Medtronic to Pay Edwards Over $1 Billion in Patent Settlement

Marlene Busko

May 21, 2014

IRVINE, CA and MINNEAPOLIS, MN — Edwards Lifesciences and Medtronic announced today that they have reached a global patent settlement agreement in which all outstanding transcatheter-valve patent lawsuits are dismissed[1,2].

Under the agreement, Medtronic will pay Edwards a onetime sum of $750 million plus royalty payments based on a percentage of CoreValve sales—a minimum of $40 million a year—until April 2022.

The companies also agreed they would not sue each other for patent infringement in the field of aortic and all other transcatheter heart valves anywhere in the world during the next eight years.

"This agreement brings to an end years of disputes between our companies related to [transcatheter aortic-valve implantation] TAVI patents and allows both companies to make their respective therapies available to physicians and patients around the world," president of the structural-heart business at Medtronic, Dr John Liddicoat, said in a statement[1]. "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 US and abroad without the overhang of any potential injunction or additional damages. "

Neither Medtronic nor Edwards admitted that their products infringe any patents or that any patents are invalid, the statement adds.

"We are pleased to reach an agreement that preserves physician choice while also recognizing Edwards's leadership in pioneering the transcatheter heart valves that are chosen most often by physicians worldwide," Edwards's chair and CEO, Michael A Mussallem, said in a statement issued by Edwards[2]. "This agreement allows us to move forward, fully dedicating our time and resources to helping patients."

As a result of the settlement, clinicians now have a choice. "The agreement [preserves] clinician choice for transcatheter-valve therapy utilizing either the Edwards Sapien valves or the Medtronic CoreValve," Mussallem said in a letter to clinicians.

Edwards will contribute $50 million from the settlement to its Lifesciences Foundation to support efforts such as its Every Heartbeat Matters philanthropic program, to improve patient care, raise disease awareness, and educate clinicians, the statement adds.

Not Unexpected

The timing and settlement are perhaps not surprising.

As reported by heartwire , on April 14, a US district court granted an injunction against US sales of Medtronic's CoreValve transcatheter valve, based on a 2010 federal jury decision that the valve "willfully infringes" on Edwards's US transcatheter aortic-valve replacement (TAVR) patent issued in 1995.

After the decision was appealed by Medtronic, a week later, the court granted a postponement of the injunction. The judge ordered the two companies to come up with an agreement about which patients cannot be treated with the Edwards Sapien device and are candidates for the CoreValve and to report the results of this negotiation to the courts on May 21.

In fact, Edwards's CEO Mussallem had previously stated that Edwards was not seeking a complete ban on the competing device and that it has made multiple offers to its rival that would allow the device to be used, with compensation provided to Edwards.

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