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Depuy Spine, Inc. (Formerly Known as Depuy Acromed, Inc.) v. Medtronic Sofamor Danek, Inc. (Formerly Known as Sofamor Danek Group, Inc.)
Citations: 469 F.3d 1005; 80 U.S.P.Q. 2d (BNA) 1865; 2006 U.S. App. LEXIS 28673Docket: 2005-1311
Court: Court of Appeals for the Federal Circuit; November 19, 2006; Federal Appellate Court
Original Court Document: View Document
DePuy Spine, Inc. and Biedermann Motech GmbH, the plaintiffs-appellants, are appealing summary judgments that ruled Medtronic Sofamor Danek, Inc. and Medtronic Sofamor Danek USA, Inc., the defendants-cross appellants, did not infringe U.S. Patent No. 5,207,678 ('678 patent) concerning certain medical devices. The case was heard in the United States Court of Appeals for the Federal Circuit, with the decision rendered on November 20, 2006, by Circuit Judges Newman, Linn, and Prost.
The district court's ruling on non-infringement for Medtronic's Vertex® model was found to be erroneous, whereas the judgment for the bottom-loaded screw devices was upheld. Additionally, the court determined that Medtronic was not entitled to judgment as a matter of law regarding non-infringement or lost profit damages related to its MAS polyaxial pedicle screws, which were found to infringe the '678 patent.
The '678 patent pertains to pedicle screws and receiver members used in spinal surgery, designed to stabilize spinal segments. It addresses prior challenges in aligning screws for proper installation and aims to reduce stocking costs by utilizing a uniform receiver portion compatible with various spherical head sizes. DePuy and Biedermann hold exclusive licensing and assignment rights to this patent. The court affirmed some aspects of the lower court's ruling, reversed others, and remanded the case for further proceedings.
Claim 1 describes a device for stabilizing spinal column segments, featuring a pedicle screw with a threaded shaft and a spherically-shaped head, a receiver member flexibly connected to the head, and a compression member that applies force to the head. The highlighted limitations under review include “bore,” “spherically-shaped,” “opening,” “compression member,” and “pressed against.” DePuy filed a lawsuit against Medtronic on January 26, 2001, alleging infringement of the ’678 patent concerning Medtronic’s pedicle screws, including the MAS, Vertex, M8, M10, and Sextant models. The assembly methods for the MAS and Vertex models involve placing the screw through a top opening, while the bottom-loaded models (M8, M10, and Sextant) require inserting components from the bottom due to the size of the screw head.
In January 2003, Medtronic filed three motions for summary judgment. The first two motions, regarding the “compression member” and “spherically-shaped” limitations, were denied. However, the third motion was granted, with the court determining that the bottom-loaded models lacked the “bore” limitation and could not invoke the doctrine of equivalents without negating that limitation. The court subsequently conducted a claim construction hearing, issuing an order on October 27, 2003. It defined the “spherically-shaped” limitation as “approximately spherical” and clarified that the “compression member” required an intermediate piece applying force to the screw head. Following this construction, Medtronic successfully argued for non-infringement concerning the Vertex model, as the receiver's inner hollow space was conical rather than approximately spherical.
The court determined that the Vertex® model did not infringe on the patent under the doctrine of equivalents, referencing the “all elements” rule from Tronzo v. Biomet, Inc., which prevents interpreting a conical shape as equivalent to a spherical shape without disregarding claim limitations. Additionally, the court found that the Vertex® model's screw head design, which contacts an edge of the receiver member, does not perform "substantially the same thing" as the device in the ’678 patent. The case moved to jury trial regarding the MAS model, which the jury found to infringe the patent under the doctrine of equivalents, awarding lost profits and reasonable royalty damages. Medtronic's motions for judgment as a matter of law (JMOL) against the MAS model's infringement and for the denial of lost profit damages were rejected. DePuy appealed the summary judgment of non-infringement for the Vertex® model and the application of the “all elements” rule, while Medtronic cross-appealed regarding the interpretation of the “compression member” limitation and the denial of its JMOL motions. The appellate court reviews summary judgment de novo, ensuring no genuine issues of material fact exist, and infringement is a factual question. Legal doctrines influencing the determination of infringement include prosecution history estoppel and the “all elements” rule, both of which are reviewed as questions of law. Lost profits compensation legality is also reviewed de novo, while contract term interpretations are subject to regional circuit law, typically reviewed de novo unless ambiguities create factual questions. DePuy contends that the district court wrongly granted summary judgment of non-infringement for the Vertex® model, arguing that material facts exist concerning both literal infringement and infringement under the doctrine of equivalents.
