In a cross-appeal opinion, the Federal Circuit ruled Monday to uphold the District of Delaware’s determinations that no new trial is warranted for both the plaintiff and the defendants in a patent infringement case brought by Bayer HealthCare against Baxalta and Nektar Therapeutics.
The jury in Bayer’s original suit found that Baxalta drug Adynovate had infringed on Bayer’s U.S. Patent No. 9,364,520, which covers a particular method of creating a treatment for hemophilia; however, before trial, the district court did not find Baxalta’s conduct to be willful, so the willful question was not posed to the jury. Bayer appealed to Federal Circuit after being denied by the district court, disputing the dismissal of the willful infringement allegation. Baxalta also appealed for a new trial, challenging whether there was sufficient evidence for infringement and enablement and whether damages were proper.
Bayer claimed that it presented sufficient evidence of willful infringement in its complaint that should have prompted it to be sent to the jury; the Circuit disagreed. According to the court, the evidence did show that Baxalta knew about the patent and infringed on it, but not that the infringement was willful.
“To establish willfulness, the patentee must show the accused infringer had a specific intent to infringe at the time of the challenged conduct,” the court explained. “Even when accepting Bayer’s evidence as true and weighing all inferences in Bayer’s favor, we conclude that the record is insufficient to establish that Baxalta’s ‘conduct rose to the level of wanton, malicious, and bad-faith behavior required for willful infringement.’”
Baxalta’s argument centered its belief that there was not enough evidence to support infringement and enablement, but after an examination of Bayer’s expert witness testimony on the protein chemistry of the defendants’ drug in relation to a letter Baxalta sent to the U.S. Food and Drug Administration, the jury found, and the Federal Circuit upheld, that Adynovate’s structure does meet the claim limitations for infringement and enablement.
On the damages issue, Baxalta contended that the district court should not have allowed Bayer to ask the jury to choose a rate within a range chosen by an expert witness. According to the Federal Circuit, however, “(t)he district court properly exercised its discretion in allowing Bayer to ask the jury to select a rate between the range presented. While an expert must use reliable methodology for determining the range of possible hypothetical negotiation royalty rates, we are aware of no precedent that requires an expert to provide a single proposed royalty rate.”
Fundamentally, Baxalta challenged the amount of damages decided by the jury, determined to be a 17.78% royalty rate. The Federal Circuit pointed out that this rate was within the range presented by the expert witness, which was found to be reasonable and supported by evidence by both the district court and the Federal Circuit.
The plaintiff is represented by Sidley Austin. The defendants are represented by Haug Partners and Richards Layton & Finger.
