Stryker Triple Patent Damages Against Zimmer Overturned

Zimmer Biomet Holdings, Inc. is getting a second bite of the apple over a $228 million patent infringement loss to Stryker Corporation. A victory might save Zimmer Biomet over $140 million.

On September 12, 2016, Stryker’s $70 million enhanced damage award against Zimmer Biomet in the patent lawsuit was been overturned by a federal appeals court and sent back to a district federal judge. The court, however, upheld its previous ruling that the patents were valid and that Zimmer infringed the patents.

Back in 2013, a federal jury in Michigan (Stryker’s home turf) awarded Stryker $70 million in damages plus royalties, ruling that Zimmer infringed three patents covering wound debridement technology with its own Pulsavac Plus device.

The judge then trebled the damages to $228 million, ruling that the infringement was willful, ordering a permanent injunction and granting Stryker’s bid for lost profit damages for another $2.4 million. The judge also granted Stryker’s motion for prejudgment interest, awarding nearly $11.2 million, plus reasonable attorney’s fees and additional prejudgment interest on those fees at a rate of 3.83%.

Changed Standard

After Zimmer appealed and won a rollback of the $228 million award, Stryker appealed to the U.S. Supreme Court to keep its treble damages award. The Supreme Court ordered the case back to the appeals court after ruling that the standard for enhanced damages awards in patent infringement cases should be relaxed.

The appeals court has now sent the case back to the original federal judge in Michigan for reconsideration of the enhanced damages and attorney fee awards using the relaxed enhanced damages standard.

Chief Judge Sharon Prost of the appeals court wrote, “On the record in this case, willful misconduct is sufficiently established by the jury’s finding. The jury made its determination under the clear and convincing evidence standard, which is a higher standard than is now necessary. We therefore affirm the jury’s finding of willful infringement. In doing so, we think the best course is to vacate the award of enhanced damages and remand to the district court for consideration of this issue. Thus, it is for the district court to determine whether, in its discretion, enhancement is appropriate here.”

Continued Prost, “The district court’s award of attorneys’ fees was based solely on its determination that Zimmer was liable of willful infringement. Though we uphold the district court’s willfulness determination, it does not necessarily follow that the case is exceptional. Because there exist further allegations of litigation misconduct in this case and because the standard for finding an exceptional case has changed since the district court issued its ruling regarding attorneys’ fees, we also remand this issue for further consideration by the district court.”

No date of a further hearing by the district judge has been set.