UPDATED July 1, 2014, with comment from KCI.
Kinetic Concepts Inc. said it agreed to pay $280 million to settle a patent infringement lawsuit with Wake Forest University, putting their long-running war over negative-pressure wound therapy to rest.
KCI licensed the NPWT patents from Wake Forest in 1993, but stopped paying royalties in 2011 after a federal judge in 2010 ruled the patents invalid.
A year later KCI and wound-care rival Smith & Nephew (FTSE:SN, NYSE:SNN), which had been tussling over the technology since Smith & Nephew’s 2007 acquisition of Blue Sky Medical Group, put their legal battle to rest as well.
Yesterday KCI said that it agreed to settle with Wake Forest via a series of payments covering retrospective royalties on the patents.
The deal calls for KCI to pay $80 million this month, another $85 million in June 2015, $85 million in June 2016 and a final $30 million payment in June 2017, according to a regulatory filing.
The Settlement Agreement includes a stipulated dismissal with prejudice of the lawsuits between KCI and Wake Forest, including the lawsuit that was previously scheduled to begin trial on July 28, 2014 in the U.S. District Court for the Western District of Texas, San Antonio Division.
"We are pleased to have resolved all negative pressure wound therapy patent litigation with Wake Forest. KCI pioneered the use of negative pressure wound therapy products when we launched our first V.A.C. Therapy System in 1994 and in so doing, improved the lives of millions of people. Today, KCI’s V.A.C. Therapy has been the treatment of choice for more than 8 million wounds worldwide and is the most effective therapy for accelerating wound healing," KCI general counsel John Bibb said in prepared remarks.