Case 2:14-cv-02564-JPM-tmp Document 17 Filed 09/25/14 Page 1 of 8 PagelD 69
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TENNESSEE
`WESTERN DIVISION
`
`CERAMEDIC LLC,
`
`Plaintiff,
`
`V.
`
`SMITH & NEPHEW, INC.,
`
`Defendant.
`
`Civil Action No. 2:14-CV-02564
`
`JURY TRIAL DEMANDED
`
`DEFENDANT SMITH & NEPHEW'S ORIGINAL ANSWER AND COUNTERCLAIMS
`
`Smith & Nephew, Inc. answers the original complaint of CeraMedic LLC as follows:
`
`The Parties
`
`ADMISSIONS AND DENIALS
`
`1 .
`
`As to paragraph 1 , Smith & Nephew lacks sufficient knowledge or information to form a
`
`belief about the truth of the allegations of the paragraph.
`
`2.
`
`As to paragraph 2, admitted.
`
`Patent-In-Suit
`
`3.
`
`As to paragraph 3, Smith & Nephew admits that the '584 patent issued on May 23, 2000
`
`to Fraunhofer and that CeraMedic is the owner of record with the US Patent and Trademark
`
`Office (USPTO), but is without sufficient knowledge or information to form a belief about the
`
`truth of the ownership and ability to enforce and collect damages for the ' 584 patent.
`
`Background
`
`4.
`
`As to paragraph 4, Smith & Nephew lacks sufficient knowledge or information to form a
`
`belief about the truth of the allegations of the paragraph.
`
`-1-
`
`Exhibit 2318 Page 001
`
`CeraMedic Ex. 2318
`CeramTec GmbH v. CeraMedic LLC
`Case IPR2015-01328
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TENNESSEE
`WESTERN DIVISION
`
`CERAMEDIC LLC,
`
`Plaintiff,
`
`V.
`
`SMITH & NEPHEW, INC.,
`
`Defendant.
`
`Civil Action No. 2:14-CV-02564
`
`JURY TRIAL DEMANDED
`
`DEFENDANT SMITH & NEPHEW'S ORIGINAL ANSWER AND COUNTERCLAIMS
`
`Smith & Nephew, Inc. answers the original complaint of CeraMedic LLC as follows:
`
`The Parties
`
`ADMISSIONS AND DENIALS
`
`1 .
`
`As to paragraph 1 , Smith & Nephew lacks sufficient knowledge or information to form a
`
`belief about the truth of the allegations of the paragraph.
`
`2.
`
`As to paragraph 2, admitted.
`
`Patent-In-Suit
`
`3.
`
`As to paragraph 3, Smith & Nephew admits that the '584 patent issued on May 23, 2000
`
`to Fraunhofer and that CeraMedic is the owner of record with the US Patent and Trademark
`
`Office (USPTO), but is without sufficient knowledge or information to form a belief about the
`
`truth of the ownership and ability to enforce and collect damages for the ' 584 patent.
`
`Background
`
`4.
`
`As to paragraph 4, Smith & Nephew lacks sufficient knowledge or information to form a
`
`belief about the truth of the allegations of the paragraph.
`
`-1-
`
`Exhibit 2318 Page 001
`
`CeraMedic Ex. 2318
`CeramTec GmbH v. CeraMedic LLC
`Case IPR2015-01328
`
`
`
`Case 2:14-cv-02564-JPM-tmp Document 17 Filed 09/25/14 Page 2 of 8 PagelD 70
`
`5.
`
`As to paragraph 5, Smith & Nephew admits Fraunhofer apparently assigned the '584
`
`patent to Ceramedic in early 2014 per the recorded assignment of record with the USPTO, but
`
`lacks sufficient knowledge or information to form a belief about the truth of the remaining
`
`allegations of the paragraph.
`
`6.
`
`7.
`
`As to paragraph 6, admitted.
`
`As to paragraph 7, admitted, except Smith & Nephew clarifies that the percentages of
`
`alumina and zirconia stated are calculated by volume, not by weight, and that BIOLOX delta is a
`
`zirconia-toughened alumina (ZTA) product.
