Stryker inks $15M settlement to resolve Conformis patent dispute

Dive Brief:

Stryker has agreed to pay Conformis $15 million to settle patent litigation involving patient-specific shoulder instruments.
Conformis filed a lawsuit against Wright Medical, which is now part of Stryker, last year. The suit alleged Wright's shoulder instruments and associated implant components infringed certain Conformis patents.
The settlement comes around 14 months after Zimmer Biomet agreed to pay Conformis $9.6 million to close a dispute over patient-specific and partially patient-specific instrumentation for knee, shoulder or hip replacements.

Dive Insight:

Conformis is a relatively small player in the orthopaedic market. Last year, with the pandemic dragging sales down, Conformis reported revenues of $68.8 million whereas net sales at Stryker clocked in at $14.4 billion. Stryker's orthopaedic unit alone generated close to $5 billion in sales. Yet, Conformis has successfully pursued Zimmer and now Stryker over products it alleges infringe on its patents.

In 2015, Conformis granted Wright a license to use patient-specific instrument technology covered by its patents and patent applications with off-the-shelf foot and ankle implants. Five years later, in April 2020, Conformis filed a suit against Wright alleging products including Tornier Blueprint 3D Planning + PSI shoulder replacement systems infringed on four of its patents.

Wright denied that its products infringed the intellectual property in December and alleged that Conformis' patents are invalid. Stryker closed its takeover of Wright weeks before the denial.

Now, Stryker has decided against continuing to fight the case. The settlement will see Stryker pay $15 million by mid-October and get a non-exclusive license with respect to certain Conformis patents. The sum is significant for Conformis, which ended March with $105 million in cash and equivalents as the result of an $85 million stock offering.

Mark Augusti, CEO of Conformis, said the Stryker settlement "highlights the strength and value of our intellectual property, as well as our steadfast commitment to protecting and enforcing it." Conformis is still pursuing cases against other companies.

Notably, Conformis filed a lawsuit against the Johnson & Johnson business DePuy Synthes in April. The lawsuit alleges DePuy's multiple lines of patient-specific instruments and associated implant components infringe seven of Conformis' patents.