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McAndrews, Held & Malloy Secures Definitive Victory for Client Alaris Medical Systems

Date: April 9, 2009 || Client Successes

The U.S. Court of Appeals for the Federal Circuit has affirmed, on all grounds, the rulings of the U.S. District Court for the Central District of California in favor of McAndrews, Held & Malloy client Alaris Medical Systems, Inc.  Alaris, a subsidiary of Cardinal Health, Inc. [NYSE: CAH], develops and markets products for the safe delivery of intravenous (IV) medications.  In its ruling, the Federal Circuit upheld the district court’s award of $5 million in attorney’s fees and costs to Alaris.

The medical device case involved more than $2 billion in Alaris products that had been accused of infringement by ICU Medical, Inc. [NASDAQ: ICUI], a manufacturer of disposable medical connection systems for use in intravenous therapy applications.  ICU asserted four patents related to valves used in IV setups.

The Federal Circuit affirmed the district court’s decisions granting summary judgment of non-infringement and invalidity, and the awards of sanctions and $5 million in attorney’s fees and costs.

The $5 million fee award stemmed from the district court’s conclusions that the case was “exceptional” under the patent laws because ICU engaged in “objectively baseless and bad faith litigation,” and asserted a frivolous claim construction.  The district court found that (1) ICU made “multiple, repeated misrepresentations . . . regarding its own patents” to support its motions for a temporary restraining order and a preliminary injunction, (2) ICU admitted that it had not originally sued on its “spike” patents, which issued several years earlier, because of the “substantial difficulty” it would face in asserting the “spike” claims against Alaris’ products, which were “spikeless,” (3) Alaris proffered evidence showing that “ICU did not believe that the [accused] SmartSite Valves infringed the ‘spike’ claims,” including a preliminary investigation in which ICU stated that “there is no spike inside the device,” and (4) “ICU’s misconduct warranted Rule 11 sanctions,” forming another basis for a fee award.  The Federal Circuit affirmed, concluding that ICU had not shown clear factual error or an abuse of discretion.

McAndrews, Held & Malloy attorneys Timothy J. Malloy, David D. Headrick, Scott P. McBride and Wil L. Rao represented Alaris.