On June 30, 2016, NuVasive, Inc. (the
“
Company
”) issued a news release announcing that it had agreed to settle its ongoing patent litigation with Medtronic plc. A copy of the news release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The Company reached agreement with Medtronic plc together with its wholly owned subsidiaries Medtronic Sofamor Danek USA, Inc., Warsaw
Orthopedic, Inc., Medtronic Puerto Rico Operations Co., and Medtronic Sofamor Danek Deggendorf GmbH (collectively, “
Medtronic
”) on terms for the settlement of the previously disclosed patent infringement lawsuits between the
Company and Medtronic, as well as the withdrawal from related proceedings in the United States Patent and Trademark Office (the “
USPTO
”). Under the terms of the settlement, the Company will make a one-time, lump sum payment
in the amount of $45.0 million to Medtronic, and the parties will release each other from,
inter alia,
any and all past patent infringement arising from the litigation originally filed against the Company by Medtronic in 2008. NuVasive
previously established a litigation liability reserve related to the litigation, which as of March 31, 2016, exceeded the amount of the lump sum payment. Under the terms of the settlement, the parties have also agreed to grant each other
irrevocable, worldwide, nonexclusive, paid-up, royalty-free licenses to practice certain of their respective patents as to certain of their respective existing product lines, subject to specified exceptions and limitations.
The Company and Medtronic also agreed as part of the settlement that, subject to certain limitations and exceptions, and for a period of seven
years, neither party will assert against the other certain claims for patent infringement (generally claims related to spinal implants and related instruments, biologics and neuromonitoring) other than through a specified dispute resolution process,
with the right to thereafter pursue claims outside that process subject to certain limitations and exceptions. Further, Medtronic has agreed that, for a period of five years, and subject to limitations and exceptions, it will not assert against the
Company certain other claims for patent infringement other than through a specified dispute resolution process, with the right to thereafter pursue claims outside that process subject to certain limitations and exceptions.
The Company and Medtronic intend to enter into a definitive settlement agreement (the “
Definitive Agreement
”) within
15 days, after which the Company will make the one-time payment to Medtronic, the parties will file joint motions to dismiss with prejudice the litigation, and the parties will take all necessary actions to withdraw from pending proceedings or
related challenges in the USPTO against the other party’s patents.
This Current Report on Form 8-K includes forward-looking
statements that are not a description of historical facts and that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause NuVasive’s results to differ materially from
historical results or those expressed or implied by such forward-looking statements. Forward-looking statements include, but are not limited to, statements about the terms and timing of the Definitive Agreement, as well as anticipated future actions
of the Company and Medtronic in furtherance of the settlement and the expected impact of the settlement. The forward-looking statements contained herein are based on the current expectations and assumptions of NuVasive and not on historical facts.
The following important factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: the risk that the Definitive Agreement is delayed or not executed, or the Definitive Agreement,
when executed, contains terms different from, or in addition to, those described herein. Additional risks and uncertainties that may affect future results are described in NuVasive’s news releases and periodic filings with the Securities and
Exchange Commission. NuVasive’s public filings with the Securities and Exchange Commission are available at www.sec.gov. NuVasive assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the
date on which it was made.