A U.S. District Court has awarded Medtronic, Inc., a higher ongoing royalty rate than a jury had awarded the company previously in an ongoing patent fight with NuVasive, Inc. over NuVasive’s CoRoent XL implants and certain MaXcess retractors and related products.
However, according to a June 12, 2013 announcement by NuVasive, the court awarded less than what Medtronic asked for after winning the first round of the patent fight
The jury verdict in Phase I of the litigation determined royalty rates of 10% on certain of the implants and 3% on certain of the retractors and related products.
The court was required to determine the ongoing royalty rates before a NuVasive’s appeal could move forward. Medtronic, according to NuVasive, requested royalty rates of 36% and 11% for those products.
In the ruling received on June 12, the District Court ordered royalty rates of 13.75% on the applicable CoRoent XL implants and 8.25% on the applicable MaXcess retractors.
The company said it had expected litigation royalty expense of approximately $11 million for the full year 2013. The new royalty rates will increase that expected litigation royalty expense for 2013 by approximately $5 million.
NuVasive Pursues Appeal
NuVasive Chairman and CEO, Alex Lukianov said he was pleased to have an outcome regarding the ongoing royalty issue so the company can finally begin the appellate process. “While we disagree with the Court-ordered royalty rates, they are significantly lower than those sought by Medtronic after its motion for an injunction following the verdict was denied. Today’s ruling will have an immaterial impact on our liquidity and our ability to fund strategic initiatives, ” said Lukianov
He added that the company will “promptly and aggressively” appeal the verdict and damage award.
The majority of the royalty expense is related to patents that will expire in February 2015, according to Wells Fargo analyst Larry Biegelsen.
