On March 2, 2015 a U.S. appeals court ruled that a $101.2 million patent infringement award against NuVasive, Inc. in favor of Medtronic Plc was excessive and ordered a new trial to determine new damages.
NuVasive Beats Medtronic at Top Appeals Court
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“We look forward to the upcoming retrial, ” said Alex Lukianov, NuVasive’s chairman and CEO.
“Erroneous Damages”
The nation’s top patent appeals court, the U.S. Court of Appeals for the Federal Circuit, upheld the original jury’s finding that NuVasive’s spinal surgery devices had infringed Medtronic’s implants and surgical methods patents. But the three-judge panel unanimously said Medtronic’s Warsaw Orthopedic, Inc. was not entitled to recover damages in the form of lost profits and ongoing royalties. The court held that the damages award was erroneous because Medtronic is not permitted to recover damages for lost profits or for the sale of convoyed products
“Our rejection of Warsaw’s claims for lost profits does not mean that Warsaw is precluded from any recovery. 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, ” the appeals panel said.
NuVasive had appealed a September 2011 jury verdict in the first phase of the litigation. The jury found that three patents at issue in the appeal were infringed awarding total monetary damages of $660, 000 to NuVasive and approximately $102 million to Medtronic, which included lost profits, the sale of ancillary or “convoyed” products and royalties.
If there are no further appeals, the case will be returned to the U.S. District Court in San Diego to determine a proper damage award based solely on a reasonable royalty. That could occur later in 2015.
Lukianov said the decision affirms NuVasive’s view that Medtronic had been awarded an excessive amount of damages. “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.” Wells Fargo analyst Larry Biegelsen noted that the ruling of the Appeals Court and a subsequent ruling should have a limited impact on NuVasive’s business moving forward because the most significant Medtronic patent expired in February 2015.
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This is a fascinating development. In my practice we've seen similar outcomes with the revised protocol. The key differentiator seems to be patient selection criteria. Has anyone else noticed the correlation with BMI thresholds?
Great point. I'd push back slightly on the conclusion, the sample size in the cited study is too small to draw population-level inferences. That said, the directional signal is compelling and worth a larger RCT.
We implemented a similar approach last year. Early results are promising but we're still gathering 12-month follow-up data. Happy to share our protocol if anyone is interested.
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