Healthcare Technology Featured Article

July 11, 2012

St. Jude Medical Sued for Breach of Contract by University of Michigan


The University of Michigan is suing St. Jude Medical (SJM), accusing the medical device maker of failing to pay $4.3 million in royalties on sales of St. Jude's Epic and Trifecta cardiovascular valves, according to a story at massdevice.com.

Heart valves prevent the backward flow of blood. “As the heart muscle contracts and relaxes, the valves open and shut, letting blood flow into the ventricles and atria at alternate times,” the University of Miami Health System explained. Heart valve malfunctions can result in heart failure.

The university said its deal with the St. Paul, Minn.-based company “gives St. Jude the exclusive right to use a Michigan patent covering a “method of making Calcification-Resistant Bioprosthetic Tissue, including certain technology described in the patent,” according to the story.

In return, the company agreed to pay a 5-percent royalty on net sales of the Epic and Trifecta devices.

But in June 2011, according to the lawsuit, St. Jude realized it had overpaid some $4.3 million in royalties from 2009 to 2011, and sent the company a letter to that effect, adding that it planned to apply the alleged over-payment as a credit to future royalty payments to Michigan.

"The purported reason for SJM's change in position for royalties payable to Michigan is an alleged change in the manufacturing process used by SJM and the difference in patent claim scope between patents of Michigan issued in the United States versus claims issued to Michigan in other countries," according to the lawsuit, massdevice.com reported.

According to the story, Michigan is demanding a jury trial, unpaid royalties and damages, according to the suit, filed in the U.S. District Court for Eastern Michigan.

St. Jude Medical has had good and bad news this year. In April, SJM undertook a study to see if patients with certain heart implants could safely withstand MRIs. But earlier this year, flaws were found in components of a heart device made by the company.




Edited by Braden Becker
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