SILICON VALLEY (April 26, 2010) — The United States Court of Appeals for the Federal Circuit reversed a ruling by the U.S. District Court for the District of Colorado finding the district court “committed clear error,” by imposing sanctions and awarding attorneys fees, costs and expenses to be paid by McDermott Will & Emery LLP and its client in the case, Medtronic.
The Federal Circuit wrote that “Because we have concluded that Medtronic did not improperly prolong the proceedings by pursuing its claims through trial, and because we disagree with most of the district court’s criticisms of Medtronic’s litigation tactics, we reverse the trial court’s exceptional case finding and vacate the attorney fee award,” in a 38-page opinion issued today.
In its opinion, the Federal Circuit stated that it accorded the district court all due deference. “Despite our reluctance to second-guess the judgment of trial judges who typically have intimate knowledge of the case, we have the responsibility, in light of the substantial economic and reputational impact of such sanctions, to examine the record with care to determine whether the trial court has committed clear error in holding the case exceptional or has abused its discretion with respect to the fee award.” Still, the Court concluded, “Based on a close study of the record in this case, we conclude the district court committed clear error,” in sanctioning the plaintiffs and attorneys.
“I am pleased that the Federal Circuit found that we engaged in proper and zealous advocacy on behalf of our client, Medtronic, in prosecuting its patent infringement claim,” said Terrence P. McMahon, partner at McDermott Will & Emery, who tried the case before the District Court. “While we respect the District Court, we stand behind our trial work and are proud of the fact that our work was vindicated after such close study by a Federal Circuit panel.”
Judge Richard Matsch of the U.S. District Court for the District of Colorado awarded attorneys fees and costs to the defendant, BrainLab Inc., saying that pre-trial rulings defining the construction of the claims “stripped the merits from this case.” Judge Matsch concluded that Medtronic and its lawyers should not have continued to pursue the case and engaged in litigation misconduct, even though he permitted the case to go to trial and a verdict in the amount of $51 million in favor of Medtronic was obtained. Prior to awarding sanctions, Judge Matsch vacated the jury’s verdict on legal grounds. The Federal Circuit found the district court erred in finding this case exceptional, concluding, “An examination of each of Medtronic’s infringement claims at trial confirms that each was sufficiently reasonable to warrant being litigated to verdict…” and that “it was not unreasonable for McDermott to continue to press its client’s case in light of the arguments that remained available to it.”
In addition, as to alleged litigation misconduct, the Federal Circuit found that “Several of the comments that the district court highlighted were unobjectionable, and the court’s criticisms of those comments were therefore unwarranted.”
“We believe in giving 100 percent for our clients, but always within legal and ethical guidelines,” said Peter John Sacripanti, Co-Chair of McDermott Will & Emery LLP. “We are proud of the work performed by our entire team. They are excellent trial lawyers who are committed to giving our clients the best possible representation within the bounds of ethical advocacy, as they did in this case.”
McDermott Will & Emery is a premier international law firm with a diversified business practice. Numbering more than 1,000 lawyers, we have offices in Boston, Brussels, Chicago, Düsseldorf, Houston, London, Los Angeles, Miami, Milan, Munich, New York, Orange County, Rome, San Diego, Silicon Valley and Washington, D.C. Extending our reach to Asia, we have a strategic alliance with MWE China Law Offices in Shanghai.