Federal Circuit Reverses Judgment for Willful Infringement

Through its recent decision in Stryker Corp. v. Zimmer, Inc., the Federal Circuit gave Zimmer an early Christmas gift worth approximately $140 million by reversing a district court’s determination of willfulness and vacating a corresponding award of trebled damages against Zimmer. The reversal was based on the Federal Circuit’s finding that the noninfringement and invalidity defenses raised by Zimmer were “not objectively unreasonable.”

This dispute between competitors Stryker and Zimmer dates back to 2010 when Stryker filed suit against Zimmer for patent infringement. The lawsuit involved three of Stryker’s patents covering devices used to deliver pressurized irrigation for certain medical therapies, including orthopedic procedures and cleaning wounds. After years of litigation, the case proceeded to trial in 2013 where a jury ultimately found Stryker’s asserted patents to be valid and infringed. The jury awarded $ 70 million to Stryker in lost profit damages. Following the jury trial, the district court trebled the $ 70 million award based on willful infringement. Zimmer appealed.

On appeal, the Federal Circuit affirmed the underlying damage award, but reversed the district court’s judgment that the infringement was willful. The reversal was based on the district court’s failure to undertake a purely objective assessment of Zimmer’s specific defenses to Stryker’s claims. According to the Federal Circuit, although Zimmer’s defenses failed at trial, since Zimmer’s litigation defenses were “not objectively unreasonable,” the infringement was not willful.

By focusing solely on the objective reasonableness of Zimmer’s legal defenses, the Stryker decision implies that a person can intentionally infringe a patent before being sued, but then still avoid liability for willful infringement after being sued as long as its legal defenses during the lawsuit are “not objectively unreasonable.” This is true even if the legal defenses are ultimately unsuccessful. The Federal Circuit appears to have set a very high bar for plaintiffs to overcome in order to obtain trebled damages in patent infringement lawsuits.