Jury Rules Medtronic Willfully Infringed Heart Valve Patent from Edwards Lifesciences

Medtronic Inc.’s CoreValve system infringes on a patent of Edwards Lifesciences Corp., according to the ruling of a federal court jury in Delaware on Jan. 15. The ruling, part of an ongoing legal battle between the two companies, holds Medtronic liable for $393.6 million in damages.

CoreValve is used in a transcatheter aortic valve implantation (TAVI) procedure, a minimally invasive treatment option for people with severe aortic stenosis. It received CE mark in Europe in 2007, but is not yet available in the United States. Minneapolis, Minn.-based Medtronic expects U.S. Food and Drug Administration approval by the completion of its 2014 fiscal year (end of April). Edwards has had the U.S. aortic valve market to itself since November 2011. Analysts expect TAVI to be a $3 billion worldwide market by the end of the decade.

Edwards and Medtronic are the two largest players in the European market for transcatheter aortic valves. And, perhaps as a result, the companies are no strangers to this sort of court battle. They have battled it out in U.S. and European courts before about patents held by Irvine, Calif.-based Edwards. The patent involved in Wednesday’s ruling is known as the Cribier patent, which also was the focus of a lawsuit in Europe that Medtronic won. Medtronic had appealed an earlier decision on the “Anderson” patent through the U.S. Supreme Court, which declined to hear it. Medtronic paid Edwards $84 million in initial damages last year in a case that’s still pending. In November, Medtronic resumed selling CoreValve in Germany after a court overturned an earlier ruling that Medtronic infringed on Edwards’ “Spenser” patent. A higher court said it would not enforce that ruling, after the European Patent Office said Edwards’ patent is not valid.

The lawsuit over the Cribier patent was filed in federal court in California in June 2011 and transferred the following year to Wilmington, Del.

Medtronic officials say the company plans to appeal the Delaware jury’s decision. However, the jury found that Medtronic’s infringement was “willful.” If that finding stands, Edwards could be entitled to damages up to three times the jury’s award, plus attorneys’ fees.

“While we are disappointed in the jury’s verdict, we continue to believe that this decision will be overturned on appeal,” said Neil Ayotte, vice president and acting general counsel at Medtronic. “Medtronic has prevailed against Edwards in several legal actions related to a European counterpart to this patent and others, and believes the Federal Circuit Court of Appeals will find no merit to Edward’s infringement claim. Today’s jury verdict does not impose an injunction, and Medtronic will oppose any requests for an injunction by Edwards.”

According to a statement on the company’s website, Edwards plans to seek an injunction to prohibit Medtronic from selling CoreValve.

New York, N.Y.-based Leerink Swann analyst Danielle Antalffy said in a note to investors, however, that an injunction was “highly unlikely,” given that it was not part of the jury’s decision. Rather than injunctions, many U.S. patent cases involving medical devices are settled with payment of a royalty.

“Today’s ruling is a nice turn of events for Edwards, but don’t expect investors to ascribe significant value to the ruling given that the appeals process can take time—we estimate 14-18 months,” Antalffy said. “We believe an injunction barring Medtronic from launching this year in the U.S. is highly unlikely and was not issued in today’s ruling; Medtronic actually won the European Cribier patent case; and the German Spenser patent case is fresh in investors’ minds, where Edwards’ injunction barring Medtronic from Germany was overturned in November.”

Aortic valve stenosis is a deadly narrowing of the aortic valve that obstructs blood flow from the heart. Half of patients with aortic valve stenosis die within two years of diagnosis. About 300,000 patients worldwide are diagnosed with aortic stenosis each year. Some patients are considered too sick to endure the trauma of having their chests open, and TAVI allows doctors to insert a new valve by inserting a catheter through an artery in the leg or through an incision in the upper body. Patients can be home from the hospital within a couple of days, instead of weeks after the procedure.

To watch a video of how the CoreValve is implanted, click here.