Luther Medical Says Catheter Royalties May Be in Jeopardy
Luther Medical Products Inc. said Wednesday that royalties from Johnson & Johnson Co. for its stickless catheter may be in jeopardy after the New Jersey-based medical products giant signed a licensing agreement with another company to produce a stickless needle.
Although no royalties to Luther Medical have been withheld, Luther Medical President W. Tate Scott said that his company was informed by Johnson & Johnson that a new agreement with British Technology Group Ltd. may reduce royalties to Luther Medical.
“Only a court of law could do that,” Scott said, adding that no lawsuits have been filed, and the negotiations about Luther’s future royalties are ongoing.
“This is an amicable discussion,” Scott said. “There’s no animosity here at all.”
Johnson & Johnson officials were not available for comment.
At issue is whether a new agreement between Johnson & Johnson subsidiary Critikon Inc. and the British firm would force a 50% reduction in the royalties paid to Luther Medical for sales of Critikon’s PROTECTIV stickless catheter, which Luther developed. A catheter is hollow tubing that is inserted into veins to medicate or feed a patient.
Johnson & Johnson recently informed Luther Medical that British Technology’s stickless needle and Luther Medical’s patented stickless catheter are close enough in design to activate a clause in the 1987 Luther-Critikon agreement, Scott said.
The clause states that Luther’s royalties could be reduced by half if Critikon signs another license to produce a device similar to the PROTECTIV stickless catheter.
Stickless catheters and needles are designed to prevent accidental pricking of health-care workers. Such devices are gaining popularity in the health-care industry because many fear that such accidents with used needles could infect workers with the AIDS virus or other communicable diseases.
Under the agreement between Critikon and Luther Medical, Critikon manufactures and distributes the PROTECTIV catheter, invented by Luther Medical founder Ron Luther.
Luther Medical in return receives royalties.
