Using “junk science” in litigation can cost you. A medical device company learned that lesson the hard way earlier this month, when the Federal Circuit Court of Appeals affirmed a $4.7 million award of attorney and expert witness fees against the company for filing a baseless patent infringement lawsuit and for relying on expert testimony that failed to meet the legal requirements for scientific reliability.
The Federal Circuit agreed with the trial judge that the frivolousness of the plaintiff’s infringement claim and its use of unfounded expert testimony provided the “exceptional circumstances” required under U.S. patent law to justify an award of $3.9 million in attorneys’ fees to the defendant.
On top of that, the Federal Circuit held that the trial judge’s “inherent authority” allowed him to award expert witness fees to the defendant beyond what is authorized by statute. Finding that the plaintiff pursued its claim in bad faith and forced the defendant to mount an expensive defense, the court affirmed the trial judge’s award to the defendant of its expert witness costs of $810,000.
A Dispute over Bonding
The plaintiff in the lawsuit, MarcTec LLC, held patents on surgical implants in which a polymeric material is bonded to the implant by heat. In 2007, MarcTec sued Cordis Corporation alleging that a stent Cordis manufactured – a drug-eluting stent known as the Cypher stent – infringed its patents.
In 2009, the U.S. District Court granted defendant Cordis’s motion for summary judgment of noninfringement. Finding that MarcTec’s patents applied to surgical devices that used the heat-bonding process, the court concluded that Cordis’s stent was not a surgical device and did not use heat bonding.
In opposing the motion for summary judgment, MarcTec attempted to prove that the coating on the Cordis stent was, in fact, bonded by heat. In support of this position, it presented expert testimony that the process of spraying the drug coating on the stent “at nearly the speed of sound” would produce heat.
In his order entering summary judgment for Cordis, the trial judge described the expert’s testimony as involving “an untested and untestable theory that is neither reliable nor relevant to the issues at hand.” The judge excluded the expert’s testimony as unreliable under Daubert v. Merrill Dow Pharms. Inc., 509 U.S. 579 (1993).
After granting summary judgment, the trial judge went on to consider Cordis’s request to be awarded attorneys’ fees and expert witness costs. The judge concluded that MarcTec had engaged in litigation misconduct by pursuing a frivolous case, by mischaracterizing the trial judge’s claims construction of its patents, and by offering “junk science” that was unreliable, untestable and had no relevance to the case.
‘Untested and Untestable’ Expert Testimony
On appeal, MarcTec argued that the trial judge erred in declaring the case “exceptional” – a finding that is required under § 285 of the patent law in order for a court to award attorneys’ fees. MarcTec also contended that the judge abused his discretion in awarding expert witness fees. The Federal Circuit disagreed on both counts.
With regard to the judge’s finding that the case was exceptional, the Federal Circuit said it was justified by the facts, explaining that MarcTec: “(1) acted in bad faith in filing a baseless infringement action and continuing to pursue it despite no evidence of infringement; and (2) engaged in vexatious and unjustified litigation conduct that unnecessarily prolonged the proceedings and forced Cordis to incur substantial expenses.”
As part of its finding of litigation misconduct, the Federal Circuit cited MarcTec’s reliance on “untested and untestable” expert testimony. “Although we agree with MarcTec that exclusion of expert testimony under Daubert does not automatically trigger a finding of litigation misconduct, and in most cases likely would not do so, we find that the circumstances of this case were sufficiently egregious to support an award of attorney fees,” the court said.
With regard to the judge’s award of expert witness fees, the Federal Circuit concluded that this was within the judge’s “inherent authority” and that the circumstances of the case justified such an award.
“This is particularly true given that: (1) Cordis was forced to incur expert witness expenses to rebut MarcTec's unreliable and irrelevant expert testimony which was excluded under Daubert; and (2) the amount Cordis was required to expend on experts was not compensable under § 285,” the court explained. “Because MarcTec's vexatious conduct and bad faith increased the cost of litigation in ways that are not compensated under § 285, we find that the district court did not abuse its discretion in awarding expert fees to Cordis.”
The case is MarcTec, LLC, v. Johnson & Johnson and Cordis Corporation, Case No. 2010-1285 (Federal Circuit, Jan. 3, 2012).