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Fish Cases

The Case of the Decade: Fresenius v. Baxter

Litigation, Appellate, Patent Litigation
United States Court of Appeals for the Federal Circuit

Fish Cases

The Case of the Decade: Fresenius v. Baxter

Litigation, Appellate, Patent Litigation

United States Court of Appeals for the Federal Circuit
Back to Case Listing

Fish won a major, precedent-setting, 10-year-long case for client Fresenius USA, which reversed a combined damages and royalty award that would have reached $150 million had it stood. The dispute dates back to 2003, when Fish filed a declaratory judgment on behalf of Fresenius against Baxter, alleging claims in four patents were invalid. In return, Baxter filed counterclaims for infringement with regards to Fresenius’ 2008K hemodialysis machine. Fish then filed an ex parte reexamination request asking the USPTO to cancel Baxter’s patent – a decision that would be important to Fresenius’ victory.

"This case demonstrated the importance of using all available avenues – including the jury trial, appeal to the Federal Circuit, and post-grant review in the USPTO – when a defendant is facing potentially large patent infringement claims, and set an important precedent for IP law that will dramatically change the strategies companies use in future patent disputes."

In-Depth

Fish won a major, precedent-setting, 10-year-long case for client Fresenius USA, which reversed a combined damages and royalty award that would have reached $150 million had it stood.

The dispute dates back to 2003, when Fish filed a declaratory judgment on behalf of Fresenius against Baxter, alleging claims in four patents were invalid. In return, Baxter filed counterclaims for infringement with regards to Fresenius’ 2008K hemodialysis machine.  Fish then filed an ex parte reexamination request asking the USPTO to cancel Baxter’s patent – a decision that would be important to Fresenius’ victory.

In 2006, a jury found in favor of Fresenius, but the jury verdict was set aside in 2007 and a separate damages trial was ordered. In 2008, the parties went to trial for a second time and again Fresenius prevailed. However, a royalty rate was imposed on Fresenius that was much higher than the jury had determined would be reasonable. This meant Fresenius’ potential liability went from $14.25 million to well over $100 million.

Fish and Fresenius appealed to the Federal Circuit. In 2009, the appellate court invalidated two of the three remaining patents Baxter was asserting in the case, but one of the patents still survived on technical grounds. The court ruled Fresenius had failed to present evidence of prior art that would justify a finding of invalidity. This ruling stemmed from the Federal Circuit’s decision that Fresenius’ technical expert had not done enough to match up the corresponding structure in the patent with the prior art.

Fish did not let this ruling stop them. They argued that any potential damages would have to be recalculated if the Baxter patents were thrown out. The Federal Circuit remanded the case. The district court ultimately rejected Baxter’s argument that it was entitled to the full royalty. The judgment shrunk Fresenius’ liability to $9.3 million.

This ruling simply strengthened Fish and the company’s resolve to press on with litigation.

Meanwhile, the USPTO cancelled Baxter’s patents per the ex parte reexamination request Fish had previously filed. Fish prepared its second appeal to the Federal Circuit in light of the USPTO’s decision.

This time, Fish’s determination and hard-work paid off. Fish argued that the 2007 liability ruling should not be considered a final judgment as the issue of damages was still being litigated.  The Federal Circuit found the 2007 decision had still been pending when the USPTO invalidated the patent.  The district court’s judgment was vacated and remanded with instructions to dismiss the case.

This case demonstrated the importance of using all available avenues – including the jury trial, appeal to the Federal Circuit, and post-grant review in the USPTO – when a defendant is facing potentially large patent infringement claims, and set an important precedent for IP law that will dramatically change the strategies companies use in future patent disputes.