Johnson and Johnson 2014 Annual Report Download - page 65

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 businesses. Many of these matters involve
challenges to the coverage and/or validity of the patents on various 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. The most significant of
these matters are described below.
Medical Devices
In January 2010, Tyco Healthcare Group, LP (Tyco) and U.S. Surgical Corporation (now Covidien plc) filed a lawsuit
against Ethicon Endo-Surgery, Inc. (EES) in the United States District Court for the District of Connecticut alleging that
EES’s HARMONIC®shears infringed three Tyco patents. The case was tried in July 2012, and in March 2013, the Court
ruled that some of EES’s HARMONIC®shears infringed Tyco’s patents and ordered EES to pay damages of
approximately $176 million, but declined to order injunctive relief. EES appealed and in December 2014, the United
States Court of Appeals for the Federal Circuit reversed the District Court’s ruling and found all the asserted claims
invalid. In January 2015, Tyco filed a motion for rehearing. In July 2014, Covidien filed another patent infringement lawsuit
against EES in the United States District Court for the District of Connecticut seeking damages and a preliminary
injunction, alleging that EES’s newest version of its harmonic scalpels, the HARMONIC ACE®+7 Shears and the
HARMONIC ACE®+Shears, infringed the three Tyco patents asserted in the previous case. Covidien brought a motion for
a preliminary injunction against the HARMONIC ACE®+7 Shears, and in October 2014, the District Court granted
Covidien’s motion for a preliminary injunction. EES appealed and the Court of Appeals for the Federal Circuit granted EES
an interim stay of the injunction. The claims asserted by Covidien in this case are the same claims that were declared
invalid in December 2014 by the Court of Appeals in the Tyco case discussed above.
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, alleging LifeScan’s OneTouch®Line of
Blood Glucose Monitoring Systems infringe two patents related to the use of microelectrode sensors. Roche is seeking
monetary damages and injunctive relief. 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. In December 2014, the District Court ruled in LifeScan’s favor and reinstated the
original claim construction. In February 2015, Roche appealed the ruling.
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 infringes the ’327 patent. Rembrandt appealed, and in August 2013, the United States Court of Appeals
for the Federal Circuit affirmed the District Court’s judgment. Rembrandt asked the District Court to grant it a new trial
based on alleged new evidence, and in July 2014, the District Court denied Rembrandt’s motion. Rembrandt has appealed
the District Court’s denial of its motion for a new trial.
In December 2009, the State of Israel filed a lawsuit in the District Court in Tel Aviv Jaffa against Omrix
Biopharmaceuticals, Inc. and various affiliates (Omrix). In the lawsuit, the State claims that an employee of a government-
owned hospital was the inventor on several patents related to fibrin glue technology that the employee developed while he
was a government employee. The State claims that he had no right to transfer any intellectual property to Omrix because it
belongs to the State. The State is seeking damages plus royalties on QUIXIL™ and EVICEL®products, or alternatively,
transfer of the patents to the State. The case remains active, but no trial date has been set.
In September 2011, LifeScan, Inc. (LifeScan) filed a lawsuit against Shasta Technologies, Instacare Corp and Conductive
Technologies (collectively, Shasta) in the United States District Court for the Northern District of California for patent
infringement for the making and marketing of a strip for use in LifeScan’s OneTouch®Blood Glucose Meters. Shasta has
alleged that the three LifeScan patents-in-suit are invalid. Shasta also challenged the validity of the asserted patents in the
United States Patent and Trademark Office (USPTO) and the patent infringement case has been stayed pending the
outcome of the USPTO proceedings. The validity of two of the patents was confirmed by the USPTO and in August 2014,
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