Medical device company NuVasive must pay $30 million for fraudulently registering trademarks

by John Chapman

In 2009, Neurovision Medical Products, Inc. sued NuVasive, Inc. alleging violations of trademark and unfair competition laws. The second jury to hear the case has awarded $30 million to Nuerovision.

Nuerovison and NuVasive both make devices used during surgery to help surgeons locate and avoid nerves during an operation. The jury found that NuVasive fraudulently registered Neurovision’s trademark as its own with the U.S. Patent and Trademark Office despite having knowledge that the trademark was already in commercial use by Nuerovison.

The case first went to trial in 2010. The first jury found for Neurovision and awarded $60 million in damages. The Ninth Circuit Court of Appeals reversed that verdict after ruling the district court had provided incorrect instructions to the jury.

According to the Ninth Circuit, the first jury was wrongly instructed that NuVasive was obligated to disclose all prior use of a mark when applying to register. Instead, an applicant such as NuVasive 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. The court of appeals reversed and ordered a new trial.

Applying the stricter standards set forth by the Ninth Circuit, the second jury has again found that NuVasive’s registration of the trademark was fraudulent. The jury found that NuVasive willfully omitted knowledge of a superior right in the mark held by Neurovision.

Evidence was presented that, before NuVasive’s application, a Neurovision staff member had given NuVasive a demonstration of a Neurovision product. There was testimony that product with Neurovision’s label on it was left at NuVasive’s offices over a weekend. In addition, NuVasive’s own filings with the FDA had made references to Neurovision’s products.

Neurovision is expected to appeal.

Intellectual Property Law and Heygood, Orr & Pearson

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** Michael Heygood, James Craig Orr, Jr. and Eric Pearson were selected to the Super Lawyers List, a Thomson Reuters publication, for the years 2003 through 2014.