DePuy claims that the court incorrectly applied the “all elements” rule and the function-way-result test concerning the doctrine of equivalents in their infringement case. Medtronic argues that the Vertex® device's receiver member features a conically-shaped hollow portion, not a spherically-shaped one, negating literal infringement. Medtronic asserts that the court appropriately evaluated the law on infringement by equivalents. Furthermore, Medtronic contends that even if a “spherically-shaped” equivalent exists, it fails to satisfy the “pressed against” limitation since the screw head only contacts the edge, not the full spherically-shaped portion.
The claim in question states that the screw “head is pressed against the hollow spherically-shaped portion.” The court defined “spherically-shaped” as “approximately spherical,” a definition both parties accept on appeal. The dispute lies in whether the “pressed against” limitation mandates engagement with the entire spherically-shaped portion or if contact with just the edge suffices. The analysis focuses on intrinsic evidence, including claim language, written descriptions, and prosecution history. The claim language does not restrict the “hollow spherically-shaped portion” to exclude its edge, nor does it specify the extent of contact required between the screw head and the spherically-shaped portion. Claim 4 suggests that independent claim 1 must encompass devices where components have unequal radii, indicating that contact could occur at the edge. Additionally, the specification and illustrative figures in the patent imply that the hollow spherically-shaped portion includes its edge and does not stipulate a specific amount of necessary contact, only that there is “contact” between components. The prosecution history does not provide further clarification.
Medtronic's argument is rejected, affirming that the term “hollow spherically-shaped portion” includes its edge, and that a screw head is considered “pressed against” this portion if it makes contact with any part of it. Regarding the Vertex® model, the district court determined no genuine issue of material fact exists for literal infringement, as its inner hollow space is conical with “angular rather than spherical” walls. Even if a portion appears spherical, it does not contact the screw head. DePuy's comparisons, including a basketball slice and cross sections of the Vertex® model versus the ’678 patent, do not establish that the Vertex® has a “spherically-shaped” portion. DePuy failed to provide specific evidence of any spherical regions in the Vertex® model, with even expert testimony acknowledging its conical design. Consequently, the district court ruled correctly that no genuine issue of material fact existed for literal infringement.
Under the doctrine of equivalents, the court found that the cylindrical-conical shape of the Vertex® model does not equate to the spherically-shaped portion of the ’678 patent. The “all elements” rule suggests that treating a conical shape as equivalent to a spherical shape would undermine the “spherically-shaped” limitation. Additionally, the function-way-result test indicated that the Vertex® model's screw head merely contacts the edge of its receiver member, not performing the same function as the device described in the ’678 patent. The doctrine of equivalents allows for findings of infringement even when literal terms are not met, recognizing the potential limitations of patent language in capturing the invention's nuances.
