No.

200%1538 __ L-_ $=_/C [_$

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

NOV16 2010

SPINE SOLUTIONS, INC., Unit_

States
Cou_
ofAppeals
SYNTHES SPINE COMPANY, L.P. ForThe
FederaJ
Circuit
AND SYNTHES, INC.
Plaintiffs-Appellees,
V.

MEDTRONIC SOFAMOR DANEK USA, INC.,

AND MEDTRONIC SOFAMOR DANEK, INC.,
Defendants-Appellants.

Appeal from the United States District Court for the Western District of Tennessee,
in case no. 07-CV-02175, Judge Ion P. McCalla

RESPONSE OF DEFENDANTS-APPELLANTS MEDTRONIC SOFAMOR

DANEK USA, INC. AND MEDTRONIC SOFAMOR DANEK, INC.
TO PETITION FOR REHEARING AND REHEARING EN BANC

MARK C. FLEMING SETH P. WAXMAN

WILMER CUTLER PICKERING WILLIAM G. MCELWAIN
HALE AND DORR LLP JAMAICA P. SZELIGA
60 State Street JASON A. SKINDER
Boston, MA 02109 WILMER CUTLER PICKERING

(617) 526-6000 HALE AND DORR LLP

1875 Pennsylvania Avenue, N.W.

JAN M. CONLIN Washington, D.C. 20006
MUNIR R. MEGHJEE (202) 663-6000
IFBILED
CYRUS A. MORTON U.S.COURTOFAPPEALS
FOR
THEFEDERAL
CtRCUff
ROBINS, KAPLAN, MILLER & CIRESI LLP
2800 LaSalle Plaza NOV1 6 7010
800 LaSalle Avenue
Minneapolis, MN 55402-2015 JANflORBALY
(612) 349-8500 CLERK

November 16, 2010

 CERTIFICATE OF INTEREST

Counsel for Defendants-Appellants Medtronic Sofamor Danek USA, Inc.

and Medtronic Sofamor Danek, Inc. certifies the following:

1. The full name of every party or amicus represented in this appeal is:

Medtronic Sofamor Danek USA, Inc.

Medtronic Sofamor Danek, Inc.

2. The names of the real parties in interest represented in this appeal are:

Medtronic Sofamor Danek USA, Inc.

Medtronic Sofamor Danek, Inc.

3. The names of all parent corporations and any publicly held companies
that own 10 percent of the party represented are:

Medtronic, Inc.

4. The names of all law firms and the partners and associates that are
expected to appear in this appeal for Defendants-Appellants Medtronic Sofamor
Danek USA, Inc. and Medtronic Sofamor Danek, Inc. are:

WILMER CUTLER P1CKERING HALE AND DORR LLP: Seth P. Waxman,

William G. McElwain, Mark C. Fleming, Jamaica P. Szeliga, Jason A.
Skinder

ROBINS, KAPLAN, MILLER & CIRESI LLP: Jan M. Conlin, Munir R. Meghjee,
Cyrus A. Morton

The following law firms and counsel formerly appeared for Defendants-
Appellants Medtronic Sofamor Danek USA, Inc. and Medtronic Sofamor Danek,
Inc. in the district court in prior phases of the case:

ROBtNS, KAPLAN, MILLER & CIRESI LLP: Sharon E. Roberg-Perez, Marta M.

Chou, Robert L. Schug*

BAKER, DONELSON, BEARMAN CALDWELL _ BERKOW1TZ, P.C.: Grady M.

Garrison, John R. Branson

-i-
 McKOOL SMITH, P.C.: Robert A. Auchter*, Dirk D. Thomas*

SUGHRUE MION PLLC: Chandran B. Iyer*

BUTLER SNOW O'MARA STEVENS & CANADA, PLLC: Eric E. Hudson*

*No longer associated with the case

Dated: November 16, 2010

- ii -
 TABLE OF CONTENTS
Page

CERTIFICATE OF INTEREST ................................................................................. i

TABLE OF AUTHORITIES .................................................................................... iv

INTRODUCTION ..................................................................................................... 1

ARGUMENT ............................................................................................................. 3

I. THE PANEL PROPERLY CONCLUDED THAT SYNTHES SPINE FAILED

TO CARRY ITS BURDEN OF PROVING STANDING .............................................. 3

II. THE PANEL PROPERLY REJECTED SSI's LOST PROFITS CLAIM ON

THE MERITS .................................................................................................... 10

CONCLUSION ........................................................................................................ 15

CERTIFICATE OF SERVICE

°.°
- 111 -
 TABLE OF AUTHORITIES

CASES
Page(s)

