41051897.1 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF INDIANA 

SOUTH BEND DIVISION 

CERAMEDIC LLC, 

 Plaintiff/Counterclaim-Defendant, 

v. 

BIOMET, INC., 

 Defendant/Counterclaim-Plaintiff. 

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Civil Action No. 3:14-cv-1689 

DEFENDANT BIOMET’S UNOPPOSED MOTION TO STAY 

Defendant Biomet moves to stay this case pending resolution of the related case against 

CeramTec—the manufacturer and sole supplier of the material plaintiff CeraMedic accuses of 

infringing. Biomet and other medical device companies buy and resell components with the 

accused CeramTec material as part of medical implants. CeraMedic sued CeramTec and four of 

its customers in three different forums for infringement of the same patent based entirely on the 

accused CeramTec material. This Court should use its inherent powers to stay this customer suit, 

pending resolution of the related manufacturer suit, because the lawsuit against CeramTec will 

eliminate or simplify the issues involving Biomet without prejudicing CeraMedic, all while 

promoting judicial economy and avoiding potential inconsistent rulings. 

CeraMedic does not oppose the motion to stay in this suit or in any of the customer suits 

so that the patent dispute may be litigated between the real parties in interest in a single suit 

against the manufacturer CeramTec. 

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Background 

CeraMedic sued Biomet for infringement of its patent for a ceramic material used in 

medical implants. Complaint, Doc. 1 at ¶ 6. CeraMedic limits its claim of infringement to 

Biomet products with BIOLOX delta ceramic material. Id. at ¶¶ 8-11, 14, 18-20. 

The accused BIOLOX delta material is manufactured by CeramTec. Id. at ¶ 7. 

CeramTec is an innovator in the field of medical ceramics and a leading supplier of ceramic 

components for joint replacements. When joints are damaged by arthritis or excessive wear, the 

joint may be replaced with a prosthesis. CeramTec developed the BIOLOX delta ceramic 

material for the components that continuously rub against each other in a joint prosthesis. 

CeramTec sells these ceramic components to medical 

device companies like Biomet. The medical device companies 

combine the CeramTec ceramic components with other 

components to create the final prosthesis. For example, 

CeramTec manufactures a ceramic cap and ball for medical 

device companies to combine with a metal shell and stem used 

in hip replacements. 

CeraMedic has sued CeramTec for infringement of the same patent asserted in this case. 

Complaint, Ex. 1 at ¶ 5. As in the Biomet complaint, CeraMedic limits its claim of infringement 

against CeramTec to the BIOLOX delta material. Id. at ¶¶ 19-25. Although the lawsuit was 

originally filed in South Carolina, the parties have agreed to a procedure where the case against 

CeramTec will be refiled in this District. 

CeraMedic has sued other BIOLOX delta customers for infringement in this district and 

elsewhere. In this district, CeraMedic has sued CeramTec customers Zimmer and DePuy. 

Complaints, Exs. 3 and 4. CeraMedic has also sued CeramTec customer Smith & Nephew in the 

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Western District of Tennessee. Complaint, Ex. 5. In all customer cases, CeraMedic accuses the 

medical device company of infringing the same claims of the same patent under 35 U.S.C. 

§ 271(a) through making, using, offering to sell, selling, and/or importing medical implants using 

BIOLOX delta ceramic material from CeramTec and 35 U.S.C. § 271(g) through importing, 

using, and selling products that incorporate BIOLOX delta. Compare Infringement Contentions, 

Exs. 6-9 at p. 1 of each. 

CeraMedic filed the customer suits between June 27 and August 1 of this year, and each 

case is still in its infancy. Each customer defendant has answered and CeraMedic has served 

preliminary infringement contentions on each customer defendant, but no further activities have 

taken place. The parties have not yet met under Rule 26(f) for their initial conference. 

CeramTec has agreed to indemnify all of the customer defendants, including Biomet, 

against CeraMedic’s patent infringement claims involving BIOLOX delta. The same counsel 

represents CeramTec and each of the customer defendants. 