Unimportant substitutes for elements of a patent can undermine its validity, as established in key cases such as Festo Corp. v. Shoketsu Kinzoku Kogyo and Graver Tank. Allowing imitation of a patented invention without requiring strict adherence to every detail would render patent protections ineffective. The “all elements” rule is crucial in the doctrine of equivalents, mandating that each element in a patent claim is material and must be assessed individually. This rule prevents the broad application of the doctrine that could entirely eliminate any claim limitation. The Supreme Court's decision in Warner-Jenkinson outlines when the doctrine of equivalents may not apply, indicating that if evidence shows no reasonable jury could find two elements equivalent, summary judgment should be granted. Additionally, if a theory of equivalence would entirely negate a claim element, the court should also render judgment. Case law demonstrates that when differences between the claimed limitation and the accused device are substantial, the “all elements” rule precludes the application of the doctrine of equivalents, as seen in Freedman Seating, Ethicon, and Tronzo. These rulings reinforce that claims must maintain their limitations without being rendered insignificant or eliminated by equivalence theories.
The "all elements" rule indicates that a claim limitation is vitiated if the evidence or theory of equivalence fails to demonstrate that differences between the claim and the accused device are insubstantial, resulting in a legal conclusion of non-infringement. Evidence is deemed legally insufficient when there is a total lack of proof necessary to establish a fact. In Sage Products, the court ruled that the doctrine of equivalents could not be applied because no reasonable jury could find the differences insubstantial, emphasizing the simplicity of the structure and the specificity of the claim. The case underscored that the patentee's theory of equivalence, which posited that a permanently locking lid was equivalent to an openable lid, lacked legal support as it did not fulfill the claimed function of controlling access through movement. Consequently, the court affirmed summary judgment of non-infringement. It is clarified that the doctrine of equivalents is not universally precluded merely because a claim limitation does not literally correspond to an accused device element; such a view would undermine the doctrine's application. The inability to apply the doctrine due to vitiation reflects that either no reasonable jury could find equivalence or the equivalence theory lacks legal sufficiency.
The district court applied the "all elements" rule and ruled that the Vertex® model could not infringe the ’678 patent due to its cylindrical-conical shape, which does not meet the requirement that the screw head be "pressed against the hollow, spherically-shaped portion." The court argued that considering the cylindrical-conical shape as equivalent to the required spherical shape would undermine the patent's explicit limitations. The district court also invoked the function-way-result test, concluding that the conically-shaped portion of the Vertex® model does not perform the same function as the spherically-shaped limitation in the patent.
However, the case presented differs from the precedent set in Tronzo, where the patent at issue involved a prosthesis socket with independent claims lacking specific shape requirements. The Tronzo decision deemed a theory of equivalence that generalized shapes as equivalent to conical limitations insufficient because it effectively eliminated the specific claim limitation. In contrast, DePuy’s expert provided detailed declarations asserting that the hollow conically-shaped portion of the accused device was only insubstantially different from the spherically-shaped limitation, supporting the screw head and allowing for flexible movement when engaged. Unlike Tronzo, the ’678 patent's written description does not categorize other shapes as inferior or prior art, making DePuy's equivalence argument valid. Therefore, the district court's conclusion that a reasonable jury could not find the conically-shaped portion equivalent to the spherically-shaped limitation was erroneous.
The district court's ruling on the Vertex® model was based on the screw head's contact with the edge of a hollow portion rather than a larger area. The term "hollow spherically-shaped portion" was interpreted to include this edge, raising a factual question regarding the significance of the difference between this shape and the claimed equivalent. The court erred in granting summary judgment of non-infringement under the doctrine of equivalents for the Vertex® model.
Regarding the bottom-loaded screw models, DePuy contended that the district court incorrectly granted summary judgment without properly construing the "bore" limitation. DePuy argued that "passing" should not imply movement through the bore, suggesting that positioning suffices. Alternatively, if "passing" implies movement, the screw shaft's interaction with a snap ring still meets the bore limitation. Medtronic countered that DePuy waived the argument by introducing it in a motion for reconsideration and maintained that the district court correctly interpreted the "bore" limitation as necessitating a bore part of the receiver chamber.
