Ethicon Wins Dismissal |of Tyco’s Patent Claims

(CN) - Covidien PLC's Tyco Healthcare Group failed to persuade the Federal Circuit to reinstate patent infringement claims against Johnson & Johnson's Ethicon Endo-Surgery. A three-judge panel voted 2-1 that Tyco failed to prove ownership of three patented devices used to cut and coagulate blood vessels during surgery.

Tyco claimed it acquired the patents from a 1999 agreement with U.S. Surgical Corporation (USSC). Under that "contribution agreement," USSC transferred to Tyco all assets, including patents, except "[a]ny and all patents and patent applications relating to any pending litigation involving USSC."

On the same day, USSC and Ethicon struck a settlement agreement resolving five pending patent lawsuits between the two companies. The parties agreed not to sue over certain products made or sold by Ethicon, including the three patents Tyco sued over in 2004.

After a 2008 trial, the judge dismissed without prejudice Tyco's claims.

Tyco appealed, and Ethicon cross-appealed, claiming the case should have been dismissed with prejudice.

The appeals court found that Tyco offered no evidence that the three disputed patents weren't related to any litigation and thus exempt from the 1999 transfer.

"In sum, Tyco Healthcare bore the burden of proving that the patents-in-suit are not 'related to' any litigation pending at the time the (agreement) was executed," Chief Judge Paul Michel wrote. "Tyco Healthcare failed to do this. Therefore, the district court correctly dismissed the suit."

The majority judges added that the lower court made the right call in dismissing the case without prejudice.

But dissenting Judge Pauline Newman accused her colleagues of "ignor[ing] the evidence."

"[I]t is not disputed that the patents here in suit do not relate in any way to those Immune Products," she wrote, referring to the products granted immunity in the settlement agreement.

In her view, "the court's denial of standing is without support in law and fact."

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