Biomet has agreed to be bound by infringement and validity determination in the case 

against the manufacturer CeramTec if this Court stays this action pending resolution of the 

manufacturer case. 

Each of the customer defendants has filed a similar unopposed motion to stay their case 

pending resolution of the related patent case against the manufacturer CeramTec. 

Argument 

The Court should stay this and the other two customer suits before it pending resolution 

of the related lawsuit against the manufacturer CeramTec in South Carolina. Resolution of the 

manufacturer case will resolve all issues related to the customers through res judicata, consent, or 

patent exhaustion. CeramTec, as the manufacturer of the accused components and indemnifier 

of the customer defendants, possesses the knowledge and incentive to defend this case. Staying 

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the customer suits will conserve judicial resources by eliminating the need to proceed with 

multiple cases in multiple forums that might produce inconsistent results. Finally, the concept of 

the “customer suit” exception in patent litigation favors proceeding with the lawsuit against the 

manufacturer while staying the related litigation against the customers like Biomet. 

A. Courts favor staying customer patent suits pending resolution of the related 

manufacturer suit 

Courts possess the inherent power to stay overlapping litigation for the sake of judicial 

economy. Landis v. N. Am. Co., 299 U.S. 248, 254 (1936) (“[T]he power to stay proceedings is 

incidental to the power inherent in every court to control the disposition of the causes on its 

docket with economy of time and effort for itself, for counsel, and for litigants.”). When 

deciding whether to grant a stay, courts balance the competing interests of the parties and the 

interest of the judicial system. Id. at 254-55. In this district, courts often consider the following 

factors when deciding whether to stay an action: (1) whether a stay will simplify the issues in 

question and streamline the trial (2) whether a stay will unduly prejudice or tactically 

disadvantage the non-moving party, (3) whether a stay will reduce the burden of litigation on the 

parties and on the court, and (4) whether the litigation is at an early stage. Tonn & Blank 

Constr., LLC v. Sebelius, 968 F. Supp. 2d 990, 993 (N.D. Ind. 2013) (citations omitted). See also

Benge v. Eli Lilly & Co., 553 F. Supp. 2d 1049, 1050 (N.D. Ind. 2008) ("(1) potential prejudice 

to the non-moving party; (2) hardship and inequity to the moving party if the matter is not 

stayed; and (3) economy of judicial resources.") (citations omitted). 

In patent litigation, courts use their power to stay customer suits and proceed with related 

cases against the manufacturer. While courts often proceed with the first filed action and stay 

related subsequent suits, the “customer suit” exception favors proceeding with a later filed 

manufacturer patent suit while staying earlier filed customer suits. Katz v. Lear Siegler, Inc., 909 

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F.2d 1459, 1464 (Fed. Cir. 1990) (affirming stay of customer patent suits pending later filed 

patent suit involving manufacturer of accused infringing goods). Under the customer suit 

exception, infringement suits involving the manufacturer of allegedly infringing goods take 

precedence over similar suits against the manufacturer’s customers. Id. The manufacturer is 

“the true defendant in [a] customer suit” because the “manufacturer must protect its customers, 

either as a matter of contract, or good business, or in order to avoid the damaging impact of an 

adverse ruling against its products.” Codex Corp. v. Milgo Elecs. Corp., 553 F.2d 735, 737-38 

(1st Cir.), cert. denied, 434 U.S. 860 (1977) (cited by Katz, 909 F.2d at 1464). 

Courts prefer to stay customer patent suits to “facilitate just, convenient, efficient, and 

less expensive determination.” See In re Nintendo of Am., Inc., 756 F.3d 1363, 1365-66 (Fed. 

Cir. 2014) (citations omitted) (ordering the district court on mandamus to sever and transfer the 

action against the manufacturer of the alleged infringing goods while staying the related 

customer suits). A primary consideration for staying the customer suits is whether the 

manufacturer, as the true defendant in the customer suit, can resolve or simplify the case against 

the customers through litigating the manufacturer suit. Katz, 909 F.2d at 1464 (“Although there 

may be additional issues involving the defendants in the [customer] action, their prosecution will 

be advanced if [the patent owner] is successful on the major premises being litigated in [the 

manufacturer case], and may well be mooted if he is unsuccessful.”). 

