Johnson and Johnson 2012 Annual Report Download - page 64

INTELLECTUAL PROPERTY
Certain subsidiaries of Johnson & Johnson are subject, from time to time, to legal proceedings and claims related to
patent, trademark and other intellectual property matters arising out of their business. The most significant of these matters
are described below.
PATENT INFRINGEMENT
Certain subsidiaries of Johnson & Johnson are involved in lawsuits challenging the coverage and/or validity of the patents
on their products. Although these subsidiaries believe that they have substantial defenses to these challenges with respect
to all material patents, there can be no assurance as to the outcome of these matters, and a loss in any of these cases
could potentially adversely affect the ability of these subsidiaries to sell their products, or require the payment of past
damages and future royalties.
Medical Devices and Diagnostics
In October 2004, Tyco Healthcare Group, LP (Tyco) and U.S. Surgical Corporation filed a lawsuit against Ethicon Endo-
Surgery, Inc. (EES) in the United States District Court for the District of Connecticut alleging that several features of
EES’s HARMONIC®Scalpel infringed four Tyco patents. In October 2007, on motions for summary judgment prior to the
initial trial, a number of claims were found invalid and a number were found infringed. However, no claim was found both
valid and infringed. Trial commenced in December 2007, and the Court dismissed the case without prejudice on grounds
that Tyco did not own the patents in suit. The dismissal without prejudice was affirmed on appeal. In January 2010, Tyco
filed another complaint in the United States District Court for the District of Connecticut asserting infringement of three of
the four patents from the previous lawsuit and adding new products. Tyco is seeking monetary damages and injunctive
relief. The case was tried in July 2012, and the parties are awaiting a decision from the Court.
In October 2007, Bruce Saffran (Saffran) filed a patent infringement lawsuit against Johnson & Johnson and Cordis
Corporation (Cordis) in the United States District Court for the Eastern District of Texas alleging infringement on U.S.
Patent No. 5,653,760. In January 2011, a jury returned a verdict finding that Cordis’s sales of its CYPHER®Stent willfully
infringed the ‘760 patent. The jury awarded Saffran $482 million. In March 2011, the Court entered judgment against
Cordis in the amount of $593 million, representing the jury verdict, plus $111 million in pre-judgment interest. Cordis has
appealed the judgment. Oral argument was heard in December 2012, and a decision from the Court of Appeals is
pending. Because the Company believes that the potential for an unfavorable outcome is not probable, it has not
established an accrual with respect to the case.
In November 2007, Roche Diagnostics Operations, Inc., et al. (Roche) filed a patent infringement lawsuit against LifeScan,
Inc. (LifeScan) in the United States District Court for the District of Delaware, accusing LifeScan’s entire OneTouch®line
of blood glucose monitoring systems of infringement of two patents related to the use of microelectrode sensors. In
September 2009, LifeScan obtained a favorable ruling on claim construction that precluded a finding of infringement. The
Court entered judgment against Roche in July 2010 and Roche appealed. The Court of Appeals reversed the District
Court’s ruling on claim construction and remanded the case to the District Court for new findings on the issue. The parties
are awaiting a ruling on claim construction. Roche is seeking monetary damages and injunctive relief.
In June 2009, Rembrandt Vision Technologies, L.P. (Rembrandt) filed a patent infringement lawsuit against Johnson &
Johnson Vision Care, Inc. (JJVC) in the United States District Court for the Eastern District of Texas alleging that JJVC’s
manufacture and sale of its ACUVUE®ADVANCE®and ACUVUE®OASYS®Hydrogel Contact Lenses infringe their U.S.
Patent No. 5,712,327 (the Chang patent). Rembrandt is seeking monetary relief. The case was transferred to the United
States District Court for the Middle District of Florida. In May 2012, the jury returned a verdict holding that neither of the
accused lenses infringe the ‘327 patent. Rembrandt has filed an appeal with the United States Court of Appeals for the
Federal Circuit.
In November 2011, Howmedica Osteonics Corp. (Howmedica) and Stryker Ireland Ltd. (Stryker) filed a patent
infringement lawsuit against DePuy Orthopaedics, Inc. (DePuy) in the United States District Court for the District of New
Jersey alleging infringement by DePuy’s PINNACLE®Acetabular Cup System and DURALOC®Acetabular Cup System of
a patent relating to a dual-locking mechanism feature in an acetabular cup system. Howmedica and Stryker are seeking
monetary damages and injunctive relief. DePuy filed its answer in February 2012 and filed a counterclaim asserting that
Stryker’s Trident Acetabular Hip System infringes DePuy’s U.S. Patent No. 6,610,097. DePuy is seeking damages and
injunctive relief from Howmedica and Stryker.
56 •Johnson & Johnson 2012 Annual Report