Stryker’s $228 Million Award Against Zimmer Slashed by $158 Million

The top U.S. patent court has slashed Stryker Corporation’s $228 million damage award from Zimmer Holdings Inc over a surgical cleaning wand to $70 million. That’s a hefty secular holiday gift.

Stryker sued Zimmer back in 2010, claiming Zimmer’s Pulsavac Plus device for cleaning wounds during orthopedic surgical procedures infringed three of its patents. A federal jury in Grand Rapids, Michigan, agreed with the Michigan-based Stryker last February and awarded the company $70 million in lost profits. However, the jury also found Zimmer’s infringement as being willful. That resulted in the federal judge tripling the damages. After additional fees, he raised the award to the $228 million.

The judge said Zimmer had all but instructed its engineers to copy the Stryker product.

Appeals Court: “Zimmer’s Conduct Not Willful”

Zimmer appealed the “willful” part and on December 19, 2014, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit agreed with Zimmer. Chief Judge Sharon Prost said, Zimmer’s defenses were reasonable and that the company did not act recklessly. The panel also vacated the original district judge’s decision to award legal fees to Stryker and sent the case back for review to see if Zimmer still has to pay the fees because of allegations of litigation misconduct.

The companies are the main competitors for the handheld surgical tools, which are battery powered and replace older, bulkier machines that had to be wheeled around and plugged in.

Zimmer’s guilt of patent infringement stands, however. The judge’s original 58-page opinion outlined Stryker’s innovation in coming up with their device to replace the bulky machines. He said Zimmer was losing market share, so it hired someone to “make one for us, ” which resulted in a product that looked and functioned like Stryker’s. Zimmer, according to the judge, recouped some market share until it was forced to pull its product from the market in 2007 because of technical problems and complaints. It reentered the market in December 2008, he wrote.

“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…A $70 million verdict sounds large in the abstract, but in context, it may not be enough, without enhancement, to deter infringing conduct, ” wrote the judge in his opinion.