Boston Scientific Corporation announced on February 1 that it will pay USD1.725bn to settle a longstanding patent dispute with Cordis Corporation, a subsidiary of Johnson and Johnson.
The payment will settle three disputes between Boston Scientific and J&J dating back to 2003. The disputes were in regard of Boston Scientific's Jang patent and J&J's Palmaz and Gray patents, all of which involve intellectual property in the area of cardiovascular science.
In 2005, there were liability trials on these two matters, and, according to Boston Scientific, both parties were found to have infringed the other's patents. Those findings were upheld on appeal.
Damage claims from these two rulings were scheduled to be decided by two jury trials slated for this month in US District Court in Delaware. Those trials will no longer take place.
Ray Elliott, President and Chief Executive Officer of Boston Scientific, said that the company has decided to make a "concerted effort" to reduce litigation risk and has now settled 17 lawsuits with J&J, as well as disputes with the government and other companies.
"We believe today's settlement - while substantial - is in the best interest of the company and its shareholders," Elliot said. "It resolves major litigation without exposing Boston Scientific to the uncertainties of a jury trial and a potential damages award that was impossible to predict."
Boston Scientific was expected to pay Cordis USD1bn by close of business on February 1. The remaining USD725m is due to be paid on January 3, 2011.
“We are very pleased to resolve these long-standing patent disputes,” said Seth Fischer, Company Group Chairman, Cordis Corporation.
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