Anascape, Ltd. v. Nintendo of America, Inc., 601 F.3d 1333 (Fed. Cir.),
cert. denied, 2010 WL 3417304 (U.S. Nov. 1, 2010) ..................................... 9

Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984) .................... 8

Datascope Corp. v. SMEC, Inc., 962 F.2d 1043 (Fed. Cir. 1992) ............................. 7

Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d 1323

(Fed. Cir. 2001) .............................................................................................. 13

Kalman v. Berlyn Corp., 914 F.2d 1473 (Fed. Cir. 1990) ..................................... 6, 7

Mars, Inc. v. Coin Acceptors, Inc., 527 F.3d 1359 (Fed. Cir. 2008) ......................... 3

Poly-America, L.P. v. GSE Lining Technology, Inc., 383 F.3d 1303

(Fed. Cir. 2004) ................................................................................ 5, 7, 10, 14

Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed. Cir. 1995) ......................... passim

Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) ......................... 6

WMS Gaming Inc. v. International Game Technology, 184 F.3d 1339

(Fed. Cir. 1999) .......................................................................................... 3, 15

RULES

Fed. R. App. P. 35(a) ................................................................................................. 3

Fed. R. Civ. P. 50(e) ................................................................................................... 9

OTHER AUTHORITIES

Moore's Federal Practice (3d ed. 1997) ................................................................. 13

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 At the Court's request, Defendants-Appellants hereby respond to Plaintiffs-

Appellees' petition for rehearing and rehearing en bane.

INTRODUCTION

Plaintiffs' petition for rehearing does not identify any point supposedly

overlooked or misunderstood by the panel. Instead, it rehashes two arguments that

the panel soundly rejected after they were fully aired in briefing_ at oral argument,

and in post-argument letters. The panel's opinion is entirely consistent with the

precedents it cited, many of which Plaintiffs do not even discuss. The supposed

intra-circuit conflicts that Plaintiffs attempt to manufacture do not, in fact, exist.

The petition should be denied in its entirety.

1. Plaintiffs do not dispute that, to carry their burden of proving that

Synthes Spine Company, L.P. had standing to sue as a plaintiff, they were required

to show that Synthes Spine held an exclusive license to the patent. But as the panel

concluded after careful analysis of the evidence, "[n]othing in the record shows

that [patentee] SSI would be prohibited from licensing the '071 patent to a third

party, should it so desire." Op. 23. Rather, SSI's corporate designee stated only

that an "understanding" based on "the way we're structured today" (A 13591 )

meant that SSI could not license the patent "outside of the corporate web" (id.).

But he did not suggest that SSI was barred from licensing other entities within the

Synthes conglomerate, or that the organizational structure "today" included a past

or continuing promise that Synthes Spine would have a right to exclude others.

The panel did not announce any new "elevated standard of proof." Pet. for Reh'g

1. Rather, it applied the settled principle that "The grant of a bare license to sell an

invention in a specified territory, even if it is the only license granted by the

patentee, does not provide standing without the grant of a right to exclude others."

Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1553 (Fed. Cir. 1995) (en banc).

2. The petition's second claim of error rests on a misreading of the panel's

opinion. The panel nowhere held, nor did Medtronic argue, that "an award of lost

profits damages to a patentee is 'jurisdictional.'" Pet. for Reh'g 1; see generally

id. at 11-13. The petition confuses the panel's ruling regarding SSI with its ruling

regarding Synthes Spine. Synthes Spine--like its publicly-traded corporate parent

Synthes, Inc.--lacks standing to sue on the '071 patent at all, regardless of the

remedy sought. Op. 24 ("Medtronic is challenging the standing of Synthes, Inc.

and Synthes Spine to bring suit on the '071 patent." (emphasis added)). _ But the

panel never suggested that SS1, the patentee, lacked standing to sue. Rather, SSI's

claim for lost profits failed on the merits because of the "undisputed" fact that it

"does not itself sell any products." Op. 24. SSI's real argument is that the panel

should have ruled that Medtronic waived its objection. But as Medtronic explained

n SSI does not challenge the panel's ruling that Synthes, Inc. lacked standing. Op.
22. Nor does SSI challenge the rulings that the O-May devices do not infringe,
that infringement was not willful, and that SSI is not entitled to attorney's fees.

