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3/13/2012
Source: Law360
 

Boston Scientific Award Upped To $42M In Cordis Stent IP War

A Delaware federal judge on Tuesday more than doubled a $19.5 million jury award for Boston Scientific Corp. in its suit accusing Cordis Corp. of infringing a patent related to a Boston Scientific coronary stent, finding that Cordis' conduct was egregious enough to merit boosted damages.

After rejecting Cordis' bid to toss the lost profits award the jury passed down in May, U.S. District Judge Sue L. Robinson ruled that the medical device company had brought on an enhanced penalty by introducing a stent that incorporated a Boston Scientific patent the Federal Circuit ruled was valid in 2009.

"Taking into account the posture of this case, whereby Cordis launched its 2.25 mm Cypher [drug-eluting stent] after the Federal Circuit's infringement and validity disposition, and relied only on a subsequently filed re-examination as a defense in this suit ... the court is persuaded that enhanced damages are appropriate in this case," Judge Robinson said.

"As there exists clear and convincing evidence that Cordis' conduct is sufficiently culpable to justify enhancing damages, the court finds that doubling the jury's award (of $20,754,192, as amended) is reasonable under the circumstances," the judge said.

The stent dispute between the medical device rivals dates back to 2003, when Johnson & Johnson subsidiary Cordis sued Boston Scientific in the Delaware court, accusing its competitor of infringing patents related to its stents used in heart surgeries.

Following extensive litigation, the companies reached a deal in February 2010 in which Boston Scientific agreed to pay out $1.725 billion to end the dispute. In the settlement, the companies each granted various stent licenses to one another — but not one for the 2.25 mm Cypher Mini stent Cordis had introduced in 2009. That stent had been the target of the suit at hand, which Boston Scientific had brought in December of that year, alleging infringement of U.S. Patent Number 5,922,021.

After the court in May 2011 granted Boston Scientific summary judgment on its infringement allegations, a Delaware jury pegged Cordis with damages of $19.5 million, covering $18.5 million in lost profits and reasonable royalties of $1 million.

The following month, Cordis moved for judgment as a matter of law against the lost profits component of the damages verdict, arguing that Boston Scientific hadn't shown that, without Cordis' infringement, it would have sold the stents Cordis allegedly sold in its place through its abuse of the '021 patent.

Cordis also pointed to a 2009 medical device conference at which two studies were released demonstrating that everolimus-eluting stents such as the Cordis Mini were safer than paclitaxel-eluting stents such as Boston Scientific's Taxus Atom. These studies, Cordis argued, were of greater significance to Boston Scientific's decreased stent sales than Cordis' competing device was.

But Judge Robinson on Tuesday dispensed with Cordis' arguments, saying "sufficient evidence supports the determination that a specific market existed for 2.25 mm [drug-eluting stents] and, within this market, the demand for Taxus Atom and 2.25 mm Cypher [drug-eluting stents] was interchangeable."

Furthermore, Boston Scientific "continued to sell Taxus stents after [the conference], and the Taxus Atom continued to outsell the 2.25 mm Cypher stent," despite the studies, the judge noted.

Since Cordis' knew the '021 patent was valid and its sole defense in the case was its bid for U.S. Patent and Trademark Office re-examination of the patent, Cordis' infringement was willful and merited the additional penalty, the judge said.

The previous $19.5 million verdict had been increased to $20.7 million due to reasonable royalties stemming from infringement between April and May 2011. This amount will be doubled under the judge's order.

When reached for comment, attorneys for Boston Scientific deferred to their client, which was not immediately available.

A Cordis representative was not immediately available for comment.

Boston Scientific is represented by Karen L. Pascale of Young Conaway Stargatt & Taylor LLP, Jeanne M. Heffernan of Kirkland & Ellis LLP, Paul A. Bondor of Desmarais LLP and Young J. Park of Fish & Richardson PC.

Cordis is represented by Steven J. Balick, Andrew Colin Mayo and Tiffany Geyer Lydon of Ashby & Geddes PA.

The case is Boston Scientific Corp. et al. v. Cordis Corp., case number 1:10-cv-00315, in the U.S. District Court for the District of Delaware.

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