June 14 (Reuters) - A federal appeals court on Thursday partially reversed a $371.2 million award for C.R. Bard Inc in a long-running patent infringement dispute with W.L. Gore & Associates over tubes that reinforce blood vessels.

The U.S. Federal Circuit Court of Appeals in Washington, D.C., in February had upheld a 2007 Arizona jury verdict that Gore, the maker of Gore-Tex, willfully infringed a Bard patent through its sale of the vascular grafts. But after Gore appealed, a three-judge panel of the same court reversed part of its decision in a 2-1 ruling on Thursday, sending the case back to the trial court for reconsideration.

Prosthetic vascular grafts are used to bypass or replace blood vessels to ensure sufficient blood flow to various parts of the body.

Bard's patent had been issued in 2002, 28 years after an application was first filed; the medical technology company sued Gore for infringement the following year. The Arizona jury had awarded Bard $185.6 million for lost profit and unpaid royalties, an award that trial judge Mary Murguia later doubled, based on a finding that Gore had willfully infringed Bard's patent.

On appeal, Gore argued that its own researcher had come up with the idea for using Gore-Tex as a possible prosthetic blood vessel and was at least a co-inventor. A divided three-judge panel of the Federal Circuit rejected Gore's arguments in February, finding "substantial" evidence to support the $371.2 million award.

But reconsidering the case at the request of the full court, the panel found that the trial judge had used the wrong analysis when determining whether Gore's alleged infringement was willful or not.

Instead of reviewing whether the jury had enough evidence to find willfulness, the judge should have first considered whether Gore's defenses were objectively reasonable, the panel said. That is ultimately a question for the judge rather than the jury, Judge Arthur Gajarsa wrote for the two-judge majority.

Judge Pauline Newman, in a separate dissent, argued that the panel should simply conclude that Gore did not commit willful infringement instead of sending the case back to the district court. She cited numerous facts supporting Gore's position that it reasonably believed it had the right to produce the Gore-Tex grafts, including the fact that Bard's patent application was pending for 28 years, raising doubts about the patent's validity.

Bard and its lawyer did not immediately respond to requests seeking comment.

Diane Gilman, a spokeswoman for Gore, welcomed the decision, saying the company was eager for the trial court's new decision on willfulness.

The case is Bard Peripheral Vascular Inc et al v. W.L. Gore & Associates Inc, U.S. Court of Appeals for the Federal Circuit, No. 2010-1510.

For Bard Peripheral Vascular Inc: John O'Quinn of Kirkland & Ellis.

For W.L. Gore & Associates Inc: Frank Porcelli of Fish & Richardson.

(Reporting by Terry Baynes)

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