Smith & Nephew's Jury Verdict Against Arthrex Revived

Smith & Nephew Plc won an appeals court ruling reinstating an $85 million patent-infringement verdict against Arthrex Inc. over anchoring devices used in shoulder surgery.

A trial judge erred in overturning the jury verdict, the U.S. Court of Appeals for the Federal Circuit in Washington said in an opinion posted today on its website. The case was remanded to the trial judge for further proceedings.

The dispute, first filed in 2004, is over devices that are anchored to a bone to repair tears in the rotator cuff or in the labrum, a fibrous ring in the shoulder socket. The June 2011 trial was the third in the case, and the jury found that Naples, Florida-based Arthrex knew that its anchor used steps similar to those covered by the patent.

“We see no reason to disturb that finding by the jury,” Circuit Judge Alan Lourie wrote for the 2-1 majority.

Circuit Judge Raymond Clevenger, in dissent, said the jury’s verdict won by London-based Smith & Nephew was “not supported by substantial evidence,” so he would have affirmed the trial judge’s decision in December 2011 to overturn the verdict.

“The reinstatement of the June 2011 jury award of $85 million for Arthrex’s infringement activities is affirmation of the innovation coming from Smith & Nephew,” Joe Metzger, a spokesman for Smith & Nephew, said by telephone. “We will continue to defend our intellectual property rights from infringement by others.”

Considering Options

Arthrex is analyzing the ruling to determine what impact it may have on another patent dispute between the two companies that was put on hold pending the outcome of this case, said Arthrex General Counsel John Schmieding.

“We’re disappointed in the ruling and considering all of our options,” he said in a telephone interview.

The case is Smith & Nephew Inc. v. Arthrex Inc., 2012-1265, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Smith & Nephew Inc. v. Arthrex Inc., 04cv29, U.S. District Court for the District of Oregon (Portland).

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