University of Michigan sues St. Jude Medical for breach of contract

University of Michigan news

The University of Michigan is suing St. Jude Medical (NYSE:STJ), accusing the medical device maker of failing to pay $4.3 million in royalties on sales of St. Jude’s Epic and Trifecta cardiovascular valves.

The university said its deal with the St. Paul, Minn.-based company grants St. Jude the exclusive right to use a Michigan patent covering a "Method of Making Calcification-Resistant Bioprosthetic Tissue," including certain technology described in the patent. In return, the company is to pay a 5% royalty on net sales of the Epic and Trifecta devices.

In June 2011, according to the lawsuit, St. Jude sent the school a letter claiming it had overpaid some $4.3 million in royalties from 2009 to 2011, saying it planned to apply the alleged over-payment as a credit to future royalty payments to Michigan.

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"The purported reason for SJM’s change in position for royalties payable to MIchigan is an alleged change in the manufacturing process used by SJM and the difference in patent claim scope between patents of Michigan issued in the United States versus claims issued to Michigan in other countries," according to the lawsuit.

Michigan wants a jury trial, unpaid royalties and damages, according to the suit, which was filed in the U.S. District Court for Eastern Michigan.

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