Moskowitz Family LLC v. Globus Med.

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MOSKOWITZ FAMILY LLC Plaintiff, v. GLOBUS MEDICAL, INC. Defendants.

Civil Action No. 20-3271

United States District Court, E.D. Pennsylvania

August 24, 2023

MEMORANDUM OPINION

Goldberg, J.

Plaintiff Moskowitz Family LLC (“Moskowitz”) holds several patents pertaining to spinal implants designed to reduce adverse outcomes in spinal fusion patients. Moskowitz's inventions include minimal impaction, steerable, and custom-fit intervertebral implants that minimize musculoskeletal disruption and nerve root retraction during and after the procedure. Defendant Globus Medical, Inc. (“Globus”) is another spinal fusion company that sells intervertebral spinal implants.

On November 20, 2019, Moskowitz sued Globus alleging both direct and indirect infringement of these various patents. On December 22, 2022, I granted summary judgment in favor of Globus on Moskowitz's claims of direct infringement of the '913 patent and the '022 patent and scheduled the remainder of the case for trial on December 4, 2023.

Currently at issue is Globus's Motion to Exclude the Testimony of Moskowitz's Damages Expert Paul K. Meyer pursuant to Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). Globus posits that Mr. Meyer's entire royalty opinion and the $88 million damages calculation he plans to present to the jury are premised on a prior settlement agreement entered between Globus and direct competitor DePuy Synthes Products, Inc. According to Globus this agreement is exactly the sort of unrelated agreement resulting from an unrelated lawsuit that the Federal Circuit has repeatedly warned damages experts against relying upon. Moskowitz counters that Mr. Meyer relied on the most relevant licenses in the record and applied sound, well-accepted methodologies in reaching his opinions. For the following reasons, I will deny the Motion.

I. FACTUAL BACKGROUND

A. General Background on the Patents-in-Suit

The human spine is composed of vertically arranged bones called vertebrae, which are separated by cartilaginous intervertebral discs. The vertebrae are divided into three portions: (1) the uppermost seven are called the cervical spine; (2) the middle twelve are called the thoracic spine; and (3) the bottom five are called the lumbar spine. Two pedicle bones dorsally extend from each vertebra and form an arch that protects the spinal cord.

In some individuals, the cartilaginous disc between vertebrae may wear, causing pain and pressure on the spinal cord. For such individuals, spinal fusion surgery may offer relief. This procedure permanently connects two or more spinal vertebrae to improve spinal stability, correct deformations, and reduce pain. This procedure can also result in some adverse patient outcomes such as high-impaction, neural or vascular injury, esophageal injuries, excessive blood loss, prolonged surgical duration, prolonged recovery, and incomplete return to work results. These adverse events may be the result of static and non-expandable implants, misplaced implants, and implant pull-out after surgery.

Moskowitz sought to invent minimally invasive spinal implants designed to reduce these adverse outcomes. From January 15, 2013 through November 19, 2019, the United States Patent and Trademark Office (“PTO”) issued to Moskowitz the eight patents at issue. These patents are directed to intervertebral spine implant screws, staples, and expandable implant systems. U.S. Patent Nos. 8,353,913 (the “'913 patent”), 110,307,268 (“'268 patent”), and 10,478,319 (the “'319 patent”) are for tools used to manipulate and insert spacers into a disc space between two vertebral bodies to facilitate bone and screw fusion. U.S. Patent No. 9,889,022 (the “'022 patent”) is for an intervertebral screw guide and fixation apparatus for insertion into a disc space between two vertebrae to encourage bone and screw fusion. U.S. Patent No. 10,028,740 (the “'740 patent”) claims a “curvilinear nail screw,” a holding structure implanted into a vertebra and around the pedicle bones to avoid penetrating them. U.S. Patent No. 10,251,643 (the “'643 patent”) relates to an intervertebral mechanism that expands between vertebral bodies and engages vertebral endplates to keep the mechanism in place. U.S. Patent No. 10,076,367 (the “'367 patent”) is for a bidirectional system inserted between vertebrae to facilitate their linking and fusion. Finally, U.S. Patent No. 10,376,386 (the “'386 patent”) claims a spinal staple with a curved base and ridged spikes that hinder the staple's removal.

