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On January 19, 2016, the Supreme Court issued a grant-vacate-remand order in a dispute between rival medical device companies Medtronic and NuVasive. The order directs the Federal Circuit to revisit its decision in light of the Supreme Court’s ruling in Commil USA, LLC v. Cisco Systems, Inc., 135 S. Ct. 1920 (2015). Commil clarified that induced infringement “requires proof the defendant knew the acts [it induced others to take] were infringing.” Id. at 1928. On remand, the case should provide insight on how the Federal Circuit will analyze evidence to determine whether a defendant possessed the state of mind necessary for induced infringement.

NuVasive’s patent is directed to a method for detecting the presence of and measuring the distance to a nerve during surgery. The patented monitoring device sends a series of “stimulus signals” in increasing strength. When a nerve fires after receiving a stimulus signal, the device “stops” sending the signal and can predict its proximity to the nearest nerve based on the signal strength most recently sent by the device. Warsaw Orthopedic, Inc. v. NuVasive, Inc., 778 F.3d 1365, 1372 (Fed. Cir. 2015).

At the Federal Circuit, Medtronic argued that its device does not infringe because it does not “stop” sending signals after a neuromuscular response is detected. Rather, its device continues to send signals at a lower level of power. According to Medtronic, the NuVasive patent’s “stopping” step requires a termination of subsequent signals. Id. at 1373.

The panel disagreed with Medtronic’s claim construction position and found that there was substantial evidence to support a finding that the Medtronic device signal does “stop” when the signal strength decreases after a neuromuscular response is detected. “By decreasing the signal strength, the old signal terminates and a new one begins . . . This ‘restart’ involves a stop followed by a start.” Id.

After affirming that there was substantial evidence to support a finding of infringement, the Federal Circuit found that
NuVasive put forth enough evidence to support a jury finding of induced infringement. There was evidence that [Medtronic] was aware of the patent prior to the litigation and that [Medtronic] specifically taught doctors to use the product during the surgical procedures in an infringing manner.
Id.

Medtronic contends that the Federal Circuit’s inducement analysis is silent on the relevant legal issue and does not identify any record evidence that shows Medtronic knew its actions would cause infringement of NuVasive’s patent. Indeed, Medtronic argues that it has consistently believed – reasonably and in good faith – that its products could not be used to practice the required “stopping” step of NuVasive’s claims. Medtronic asserts that under Commil, its reasonable belief of noninfringement should be enough to defeat NuVasive’s inducement claims.

Moreover, Medtronic argues that whether its reading of the claims is correct and whether its reading is unreasonable are two different things. The Federal Circuit never discussed whether Medtronic’s alternative claim construction is reasonable and thus inconsistent with a finding of indirect infringement. And simply because its non-infringement position did not prevail in litigation, it does not follow that Medtronic’s position was unreasonable or that it had the requisite mental state to induce infringement. Medtronic therefore contends that it did not have the requisite knowledge to induce infringement because it reasonably read the patent claims in a way that foreclosed infringement.

But here is where it gets interesting. Medtronic’s “reasonable belief” that its products do not practice the “stopping” step of NuVasive’s claims is based on two premises: (1) the plain meaning of “stopping” requires more than decreasing the signal’s intensity and (2) NuVasive allegedly disclaimed that claim scope during prosecution of its patent.

The Federal Circuit indirectly addressed the reasonableness of Medtronic’s plain meaning argument. The panel found that “treating a ‘restart’ as a type of stop is clearly envisioned by the claims” because several of the dependent claims cover methods in which the steps of claim 1 are repeated. Id. (emphasis added). Accordingly, while Medtronic’s plain meaning argument may be a reasonable noninfringement position for claim 1 in isolation, it could be accused of failing to account for the patent’s entire claim scope.

Similarly, the Federal Circuit appears to have rejected the reasonableness of Medtronic’s prosecution history estoppel argument. The panel noted that “no construction of the ‘stopping’ step was presented to the jury, nor did [Medtronic] request a construction beyond its plain and ordinary meaning.” Id. As such, the Federal Circuit found that it was improper to test the jury verdict by the “new and more detailed interpretation” based on the prosecution history. Id.

While it is not clear how the Federal Circuit will rule on remand, the case does present a few important practice points. First, advance multiple noninfringement arguments. Second, preserve all reasonable noninfringement arguments at the trial level. Finally, if at all possible, craft noninfringement arguments that are reasonable in light of the entire claim scope, rather than narrowly focused on a single claim.

Federal Circuit Tasked With Analyzing Evidence For Proof That Defendant Had the State of Mind Necessary For Induced Infringement