Medtronic, Inc. v. Boston Scientific Corporation
682 F. App'x 921
| Fed. Cir. | 2017Background
- Dr. Mirowski licensed ICD patents to Eli Lilly (1991 Agreement). Lilly could notify Medtronic of alleged infringement and, if Medtronic paid royalties and then prevailed in declaratory judgment litigation, the losing party would pay the winner’s attorney fees.
- Mirowski Family Ventures (MFV) later succeeded to Dr. Mirowski’s rights; Guidant assumed Lilly’s rights in 2004 and was later acquired by Boston Scientific.
- In 2006 MFV, Guidant, and Medtronic executed a Litigation Tolling Agreement that (1) allowed MFV to notify Medtronic under a modified procedure (¶ 7(c)) and (2) amended the 1991 Agreement as necessary to conform to the Tolling Agreement.
- MFV gave notice under ¶ 7(c) in 2007; Medtronic sued for declaratory judgment in Delaware and ultimately prevailed after appeals (including Supreme Court decision and Federal Circuit affirmance on remand).
- Medtronic sought attorney fees; the district court awarded $6,028,305.33 against MFV, holding the fee claim timely and that MFV (but not Guidant or Boston Scientific) was bound by the 1991 Agreement’s fee-shifting clause.
Issues
| Issue | MFV / Plaintiff's Argument | Medtronic / Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of fee claim under Rule 54(d)(2) | Medtronic’s fee motion was untimely because not filed within 14 days of judgment | Fees arise from contract and were an element of damages provable at trial, so Rule 54(d)(2)’s 14-day motion rule does not apply | Timely: exception applies; fees were an element of damages proven at trial |
| Whether MFV is bound by 1991 Agreement’s fee-shifting provision | MFV not a 1991 signatory, so cannot be liable under that agreement | Tolling Agreement amended 1991 Agreement to vest MFV with Lilly’s rights and liabilities (including fee-shifting) | MFV bound: Tolling Agreement put MFV in Lilly’s position and left fee clause intact |
| Liability of Guidant / Boston Scientific for fees | If MFV liable, Guidant and Boston Scientific should also share liability | Only the party that gave notice under the Tolling Agreement is liable; MFV alone gave notice | Only MFV liable; Guidant and Boston Scientific not liable |
| Jurisdictional/other defenses by Guidant (alternative) | Guidant argued district court lacked subject-matter jurisdiction over claims against it | Medtronic asserted proper jurisdiction and fee entitlement | Court did not reach Guidant’s jurisdictional argument because it found Guidant not liable for fees |
Key Cases Cited
- Info-Hold, Inc. v. Muzak LLC, 783 F.3d 1365 (Fed. Cir. 2015) (choice-of-law and regional-circuit standard application)
- United Auto Workers Local 259 Soc. Sec. Dep’t v. Metro Auto Ctr., 501 F.3d 283 (3d Cir. 2007) (Rule 54(d) timeliness reviewed de novo)
- John F. Harkins Co., Inc. v. Waldinger Corp., 796 F.2d 657 (3d Cir. 1986) (distinction between contract interpretation and construction)
- Ram Constr. Co. v. Am. States Ins. Co., 749 F.2d 1049 (3d Cir. 1984) (contract construction where subsequent events affect legal relations)
- Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S. Ct. 843 (U.S. 2014) (Supreme Court decision on related merits issues referenced in procedural history)