Tuesday, February 26, 2008

Tempering (Over) Zealous Advocacy - Courts Overturn Verdict, Sanction Counsel $10M

"There are only two tragedies in life: one is not getting what one wants, and the other is getting it."

- Oscar Wilde

Medtronic Navigation Inc. v. Brainlab, Civil Action No. 98-cv-01072-RPM, District of Colorado, February 12, 2008

When judges become infuriated over hyper-aggressive litigation, they issue sanctions, and even set aside verdicts. Here, U.S. District Senior Judge Richard P. Matsch did both, after a 13-day patent infringement trial. After a jury returned a $51M verdict, Judge Matsch overturned the verdict, then ordered the lawyers to pay the fees and costs of the opposing side.

One example of the misconduct included plaintiff's repeated comparing of products to establish infringement.
After agreeing that a product-to-product comparison for infringement was improper, counsel nevertheless went forward and compared the defendant's products with the plaintiff's in front of the jury during trial and at closing arguments. A centerpiece for the plaintiff was an FDA letter, where the defendants identified their product as being "substantially equivalent" to the plaintiff's product. Judge Matsch was not pleased with this tactic:
Medtronic’s counsel were experienced patent litigators who understood the differences between the doctrine of equivalents and the FDA process. They knew that BrainLAB’s statements in its FDA submission were not an admission that the BrainLAB products infringed the asserted patents. Indeed, Medtronic as a defendant has argued that admission of similar statements it made in an FDA application would be misleading and unfairly prejudicial. See Cardiovention, Inc. v. Medtronic, Inc., 483 F.Supp.2d 830, 840-41 (D. Minn. 2007).
Also, after the court issued a claim construction finding prosecution estoppel, plaintiff's counsel stated later to the jury: “this whole notion that whatever happened in the patent office on this patent, that somehow it was a limitation, is just nonsense.”

Concluded the court:
The conduct of . . . counsel constituted much more than a few instances of overstepping during a hard-fought battle. This case involved complicated technology. Patent law is complex and not intuitive to the average juror. Parties and counsel have an obligation to refrain from seeking to take advantage of those complexities by employing misleading strategies.

[A]fter the Court issued its claim construction rulings, Medtronic’s counsel proceeded cavalierly, with reckless indifference to the merits of Medtronic’s infringement claims. The continued prosecution of a claim after its lack of merit has become apparent warrants sanctions under § 1927 . . . At trial, [counsel's] conduct was in disregard for the duty of candor, reflecting an attitude of “what can I get away with?” Throughout the trial, the [] lawyers artfully avoided the limitations of the patent claims and created an illusion of infringement. They did so with full awareness that their case was without merit.
Read/download the order here (link)

Depuy Spine, Inc. v. Medtronic, Civil Action No. 01-10165-EFH, District of Massachusetts, February 25, 2008

From the order:
Throughout trial, the defendants demonstrated a failure to accept the claim construction governing this case. In fact, with the exception of their ensnarement argument, their defense to infringement appears to have been wholly based on an attempt to obscure, evade, or minimize the Federal Circuit’s construction of the patent-in-suit (the ‘678 patent). Even as early as the defendants’ opening statements, they essentially urged the jury to adopt an interpretation of the patent claims developed by their experts instead of the construction mandated by the Federal Circuit.
Apparently, news traveled fast from Colorado to Massachusetts, as Judge Harrington picked up on Judge
Matsch's order from two weeks earlier:
As Judge Richard Matsch of the District of Colorado has recently observed, “Patent law is complex and not intuitive to the average juror. Parties and counsel have an obligation to refrain from seeking to take advantage of those complexities by employing misleading strategies.” . . . The defendants here clearly sought to take advantage of the technical and legal complexities inherent in this case.
And now, the kicker:
The defendants prolonged the proceedings unnecessarily (thus unduly imposing upon the jury’s time), they sought to mislead both the jury and the Court, and they flouted the governing claim construction as set forth by the Federal Circuit. Under these circumstances, the Court concludes that it is proper to impose a penalty of ten million dollars.
View/download the order here (link)

3 Comentários:

Anonymous said...

One can't tell from Judge Harrington's brief memorandum what actually went on at trial, e.g., did the other side object, how frequently did this occur, and what did the court do at the time about the bad actions.

But the concept of a punitive award for trial conduct that the judge disapproves of is frightening. It sets up conflict between trial counsel and the client, inhibits aggressive but acceptable conduct, and imposes an undue penalty for aggressive conduct that perhaps does cross the line. When such conduct occurs, the judge has the ability to address it right away. If accepted by other courts, this would be a terrible development in the already-difficult job of trial practice.

Anonymous said...

I also wondered how it got to this point. Seemed very strange that the judge didn't hammer this down sooner.

Anonymous said...

Well, my guess is that there was a confluence of events that led to this result.

1. Judge Matsch, heck, all of the federal judges in Denver, are very cranky and leery of out of town lawyers.

2. Did anyone notice that it was Medtronic that was at the receiving end in both cases? Need I say more about "aggressive," "scorched earth," "ti#$ to the wringer," "no stone unturned," "slash and burn" etc. litigation styles?

3. Did anyone notice it was Medtronic ...

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