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Spine Wars: Michelson vs. the Industry? BY ROBIN R. YOUNG CFA, OCTOBER 4, 2004

If we've heard it once, we've heard it a dozen times. Gary Michelson, with attorneys in tow, haunts spine company booths at conferences like the upcoming NASS or CNS informing them of patent violations on the fly. Yikes! And last week a federal court jury ordered Sofamor Danek to pay Michelson about $110 million in a dispute over royalties for a number of its spinal fusion technologies.

Four years ago Michelson won a case (on Sofamor Danek's dime) against U.S. Surgical over his spine cage design.

Somewhat cynically I've said for years that the main value of a U.S. patent is that it gives you the opportunity to sue and be sued.

In reality, the US patent office has approved patents that are marginal patents and decided to let the courts sort out the mess. Once in the courts, it is a jury that decides the case. And in the words of Paul Simon, no jury of my peers would ever find me guilty. Indeed, can a jury of average citizens understand the intricacies of spinal fusion technology and markets, to the tune of $100 million? If this were truly a jury of Michelson and Sofamor Danek's peers, would this have been the verdict?

In last week's ruling, the Tennessee jury found that Sofamor Danek owed Dr. Gary Michelson $110 for a variety of spinal implant inventions that Sofamor Danek has been commercializing for years. In addition, the jury ordered Sofamor Danek to pay unspecified damages for patent infringement, according to court documents.

Dr. Michelson had claimed $1.7 billion in damages, lost royalties and compensation for failure to market his inventions.

What the jury did agree with and then ruled on accordingly was that Sofamor Danek had breached certain aspects of the purchase and licensing agreements with Dr. Michelson and his company, Karlin Technology as well as infringed certain of his patents.

The dispute between Michelson and Sofamor Danek goes back a few years. In 2001, it was Sofamor Danek that sued claiming that Dr. Michelson had tried to sell spine surgery tools and implants to Sofamor Danek's competitors in violation of an existing noncompete agreement. The outcome of that trial won't be known for about another month.

The implants and instruments, as best we can determine, refer to the following:

• The ATLANTIS' Anterior Cervical Plate System which is licensed under one or more of G. Karlin Michelson, M.D., Patent Nos.: 6,193,721; 6,398,783; 6,454,771.
• The COLORADO 2' Spinal System of spinal instrumentation. The guide tubes incorporate technology developed by Gary K. Michelson, M.D.
• The MD I through MD IV Bone Dowels implant methods and instruments incorporate technology developed by Gary K. Michelson, M.D.
• The ZEPHIR', PREMIER', and ATLANTIS' products are licensed under one or more of G. Karlin Michelson, M.D., Patent Nos.: 6,193,721; 6,398,783; 6,454,771.

Doing a quick search at the US Patent office, we came up with the following under Dr. Michelson:

• US Patent # 6,454,771 B1 Anterior cervical plating system Gary K. Michelson, 438 Sherman Canal, Venice, Calif. 90291 (US) Filed on Jan. 04, 2001, as Appl. No. 9/754,733
• US Patent #6,485,517 B1 Nested interbody spinal fusion implants Gary K. Michelson, 438 Sherman Canal, Venice, Calif. 90291 (US) Filed on May 05, 2000, as Appl. No. 9/566,272
• US Patent No. 6,416,528 to Gary K. Michelson of Venice, CA for Anterior cervical plating system, instrumentation, and method of installation

In addition, Dr. Michelson had licensed a number of spinal implant products to Centerpulse (now Zimmer Spine):

• The Trinica(TM) and Trinica(TM) Select Anterior Cervical Plate Systems technology. Invented by GARY KARLIN MICHELSON, M.D., these are covered by one or more of the following: U.S. Patent Nos. 6,193,721, 6,398,783, 6,416,528, 6,454,771 and D449,692; and pending U.S. and international patent applications.