Alphatec Spine and Cross Medical Products settle license agreement dispute


On 5 January, Alphatec Holdings, the parent company of Alphatec Spine, announced that it has reached a global settlement agreement of two pending lawsuits. In the first lawsuit, Cross Medical Products claimed that Alphatec Spine had breached the 23 April 2003 license agreement with Cross Medical by failing to make certain royalty payments. In the second lawsuit, Alphatec Spine claimed that a subsidiary of Biomet infringed a patent owned by Alphatec Spine. 

Under the terms of the settlement, all parties obtained a release of all claims that were the subject of the disputes. No party has admitted liability in connection with the settlement. The settlement also includes an amendment to the 23 April 2003 License Agreement.

“While we continue to believe in the strength of our position in this dispute, we felt it served the best interests of our stockholders to proactively settle the matter to eliminate ongoing legal costs resulting from the litigation and remove any uncertainty that is inherent in the litigation process,” said Dirk Kuyper, president and CEO of Alphatec Spine. “This settlement provides certainty and will allow us to more fully focus our time and resources on executing our 2012 business plan.” 

As part of the settlement, Alphatec Spine will pay Cross Medical an initial payment of US$5 million dollars. In addition to the initial payment, Alphatec Spine shall make thirteen payments of US$1 million, with the payments made quarterly, and the first payment being due on 1 August 2012, and each subsequent payment due three months thereafter until the final payment, which is due 1 August 2015 is made. The total cash impact of US$18 million will be dispersed in the following amounts: US$7 million in 2012, US$4 million in 2013, US$4 million in 2014 and US$3 million in 2015. In addition, pursuant to the settlement, the parties have exchanged covenants not to sue for patent infringement with respect to products that each respective company had on the market as of 30 December 2011.