VNUS Medical Technologies has been involved in a series of patent litigation lawsuits that have been on the verge of coming to a close for the past few months. The conclusion of that litigation is now here. AngioDynamics and Vascular Solutions have both agreed to a settlement in which the company can continue to make the products that are in violation of the patent lawsuit but they will have to pay upfront fees as well as an ongoing percentage of profits to VNUS. This results in approximately $10 million upfront cash to VNUS at this time, a fact which has caused already-high stocks in the company to soar.
AngioDynamics has agreed to pay $6.8 million up front to VNUS for the violations that have occurred in the past. The company will also be paying VNUS one quarter of the royalties on the product in violation. This latter payment will be ongoing through 2017, at which time the VNUS patent expires. Vascular Solutions will be in a similar situation, making a $3.1 million upfront payment and then paying out royalties until the patent expires.
Question of the Day: Does this conclusion to the litigation make you more interested in investing in VNUS Medical Techologies?
