 findings of the jury are binding on the trier of equitable claims.”). At oral argument, Gore 25 responded to Plaintiffs by arguing that the jury determination on lost profits was based on 26 a hypothetical market, one that is far removed from reality. According to Gore, the jury only 27 determined that ‘but for’ Defendant’s infringement, Plaintiff would have captured over $102 28 Million worth of lost sales. But that does not mean that in a real technical or scientific sense - 10 - 1 that all of Gore’s products could be removed from the market and replaced by Bard’s 2 products without public health ramifications. 3 To this end, Gore has highlighted features of its various Counterpart Products and 4 what a disruption in product availability might portend to thousands of cardiovascular 5 patients. Gore attached supporting declarations by various medical doctors in aid of its 6 argument. Gore notes that the film wrap on its surgical grafts substantially increases suture 7 removal with a reduced risk of tearing the graft. (Booth Ex. ¶7; Yamauchi Ex. ¶ 5.) With 8 respect to dialysis patients, Dr. Neville, one of Gore’s supporting doctors has stated that 9 Gore’s wrapped grafts are the best “synthetic prosthetic graft” used as access points for 10 dialysis patients. (Neville Ex. ¶ 7.) Gore submits that some doctors will use Gore’s ePTFE 11 grafts exclusively for such treatments. (Ascher Ex. ¶ 7.) Gore also argues that its wrapped 12 grafts are stronger and more resistant to aneurysms than competitors, and that in above the 13 knee applications, Gore’s wrapping helps to prevent aneurysmal dilation, especially for 14 patients with high blood pressure. (Veith Ex. ¶ 6; Hollis Ex. ¶ 9; Yamauchi Ex. ¶ 5.) Dr. 15 Ascher stated that without access to Gore’s grafts, doctors would not have access to a product 16 that could salvage the legs of some patients. (Ascher Ex. ¶¶ 3-5.) Furthermore, Gore claims 17 that its wrapped grafts have been clinically proven to significantly reduce risks when 18 compared to non-wrapped grafts, such as those produced by Bard. Additionally, Gore and 19 its supporting doctors have noted that the stretch and thin wall characteristics of its standard 20 grafts produce clinical benefits that would not be otherwise available to the general public, 21 if the Court issued an injunction. (See Wheatley Ex. ¶ 4; Morasch ¶ 11; Yamauchi Ex. ¶ 10.) 22 Gore has also highlighted numerous other features, which it argues are unique and currently 23 unavailable, but which the Court will not highlight in detail. With respect to Gore’s brand 24 name products, in its briefing, Gore discussed the uniquely therapeutic uses of its 25 PROPATEN graft, which it argues is the only FDA approved product on the market with 26 heparin bioactivty. As one of Gore’s medical experts states, PROPATEN “is an exceedingly 27 successful breakthrough” that has no “substitute” and “will save many limbs.” (Hollis Ex. 28 ¶ 9.) Other defense supporters note that removing PROPATEN from the market would lead - 11 - 1 to increased amputations and death, resulting from increased graft failure from clotting. 2 (Neville Ex. ¶ 13; Kanjickal Ex. ¶ 12.) 3 Gore argues that its ring products also provide benefits that cannot be duplicated by 4 substitute products on the market. Gore notes that application of INTERING internal ring 5 grafts results in easier insertion by the surgeon and reduced trauma for the patient. 6 (Yamauchi Ex. ¶ 9; Wheatley Ex. ¶ 7.) Lastly, at oral argument, Gore’s lead counsel was 7 also emphatic in highlighting the potentially dangerous consequences for pediatric patients 8 if Gore’s pediatric shunts were no longer available. As one of Gore’s supporting medical 9 professionals, Dr. Teodori, noted, taking Gore’s pediatric shunts and related products off the 10 market “would expose my patients to more risk of complications such as infection and injury 11 to the heart.” (Teodori Ex. ¶ 5.) 