`
`8.
`
`9.
`
`As to paragraph 8, admitted.
`
`As to paragraph 9, admitted.
`
`10.
`
`As to paragraph 10, Smith & Nephew admits that it is knowledgeable about some
`
`composition and performance characteristics of BIOLOX delta orthopedic implants, but denies
`
`that it is knowledgeable about all of the science behind the material, including the details of its
`
`manufacture.
`
`1 1 .
`
`As to paragraph 1 1 , admitted, except with the clarification that Smith & Nephew does not
`
`manufacture any BIOLOX delta components, and has minimal input regarding the design and/or
`
`development of such components.
`
`Jurisdiction and Venue
`
`12.
`
`13.
`
`14.
`
`As to paragraph 12, admitted.
`
`As to paragraph 13, admitted.
`
`As to paragraph 14, Smith & Nephew denies that its BIOLOX® Delta Ceramic Femoral
`
`Heads infringe the ' 584 patent, but otherwise admits the allegations of the paragraph.
`
`15.
`
`As to paragraph 15, admitted.
`
`Count I - Infringement of the '584 Patent
`
`-2-
`
`Exhibit 2318 Page 002
`
`CeraMedic Ex. 2318
`CeramTec GmbH v. CeraMedic LLC
`Case IPR2015-01328
`
`
`
`Case 2:14-cv-02564-JPM-tmp Document 17 Filed 09/25/14 Page 3 of 8 PagelD 71
`
`16.
`
`17.
`
`18.
`
`19.
`
`20.
`
`21.
`
`As to paragraph 16, Smith & Nephew incorporates its prior answers.
`
`As to paragraph 17, denied.
`
`As to paragraph 18, denied.
`
`As to paragraph 19, denied.
`
`As to paragraph 20, denied.
`
`As to paragraph 21, Smith & Nephew learned of the '584 patent in 2014 upon being
`
`made aware of it by CeraMedic, but all other allegations in this paragraph are denied.
`
`22.
`
`As to paragraph 22, denied.
`
`Damages
`
`23.
`
`As to paragraph 23, denied.
`
`AFFIRMATIVE DEFENSES
`
`Smith & Nephew is not liable to CeraMedic for the following reasons:
`
`1.
`
`Smith & Nephew does not directly or indirectly infringe the '584 patent, either
`
`literally or by equivalence.
`
`2.
`
`CeraMedic is estopped from asserting infringement against BIOLOX delta based
`
`on representations made in the patent and during prosecution of the application.
`
`3.
`
`The claims of the '584 patent are invalid under 35 U.S.C., including §
`
`102, 103,
`
`and 112.
`
`4.
`
`5.
`
`CeraMedic' s claims are barred by the theories of laches and equitable estoppel.
`
`CeraMedic is prevented under 35 U.S.C. §287 from collecting damages for acts
`
`occurring before actual notice of infringement.
`
`6.
`
`CeraMedic is prevented from recovering costs under 35 U.S.C. §287 for failing to
`
`disclaim invalid claims at the Patent and Trademark Office before commencing this suit.
`
`-3-
`
`Exhibit 2318 Page 003
`
`CeraMedic Ex. 2318
`CeramTec GmbH v. CeraMedic LLC
`Case IPR2015-01328
`
`
`
`Case 2:14-cv-02564-JPM-tmp Document 17 Filed 09/25/14 Page 4 of 8 PagelD 72
`
`COUNTERCLAIMS
`
`Counterclaim-Plaintiff Smith & Nephew, Inc. asserts the following counterclaims for
`
`declaratory judgment of non-infringement and invalidity of U.S. Patent No. 6,066,584 against
`
`Counterclaim-Defendant CeraMedic LLC as follows:
`
`Jurisdiction and Venue
`
`1.
`
`CeraMedic has sued Smith & Nephew for infringement of '584 patent in this
`
`action. The action creates an actual and justiciable controversy between CeraMedic and Smith &
`
`Nephew concerning the non-infringement and invalidity of the '584 patent and Smith &
`
`Nephew' s continued right to make, use, sell, or offer for sale in the United States, or import into
`
`the United States, medical devices with BIOLOX delta.
