A federal court put the kaibosh on a lower court's decision to award $15.7 million to Haemonetics Corp. (NYSE:HAE) in a patent spat with Fenwal Inc.
Haemonetics sued Fenwal in 2005, alleging that the then-Baxter Healthcare (NYSE:BAX) subsidiary infringed a Haemonetics patent for a portable blood-collection device.
A jury awarded $15.7 million in damages to Haemonetics for the infringement in January 2009, involving a separation cup component of the Lake Zurich, Ill.-based blood management products maker's Alyx blood collection system. Judge Nathaniel Gorton of the U.S. District Court for Massachusetts later ruled that Fenwal must stop selling the consumable by Dec. 1, 2010, pay Haemonetics a 10 percent royalty on net sales of the kit from Jan. 30 until the injunction takes effect and pay 5 percent pre-judgment interest on the damages. Fenwal, which Baxter spun out in 2007, appealed and said it would pull the infringing component from the kit before the end of the year.
In December 2009, Haemonetics sued Fenwal again, alleging that the new Alyx kits containing a modified version of the separation cup was designed to circumvent the infringement.
But the U.S. Court of Appeals for the Federal Circuit overturned June 2 the lower court's specification that the infringing component, a centrifuge, consisted solely of the separation cup and not "a plurality of tubes," according to court documents.
"Because the district court erred in its construction of 'centrifugal unit,'" the federal appeals court sent the case back to the district court.
Fenwal commercial operations senior vice president Dean Gregory said the decision "brings us meaningfully closer to putting this litigation behind us," according to a press release.
For its part, Haemonetics said the U.S. Patent and Trademark Office upheld the validity of the patent May 28, "explicitly reject[ing] Fenwal's position that the Patent was invalid over the prior art," according to a press release.
"The Appeals Court ruling did not invalidate Haemonetics' patent and made no decision about whether Fenwal's product infringed, leaving the question of infringement to be decided after further proceedings before the district court," according to the release. "Haemonetics believes that notwithstanding the Appeals Court instructions on claim construction on remand to the trial court, Fenwal's product still infringes Haemonetics' patent."
"Haemonetics wants this matter resolved as quickly as possible so that our customers can plan accordingly. We're surprised at the Federal Appeals Court's decision, especially in light of the Patent Office decision confirming the validity of our patent," added CEO Brian Concannon.