Medical Device Link.

Originally Published MX November/December 2005

BUSINESS NEWS

Boston Scientific Corp. (Natick, MA) in September agreed to pay $750 million to Medinol Ltd. (Tel Aviv, Israel) in order to resolve a long-standing dispute over the manufacture and sale of coronary stents. Under the terms of the out-of-court settlement, the two companies also terminated all agreements and existing claims against one another in both Europe and Israel, particularly with respect to Boston Scientific's Express and Taxus stents.

Additionally, Boston Scientific agreed to return its 22% stake in the Israeli medtech manufacturer. For its part, Medinol stipulated that any future dispute involving alleged patent infringement by Boston Scientific would be settled through an established arbitration process and that any relief would be limited to reasonable royalties. Medinol also agreed not to seek an injunction against the sale of Express or Taxus stents.

The dispute between the two companies stemmed from a contractual relationship established in 1995, in which Boston Scientific agreed to distribute the Nir stent manufactured by Medinol.

The current settlement was the culmination of a trial that began this June in the U.S. District Court in Manhattan. Medinol's attorneys reportedly sought $4.5 billion. Boston Scientific, claiming lost business due to Medinol's actions, countersued for $400 million. Judge Alvin Hellerstein called for a recess in August and urged the two litigants to reach a settlement.

Commenting on the settlement—the largest ever paid by Boston Scientific—company senior vice president for corporate communications Paul Donovan said, "We're pleased to close this chapter and put this matter behind us. We can now direct our full attention to developing our lifesaving products and technologies."

Kobi and Judith Richter, founders and principals of privately held Medinol, did not publicly comment on the settlement. But Rory O. Millson, lead attorney representing the company, said, "With the help of the judge, we have received a full and fair settlement for what Boston Scientific did to us."

In spite of the agreement, Millson hinted that Medinol is likely to pursue additional claims against Boston Scientific's next-generation coronary stent, Liberté, which just recently received the CE mark from European regulators. Without providing any detail, Millson said, "There's going to be a lot of activity over our intellectual property."

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