WARSAW — Former Warsaw surgeon and inventor Dr. Rick C. Sasso has filed a lawsuit against Warsaw Orthopedic Inc., Medtronic PLC and Medtronic Sofamor Danek Inc. in Kosciusko County Superior Court I. The lawsuit revolves around access to a sales ledger to determine royalties owed following the 2018 lawsuit granting Sasso $112.5 million in damages.
The complaint addresses Medtronic’s failure to comply with the audit provisions contained in two agreements Medtronic entered into with Sasso: the 2001 Vertex Agreement and the 1999 Screw Delivery System Agreement.
The $112.5 million in damages from the won lawsuit were limited to unpaid Vertex royalties and prejudgment interest due up until the first day of the trial, Nov. 1, 2018, and unpaid Screw Delivery System royalties and prejudgment interest due through Dec. 31, 2017. The complaint states that Sasso could not pursue additional royalties because the amounts owed by Medtronic can’t be determined until Medtronic completes sales of the relevant medical devices and discloses and accounts for the sales. Currently, Medtronic continues to sell both Vertex and medical devices that use the Screw Delivery System.
The Vertex agreement requires Medtronic to continue paying royalties on sales of Vertex so long as “the medical device is covered by a valid claim of an issued patent arising out of the Intellectual Property Rights.” The Screw Delivery System agreement requires Medtronic to continue paying royalties until the expiration of two patents — Nov. 23 at the earliest.
On Feb. 19, Sasso requested access to the Medtronic ledger. On Feb. 27, Medtronic responded that they were reviewing the request, but provided no date to respond nor any indication that they would actually allow Sasso to proceed with the audit.
The complaint goes on to state that, based on prior history, Medtronic will not provide access to the sales ledger since they have been breaching contracts with Sasso since 2010. In 2015, a dispute regarding hip pins began in 2019 and Medtronic was ordered to pay $2.34 million in damages and to account for sales to Sasso. This amount was never paid. The complaint discussed other breached contracts, including a SiLo agreement and a Bryan Disc agreement.
The complaint further states that Sasso learned “Medtronic had generated new part numbers for several of the most profitable implant parts without informing him and did not include sales of those parts in his royalty calculations.”
The lawsuit seeks an injunction ordering Medtronic to provide “full and complete access to its SAP sales ledger to the Somerset CPA firm on a ‘confidential basis.'” This would allow Sasso to investigate and determine royalties owed under the 2001 Vertex Agreement and 1999 Screw Delivery System.