The U.S Supreme Court dashed Boston Scientific Corp.’s (NYSE:BSX) hopes of collecting damages from St. Jude Medical (NYSE:STJ) in a long-running patent infringement battle over pacemaker technology.
The Supremes declined to hear Boston Scientific’s appeal in the 14-year-old case, meaning a lower court’s decision barring BSX from collecting the damages will stand.
The case began in 1996, when Guidant Corp. sued St. Jude Medical, accusing the St. Paul, Minn.-based device maker of violating one of its implantable cardiac defibrillator patents. In 2001, a jury ruled that St. Jude’s device infringed the patent and awarded $140 million in damages to Guidant (Boston Scientific acquired Guidant — and the lawsuit — in 2006).
Another court overturned the jury’s ruling, but the U.S. Court of Appeals for the Federal Circuit over-ruled that decision and sent the case back down to the U.S. District Court for Southern Indiana for a damages decision. Boston Scientific then asked the Supreme Court to review the appeals court’s ruling, but the high court declined to hear the case.
That means the appeals court decision stands, an outcome that affects any company holding a so-called "method patent," covering the process behind the manufacture of a product. Natick, Mass.-based BSX asserted that patent owners should be able to collect damages for sales of products found to infringe patents, no matter where the sales occur.
But the appeals court said U.S. patents apply only to U.S. sales, limiting BSX’s damages claims in ruling that method claims can’t be infringed if the method is performed overseas.
That means St. Jude Medical won’t owe any damages on overseas sales of the pacemaker at the center of the 1996 case.
The patent concerns the method used by a pacemaker to detect heart arrhythmias, select the proper shock to deliver to the heart. The federal appeals court decided that shipping a product overseas that uses that method isn’t infringement.