BREAKING: Abbott, Edwards settle heart device patent spats

Abbott (NYSE:ABT) and Edwards Lifesciences (NYSE:EW) said that they have agreed to settle all outstanding patent disputes related to transcatheter mitral and tricuspid repair products, and Edwards has apparently already made an undisclosed one-time payment to Abbott.

The agreement will result in the dismissal of all pending cases or appeals in courts and patent offices worldwide, and includes a provision that the parties will not litigate patent disputes with each other in the field of transcatheter mitral and tricuspid repair and replacement products for the next 10 years. Any injunctions currently in place will be lifted.

A judge in the England issued an injunction in April barring Edwards from selling its Pascal transcatheter mitral valve repair (TMVR) device in the U.K. Judge Colin Birss of the High Court of England and Wales also ruled that two patents held by Abbott unit Evalve for its MitraClip TMVR device were valid and that Edwards’ Pascal device infringed them.

In April, the U.S. Patent Trial and Review Board (PTAB) shot down an attempt by Edwards to invalidate the patents that Abbott holds on MitraClip. The PTAB said Edwards failed to show that it would prevail in at least one of the claims it made against the patents owned by Abbott subsidiary Evalve, which makes MitraClip. Abbott bought Evalve in 2009 for $410 million.

Edwards filed the PTAB petition in July 2019, asking the board to review 25 claims that Evalve/Abbott hold on the MitraClip patent. Edwards had argued that the claims are unpatentable. Abbott responded that the patent claims Edwards challenged could be resolved in a trial that was scheduled to begin May 4, 2020. Abbott sued Edwards for patent infringement in U.S. District Court in Delaware in January 2019 over the same ‘493 patent on MitraClip.

In the settlement announced Yesterday, Edwards agreed to make ongoing payments to Abbott based on Edwards’ Pascal sales through 2025 as well as a potential sales milestone payment in 2026, according to Abbott. Edwards said it will record the one-time settlement expense in the quarter ended June 30, 2020, and will “incur royalty expenses through May 2024.”

Although the companies declined to release other details of the settlement Edwards said in a statement that it “considers this agreement a positive development, as it allows the company to fully dedicate time and resources to helping patients.”

Abbott and Edwards have been going head-to-head on transcatheter tricuspid valve repair devices outside of court as well. In May, Edwards announced that it received CE Mark approval for its Pascal system for treating tricuspid regurgitation (TR). Pascal is not yet approved in the U.S., although it did receive CE Mark approval for treating mitral regurgitation in February 2019. Abbott won the CE Mark for its TriClip transcatheter tricuspid valve repair system in March.

Yesterday’s settlement deal could be yet another example of how medical device companies are trying to avoid unnecessary costs — including potentially money-draining litigation and IP cases — amid the COVID-19 pandemic and resulting recession. It comes just days after two major insulin pump makers — Medtronic (NYSE:MDT) and Tandem Diabetes Care (NSDQ:TNDM) — announced that they’ve inked a non-exclusive patent cross-license agreement related to diabetes treatment tech. The cross-license agreement involves Medtronic’s and Tandems’ existing products, as well as new products for at least the next five years. The two companies also promised not to clone each other’s products. No money is changing hands as part of the deal.