Wake Forest Baptist announces $280 million settlement ending legal battle

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Walt Unks/Journal

WINSTON-SALEM, N.C. — Wake Forest Baptist Medical Center announced a $280 million settlement today in a legal dispute over a wound treatment therapy, according to the Winston-Salem Journal.

Kinetic Concepts Inc. (KCI) will make payments over three years to Wake Forest University Health Services, the research branch of the medical center, and the money will used “to fund major initiatives of strategic importance to the Medical Center,” according to a statement from Dr. John McConnell, the chief executive officer of Baptist.

The agreement resolves lawsuits between Wake Forest and KCI over the patents and licensing for Negative Pressure Wound Therapy, including a claim that was scheduled for trial in San Antonio, Texas, next month.

Kinetic Concepts Inc. sued Wake Forest University Health Sciences in February 2011, asking a federal court to rule that Kinetic no longer owed royalties on patents licensed from Wake Forest that have been declared invalid, according to the Express-News of San Antonio.

The hospital and KCI had formed a partnership in the 1990s that allowed KCI to develop a commercial application of the wound treatment developed by Wake Forest.

The payments were lucrative, with Wake Forest collecting $268 million in royalties from KCI from 2007 through 2010, Kinetic disclosed in a previous regulatory filing.

The wound-treatment system promoted healing primarily by using a vacuum — or “negative pressure” — to pull infectious fluid away from a wound, as well as draw the edges of the wound together.

The device was created by Dr. Louis Argenta and Michael J. Morykwas, two researchers in the medical center’s department of plastic and reconstructive surgery.