A federal appeals court reversed a legal win for Boston Scientific (NYSE:BSX), vacating a lower court’s ruling and remanding the case for reconsideration.
The U.S. Court of Appeals for the Federal Circuit ruled that the district court judge erred in deciding how the patents’ claims would be construed, with an "erroneously imported" limitation from 1 of the patent’s claims.
The case dates back to 1999, when Dr. David Jang won approval from the U.S. Patent & Trademark Office for the patents, which covered a stent design featuring lateral struts linking parts of the stent. In 2002, he inked a deal worth up to $160 million to license the patents to Boston Scientific subsidiary Scimed Life Systems. Jang received $50 million up front, according to court documents, but only $10 million of the remaining $110 million in milestone payments.
Jang sued in 2005 in the U.S. District Court for Central California, alleging breach of contract and other charges. BSX denied the accusations and filed a counterclaim in 2006 "denying any obligation to make additional contingent payments to Jang on the ground that that the accused stents did not infringe," and thus were not covered under the deal with Jang.
The district court ruled that the Boston Scientific stents did not infringe the Jang patents, shooting down the breach of contract claim and deciding the other claims in BSX’s favor. After Jang appealed, the Federal Circuit appeals court vacated the decision and told the Central California district court to specify "how the claim constructions would render the accused products infringing or noninfringing."
Unsatisfied with the lower court’s response, the appeals court ruled August 22 that the lower court must reconsider the case.