Court Overturns Multi-Million-Dollar Award to Medtronic in NuVasive’s Favor

San Diego, Calif,-based spine firm NuVasive Inc. is celebrating a reversal of fortune.

A Federal Court of Appeals Circuit overturned a damages award against NuVasive in an ongoing patent infringement battle with the spine unit of Medtronic plc.

The appeal challenged a September 2011 jury verdict in the first phase of the litigation between NuVasive and Medtronic. The jury found that the three remaining patents at issue in the appeal were infringed awarding total monetary damages of $660,000 to NuVasive and approximately $102 million to Medtronic, which included lost profits, the sale of ancillary or “convoyed” products and royalties.

On March 2, a the three-judge panel of the Court of Appeals issued a unanimous decision upholding the jury’s finding of liability as to all patents, but overturning the damage award against NuVasive as improper. The court ruled that the damages award was erroneous because Medtronic is not permitted to recover damages for lost profits or for the sale of convoyed products. Absent further proceedings on appeal, the case will be returned to the District Court for further proceedings to determine a proper damage award based solely on a reasonable royalty, according to information released by NuVasive.

NuVasive officials said the timing of a retrial to determine the new damages amount is “difficult to predict,” but could happen later this year.

“We are pleased with today’s legal ruling,” said Alex Lukianov, chairman and CEO of NuVasive. “This provides greater clarity on the process moving forward and affirms our view that Medtronic had been awarded an excessive amount of damages. By limiting the damages to only a reasonable royalty, we believe our overall exposure in this phase of the litigation has been reduced from the current amount we have accrued. We look forward to the upcoming retrial.”