Providing temporary relief to Medtronic (NYSE: MDT), a U.S. appeals court has postponed the preliminary injunction issued against the company in connection with its patent infringement court case with rival medical device maker Edwards Lifesciences (NYSE:EW). The injunction, which was earlier expected to take effect on April 23, would have prevented Medtronic from selling its CoreValve transcatheter aortic valve replacement (TAVR) device in the U.S., where it competes with Edwards’ SAPIEN device. 
Procedural technicalities and other legal matters concerning the injunction are to be re-examined by the Appellate court, but its ruling will have no impact on the judgment of the Federal District Court of Delaware, which found Medtronic guilty of patent infringement and stated that “Medtronic disregarded the law in infringing Edwards’ patent and boldly continued to thumb its nose at the law by continuing its conduct even after being found to be a willful infringer.”  While the injunction will not allow Medtronic to sell or promote its CoreValve device in the U.S., both companies are engaged in discussions to ensure that patients do not suffer because of this ruling. Unlike the SAPIEN device, CoreValve is available (and FDA approved) for use in a wide range of sizes which makes it the only viable device in some aortic valve replacement patients. The Federal court also admitted in its ruling that there is a need for a mechanism to ensure availability of CoreValve to physicians and patients who urgently require this device and where Edwards’ SAPIEN is not an alternative. 
Medtronic faced a similar situation in Germany last year when a German court banned it from selling its CoreValve device in the country following a patent infringement issue with Edwards.  This ruling was overturned a few months later by a higher court and Medtronic is likely hoping for a similar outcome in this case as well, though it seems unlikely. If the Federal ruling is upheld by the Appellate court, Medtronic is unlikely to see growth in the U.S. TAVR market for at least the next three years, when the patent in question is due to expire. It could maintain its small market share in the near term, if it can reach a suitable arrangement with Edwards for selective commercial presence in the country on grounds of public interest.
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Background Of The Patent Issue
The technology used by Edwards in its SAPIEN family of TAVR devices is based on the Anderson patent, which it acquired as part of its deal with Percutaneous Valve Technologies (PVT) in 2002. Similarly, Medtronic got hold of its TAVR technology by acquiring CoreValve in 2009, which was an independent company at the time. The patent issue started in 2008, before Medtronic acquired CoreValve, when Edwards filed a case against CoreValve for infringing its Anderson patent. It was surprising that Medtronic went on to acquire CoreValve after being fully aware of its patent issue with Edwards at the time. In 2010, a federal jury found Medtronic guilty of infringing on Edwards’ Anderson patent. It is this judgement which became the primary basis for issuance of the preliminary injunction against Medtronic last week. 
In its defense, Medtronic says that the Anderson patent was issued to Edwards in 1995 but it expired in 2012. It further adds that Edwards’ patent extension (through 2016) is not applicable to all claims of the patent and since its CoreValve device is very different from Edwards’ SAPIEN in terms of design or concept, there is no wrongdoing on its part. In a press release following the Federal court order, Medtronic stated a number of reasons why it still had a strong case against Edwards.  While it is unlikely that the 2010 judgement could be overturned in favor of Medtronic, we will have to wait and see what the Appellate court says regarding the injunction in the next few weeks. In a separate patent infringement case with Edwards over the CoreValve device (Cribier transcatheter heart valve patent), Medtronic was ordered to pay $392 million in damages in January this year. Notes:
- U.S. court postpones injunction against Medtronic heart valve, Reuters, April 21 2014 [↩]
- Court Ruling, U.S. District Court, District of Delaware [↩]
- New Medtronic Heart Valve Threatened By Court Decision, Forbes, April 15 2014 [↩]
- Medtronic Faces Removal Of CoreValve Transcatheter Heart Valve From German Market, Forbes, July 12, 2013 [↩]
- US District Court Issues Injunction Against CoreValve Sales, Medscape.com, April 14 2014 [↩]
- Press Release, Medtronic, April 21 2014 [↩]
- Edwards Lifesciences Wins $392 Million in Medtronic Case, Bloomberg, Jan 16 2014 [↩]