Medtronic Inc. and Edwards Lifesciences Corp., an Irvine heart valve maker, on Tuesday announced a settlement to end a long-running patent dispute that includes a one-time payment by Medtronic of $750 million and annual royalties of between $40 million and $60 million to Edwards through 2022, the companies said.
The agreement ends a dispute that began in 2008 when Edwards Lifesciences accused Minneapolis-based Medtronic of infringing on its patent for a heart valve that can be implanted in a minimally invasive procedure, inserted through an artery rather than requiring open-heart surgery.
Under the terms of the agreement, the two companies also agreed to avoid litigation over the heart valves for the next eight years. They also will dismiss any currently pending litigation, the companies said.
“We are pleased to reach an agreement that preserves physician choice while also recognizing Edwards’ leadership in pioneering the transcatheter heart valves that are chosen most often by physicians worldwide,” said Edwards Chief Executive Michael A. Mussallem in a statement. “This agreement allows us to move forward, fully dedicating our time and resources to helping patients.”
As part of the agreement, Medtronic and Edwards do not admit their products infringe on any patents or that any are invalid.
The one-time $750-million payment by Medtronic reduced the company’s fiscal fourth-quarter earnings by 54%, Medtronic said Tuesday. Net profit was $448 million, or 44 cents a diluted share, compared with the same period a year earlier.
Shares of Medtronic were down $1.32, or 2.19%, to $59.02, in late-morning trading Tuesday. Edwards shares were down $1.51, or 1.75%, to $84.97.