Boston Scientific Settles With J&J for $1.7 Billion

Boston Scientific Corp. agreed to pay $1.73 billion to settle three patent disputes with Johnson & Johnson over the companies’ stent technologies.

While the cases have been tried and settled — both companies were found to have infringed each other’s patents — the settlement was scheduled to be determined in court this month.

Beginning in 2003, J&J said Boston Scientific’s Express, Taxus Express and Liberte stents infringed its Palmaz and Gray patents. For its part, Boston Scientific claimed J&J’s Cypher, BX Velocity and Genesis stents infringed its Jang patent.

In 2005, in liability trials in court, both parties were found to have violated patent protections, decisions that were upheld on appeal, according to Boston Scientific officials. With the settlement and the payment of $1.73 billion, settlement trials that were to happen in U.S. District Court in Delaware will not take place.

Under the settlement, Boston Scientific will pay J&J $1 billion immediately and the rest on or before the first week of January 2011, according to officials. The company says it plans to post a $745 million letter of credit, which will cover the $725 million balance and interest.

Last month Boston Scientific launched trials for a new stent, the WallFlex Biliary RX Fully Covered Stent, for use in the treatment of benign bile duct strictures.

In December, Boston Scientific agreed to a $22 million settlement with the U.S. Department of Justice following an investigation into post-market surveys conducted by Guidant Corp. before Boston Scientific acquired Guidant in 2006.

The DOJ alleged Guidant used the studies to pay kickbacks to doctors to induce them to use its heart devices. Boston Scientific said the settlement does not include any admission of wrongdoing by the company.