The past two years have not been kind to Metronic, which also lost patent lawsuits brought by Interpore Cross International, Biomet, Cytometix and Guidant. But the company isn't the only medical device maker that had to pay up this year. Indeed, the second-biggest payout was made by one of Medtronic's rivals, Boston Scientific, to Israel's Medinol.
Medinol claims that Boston Scientific took its equipment and reverse-engineered a copy with the intention of eliminating Medinol as a supplier, or buy the company cheaply. Medinol's $750 million settlement suggests it had a strong case, and the fight isn't over yet, according to Rory Millson, an attorney with Cravath, Swaine & Moore, which represents the company.
"We're going to bring a patent infringement case .... It's going to cover the Liberte and other products of theirs that we say infringe on our intellectual property," Millson said, vowing to pursue future royalties on a next-generation stent.
But winning a large settlement is not easy, according to Kirkland & Ellis LLC partner Robert Krupka, who represented Michelson in the Medtronic case and negotiated the settlement.
"Reaching that settlement was the hardest thing I've ever done as a practicing lawyer," he said. "Small differences on issues were magnified because of the amounts involved. This was an unusual settlement because the court was watching and the press was watching. It was a complicated mess because the deal was contingent on events."
Our survey shows that copyright and trade-secrets litigation can also yield huge payouts. In March, a California jury awarded memory-card maker Lexar Media more than $380 million in monetary damages in its lawsuit against Japanese computer maker Toshiba for breach of fiduciary duty and theft of trade secrets.
Semiconductor Manufacturing International, China's largest chip maker, agreed to pay $175 million to settle a patent infringement and trade-secrets suit brought by rival Taiwan Semiconductor Manufacturing in U.S. and Taiwanese courts.
In a high yielding copyright suit, a group of freelance writers won an $18 million settlement from database operators, including ProQuest Co., Reed Elsevier Group's LexisNexis database, as well as The New York Times and Dow Jones & Co., after alleging the operators used their articles in databases without the authors' permission.
The survey covered judgments, awards and publicly disclosed settlement amounts from January 1 until November 4 this year. There is no way to account for undisclosed settlement amounts. Of the millions in payouts in 2005, eight of the top ten were a result of out of court negotiations. Only two, the $480 million award to Paragon Trade Brands byWeyerhaeuser Co., and the $465 million award to Lexar by Toshiba, were handed down as verdicts.
Two firms appear in the top ten as representing both plaintiffs and defendants. Cravath, Swaine & Moore won a $750 million settlement representing Medinol, but lost a $400 million settlement defending Compuware.
Wilmer, Cutler, Pickering, Hale & Dorr defended Boston Scientific, which paid Medinol $750 million, but led EMC Corp. to a $325 million settlement against Hewlett Packard.
Although these million-dollar settlements are financially lucrative for plaintiff's attorneys, they can also be valuable in other ways, Krupka said.
"Before this case, I many people didn't know Kirkland had a California office," he said. "Now everyone knows. But as many people as were pleased and proud of us, there are others who are appalled that we were involved in transferring wealth of that magnitude to an individual."