12 The Court is mindful of the jury’s findings regarding lost profits and how such 13 findings relate to the interchangeability of Gore’s Counterpart Products. At the same time, 14 the Court understands that the jury’s determination took place in the vacuum of the 15 courtroom; they were asked only to determine whether Bard, absent Gore’s infringement, 16 would have been capable of making the same sales. As a hypothetical matter, the jury 17 answered yes. That is the not same inquiry that the Court, sitting in equity, is presently 18 engaged in. Here, the Court weighs the utility of Gore’s products against potential harm to 19 public health, and in doing so, it must focus on the practical consequences—for real patients 20 and surgeons—of granting Plaintiffs’ requested remedy. This inquiry is not tantamount to 21 reweighing the evidence or drawing inferences that contradict the facts as embodied by the 22 jury’s verdict. The court acknowledges that this is a difficult and relatively novel issue, in 23 light of the eBay decision. The Court is aware of the sentiments expressed by Plaintiffs’ 24 counsel at oral argument, that a willful infringer, such as Gore, should not be able to continue 25 its future infringement unabated simply because it wrongfully acquired and then successfully 26 27 28 - 12 - 1 reproduced a product of great public importance.1 Nor does the Court dispute the accuracy 2 of Plaintiffs argument that “[i]ntellectual property enjoys its highest value when asserted 3 against a direct competitor in the plaintiff’s market.” Acumed LLC v. Stryker Corp., 2007 4 WL 4180682, *4 (D. Or. 2007), aff’d, 551 F.3d 1323 (Fed. Cir. 2008). However, the values 5 of the Patent Act and the protections that it offers to the patentee are sometimes outweighed 6 by the Court’s equitable concern for the greater public good, particularly in the realm of 7 vascular surgery and other potentially life saving technologies. The Court therefore declines 8 to enjoin Gore from the continued production and sales of its Counterpart Products, finding 9 that Plaintiffs’ remedy at law provides adequate compensation under the meaning of the 10 Patent Act, particularly when viewed in light of the public interest served by Gore’s 11 continued infringement—for which Plaintiffs are to receive a compulsory license. 12 Turning to Gore’s Non-Counterpart Products, as Gore notes in its brief, the TAG and 13 EXCLUDER stent-grafts are preferred by experts because of ease of use and low patient risk. 14 TAG was the first sten-graft approved fo thoracic aortic aneurysms, has the most clinical use, 15 and is considered to be the industry standard. As one practitioner noted, “[f]or . . . patients 16 with small or tortous arteries, and who cannot tolerate the shock of open heart surgery, there 17 is no appropriate alternative.” (Morasch Ex. ¶ 4.) Gore has submitted statements by other 18 doctors which mirror those of Dr. Morasch. In addition, Gore claims that the EXCLUDER 19 stent-graft is the product of choice for treating abdominal aortic aneurysms. Dr. Morasch 20 stated that he uses the EXCLUDER “almost exclusively” because it is “more deliverable 21 through small or diseased iliac arteries than stiffer alternatives” due to its low profile and 22 greater flexibility and because its “low permeability film promotes reduction in aneurysm 23 1 24 25 26 27 28 Plaintiff has cited to cases where trial courts have imposed injunctions in the medical field. Mallinckrodt, Inc. v. Masimo Corp., 147 Fed. Appx. 158, 177-78 (Fed. Cir. 2005) (blood oximeter); Smith & Nephew, Inc.v. Synthes (U.S.A.), 466 F. Supp. 2d 978, 985 (W.D. Tenn. 2006) (orthopedic bone nails); Diomed, Inc.v. AngioDynamics, Inc., 2007 WL 2045227, at *1 (D. Mass. 2007) (laser vein ablation); Sanofi-Synthelabo v. Apotex, Inc., 492 F. Supp. 2d 353 (S.D.N.Y.) (anti-platlet aggregation drug); Amgen, Inc. v. F. Hoffman-La Rouche, Ltd., 581 F. Supp. 2d 160 (D. Mass. 2008) (anemia drug); Fresenius, 2008 WL 928496 (N.D. Cal. 2008) (dialysis machines). - 13 - 1 ‘sack size’.” Id. at ¶ 6. Furthermore, Dr. Morasch described the EXCLUDER as a “life 2 saving paradigm shift” to treat young patients injured in car accidents. Id. at ¶ 6. Despite 3 Gore’s infringement, removing these products from the market would increase patient risk 4 and may lead to preventable deaths from burst arteries. The Court is unwilling to take such 5 a gamble. 