Stryker crushes Zimmer with $70M patent violation verdict

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Stryker says Zimmer's Pulsavac wound debridement system infringed on its own similar products.--Courtesy of Zimmer

Stryker ($SYK) struck hard, suing Zimmer ($ZMH) over a device it has that uses pulsing liquid to remove debris for orthopedic surgery procedures such as joint replacements. The fight paid off now that a federal jury ruled in Stryker's favor and ordered the loser to make a $70 million payout, determining "willful infringement" involving three different patents.

It's an early victory that might not necessarily be set in stone, however, as Zimmer plans to appeal the decision, a company spokesman told Bloomberg.

At issue: Zimmer's Pulsavac wound debridement system, which is part of Zimmer's surgical unit (a division that booked $386 million in sales in 2012). Stryker said the device infringed on similar products it has that use pulsing water or saline in order to clear a surgical site for joint replacement. Stryker's MedSurg Equipment unit carries those products, and the division booked more than $3.27 billion in sales in 2012, Bloomberg noted.

Greg Vogler, a lawyer from McAndrews, Held & Malloy in Chicago, which represented Stryker, told Bloomberg that "Stryker has some pioneering inventions," which Zimmer "took recklessly and judgment day came."

In the device world especially, patents are gold. And in a world where devices gain 510(k) approval because of substantial equivalence to what is already on the market, preserving unique patent rights to a product becomes a financial lifeline. The losing company doesn't always have to pull its product outright, but sometimes reaffirming patent protection in court requires the loser to pay royalties on top of damages. And if the verdict holds in appeals court, then Zimmer will have to pay big.

- read the Bloomberg story

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