Lost Profits Must Come From The Lost Sales Of A Product Or Service The Patentee Itself Sells

In Warsaw Orthopedic, Inc. v. NuVasive, Inc., Nos. 13-1576, -1577 (Fed. Cir. Mar. 2, 2015), the Federal Circuit affirmed the district court's finding of invalidity and infringement of the patents-at-issue, vacated the district court's damages award, and remanded for a new trial on damages.

Warsaw Orthopedic, Inc. ("Warsaw") owns U.S. Patent Nos. 5,860,973 ("the '973 patent") and 6,945,933 ("the '933 patent"), and NuVasive, Inc. ("NuVasive") owns U.S. Patent No. 7,470,236 ("the '236 patent"). Warsaw sued NuVasive for infringement of its '973 and '933 patents, and NuVasive counterclaimed for infringement of its '236 patent. At trial, the jury found (1) the asserted claims of the '973 patent were valid, (2) the asserted claims of the '933 patent were infringed under the DOE, and (3) the asserted claims of the '236 patent were infringed. The jury awarded damages for each. After trial, Warsaw filed motions seeking supplemental damages and a permanent injunction with respect to its '973 and '933 patents, and a motion for JMOL or a new trial with respect to the jury's finding of infringement of the '236 patent. NuVasive also moved for JMOL or a new trial with respect to the jury's finding of validity of the '973 patent, infringement of the '933 patent, and Warsaw's entitlement to lost profits. The district court denied the motions for JMOL or a new trial, denied Warsaw's requests for supplemental damages and a permanent injunction, and set ongoing royalty rates. Both parties appealed.

On appeal, the Federal Circuit addressed these issues in turn. On the issue of invalidity of the '973 patent, the Court held that the district court did not err in either the claim construction or the jury instructions. Specifically, with respect to claim 35 of the '973 patent, the Court found no error in the district court's conclusion that the preamble is not limiting. In addition, the Court found no error in the district court's instruction to the jury that "said implant" refers to "a spinal implant capable of being inserted translaterally," and that "capable" should be given its plain meaning. Slip op. at 6 (citation omitted). Finally, the Court held that because Warsaw presented substantial evidence to the jury distinguishing the '973 patent from the prior art references relied upon by NuVasive, the jury was entitled to find that the prior art references did not anticipate or render obvious the asserted claims of the '973 patent.

"To be entitled to lost...