U.S. Appeals Court Scraps $176M Award In Covidien-J&J Patent Spat

By Chuck Seegert, Ph.D.

The highest patent appeals court in the U.S. has tossed out a $176 million judgment recently awarded to Covidien over the company’s dispute with Johnson and Johnson’s subsidiary, Ethicon Endo-Surgery. The lawsuit involved J&J’s purported infringement of Covidien’s patented surgical cutting technology. 

One of the key requirements of a patent is that it is non-obvious, which essentially means that the protected invention must be an unexpected advance to a professional familiar in that area. It is possible for a patent to be mistakenly awarded when a technology is obvious, in which case the patent can be challenged in court. If the challenge is successful, the patent can be invalidated.

This was the exact scenario Covidien encountered recently when Judge Sharon Prost of the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., ruled that certain claims in their patents were invalid, according to a recent story from Reuters. The lawsuit was originally filed in 2010 when Covidien alleged that Ethicon was infringing on patents awarded in the 1990s for ultrasonic surgical cutting instrumentation.

After significant legal wrangling, a $176 million judgment was handed down in March of 2013 that favored Covidien. Ethicon appealed the ruling.

While the appeal was pending, Covidien went a step further to protect its piece of the ultrasonic instrumentation market by obtaining an injunction against the J&J subsidiary. Filed in June of 2014, the injunction was awarded by the courts in October 2014 and legally prevented J&J from making, marketing, or selling its Harmonic ACE+7 Shears ultrasonic surgical tool.

The recent judgment from Prost discredited Covidien’s patent because “the inventions described by Covidien's patent claims, which include using a curved blade instead of a straight one, were obvious in light of earlier technology,” according to Reuters.

In a written statement, Covidien expressed disappointment at the judgment.

Currently, Covidien is in the midst of a $43 billion takeover by healthcare giant Medtronic. The deal was recently approved by U.S. and European regulators. Chinese and South Korean regulatory bodies also recently approved the merger, which is set to be completed by early next year.