Medtronic and Edwards Lifesciences settle the score in ongoing patent feud

Edwards Lifesciences' Sapien XT--Courtesy of Edwards

Medtronic ($MDT) and Edwards Lifesciences ($EW) have settled the score in their ongoing patent feud over competing transcatheter aortic valve replacement (TAVR) products. The companies agreed to a global settlement, effectively dismissing all outstanding patent litigation and putting the kibosh on future disputes.

As part of the settlement, Medtronic and Edwards will dismiss all pending cases or appeals in courts and patent offices and will not sue one another over TAVR patents for eight years. Medtronic will make a one-time payment to Edwards of $750 million, and will continue to pay ongoing royalties through April 2022 based on a percentage of sales from its CoreValve device. Royalty payments must be no less than $40 million annually, the companies said in a statement.

"Edwards has looked forward to resolving these cases for a long time, and more recent court activity prompted a productive dialogue that led to this agreement. We are very pleased that we reached a settlement that recognizes our significant commitment to pioneering transcatheter heart valves for clinicians and their patients around the world," Edwards CEO Mike Mussallem said in a letter to clinical partners.

Medtronic's CoreValve device
Medtronic's CoreValve--
Courtesy of Medtronic

The settlement marks the end of a long road for the companies, which have battled continuously over their TAVR devices. In April, a U.S. District Court Judge in Wilmington, DE, found that Medtronic's CoreValve product infringed on Edwards' Andersen patent for its Sapien transcatheter heart valve and granted the company's request for an injunction. The court order built on two previous rulings which also named Irvine, CA-based Edwards a winner. In 2010, a jury decided that Medtronic's CoreValve infringed on one of Edwards' patents and awarded the company $74 million. Earlier this year, a U.S. District Court jury ordered the Minnesota device giant to pay up $394 million in damages, helping Edwards grab a bigger piece of a $3 billion market.

However, Medtronic did not go down without a fight. Following the U.S. District Court ruling in April, the company filed an emergency motion in a U.S. Circuit Court of Appeals to prevent the injunction against its CoreValve product from going into effect. Medtronic cited a portion of the lower court's ruling that said its CoreValve system "is a safer device and that patients in whom it is implanted have better outcomes with a lower risk of death." Edwards' competing device cannot serve individuals with aortic annuli larger than 25 mm, leaving some patients without a viable treatment option, Medtronic said in its U.S. Circuit Court of Appeals filing.

The recent settlement also follows a March ruling by the European Patent Office, which invalidated and revoked Edwards' Spenser patent for its Sapien XT, allowing Medtronic to sell its product in Germany.

"This agreement brings to an end years of disputes between our companies related to [TAVR] patents, and allows both companies to make their respective therapies available to physicians and patients around the world," said Dr. John Liddicoat, president of the Structural Heart business at Medtronic. "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."

- read Medtronic's statement
- here's Edwards' statement
- here's Mike Mussallem's letter (PDF)
- read Medtronic's appeals filing (PDF)

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