Haynes and Boone Secures Injunction, Damages for Client In Heart Repair Device Patent Infringement Suit

04/07/2008

DALLAS – Haynes and Boone, LLP announced today that final judgment was entered in favor of its client Chase Medical, LLP, upholding the 2007 jury verdict that affirmed the validity of Chase Medical patents covering a method for surgically repairing human hearts after a severe heart attack. This month’s final judgment awards Chase a broad injunction, lost profits, enhanced damages, legal fees and expenses totaling more than $2.3 million.

“We’re proud that we could help Chase Medical protect its rightful position as innovator in the important medical area of left ventricular restoration,” said Phillip Philbin, a member of the Haynes and Boone litigation team. “With this judgment, potential infringers of Chase patents have been put on notice that our client has and will defend its inventions. The patent portfolio's validity has been tested and affirmed. The broad injunction entered by the judge will prevent further infringement by these defendants and should serve notice on potential infringers.”

Following a three-week trial last year in the Northern District of Texas, a jury unanimously agreed that CHF Technologies, Inc. and Endoscopic Technologies, Inc., both of Danville, Calif., had improperly and willfully infringed Chase Medical’s unique method of left ventricular reconstruction (LVR) using a shaping device known as the “Chase Mannequin™” and should pay lost profits damages.

"Viewing the scope of the litigation as a whole, the Court finds that Plaintiff achieved overwhelming success …," wrote U.S. District Court Judge Barbara M. G. Lynn in her final judgment. "The jury properly found by clear and convincing evidence that Defendants deliberately developed, and marketed to Plaintiff's customers, an infringing product. The case was not close, with the jury reasonably finding willful infringement as to every claim of the [two] patents."

The judge also noted that the patent infringements held major repercussions for Chase Medical in the marketplace. "Defendants' continued sale of infringing products in a small, highly competitive market comprised of approximately 200 cardiothoracic surgeons performing LVR in the U.S. will very likely have serious, long-term consequences for Plaintiff's market share, reputation, and good will," the judge wrote.

In entering final judgment, Judge Lynn awarded the plaintiff broad injunctive relief, lost profits, enhanced damages and attorneys’ fees and expenses to be paid in the amounts as follows:

• $306,669.12 for lost profits caused by the infringement
• $66,686.77 in prejudgment interest
• $306,669.12 for enhanced damages as a result of the willful infringement finding
• $1,548,062.50 for attorneys fees
• $155,008.57 for expenses
• Post-judgment interest at a rate of 1.60%
• A permanent injunction, including (1) Neither defendant can make, sell, offer for sale, distribute or use the Blue Egg or the method taught using the Blue Egg; (2) Defendants are required to deliver all existing Blue Eggs to Mr. Philbin within 20 days of the Judgment; and (3) Defendants have been ordered to notify all hospital personnel, surgeons, related staff and employees, as well as any other person who has purchased the Defendants' Blue Egg of the Final Judgment, provide them a copy of the Final Judgment, and advise them that all use of the Blue Egg should cease immediately.

"The Court is of the view that Defendants did not have a reasonable, good faith belief that the Blue Egg would not infringe Plaintiff's patents,” the judge said in her judgment. “The injunctive relief awarded here, which is critical to preserve Chase's competitive position, was a central objective of the litigation."

The case stemmed from patents issued to Chase Medical beginning in 2004 for left ventricle repairs on people who have suffered congestive heart failure. “The defendants introduced the Blue Egg device after reviewing Chase Medical’s pending patent application and the Mannequin, so they were clearly aware of our client’s groundbreaking work in this arena,” Mr. Philbin said.

Jurors found that the defendants’ surgical method using the Blue Egg infringed on all asserted claims of Chase Medical’s two patents, both by contributory infringement and by inducing infringement by others. The Haynes and Boone team fought for and secured an injunction against both defendants to prevent future use of the patented method. Further, the Judgment requires defendants to notify all hospitals and doctors who have the Blue Egg to cease use and return all Blue Eggs to Mr. Philbin.

Representing Chase Medical from Haynes and Boone were Mr. Philbin, Don Templin, Russ Emerson, Debbie McComas and Jacob Hodges.

The case is Chase Medical Inc. v. CHF Technologies Inc. et al., case number 3:04-cv-02570 in the U.S. District Court for the Northern District of Texas. The patents-in-suit are U.S. Patent Numbers 6,994,093 and 6,681,773.

Haynes and Boone, LLP is an international corporate law firm with offices in Texas, New York, Washington, D.C., Mexico City and Moscow, providing a full spectrum of legal services. With almost 500 attorneys, Haynes and Boone is ranked among the largest law firms in the nation by The National Law Journal. The firm has been recognized as one of the "Best Corporate Law Firms in America" (Corporate Board Member Magazine, 2001-2007), and as a Top 100 law firm for both diversity (MultiCultural Law Magazine, 2008), and women (Women 3.0, 2008).

Chase Medical, LLP is a privately held company based in Richardson, Texas dedicated to providing innovative technology solutions for cardiac MRI analysis and cardiac surgical devices to improve the delivery of therapies to patients with heart failure. Chase Medical’s foundation was built on the development of the SVR® Mannequin to resize, reshape and reorient the left ventricle in the treatment of heart failure. (SVR is a registered service mark of Chase Medical. Mannequin is a trademark of Chase Medical.)

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