UPDATED April 30, 2013 with analyst’s reaction; comment from Boston Scientific.
OrbusNeich Medical said a German court granted a preliminary injunction against Boston Scientific (NYSE:BSX) in a legal war over coronary stent patents.
OrbusNeich won a European patent decision in February and promptly sued Natick, Mass.-based Boston Scientific in a smattering of European courts. The German lawsuit claims infringement of 2 OrbusNeich patents by drug-eluting stents from Boston’s Promus line (the Premier, Element and Element Plus models), plus the Taxus Element, Omega and Synergy stents.
Now Hong Kong- and Ft. Lauderdale-based OrbusNeich says the Dusseldorf Regional Court granted its bid for a preliminary injunction barring BSX from selling some versions of stent. The court found that Boston’s small vessel, small workhorse and workhorse stents used in vessels of 4mm or less infringe the German portion of 1 of the patents, according to a press release.
OrbusNeich is also seeking a permanent injunction, damages and a recall of any infringing products that have not been used in patients. A hearing is slated for early 2014, OrbusNeich said.
"We welcome the decision of the Dusseldorf Regional Court. It reinforces both the strength of our intellectual property rights and our efforts to defend these rights on a global basis. OrbusNeich will continue to take all necessary actions to protect the company from unlawful competitive practices," OrbusNeich chairman & CEO Al Novak said in prepared remarks. "Through these proceedings, we are seeking to safeguard these technologies for the benefit of our patients, physician customers, investors, and employees."
Although it’s more likely to end in a royalty settlement, according to Leerink Swann analyst Danielle Antalffy, the injunction could cost BSX about $90 million in sales and 2¢ in earnings per share.
"While this preliminary injunction appears to be limited to ‘workhorse’ and small stents – and excludes long stents – our sense is that these ‘workhorse’ stents make up the majority of what we peg to be a ~$500M market," Antalffy wrote in a note to investors this morning. "An injunction could impact BSX’s ability to achieve its goal of returning to positive top-line organic growth this year. But we do think a likely scenario ultimately could be a settlement between BSX and OrbusNeich in which BSX ends up simply paying a royalty, with an even more modest and manageable EPS impact.
OrbusNeich sued Boston Scientific in February in the German court and another in the Netherlands (later adding a lawsuit filed in Ireland), after the European Patent Office denied Boston’s move to have an OrbusNeich patent overturned. Boston Scientific appealed that decision.
It’s not the first legal dance for the 2 companies, which are also fighting in U.S. courts. A lawsuit filed here in 2009 has been stayed pending review of the patents in question. OrbusNeich is "reviewing its options with respect to this litigation," according to a company statement.
In March 2011, a federal judge in Massachusetts shot down Boston Scientific’s bid to have a pair of claims dismissed from an OrbusNeich lawsuit over BSX’s Liberté stent.
The District Court of The Hague, Netherlands, handed Boston Scientific a setback in December 2010, ruling that its patent for a "balloon catheter with distal guide wire lumen" had been revoked in the Netherlands.
And in April 2010, OrbusNeich amended a lawsuit against the medical device giant after the U.S. Patent & Trademark Office granted it a new patent covering helical stent technology.
“Boston Scientific strongly believes that our products do not infringe Orbus’ patents. The company will appeal the decision and seek remedies for loss of revenue stemming from the injunction. In the meantime, we will abide by the German court’s rulings,” spokesman Steve Campanini told MassDevice.com in an email.
