Federal Circuit Patent Updates - March 2015

Warsaw Orthopedic, Inc. v. Nuvasive, Inc. (No. 2013-1576, 2013-1577, 3/2/15) (Lourie, Dyk, Reyna)

March 2, 2015 12:15 PM

Dyk, J. Affirming finding of validity and infringement but remanding on damages. The plaintiff Warsaw licensed the patent to a related, but non-named manufacturing entity which sold the product to plaintiff MSD and paid royalties to Warsaw. Warsaw sought damages on convoyed sales which it sold MSD, a royalty received from the manufacturing entity and inter-company transfer payments between MSD and Warsaw. The Court held 1) the convoyed sales were not properly part of the damages award because they failed the functional relationship test in the absence of evidence that they had no function independent of the patented product, 2) the royalty payments from the manufacturing entity could not be recovered as a species of lost profits because Warsaw did not practice the patent and 3) the inter-company transfer payments were not recoverable because they were not clearly tied to transactions involving the patented products.

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