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in detail to the panel, and explains again here, Medtronic promptly and repeatedly

objected to SSI's claim for lost profits, and the district court and SSI acknowledged

that the matter was preserved--facts that amply distinguish the "stipulat[ion]" in

WMS Gaming lnc. v. International Game Technology, 184 F.3d 1339, 1361 (Fed.

Cir. 1999). Furthermore, Medtronic's preservation of its objection on this record is

fact-specific; it does not affect "uniformity of the court's decisions," nor is it an

issue of"exceptional importance." Fed. R. App. P. 35(a).

ARGUMENT

I. THE PANEL PROPERLY CONCLUDED THAT SYNTHES SPINE FAILED TO

CARRY ITS BURDEN OF PROVING STANDING.

Plaintiffs do not quarrel with the panel's recognition--based on settled

law--that "' [o]nly a patent owner or an exclusive licensee can have constitutional

standing to bring an infringement suit.'" Op. 21 (quoting Mars, lnc. v. Coin

Acceptors, lnc., 527 F.3d 1359, 1367 (Fed. Cir. 2008)). Nor do they deny that, to

claim the right to sue as an exclusive licensee, Synthes Spine bore the burden of

proving not only "'the right to practice the invention within a given territory, but

also the patentee's express or implied promise that others shah be excluded from

practicing the invention within that territory as well.'" Id. (quoting Mars, 527 F.3d

at 1368) (emphasis added); see also Rite-Hite, 56 F.3d at 1552 (same).

In this case, "SSI acknowledge[d] that there is no agreement, either oral or

written, between SSI and Synthes Spine with respect to the '071 patent." Op. 22.

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Indeed, SSI's counsel stated that SSI "has not undertaken any licensing efforts on

the '071 patent." A14346. And SSI's Chairman Robert Donohue--in a deposition

that occurred only after Medtronic moved to compel--admitted that he could not

identify "any document or anything in writing that would indicate that [an

agreement] even exists [or] that would refer to it in any way." A13588. Although

Mr. Donohue attempted to describe Synthes Spine as having an "exclusive license"

(e.g. A13586), he could not explain the terms of the license, who participated in

making it, or any consideration given for it. A13587; A13590. The most he could

say was: "I--I think the way I would characterize it, there's--there's an

understanding between the organizations" (A13586), and that the understanding

was "on the premise of the way the company is organized" (A13587).

Even taking everything Mr. Donohue said as true, he did not testify that SSI

has "promise[d] that others shall be excluded from practicing the invention," which

is what this Court has ruled is required to create an exclusive license. Rite-Hite, 56

F.3d at 1552. On the contrary, when asked whether SS1 retained the right to

license the patent to other entities, Mr. Donohue answered: "I would say outside of

the corporate web, no" (A13591)--thus failing to rule out licenses to other entities

inside the "corporate web." Moreover, Mr. Donohue made clear that his opinions

about what SSI could and could not do were based on "the way we're structured

today." Id. (emphasis added). Accordingly, the most Mr. Donohue's testimony

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could establish was that, as of that moment, SSI had not licensed the patent to any

other entity. That is far different from an exclusive license, which carries with it a

promise that no other licenses will be given in the future and that the licensee has

the right to exclude others from practicing the patent. As the en banc Court ruled,

"[t]he grant of a bare license to sell an invention in a specified territory, even if it is

the only license granted by the patentee, does not provide standing without the

grant of a right to exclude others." Rite-Hite, 56 F.3d at 1553.

The panel's decision is reinforced by SSI's admission that, whatever other

rights it may have licensed to Synthes Spine, Synthes Spine does not have the right

to sue for patent infringement. A14075 ("SSI has retained the right to sue");

A 14104 (same). A company with no right to sue on the patent necessarily lacks

standing to bring an infringement suit. See, e.g., Poly-America, L.P. v. GSE Lining

Tech., Inc., 383 F.3d 1303, 1311 (Fed. Cir. 2004) ("[A] licensee generally may not

sue for damages unless it has exclusive rights under a patent, including the right to

sue." (emphasis added)); Rite-Hite, 56 F.3d at 1553 (dismissing plaintiffs for lack

of standing because they had no "right to sue").

