It's hard being at the top, as evidenced by Medtronic's ($MDT) slew of recent patent battles. The Minneapolis device giant faced one of its biggest showdowns earlier this year when it went head-to-head with Edwards Lifesciences ($EW) over a patent for the companies' competing transcatheter aortic valve replacement (TAVR) products.
In April, a U.S. district judge in Wilmington, DE, found that Medtronic's CoreValve device 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. In early 2014, a U.S. District Court jury ordered Medtronic to cough up $394 million in damages, helping Edwards snag a bigger piece of a $3 billion TAVR market.
But Medtronic struck back, filing an emergency motion in a U.S. Circuit Court of Appeals to prevent the injunction against its CoreValve device from going into effect. The company cited a portion of the lower court's ruling that said its CoreValve system is a safer device with better patient outcomes and argued that Edwards' competing device cannot service individuals with aortic annuli larger than 25 mm, leaving some patients without a viable treatment option.
In May, the battle came to a standstill when Medtronic and Edwards agreed to a global settlement, dismissing all outstanding litigation and agreeing not to sue one another over TAVR patents for 8 years. Medtronic made a one-time payment to Edwards of $750 million and said it would continue to pay ongoing royalties through April 2022 based on a percentage of sales from its CoreValve devices. Edwards Lifesciences' stock jumped 10% in July 2014 as a result, and the litigation charge boosted the company's postsettlement revenues.
Still, Medtronic is forging ahead with its TAVR device. In March 2014, the European Patent Office invalidated and revoked Edwards' Spenser patent for its Sapien XT product, allowing Medtronic to sell its CoreValve device in Germany. In September, the company unveiled positive two-year results from a study of the CoreValve system which showed that only 4.4% of all treated patients experience moderate or severe paravalvular leakage after being outfitted with the implant.
|Edwards Lifesciences' Sapien XT valve|
Medtronic fared better on other fronts this year, scoring victories in a years-long battle over patents for its cardiac resynchronization therapy products. In January, the U.S. Supreme Court unanimously reversed a lower court's decision that would have forced Medtronic to prove that it did not infringe on Mirowski Family Ventures' two patents for hemodynamic dysfunction technology.
Medtronic had licensed the patents from Mirowski but said that its newer cardiac resynchronization products did not infringe Mirowski's patents and that it should not be forced to pay royalties. In a 9-0 vote, the Supreme Court ruled in favor of Medtronic and said that the burden of proof rests with the party claiming product infringement, even if a license exists between a patent holder and product manufacturer. In October, the nation's high court declined to hear an appeal from Mirowski over the patents.
Medtronic scores victory in ongoing patent war with Mirowski
Medtronic and Edwards Lifesciences settle the score in ongoing patent feud
Edwards wins a battle in its ongoing TAVR patent war with Medtronic
Medtronic wins patent loss reversal in U.S. Supreme Court