Lenox MacLaren's grinding court battle with Medtronic will continue

Medtronic's Midas Rex bone mill device--Courtesy of Medtronic

A federal appeals court panel ruled that Lenox MacLaren Surgical has sufficient grounds to take Medtronic ($MDT) back to court over monopolization claims against the Minnesota-based medical device giant.

The 10th Circuit Court of Appeals ruled earlier this month that the Colorado-based company had sufficient evidence to support claims Medtronic violated antitrust laws involving Lenox's bone mill device, MassDevice reported. The decision reopens litigation that began in 2007 and was thought to be closed last year when a U.S. District Court judge ruled that Lenox had failed to make its case.

In reversing the lower court's ruling, the appeals court wrote that, "Lenox has presented sufficient evidence to support a finding on each element of its Section 2 claim for actual monopolization: monopoly power in the relevant product market, exclusionary conduct, and harm to competition."

The devices are used to grind bone samples of a patient into uniform pieces that are then used to fill voids or fractures during spinal fusion procedures.

Lenox has long claimed Medtronic lured it into a distribution deal in 2000 for its bone mills, but only bought about 500 of the devices. The company said Medtronic first distributed the Lenox device as part of a loaner program to create a demand for them in orthopedic suites at the same time it was developing its own bone mill device. Medtronic, according to Lenox, then issued a voluntary recall of the Lenox bone mills and replaced them with their own devices, destroying Lenox's reputation and preventing it from re-entering the market.

The original case was settled in arbitration, however Lenox sued Medtronic again after it found evidence during the discovery process of the first lawsuit of collusion among other Medtronic subsidiaries regarding the alleged bone mill scheme.

The decision comes as Medtronic is gearing up to fend off growing opposition to its $43 billion deal to buy Covidien ($COV) as the U.S. government attempts to crack down on companies moving operations overseas to escape U.S. tax rates. Covidien is based in Ireland.

- see the MassDevice story

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