Zimmer Told to Pay Stryker $228 Million in Patent Case

Zimmer Holdings Inc. (ZMH), which lost a February trial against Stryker Corp. over a surgical device, was told to pay more than $228 million -- three times the jury award -- and stop selling its products.

The increase in the jury award was appropriate because Zimmer intentionally infringed Stryker patents to build its business for pulsed lavage, a technique that removes damaged tissue and cleans bones during joint-replacement surgery, U.S. District Judge Robert Jonker said in an order issued yesterday. He also ordered Zimmer to stop selling its Pulsavac Plus device.

A federal jury in Grand Rapids, Michigan, in February sided with Stryker and awarded $70 million in damages. The dispute is over devices that use pulsing liquid, such as water or saline solution, to loosen debris from a surgical site and remove it by suction.

“A $70 million verdict sounds large in the abstract, but in context, it may not be enough, without enhancement, to deter infringing conduct,” Zonker wrote in his opinion.

The judge awarded $210 million after tripling the jury award, another $7 million for infringing sales that weren’t covered by the verdict, $11.2 million for interest, as well as attorney’s fees, said Stryker lawyer Greg Vogler of McAndrews Held & Malloy in Chicago.

‘High-Risk Strategy’

The judge’s 58-page opinion outlines Stryker’s innovation in coming up with a portable lavage device to replace bulky machines that were wheeled around a hospital. Zimmer was losing market share, so hired someone to “make one for us,” which resulted in a product that looked and functioned like Stryker’s.

Zimmer recouped some market share until it was forced to pull its product from the market in 2007 because of technical problems and complaints, the judge said. It reentered the market in December 2008, he said.

“Zimmer chose a high-risk/high-reward strategy of competing immediately and aggressively in the pulsed lavage market and opted to worry about the potential legal consequences later,” the judge said.

The case is Stryker Corp. (SYK) v. Zimmer Inc., 10cv1223, U.S. District Court for the Western District of Michigan (Grand Rapids).

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To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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