Voda v. Cordis Corp.: Catheters Won't Relieve the Pressures Facing Injunction Seekers

It will be interesting going forward to see whether the panel is correct that it has not created a class of would-be plaintiffs incapable of obtaining injunctive relief, because the would-be plaintiff is an exclusive licensor and not someone practicing the invention.

Clay Holloway focuses his practice in patent litigation in the Atlanta office of Kilpatrick Stockton LLP. He can be reached at [email protected].

After a successful willful infringement verdict, which subsequently resulted in treble damages, the issue of willful infringement may not yet be decided. But the Federal Circuit's refusal to take the opportunity to provide guidance on the new “objective recklessness” standard for willful infringement set forth in In re Seagate, 497 F.3d 1360 (Fed. Cir. 2007), is not as significant as its holding on the cross-appeal issue of permanent injunction. Despite the Supreme Court's statements in eBay v. MercExchange, LLC, 547 U.S. 388, 391 (2006), the Federal Circuit held that exclusive licensees who do not practice the patented invention can be made whole through damages, making injunctive relief that much harder to get.

The Underlying Case

Dr. Jan Voda, a cardiovascular surgeon, invented a pioneering catheter shape for use in catheterization of the left main coronary artery. Previously, catheterization of the left main coronary artery was a risky procedure. The risk, aside from that of general surgery, was that dissecting or tearing of either the left main coronary artery or the aorta from which it branched resulted in almost certain death. If such a tear occurred, the patient had but 10 minutes to live with the only possible remedy being full open heart surgery.

Prior art catheters had sharp or acute curves that aided the physician in guiding the catheter into the left main coronary artery. It was this prior art design that made catheterization of the left main coronary artery dangerous, because should the catheter have to cross a blockage, the force generated by the pressure the physician applied could force the acutely shaped catheter through the wall of the blood vessels. Dr. Voda's catheter, however, included an elongated substantially straight portion that rested against the aorta wall opposite the ostium ' the entrance to the left main coronary artery. Because this elongated portion conformed to the shape of the aorta wall, it created a larger base for receiving any forces created by the physician in catheterizing the desired blood vessel.

Dr. Voda ultimately obtained three patents ' U.S. Patent Nos. 5,445,625; 6,083,213; and 6,475,195. While some of these patents were pending, Dr. Voda, who had no manufacturing experience or capabilities, sought to commercialize his invention by partnership with a medical device manufacturer. Ultimately, Dr. Voda and SciMed entered into an exclusive license whereby SciMed manufactured and sold catheters possessing Dr. Voda's inventive design. Since that time, SciMed has made and sold those catheters as the exclusive licensee.

Cordis began making a catheter containing an elongated section that was substantially straight, designed for seating against the aorta wall. Prior to the issuance of any of Dr. Voda's patents, but while they were pending and after Voda allegedly showed them to Cordis, Cordis allegedly made copies of Dr. Voda's design. Prior to the issuance of Dr. Voda's patents, Cordis changed the product to accommodate a manufacturing preference. Since that time, Cordis has made the slightly modified catheter.

In December 2003, Dr. Voda brought suit against Cordis for infringement of his patents. Dr. Voda sought both monetary relief for past infringement as well as injunctive relief. Cordis averred that the patents were invalid and, if valid, nevertheless not infringed. The jury held that Dr. Voda's patents were valid and infringed. The jury further found that Cordis' actions, both the pre-suit copying and continuing to make infringing products, were willful even though Cordis put forth evidence of opinions of counsel. Judge Tim Leonard of the Western District of Oklahoma originally doubled the damage amount awarded by the jury based on the willfulness finding. Then, after new evidence was presented by Cordis that exact copies had been made but previously undisclosed, Judge Leonard trebled the damages amount.

However, Judge Leonard denied Dr. Voda's request for permanent injunction, because Dr. Voda himself did not lose sales or market position. Since Dr. Voda did not sell or market the products, monetary damages were sufficient to compensate him. Cordis appealed the underlying issues of liability, several claim construction issues, and the finding of willful infringement. Dr. Voda cross-appealed on one claim construction issue and the district court's denial of a permanent injunction.

