Greatbatch Ltd. v. AVX Corp. and AVX Filters Corp. Court Grants Motion to Set Aside Verdict (March 30, 2018)

Delaware District Court Judge Stark granted AVX’s motion to set aside the damages verdict. The reason for the set aside was solely because the jury verdict form did not separate damages for each patent accused, and thus constituted a damages award for all patents and all products.

Judge Stark himself observes this case possesses “a convoluted history.” It seems that Judge Stark sanctioned AVX because of its late production of core technical documents relevant to the infringement issues on one of the four patents in suit (i.e., the ‘715 patent). The sanctions levied involved the judge granting a motion for summary judgment that all of AVX’s Ingenio products infringed the ‘715 patent. When the case proceeded to trial concerning the three other patents in suit, the jury returned a damages award in the form of a lump sum of $37.5 million for infringement of all four patents by all of AVX’s accused products. After the jury trial, the court granted a motion for reconsideration of the sanctions. A new trial for the ‘715 patent was held and the result was that the jury found no infringement concerning some of AVX’s Ingenio products, while finding infringement with regard to a smaller subset of Ingenio products.

The reason for the jury award set-aside is attributed to the jury verdict form, which failed to request damages figures on a patent-specific and product-specific basis. Citing two Federal Circuit cases (Verizon Services Corporation v. Vonage Holdings Corp. and DDR Holdings, LLC v. Hotels.com, L.P.), the judge’s opinion seems to provide the only solution – a new trial on damages.

Important to note, AVX initially requested that the verdict form offer a damages line on a patent-by-patent basis; however, Greatbatch prevailed with its insistence for the general verdict form ultimately provided to the jury. Note in this instance, however, that because not all accused Ingenio products were found to infringe the ‘715 patent, a patent-by-patent jury verdict form might not have obviated the need for a new trial on damages under these specific circumstances.

GlaxoSmithKline LLC and SmithKline Beecham Ltd. v. Teva Pharmaceuticals USA, Inc. (JMOL granted March 28, 2018)

The jury verdict states that Teva infringed the ‘000 patent and owes GlaxoSmithKline (“GSK”) $234,110,000 in lost profits and $1,400,000 in reasonable royalty damages. District Court Judge Stark granted-in-part Teva’s JMOL motion and determined that Teva did not induce infringement. Consequently, the jury verdict was vacated.

While largely an issue of liability, this opinion collides with issues of damages. The damages analysis was focused on lost profits, and the lost profits construct requires that a damages expert conceive a but-for world where infringement does not occur. Conceptualization of that but-for world proved critical for Judge Stark.

A little history: It appears that GSK determined that a drug (carvedilol) which was already used to treat high blood pressure and left ventricular dysfunction (“LVD”) after a heart attack, was also effective for treatment of congestive heart failure (“CHF”). Glaxo applied for, and received a patent (namely, the ‘000 patent at issue) for the method of using carvedilol for CHF treatment.

Meanwhile, Teva and other generic manufacturers had been marketing and selling generic carvedilol for treatment of high blood pressure and LVD; but not explicitly for treatment of CHF. Four years after Teva entered the generic carvedilol market, the FDA instructed Teva to add CHF treatment indication to its labels. (The ‘000 patent had been delisted from the Orange Book.)

The question facing GSK’s damages expert, Dr. Robert Maness, and defendants’ experts, Dr. DeForest McDuff and Dr. Sumanth Addanki, was whether in the but-for world where GSK is entitled to lost profits, are generic carvedilol products (which are not indicated for practicing the patented method) on the market? Given the generic’s prior & ongoing availability for non-accused indications (i.e., high blood pressure and LVD), the answer is not self-evident. The experts answered the question differently and forced Judge Stark to decide.

Judge Stark’s pre-trial determination to exclude defendants’ experts, portions of which are reproduced below, seems to recognize when damages analysis diverges from liability, while also seeming to foreshadow his ruling on the post-trial JMOL motions. Ultimately, Judge Stark granted the motions to strike defendant experts Dr. McDuff and Dr. Addanki based upon their misapplication of the law when formulating a but-for world of lost profit damages. Their failure in this instance was to assume the existence of non-party generics, available for non-accused indications, and therefore available to satisfy the but-for demand. (Dr. Maness’ reliance upon a survey expert who determined what portion of the Teva users likely used the product in an infringing manner was allowed.)

With respect to vacating the jury award, Judge Stark pointed to the fact that GSK failed to establish a causal nexus between the purchase of accused Teva product and actual infringement of the patented method. Documents did not support Teva’s inducement; so there was no proof that Teva induced infringement. That is, product was sold, but toward what use, no one could provide the necessary evidence.

A physician, who provided testimony, claimed that when he prescribed the Teva generic for CHF, he did not look at the label first to determine whether the generic product was indicated for the infringing use. Absent that link between Teva and infringement, Judge Stark concluded the jury award could not stand.

Finally, in his footnote 16, Judge Stark offers insight into broader policy implications of this matter which is well worth the read. He notes, however, that those implications “have not impacted the Court’s ruling on the pending motions.”

Integra Lifesciences Corp. et al. v. Hyperbranch Medical Technology, Inc. (Motion to Strike Granted in Part March 13, 2018)

Magistrate Judge Burke granted in part and denied in part John Jarosz’s damages analysis on November 14, 2017. Four months later, Judge Stark adopted the Magistrate’s order.

Judge Stark denied Defendant’s motion to strike Mr. Jarosz’s price-erosion analysis, but granted exclusion of Mr. Jarosz’s market-share apportionment.

Review of the redacted order by Magistrate Judge Burke reveals that the decision to strike – or not to strike – appears to have nothing to do with the actual analysis done, but instead pivots on whether Plaintiffs failed properly to disclose their damages theories. For Mr. Jarosz’s market-share apportionment analysis, Judge Burke and Judge Stark both agree that the late disclosure “could cause prejudice to Defendant.” The footnote excerpted below suggests that even late disclosure is better than no disclosure:

This case affords yet another cautionary tale about timely disclosure.

Idenix Pharmaceuticals LLC, et al. v. Gilead Sciences, Inc. (JMOL decided February 16, 2018)

This case went to trial in December 2016 and Judge Stark issued his second opinion on JMOL on February 16, 2018. Relevant for damages is Judge Stark’s opinion that comparability of licenses should go to the weight, and not the admissibility of a damages opinions:

Courts appear to disagree about comparable license analysis. In some cases, courts have determined that licenses are not comparable and opinions should be stricken. In others, the comparability goes to the weight, and not the admissibility of the evidence. Given the lack of a clear road map to determine comparability, this issue will continue to be difficult for damages experts to navigate.

Additionally, Judge Stark makes the following patent-portfolio observation in a footnote:

This footnote is interesting for two reasons. First, as a matter of law, an expert may aggregate patents into an assumed portfolio for the purposes of a hypothetical negotiation. Second, as a matter of fact, Judge Stark appears persuaded that Mr. Carter tied his aggregation to the facts of the case. It is unclear whether Mr. Carter would have been precluded from testifying about his portfolio approach had it been the subject of a Daubert motion, like the one found here in the Oracle v. Google matter. Referencing general “real-world negotiations” is not necessarily a strong tie to specifics of a contemplated negotiation. The hypothetical negotiation is not a real-world negotiation. Arguing patent aggregation under this guise appears potentially fraught.

Also relevant is Judge Stark’s opinion that the entire market value rule did not apply in this case and that Plaintiffs were entitled to get damages on a royalty base consisting of the entire pharmaceutical.