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By Tony Dutra
Jan. 13 — Forty years after the patent application was filed, and after three other appeals, the Federal Circuit continued to disagree Jan. 13 as to the proper disposition of the Gore-Tex patent infringement case.
The court issued three opinions on the question of willful infringement by W.L. Gore & Associates Inc. of the patent previously determined to be owned by Bard Peripheral Vascular Inc. The court affirmed willfulness—and thus punitive damages doubling a $186 million jury award—because Gore's defense based on its claims to inventorship was not reasonable given its loss in 2001 in an interference appeal.
The dissent viewed the facts related to Gore's claims to inventorship as establishing Gore's reasonable belief in its argument that Bard's patent was either invalid or unenforceable.
A concurrence saw merits in both views and asked the court to sit en banc and reconsider its willfulness standard in light of the Supreme Court's recent Highmark and Octane decisions overturning similar standards for an “exceptional case” determination.
Peter Cooper at Gore was working on making tubes of highly-expanded polytetrafluorethylene (ePTFE) in the early 1970s. He sent samples to multiple researchers, including David Goldfarb at the Arizona Heart Institute. Using a graft supplied by Cooper, Goldfarb was successful with an implant in a dog.
Cooper simultaneously worked on grafts similar to the one with which Goldfarb had success, and he applied for a patent April 2, 1974. Goldfarb applied for a patent six months later.
The Patent and Trademark Office declared an interference nine years after that, and did not award priority—to Goldfarb—until 1995. The Federal Circuit affirmed the decision in 1998 (Cooper v. Goldfarb, 154 F.3d 1321, 47 U.S.P.Q.2d 1896 (Fed. Cir. 1998)).
However, the case returned to the PTO on a question of inurement and, after another round trip, the Federal Circuit again affirmed in favor of Goldfarb in 2001 (Cooper v. Goldfarb, 240 F.3d 1378, 57 U.S.P.Q.2d 1990 (Fed. Cir. 2001).
The PTO finally issued a patent (U.S. Patent No. 6,436,135) to Goldfarb in 2002. Meanwhile, in the 28 years since Cooper and Goldfarb first filed their applications, Gore successfully marketed and developed Gore-Tex.
Goldfarb and exclusive licensee Bard sued Gore for patent infringement in 2003 in the U.S. District Court for the District of Arizona. A jury in 2007 found that Cooper was not a joint inventor, the patent was not invalid and Gore willfully infringed the patent. It awarded Bard $102 million in lost profits and $83.5 million in reasonable royalties.
Judge Mary H. Murguia denied Gore's post-trial motions, doubled the award due to the willfulness finding and awarded Bard $19 million in attorneys' fees and costs.
A Federal Circuit panel rejected Gore's validity challenges—largely based on its work related to the inventorship issues—and affirmed each of the lower court's judgments (Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., 670 F.3d 1171, 101 U.S.P.Q.2d 1641 (Fed. Cir. 2012). In dissent, Judge Pauline Newman called it an “insult to judicial process” to enforce the patent against Gore.
However, the en banc Federal Circuit granted Gore's rehearing petition for the limited purpose of authorizing the panel to revise the portion of its opinion addressing willfulness (476 Fed. App'x 747, 748 (Fed. Cir. 2012) (en banc)).
“Ultimately, to have stood a reasonable chance of prevailing on this issue, Gore needed to raise new evidence or theories that were not considered” in prior appeals on inventorship.—Chief Judge Sharon Prost
The willfulness finding allowed treble damages under 35 U.S.C. §284, and the panel had said that the district court reasonably exercised its discretion in doubling the jury's damages award. The en banc court vacated that ruling and remanded asking for review under the two-pronged test in In re Seagate Technology LLC, 497 F.3d 1360, 83 U.S.P.Q.2d 1865 (Fed. Cir. 2007) (en banc): an “objectively high likelihood” that the infringer's actions constituted infringement of a valid patent, that “was either known or so obvious that it should have been known to the accused infringer.”
Notably, the court said, “This court therefore holds that the objective determination of recklessness, even though predicated on underlying mixed questions of law and fact, is best decided by the judge as a question of law subject to de novo review.”
The district court came to the same conclusion on remand. Again, Gore appealed.
Chief Judge Sharon Prost wrote the opinion of the court. It began with a rejection—which neither of the other two opinions contested—of Gore's challenge to Goldfarb's standing as a plaintiff in 2003.
The court ruled that no “exceptional circumstances” applied that changed the question of standing between the 2012 panel's ruling—even if the panel did not expressly discuss standing—and the current appeal. And the court dismissed Gore's arguments on the merits—which characterized Goldfarb's agreement with Bard as a virtual assignment—in any case.
Turning to the willfulness question, the court said first, “we reject Gore’s argument that the mere fact a member of the previous panel dissented on this issue indicates that its position was reasonable.”
It next identified two questions relevant to Gore's inventorship defense—what the “definite and permanent idea” of the invention was and “whether Cooper and Goldfarb acted in concert to jointly arrive at that idea.” But these were the precise questions addressed in the two interference appeals in 1998 and 2001, the court said.
“Ultimately, to have stood a reasonable chance of prevailing on this issue, Gore needed to raise new evidence or theories that were not considered in Cooper I and II,” it said. Instead, as the prior panel had noted, the court said, “Gore's argument remains unchanged.”
It thus affirmed the willful infringement judgment.
Newman again dissented, faulted the majority for failing to follow the prior en banc court's requirement of de novo review of all the evidence available in this case.
“The question for the reviewing court is not whether the district court’s decision of law can be found supported by substantial evidence,” she said. “The question of willful infringement is whether the accused infringer raised a substantial question of invalidity or unenforceability regarding the ’135 patent.”
Newman reviewed the record and identified five grounds on which the validity of the patent was “vulnerable”—one of which went beyond inventorship and involved third-party prior art—and seven grounds of either misstatements or withholding information from the PTO.
“The flaws in the Goldfarb patent and the way it was obtained provided sufficiently reasonable defenses to both validity and enforceability,” she said.
And even if willfulness is affirmed, Newman said, her colleagues should have addressed whether double damages were justified in this case.
Judge Todd M. Hughes wrote a concurrence first noting the “sound argument” offered by each of his colleagues, not to mention “a thorough and well-reasoned opinion” by the district court.
“If one of these several reasonable opinions must ultimately govern, it should be the opinion of the district judge, whose assessment of litigation positions is informed by trial experience and who has ‘lived with the case over a prolonged period of time,'” he said, quoting Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S. Ct. 1744, 1748, 110 U.S.P.Q.2d 1343 (2014).
The parallels between the recent exceptional case jurisprudence and willfulness were first noted in a concurring opinion in another case in October, which Hughes joined.
His concurrence here echoed the call in that opinion that “the full court should review our willfulness jurisprudence” in light of Highmark and Octane.
Michael W. McConnell of Kirkland & Ellis, Washington, represented Bard. James W. Poradek of Faegre Baker Daniels LLP, Minneapolis, represented Gore.
To contact the reporter on this story: Tony Dutra in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Tom P. Taylor at email@example.com
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