Federal Circuit Upholds Jury Award, Weighs in on Willfulness Normal, in Adynovate® Dispute

In line with the Federal Circuit, $173 million was the proper damages award for nearly three years of patent infringement ensuing from Baxalta’s sale of its biologic product Adynovate^® (Antihemophilic Issue (Recombinant), PEGylated).  In Bayer Healthcare LLC v. Baxalta Inc., et al., Nos. 2019-2418, 2020-1017 (Fed. Cir. 2021), the circuit court docket upheld an award to Bayer HealthCare LLC of $155 million in royalties and $18 million in pre-verdict supplemental damages, with out enhancement, for infringement of U.S. Patent No. 9,364,520 (the “’520 Patent”), which is directed to recombinant types of human issue VIII.

In its resolution, the Federal Circuit addressed the District of Delaware’s findings on infringement, enablement, damages, and willfulness.  Slip op. at 2.  Within the district court docket, the jury had “found the asserted claims were enabled and infringed, and that Bayer was entitled to reasonable-royalty damages,” however didn't contemplate the query of willfulness as a result of the district court docket held “as a matter of law that Baxalta’s conduct did not meet the requirements.”  Id.  Baxalta then appealed the denial of its JMOL motions on legal responsibility and damages, whereas Bayer cross-appealed for a brand new trial on willfulness. The Federal Circuit has affirmed.

At subject have been “recombinant forms of human factor VIII . . . a protein that is produced, and released into the bloodstream, by the liver” and “is useful in the treatment of hemophilia A.”  Slip op. at 2.  The ’520 Patent is directed to make use of of a selected technique of “PEGylation” that will increase “the in vivo half-life of a protein,” creating “an improved [factor VIII] variant that possesses greater duration of action in vivo . . . while retaining functional activity” and is produced constantly.  Id. at 2-4.  Adynovate “is a recombinant PEGylated FVIII product used to treat hemophilia A.”  Id. at 5.  It “is made by PEGylating [] amino acids in FVIII that have amine groups, including the amino acid lysine.”  Id. 

On enchantment, the Federal Circuit thought of and rejected a number of challenges from Baxalta to the district court docket’s declare constructions and to the jury’s verdict that the asserted claims are usually not invalid for lack of enablement. See slip op. at 8-19, 22-26.

The Court docket additionally addressed Baxalta’s damages arguments.  Baxalta argued that Bayer’s use of a “50-50 split royalty rate” was improper, and that the district court docket erred when it “permitted Bayer to rely on a flawed and speculative methodology.”  Slip op. at 27.  The Federal Circuit disagreed, and located that the “district court properly exercised its discretion in allowing Bayer to ask the jury to select a rate between the range presented.”  Id.  The Court docket additional discovered that “substantial evidence supports the jury’s 17.78% royalty rate, which was within the range encompassed by the record as a whole.”  Id. at 29.

The Federal Circuit individually addressed Baxalta’s problem to the pre-verdict supplemental damages award.  Slip op. at 30-31.  Baxalta argued that the award violated its Seventh Modification proper to a jury trial.  The Federal Circuit disagreed, discovering that “[c]alculating pre-verdict supplemental damages in this case merely required applying the jury’s royalty rate to the undisputed actual infringing sales base.”  Id. at 32.  As a result of the district court docket used the royalty charge decided by the jury, the Federal Circuit discovered that the “district court did not abuse its discretion in awarding pre-verdict supplemental damages.”  Id. at 34.

Lastly, the Federal Circuit addressed Bayer’s enchantment of the district court docket’s discovering of no willfulness.  See slip op. at 34.  The district court docket discovered that Bayer didn't present “sufficient evidence of the state of mind necessary for a finding of willfulness.”  Id.  The court docket defined that whereas “there was no dispute that Baxalta was aware of the ’520 patent . . . . Bayer merely assumed that Baxalta knew Adynovate infringed because it involved pegylation at the B-domain of factor VIII.”  Id.  The Federal Circuit concluded “that the record is insufficient to establish that Baxalta’s conduct rose to the level of wanton, malicious, and bad-faith behavior required for willful infringement.”  Id. at 35-36.  “Knowledge of the asserted patent and evidence of infringement is necessary, but not sufficient, for a finding of willfulness.  Rather, willfulness requires deliberate or intentional infringement.”  Id. at 36.

Any request for rehearing is due on March 31, 2021.