A Medical Device Daily

Kinetic Concepts (KCI; San Antonio) won its patent infringement suit against Smith & Nephew (S&N; London) in what has been called a “worldwide“ battle over negative pressure wound therapy patents.

The case is one of many as both companies have had litigation in the U.S. as well as Australia, Germany and the UK regarding equivalent intellectual property (Medical Device Daily, May 4, 2009).

According to court documents, a jury in the U.S. District Court for Western Texas decided that the Smith & Nephew product violates a pair of patents owned by Wake Forest University (Winston-Salem, North Carolina) and licensed to KCI, which sued S&N for patent infringement in 2008.

The jury found that KCI showed it lost about $900,000 in profits and about $143,000 in lost royalties due to the infringement, which also cost Wake Forest roughly $186,000 in lost royalties, according to court documents.

KCI said it will be seeking an injunction in the U.S. District Court in post-trial proceedings to prevent further infringement by S&N.

But S&N has argued that the patents are invalid because the idea of using foam dressing in negative pressure wound therapy was conceived long before KCI obtained the first patent in 1997.

“The outcome of this trial exemplifies the protections provided to innovators like Wake Forest and KCI under the U.S. patent system,“ said Catherine Burzik, KCI's president/CEO. “And for the nearly 7,000 people of KCI, this decision reinforces the purpose and promise of the innovative spirit. For KCI, it is that spirit — combined with our unparalleled clinical expertise — that produces the superior outcomes that differentiate KCI from the competition.“

S&N said that it was surprised and disappointed by the jury findings, which the company believes are contrary to the facts and the law.

The company added that it will continue to pursue its invalidity claims before the district court, which will make its own determination regarding invalidity. S&N will also pursue post-trial motions seeking to overturn the infringement verdict and damages award.

“While we are disappointed with the jury's findings, Smith & Nephew has had better results in other jurisdictions, including invalidating KCI's related patents in the UK and Germany. We remain firm in our belief that we do not infringe any valid U.S. patents,“ said Robin Carlstein, Senior VP, S&N Advanced Wound Devices.

Michael Matson, an analyst with Wachovia, said in a research note that he believes Kinetic Concepts will still lose market share but that the court win could slow its losses.

KCI first filed suit against S&N in May of last year shortly after that company acquired Blue Sky Medical Group (Carlsbad, California) (MDD, May 17, 2008). Blue Sky had been involved in litigation over its negative pressure wound therapy products with KCI for several years prior to its acquisition by S&N.

KCI lost a 2006 trial against Blue Sky regarding these gauze-based products, a different version of the system from the one covered by Wednesday's verdict. While upholding the validity of the patents, the jury in the earlier case determined that Blue Sky products didn't infringe them.