March 16 capped off a rough week for Boston Scientific Corp. and its Taxus stent line.
Two days later, the same day the Natick-based device giant settled a patent infringement case filed by a Texas physician, it was slapped with another by a Hong Kong cardiovascular device maker.
In the class-action suit, Boston’s U.S. District Judge Douglas Woodlock ruled that a Mississippi pension fund and other shareholders press securities fraud claims alleging that company officials misled investors about problems with the Taxus stents, which Boston Scientific recalled after problems emerged in deflating the device’s balloon during coronary angioplasties — so-called “focal neckdown” problems that could result in serious injury to patients.
Ironically, the same stent prompted New Jersey physician Bruce Saffran to sue BSC a year later in U.S. District Court for the Eastern District of Texas, accusing it of infringing one of his patents with its Liberte and Taxus Express stents. A Texas jury agreed and awarded damages of $431 million to Saffran, plus $69 million in pre-judgment interest.
BSC appealed the decision and the two sides settled March 16. Boston Scientific told the federal Securities and Exchange Commission that it expects to log a $50 million pre-tax charge during the first quarter of 2009 due to the settlement.
That was only the beginning of the bad news that day for the device conglomerate. Even as it settled the Saffran suit, OrbusNeich Medical Inc. slapped it with a lawsuit accusing BSC of patent infringement, breach of contract and misappropriation of trade secrets connected to the Taxus Liberte stent.
In that lawsuit, filed in the U.S. District Court for the Eastern District of Virginia, Hong Kong-based Orbus alleges that Boston Scientific stole designs for luminal stent technology it later incorporated into the Liberte product.
The roots of that case go back to 2000, when the companies began negotiating a potential relationship. As part of the negotiation, Orbus sent stent samples and designs to BSC ahead of filing patent applications covering the technology, applications that were later granted.
The Natick stent maker later filed its own patent application, according to the lawsuit, which contained new stent designs that were not included in any of the company’s provisional filings for the technology. Orbus only became aware of the alleged theft after the Liberte stent hit the market.
The Hong Kong firm claims it designed “major aspects of the Liberte product architecture” and is seeking unspecified monetary damages and injunctive relief.