A federal jury in California returned a $30 million verdict against NuVasive, Inc. on April 3, 2014 in a second trial in the company’s ongoing litigation with Neurovision Medical Products (Neurovision) over the right to use the trademark, “NeuroVision.”
2009 Lawsuit
Neurovision sued NuVasive in September 2009 asserting claims of federal and state unfair competition, common law trademark infringement, and asking for cancellation of trademark registration. After a five-day trial, a jury awarded $60 million to Neurovision. The jury found that NuVasive had committed fraud in procuring its federal trademark registration for “Neurovision”, and that NuVasive willfully infringed Neurovision’s rights.
First $60 Million Ruling
The U.S. District Court ordered NuVasive to pay Neurovision $60 million in January 2011 and issued a permanent injunction prohibiting NuVasive from using the trademark.
Appealing Judicial Errors
NuVasive appealed the verdict to the Circuit Court, and, in September 2012, after finding significant errors in the district court’s instructions to the jury, the Circuit Court issued a ruling that:
- reversed and vacated the District Court’s judgment against NuVasive;
- reversed and vacated the injunction and the award of attorney fees and costs against NuVasive;
- remanded the case back to the District Court for a new trial; and
- instructed the District Court to assign the case to a different judge for the new trial.
New Verdict, NuVasive Will Appeal
After a second trial, a different judge and a new jury, NuVasive lost the trial.
In an April 4, 2014 SEC filing, the company said it intends to file post-trial motions in the U.S. District Court for the Central District of California seeking judgment as a matter of law, and, in the alternative, a new trial. If necessary, the company intends to appeal the verdict to the Ninth Circuit Court of Appeals. In the event NuVasive’s post-trial motions are denied and judgment is ultimately entered by the District Court, any payment of damages per the judgment will be stayed pending resolution of the appeals process (which could take up to two years).
The company added that this case relates solely to the use of the “NeuroVision” brand name and has no impact on NuVasive’s proprietary neuromonitoring technology that underlies NuVasive’s NVM5 nerve monitoring system or future products. NuVasive does not anticipate any disruption to sales or the ability to meet surgery demands based on this verdict.
Judicial Errors
For readers interested in the details of the “significant” errors by the district court, we refer to the law firm Perkins Coie’s September 12, 2012 blog by Bryan Beel, Ph.D.
Beel writes that the Ninth Circuit noted errors in the district court proceeding in three areas:
“First, the district court had instructed the jury that ‘an applicant for a trademark registration [must] disclose all prior use of a mark’ to the U.S. Patent and Trademark Office. In fact, the proper instruction is that ‘an applicant must disclose only those prior users that the applicant believes have acquired superior rights to the mark in the classification for which registration is sought.’
“Second, the district court had instructed the jury that Neurovision could challenge NuVasive’s incontestable trademark merely by showing that Neurovision had ‘establish[ed] trademark rights in the mark ‘NEUROVISION’ through prior use of the mark in commerce.’ The Ninth Circuit noted that a proper instruction would have required the jury to ‘determine both the geographic scope of [Neurovision’s] rights and whether [Neurovision] maintained continuous use of the mark following the acquisition of any state law rights in the mark.’
“Third, the Ninth Circuit held that the district court abused its discretion by (1) excluding relevant evidence regarding the functions and user bases of the parties’ devices from the likelihood of confusion analysis; and (2) instructing the jury that such evidence was ‘irrelevant to the trademark infringement inquiry.’ Instead, it is black letter law that such evidence is ‘highly probative’ as to the likelihood of confusion and whether the parties are direct competitors.”
