Medtronic Will Appeal Jury Verdict

Medtronic, Inc. (NYSE: MDT) announced today that it will appeal a verdict from a federal jury in Boston that its VERTEX® line of multi-axial pedicle screws infringe, under the doctrine of equivalents, a patent licensed to DePuy Spine, a division of Johnson & Johnson. Under the verdict, the jury found $226.3 million in damages to DePuy. The verdict is not yet final and is subject to post-trial rulings on certain of Medtronic’s defenses. When and if the judgment is entered by the court, Medtronic will appeal.

Medtronic had previously prevailed in the case, under an award of summary judgment from a lower trial court. In November 2006, the Federal Circuit agreed with Medtronic that there was no literal infringement of the patent, but remanded the case for trial under the doctrine of equivalents. Prior to the remanded trial, which began on Sept. 10, 2007, a federal court sitting in California in a separate suit, found the same patent to be invalid, and dismissed that case. Medtronic was not allowed to challenge the validity of the patent in the Boston trial. The United States Patent and Trademark Office has also recently initiated a reexamination of the patent, which is set to expire in July of 2010.

“We are disappointed in the jury’s verdict,” said Pete Wehrly, senior vice president and president of the Spine and Biologics business unit at Medtronic. “We appreciate the time and effort that the jury put into this case but we respectfully disagree and we will appeal. We respect the intellectual property rights of others, and will vigorously defend ourselves.”

DePuy has indicated that it will request a permanent injunction once the judgment is final. Medtronic is in the process of phasing in a non-infringing screw design with improved features and patient benefits.