Mirowski Family Ventures, on the hook for a $6 million tab for Medtronic‘s (NYSE:MDT) legal costs, told a federal appeals court last week that a lower court misconstrued a 24-year-old deal with Eli Lilly (NYSE:LLY).
The long-running case involves patents licensed to Boston Scientific (NYSE:BSX). MFV represents the estate of Dr. Michel Mirowski, who helped invent the implantable defibrillator. The group, which controls several patents related to implantable cardioverter defibrillators and cardiac resynchronization therapy devices, has been pursuing patent infringement cases against Medtronic, Guidant and successor Boston Scientific for years.
In January 2014, the U.S. Supreme Court ruled unanimously that MFV must prove Medtronic’s devices were in violation, even though Medtronic filed the original patent challenge in 2003, while still under a 1991 sub-license agreement for the technology. The high court in October 2014 declined to hear MFV’s petition that it revisit a lower court decision that Medtronic did not infringe MFV’s patents, which were sub-licensed to Medtronic through Guidant’s then-owner, Lilly. Boston Scientific acquired Guidant in 2006. In late September 2014, a Maryland circuit court ordered that Boston Scientific pay MFV $309 million in back royalties and damages.
Judge Susan Robinson of the U.S. District Court for Delaware ruled in June that MFV must cover legal costs in the case, which made it all the way to the U.S. Supreme Court last year. Medtronic then asked Robinson to award more than $6 million in fees, “reflecting the amounts paid by Medtronic litigating this action from August 2007 through June 2015,” according to court documents.
“These are amounts billed by Robins Kaplan, lead counsel in this matter, and WilmerHale, whose attorneys were retained to represent Medtronic at the United States Supreme Court,” according to the filings.
MFV countered that Robinson erred in ruling that the deal between Medtronic and Lilly applied to MFV.
“The Mirowski family never ‘took over’ Lilly’s obligations under the 1991 cross license. Indeed, it would have been impossible for the Mirowski family to do so since it had no right to license the Lilly patents, or even the Mirowski patents. Nor would Medtronic have ever agreed to such a takeover since it would have taken away Medtronic’ s license to the Lilly and Mirowski patents,” MFV argued, according to court documents, calling Robinson’s justification “plainly baseless” for a couple of reasons.
“First, as the district court plainly stated in its 2011 decision, both Guidant and its parent BSC did assert infringement. Also, the district court specifically entered judgment of non-infringement against Guidant and BSC,” the family argued. “Second, the 1991 cross license specifically provides that the DJ challenge fee provision is only applicable to ‘the losing party’ and the only parties to the cross license were Lilly and Medtronic. Further, the cross license makes no reference to ‘the party asserting infringement.’ Rather, it only refers to Lilly asserting infringement.”