Medtronic subsidiary to pay $110 million for breach of agreement

A Memphis jury yesterday ruled that a subsidiary of medical-device maker Medtronic “breached certain provisions of its technology agreements” with a physician who invented some of the company’s spinal-fusion implants and other spinal-surgery therapies, the Wall Street Journal reports. The jury ordered Medtronic Sofamor Danek, which was acquired by Medtronic in 1999, to pay $110 million to Dr. Gary Michelson and his company, Karlin Technology, and said that Medtronic may have to pay “additional damages” for patent infringement. The suit, which was filed by Michelson in 2001, alleges that the physician’s licensing rights for many of the products still apply and that he is owed “millions of dollars in licensing fees in connection with agreements signed a decade ago,” years prior to Medtronic’s purchase of Sofamor Danek. Medtronic says it will “evaluate the jury’s decision to ensure compliance with the provisions of its agreements with Dr. Michelson.” The Journal notes that the next phase of the trial will determine whether punitive damages are appropriate; so far the jury found that Medtronic “hadn’t breached any duties” to Michelson or his company (9/28).