IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE ORTHOPHOENIX, LLC, Plaintiff, v. DFINE, INC.

; JOHN AND/OR JANE DOES 1-100, Defendants. COMPLAINT FOR PATENT INFRINGEMENT Plaintiff Orthophoenix, LLC (Orthophoenix) alleges as follows: PARTIES 1. Orthophoenix is a Delaware limited liability company with a principal C.A. No. ________________ JURY TRIAL DEMANDED

place of business located at 2515 McKinney Avenue, Suite 1000-B, Dallas, Texas 75201. 2. Defendant Dfine, Inc. (Dfine) is a Delaware corporation with a principal

place of business at 3047 Orchard Parkway, San Jose, California 95134. Dfine has appointed The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, as its agent for service of process. 3. Defendants John and/or Jane Does 1-100 (Does) are orthopedic

surgeons using the infringing products manufactured by Defendant Dfine. Does identities are not presently known to Orthophoenix; however, on information and belief, Defendant Dfine is in possession of documents and information from which Does identities can be readily ascertained.

JURISDICTION AND VENUE 4. This action arises under the patent laws of the United States, Title 35 of

the United States Code. Accordingly, this Court has subject matter jurisdiction under 28 U.S.C. 1331 and 1338(a). 5. This Court has personal jurisdiction over Defendant Dfine because, among

other reasons, Defendant Dfine is a corporation organized and existing under the laws of the State of Delaware. Thus, Defendant Dfine has purposefully availed itself of the benefits of the State of Delaware and the exercise of jurisdiction over Dfine would not offend traditional notions of fair play and substantial justice. 6. Venue is proper in this District under 28 U.S.C. 1391 (b)-(c) and

1400(b) because Defendant is subject to personal jurisdiction in this District. BACKGROUND 7. In 1994 Dr. Mark Reiley, an orthopedic surgeon from Berkeley,

California, Mr. Arie Scholten, an engineer and inventor of surgical products, and Dr. Karen Talmadge, a Harvard University biochemist, founded Kyphon Inc. (Kyphon). Kyphon quickly came to be recognized as the global leader in restoring spinal function through minimally invasive therapies via its innovative, and then disruptive, technology. Kyphon relentlessly pursued novel solutions and their translation into practice. Dr. Reiley performed the first balloon kyphoplasty in 1998; today, over 11,000 physicians throughout the world have been trained to perform balloon kyphoplasty. 8. Due to Kyphons dedication to developing pioneering medical

technologies, it was awarded over 500 U.S. Patents and Applications.

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Kyphon became the industry leader and Dr. Karen Talmadge, then

Executive Vice President, Co-Founder, and Chief Science Officer was given the Patient Quality of Life Award in November 2004 by the International Myeloma Foundation. This award recognized the impact of balloon kyphoplasty in helping myeloma patients with spinal fractures return to their daily lives. In the same year, Kyphon was named the top emerging medical device company in the industry by a group of 150 medical device CEOs. 10. The significant value of Kyphon and its patents is reflected in the $4.2

billion purchase price Medtronic, Inc. (Medtronic) paid for Kyphon in 2007. 11. Medtronic is a world leader in medical device technologies and therapies.

Medtronic specializes in developing and manufacturing medical device technologies and therapies to treat chronic disease worldwide. On April 26, 2013, Orthophoenix completed a transaction to acquire the Kyphon technology, which includes approximately 500 patents and applications. 12. On May 13, 2013, Orthophoenix, through its licensing agent, provided a

letter via overnight delivery service to Dfine requesting that Dfine enter into discussions regarding the technology at issue in this case. Dfine never responded. ASSERTED PATENTS 13. Orthophoenix is the owner by assignment of U.S. Patent No. 6,863,672

(the 672 patent). The 672 patent is entitled Structures And Methods For Creating Cavities In Interior Body Regions. The 672 patent issued on March 8, 2005. A true and correct copy of the 672 patent is attached hereto as Exhibit A.

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Orthophoenix is the owner by assignment of U.S. Patent No. 6,440,138

(the 138 patent). The 138 patent is entitled Structures and Methods For Creating Cavities In Interior Body Regions. The 138 patent issued on August 27, 2002. A true and correct copy of the 138 patent is attached hereto as Exhibit B. COUNT I (Infringement of U.S. Patent No. 6,863,672) 15. Orthophoenix references and incorporates by reference paragraphs 1

through 14 of this Complaint. 16. Defendants Does have been and still are infringing at least Claim 11 of the

672 patent, literally and under the doctrine of equivalents, by using, without license or authority, surgical instruments including, but not limited to, the VertecoR MidLine Navigational Osteotome Does purchased from Dfine, in the manner instructed and taught by Dfine, and in the manner for which the VertecoR MidLine Navigational Osteotome is approved for use by the FDA. 17. Dfine has been and still is infringing at least Claim 11 of the 672 patent,

literally and under the doctrine of equivalents, by using surgical instruments, including but not limited to the VertecoR MidLine Navigational Osteotome. By way of example only, Dfine directly infringes the 672 patent by performing the method of treating a vertebral body described in Claim 11. 18. Dfine has also infringed indirectly and continues to infringe indirectly the