`
`2.
`
`This Court has subject matter jurisdiction over Smith & Nephew's declaratory
`
`judgment claims against CeraMedic pursuant to 28 U.S.C. § 1331, 1338(a), 2201, 2202 and the
`
`Patent Laws of the United States, 35 U.S.C. § 100, et. seq.
`
`3.
`
`This Court has personal jurisdiction over CeraMedic based on its filing of the
`
`lawsuit for patent infringement against Smith & Nephew in this jurisdiction.
`
`Background
`
`4.
`
`CeraMedic bases its claim of infringement on Smith & Nephew products using
`
`BIOLOX delta ceramic materials from CeramTec. CeramTec is a leading innovator in the field
`
`of medical ceramics and a leading supplier of ceramic components for hip replacement and other
`
`medical applications.
`
`5.
`
`On information and belief, CeraMedic and its predecessor Fraunhofer have
`
`known that BIOLOX delta does not infringe the '584 patent. Fraunhofer and Andreas Krell, the
`
`lead named inventor of the '584 patent, had full knowledge of BIOLOX delta and certain other
`
`VAI
`
`Exhibit 2318 Page 004
`
`CeraMedic Ex. 2318
`CeramTec GmbH v. CeraMedic LLC
`Case IPR2015-01328
`
`
`
`Case 2:14-cv-02564-JPM-tmp Document 17 Filed 09/25/14 Page 5 of 8 PagelD 73
`
`CeramTec products at least by 2004, but never asserted any claim of infringement against
`
`BIOLOX delta in communications with CeramTec about the '584 patent between 2005 and
`
`2012.
`
`6.
`
`On information and belief, a company known as Acacia arranged for the acquisition
`
`of the '584 patent from Fraunhofer by Acacia's subsidiary CeraMedic. Acacia is one of the
`
`largest patent aggregators, focused solely on collecting and monetizing patents through licensing
`
`and litigation instead of developing commercial products and inventions. CeraMedic was
`
`formed shortly before the acquisition of the '584 patent in February 2014 for the purpose of
`
`holding and suing on the patent.
`
`7.
`
`On information and belief, CeraMedic filed this lawsuit with actual or imputed
`
`knowledge that BIOLOX delta does not infringe any properly construed claim of the '584 patent.
`
`Count 1: Declaratory Judgment of Non-infringement of the '584 patent
`
`8.
`
`Smith & Nephew does not infringe any of the method claims of the '584 patent
`
`because it does not manufacture BIOLOX delta or perform or control any of the steps used in
`
`manufacturing the accused BIOLOX delta.
`
`9.
`
`Smith & Nephew does not infringe any claim of the '584 patent because BIOLOX
`
`delta is a zirconia toughened alumina (ZTA) and is not a sintered alumina material within the
`
`meaning of the '584 patent and the product was not made with certain steps or does not have
`
`certain properties required by the claims.
`
`10.
`
`Smith & Nephew does not make, use, sell, or offer for sale in the United States, or
`
`import into the United States, any processes or products, including medical devices with
`
`BIOLOX delta, that infringe, either literally or by equivalence, any claim of the '584 patent.
`
`Further, Smith & Nephew has not contributed to, induced, or controlled acts of infringement of
`
`any claim of the '584 patent by another.
`
`-5-
`
`Exhibit 2318 Page 005
`
`CeraMedic Ex. 2318
`CeramTec GmbH v. CeraMedic LLC
`Case IPR2015-01328
`
`
`
`Case 2:14-cv-02564-JPM-tmp Document 17 Filed 09/25/14 Page 6 of 8 PagelD 74
`
`Count 2: Declaratory Judgment of Invalidity of the '584 Patent
`
`11.
`
`BIOLOX delta was disclosed in a CeramTec patent application published over a
`
`year before the priority date of the '584 patent. CeraMedic' s interpretation of the scope of the
`
`'584 patent necessarily renders its patent invalid.
`
`12.