B. Staying the customer suits will allow the manufacturer suit to simplify or eliminate the 

claims against the customer defendants 

Resolution of CeraMedic’s claims against the manufacturer CeramTec will resolve most, 

if not all, of the issues against the customers. For example, if the manufacturer succeeds in its 

defenses of invalidity, then CeraMedic may not assert its patent against any CeramTec customer 

because collateral estoppel prevents CeraMedic from getting a second bite at the apple on these 

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common issues that it already lost. Blonder–Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 

313, 350 (1971) (finding that collateral estoppel from prior determination of invalidity may 

prevent patent owner from later asserting patent against other infringers). 

As another example, if CeraMedic settles the manufacturer suit and licenses CeramTec, 

then CeraMedic still could not pursue additional compensation from the customers for authorized 

sales under the United States patent rights granted by the license because the manufacturer 

license exhausts the patent rights against later use or resale of the licensed product by others. See 

Intel Corp. v. ULSI Sys. Tech., Inc., 995 F.2d 1566, 1568 (Fed. Cir. 1993) (finding that the sale 

of products manufactured by a licensee exhausts the patent owner’s rights with respect to those 

products). 

Even if the manufacturer suit does not somehow resolve all the issues against the 

customers, the suit against CeramTec at least will reduce and simplify any remaining issues. The 

customers have agreed to be bound by the determinations of infringement and validity of the 

patent in the CeramTec case, contingent on a stay of the customer suits. As a result, most, if not 

all, of the relevant issues will be resolved by the manufacturer suit. Katz, 909 F.2d at 1464 

(staying case against customers even when there may be additional issues not addressed in the 

manufacturer suit). 

Accordingly, a stay of the customer suits will allow the lawsuit against manufacturer 

CeramTec to eliminate or simplify any remaining issues against the customer defendants, 

thereby avoiding the harm to the customer defendants resulting from having to participate in 

unnecessary and duplicative litigation. 

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C. Staying the customer suits will not unduly prejudice or tactically disadvantage 

CeraMedic 

A stay of the customer suits will not prejudice CeraMedic. CeraMedic will be able to 

pursue the same patent claims against the manufacturer of the accused infringing ceramic 

products from the customer suits. As discussed above, the case against CeramTec should fully 

compensate CeraMedic for any alleged harm for the resale of the BIOLOX delta components by 

the customer defendants. If for some reason CeraMedic has a claim for additional compensation 

against the customer defendants after the manufacturer suit, CeraMedic still would be allowed to 

pursue those claims, but with most issues already resolved or simplified. Further, CeraMedic 

agreed not to oppose the motion to stay in this and the other customer suits. 

D. Staying the customer suits will conserve resources and avoid inconsistent rulings 

This Court can promote judicial efficiency by staying the multiple customer suits in favor 

of the single suit against the manufacturer. CeraMedic is currently pursuing five different 

lawsuits in three different forums involving the same BIOLOX delta ceramic material. Left 

unabated, the parties could face different deadlines and disclosure requirements in different 

forums. The parties would have to brief the same issues—like claim construction, infringement, 

and invalidity—possibly in different courts. The customer defendants would face the rigorous 

discovery obligations placed on a party to a lawsuit, even though they have little to add to the 

dispute. With a stay of the customer suits, the true parties in interest, CeraMedic and CeramTec, 

can more efficiently address the issues common to all defendants in a single forum. 

A stay would also avoid the potential of inconsistent rulings from different courts. For 

example, the court must construe the terms of the patent claims as a question of law as the first 

step of any infringement or invalidity analysis. Markman v. Westview Instruments, Inc., 517 

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U.S. 370, 384-91 (1996). If the three courts construe the claim terms in different ways, then the 

parties would be left to struggle with the results of inconsistent rulings across different forums. 

By staying all but the single suit against the manufacturer, the parties and courts can 

avoid the harms caused by unnecessary litigation and inconsistent rulings. 