672 patent by active inducement under 35 U.S.C. 271(b). 19. Upon information and belief, Dfine had knowledge of the 672 patent

since at least as early as 2012. Dfine cited the 672 patent in the following U.S. Patents,

both of which were issued in 2012: U.S. Patent No. 8,109,933 and U.S. Patent No. 8,241,335. 20. On information and belief, Dfine has intended, and continues to intend, to

induce patent infringement by third-party physicians and has had knowledge that the inducing acts would cause infringement or has been willfully blind to the possibility that its inducing acts would cause infringement. For example, Dfine provides training and instruction materials to physicians on how to use the infringing surgical instruments, including the VertecoR MidLine Navigational Osteotome, during the performance of surgical procedures during which physicians use the infringing surgical instruments to create cavities in the cancellous bone of a vertebral body. By using the infringing surgical instruments, including the VertecoR MidLine Navigational Osteotome, to create cativities in cancellous bone as instructed and trained by Dfine, physicians directly infringe at least Claim 11 of the 672 patent. By continuing to provide instruction and training to physicians on how to use the VertecoR MidLine Navigational Osteotome to perform surgical procedures in the manner described in Claim 11 of the 672 patent, Dfine has and continues to specifically intend to induce infringement of the 672 patent. 21. Dfine has also infringed indirectly and continues to infringe indirectly the

672 patent by contributory infringement under 35 U.S.C. 271(c). 22. Dfine has and continues to intentionally commit contributory infringement

by selling, offering to sell, or importing the infringing surgical instruments, including but not limited to the VertecoR MidLine Navigational Osteotome, with the knowledge that the surgical instruments will be used by physicians to directly infringe at least Claim 11 of the 672 patent.

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Dfine had knowledge of the 672 patent since at least 2012. Since at least

2012, Dfine has had knowledge that the surgical instruments, including the VertecoR MidLine Navigational Osteotome, are material components to practicing the surgical procedures claimed in the 672 patent, that the surgical instruments are not staple articles or commodities of commerce suitable for substantial non-infringing use, and that the instruments, including the VertecoR MidLine Navigational Osteotome, are especially made and/or adapted for use in infringing the 672 patent. For example, despite having knowledge that the VertecoR MidLine Navigational Osteotome is used by physicians to perform surgical procedures infringing the 672 patent, Dfine continues to provide instruction and training to physicians on how to use the VertecoR MidLine Navigational Osteotome in a manner that directly infringes at least Claim 11 of the 672 patent. Dfine does not provide instructions or training on the use of the VertecoR MidLine Navigational Osteotome in a manner that does not infringe the 672 patent. Furthermore, upon information and belief, the FDA has only approved the VertecoR MidLine Navigational Osteotome for use in surgical procedures that infringe the 672 patent. 24. Since at least 2012, Dfine has been and still is willfully infringing the 672

patent. At least as early as 2012, Dfine had actual knowledge of the 672 patent. Despite having actual knowledge of the 672 patent, Dfine has continued to willfully, wantonly, and deliberately infringe the 672 patent. Accordingly, Orthophoenix seeks enhanced damages pursuant to 35 U.S.C. 284 and a finding that this is an exceptional case within the meaning of 35 U.S.C. 285, entitling Orthophoenix to its attorneys fees and expenses.

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To the extent applicable, the requirements of 35 U.S.C. 287(a) have been

met with respect to the 672 patent. 26. As a result of Defendants infringement of the 672 patent, Orthophoenix

has suffered monetary damages in an amount adequate to compensate for Defendants infringement, but in no event less than a reasonable royalty for the use made of the invention by Defendants, together with interest and costs as fixed by the Court, and Orthophoenix will continue to suffer damages in the future unless Defendants infringing activities are enjoined by this Court. 27. Unless a permanent injunction is issued enjoining Defendants and their

agents, servants, employees, representatives, affiliates, and all others acting or in active concert therewith from infringing the 672 patent, Orthophoenix will be greatly and irreparably harmed. COUNT II (Infringement of U.S. Patent No. 6,440,138) 28. Orthophoenix references and incorporates by reference paragraphs 1

through 27 of this Complaint. 29. Dfine has been and still is infringing at least Claim 1 of the 138 patent,

literally and under the doctrine of equivalents, by manufacturing, using, selling, offering to sell, or importing, without license or authority, surgical instruments including, but not limited to, the VertecoR MidLine Navigational Osteotome. 30. By way of example only, with reference to Claim 1 of the 138 patent, the

