Medtronic, Inc. (MDT) recently entered into a legal tussle with Medgraph Inc, whereby the latter has claimed that Medtronic’s Carelink System violates its patent. Medgraph has also claimed that the patent infringement by Medtronic was willful, deliberate and with full knowledge. Medgraph specializes in communicating diagnostic information between patients and their physicians.
Carelink is Medtronic’s patient management tool. It is actually a complete package of Carelink Network, monitor and software that helps physicians to better manage chronic cardiovascular diseases of patients who are being treated by implantable device therapy.
Medtronic has denied Medgraph’s claim after its initial review. The company has reported that the patent itself may not be valid as the claimed invention was already made by several others before Medgraph applied for its patent.
Medtronic is presently running through a bad phase. The company recently disclosed that it has received a subpoena from the Office of Inspector General for the Department of Health and Human Services in the District of California requesting production of documents relating to its cardiac rhythm medical devices. The company will comply as required with the terms of the subpoena.
Medtronic is one of the world’s leading medical technology companies, specializing in implantable and interventional therapy devices and products. The company’s main competitors include St. Jude Medical (STJ) and Boston Scientific Corp. (BSX).
Medtronic’s management has a typical “ONE Medtronic” approach that encompasses the following goals: drive sustainable long-term growth of 9%−11% through innovation, focus on operating margins − increase by 300 to 400 basis points, EPS growth of 11%−14% and return a minimum of 40%−50% of free cash flow to shareholders annually, and align the organization for consistent execution. Medtronic’s results till date indicate that the company is well on track to achieve these goals.
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