SSI asserts that the panel somehow imposed "special, heightened

requirements to prove the existence of an implied license." Pet. for Reh'g 3. Not

so. The panel simply held that the evidence in this case was insufficient to

carry Synthes Spine's burden to show that SSI gave it an exclusive license. See

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Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 104 (1998) ("[T]he party

invoking federal jurisdiction bears the burden of establishing its existence."). The

panel certainly did not rule out the possibility that, in another case, the behavior of

related corporate parties could justify an inference that the patentee had impliedly

licensed the patent exclusively. The mere fact that the parties' structure "today"

results in an "understanding" that there is only one licensee (A1359 l), however,

has never been considered enough to infer a promise of exclusivity or a right to

exclude. Rite-Hite, 56 F.3d at 1553. 2

Contrary to SSI's argument, the panel's opinion does not conflict with

Kalman v. Berlyn Corp., 914 F.2d 1473 (Fed. Cir. 1990). Kalman involved an

individual inventor-patentee who licensed a patent to a close corporation of which

he and his brother were the 50% owners and sole directors. Id. at 1475-1476. The

Court ruled that, "when the nexus between the sole licensee and the patentee is so

clearly defined as here, the sole licensee must be recognized as the real party in

interest." Id. at 1482. But the Court has never extended that reasoning, closely

tied to the context of an individual inventor and his closely-held corporation, to a

large conglomerate like Synthes, Inc. and its reticulated network of subsidiaries

and affiliates--a structure that SSI's witness called "a very complex organization"

2 SSI asserts, without citation, that there was a "longstanding course of conduct as
to the patent-in-suit." Pet. for Reh'g 8. Such "conduct" might be relevant in cases
where it is proven, but SSI points to no evidence that it existed here.

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that would take "a few hours" to explain. A13586. Rather, this Court has

indicated the exact opposite: companies that "arrange[] their corporate identities

and functions to suit [their] own goals and purposes ... must take the benefits with

the burdens." Poly-America, 383 F.3d at 1311. This case demonstrates the

correctness of holding sophisticated corporate entities to the consequences of their

chosen structure: otherwise, nothing would prevent a conglomerate from

describing its organization as giving rise to an exclusive license "today" (A13591),

but taking a contrary view tomorrow if its interests suited. 3

SSI criticizes the panel for "not say[ing]" how SSI could have proven "an

intra-family implied license." Pet. for Reh'g 5. But this Court has been clear since

1996 as to what is required to prove exclusivity: a "promise that others shall be

excluded from practicing the invention." Rite-Hite, 56 F.3d at 1552. A written

contract is the easiest way to prove such a promise, but promises can also be

proven through circumstantial evidence. For instance, a patentee's statement that it

3 Even ifKalman could be read to adopt a broad rule that a bare license to one
party compelled an inference of an exclusive license, such reasoning cannot
survive the en banc decision in Rite-Hite, which made plain that a "bare license ...,
even if it is the only license granted by the patentee, does not provide standing
without the grant of a right to exclude others." 56 F.3d at 1553. SSI'cites two
cases that "cited Kalman with approval" (Pet. for Reh'g 6), but neither discussion
involved standing. See Rite-Hite, 56 F.3d at 1550 (citing discussion of the entire
market value rule); Datascope Corp. v. SMEC, Inc., 962 F.2d 1043, 1047 (Fed.
Cir. 1992) (affirming denial of leave to add a defendant due to undue delay and
prejudice; distinguishing Kalman on its facts).

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was powerless to license another entity, or internal documents referencing the

inability of other entities to manufacture patented products, would arguably

support a claim of an implied promise. The panel opinion did not rule out the

inference of an "actual agreement" in such circumstances (Op. 23); it simply ruled

that the party seeking to invoke federal jurisdiction must prove that the promise is

"actual," not fictional, and that Synthes Spine failed to carry that burden here. 4

SSI next asserts that the district court made "factual findings" that "credited"

Mr. Donohue's assertion that Synthes Spine had an exclusive license. Pet. for

Reh'g 9. What SSI now calls "findings" are simply sentences in the "Background"

section of a cursory order denying the parties' cross-motions in limine as moot.

