The family of the late physician who helped invent the implantable cardioverter defibrillator, Dr. Michel Mirowski, sued Boston Scientific (NYSE:BSX) over an alleged secret deal with rival St. Jude Medical (NYSE:STJ) that cut Mirowski out of some $570 million in royalties and damages.
Mirowski Family Ventures LLC (Mirowski died in 1990) sued Boston Scientific and its Guidant subsidiary in a Maryland court, alleging that the secret pact with St. Jude to settle 6 cases was designed to hush up false testimony in an earlier patent infringement case by an expert witness for BSX/Guidant, according to court documents.
In that case, Boston Scientific and Mirowski sued St. Jude for patent infringement. They won the suit and a $313 million judgment, but it was thrown out of court after the false testimony came to light in another patent infringement lawsuit with Medtronic (NYSE:MDT), according to the documents, costing Guidant some $377 million and invalidating 1 of the patents at issue.
That invalidation allegedly prompted then-Guidant to deny royalties owed to Mirowski on the grounds that royalties can’t be owed on an invalid patent, according to the documents.
"Defendants entered the secret settlement to eliminate hundreds of millions of dollars in claims made against them by St. Jude in cases that did not involve Mirowski and, purportedly, to protect themselves from embarrassment and other exposure arising out of their conduct during the [earlier trial]," according to the documents. "[The earlier trial], which initially resulted in a hundred million dollar verdict in Mirowski’s and defendants’ favor, should have been a successful litigation. Instead, because of defendants’ dishonest behavior toward the jury and the court, it began a pattern of misconduct by defendants that continues to this day and which has enriched defendants and damaged Mirowski in excess of hundreds of millions of dollars."
The lawsuit seeks more than $570 million in damages including more than $485 million in damages lost from lawsuits against St. Jude that were put to rest in the secret settlement; another $80 million in unpaid royalties on ICDs sold from July 2002 through Dec. 23, 2003; $5 million in legal fees "incurred by Mirowski in ongoing litigation against Medtronic Corp. in Delaware, which are due to Mirowski under the parties’ agreements," according to the documents; and "any profits defendants realized from their self-dealing secret settlement."