Medtronic further asserted that the bottom-loaded screw models lack the "opening" limitation, which provided additional grounds for the summary judgment of non-infringement. However, since the district court's conclusion primarily focused on the "bore" limitation, it did not expressly address the "opening" limitation. The appellate court noted that while the district court's judgment did not cover the "opening" limitation, the issue had been fully argued below and could be reviewed on appeal.
An appellate court may adopt a ground for summary judgment proposed by the appellee but not accepted by the trial court. In the case regarding the ’678 patent, claim 1 specifies a receiver member with an opening opposite a bore for inserting a screw, requiring that the opening be both located opposite the bore and functional for screw insertion. The specification mandates that the opening and hollow portion must be sufficiently sized for the screw head. Medtronic argues, unchallenged by DePuy, that the aperture in the bottom-loaded screw models cannot insert the screw due to its smaller diameter compared to the screw head, thus failing the “opening” requirement. DePuy contends that the receiver member's interior meets this requirement, but the court agrees with Medtronic, concluding that the only aperture opposing the bore does not enable screw insertion. Consequently, the court affirms the district court's summary judgment of no infringement based on the “opening” limitation without needing to address the “bore” limitation.
On cross-appeal, Medtronic claims the district court wrongly denied its motion for judgment as a matter of law (JMOL) regarding non-infringement of the MAS model, asserting DePuy failed to provide evidence that it met the “pressed against” limitation in a functionally equivalent manner. While DePuy presented evidence related to the “hollow spherically-shaped portion” limitation, Medtronic argues that no evidence was provided for pressing against a hollow portion. Medtronic also asserts the jury's finding of infringement by equivalence undermined the “spherically-shaped” limitation, claiming DePuy's expert suggested “any shape” suffices, which would eliminate the limitation. DePuy counters that it presented expert testimony confirming the MAS device's equivalent to the “spherically-shaped” limitation was valid and that pressing against the edge of a hollow portion suffices. The court finds Medtronic's arguments unpersuasive, affirming that DePuy provided enough evidence regarding the MAS models' compliance with the “hollow spherically-shaped portion” requirement.
DePuy provided evidence showing that the MAS model meets the “pressed against” limitation, as an expert testified that the screw head presses against the edge of a hollow spherically-shaped portion. This evidence, along with reasonable inferences, indicated that Medtronic was not entitled to judgment as a matter of law on this issue. Unlike the case of Tronzo, where the expert claimed any shape could serve as an equivalent, DePuy's expert specifically identified the hollow shape of the MAS model as equivalent to the “spherically-shaped” limitation based on the function-way-result test. The assertion of “any shape” by Medtronic misrepresented earlier deposition testimony and did not reflect the expert's clarification that equivalent shapes still needed to meet the limitation.
Regarding the “compression member” limitation, Medtronic contended that the district court improperly construed it as a means-plus-function limitation. Medtronic argued that the absence of the term “means” and the function-only description in claim 1 of the ’678 patent justified this construction, leading to a conclusion of non-infringement. DePuy countered that the lack of the term “means” generally presumes it is not a means-plus-function limitation, and that the term “compression member” is understood within the relevant field to refer to known structures, supported by claim constraints. The presumption against means-plus-function treatment remains strong unless sufficient structural context is provided, which DePuy argued was present in the claim language indicating that the compression member must fit within a cylindrical opening and exert force on the screw head, thus demonstrating structural specificity.
The term “compression member” is defined in the specification as a specific cylindrical insert, rather than a general term for any structure performing a function. While the prosecution history does not clarify this further, dictionary definitions and expert opinions confirm that it is recognized in the field as a structural term. The determination of whether this term qualifies as a means-plus-function limitation may involve expert evidence. Unlike the Mas-Hamilton case, where no structural significance was attributed to the terms, the claims and specification of the ’678 patent indicate that “compression member” conveys structural meaning to those skilled in the art. Consequently, the district court's decision not to treat “compression member” as a means-plus-function limitation and its ruling on non-infringement are upheld.
