Medtronic has seen its fair share of bad patent news of late. Last year, the company agreed to pony up more than $1 billion to settle patent litigation with Edwards Lifesciences. Now, the company stands to lose out on a significant cash award it had anticipated stemming from a patent row with NuVasive.
The original patent suit filed by Medtronic against NuVasive claimed that NuVasive's CoRoent XL spinal implants, MaXcess II and III retractors, and Helix and Helix mini anterior cervical plates, infringe three Medtronic patents.
The U.S. Court of Appeals for the Federal Circuit agreed that patents held by Medtronic-owned Warsaw Orthopedic Inc. had been infringed, but decided that Medtronic was not entitled to lost profits, only royalties. The appeals court judges ordered a new trial to determine damages.
“It is impossible to determine from the verdict form what portion of the ($101.2 million) verdict is attributable to lost profits and what portion is attributable to a reasonable royalty, much less how much of the lost profits portion is attributable to each of the three different revenue streams,” the appeals court ruling says. “Warsaw is entitled to a reasonable royalty sufficient to compensate it for the value of what was taken from it—the value of the patented technology. As we recently explained, a reasonable royalty compensates the owner not for the damage he suffered, but for the value of what was taken.”
The three-judge panel decided that the period for which Medtronic should receive that “reasonable royalty rate” was unclear in the 2011 trial, and that the jury may have “impermissibly relied on evidence” that did not prove the value of the patented spinal devices.
NuVasive hailed the ruling as a victory.
“This provides greater clarity on the process moving forward and affirms our view that Medtronic had been awarded an excessive amount of damages,” said NuVasive chairman and CEO Alex Lukianovin a statement. “By limiting the damages to only a reasonable royalty, we believe our overall exposure in this phase of the litigation has been reduced from the current amount we have accrued. We look forward to the upcoming retrial.”
So does Medtronic, according to an email statement.
“Medtronic is pleased that the U.S. appeals court upheld the jury’s original finding that Nuvasive’s devices infringed on our patents,” the company said. “We remain confident that the retrial will return an award that is appropriate to the damages we are seeking in this case. Medtronic is committed to vigorously protecting our intellectual property.”
