Medtronic, Insulet settle patent dispute

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.

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.