A Medical Device Daily

Medtronic (Minneapolis) reported that an independent arbitration panel has found in its favor in a case in which Johnson & Johnson (New Brunswick, New Jersey) and its Cordis (Miami Lakes, Florida) business unit alleged that Medtronic's Driver stent and several other Medtronic stents infringed certain Cordis patents.

The arbitration panel issued the non-appealable decision on Feb. 20 and the award became final on March 22, according to Medtronic.

The company said that the panel ruled that the Medtronic stents in question were licensed under a 1997 agreement between the companies, and that a 1998 Cordis “covenant not to sue“ barred Cordis from filing a lawsuit that the Medtronic Vascular (Santa Rosa, California) products infringed Cordis's patents.

As a result of the ruling, Medtronic said that the Driver stent and the other Medtronic stents in question have been found to be licensed to the Palmaz-Schatz patents owned by J&J/Cordis. It said it has moved to dismiss related litigation involving the same subject that had been stayed in the U.S. District Court for the District of Delaware pending the arbitration ruling.

Scott Ward, president of Medtronic Vascular, said the ruling “gives Medtronic further confidence in the intellectual property strength of Driver and Endeavor, and reinforces our belief that the company is well positioned to defend against legal challenges and assert our own patent rights.“

The Driver stent is the platform for Medtronic's Endeavor drug-eluting stent system sold in about 85 countries outside the U.S. Medtronic said it expects FDA approval for Endeavor in 2007.

In a related matter, on Feb. 23, Medtronic and J&J/ Cordis filed an unopposed motion in the U. S. District Court for the Eastern District of Texas, Marshall Division, to lift a stay in a patent infringement lawsuit Medtronic had filed against J&J/Cordis, alleging that the Cypher DES infringes Medtronic's Fitzmaurice catheter design patents. This case had been on stay pending the outcome of the arbitration panel award.

The stay was lifted March 2, and a trial will be scheduled.

In other legalities:

Wolf Haldenstein Adler Freeman & Herz reported filing a class-action suit in the U.S. District Court, Eastern District of Wisconsin, Milwaukee Division vs. Merge Technologies (doing business as Merge Healthcare ; Milwaukee) and various company executives for the period Aug. 2, 2005, through March 16, 2006.

The complaint concerns the all-stock merger between the company and Cedara Software (Toronto), completed June 2005 (Medical Device Daily, June 2, 2005), and that Merge represented that the merger was highly-successful and that it was maintaining a strong financial position, while concealing that it lacked adequate internal controls; that its financial statements for 2Q05 and 3Q05 were unreliable; and that its financial projections were “irresponsible“ given the knowledge defendants possessed concerning its actual situation.

The company first delayed its 4Q05 financial reports and then on March 17 reported a variety of auditing irregularities. This news resulted in a one-day decline of 16.3% in the price of the company's stock to $20.50.

A class-action lawsuit has been filed in the U.S. District Court for the District of Illinois against blood substitute manufacturer Northfield Laboratories (Evanston, Illinois), alleging misrepresentations of the company's market opportunities serving to inflate its market price. The class period is from Feb. 20, 2004, through Feb. 21, 2006.

Northfield has been recently seen its share price fall as the result of heavy criticism of previous and ongoing clinical trials of its PolyHeme oxygen therapeutic.