A14403-14404. SS] revealingly did not suggest in its merits brief that that order

contained any "factual findings" regarding license exclusivity. SSI's newfound

4 SSI claims, citing nothing, that "businesses across the nation ... commonly
depend on implied exclusive licenses as a key tool in operating the entities and
managing the patent holdings of the corporate family." Pet. for Reh'g 7. Even if
that is true, SSI offers no reason to believe that those businesses face any hardship
from the settled requirement that, if a non-patentee entity wishes to sue for
infringement, it must prove that it received a "promise" of exclusivity and cannot
simply rely on the fact that it currently holds "the only license granted by the
patentee." Rite-Hire, 56 F.3d at 1552, 1553.

The panel's opinion does not conflict with the general observation that
affiliated companies have a "unity of interest." Copperweld Corp. v. Independence
Tube Corp., 467 U.S. 752, 771 (1984). On the contrary, it is precisely because a
conglomerate like Synthes "has complete power" to reorganize at will (id. at 772)
that an arrangement based on the corporate organization that exists "today" will
not necessarily carry the burden of proving a "promise" not to license others.

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interpretation is belied by the district court's subsequent conduct: the court

received Medtronic's offer of proof on the subject (A 15595-15601), acknowledged

that the matter was "re-raised" as part ofMedtronic's pre-verdict JMOL motion

(A15543), and ultimately "decline[d] to address the merits" of Medtronic's

objection to Synthes Spine's standing (A 178)---actions that would have made no

sense had the court already resolved the "merits" of the argument by finding that

Synthes Spine held an exclusive license. 5

Finally, the panel was not required to remand for "limited proceedings" (Pet.

for Reh'g 10)--an outcome SSI never sought, despite discussing Synthes Spine's

standing in detail in its brief, at oral argument, and in a post-argument letter. Cf

Fed. R. Civ. P. 50(e) ("the prevailing party may, as appellee, assert grounds

entitling it to a new trial"). Even in the petition for rehearing, Plaintiffs do not

point to any other evidence or facts that they would submit during such a

proceeding that would supposedly demonstrate an "exclusive license" for Synthes

Spine, an issue on which Plaintiffs bear the burden of proof. Accordingly, the

panel was well Within its rights in "direct[ing] the entry ofjudgmenf' on this issue.

See id.

5 Moreover, even if the district court had made a "finding" of an exclusive license
based on Mr. Donohue's testimony, the panel would have been justified in
concluding that the testimony was "not supported by any evidence at all" and thus
insufficient to support a finding. Anascape, Ltd. v. Nintendo of Am., Inc., 601 F.3d
1333, 1339 (Fed. Cir.), cert. denied, 2010 WL 3417304 (U.S. Nov. 1, 2010).

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II. THE PANEL PROPERLY REJECTED SSrs LOST PROFITS CLAIM ON THE
MERITS.

With respect to SSI itself, the patentee, the panel ruled that no lost profits

were available because "lilt is undisputed that SSI does not itself sell any products.

Therefore, SSI is not entitled to any lost profits damages." Op. 24 (citing Poly-

America, 383 F.3d at 1311). SSI does not challenge that ruling on the merits;

indeed, it does not even cite, much less take issue with, Poly-Ameriea.

Instead, SSI repeatedly disparages the panel for supposedly

"mischaracteriz[ing] the issue as 'jurisdictional.'" Pet. for Reh'g 3; see also id. at

12 ("[T]he panel did mislabel entitlement to lost profits as "'jurisdictional.'"). But

it is SSI's description of the panel opinion that is the mischaracterization. The

panel opinion makes clear that the standing issue affects only the two non-patentee

entities that SSI sought to add as co-plaintiffs shortly before trial. Op. 24

("Medtronic is challenging the standing of Synthes, Inc. and Synthes Spine to bring

suit on the '071 patent." (emphasis added)). Contrary to SSI's assertion, the panel

nowhere stated that "an award of lost profits damages to a patentee is

'jurisdictional' and not waivable." Pet. for Reh'g 1 (emphasis added). Indeed,

Medtronic's opening brief straightforwardly acknowledged that SSI, "as the

patentholder[,] clearly has standing to sue," whereas the other two putative

plaintiffs did not. Opening Br. 53. SSI adopted this distinction in its own brief.