VertecoR MidLine Navigational Osteotome manufactured, sold, offered for sale, or imported by Dfine includes a cannula having an axis establishing a percutaneous path leading to inside a bone. The VertecoR MidLine Navigational Osteotome includes a

shaft that carries a cavity-forming structure adapted to be deployed inside bone by movement within and along the axis of the cannula. The cavity-forming structure comprises a surface which directly contacts and shears cancellous bone in response to rotating the shaft within and about the axis of the cannula. 31. Defendant Does have been and still are infringing at least Claim 1 of the

138 patent, literally and under the doctrine of equivalents, by using, without license or authority, surgical instruments including, but not limited to, the VertecoR MidLine Navigational Osteotome Does purchased from Dfine. 32. Dfine has also infringed indirectly and continues to infringe indirectly the

138 patent by active inducement under 35 U.S.C. 271(b). 33. Upon information and belief, Dfine had knowledge of the 138 patent

since at least as early as 2010. Dfine cited the 138 patent in U.S. Patent No. 7,682378, which was issued in 2010. Alternatively, Dfine had knowledge of the 138 patent since at least as early as 2012. Dfine cited the 138 patent in the following U.S. Patents, both of which were issued in 2012: U.S. Patent No. 8,109,933 and U.S. Patent No. 8,241,335. 34. On information and belief, Dfine has intended, and continues to intend, to

induce patent infringement by third-party physicians and has had knowledge that the inducing acts would cause infringement or has been willfully blind to the possibility that its inducing acts would cause infringement. For example, Dfine provides training and instruction materials to physicians on how to use the infringing surgical instruments, including the VertecoR MidLine Navigational Osteotome, during the performance of surgical procedures during which physicians create cavities in cancellous bone. By using the infringing surgical instruments, including but not limited to the VertecoR MidLine

Navigational Osteotome, during procedures during which physicians create cavities in cancellous bone as instructed and trained by Dfine, physicians directly infringe at least Claim 1 of the 138 patent. By continuing to provide instruction and training on the use of the VertecoR MidLine Navigational Osteotome to physicians despite its knowledge that the VertecoR MidLine Navigational Osteotome infringes the 138 patent, Dfine has and continues to specifically intend to induce infringement of the 138 patent. 35. Since at least 2010, Dfine has been and still is willfully infringing the 138

patent. At least as early as 2010, Dfine had actual knowledge of the 138 patent. Despite having actual knowledge of the 138 patent, Dfine has continued to willfully, wantonly, and deliberately infringe the 138 patent. Accordingly, Orthophoenix seeks enhanced damages pursuant to 35 U.S.C. 284 and a finding that this is an exceptional case within the meaning of 35 U.S.C. 285, entitling Orthophoenix to its attorneys fees and expenses. 36. To the extent applicable, the requirements of 35 U.S.C. 287(a) have been

met with respect to the 138 patent. 37. As a result of Defendants infringement of the 138 patent, Orthophoenix

has suffered monetary damages in an amount adequate to compensate for Defendants infringement, but in no event less than a reasonable royalty for the use made of the invention by Defendants, together with interest and costs as fixed by the Court, and Orthophoenix will continue to suffer damages in the future unless Defendants infringing activities are enjoined by this Court. 38. Unless a permanent injunction is issued enjoining Defendants and their

agents, servants, employees, representatives, affiliates, and all others acting or in active

concert therewith from infringing the 138 patent, Orthophoenix will be greatly and irreparably harmed. PRAYER FOR RELIEF Orthophoenix prays for the following relief: 1. A judgment that Defendants have infringed one or more claims of the 672

patent and/or the 138 patent; 2. A permanent injunction enjoining Defendants and their officers, directors,

agents, servants, affiliates, employees, divisions, branches, subsidiaries, parents, and all others acting in active concert or participation with Defendants, from infringing the 672 patent and/or the 138 patent; 3. An award of damages resulting from Defendants acts of infringement in

accordance with 35 U.S.C. 284; 4. A judgment and order finding that this is an exceptional case within the

meaning of 35 U.S.C. 285 and awarding to Orthophoenix its reasonable attorneys fees against Dfine. 5. A judgment and order requiring Defendants to provide accountings and to

pay supplemental damages to Orthophoenix, including, without limitation, prejudgment and post-judgment interest; and 6. entitled. Any and all other relief to which Orthophoenix may show itself to be

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JURY TRIAL DEMANDED Orthophoenix hereby demands a trial by jury of all issues so triable.

June 4, 2013 BAYARD, P.A. OF COUNSEL: Marc A. Fenster Daniel P. Hipskind RUSS, AUGUST & KABAT 12424 Wilshire Boulevard 12th Floor Los Angeles, California 90025 [email protected] [email protected] (310) 826-7474 /s/ Stephen B. Brauerman Richard D. Kirk (rk0922) Stephen B. Brauerman (sb4952) Vanessa R. Tiradentes (vt5398) 222 Delaware Avenue, Suite 900 Wilmington, DE 19801 (302) 655-5000 [email protected] [email protected] [email protected] Attorneys for Plaintiff, Orthophoenix, LLC

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