Supreme Court denies Arthrex in $29m loss to KFx Medical

The U.S. Supreme Court this week declined to review a $29 million patent infringement loss for Arthrex, which wanted the high court to overturn a victory for orthopedics rival KFx Medical.

In petitioning the Supremes, Arthrex argued that the appeals court’s decision to treat the “reason to combine” question in determining the obviousness of patent validity as a factual issue was “inexplicable,” according to court filings.

“The Supreme Court’s ruling has now ended this dispute. KFx has prevailed at each and every step along the way with the superb representation from Joe Jennings, our lead counsel from Knobbe Martens,” KFx CEO Tate Scott said in prepared remarks. “Small companies can indeed win and defend their intellectual property from much, much larger companies. The Supreme Court’s ruling [Nov. 16] has confirmed KFx patents are valid and infringed by Arthrex. We will continue to require other infringers to respect our intellectual property.”

The patent-spat involves KFx’s patent covering a knotless bridged soft-tissue suture system that uses multiple bone anchors and sutures that can be tightened after being placed with no knots. Arthrex produces PushLock and SwivelLock knotless anchors, which are used in its SutureBridge and SpeedBridge surgical procedures to attach soft tissue to bone.

KFx sued Arthrex in August 2011, alleging infringement of its patents by Arthrex’s SutureBridge and SpeedBridge devices for rotator cuff repair and Achilles tendon repair.

In October 2013 a jury found for KFx, awarding $29 million in damages. Judge Dana Sabraw of the U.S. District Court for Southern California later denied an Arthrex motion for a new trial and tacked on another $1.9 million in damages and prejudgment interest of 7%.

The U.S. Court of Appeals for the Federal Circuit in January denied Arthrex’s appeal, prompting the Naples, Fla.-based company to ask the appeals bench for a full, en banc review. In April, the Federal Circuit denied that bid and issued an April 17 mandate enforcing the ruling; Arthrex later coughed up $35 million to satisfy the judgment.

Naples, Fla.-based Arthrex is also hoping the Supremes will revisit its $99 million loss toSmith & Nephew (NYSE:SNN) in their decade-long patent infringement war.

The British healthcare giant 1st sued Arthrex way back in 2004, winning a $20.5 million judgment in June 2008. Although that verdict was overturned the next year, a new trial ended in an $85 million judgment for Smith & Nephew in 2011. After the case bounced from the district level to the U.S. Federal Circuit Appeals Court and back, the appeals court in March upheld the decision. In June Smith & Nephew said it received $99 million from Arthrex, including $4 million in costs and interest payments.

In an Oct. 30 petition for certiorari, Arthrex asked the Supremes to consider “whether a defendant may be held liable under a ‘knowledge’ standard where its actions were consistent with an understanding of relevant legal requirements that was not objectively unreasonable.”

In 2013, Smith & Nephew inked a licensing deal with KFx for the latter’s rotator cuff repair technologies.

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