Tyco Healthcare Group LP v. Ethicon Endo-Surgery Inc.
Prototypes that are not "reduced to practice" first may not qualify as "prior art." The plaintiff, Tyco Healthcare Group, alleged that defendant Ethicon Endo-Surgery Inc. violated the plaintiff's patents for ultrasonic surgical instruments. At trial, the main disputes between the "Coke and Pepsi" of the surgical instrument market concerned camming mechanisms and curved blades. Although Dr. William Cimino claimed that Ethicon's products utilize a rack-and-pinion mechanism, the court credited Dr. William Durfee's opinion that camming mechanisms in Ethicon's products are similar to camming mechanisms that Tyco patented. It also was more likely than not that Ethicon's products met various claim limitations concerning a curved blade, a sealing ring, and a "coupling" and "swivel." Ethicon also claimed that Tyco's patents were not valid, because of prior inventions. Although Ethicon's affiliate, Ultracision, created its prototype first, Ethicon failed to prove, by clear and convincing evidence, that the prototype worked and was "reduced to practice" first. One of the Ethicon prototype blades became so warm that tissue was charred and the blade melted. Ethicon also failed to prove, by clear and convincing evidence, that Tyco's invention and use of a curved blade with dual cams was obvious. "While Ethicon has pointed to elements of the non-ultrasonic laparoscopic surgical instruments that have camming members, rotatability of the blade and clamp arm, tube-in-tube designs, and the ability to fit down a 5 mm trocar," wrote the court, "the fact that such elements existed out in the laparoscopic surgical world is not enough to render them invalidating prior art on account of obviousness." Dr. Keith Ugone opined that Tyco's market share was 24 percent in 2010 and that, if Ethicon had not produced products that infringed Tyco's patents, Tyco's market would have been 54 percent. The court found that Tyco failed to prove that, but for the infringement, sales would have gone to Tyco, as required to prove lost profits on sales. The court awarded Tyco royalty damages of 8 percent, or $140 million, on infringing sales of $1.7 billion, and prejudgment interest of 3.25 percent, for a total judgment in the amount of $176 million.