6 With respect to VIABAHN, that devise is used to treat femoral and visceral artery 7 aneurysms and artery ruptures. (Hollis Ex. ¶ 5; Morasch Ex. ¶ 9.) It is an FDA approved 8 minimally invasive alternative to open surgery for narrowing of the superficial femoral 9 artery, and according to Gore, is the only practical FDA approved endograft for treating long 10 segment superficial femoral artery occlusive legions. (Morasch Ex. ¶ 9.) Untreated, this 11 condition can lead to loss of limb and increased risk of death. (Beckstead Ex. ¶ 3.) Patients 12 for whom open heart surgery is not an option are at increased risk for amputation without 13 VIABAHN. Gore has proffered statements by doctors who view VIABAHN as unique and 14 without any real substitute. (Morasch Ex. ¶ 9.) In addition, VIABAHN is considered to be 15 ideal fo behind the knee implantation: Dr. Ascher stated that he would not cross a joint with 16 any other stent-graft, while Dr. Wheatley stated that he would not use small diameter Dacron 17 stent-grafts in a patient’s leg. (Ascher Ex. ¶ 12; Wheatley Tr. 1819, 1837-38.) Gore argues 18 that Bard’s competing products cannot work in such applications. 19 Given the utility of Gore’s infringing products, both Counterpart and Non- 20 Counterpart, the important role that these products play in aiding vascular surgeons who 21 perform life saving medical treatments, sound public policy does not favor removing Gore’s 22 items from the market. The risk is too great. Placing Gore’s infringing products out of reach 23 of the surgeons who rely on them would only work to deny many sick patients a full range 24 of clinically effective and potentially life saving treatments. The Court finds that the strength 25 of this factor alone precludes it from imposing a permanent injunction. 26 The Court will therefore deny Plaintiffs’ request to permanently enjoin Gore from 27 future development, manufacture and sale of products that infringe upon the Goldfarb patent. 28 Finding that a permanent injunction cannot be justified in the instant case, the Court holds - 14 - 1 that a compulsory license is the appropriate manner in which Plaintiffs may be compensated 2 for Gore’s future infringement. Therefore, Plaintiffs’ motion for a permanent injunction is 3 denied and Plaintiffs’ motion for a compulsory licence is granted. 4 Within 15 days of this Order the Parties, after satisfying a meet and confer 5 requirement, are to file a proposed schedule for the Court’s approval regarding the imposition 6 of a compulsory license on Defendant Gore. 7 Accordingly, 8 IT IS HEREBY ORDERED granting Plaintiffs’ Motion for Prejudgment Interest 9 Under 35 U.S.C. § 284. (Dkt.#852.) The Court shall levy a 10% rate of simple interest on 10 Plaintiffs’ award of damages from the jury. The jury awarded Plaintiffs $185,589,871.02. 11 The Court will therefore impose prejudgment interest on the jury verdict at a total of 12 $18,558,987.10. Additionally, the Court shall levy a 10% rate of simple interest on 13 Plaintiffs’ award of attorneys fees, which has been stipulated at $19,000,000. The Court will 14 therefore impose prejudgment interest on the attorneys fees at a total of $1,900,000. 15 IT IS FURTHER ORDERED granting Plaintiffs’ Motion to Amend the Judgment 16 to Provide for Supplemental Damages Under 35 U.S.C. § 284 (Dkt.#855.) and Motion for 17 Supplemental Discovery. (Dkt.854.) The Court hereby directs the Parties to meet and confer 18 in an attempt to work out their differences concerning the scope of discovery. Within 15 days 19 of this Order, after having met and conferred, the Parties shall file a joint proposed schedule 20 for the Court’s approval. Any proposed schedule must be consistent with the dictates of the 21 instant Order. The Court further notes that the issue of supplemental damages will be decided 22 based on the Parties briefs, along with any exhibits. IT IS FURTHER ORDERED granting Defendant’s Motion for Leave to File Motion 23 24 to File Surreply. (Dkt.#918.) 25 /// 26 27 28 - 15 - 1 IT IS FURTHER ORDERED granting in part and denying in part Plaintiffs’ Motion 2 for Permanent Injunction Under 35 U.S.C. § 283 to Enjoin Gore From Further Infringement 3 of the Goldfarb Patent or, in the Alternative, Imposition of an Ongoing Royalty (Dkt.#856.) 4 DATED this 31st day of March, 2009. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 16 -
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