SSI Br. 55. Accordingly, SSI's contention that the panel treated the jurisdictional

-10-
issue as affecting SSI, instead of Synthes Spine and Synthes, Inc., is utterly

unsupported. Rather, the decision regarding SSI was a decision on the merits m

and a correct one.

Once the panel opinion is properly understood, SSI's argument for a

supposed intra-circuit conflict simply vanishes. Objections to a patentee's

recovery of lost profits are non-jurisdictional and are waivable, and the panel never

suggested otherwise. SSI's true complaint is not that the panel made a

jurisdictional ruling regarding the ability of patentees to claim lost profits--it did

no such thingmbut that, in SSI's view, the panel should have ruled that Medtronic

waived its objection to SSI's lost profits claim. Pet. for Reh'g 13-14. But the

case-specific question whether Medtronic preserved its argument here does not

merit en bane review, and SS! identifies nothing in the panel opinion that would

create "uncertainty about the manner in which district courts should evaluate

waiver." Id. at 14. Nor has SSI pointed to any fact bearing on the matter that was

not amply aired in the parties' briefs, oral argument, and post-argument letters.

Nonetheless, in the interest of completeness, Medtronic summarizes the relevant

facts once again.

The matter of SSI's relationship to its affiliates first arose when SSI's expert

claimed, without explanation, that SSI and its parent Synthes, Inc. (but not Synthes

Spine, which was not mentioned) could be treated as one. A27011 (Tollison report

-11-
referring to SSI and Synthes, Inc. as "Synthes"). Medtronic immediately sought to

test Tollison's assumption by noticing a Rule 30(b)(6) deposition. A27000;

A5393-5394. At the deposition, SSI instructed its designee not to answer whether

SSI licensed the patent to Synthes, Inc. A5394. After Medtronic moved to compel

(A5381), SSI relented. Mr. Donohue's deposition on May 9, 2008, was the first

time that SSI mentioned Synthes Spine as a purported "exclusive licensee." At that

time, however, SSI was still the only plaintiffbefore the district court.

SSI later moved to supplement Tollison's report with lost profits

calculations on behalf of SSI (again, Synthes Spine was not mentioned). A27032;

A27046. Medtronic re-raised its concern the very next week, disputing "whether

Spine Solutions is entitled to lost profits here in this case at all given they don't

make or sell the ProDisc device." A10440. Magistrate Judge Vescovo granted

SSI's motion to supplement Tollison's report, but also allowed Medtronic to

supplement its expert reports "by the trial date or as extended." A10494. On

August 26, 2008--well before trial began in November--Medtronic served a

supplemental report stating that "It is not at all clear from Mr. Donohue's

testimony or Dr. Tollison's analysis which entity is claiming it would have made

the sales allegedly lost to the accused Maverick product--but it clearly is not

[SS1]." A27086.

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 Medtronic also timely moved & limine demonstrating that SSI--still the sole

plaintiff--could not recover lost profits. A 13569- l 3577. 6 The court allowed SSI

to add Synthes and Synthes Spine as plaintiffs over Medtronic's objection.

A14404-14405; A14333-14336; A14393-14396. The parties then agreed that

Medtronic could preserve its objection via an offer of proof. See Op. 5; A14395.

Medtronic submitted the offer of proof, which included evidence showing that SSI

"does not manufacture, market, or sell any of the ProDisc II products." A 15596.

Medtronic asked to "preserve our objections" on "the issue of lost profits" when it

moved for JMOL before the jury retired; the district court acknowledged that the

matter was "re-raised." A 15543; A 16486-16487. Medtronic repeated its objection

in its post-verdict JMOL motion. A21295-21297.

This evidence, which was before the panel (Reply Br. 23-27), shows that

Medtronic repeatedly "pressed" its objection to a lost profits award, thereby

preserving it. Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d 1323,

1344 (Fed. Cir. 2001) (quoting 19 Moore's Federal Practice §205.05, at 205-255

(3d ed. 1997)). SSI's petition addresses none of that history. Instead, SSI points to

its own advocacy below, which quoted isolated statements made early in the case

6 SSI's petition does not dispute that Medtronic's motion in limine was timely; nor
could it, given that SSI filed its own motion the same day. A14066-14067.

