Jury May Infer Intent to Induce Infringement Where Alleged Belief in Noninfringement Is Based on Objectively Unreasonable Reading of Claims

Warsaw Orthopedic, Inc. v. NuVasive, Inc., ___ F.3d ___ (Fed. Cir. June 3, 2016) (Lourie, DYK, Reyna (concurring)) (S.D. Cal.: Bencivengo) (4 of 5 stars)

Following the Supreme Court's vacatur and remand for reconsideration of the Federal Circuits's previous decision (778 F.3d 1365) in light of Commil USA, LLC v. Cisco Systems, Inc., 575 U.S. ___, 135 S. Ct. 1920 (2015), Federal Circuit reaffirms judgment of liability for inducement of patent infringement and reinstates previous decision on other issues.

Noting that "knowledge of infringement can be inferred from circumstantial evidence," slip op. at 4, the Federal Circuit held that a reasonable jury could have concluded that accused infringer Medtronic either knew or was willfully blind to the fact that its customer doctors were infringing. Substantial evidence supported a finding that Medtronic had no objectively reasonable belief that there was no infringement, because such belief was based on a narrow reading of the claims that was inconsistent with Medtronic's position on related claim language earlier in the litigation and was inconsistent with the claim language, which merely required that a nerve stimulating signal be stopped, which could be met by lowering a signal below a nerve stimulating level while keeping the signal on at some lower level. Also, Medtronic had not proposed a claim construction so the Federal Circuit saw Medtronic as trying improperly to argue claim construction to the jury: "[I]t is improper for juries to hear conflicting expert testimony on the correctness of a claim construction, given the risk of confusion." Slip op. at 10 (citing CytoLogix Corp. v. Ventana Med. Sys., Inc., 424 F.3d 1168, 1172 (Fed. Cir. 2005)). The majority opinion also noted, in response to the concurrence, that inducement does not automatically follow from a finding of direct infringement, but "it is sufficient that the plaintiff establish that a defendant's asserted belief in non-infringement was unreasonable." Slip op. at 12 n.2. The Federal Circuit also affirmed without discussion the district court's royalty award for Medtronic's infringement of this patent and reinstated the Federal Circuit's previous judgment as to NuVasive's infringement of certain Medtronic patents. The prior Federal Circuit decision on those issues was unaffected by the Supreme Court's reconsideration order.

Concurrence: Judge Reyna would have resolved the case on waiver grounds without reaching the reasonableness of Medtronic's claim interpretation: "While the Supreme Court in Commil stated that a defendant lacks the intent for induced infringement where his reading of the claims is both different from the plaintiff and reasonable, I do not believe Commil opens the door for this court to assess the reasonableness of a defendant's non-infringement position that is based on a claim construction that a defendant failed to raise, or that was not before the jury." Concurring op. at 2. He also criticized the majority for basing its evaluation of what Medtronic "must have known" on evidence that Medtronic's product operated in a directly-infringing manner: "The opinion's analysis suggests that any time a defendant's products are found to directly infringe, the plaintiff has sufficiently established the defendant's intent to induce infringement." Concurring op. at 4.