Medtronic 2013 Annual Report Download - page 131

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75732me_10K.indd 116 6/25/13 6:40 PM
Table of Contents
Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)
Litigation with Wyeth and Cordis Corporation
On February 22, 2008, Wyeth and Cordis Corporation (Cordis) filed a lawsuit against the Company and its subsidiary, Medtronic
AVE, Inc., in U.S. District Court for the District of New Jersey, alleging that Medtronic's Endeavor drug-eluting stent infringes
three U.S. “Morris” patents alleged to be owned by Wyeth and exclusively licensed to Cordis. On January 19, 2012, the Court
found the patent claims asserted against Medtronic to be invalid and entered an Order and Judgment in favor of Medtronic and
the other defendants. Wyeth and Cordis have appealed. The Company is indemnified for the claims made by Wyeth and Cordis.
The Company has not recorded an expense related to damages in connection with these 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 this matter.
Litigation with Edwards Lifesciences, Inc.
On March 19, 2010, the U.S. District Court for the District of Delaware added Medtronic CoreValve LLC (CoreValve) as a party
to litigation pending between Edwards Lifesciences, Inc. (Edwards) and CoreValve, Inc. In the litigation, Edwards asserted that
CoreValve’s transcatheter aortic valve replacement product infringed three U.S. “Andersen” patents owned by Edwards. Before
trial, the court granted summary judgment to Medtronic as to two of the three patents. Following a trial, on April 1, 2010 a jury
found that CoreValve willfully infringed a claim on the remaining "Andersen" patent and awarded total lost profit and royalty
damages, as of that time, of $74 million. On November 13, 2012, the U.S. Court of Appeals for the Federal Circuit upheld the
jury verdict. Medtronic filed a petition for certiorari to the United States Supreme Court on May 6, 2013. Medtronic recorded an
expense of $245 million related to probable and reasonably estimated damages for this matter in the second quarter of fiscal year
2013, of which $84 million was paid on February 28, 2013.
On March 12, 2010, Edwards served a second lawsuit in the Delaware court upon CoreValve, Medtronic Vascular, and Medtronic,
asserting that Medtronic's transcatheter aortic valve replacement product from CoreValve infringed three U.S. "Andersen" patents
owned by Edwards, including two of the patents that were the subject of the first lawsuit. Medtronic has moved to dismiss the
lawsuit. Also pending in the Delaware court is Edwards' claim that the CoreValve transcatheter aortic valve replacement product
infringes a "Cribier" patent. This claim is scheduled for trial in calendar year 2014. The Company has not recorded an expense
related to damages in connection with these 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.
Edwards has also brought actions in Europe alleging patent infringement. Edwards previously asserted that the CoreValve product
infringed an "Andersen" patent in Germany and the United Kingdom, which is a counterpart to the U.S. "Andersen" patents. Courts
in both countries found that the CoreValve product does not infringe the European "Andersen" patent and dismissed both cases.
On August 30, 2012, Edwards commenced a proceeding in Mannheim, Germany, alleging that Medtronic's CoreValve transcatheter
valve infringes three European patents and seeking injunctive and other relief. On June 14, 2013, the Mannheim court dismissed
Edward's case on the merits that Medtronic's CoreValve transcatheter valve infringes the "Cribier" patent. Proceedings in the other
two patents are pending, with one ruling expected July 12, 2013 and a trial hearing scheduled for the other on December 20, 2013.
The Company has not recorded an expense related to damages in connection with this matter 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 this matter.
Sprint Fidelis Product Liability Matters
In 2007, a putative class action was filed in the Ontario Superior Court of Justice in Canada seeking damages for personal injuries
allegedly related to the Company's Sprint Fidelis family of defibrillation leads. On October 20, 2009, the court certified a class
proceeding but denied class certification on plaintiffs' claim for punitive damages. Pretrial proceedings are underway. The Company
has not recorded an expense related to damages in connection with this matter 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 this matter.
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