Friday, October 10, 2008

Boston Scientific settles tangled patent lawsuits

By Mass High Tech Staff

Medical device giant Boston Scientific Corp. has successfully settled a complex set of patent infringement lawsuits and related proceedings it inherited from a recent acquisition.

Natick-based Boston Scientific’s (NYSE:BSX) involvement in the suits and countersuits stemmed from its $17.6 million buyout of San Diego-based CryoCor Inc. last April. CryoCor manufactures a disposable catheter system that uses cryoablation, or extreme cold, to treat patients with cardiac arrhythmia.

The CryoCor case was one of several recent legal actions involving Boston Scientific, and not all, including one this week, have gone as well.

While intellectual property experts said such disputes are commonplace in the medical device industry, the CryoCor battles were particularly antagonistic. For one thing, the dispute was fought in courts both in the United States and Canada, said George Xixis, an attorney with Boston law firm Nutter McClennen & Fish LLP.  “They were fighting on every front.”

CryoCor’s patent litigation saga began in October 2007, when CryoCath Technologies Inc., a Montreal-based cryotherapy technology manufacturer, filed a suit in the U.S. District Court of Delaware. CryoCath alleged CryoCor had infringed on patents related to its cryosurgical console systems. The litigation eventually mushroomed to cover more than a half-dozen other technologies and procedures.

Initially, CryoCor maintained CryoCath’s claims were without merit. Then, early in 2008, CryoCor lodged patent suits of its own against CryoCath in both Delaware and Canada. CryoCor also fought against a pending patent claim with the U.S. Patent and Trademark Office over some of CryoCor’s pre-cooling technologies and requested the U.S. International Trade Commission launch an investigation into CryoCath’s alleged unfair use of several of CryoCor’s patents.

Then Boston Scientific entered the fray. Since June 2007, Boston Scientific had been collaborating with CryoCor to devise therapies for atrial fibrillation, one of the most pervasive types of cardiac arrhythmia. While the CryoCath litigation was ongoing, last spring Boston Scientific purchased CryoCor. And on Sept. 25, CryoCath made a brief announcement that it and Boston Scientific had dropped their suits and called a legal cease-fire for 12 years.

And last month, Minnesota-based device maker Medtronic Inc. announced it was purchasing CryoCath for $380 million. Interestingly, Medtronic (NYSE:MDT) had won a patent infringement case against Boston Scientific over the Natick company’s balloon catheters and stent delivery systems. However, a judge recently pared down the award to $19 million.

A CryoCath spokesman said that because of the acquisition by Medtronic, he had no comment. For its part, CryoCor deferred all questions to Boston Scientific, which also declined to comment.

Boston Scientific and CryoCath have agreed to allow the patent interference proceedings to continue, whatever the outcome, but have said there will be no further suits. Perhaps better yet for Boston Scientific, CryoCath also will pay undisclosed royalties for the use of some of its patents “for a limited time.”  

In other legal disputes, a court on Oct. 1 ordered Boston Scientific to pay some $703 million in patent damages to rival Johnson & Johnson Co. over a coronary stent dispute. An appeal from Boston Scientific was rejected by the U.S. Supreme Court this week.