OrbusNeich Medical accused Boston Scientific (NYSE:BSX) of deliberately violating an injunction against importing drug-eluting stents into Germany and said a German court has issued its second import ban against Boston Scientific in their patent war.
Ft. Lauderdale- and Hong Kong-based OrbusNeich won the 1st injunction last month in the Dusseldorf Regional Court, after winning a patent decision in February. Earlier this month the company moved to enforce the injunction, and today accused its Natick, Mass.-based rival of scheming to get around the injunction.
In a press release, OrbusNeich accused Boston Scientific using a pair of British subsidiaries "to intentionally circumvent a prior order of the court banning sales of the same stent systems in Germany by other entities in the Boston Scientific corporate group."
"Rather than respecting the injunction, Boston Scientific immediately took steps to circumvent it. Boston Scientific transferred the German distribution of these products to Boston Scientific (UK) Ltd. and Boston Scientific Ltd. The company then sent a letter to its German customers advising them of the injunction and announcing that infringing products could be ordered from Boston Scientific UK," according to the release. "The letter provided contact information for orders and assured customers that a German-speaking salesperson would be at their disposal. These acts prompted the filing of the 2nd preliminary injunction request, which was granted yesterday and which Boston Scientific may appeal. OrbusNeich has immediately initiated enforcement of this new preliminary injunction."
"If Boston Scientific keeps shifting distribution to other entities, we will continue to seek further injunctions and any other penalties available under German law," added chairman & CEO Al Novak. "Further to this second preliminary injunction, we have also filed a request that the [Dusseldorf] Regional Court penalize Boston Scientific for the recent violations of the court’s order."
The injunction prevents Boston Scientific from selling in Germany its Promus Element, Promus Element Plus, Promus Premier, Omega, Taxus Element or Synergy stents in any of the small vessel, small workhorse or workhorse diameters and prevents Boston Scientific from encouraging other companies to sell the products in Germany.
The German court last month granted OrbusNeich a preliminary injunction in the legal row over coronary stent patents. The German win was part of the smattering of lawsuits OrbusNeich filed after winning a European patent decision in February.
"Boston Scientific strongly believes that our products do not infringe Orbus’ patents," spokesman Steve Campanini told MassDevice.com in an email late last month. "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."
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.
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.
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.
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