St. Jude sued Volcano in July 2010 in the U.S. District Court for Delaware, accusing it of violating a quintet of patents St. Jude acquired in its 2008 buyout of Radi Medical Systems AB, a Swedish guidewire maker.
The patents cover STJ’s PressureWire system, which uses a sensor to measure arterial blood pressure by calculating fractional flow reserve associated with stenosis in patients with coronary artery disease, according to court documents. The lawsuit alleges that San Diego-based Volcano’s PrimeWire system violates the patents.
A 2nd trial over Volcano’s countersuit is scheduled for today, according to court documents.
The jury’s decision is a best-case scenario for Volcano, according to Leerink Swann analyst Danielle Antalffy, "as it removes a headline risk."
"Regardless of what happens in the VOLC patent trial this week, STJ is likely to appeal last week’s ruling – potentially dragging out litigation for some time. But with this ruling now in hand, VOLC seems to have – for now, depending upon appeal – avoided a worst-case scenario,” Antalffy wrote in a note to investors this morning, re-affirming Leerink’s “outperform” rating and $32 price target.
The outcome of the trial slated to begin today could go either way, she noted.
"Despite VOLC’s undisputed win in last week’s trial, this week’s trial evaluating STJ’s infringement of VOLC’s patents, as well as the validity of VOLC’s patents, is too uncertain, in our view, to call up front. Coming out of claims construction, both parties have strong cases on different VOLC patents: 1) STJ has the upper hand on the ‘856, potentially leading to non-validity or non-infringement for STJ, while 2) VOLC has the edge on its ‘994 patent – especially since the ‘Paris video’ was ruled as inadmissible – leaving open the possibility of STJ infringement and possible damages or ongoing royalties to VOLC."
