Medtronic (NYSE:MDT) agreed to pay $750 million to Edwards Lifesciences (NYSE:EW) to put to rest their international patent infringement war over transcatheter aortic valve implants and other technologies.
The deal includes a provision that will see Medtronic pay royalties through April 2022 of at least $40 million annually. It also puts to rest all other pending litigation between the medical device companies. Neither company admitted to any infringement as part of the settlement.
"We are pleased to reach an agreement that preserves physician choice while also recognizing Edwards’ leadership in pioneering the transcatheter heart valves that are chosen most often by physicians worldwide. This agreement allows us to move forward, fully dedicating our time and resources to helping patients," Edwards chairman & CEO Michael Mussallem said in prepared remarks. Edwards said it would put $50 million from the settlement into the Edwards Lifesciences Foundation.
"This agreement brings to an end years of disputes between our companies related to TAVI patents, and allows both companies to make their respective therapies available to physicians and patients around the world," Medtronic’s structural heart president Dr. John Liddicoat said in a statement. "With this resolution, we are pleased that Medtronic will be able to continue to provide the CoreValve system, as well as other products, to patients who need them in the U.S. and abroad without the overhang of any potential injunction or additional damages."
The agreement covers a raft of litigation in the U.S. and overseas, including the case in which a federal appeals court last month stayed an injunction limiting U.S. sales of the CoreValve transcatheter aortic heart implant to patients deemed unsuitable for Edwards’ rival Sapien device.
Edwards initially filed that infringement claim in 2008 against CoreValve, then an independent entity (Medtronic acquired CoreValve in 2009). A federal jury ruled in 2010 that the CoreValve device willfully infringes Edwards’ "Andersen" patent, also known as the ‘552 patent. The U.S. Court of Appeals affirmed that decision in 2012 and the Supreme Court last year refused to hear Medtronic’s appeal. Earlier this year the FDA approved the CoreValve system for sale in the U.S.
Their legal battle was also joined overseas, where the European Patent Office in October 2013 issued a preliminary, non-binding ruling that an Edwards’ patent was invalid, allowing CoreValve back on the German market after a temporary ban. The EPO finalized that ruling, entirely invalidating and revoking the so-called "Spenser patent" at the heart of the overseas dispute.
Today’s settlement covers that case, and another in the U.S. in which Edwards won a $393 million decision after a Delaware jury ruled that CoreValve infringes on Edwards’ "Cribier" patent.