Coloplast A/S vs. Generic Medical Devices, Inc., No. 2:2010cv00227 - Document 265 (W.D. Wash. 2012)
Court Description: ORDER granting 224 Sealed Motion for Permanent Injunction by Judge Benjamin H Settle.(TG)
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Coloplast A/S vs. Generic Medical Devices, Inc. Doc. 265 1 2 3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 6 7 8 COLOPLAST A/S, 9 Plaintiff, 10 v. 11 GENERIC MEDICAL DEVICES, INC., 12 CASE NO. C10-227 BHS ORDER GRANTING PLAINTIFF’S MOTION FOR A PERMANENT INJUNCTION Defendant. 13 14 This matter comes before the Court on Plaintiff Coloplast A/S’s (“Coloplast”) 15 motion for a permanent injunction (Dkt. 224). The Court has considered the pleadings 16 filed in support of and in opposition to the motion and the remainder of the file and 17 hereby grants the motion for the reasons stated herein. I. PROCEDURAL HISTORY 18 19 On February 8, 2010, Coloplast filed a complaint for patent infringement against 20 Defendant Generic Medical Devices, Inc. (“GMD”) alleging that GMD was indirectly 21 infringing United States Patent No. 6,638,211 (the “‘211 Patent”) and United States 22 Patent No. 7,621,864 (the “‘864 Patent”) (collectively “Patents-in-Suit”). Dkt. 1, ¶¶ 9-17. ORDER - 1 Dockets.Justia.com 1 On April 17, 2012, the Court began a seven-day jury trial. On April 30, 2012, the 2 Jury returned a verdict finding that (1) Coloplast failed to prove direct infringement of the 3 ‘211 Patent, (2) Coloplast proved direct and indirect infringement of the ‘864 Patent, (3) 4 the Patents-in-Suit were not invalid, (4) Coloplast was entitled to a reasonable royalty 5 rate of $55 per device, and (5) Coloplast proved total damages of $159,775. Dkt. 200. 6 On June 7, 2012, Coloplast filed a motion for a permanent injunction. Dkt. 224. 7 On June 25, 2012, GMD responded. Dkt. 232. On June 29, 2012, Coloplast replied. 8 Dkt. 243. 9 On July 11, 2012, Coloplast filed a motion for a temporary restraining order 10 requesting immediate injunctive relief because GMD was allegedly dissolving. Dkt. 246. 11 On July 17, 2012, the Court held a hearing, heard oral argument of counsel, and 12 requested additional briefing. Dkt. 250. During the hearing, the parties agreed to a 13 stipulated temporary restraining order pending a decision on the permanent injunction. 14 Dkt. 249. 15 On Jul 23, 2012, Coloplast filed a supplemental brief. Dkt. 251. On July 30, 16 2012, GMD filed a supplemental response. Dkt. 257. On August 1, 2012, Coloplast filed 17 a supplemental reply. Dkt. 261. 18 II. DISCUSSION 19 The Supreme Court has held that “the traditional four-factor framework that 20 governs the award of injunctive relief” applies to “disputes arising under the Patent Act.” 21 eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 394 (2006). When seeking injunctive 22 relief, plaintiff bears the burden of demonstrating: (1) that it has suffered an irreparable ORDER - 2 1 injury; (2) that remedies available at law, such as monetary damages, are inadequate to 2 compensate for that injury; (3) that, considering the balance of hardships between the 3 plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest 4 would not be disserved by a permanent injunction. Id. at 391. The Court stated that “the 5 decision whether to grant or deny injunctive relief rests within the equitable discretion of 6 the district courts, and that such discretion must be exercised consistent with traditional 7 principles of equity . . . .” Id. at 394. 8 A. Irreparable Injury 9 Factors a court may consider in assessing irreparable injury are (1) the patent 10 holder’s loss in market share and access to customers; (2) the infringer’s inability to 11 satisfy a judgment; and (3) direct competition between the patent holder and the infringer. 12 Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1150 (Fed. Cir. 2011). 13 In this case, Coloplast initially submitted substantial evidence in support of 14 irreparable injury. See, e.g., Dkt. 242 at 4–11. The evidence supported Coloplast’s 15 claims of loss of customers, loss of business relationships, loss of good will, and loss of 16 sales. The circumstances, however, have changed because GMD is ceasing operations 17 and dissolving. Dkt. 252, Declaration of Theodore Budd, Exh. 1. This fact lends 18 supports to the argument that GMD will be unable to satisfy any judgment entered 19 against it. At trial, GMS’s officers testified that GMD invested several million dollars in 20 start-up costs and that its business was mainly limited to female urinary incontinence 21 devices. Allowing GMD to complete some final infringing sales before it closes its 22 doors, requiring Coloplast to obtain a judgment to enforce, and then take its place in the ORDER - 3 1 creditor’s line would contravene any principle of equity. Therefore, the Court finds that 2 Coloplast has shown irreparable injury to warrant a permanent injunction. 