Medtronic 2015 Annual Report Download - page 18

approximately $238 million. Based upon a preliminary valuation, the Company acquired $159 million of customer-related
intangible assets and tradenames with an estimated useful life of 20 years at the time of acquisition and $197 million of
goodwill.
Sapiens Steering Brain Stimulation
On August 25, 2014, the Company acquired Sapiens Steering Brain Stimulation (Sapiens), a privately-held developer of deep
brain stimulation technologies. Total consideration for the transaction was approximately $203 million. Based upon a
preliminary valuation, the Company acquired $30 million of IPR&D and $170 million of goodwill.
Visualase, Inc.
On July 25, 2014, the Company acquired Visualase, Inc. (Visualase), a privately-held developer of minimally invasive MRI
guided laser ablation for surgical applications. Total consideration for the transaction was approximately $97 million. Based
upon a preliminary valuation, the Company acquired $66 million of technology-based intangible assets with an estimated useful
life of 10 years at the time of acquisition and $43 million of goodwill.
Corventis, Inc.
On June 20, 2014, the Company acquired Corventis, Inc. (Corventis), a privately-held developer of wearable, wireless
technologies for cardiac disease. Total consideration for the transaction was approximately $131 million, including a $50
million payment to Medtronic with respect to settlement of outstanding debt. Based upon the acquisition valuation, the
Company acquired $80 million of technology-based intangible assets with an estimated useful life of 16 years at the time of
acquisition and $48 million of goodwill.
Patents and Licenses
We rely on a combination of patents, trademarks, tradenames, copyrights, trade secrets, and non-disclosure and non-competition
agreements to establish and protect our proprietary technology. We have filed and obtained numerous patents in the U.S. and
abroad, and regularly file patent applications worldwide in our continuing effort to establish and protect our proprietary
technology. U.S. patents typically have a 20-year term from the application date while patent protection outside the U.S. varies
from country to country. In addition, we have entered into exclusive and non-exclusive licenses relating to a wide array of third-
party technologies. We have also obtained certain trademarks and tradenames for our products to distinguish our genuine
products from our competitors’ products, and we maintain certain details about our processes, products, and strategies as trade
secrets. In the aggregate, these intellectual property assets and licenses are of material importance to our business; however, we
believe that no single patent, technology, trademark, intellectual property asset or license is material in relation to any segment
of our business as a whole. Our efforts to protect our intellectual property and avoid disputes over proprietary rights have
included ongoing review of third-party patents and patent applications. For additional information see “Item 1A. Risk Factors—
We are substantially dependent on patent and other proprietary rights and failing to protect such rights or to be successful in
litigation related to our rights or the rights of others may result in our payment of significant monetary damages and/or royalty
payments, negatively impact our ability to sell current or future products, or prohibit us from enforcing our patent and other
proprietary rights against others.” and Note 16 to the consolidated financial statements in “Item 8. Financial Statements and
Supplementary Data” in this Annual Report on Form 10-K.
Markets and Distribution Methods
We sell most of our medical devices and therapies through direct sales representatives in the U.S. and a combination of direct
sales representatives and independent distributors in markets outside the U.S. For certain portions of our business acquired
through the Covidien acquisition, we also sell through distributors in the U.S. Our medical supplies products are used primarily
in hospitals, surgi-centers and alternate care facilities, such as home care and long-term care facilities, and are marketed to
materials managers, GPOs and integrated delivery networks (IDNs) primarily through third-party distributors, although we also
have direct sales representatives. We often negotiate with GPOs and IDNs, which enter into supply contracts for the benefit of
their member facilities. Our three largest markets are the U.S., Western Europe, and Japan. Emerging markets are an area of
increasing focus and opportunity as we believe they remain under-penetrated.
Our marketing and sales strategy is focused on rapid, cost-effective delivery of high-quality products to a diverse group of
customers worldwide — including physicians, hospitals, other medical institutions, and GPOs. To achieve this objective, we
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