The Court of Appeals of Indiana has reaffirmed a judgment awarding an Indiana spine surgeon and inventor $112 million in his legal battle against medical device company Medtronic.
The initial litigation arises from a royalties dispute between Rick Sasso, M.D. and Medtronic. In 1999, Dr. Sasso invented a screw delivery system and entered into a licensing agreement with the predecessor company to Medtronic Spine. A few years later the parties entered into another licensing agreement for another invention, the Vertex cervical spine system.
Dr. Sasso successfully sued Medtronic for royalty payments due under the two contracts and was awarded $112,452,269 in 2018. For OTW’s previous coverage of the ongoing legal battle, see “Sasso v Medtronic Remanded to State Court” and “Spine Surgeon Wins $112 Million in Battle With Medtronic.”
After the verdict, Medtronic appealed and presented six issues for the court’s review. Dr. Sasso cross-appealed on one issue. The court reaffirmed the trial court’s judgment on all issues.
The court first addressed Medtronic’s claim that “the trial court lacked subject matter jurisdiction because Sasso’s claims ‘arise under’ patent law, which is within the exclusive jurisdiction of the federal courts.” The court upheld its jurisdiction reasoning that the federal patent issue was not “substantial” and the state courts have jurisdiction over contractual claims.
The court then addressed Medtronic’s argument that it had already paid Dr. Sasso all that he was due under the Screw Agreement. It agreed with Dr. Sasso and the trial court that the Screw Agreement was modified by the conduct of the parties.
Next, the court addressed Medtronic’s argument that “the trial court abused its discretion by excluding evidence that some of the claims under one of the patents at issue were declared invalid.” The court relied on the timeline of when Medtronic challenged the patent’s validity. Here, Dr. Sasso’s claim for royalties ended about six months before Medtronic challenged validity. Thus, the court concluded “evidence regarding validity was not relevant to the royalties sought by Sasso.”
The court then addressed Medtronic’s argument that the “Screw Agreement terminated seven years from the date of first sale of any medical device covered by that agreement.” In affirming the trial court’s decision, the court looked at the language of the agreement and Medtronic’s actions in continuing to pay Dr. Sasso royalties after seven years.
For the last two issues, Medtronic argued that there was insufficient evidence to support the jury’s award of damages under the Screw Agreement and the Vertex Agreement. The appeals court stated that it “will not reverse a jury’s damages award if it is within the scope of the evidence.” It determined that in both instances, Dr. Sasso presented sufficient evidence to “support the jury’s award of damages.”
On cross-appeal, Dr. Sasso raised the issue of whether the trial court should have granted him punitive damages. The court upheld the trial court’s ruling as Dr. Sasso failed to present any evidence to meet the “elevated burden of proof for such claims.”