B. Background of the Relevant License Agreements Discussed by Mr. Meyer

Through discovery, Moskowitz served requests seeking all of Globus's patent license and/or settlement agreements related to spinal implant devices. (Pl.'s Ex. A at No. 19.) Moskowitz intended to provide these documents to its damages expert, Paul Meyer, so that he could determine what a reasonable royalty rate would be for Globus's licensing of Moskowitz's technology and, in turn, render a damages opinion. Globus eventually produced five Globus license agreements related to spinal implant devices, one of which the parties agreed was not relevant to the computation of damages here. The remaining four agreements were reviewed by Mr. Meyer to determine whether they were probative of what would constitute a hypothetical license negotiation involving the technology at issue. Although Mr. Meyer relied primarily on only one of the four, a brief discussion of all four provides necessary context for the parties' dispute.

The first agreement was between Bonutti Skeletal Innovations LLC (“Bonutti”) and Globus (the “Bonutti/Globus License Agreement”), wherein Bonutti granted Globus a non-exclusive license to fourteen U.S. patents and two U.S. patent applications. (Def.'s Ex. 10, Rep. of William Rosenberg (“Rosenberg Rep.”) ¶¶ 264-69.) The Bonutti/Globus License Agreement is a settlement and patent license agreement pertaining to allegations of infringement of six Bonutti patents concerning technology principally related to changing the spatial relationship between bones. (Id. ¶ 264.)

Moskowitz's technology expert, William Rosenberg, opined that the Bonutti/Globus License Agreement does not relate to technology involving spinal implants, but rather to modifying the spatial relationship between bones in various locations throughout the body. As those patents do not describe implants suitable for spinal fusion, Dr. Rosenberg concluded that they are not comparable to the patents-in-suit, an opinion with which Mr. Meyer agreed. (Id. ¶¶ 264-69; Def.'s Ex. 1, Rep. of Paul Meyer (“Meyer Rep.”) ¶¶ 158-67.) Consistently, Globus's own damages expert opined that the Bonutti Agreement was not economically comparable. (Pl.'s Ex. B, Dep. of Michael Lasinski (“Lasinski Dep.”) 168:3-11.)

The second agreement reviewed by Mr. Meyer involved an Asset Purchase and Royalty Agreement between the University of Toledo and Globus (the “Toledo/Globus Agreement”). Under this agreement, the University of Toledo assigned two U.S. patent applications to be used for research and educational purposes. Mr. Meyer opined that this agreement was not comparable because it did not relate to any issued patents, was an acquisition rather than a license, and was irrelevant to any material Globus products. (Meyer Rep. ¶¶ 168-176.)

The third agreement was a Patent Purchase Agreement entered into between Dr. Paul C. McAfee and Globus (the “McAfee Agreement”), wherein Dr. McAfee assigned a single patent application to Globus. Mr. Meyer opined that this agreement was also not comparable because (a) Dr. McAfee was a member of Globus's Board of Directors, and consequently, the agreement was not necessarily an arms-length transaction, and (b) it pertained to patent applications unrelated to any Globus product. (Id. ¶¶ 177-84.)

The final agreement is the one primarily in dispute here, the “Synthes/Globus License.” Specifically, Globus and DePuy Synthes Products, Inc. (“Synthes”) were involved in patent infringement litigation during which a jury heard testimony and rendered a verdict finding that Globus's INDEPENDENCE, COLATION, and InterContinental products (the products accused of infringement here) literally infringed all three of Synthes's ICI patents-in-suit. On January 13, 2016, as a final resolution of that litigation and USPTO proceedings, Globus and DePuy Synthes Products, Inc. entered the Synthes/Globus License. The first part of the agreement is a license Synthes granted to Globus to allow future Globus ICI (Independence and Coalition) Products-which are among the products accused here-to practice Synthes ICI (Independence, Coalition, and InterContinental) Patents, in exchange for a royalty rate paid to Synthes of 10% of the Net Sales of those products. The second part of the agreement involved a lump sum payment from Globus, a cross-license of patents, releases, and other grants of rights and licenses between the parties. The Synthes/Globus license was executed two years before the hypothetical negotiation here, and Mr. Meyer deemed it comparable. (Meyer Rep. ¶ 157.)

Globus disputes Mr. Meyer's reliance on the Synthes/Globus License as a reasonable comparator to determine damages and contends that his opinion should be excluded. Globus also asserts that the Toledo/Globus Agreement and the McAfee Agreement are more reliable approximations of the hypothetical negotiations and should be the basis for a reasonable royalty rate.

II. STANDARD OF REVIEW

Federal Rule of Evidence 702 provides:

A witness who is qualified as an expert by knowledge, skill experience, training, or education may testify in the form of an opinion or otherwise if:

(a) The expert's scientific, technical, or other specialized knowledge will help the trier of fact

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