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Kinetic Concepts, Inc. v. Smith & Nephew, Inc.

Dear APaTS:

   Please help settle an argument. I say if a judge in a patent infringement case includes the ultimate question of obviousness on the special verdict form, all of the factual determinations underlying that ultimate question were implicitly put to the jury. Someone else—let’s call them Adjudged Infringer—says the jury’s finding of nonobviousness was merely advisory so it was O.K. for the judge to enter JMOL on obviousness. Who’s right?


A (Nonobvious) Patient Patent Plaintiff-Appellant

Dear Nonobvious:

   You win. In Kinetic Concepts, Inc. v. Smith & Nephew, Inc., the Federal Circuit said it’s a reversible error for a district court to enter JMOL when substantial evidence supports the implicit factual findings reflected in the jury’s answer to the ultimate, legal question of obviousness. Smith & Nephew, the accused infringer, had argued that the jury’s opinion on obviousness was only advisory and the district court was, therefore, free to makes its own finding of facts. The court of appeals rejected that argument—and Smith & Nephew’s take on the advisory role the jury plays when it comes to the legal question of obviousness.

   The patents at issue in Kinetic Concepts claimed methods and an apparatus for treating large open wounds. Prior to the invention, treating these kinds of wounds was very difficult. Wounds too large to close spontaneously are often also too big to suture or staple. Additionally, mechanical closures like sutures and staples can inhibit healing. The claimed invention addressed these issues by using a combination of foam and suction or negative pressure. Patent owner, Wake Forrest University, granted an exclusive license of the patents to Kinetic Concepts. Together, they sued Smith & Nephew alleging that its foam and negative pressure wound treatment product infringed the licensed patent rights held by Kinetic Concepts.

   During trial, the parties spent a great deal of time disputing how the case would go to the jury.  Ultimately, the court used a special verdict form. The jury instructions included a discussion of the parties’ contentions regarding the differences between the prior art and the claims. But, the special verdict form submitted to the jury did not allow it to provide a narrative about which differences were found to exist. Instead, the special verdict form the court used contained “yes” or “no” questions on prior art differences, a chart that allowed the jury to indicate whether objective indicia of nonobviousness were present, and a “yes” or “no” question on whether or not Smith & Nephew proved that the invention was obvious. The jury answered the ultimate question “no” and also found most of the factors favoring nonobviousness to be present. Still, the district court granted Smith & Nephew’s JMOL.

Not so obvious

   On appeal, the appellate court held that because the district court included the ultimate legal question of obviousness on the special verdict form, all of the factual determinations underlying the ultimate question were implicitly put to the jury. As a result, the district court was required to accept all implicit factual findings supporting the jury’s conclusion as long as they were supported by substantial evidence. The Federal Circuit reviewed the jury’s explicit and implicit factual findings for substantial evidence, and then reviewed the legal conclusion of obviousness de novo in light of the factual findings found adequately supported.

   The appellate court found that Smith & Nephew failed to show by clear and convincing evidence that the claims were obvious. Substantial evidence supported that none of the prior art alone, or in combination, disclosed treating wounds with negative pressure. The Federal Circuit also found compelling the secondary considerations of nonobviousness. In particular, the industry scoffed when the claimed apparatus was first introduced and remained skeptical, despite successful clinical studies. The inventors were turned away by conference organizers and encountered difficulty publishing in peer-reviewed journals. After the initial skepticism, the methods and apparatus were widely adopted and praised as “a paradigm shift in wound healing,” resulting in commercial success of $1.4 billion a year.

   The Federal Circuit focused its discussion on the lack of a reason to combine the prior art references (itself a factual finding), and voiced concerns about the district court’s hindsight reconstruction. The court emphasized that Smith & Nephew never offered evidence articulating why a person having ordinary skill in the art would combine the primary references to achieve the disclosed inventions. In a statement suggesting a technology-based limitation on the use of common sense, the court held that “although expert testimony regarding motivation to combine is not always required, the technology at issue here is not the type of technology where common sense would provide the motivation to combine these references.”  The court noted that the “record is devoid of any reason someone would combine these references.”

   Our advice? In the kindest way possible, Patient Patent Plaintiff-Appellant –and others in similar situations—will want to make sure Adjudged Infringer gets Kinetic Concepts’ message. The decision demonstrates a very compelling case of secondary considerations of nonobviousness, giving those Graham factors some real bite. The case also highlights the interplay between a patentee being entitled to a jury trial on the issue of validity, and the treatment of obviousness as a question of law. Getting obviousness questions out in the open could just end up doing everyone a favor.

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