Wake Forest gets $280M settlement
It’s Christmas in July for Winston-Salem’s largest employer. Wake Forest Baptist Medical Center settled a patent lawsuit with Kinetic Concepts Inc., a San Antonio-based company, which has agreed to pay $280 million in royalties through 2017.
The medical center will use income from the settlement to fund “major initiatives of strategic importance,” according to a statement issued today.
Wake Forest licensed technology for closing wounds, developed by faculty members Louis Argenta and Michael Morykwas, to KCI in 1993. The device led to about $500 million in royalties for Wake Forest, according to a 2012 Fortune story written by BNC contributing editor Ken Otterbourg.
Those royalty payments ended in 2010 after KCI said it was freed from the licensing agreements due to a federal court ruling invalidating the product’s patents. That prompted a lawsuit in which Wake Forest and KCI have accused each other of acting in bad faith.
Today’s statement notes that KCI will pay $80 million in 2014, $85 million in 2015, $85 million in 2016 and $30 million in 2017.
“The agreement negates the need for further litigation and fully releases all claims and counter-claims that were previously scheduled to go to trial in San Antonio, Texas, next month,” according to the statement.
KCI, founded in 1976 by Jim Leininger, is a private company owned by a group of pension funds and private-equity firms.