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What are examples of the terms of agreement for licensing invasive medical devices?
Hello! Thanks for asking Wonder for examples of the terms of agreement for licensing invasive medical devices. The most useful sources I found to response to your query were Law Insider and the SEC website.
After searching extensively through SEC documents, company press released, and a sample contract database, I’ve determined that the information you requested is not publicly available because companies typically do not release the details of their license agreements. However, I was able to learn that license and purchase agreements typically contain a confidentiality or non-disclosure clause, limiting their public availability. I found one technology license agreement that may be of some interest, as it is between Surgi-Vision, Inc. and Cardiac Pacemakers, Inc, which was a sub-organization of Boston Scientific. However, the agreement is rather dated (2008), and it seems that Cardiac Pacemakers may not long be operating. Below, please find the results of my research, along with my research methodology.
Please note that I am not an attorney, and this information should not be taken as legal advice.
METHODOLOGY
I searched extensively through the SEC website and Edgar database, the Law Insider database, corporate annual reports and press releases, and reputable new sources such as PR Newswire. I did deep xRay searches of all of the sites and more in an attempt to unearth the data you seek, but these searches revealed no data regarding the licensing of the product you identified or others. Using the Law Insider Contract Database and Search Engine, I searched for information on both companies you specified, as well as using search terms targeted at licenses involving invasive medical devices. But again, the information proved elusive. I searched both company websites, annual reports, and press releases, to no avail. I also reached out to my fellow research colleagues, one of whom is an attorney, and still no data regarding the details of license agreements could be found. Likely, this lack of data is due to the confidential nature of such agreements.
FINDINGS
From my research, I found no documents that indicate Medtronic has entered into a license agreement with another company in relation to its Activa PC+S Deep Brain Stimulation (DBS) device to any other company. An FDA product recall names Medtronic alone as the manufacturer initiating the recall. Also, Activa is listed in Medtronic's portfolio in its annual report, suggesting that the company sells the product directly to buyers. In one of its annual report 10-K filings, the company states, "We rely on a combination of patents, trademarks, copyrights, trade secrets, and non-disclosure and non-competition agreements to establish and protect our proprietary technology .... 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."
Similarly, I found no data regarding licensing of Boston Scientific Vercise Primary Cell (PC) DBS device.
SAMPLE AGREEMENTS AND CONTRACTS
My research turned up one license agreement, but it is directly related to the one you already found for Medtronic and Urologix, which is in regard to a non-invasive device. The agreement I found appears as though it may be the parent agreement for the one you located, so it may be of some benefit to peruse the document. While some figures are omitted from the publicly available in formation, the document establishes that, "Urologix shall pay to Medtronic the non-refundable amount of One Million Dollars ($1,000,000) ( less the Purchase Price under the Asset Purchase Agreement and less any credit issued under Section 3.2(a)(i) of the TSSA) (the “License Fee”). Five Hundred Thousand Dollars ($500,000) of the License Fee is to be paid immediately upon execution of this Agreement. The remaining Five Hundred Thousand Dollars ($500,000) (less the Purchase Price under the Asset Purchase Agreement and any credit issued under Section 3.2(a)(i) of the TSSA ) shall be paid by Urologix to Medtronic on the twelve (12) month anniversary of the Effective Date, subject to Sections 2.2(a)(v), 4.1(d)(ii) and 4.1(d)(iii) of the TSSA."
Medtronic received FDA approval for its "Activa® RC and Activa PC, the most innovative deep brain stimulation (DBS) devices available for the treatment of the symptoms of advanced Parkinson’s disease and essential tremor" in 2009. It received FDA approval for "its Activa® portfolio of Deep Brain Stimulation (DBS) neurostimulators have received FDA approval for full-body Magnetic Resonance Imaging (MRI)" in 2015. Urologix is now operated as the privately-held Urologix LLC.
TECHNOLOGY LICENSE AGREEMENT
Cardiac Pacemakers, Inc. is a sub-organization of Boston Scientific. A 2008 Technology License Agreement between Surgi-Vision IP and Cardiac Pacemakers, Inc., found at the SEC website, indicates that, "In consideration of the exclusive license in the Implantable Cardiac Field to the Surgi-Vision IP granted herein, CPI agrees to pay to SVI royalties on Net Sales of Royalty Products as follows: either (i) one and a half (1.5%) percent of the aggregate worldwide Net Sales of all Reduced Royalty Products; or (ii) three and a half (3.5%) percent of the aggregate worldwide Net Sales of Royalty Products which are not Reduced Royalty Products. After the aggregate royalty payments to SVI under this Agreement (which excludes the License Fee, as defined hereunder) reach one hundred million ($100,000,000.00) dollars, the royalty on Net Sales of all Royalty Products which are not Reduced Royalty Products will be reduced from three and a half (3.5%) percent to two (2%) percent." Additional details regarding compensation arrangements can be found in section 3 of the agreement.
FURTHER RESEARCH SUGGESTIONS
During my research, I discovered the Law Insider Contract Database and Search Engine. Further information may be available at this website; however, without the specific names of the licensor, licensee, and product name, it was difficult to conduct a thorough search of this site. Furthermore, the information found there is somewhat limited in nature, as financial figures are only partially disclosed on license and purchase agreements. A search of this database for Medtronic and Boston Scientific provides some samples document, though documents meeting your criteria proved elusive.
In addition to this database, I found a medical device royalty rates reference document that is available for purchase. The document, entitled "Royalty Rates for Medical Devices Diagnostics: 2016 Edition" can be purchased here.
The SEC Edgar database may be of further assistance, but it would require knowing the names of the companies and products involved to find useful data. Information the SEC regulations for patents can be found here.
Also, an article at the Association for Academic Surgery offers advice for how to commercialize a medical device, which you might find beneficial.
SUMMARY
In summary, while the specific data you requested was not available publicly, I was able to provide one sample technology licensing agreement, as well as several resources for further research that I hope will prove beneficial as you pursue your product goals.
Thanks for using Wonder for your research needs! Please let us know if we can be of further assistance.