CardiAQ Valve Technologies, Inc. v. Neovasc Inc.
708 F. App'x 654
Fed. Cir.2017Background
- CardiAQ (founded by Dr. Arshad Quadri and Brent Ratz) developed transcatheter mitral valve implant (TMVI) prototypes and engaged Neovasc to supply and sew tissue leaflets under an NDA; collaboration lasted ~1 year.
- While collaborating, Neovasc employee Randy Lane secretly began developing Neovasc’s own TMVI (later branded Tiara); Neovasc filed a provisional application shortly after collaboration ended that matured into U.S. Patent No. 8,579,964.
- CardiAQ sued Neovasc in D. Mass. alleging trade-secret misappropriation (six trade-secret categories), breach of the NDA, and seeking correction of inventorship under 35 U.S.C. § 256.
- Jury found breach of the NDA (no damages), misappropriation as to Trade Secrets 4–6 and awarded $70M; district court enhanced damages by 30% to $91M and ordered Quadri and Ratz added as co-inventors on the ’964 patent; denied CardiAQ’s requested 18‑month injunction suspending Neovasc’s TMVI work.
- On appeal, this Court reviewed co-inventorship de novo (factual findings for clear error) and reviewed denial of new trial for misappropriation/damages and denial of injunction for abuse of discretion, and affirmed the district court in all respects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Correction of inventorship under 35 U.S.C. § 256 | CardiAQ: Quadri and Ratz contributed significantly to conception of claim 1 and must be added as co-inventors | Neovasc: CardiAQ’s contributions were present in prior art (including secret Chau app. and Solem) and thus cannot establish co-inventorship | Affirmed: district court correctly found clear-and-convincing evidence of contribution; presence in then-secret prior art did not preclude co-inventorship and Solem argument was forfeited/undeveloped |
| Trade-secret misappropriation (Trade Secrets 4–6) — sufficiency/specificity | CardiAQ: Trade Secrets 4–6 were sufficiently specific, constituted unified, protectable secrets (including combinations) and were used by Neovasc | Neovasc: Definitions were too broad/vague; combinations of known elements not protectable; some items were public/known | Affirmed: definitions (agreed to by parties) were sufficiently specific; combinations could be secret; jury verdict not against weight of evidence |
| Trade-secret damages methodology | CardiAQ: Reasonable royalty based on hypothetical 2010 negotiation using available evidence (including later valuations and experts’ timelines) | Neovasc: Expert relied improperly on 2015 valuations, assumed an 18‑month head start, and used values tied to trade secrets the jury rejected | Affirmed: use of ex-post evidence and expert reliance on testimonial facts permissible; methodology supported and challenged facts were for the jury; no new trial warranted |
| Injunctive relief (18‑month suspension) | CardiAQ: NDA text establishes irreparable harm and entitles it to injunctive relief to stop Neovasc for 18 months | Neovasc: Injunction unjustified; damages adequate; public interest and hardship weigh against suspension | Affirmed: district court did not abuse discretion — injunction would be duplicative of monetary relief, speculative irreparable harm, and public interest/harms counseled denial |
Key Cases Cited
- Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352 (Fed. Cir. 2004) (standard of review and law on co-inventorship contributions)
- Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998) (co-inventorship requires more than explaining state of the art)
- Acromed Corp. v. Sofamor Danek Grp., Inc., 253 F.3d 1371 (Fed. Cir. 2001) (contribution not insignificant in quality standard for co-inventorship)
- Pannu v. Iolab Corp., 155 F.3d 1344 (Fed. Cir. 1998) (clarifying conception and joint inventorship principles)
- KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007) (combination of known elements can be patentable)
- Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009) (permitting use of ex-post evidence in hypothetical negotiation analysis)
- eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) (four-factor equitable test for permanent injunction)