Page 57 - Intellectual Property Disputes

was insufficient as a matter of law for the jury to find that the patented tie-down system and unpatented
passenger seats were part of a single functional unit." The Federal Circuit agreed with the trial court’s
conclusions that the patent owner failed as a matter of law to meet its burden of establishing a functional
relationship between passenger seats and the patented restraint system. The court confirmed that the jury
properly awarded damages for lost profits on the alleged infringer’s deliveries of the VPRo II product
predicated upon offers to sell the infringing VPRo I product. fn 113

The Federal Circuit noted that a

functional relationship does not exist when independently operating patented and unpatented
products are purchased as a package solely because of customer demand. The fact that customers
prefer that passenger seats and tie-down wheelchair restraint systems come from a single
supplier for ease of purchase, repair, and uniform design and appearance, does not compel the
conclusion that the seats and tie-down system are "analogous to components of a single assembly
or ... parts of a complete machine." fn 114

The court cited as evidence that "[t]ie-downs and passenger seats were usually but not always purchased
by bus manufacturers from the same company; package sales were for reasons of convenience and ‘one-
stop shopping,’ not because of an absolute requirement that the two items function together." Additional
evidence cited by the court was the showing "that passenger seats command a market value and serve a
useful purpose independent of the patented product." "Because it is clear that no interrelated or
functional relationship inheres between the seats and the tie-down restraint system on a passenger bus,
the district court was correct that the jury had no basis to conclude that lost profits on collateral sales of
passenger seats were due American Seating." Accordingly, the court concluded that "[d]amages on these
items would exceed that which suitably compensates for the infringement." fn 115

In Warsaw Orthopedic, Inc. and Medtronic Sofamor Danek USA, Inc., et al. v. Nuvasive, Inc., fn
116 the Federal Circuit again addressed convoyed sales and ultimately determined that the trial
court erred in denying Nuvasive’s motion for a Judgment as a Matter of Law related to the jury’s
award of lost profits, which included lost profits on convoyed sales. In Warsaw Orthopedic, the
patents-in-suit related to, among other things, spinal surgical implants and methods and devices
for retracting tissue in minimally invasive spinal surgery. Warsaw, under a convoyed sales
theory, sought lost profits on sales of "fixations (e.g., rods and screws for holding the implant
and vertebrae in place)," which were sold as part of medical kits. Nuvasive argued that lost
profits on fixations were inappropriate because there was no functional relationship between the
convoyed sales and patented products, as "unpatented components ‘can be and are frequently
used independently of the patents implants and retractors." In response, Warsaw asserted that lost
profits on convoyed sales were appropriate because the unpatented fixations were "part of
comprehensive medical kits that ‘contain everything necessary for a fusion procedure.’"

fn 113 Am. Seating, 514 F.3d at 1262.

fn 114 Id.

fn 115 Id.

fn 116 Warsaw Orthopedic, Inc. and Medtronic Sofamor Danek USA, Inc., et al. v. Nuvasive, Inc., Nos. 13-1576, -1577 (Fed. Cir. 2015).

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