`
`CeramTec and others were publishing and commercializing sintered alumina
`
`materials before the date of invention and over a year before the priority date of the ' 5 84 patent
`
`that anticipate each limitation and/or render obvious the claimed invention of the ' 5 84 patent,
`
`thereby invalidating the '584 patent under 35 U.S.C. § 102 and 103.
`
`1 3 .
`
`The specification of the ' 5 84 patent fails to provide a written description or enable
`
`the claimed invention, thereby rendering the patent claims invalid under 35 U.S .0 . § 1 12.
`
`1 4.
`
`The claims of the ' 5 84 patent fail to particularly point out and distinctly claim the
`
`subject matter of the invention and therefore are invalid as indefinite under 35 U.S .0 . § 1 12.
`
`PRAYER FOR RELIEF
`
`For these reasons, Smith & Nephew asks the Court to:
`
`a) Render judgment that CeraMedic take nothing;
`
`b) Dismiss CeraMedic's suit with prejudice;
`
`c) Declare that Smith & Nephew does not infringe any claims of the '584 patent;
`
`d) Declare the '584 patent claims invalid;
`
`e) Award Smith & Nephew its attorney fees for an exceptional case under 35 U.S.C.
`
`§285;
`
`f) Assess costs against CeraMedic; and
`
`g) Award Smith & Nephew all other relief the Court deems appropriate.
`
`Exhibit 2318 Page 006
`
`CeraMedic Ex. 2318
`CeramTec GmbH v. CeraMedic LLC
`Case IPR2015-01328
`
`
`
`Case 2:14-cv-02564-JPM-tmp Document 17 Filed 09/25/14 Page 7 of 8 PagelD 75
`
`Smith & Nephew requests a trial by jury for all issues under Federal Rules of Civil
`
`JURY DEMAND
`
`Procedure 38.
`
`Respectfully submitted,
`
`Is/Mark Vorder-Bruegge, Jr.
`Mark Vorder-Bruegge, Jr.
`WYATT, TARRANT & COMBS, LLP
`1715 Aaron Brenner Drive, Suite 800
`Memphis, TN 38120
`Telephone: (901) 537-1010
`Facsimile: (901) 537-1010
`mvorder-bruegge @ wyattfirm.com
`
`Peter F. Felfe
`Charles B. Walker, Jr.
`FULBRIGHT & JAWORSKI LLP
`1301 McKinney, Suite 5100
`Houston, TX 77010-3095
`Telephone: (713) 651-5151
`Facsimile: (713) 651-5246
`charles.walker@nortonrosefulbright.com
`peter.felfe@nortonrosefulbright.com
`
`Counsel for Defendant SMITH & NEPHEW,
`INC.
`
`-7-
`
`Exhibit 2318 Page 007
`
`CeraMedic Ex. 2318
`CeramTec GmbH v. CeraMedic LLC
`Case IPR2015-01328
`
`
`
`Case 2:14-cv-02564-JPM-tmp Document 17 Filed 09/25/14 Page 8 of 8 PagelD 76
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on September 25, 2014, I electronically filed the forgoing document
`
`with the Clerk of the Court using the CM/ECF system which sent notification of such filing by
`
`electronic mail to all attorneys of record:
`
`COUNSEL FOR PLAINTIFFS
`
`John M. Desmarais
`Laurie Stempler
`Kevin K. McNish
`DESMARAIS LLP
`230 Park Avenue
`New York, NY 10169
`Telephone: (212) 351-3400
`Facsimile: (212) 351-3401
`jdesmarais@desmaraisllp.com
`lstempler@desmaraisllp.com
`kmcnish@desmaraisllp.com
`
`Adam S. Baldridge
`BAKER, DONELSON, BEARMAN,
`CALDWELL & BERKOWITZ, PC
`165 Madison Avenue, Suite 2000
`Memphis, TN 38103
`Telephone: (901) 577-2102
`Facsimile: (901) 577-0838
`abaldridge@bakerdonelson.com
`
`Is/Mark Vorder-Bruegge, Jr.
`Mark Vorder-Bruegge, Jr.
`
`Exhibit 2318 Page 008
`
`CeraMedic Ex. 2318
`CeramTec GmbH v. CeraMedic LLC
`Case IPR2015-01328
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