Spurned inventor sues over Medtronic licensing agreement

October 31, 2012 by MassDevice staff

An inventor seeks to depose a hospital representative with alleged information regarding a soured technology licensing and royalty payment deal with medtech giant Medtronic.

Legal law gavel illustration

Medical device industry giant Medtronic (NYSE:MDT) found itself dragged into a technology licensing spat between an inventor and a Texas hospital, after a royalty agreement soured when patents expired.

Inventor Robert Tcholakian designed "silastic sheath technology," which helps prevent infections in implant patients, according to court documents. He agreed to assign all rights to the technology to the University of Texas M.D. Anderson Cancer Center, under a contract guaranteeing him royalties on all licensing.

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The hospital licensed the technology to Medtronic with a maximum cumulative royalty value of $67 million, guaranteeing a 15% cut for Tcholakian, representing about $10.1 million.

Tcholakian claims the hospital allowed the patents for the sheath technology to expire in order to cut him out of share of the royalties from the Medtronic agreement, according to court documents.

The spurned inventor asked a Texas court to allow him to depose a hospital representative who allegedly has insider information on the current status of the Medtronic licensing agreement as well as knowledge of communications between the hospital and Medtronic regarding development, marketing and the termination of agreements under the licensing contract.

UT Anderson sought to block the deposition, claiming that the hospital was protected under a rule of "sovereign immunity," but was shot down by the court.