Medtronic 2015 Annual Report Download - page 133

Medtronic plc
Notes to Consolidated Financial Statements (Continued)
In addition, the Company believes that this manufacturer has an obligation to indemnify Covidien with respect to the promotion
of the pelvic mesh products. The litigation includes a federal multi-district litigation in the United States District Court for the
Northern District of West Virginia and cases in various state courts and jurisdictions outside the United States. Generally,
complaints allege design and manufacturing claims, failure to warn, breach of warranty, fraud, violations of state consumer
protection laws and loss of consortium claims. As of June 1, 2015, approximately 11,300 pending cases or claims were filed or
estimated to be filed involving products manufactured by Covidien’s subsidiaries. See “Accrued Certain Litigation Charges”
within Note 1 for additional discussion.
Patent Litigation
Ethicon
On March 28, 2013, the federal court ruled in favor of Covidien in a patent infringement suit against Ethicon Endo-Surgery, Inc.
(Ethicon), a Johnson & Johnson company, relating to Ethicon’s Harmonic®line of ultrasonic surgical products. The federal
court awarded Covidien $177 million in damages upon ruling that several of Covidien’s patents were valid, enforceable and
infringed by Ethicon. Ethicon appealed the decision. On December 4, 2014, the U.S. Court of Appeals for the Federal Circuit
reversed the $177 million judgment against Ethicon and ruled that the infringed patent claims were invalid. On June 24, 2014,
Covidien filed a lawsuit in the U.S. District Court for the District of Connecticut against Ethicon alleging that Ethicon’s
ultrasonic surgical product, the Harmonic ACE®+7, infringes three of the Company’s patents. Covidien asked the court to
enjoin Ethicon from continuing to make and sell the Harmonic ACE®+7 device and to grant damages for the patent
infringement. On October 17, 2014, the district court granted a preliminary injunction against Ethicon, which prevents Ethicon
from making and selling the Harmonic ACE®+7 device. Ethicon obtained a temporary stay and appealed this preliminary
injunction ruling. On March 25, 2015, the U.S. Court of Appeals for the Federal Circuit reversed the preliminary injunction
entered against the Harmonic ACE®+7 and remanded for further proceedings. On May 8, 2015, pursuant to a stipulation of the
parties, the U.S. District Court for the District of Connecticut dismissed that case involving the Harmonic ACE®+7.
Ethicon Endo-Surgery, Inc., et al. v. Covidien, Inc., et al. is a patent infringement action filed on December 14, 2011 in the
United States District Court for the Southern District of Ohio, Western Division. The complaint alleges that Covidien’s
Sonicision product infringes several of Ethicon’s design and utility patents. Ethicon is seeking monetary damages and injunctive
relief. On January 22, 2014, the district court entered summary judgment in Covidien’s favor, ruling that Covidien does not
infringe any of the seven Ethicon patents in dispute and declaring five of Ethicon’s patents invalid. Ethicon has appealed the
district court’s decision. Oral argument before the U.S. Court of Appeals for the Federal Circuit was held March 6, 2015.
The Company has not recorded an expense related to damages in connection with the patent litigation matters because any
potential loss is not currently probable or reasonably estimable under U.S. GAAP. Additionally, the Company cannot
reasonably estimate the range of loss, if any, that may result from these matters.
Shareholder Related Matters
INFUSE
On March 12, 2012, Charlotte Kokocinski filed a shareholder derivative action against both Medtronic, Inc. and certain of its
current and former officers and members of its Board of Directors in the U.S. District Court for the District of Minnesota,
setting forth certain allegations, including a claim that defendants violated various purported duties in connection with the
INFUSE bone graft product and otherwise. On March 25, 2013, the Court dismissed the case without prejudice. On March 30,
2015, the Court granted defendants’ motion to dismiss the Amended Complaint, dismissing the case with prejudice.
In May 2012, Daniel Himmel and the Saratoga Advantage Trust commenced two other separate shareholder derivative actions
in Hennepin County, Minnesota, District Court against the same defendants, making allegations similar to those in the
Kokocinski case. On July 1, 2014, Road Carriers Local 707 Welfare & Pension Funds filed a shareholder derivative action in
Hennepin County, Minnesota, District Court against the same defendants making allegations similar to those in the Kokocinski,
Himmel, and Saratoga Advantage Trust cases. On July 24, 2014, Anne Shirley Cutler filed a shareholder derivative action in
Hennepin County, Minnesota, District Court against certain of the same defendants making allegations similar to those in the
Kokocinski, Himmel, and Saratoga Advantage Trust cases as well as allegations that defendants violated purported duties in
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