Sheath Sell Off Sinks Big Dollar Damage Award

• Published date: 28 February 2022
• Subject Matter: Corporate/Commercial Law, Intellectual Property, Contracts and Commercial Law, Patent
• Law Firm: Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
• Author: Ms Angeline Premraj, Shannon Patrick, Amanda K. Murphy, Elizabeth D. Ferrill, Stacy Lewis and Thomas L. Irving

Holding

In Junker v. Medical Components, 21-1649 (Fed. Cir. Feb. 10, 2022), the Court of Appeals for the Federal Circuit ("Federal Circuit") reversed a district court decision granting summary judgment of no invalidity under the on-sale bar.

Background

Junker sued Medical Components and Martech Medical Products (collectively, "MedComp") for infringement of design patent D450,839 ("the '839 patent"), which is directed to "introducer sheaths" used in the medical insertion of catheters. The application leading to the '839 patent was filed on Feb. 7, 2000. Since the effective filing date was prior to March 16, 2013, pre-AIA law applied, and the critical date for the on-sale bar of 35 U.S.C. '102(b) was Feb. 7, 1999. Id. at *3-4.

In 1998, Junker entered into a business relationship with Eddings. In January 1999, Eddings' company, Xentek, produced a prototype of an introducer sheath product that included all of the features of Junker's design. Id. at *5.

On January 8, 1999, Xentek sent Boston Scientific Corporation a letter detailing bulk pricing information for variously sized introducer sheath products. Id.

The district court granted Junker's motion for summary judgment of no invalidity, finding that the January 8 letter was not a commercial offer for sale and, therefore, not a basis for invalidity under the on-sale bar of 35 U.S.C. '102(b). According to the district court, the letter was "a preliminary negotiation, not a definite offer." Id. at *7. Although the letter "included numerous, specific, commercial terms (such as payment terms, shipment terms, and delivery conditions)," the court focused on use of the word "quotation" and the invitation to further discuss specific requirements. Id.

Rejecting other invalidity arguments, the district court found MedComp willfully infringed the '839 patent and awarded damages of $1.2M. Id. at *8.

Federal Circuit Decision

The Federal Circuit reversed, finding that the pre-critical date letter was a commercial offer for sale. There was no dispute that the product described in the letter embodied the claimed design and that the claimed design was ready for patenting as of January 1999 when the prototype was produced by Xentek including all the features of Junker's design.

The only issue was a question of law ' whether the letter constituted a commercial offer for sale. Id. at *10. The Federal Circuit found three factors supporting the conclusion that the letter was a commercial offer for sale inviting Boston Scientific...