The Federal Circuit Decision

On appeal, Cordis argued that the district court erred in its construction of several terms. The panel, however, disagreed and kept the district court's claim constructions intact. The panel did, however, disagree with the district court on one issue of infringement under the doctrine of equivalents as it pertained to amendment-based estoppel. Specifically, the panel agreed with Cordis that by amending claims during the prosecution of the '213 patent, Dr. Voda was barred for seeking equivalents regarding a first substantially straight leg. With that one exception, the panel affirmed the district court's findings on the issues of underlying liability. Thus, Dr. Voda possessed claims that were valid and infringed by Cordis' sale of certain catheters.

Next, the panel took up the issue of willful infringement. Exactly one week before Dr. Voda submitted his responsive and cross-appeal brief, the Federal Circuit issued its en banc decision in In re Seagate. In that decision, the court abandoned the then standard of exercising due care for determining whether infringement was willful. The court announced the new standard for willful infringement: whether the evidence showed the alleged infringer behaved objectively reckless. Dr. Voda argued that despite the jury's instruction under the old standard, the evidence of record indicated that the change in standard would not work manifest injustice, the standard in the Tenth Circuit, on Cordis.

The panel pointed to the competing evidence cited in the briefs of Cordis' copying (both before the patents' issuance and acts of literal copying thereafter) and Cordis' obtaining opinions of counsel. According to the panel, “[g]iven this record, we find that a jury instruction in accord with the Seagate objective recklessness standard may have changed the result of the jury verdict on willfulness.” The court then remanded the issue of willfulness to the district court for disposition either as a matter of law or by new trial.

Finally, the panel addressed the issue of permanent injunction. Citing the four-part test required in eBay v. MercExchange, L.L.C., the panel agreed with the district court that Dr. Voda “had not identified any irreparable injury to himself due to Cordis's infringement of his patents and also failed to show that monetary damages are inadequate to compensate for Cordis's infringement.” The panel acknowledged the Supreme Court's proscription on creating a class of would-be plaintiffs who would be unable to obtain an injunction under the four-part test: 1) that it has suffered irreparable injury; 2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; 3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and 4) that the public interest would not be disserved by a permanent injunction. The panel then stated “[n]othing in eBay eliminated the requirement that the party seeking a permanent injunction must show that 'it has suffered an irreparable injury.'”

The Federal Circuit panel reasoned “we disagree with Voda that the denial of a permanent injunction in this case conflicts with eBay. The Supreme Court held only that patent owners that license their patents rather than practice them 'may be able to satisfy the traditional four factor test' for a permanent injunction. Nothing in eBay eliminated the requirement that the party seeking a permanent injunction must show that 'it has suffered an irreparable injury.' Moreover, we conclude that the district court did not clearly err in finding that Voda failed to show that Cordis's infringement caused him irreparable injury.” In essence, the panel held that an exclusive-licensing patent holder may obtain an injunction if it can show irreparable harm to itself, yet Dr. Voda was unable to do so because the only harm to him was monetary. The panel stated that it was not creating a class of potential plaintiffs incapable of obtaining an injunction. Unfortunately for the non-practicing exclusive licensor, such as Dr. Voda, the licensor's only relation to the infringement injury is receipt of payments or past receipt of payments. A point the panel noted meant monetary damages would be sufficient to make a licensor-plaintiff whole. Having elected to forgo the market themselves, exclusive licensors can show no loss of sale by themselves or any impact on their market position.

It will be interesting going forward to see whether the panel is correct that it has not created a class of would-be plaintiffs incapable of obtaining injunctive relief, because the would-be plaintiff is an exclusive licensor and not someone practicing the invention.

Clay Holloway focuses his practice in patent litigation in the Atlanta office of Kilpatrick Stockton LLP. He can be reached at [email protected].