Thursday, September 07, 2006

District Court Grants Enhanced Damages, But Denies Injunction in Cordis Case

Doctor Jan K. Voda, a native of Czechoslovakia, sued Florida-based Cordis Corp. in the Western District of Oklahoma on October 2003, claiming that the company infringed three of his patents directed to guiding-catheters for performing angioplasty (U.S. Patents 5,445,625, 6,083,213, and 6,475,195). Voda immigrated to the United States in the late 1970s to practice medicine and develop his inventions. He has patented a number of catheters and other medical devices used in cardiology, including guiding catheters, specially shaped flexible rods, for removing blockages in the coronary artery.

In May, a federal jury decided that Cordis infringed upon the patents held by Voda and awarded him a 7.5 percent royalty, totaling an estimated $10 million over the life of the patents. The jury also found that the infringement by Cordis was willful. Accordingly, Voda moved, among other things, for treble damages and a permanent injunction.

On the issue of treble damages, the district court relied on Read Corp. v. Portec Inc. for establishing whether damages should be increased, and to what extent:

Courts consider several factors when determining whether an infringer has acted in bad faith and whether damages should be increased. They include:

(1) whether the infringer deliberately copied the ideas or design of another;

(2) whether the infringer, when he knew of the other's patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed;

(3) the infringer's behavior as a party to the litigation;

(4) defendant's size and financial condition;

(5) closeness of the case;

(6) duration of defendant's misconduct;

(7) remedial action by the defendant;

(8) defendant's motivation for harm; and

(9) whether defendant attempted to conceal its misconduct.

Based on the totality of circumstances, the court concluded that Voda's damages should be increased, but not trebled. Issues that supported the finding of increased damages included the fact that the jury found deliberate copying by Cordis, and that no remedial measures were taken - in fact, Cordis indicated it would continue to produce and market the infringing devices without change even after the jury verdict. While Cordis relied on an opinion of counsel defense, the jury found that the timing of the opinions, along with the thoroughness of information and the independence of counsel, precluded Cordis from negating willfulness.

On the other hand, the court noted that there was no evidence of litigation misconduct by Cordis, and found that Voda's eight-year delay in bringing suit was a material factor in reducing damages.

On the injunction, the court followed the four-factor test established in eBay Inc. v. MercExchange, L.LC., and found that Voda could not demonstrate either irreparable injury or that monetary damages would be inadequate to compensate him. Voda's patents were under an exclusive license to Scimed at the time the lawsuit was pending. However Scimed declined to sue Cordis when the opportunity arose, leaving Vordis alone in enforcing the patents. This was a significant factor to the court in denying injunctive relief:

[O]ther than the presumption of irreparable harm, plaintiff identifies no harm to himself; rather, he relies on alleged harm to a non-party, Scimed . . . The court concurs with defendant that such harm is irrelevant because Scimed elected not to sue to enforce the patent rights. As patents have 'the attributes of personal property', the person seeking a permanent injunction must demonstrate harm from infringement of those rights that is personal as well.

The court also finds plaintiff has not established that monetary damages are inadequate to compensate him. Plaintiff argues he granted Scimed an exclusive license to his patented inventions and defendant's continuing infringement will damage his relationship with Scimed. This argument, however, is simply the other side of the right-to-exclude coin and is not sufficient to justify granting injunctive relief. Plaintiff's request for a permanent injunction is therefore denied.

NOTE: The Voda v. Cordis case has been named one of the "Top Ten Pending Patent Cases" by Hal Wegner over the issue of trans-border patent enforcement. In this same case, on supplemental jurisdiction grounds, Voda asked the court for leave to amend his complaint to assert infringement of four counterpart patents granted in Canada, France, Germany, and the UK. On August 2 2004, the district court accepted Voda's request. Cordis appealed this order, and oral hearing before the Federal Circuit took place on January 12 2006. The Federal Circuit has not issued an opinion yet (for more on this issue, see here and here).

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