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Judge orders Zimmer to pay Stryker $228 million in patent case

By Jonathan Stempel

(Reuters) - A federal judge ordered Zimmer Holdings Inc to pay Stryker Corp more than $228 million for infringing its surgical irrigation patents, and in doing so tripled a damages award by a jury that found Zimmer's conduct was willful.

U.S. District Judge Robert Jonker in Grand Rapids, Michigan, also issued a permanent injunction banning Zimmer from selling infringing products, including from its Pulsavac Plus line.

Zimmer said it plans to appeal Wednesday's decision.

Stryker and Zimmer are large producers of orthopedic pulsed lavage devices, a combination spray gun and suction tube that is used to clean wounds and tissue during surgery.

In a 2010 lawsuit, Stryker contended that Pulsavac Plus lavage devices infringed three of its patents and caused it to lose market share.

A jury in February awarded Stryker $70 million of damages representing lost profits, and found that Zimmer's infringing conduct was willful.

Zimmer tried to have the award thrown out.

But Jonker said there was substantial evidence to support the jury's finding, including testimony that Zimmer "all but instructed" its design team to copy Stryker's products.

He also noted that Zimmer's recent annual profit has been more than 10 times the size of the verdict and that a $70 million award "may not be enough, without enhancement," to deter infringements.

"Zimmer chose a high-risk/high-reward strategy of competing immediately and aggressively in the pulsed lavage market and opted to worry about the potential legal consequences later," the judge wrote in a 58-page decision. "Ultimately, however, the trial proofs demonstrated that this was not a close case."

The judge also said Stryker should recover more than $18 million in interest and other damages, bringing the total award to more than $228 million.

Monica Kendrick, a Zimmer spokeswoman, said on Thursday the Warsaw, Indiana-based company made changes to its Pulsavac Plus line after the jury verdict, and believes the products it now sells are "outside the scope" of the injunction.

"Zimmer plans to file an appeal challenging both the earlier jury verdict and the recent rulings by the judge," she added.

Jo Johnson, a spokeswoman for Stryker, said the Kalamazoo, Michigan-based company is pleased with the decision.

In Thursday trading, Zimmer shares closed up 70 cents at $83.29, and Stryker shares rose 11 cents to $70.90.

The case is Stryker Corp et al v. Zimmer Inc et al, U.S. District Court, Western District of Michigan, No. 10-01223.

(Editing by John Wallace and Bob Burgdorfer)

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