Lilly v. Medtronic

Originally Published MX November/December 2003

GOVERNMENTAL & LEGAL AFFAIRS

In 1988, Eli Lilly and Co. brought suit against Medtronic Inc., alleging infringement by Medtronic of two U.S. patents for the automatic implantable defibrillator. Medtronic, which had once been the owner of these patent rights, asserted invalidity, and the case was tried before a jury in Philadelphia. Ultimately, the jury found the patent valid and that Medtronic willfully infringed, and awarded $26 million in up-front royalties and a 40% running royalty. The court held the patent enforceable and entered an injunction prohibiting further infringement. The injunction remained in place for 18 months.

On appeal, the defendant Medtronic argued that, claim scope and validity notwithstanding, the injunction ought be removed on the grounds that its clinical sales of the infringing product were immunized under the safe harbor provisions of Section 271(e)(1) of the Patent Act referring specifically to "a federal law regulating drugs."