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before discovery revealed that SSI did not make or sell products. A 14075-14078.

Medtronic preserved the issue through the subsequent actions detailed above.

SSI next asserts that Medtronic somehow waived its argument when it

"declined the district court's offer to continue the trial to allow Medtronic

additional discovery" (Pet. for Reh'g 13 (citing A179; A14390-14391))---a

position SSI notably did not take before the panel. See Reply Br. 27 n. 19. The

argument is simply untenable. It is undisputed that SSI sells no products (Op. 24);

Medtronic did not need any "additional discovery" on the subject, and was

certainly not required to delay the trial in order to insist that the district court--and

later, the panel---correctly apply the settled principle that "the patentee needs to have

been selling some item, the profits of which have been lost due to infringing sales, in

order to claim ... lost profits." Poly-America, 383 F.3d at 1311 (quoted at Op. 24).

Finally, SSI's insinuation that Medtronic should have raised the matter at

trial (Pet. for Reh'g 13-14) is utterly disingenuous. It was SSI that objected to

putting the matter to the jury, though Medtronic was prepared to do so. A14391-

14393. SSI instead agreed that Medtronic's offer of proof would "preserve the

record outside the presence of the jury." A14393; see also A14395 (agreeing that

Medtronic could raise its objection "after they make their offer of proof and

preserve the record"). The district court agreed. A14395 ("Okay."). Medtronic

- 14-
did not waive its position by following the procedure that all agreed would

"preserve the record."

This case accordingly differs significantly from WMS Gaming Inc. v.

International Game Technology, 184 F.3d 1339 (Fed. Cir. 1999), where the

defendant "stipulated in a pretrial order" that the patentee manufactured the

relevant products; later, when the defendant tried to contend that a separate

subsidiary manufactured the products, the Court presumed that the manufacturing

subsidiary had standing to sue and could have been joined as a plaintiff without

prejudice to the defendant. Id. at 1361. Here, by contrast, Medtronic never

stipulated that SSI manufactured anything; rather, it is undisputed that SSI

manufactures nothing. Op. 24. And unlike the manufacturing subsidiary in WMS,

Synthes Spine lacks standing to sue and so could not have been joined as a plaintiff.

The panel did not directly address this evidence, but it was not required to.

The record gave it ample basis to decide that Medtronic preserved the matter for

appeal, with SSI's contrary arguments resting only on a partial and misleading

presentation of the procedural history of the case. SSI has pointed to no

misapprehended fact or principle, and its disagreement with the panel's fact-

specific and manifestly correct outcome does not warrant en banc review.

CONCLUSION

The petition for rehearing and rehearing en banc should be denied.

-15-
 Resp_tfully submitted, _

MARK C. FLEMING SETH'P._WA_IAN

WILMER CUTLER PICKERING WILLIAM G. MCELWAIN
HALE ANDDORR LLP JAMAICA P. SZELIGA
60 State Street JASON A. SKINDER
Boston, MA 02109 WILMER CUTLER PICKERING
(617) 526-6000 HALE AND DORR LLP

1875 Pennsylvania Avenue, N.W.

JAN M. CONLIN • Washington, D.C. 20006
MUN1R R. 1VIEGHJEE (202) 663-6000
CYRUS A. MORTON
ROBINS, KAPLAN, MILLER & CIRES1 LLP
2800 LaSalle Plaza
800 LaSalle Avenue
Minneapolis, MN 55402-2015
(612) 349-8500

November 16, 2010

 CERTIFICATE OF SERVICE

I hereby certify that on this 16th day of November, 2010, I caused two

copies of the foregoing Response of Defendants-Appellants Medtronic Sofamor

Danek USA, Inc. and Medtronic Sofamor Danek, Inc. to Petition for Rehearing

and Rehearing En Banc to be served via overnight courier at the following address:

JEFFREYM. OLSON
PAUL H. MEIER
ROBERT A. HOLLAND
SEAN A. COMMONS
SIDLEY AUSTIN LLP
555 West Fifth Street, 40th Floor
Los Angeles, CA 90013
(213) 896-6000

WILLIAM G. MCELWAIN