Devices Surgery Orthopaedic Litigation

 News Release - January 17, 2006

Dr. Harvinder Sandhu & Kyphon File Suit Against Sofamor Danek

SUNNYVALE, Calif., Jan. 17 (HSMN NewsFeed) -- Kyphon Inc. (Nasdaq: KYPH ) today announced that suit was filed in late November 2005 in federal district court in Memphis, Tennessee against Medtronic Sofamor Danek and several other related corporate entities seeking compensatory and punitive damages and injunctive relief for breach of contract and related covenants, trade secret theft, fraud, unjust enrichment, and correction of inventorship of several patents and patent applications presently owned by Sofamor Danek, including U.S. Patent No. 6,676,665. The complaint was unsealed on January 17, 2006 at Kyphon's request after the parties were unable to reach an agreement resolving their dispute.

The dispute concerns inventions related to an expandable, mechanical bone tamp for use in treating vertebral compression fractures that Dr. Sandhu, a well-respected orthopaedic surgeon, invented in the late 1990's. In 1999, Dr. Sandhu confidentially disclosed and discussed his inventions with Sofamor Danek after execution of a nondisclosure agreement. The complaint alleges that Sofamor Danek soon thereafter began to file for several patents encompassing and claiming Dr. Sandhu's inventions without naming him as inventor of that technology and without first seeking his permission to do so. The complaint further alleges, among other things, that Sofamor Danek also incorporated Dr. Sandhu's inventions into its internal Equestra project, again without his permission, and that Sofamor Danek recently admitted and confirmed to Dr. Sandhu that its prototype Equestra void creator product is identical to Dr. Sandhu's confidentially disclosed invention. In late 2005, after failing to reach agreement with Sofamor Danek to resolve the dispute, Dr. Sandhu exclusively licensed to Kyphon all of his intellectual property rights to his inventions.

The suit against Sofamor Danek, filed by both Dr. Sandhu and Kyphon, seeks redress for Sofamor Danek's alleged misconduct and requests, among other relief, that Sofamor Danek transfer to Dr. Sandhu ownership of its patents and patent applications covering his bone tamp inventions, including the '665 patent, and that Sofamor Danek respect Dr. Sandhu's rights and not commercialize his inventions without permission.

About Kyphon Inc.

Kyphon develops and markets medical devices designed to restore spinal function using minimally invasive technologies. The company's KyphX line of products are used in balloon kyphoplasty, a minimally invasive procedure to treat spinal fractures caused by osteoporosis or cancer. For more information, visit Kyphon's Web site at http://www.kyphon.com .

NOTE: Kyphon and KyphX are registered trademarks of Kyphon Inc.

Source: Kyphon

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