A Medical Device Daily

Big medical device makers were prominent in the legal arena this week, with a whistleblower challenging a $40 million settlement between Medtronic (Minneapolis) and the government, while in another action Boston Scientific (Natick, Massachusetts) and St. Jude Medical (St. Paul, Minnesota) agreed to settle their technology battles – at least on some issues.

The New York Times reported yesterday that a whistleblower is challenging a ruling that Medtronic must make a federal settlement of $40 million because of violations by its Medtronic Sofamor Danek (Memphis, Tennessee) subsidiary. Jacqueline Poteet is one of two whistleblowers who have made charges against the company, but she was excluded from the settlement.

Andrew Carr, a lawyer for Poteet, has filed a complaint in the U.S. District Court in Memphis, saying that the case had not been investigated “adequately,” and calling the $40 million settlement “woefully inadequate.”

Poteet, a former Medtronic Sofamor Danek employee, in her original lawsuit had claimed that she was assigned to make travel arrangements for doctors to what she described as “lavish” company conferences, and she said that the payments were used to induce the doctors named in the lawsuit and others to use Medtronic products and to recruit other doctors to do the same (Medical Device Daily, Jan. 27, 2006).

The lawsuit claimed that these trips and the financial inducements had the effect of distorting the physicians' decision-making in treating patients.

Poteet originally filed charges in 2003 but has since said that Medtronic has continued to make the payments to doctors in 2004 and 2005.

According to the Times report, Poteet's claims may be challenged on the basis that her charges are redundant, simply a refiling of allegations made by an earlier whistleblower, and therefore fall under the category of a “copycat” filing.

In the dispute between Boston Scientific and St. Jude Medical, the companies reported reaching a settlement on four patent infringement disputes related to electronic device technologies and said they have cross-licensed a variety of patents.

The agreement ends disputes over components in pacemakers and defibrillators, and in neurostimulators, for pain treatment.

In the case of the cardiovascular technologies, the settlements primarily involve patents obtained in Boston Scientific's purchase of Guidant (Indianapolis) earlier this year. The agreements also cross-license neurostimulation technology and won't involve any payment of royalties.

Additionally, the deals between the two companies limit continuing litigation in two cases over implantable defibrillators, including one in Indianapolis that resulted in a $140 million verdict against St. Jude and is scheduled for a new trial in April of next year.

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