Medtronic Inc. will receive several million dollars in a settlement of a dispute with a Massachusetts company it had accused of violating some of its patents covering technology for insulin pumps.
As a result of the settlement, announced Thursday, Medtronic will also cross-license the affected patents with the defendant, Insulet Corp.
In a statement, Insulet said it would make a one-time payment to Medtronic. It didn't disclose the precise amount but said that the payment and legal fees together added up to about $10 million.
The settlement resolves an issue that had weighed on the stock value and financial prospects of Insulet, a Bedford, Mass., company with about $200 million in annual revenue that has been growing quickly by selling a new type of pump to people with insulin-dependent diabetes.
Insulet shares closed up 4 percent, or $1.39, to $36.60 on the Nasdaq Stock Market. Medtronic shares rose 13 cents to $52.94 on the New York Stock Exchange.
Insulet's OmniPod is a podlike device that holds and delivers insulin and can be worn on many parts of the body. It is coupled with a wireless handheld device that programs the pod and calculates insulin doses with help from a built-in blood glucose meter.
Fridley-based Medtronic, a medical device giant that gets about 10 percent of its $16 billion in annual revenue from diabetes-related products, sued Insulet a year ago in a Los Angeles federal court, alleging that Insulet infringed some of its patents for features of insulin pumps.
In the settlement, the two companies agreed not to sue each other over intellectual property on existing products.
However, the firms noted limits to the cross-license pact. For instance, it does not cover patents Medtronic holds for so-called "closed loop" insulin pump systems, which adjust automatically without human intervention.