Boston Scientific Wins Double Damages for Infringement

A federal judge has doubled a jury’s $20.7 million jury award for Boston Scientific Corp. in a patent infringement suit against Johnson & Johnson subsidiary Cordis Corp. over stent technology. U.S. District Judge Sue Robinson’s March 13 order means that Boston Scientific stands to collect $41. 4 million.

Boston Scientific and Boston Scientific Scimed Inc. filed the case, Boston Scientific Corp. v. Cordis Corp., in the District of Minnesota in December 2009. That court transferred the case to Delaware in April 2010. The case involved alleged infringement by Cordis’ 2.25 mm Cypher stent.

Boston Scientific claimed that Cordis’s stent, released in 2009, infringed the same patent that that it won a dispute over in 2007.That judgment was upheld by the U.S. Court of Appeals for the Federal Circuit.

Enhanced damages are relatively uncommon because they require an underlying finding of willfulness, said Michael Albert, co-chairman of the litigation group at Boston-based Wolf, Greenfield & Sacks, who wasn’t involved in the case.

“In this particular case, Judge Robinson seems to have focused on the fact that Cordis was selling a product that was effectively identical to something that the Federal Circuit had previously found to infringe,” Albert said.

The Federal Circuit ruling resolved only one portion of the legal disputes between the companies, but ultimately they came to a broad settlement under which Boston Scientific paid Cordis more than $1.7 billion and the companies extended licenses to each other.

In her order, Robinson, of the District of Delaware, adjusted the May 2011 jury verdict to account for lost profits and reasonable royalty damages, plus prejudgment interest. Robinson granted Boston Scientific’s motion for ongoing damages at a royalty rate of 32 percent in lieu of a permanent injunction.

But she denied Boston Scientific’s motion for attorney’s fees even though Cordis’s infringement was willful. Robinson wrote that Boston Scientific “does not specifically challenge Cordis’s behavior in litigation,” except for the fact that it launched the product in the face of an adverse court judgment and used inapplicable defenses, burdening the court and Boston Scientific.

Citing the 1992 Federal Circuit ruling in Read Corp. v. Portec Inc., Robinson found that the following factors favored enhancement: the extent to which Cordis was aware of and investigated the scope of the patent at issue in the case; Cordis’s conduct during the litigation; Cordis’s finances; Cordis’s motivation for harm; how close the case was; and the lack of remedial action.

No factors specifically weighed against enhancement, she added, and several factors were neutral, including that Cordis didn’t copy Boston Scientific’s designs and didn’t try to hide its infringement.

Boston Scientific’s lawyers at Desmarais LLP in New York, Fish & Richardson and Chicago’s Kirkland & Ellis referred questions to the company. Young, Conaway, Stargatt & Taylor of Wilmington, Del., which also represented Boston Scientific, did not respond to a request for comment.

“Boston Scientific doesn’t want to comment on the judge’s decision,” said spokesman David Knutson. “We’ll let it speak for itself.”

Lawyers at Ashby & Geddes in Wilmington, Del., who represented Cordis in the case, also referred questions to their client.

“We are disappointed with the ruling and will appeal,” said Cordis spokesperson Sandy Pound via e-mail.

Albert noted that Cordis’s only defense was related to a U.S. Patent and Trademark Office request to re-examine the patent.

“Reading between the lines, Judge Robinson may perhaps have felt that Cordis should not have filed this case in the first place,” Albert said.

Overall, the situation is highly unusual because it involved a party that continued fighting a related case even after the Federal Circuit ruled against its position in an earlier case about the patent, he said.

Sheri Qualters can be contacted at [email protected].

This article originally appeared in The National Law Journal.