Doc inventor wins $113m in royalties spat with Medtronic

December 3, 2018 By Brad Perriello Leave a Comment

A state court jury in Indiana last week reportedly awarded a $112 million decision to a local spine surgeon turned medical device inventor in his five-year royalties dispute with Medtronic (NYSE:MDT).

Dr. Rick Sasso sued Medtronic in 2013, alleging that the world’s largest medical device maker shorted him on their royalties deal for the Vertex cervical spine system he helped develop, according to the Indianapolis Business Journal.

Sasso licensed some of his early inventions to Sofamor Danek, about a year before its $3.3 billion merger with Fridley, Minn.-based Medtronic in January 1999, the newspaper reported. Further deals for spine stabilization devices followed, including some that eventually hit the market under the Vertex brand. The company agreed to pay him 2% of net sales for eight years or the life of the patent if it it is used in a device covered by a valid patent claim. Sasso argued that the Vertex system is covered by several valid patents and that Medtronic left out other products that used Vertex components, undercounting the sales calculation for his royalties.

The $112.5 million verdict lodged Nov. 28 culminated a five-year campaign that saw Sasso lose several battles. In 2015 an Indiana state court found that he never transferred his patent to his corporation, meaning it could not have licensed the technology to Sofamor Danek. Medtronic, having already paid Sasso some $23 million, didn’t owe him anything more, according to the ruling, which was later upheld by the Indiana state appeals court.

After amending his complaint three times, Sasso found favor with a six-person Marshall County Circuit Court jury last week, which deliberated for six hours after a trial that lasted nearly a month, according to the business journal.

In a quarterly regulatory filing, Medtronic said it has “strong arguments to appeal the verdict” and plans to file post-trial motions appeal if necessary.

“The company has not recognized an expense in connection with this matter because it does not currently believe a loss is probable under U.S. GAAP,” the company said in the filing.

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