E. The “customer suit” exception favors staying this action because the manufacturer is 

the true defendant 

In patent litigation, the customer suit exception has developed to favor the patent suit 

against the manufacturer over related suits against customers and resellers of the accused 

products. Katz, 909 F.2d at 1463-64. While the analysis of applying the customer suit exception 

largely overlaps with the traditional analysis used in this district for staying cases in general, 

whether to apply the customer suit exception additionally depends in part on identifying the “true 

defendant” of the patent dispute. Id. at 1464 (citation omitted). 

CeramTec, as the manufacturer, is the “true defendant” for the claims against its 

customers. CeraMedic targets only BIOLOX delta products in its lawsuits. Infringement 

Contentions, Exs. 6-9 at p. 1 of each. CeramTec is the only source for BIOLOX delta. 

CeramTec naturally has a business incentive to defend and handle the patent infringement 

allegations. Further, CeramTec has agreed to indemnify and defend the customer defendants 

from the patent infringement claims asserted by CeraMedic. CeramTec bears the greatest 

financial and business incentive to defend this dispute. 

The customers are mere resellers of the asserted invention. While the customer 

defendants often combine the BIOLOX delta components with other components to create the 

final medical implant, the asserted claims are limited to the material itself and not the final 

medical implants sold by the customer defendants. CeraMedic’s asserted patent claims are 

limited to the ceramic material and the methods of making the material. Infringement 

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Contentions, Exs. 6-9 at p. 1 of each (asserting claims 7, 11, 14, and 26); Patent, Ex. 2 at col. 15-

17 (claims 7 and 11 directed to a method to create a sintered material and claims 14 and 26 

directed to a sintered material). 

CeramTec, as the manufacturer, is in a better position to defend against many of the 

asserted patent claims. CeraMedic accuses the customer defendants of infringing a method to 

manufacture the ceramic material. Infringement Contentions, Exs. 6-9 at p. 1 of each (alleging 

infringement of claims 7 and 11); Patent, Ex. 2 at col. 15 (claims 7 and 11 directed to a method 

of making a sintered material). CeramTec, not any of its customers, manufactures the accused 

ceramic material. The asserted method claims will require detailed knowledge about the 

particular steps used to manufacture BIOLOX delta, as well as detailed knowledge about the 

characteristics of certain ingredients used and intermediate mixtures created during the process. 

Patent, Ex. 2 at col. 15 (claim 7). CeramTec, not its customers, is in the best position to respond 

to these claims. 

Finally, CeramTec has positioned itself as the true defendant early in this case. The 

parties have not met for their initial pretrial conference in the customer suits. Accordingly, the 

parties have not invested significant time or resources into the customer suits to provide reason 

to continue these litigations. 

Conclusion 

For the foregoing reasons, the Court should stay this customer suit so that the true parties 

in interest, CeraMedic and CeramTec, can more efficiently litigate and resolve the issues related 

to all of the customer defendants. 

case 3:14-cv-01689-RLM-CAN document 19 filed 10/17/14 page 9 of 11
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Dated: October 17, 2014 Respectfully submitted, 

/s/ Charles B Walker, Jr. 

John D. LaDue (19039-71) 

Erin Linder Hanig (29113-71) 

LADUE CURRAN KUEHN 

200 First Bank Building 

205 Jefferson Blvd. 

South Bend, IN 46601 

Telephone: (574) 968-0760 

Facsimile: (574) 968-0761 

jladue@lck-law.com 

elinder@lck-law.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 

peter.felfe@nortonrosefulbright.com 

charles.walker@nortonrosefulbright.com 

Counsel for Defendant 

Biomet, Inc. 

 

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Certificate of Service 

I hereby certify that on October 17, 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: 

/s/ Charles B. Walker, Jr. 

COUNSEL FOR PLAINTIFFS 

John M. Desmarais PHV 

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 

Michael J. Hays 

James M. Lewis 

TUESLEY HALL KONOPA LLP 

212 E. LaSalle Ave., Suite 100 

South Bend, IN 46617 

Telephone: (574) 232-3538 

Facsimile: (574) 232-3790 

mhays@thklaw.com 

jlewis@thklaw.com 

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