Patent Infringement Suit Against American Hospital Supply : Judge Awards Pfizer $44 Million

A federal judge in Los Angeles has awarded Pfizer Inc. $44.7 million in damages, interest and legal fees in the drug giant’s 6-year-old patent infringement suit against American Hospital Supply Corp., an archrival in the mechanical-lung market.

The award, involving Orange County-based subsidiaries of the two medical companies, was made Monday by U.S. District Judge Wallace Tashima and is believed to be among the largest judgments in U.S. patent history stemming from a jury verdict. It represents $35 million in damages--double the $17.5 million originally awarded in October by a Los Angeles jury--plus $8.8 million in interest and $800,000 in attorney fees, according to John Kidd, attorney for New York-based Pfizer.

In reviewing the jury’s finding that Evanston, Ill.-based American Hospital Supply had infringed the patent, Tashima ruled that the company had done so in a manner that was “wanton and willful,” Kidd said. That finding entitled the judge to triple the jury’s award, but he chose only to double it.

Kidd said the judge also issued an injunction forbidding American Hospital Supply from selling any products using the patent. It is unclear whether recent modifications to American Hospital Supply’s heart and lung machines will allow the company to continue to sell the products.

Officials at Chicago-based American Hospital Supply were unavailable for comment late Tuesday but said in October that they would appeal if the judge ruled against the company.

The patent suit, filed in 1978, alleged that Bentley Laboratories Inc., an Irvine subsidiary of American Hospital Supply, knowingly used technology for a heat transfer device that is patented by Shiley Inc., a Pfizer subsidiary also in Irvine.

The heat device is used in mechanical lungs to cool and rewarm blood during open heart surgery.

Worldwide sales of mechanical heart and lung machines totaled $210 million in 1983. According to Biomedical Business International Inc., a market research firm in Tustin, Bentley had 35%, or $73.5 million, of those sales, making it first in the market. Shiley had about 9.5%, or about $20 million, placing it third.

Monday’s award equals about 25% of the annual profits of American Hospital Supply, or about five years of Bentley’s profits, BBI estimated. If American Hospital loses a court appeal and has to pay the award, a spokesman for BBI said, “it’s not great, but it won’t wipe the company out by any stretch of the imagination.”