It’s business as usual in the German transcatheter aortic valve implantation market, analysts said, as a local court denied a patent infringement claim brought by Edwards Lifesciences (NYSE:EW) against TAVI rival Medtronic (NYSE:MDT).
Although the row is just 1 battle in a larger war over TAVI technology and market share, the news dragged EW shares down a few points and won MDT a small boost early morning trading.
"Our estimates are unchanged and the status quo in Germany has been maintained, but we view today’s news as a minor negative for EW as we believe some investors had started to factor in a potential infringement decision and injunction against MDT," Leerink Swann analysts wrote in a note to investors.
EW shares were down 2.4% to $70.22 as of about 12:25 p.m., while MDT saw a modest 0.2% boost to $52.86 per share.
The latest legal decision rounds out just 1 of 3 ongoing TAVI legal battles between the medtech rivals, analysts Danielle Antalffy and Robert Marcus noted, and each case has concerned alleged infringement of a unique patent claim.
Should Edwards win a patent decision against Medtronic, German law prescribes an immediate injunction against the offending technology, meaning the CoreValve system would be stripped from shelves all over the country. Edwards would be responsible for posting a "sizable" bond to make reparations to Medtronic should an appeals court choose to lift the injunction, the analysts wrote.
This pair of device makers has gone several rounds over TAVI technology, each notching some wins and losses along the way. In 2010 a German appeals court ruled in favor of Medtronic, finding that the CoreValve system isn’t in violation of patent law. That allowed Medtronic to sell CoreValve in Germany without having to obtain a licensing agreement from Edwards.
The larger war stems back even further. Edwards and CoreValve Inc. began the patent spat when the Irvine, Calif.-based rivals filed suit against each other in 2007. Medtronic inherited the beef when it purchased CoreValve in April 2009 for about $700 million.
In April 2010, a jury found that CoreValve willfully infringed an Edwards patent, awarding $73.5 million in damages. That decision was later upheld by a federal appeals court, and in April 2013 Edwards asked a Delaware court to widen that award after the company won an extension on its TAVI patent from the U.S. Patent & Trademark Office.
The rivalry has made it all the way to the Supreme Court, where Medtronic asked the Justices to toss the lower court’s decision to uphold Edwards’ $73.5 million legal win.