3 B. Monetary Damages 4 GMD argues that Coloplast has failed to present credible evidence as to why 5 monetary damages would not be sufficient. Dkt. 257 at 6. The Court heard the evidence 6 of GMD’s financial condition at trial and is not persuaded that monetary damages are 7 even available to Coloplast, much less a sufficient remedy. 8 C. Balance of Hardships 9 The Court is persuaded that the balance of hardships favors Coloplast because it is 10 unlikely Coloplast will be compensated for the infringing sales that have already 11 occurred, much less final sales GMD seeks to complete. Moreover, GMD’s hardship is 12 the result of its calculated business risk to enter the relevant market with its devices. 13 Therefore, the Court finds that the balance of hardships favors the entry of an injunction. 14 D. The Court agrees with GMD that the public has an interest in lower health care 15 16 17 18 19 20 21 22 Public Interest costs and increased competition. But that interest may not be fostered by infringing conduct. The Court is persuaded that the public is best served by enforcing Coloplast’s patent rights. Therefore, the Court finds that the public interest would not be disserved by the entry of an injunction. E. Scope “[C]ourts have broad discretion in determining the scope of injunctive relief . . . .” Johns Hopkins University v. CellPro, Inc., 152 F.3d 1342, 1354 (Fed. Cir. 1998). In this ORDER - 4 1 caes, GMD argues that Coloplast’s proposed injunction is overbroad. Dkt. 232 at 19–20. 2 The Court agrees, especially in light of GMD’s decision to dissolve. The Court finds that 3 Coloplast’s interests are sufficiently protected simply by enjoining GMD from selling its 4 remaining inventory of spiral or hook trocar model numbers 2041, 2042, 2046, 2047, and 5 2048 and/or devices that are merely colorably different. 6 The jury found that GMD indirectly infringed by either active inducement or 7 contributory infringement. Active inducement is satisfied by instructing an individual 8 “on how to engage in an infringing use . . . .” DSU Medical Corp. v. JMS Co., Ltd., 471 9 F.3d 1293, 1305 (Fed. Cir. 2006) (citing Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, 10 Ltd., 545 U.S. 913, 936 (2005)). GMD concedes that its products must be sold with the 11 accompanied instructions for use, which may not be changed by GMD. Dkt. 257 at 4. 12 Therefore, any sale would be active inducement of infringement. 13 With regard to contributory infringement, the jury must have found that GMD’s 14 products do not have a substantial non-infringing use. Therefore, any sale would be 15 contributory infringement. Based on these conclusions, any sale by GMD would 16 constitute indirect infringement. 17 GMD does argue that it should be allowed to sell its remaining devices to 18 Coloplast’s licensees. Dkt. 257 at 2–3. Although interesting, the argument is 19 unpersuasive and lacks any supporting evidence that Coloplast would not be irreparably 20 injured by such sales. For example, the Court is unaware of the terms of the licenses 21 between Coloplast and its licensees. Buying products from other manufacturers may be 22 ORDER - 5 1 prohibited and violate those contracts. Therefore, the Court declines to decrease the 2 scope of the injunction as GMD requests. 3 III. ORDER 4 Therefore, it is hereby ORDERED that Coloplast’s motion for a permanent 5 injunction (Dkt. 224) is GRANTED and the Court enters the following injunction: 6 13 Generic Medical Devices, Inc., its officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with any of them who receive actual notice of this order by personal service or otherwise, are enjoined from infringing claims 1, 2, 3, 7, 8, and/or 11 of U.S. Patent No. 7,621,864 (“Method for Treating Urinary Incontinence in Women and Implantable Device Intended to Correct Urinary Incontinence”) under 35 U.S.C. §§ 271(b) and/or (c), by (1) manufacturing, offering for sale, selling, or otherwise using, providing, or distributing in the United States, or importing into the United States, spiral trocar model numbers 2041, 2042, 2047, and 2048 and/or trocars that are merely colorably different; or (2) manufacturing, offering for sale, selling, or otherwise using, providing, or distributing in the United States, or importing into the United States, hook trocar model number 2046 and/or trocars that are merely colorably different. 14 Dated this 9th day of August, 2012. 7 8 9 10 11 12 A 15 16 BENJAMIN H. SETTLE United States District Judge 17 18 19 20 21 22 ORDER - 6
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