Could Friday's 2-1 squeaker of a ruling by the U.S. Court of Appeals for the Federal Circuit truly be "the final curtain," as the majority put it, in a patent saga that dates back to 1974?
The majority affirmed a $186 million jury verdict of willful infringement against W.L. Gore, as well as post-trial rulings that doubled the verdict. It also tacked on $19 million in attorneys' fees, and added a 12.5-to-20 percent royalty for Gore's ongoing infringement of C.R. Bard's patent on vascular stents. Right now, Gore owes Bard between $800 and $900 million, with more to come in future royalties. That makes the Bard case one of the biggest patent awards ever affirmed by the Federal Circuit, apparently second only to Polaroid's $873 million award against Kodak.
Steven Cherny of Kirkland & Ellis, who waded into the deep pool of bad blood between Gore and Bard in 2004, made the winning argument for Bard at the Federal Circuit.
Gore brought in appellate ace Richard Taranto of Farr & Taranto, who was nominated to join the Federal Circuit bench in November 2011. Taranto (and Gore's longtime lawyers from Locke, Lord, Bissell & Liddell and Osborn Maledon) certainly made a go of the appeal, highlighting some of the bizarre facts of this 38-year dispute. Basically, Gore argued that the inventor who licensed his patent to Bard, a physician and researcher named David Goldfarb, had worked with Gore to conduct tests on samples of Gore-Tex as a possible prosthetic blood vessel. At the very least, Gore asserted on appeal, the plant manager who conceived the idea, sent samples to Goldfarb and other researchers, and first applied for a patent on the stent was a co-inventor.
That argument made sense to Federal Circuit Judge Pauline Newman, who wrote the dissent. Noting that it took the U.S. Patent and Trademark Office 28 years to award the patent to Goldfarb after a contested proceeding between him and the Gore plant manager, she said that as a matter of law, "Goldfarb cannot deprive Gore of the invention Gore possessed and that was known to Gore and published by others before Goldfarb entered the scene," Newman wrote. "A person who tests a material provided to him for testing, in the test for which the material was provided, does not become the inventor of the material ... with the sole right to the use he was invited to test." (The judge also cited a "history of incorrect law, impropriety, questionable advocacy, and confessed perjury" in calling for a new trial.")
But Newman was in the minority. The majority opinion, written by Judge Arthur Gajarsa for himself and Judge Richard Linn, agreed with Bard's lawyers -- from Kirkland; Latham & Watkins; Fennemore Craig; and Wolf, Greenfield & Sacks -- that Goldfarb was the first researcher to pinpoint the precise microscopic structure that would permit the vascular grafts to work effectively as artificial blood vessels. Yes, Gore sent him the materials, the majority concluded. But Goldfarb turned those materials into an invention.
"We hold that Bard presented substantial evidence for the jury to find that Goldfarb and [Gore plant manager Peter] Cooper were not joint inventors because Cooper did not communicate to Goldfarb that the internodal distance was the key to creating successful grafts, and, therefore, the jury could have reasonably concluded that Cooper's collaboration with Goldfarb did not contribute to the conception of the invention in a significant manner," Gajarsa wrote.
Gore has said it is considering its options. (A Gore spokesperson didn't return my call for comment.) But this isn't the sort of dispute that typically attracts an en banc court; the dispute between Newman and the majority judges is really a question of facts more than legal interpretation. It's not likely that the rest of the Federal Circuit is eager to get involved in a 38-year-old case that's already been before the appeals court three times. Clearly, Gajarsa intended to discourage that prospect. "Contrary to the dissent, we are not free to ignore the long history of this case," he wrote. "We cannot revisit the facts anew, nor meander through the record and select facts like our favorite jelly beans, nor characterize the facts as the Bard would in a Shakespearean tragedy."
(Reporting by Alison Frankel)
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