A Minneapolis medical device manufacturer said Friday that it would pay a Los Angeles back surgeon and his company $1.35 billion to end a long-running dispute over rights to spinal implants and other instruments invented by the doctor.
The deal is believed to be one of the largest ever involving an intellectual property dispute. Under its terms, Medtronic Inc. will pay $800 million to acquire many of Dr. Gary Michelson's inventions and an additional $550 million to settle all legal claims.
Michelson, 56, a former surgeon at Centinela Hospital Medical Center in Inglewood, and his licensing firm, Karlin Technology Inc., will share the total amount, which is less than the $1.7 billion the doctor had sought in federal court.
The accord concludes a four-year legal battle over technology that helped make Medtronic a world leader in spinal implants. The products at the center of the dispute were invented by Michelson to simplify basic spinal surgery, in which a damaged disk is removed and the adjacent vertebrae are fused together. The devices help patients recover more quickly and spend less time in the hospital.
Michelson, a prolific inventor whose many patents include a newfangled paper clip, said he was pleased that the dispute was over. The physician said it cost him more than $60 million to fight Medtronic in an all-consuming battle that put his professional life on hold.
"This has been a terrible distraction," he said. "I feel very good about being able to put this behind."
Michelson said that he planned to start a research foundation, contributing $200 million of the money he will be receiving from Medtronic. He has chosen a name -- Medical Research Foundation Trust -- but has not yet settled on a focus.
Medtronic, too, said it was pleased with the agreement because the company would get all of Michelson's spine-related inventions -- a portfolio of more than 100 U.S. patents, more than 110 pending U.S. patents and 500 patents in foreign countries. The company also will get rights to Michelson's future spinal inventions for the next 15 years.
"With this agreement, we come full circle in our relationship with Dr. Michelson," said Michael DeMane, head of Medtronic's spinal business.
The dispute centered on rights to implants, surgical tools and techniques that Michelson had licensed in the mid-1990s to Sofamor Danek, a company Medtronic acquired in 1999.
