NuVasive Pays Medtronic $45 Million Over Patent Dispute

NuVasive, Inc. and Medtronic plc have made peace.

On June 30, 2016, NuVasive announced that the company has agreed to settle ongoing patent litigation with Medtronic by paying Medtronic $45 million to settle litigation that began in 2008 in federal court in California. The litigation led to a jury verdict finding both companies liable for patent infringement.

Patent Fight

The patent fight included two rounds at a federal appeals court and a brief trip to the U.S. Supreme Court. The fight started when Medtronic filed suit against NuVasive for infringement of Medtronic’s spinal implant and surgical method patents.

NuVasive countersued, accusing Medtronic of infringing its patent on monitoring technology that gives surgeons a way to detect and avoid damaging spinal nerves during surgery. A jury found both sides liable, awarding $101.2 million in damages to Medtronic, and $660, 000 to NuVasive.

The U.S. Court of Appeals for the Federal Circuit, a specialized patent court, ordered a retrial on damages on Medtronic’s patents. That retrial had not yet taken place.

In a federal filing, NuVasive said it reached terms for the settlement as well as the withdrawal from related proceedings in the United States Patent and Trademark Office.

Settlement Terms

Under the terms of the settlement, NuVasive will make a one-time, lump sum payment in the amount of $45.0 million to Medtronic, and the parties will release each other from, inter alia, any and all past patent infringement arising from the litigation originally filed against NuVasive by Medtronic.

NuVasive previously established a litigation liability reserve related to the litigation, which as of March 31, 2016, the company says exceeded the amount of the lump sum payment. Under the terms of the settlement, the parties have also agreed to grant each other “irrevocable, worldwide, nonexclusive, paid-up, royalty-free licenses to practice certain of their respective patents as to certain of their respective existing product lines, subject to specified exceptions and limitations.”

NuVasive and Medtronic also agreed that for a period of seven years, “neither party will assert against the other certain claims for patent infringement (generally claims related to spinal implants and related instruments, biologics and neuromonitoring) other than through a specified dispute resolution process, with the right to thereafter pursue claims outside that process subject to certain limitations and exceptions.”

Additionally, Medtronic has agreed that, for a period of five years, it will not assert against NuVasive “certain other claims for patent infringement other than through a specified dispute resolution process, with the right to thereafter pursue claims outside that process subject to certain limitations and exceptions.”

Framework for Resolution

Greg Lucier, NuVasive’s CEO said, “We are very pleased to have negotiated a mutually agreeable settlement that removes the ongoing burden of this litigation and provides for a framework for resolution of potential patent disputes in the future.”

Medtronic spokesman Eric Epperson said, “We look forward to continue focusing our efforts on accelerating innovations that transform spine surgery and improve outcomes for more patients.”