JMOL Overturned Because Substantial Evidence Supported Jury's Findings Of Nonobviousness

In Kinetic Concepts, Inc. v. Smith & Nephew, Inc., No. 11-1105 (Fed. Cir. Aug. 13, 2012), the Federal Circuit reversed and remanded the district court's grant of JMOL to defendant Smith & Nephew, Inc. ("S&N") of invalidity for obviousness, because S&N failed to establish by clear and convincing evidence that the claims were obvious.

Kinetic Concepts, Inc., KCI Licensing, Inc., KCI USA, Inc., KCI Medical Resources, KCI Manufacturing, and Medical Holdings Limited (collectively "KCI"), and Wake Forest University Health Sciences ("Wake Forest") brought suit against S&N, alleging infringement of U.S. Patent Nos. 7,216,651 ("the '651 patent") and 5,645,081 ("the '081 patent"), which are owned by Wake Forest and exclusively licensed by KCI. The claims of the asserted patents are directed towards methods and apparatuses for the treatment of wounds through the application of negative pressure.

In the district court, the parties disagreed about the form and content of the jury instructions with regard to obviousness. Ultimately, the jury verdict form presented yes or no questions about differences between the prior art and the asserted claims, a yes or no chart about certain objective indicia of nonobviousness, and a yes or no question on whether S&N had proven obviousness. The jury determined that the prior art exhibited differences from the claims, that objective considerations of nonobviousness were present, and that obviousness was not established.

S&N moved for JMOL, arguing that the jury's explicit findings were not supported by substantial evidence. The district court agreed, finding that, contrary to the jury's explicit findings, the differences between the claimed invention and the prior art, if any, were minimal, and that the objective indicia of nonobviousness did not overcome the strong case of obviousness. The district court granted JMOL in favor of S&N, and Wake Forest appealed.

As an initial matter, the Federal Circuit rejected S&N's argument that the jury verdict was "advisory" and therefore not binding. The Court held that because the district court did not use the term "advisory jury" to denote a jury under Fed. R. Civ. P. 39(c)(1), the cases cited by S&N were irrelevant. The Court concluded that the district court instead used the term "advisory jury" to indicate that the jury was permissibly given a legal issue whose ultimate determination was reserved for the court. Accordingly, the Court held that all of the jury's explicit and...