As part of the agreement, the companies will withdraw all pending cases or appeals in courts and patent offices worldwide.
The companies caught up in legal dispute for over a year after Abbott sued Edwards for patent infringement over its MitraClip. The companies had lawsuits pending in several jurisdictions globally.
The agreement specifies that both parties will not litigate patent disputes with each other in the field of transcatheter mitral and tricuspid repair and replacement products for the ten-year duration of the agreement.
In connection with the agreement, any injunctions that are currently in place will also be lifted.
Abbott said it will receive a one-time payment and ongoing payments based on Pascal sales through 2025, as well as a potential sales milestone payment in 2026.
Meanwhile, Edwards will book a one-time settlement expense in the June-ending quarter and will pay royalties to Abbott until May 2024. In addition, the company will incur royalty expenses until May 2024.
Edwards said it considers the agreement as a positive development as it allows the company to fully dedicate time and resources to help patients.
The companies have not disclosed the details of the settlement.
Last month, Abbot reported late-breaking data on its MitraClip system for transcatheter mitral valve repair and data on TriClip system for transcatheter tricuspid valve repair and the Tendyne transcatheter mitral valve implantation system.
The company received the US Food and Drug Administration (FDA) approval for its Gallant implantable cardioverter-defibrillator (ICD) and cardiac resynchronisation therapy defibrillator (CRT-D) devices last week.