NuVasive to pay $101 million for Medtronic patent violations

Medtronic has won a federal jury award of more than $101 million in a patent infringement case against competitor NuVasive, reportedly the fourth largest patent-infringement award ever. Both companies produce devices used in spine surgeries, although Medtronic claims a much greater market share than San Diego-based NuVasive.

The award is the first resolution of claims and counterclaims of patent violations between the two companies in what is expected to be a lengthy court battle. In a separate decision, the jury also awarded NuVasive $660,000 for Medtronic’s violation of one of its patents.

Despite its claims that NuVasive infringed on the use of three spine-stabilizing implant products, Medtronic did not ask the court to block NuVasive from using its products.

NuVasive’s stock prices fell more than 12 percent once the jury’s award was announced, but some analysts say the California device maker can well afford the legal loss. NuVasive reported more than half a billion dollars in cash reserves at the end of June. NuVasive’s last financial report showed the company generated more than $478 million in revenue in 2010 with profits of more than $78 million.

The CEO of NuVasive estimated the federal court decision will cost his company $5 million in royalties this year and $11 million in 2012. The executive said the award will have no impact on the company’s day-to-day business.

One San Francisco senior stock analyst said that the patent infringement decision clears the slate for NuVasive. He noted that the patents remaining under dispute are smaller and of less interest to company investors.

Source: signonsandiego.com, “NuVasive hits with $101 million in patent infringement damages,” Keith Darce, Sept. 21, 2011