In a cross-appeal, Medtronic contends that the court wrongly denied its motion for judgment as a matter of law (JMOL) regarding lost profits, arguing that DePuy Spine became an exclusive licensee of the ’678 patent only with a 1999 agreement. Medtronic claims that lost profits prior to this date should not be awarded due to Biedermann Motech's inability to meet demand. DePuy counters that substantial evidence supports a finding of an exclusive license relationship stemming from a 1993 Technology Agreement effective from January 1998, asserting that the 1999 agreement merely confirmed this relationship. Medtronic disputes this, stating that the determination of the date for lost profits is a legal question. The court's earlier ruling on the exclusive licensee status is acknowledged, with the underlying facts not being in dispute, allowing for de novo review of the legal question regarding entitlement to lost profits.
Medtronic's cross-appeal challenges the jury's lost profit award before the 1999 Exclusive License Agreement, asserting two main points: (1) DePuy Spine was not an exclusive licensee during that period, thus its lost profits were unrecoverable; (2) Biedermann Motech lacked the capacity to manufacture and market the product, negating its claim for lost profits. Medtronic concedes that if DePuy Spine had exclusive licensing rights during the relevant timeframe, it would be entitled to the lost profits. The analysis begins with the question of DePuy Spine's status as an exclusive licensee of the ’678 patent prior to 1999. Medtronic's claim that the district court conclusively ruled on this in a 2002 order is incorrect, as the court indicated that DePuy Acromed's standing started on August 31, 1999, but later denied Medtronic's motion to exclude lost profits evidence from before that date, determining that Biedermann Motech could recover lost profits due to a joint venture with DePuy Acromed. Further, in a 2005 ruling, the court found that DePuy had introduced sufficient evidence to establish it was an exclusive licensee as of January 23, 1998. The evaluation of the 1993 Technology Agreement is necessary to clarify DePuy's licensing status. Exclusive licensing requires the patent owner to promise that others will be excluded from practicing the invention within the licensed field. The determination of whether a license is exclusive hinges on the intent of the parties as reflected in the agreement's terms, adhering to Indiana's "four corners rule" of contract interpretation.
Contract terms are ambiguous only when reasonably intelligent individuals might genuinely disagree on their meaning. The 1993 Technology Agreement clearly grants DePuy Spine an exclusive license for all of Biedermann Motech’s current and future knowledge related to the manufacture of spinal treatment products. In January 1998, Biedermann Motech acquired the ’678 patent for a specific pedicle screw design, which is categorized as a "future" design under the 1993 Technology Agreement, thereby justifying the jury's award for lost profits. The 1993 Exclusive License Agreement, which involves Ort-Med and DePuy Spine, is not relevant to the rights between Biedermann Motech and DePuy Spine since Ort-Med never owned the ’678 patent. Additionally, the 1999 Exclusive License Agreement is also irrelevant as it was established after the 1993 Technology Agreement. The court found that DePuy was entitled to lost profit damages prior to August 31, 1999, and appropriately denied Medtronic’s motion for judgment as a matter of law (JMOL) on this point.
The district court erred in its interpretation of the ’678 patent concerning the "hollow spherically-shaped portion," which led to a misapplication of the doctrine of equivalents, resulting in a reversal of the summary judgment of non-infringement for the Vertex® model with a remand for further proceedings. However, the court's decision on no literal infringement for the Vertex® model and the bottom-loaded screw models was affirmed. The jury's finding that the MAS model infringed the ’678 patent under the doctrine of equivalents was supported by substantial evidence, and the theory was legally sufficient, leading to the affirmation of the jury's verdict and damages award on the MAS model. The court affirmed DePuy’s status as an exclusive licensee of the ’678 patent prior to August 31, 1999, and thus properly denied Medtronic’s JMOL motion regarding lost profit damages prior to that date. Costs were awarded to DePuy. The judgment is affirmed in part, reversed in part, and remanded for further proceedings.