Medtronic plc, Medtronic, Inc., Medtronic USA Inc., and Medtronic Sofamor Danek USA, Inc. to Pay $4.41 Million to Resolve Allegations
Apr 2 15
United States Attorney Andrew M. Luger announced that Medtronic, plc and affiliated Medtronic companies, Medtronic, Inc., Medtronic USA, Inc., and Medtronic Sofamor Danek USA, Inc., have agreed to pay $4.41 million to the United States to resolve allegations that they violated the False Claims Act by making false statements to the United States Department of Veterans Affairs (VA) and the United States Department of Defense (DoD) regarding the country of origin of certain Medtronic products sold to the United States. According to the settlement agreement, between 2007 and 2014, Medtronic sold to the VA and DoD products it certified would be made in the United States or other designated countries. The Trade Agreements Act of 1979 (TAA), generally requires companies selling products to the United States to manufacture them in the United States or in a designated country. The United States alleged that Medtronic sold the United States products manufactured in China and Malaysia, prohibited countries under the TAA. The specific Medtronic products at issue included anchoring sleeves sold with cardiac leads and used to secure the leads to patients, certain instruments and devices used in spine surgeries, and a handheld patient assistant used with a wireless cardiac device. The agreement covers the period from January 1, 2007 to December 31, 2013, and for one device (the handheld patient assistant), the period from January 1, 2014 to September 30, 2014. The settlement resolves allegations originally brought in a lawsuit filed by three whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and share in any recovery. This settlement illustrates the government's emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.
NuVasive Announces Successful Appeal of Medtronic Verdict
Mar 3 15
NuVasive, Inc. announced that the Court of Appeals for the Federal Circuit overturned the damages award in the Company's ongoing patent lawsuit with Medtronic Sofamor Danek USA, Inc. and Warsaw Orthopedic, Inc. The appeal challenged a September 2011 jury verdict in the first phase of the litigation between NuVasive and Medtronic. The jury found that the three remaining patents at issue in the appeal were infringed awarding total monetary damages of $660,000 to NuVasive and approximately $102 million to Medtronic, which included lost profits, the sale of ancillary or 'convoyed' products and royalties. On March 2, 2015, the three Judge panel of the Court of Appeals issued a unanimous decision upholding the jury's finding of liability as to all patents, but overturning the damage award against NuVasive as improper. Significantly, the Court of Appeals held that the damages award was erroneous because Medtronic is not permitted to recover damages for lost profits or for the sale of convoyed products. Absent further proceedings on appeal, the case will be returned to the District Court for further proceedings to determine a proper damage award based solely on a reasonable royalty. The timing of a retrial to determine the new damages amount is difficult to predict, but could occur later in 2015.