South Bend, Indiana – Indiana patent lawyers for CeraMedic LLC of Plano, Texas sued for patent infringement in the Northern District of Indiana alleging that Zimmer Holdings, Inc. and Zimmer, Inc., both of Warsaw, Indiana (collectively “Zimmer”), infringed “Sintered Al₂O₃ Material, Process for Its Production and Use of the Material,” Patent No. 6,066,584, which has been issued by the United States Patent Office.
Patent No. 6,066,584 (the “‘584 patent”) relates to the field of ceramics and concerns sintered Al₂O₃ compositions and methods for the use of such material as medical implants or tool material. Similar litigation was also recently commenced against Biomet by Indiana patent attorneys for CeraMedic.
The ‘584 patent was issued in May 2000 to Fraunhofer-Gesellschaft zur Förderung der Angewandten Forschung e.V., Germany (“Fraunhofer”), Europe’s largest application-oriented research organization. CeraMedic states that Fraunhofer, the assignee of over 1,500 U.S. patents, assigned ownership of the ‘584 patent to CeraMedic in early 2014.
CeraMedic indicates that non-party CeramTec GmbH (“CeramTec”) developed and manufactures Biolox delta, (pictured) an aluminum oxide matrix composite ceramic consisting of approximately 82% alumina (Al₂O₃), 17% zirconia (ZrO₂), and other trace elements.
The allegations Defendant Zimmer include that it “designs, develops, manufactures, offers for sale, sells, uses, distributes, and markets hip implants, many of which include” CeramTec’s Biolox product and that such actions constitute infringement of the ‘584 patent. Zimmer is accused of infringing the ‘584 patent directly, literally, and/or by equivalents.
The complaint, filed by Indiana patent counsel, lists a single count: infringement of the ‘584 patent. CeraMedic asks the court for a judgment against Zimmer determining that Zimmer has infringed and continues to infringe one or more claims of the ‘584 patent; enjoining Zimmer and its agents from further infringing the ‘584 patent; ordering Zimmer to account for and pay to CeraMedic all damages suffered by CeraMedic as a consequence of Zimmer’s alleged infringement of the ‘584 patent, together with interest and costs; trebling or otherwise increasing CeraMedic’s damages under 35 U.S.C. § 284 upon a finding that the asserted infringement by Zimmer of the ‘584 patent was deliberate and willful; and declaring that this case is exceptional and awarding to CeraMedic its costs and attorneys’ fees in accordance with 35 U.S.C. § 285.
Zimmer has been sued for patent infringement before. One patent lawsuit, Stryker v. Zimmer, is illustrative of the potential cost of willful infringement. In that litigation, the jury found that Zimmer had committed patent infringement and awarded $70 million in damages. The jury also held that Zimmer’s infringement had been willful. Plaintiff Stryker asked the court for, inter alia, attorneys’ fees and enhanced damages.
Under 35 U.S.C. § 285, if the prevailing party establishes by clear and convincing evidence that the case is “exceptional,” the court may exercise its discretion to award attorneys’ fees. The court in this case cited various factors that could be used in determining whether a case was exceptional, for example: “willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, [or] conduct that violates Federal Rule of Civil Procedure 11.” The court awarded Stryker’s attorneys’ fees, holding that that the jury’s finding of willful infringement weighed heavily in favor of such an award (“indeed, when a trial court denies attorney fees in spite of a finding of willful infringement, the court must explain why the case is not ‘exceptional’ within the meaning of the statute.”)
The court also evaluated whether an award of enhanced damages was warranted. Under 35 U.S.C. § 284, “the court may increase the damages up to three times the amount found or assessed” at trial. For this determination, the court referred to Read Corp. v. Portec, Inc. In Read, the Federal Circuit held that the “paramount determination in deciding to grant enhancement and the amount thereof is the egregiousness of the defendant’s conduct based on all the facts and circumstances.” In evaluating the egregiousness of the defendant’s conduct, courts typically rely on the nine Read factors, which are:
1. whether the infringer deliberately copied the patentee’s ideas or design;
2. whether the infringer investigated the scope of the patent and formed a good faith belief that it was invalid or not infringed;
3. the infringer’s conduct during litigation;
4. the infringer’s size and financial condition;
5. closeness of the case;
6. duration of the infringing conduct;
7. remedial actions, if any, taken by the infringer;
8. the infringer’s motivation for harm; and
9. whether the infringer attempted to conceal its misconduct.
The court found that all nine Read factors favored substantial enhancement and trebled the jury’s award of damages. The court stated, “Zimmer chose a high-risk/high-reward strategy of competing immediately and aggressively in the pulsed lavage market and opted to worry about the potential legal consequences later.” In total, Zimmer was ordered to pay Stryker over $228 million.
The case was filed by James E. Lewis and Michael J. Hays of Tuesley Hall Konopa, LLP and John M. Desmarais, Paul A. Bondor, Alex Henriques and Dustin F. Guzior of Demarais LLP. The case assigned to District Judge Philip P. Simon and Magistrate Judge Christopher A. Nuechterlein in the Northern District of Indiana and assigned Case No. 3:14-cv-1688-PPS-CAN.