Medtronic 2014 Annual Report Download - page 132

Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)
Other INFUSE Litigation
On June 5, 2014, Humana, Inc. filed a lawsuit for unspecified monetary damages in the U.S. District Court for the Western
District of Tennessee, alleging that Medtronic violated federal racketeering (RICO) law and various state laws, by conspiring
with physicians to promote unapproved uses of INFUSE. The Company has not recorded an expense related to damages in
connection with this matter because any potential loss is not currently probable or reasonably estimable under U.S. GAAP.
Additionally, the Company cannot reasonably estimate the range of loss, if any, that may result from this matter.
Shareholder Related Matters
On March 12, 2012, Charlotte Kokocinski filed a shareholder derivative action against both the Company and certain of its
current and former officers and members of the Board of Directors in the U.S. District Court for the District of Minnesota,
setting forth certain allegations, including a claim that defendants violated various purported duties in connection with the
INFUSE bone graft product and otherwise. On March 25, 2013, the Court dismissed the case without prejudice. In May 2012,
Daniel Himmel and the Saratoga Advantage Trust commenced two other separate shareholder derivative actions in Hennepin
County, Minnesota, District Court against the same defendants, making allegations similar to those in the Kokocinski case.
West Virginia Pipe Trades and Phil Pace, on June 27 and July 3, 2013, respectively, filed putative class action complaints
against Medtronic and certain of its officers in the U.S. District Court for the District of Minnesota, alleging that the defendants
made false and misleading public statements regarding the INFUSE Bone Graft product during the period of December 8, 2010
through August 3, 2011. The Company has not recorded an expense related to damages in connection with these matters
because any potential loss is not currently probable or reasonably estimable under U.S. GAAP. Additionally, the Company
cannot reasonably estimate the range of loss, if any, that may result from these matters.
Mirowski
Medtronic is a licensee to the RE 38,119 patent (‘119 Patent) and RE 38,897 patent (‘897 Patent) owned by Mirowski Family
Ventures, LLC (Mirowski) relating to the treatment of hemodynamic dysfunction. Medtronic and Mirowski dispute the
application of the ‘119 and ‘897 Patents to certain Medtronic cardiac resynchronization products. On December 17, 2007,
Medtronic filed an action in U.S. District Court for the District of Delaware seeking a declaration that none of its products
infringe any valid claims of either the ‘119 or ‘897 Patents. If certain conditions are fulfilled, the ‘119 and/or ‘897 Patents are
determined to be valid, and the Medtronic products are found to infringe the ‘119 and/or ‘897 Patents, Medtronic will be
obligated to pay royalties to Mirowski based upon sales of certain cardiac resynchronization therapy-defibrillator (CRT-D)
products. On March 30, 2011, the trial court entered a judgment of non-infringement in Medtronic’s favor. On September 16,
2012, the Federal Circuit reversed and remanded the trial court’s decision for a new trial, based on its holding that the trial court
did not properly allocate the burden of proof in the initial proceedings. Medtronic’s petition for certiorari to the U.S. Supreme
Court was granted, and on January 22, 2014, the Supreme Court reversed the Federal Circuit’s decision regarding the burden of
proof. On March 11, 2014, the Federal Circuit affirmed the trial court’s judgment of non-infringement. The Company has not
recorded an expense pursuant to U.S. GAAP requirements in connection with this matter because any loss is not probable or
reasonably estimable. Additionally, the Company cannot reasonably estimate the range of loss, if any, that may result from this
matter.
Other Matters
The Company has received subpoenas or document requests from certain government bodies seeking information regarding
sales, marketing, clinical, and other information relating to the INFUSE bone graft product, including civil investigative
demands from the Attorneys General in Massachusetts, California, Oregon, Illinois, and Washington. The Company is fully
cooperating with these requests.
On September 16, 2009, the Company received a subpoena from the Office of Inspector General for the Department of Health
and Human Services in the Eastern District of California requesting production of documents relating to the Company’s cardiac
rhythm medical devices, including revenue, sales, marketing, and promotional documents, documents relating to reimbursement
communications to customers pertaining to the devices, documents relating to scientific studies and registries pertaining to the
devices, and documents relating to payments or items of value provided to customers. The Company recorded an expense of
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