Medtronics, Edwards Settle Patent Dispute

Edwards Lifesciences Corp. said rival Medtronics Corp. agreed to pay $20 million to settle patent litigation. As part of the agreement, Medtronics will license two Edwards patents used in heart valve repair, and pay Edwards unspecified royalties on sales of products produced under the license.

Edwards, based in Irvine, is the market leader in heart repair and replacement valves, an $800-million annual market. The payment from Medtronic represents about 30% of the estimated $60 million to $70 million spent annually on heart repair valves.

The settlement also represents one-third of Edwards’ 2001 net income of $63 million. Edwards said it would be reported as a one-time gain in the second quarter.

Edwards said a separate patent dispute with Medtronics concerning a heart-valve replacement technology will be submitted to binding arbitration, with a hearing set for June.

A patent infringement suit by Edwards against St. Jude Medical Inc. of St. Paul, Minn., the world’s biggest maker of mechanical valves, is pending in federal court in Los Angeles.