- The Washington Times - Wednesday, August 20, 2003

TRENTON, N.J. (AP) — Two competitors of the Johnson & Johnson unit that makes cardiac stents have been ordered to pay damages totaling nearly $700 million to the health care giant after losing patent disputes.

Johnson & Johnson, based in New Brunswick, N.J., said yesterday that a private arbitration panel in Chicago on Tuesday upheld a preliminary ruling, issued on June 5, requiring Guidant Corp. of Indianapolis to pay $425 million to J&J;’s Cordis Corp. of Miami Lakes, Fla.

Thepanel determined that Guidant’s Multi-Link Duet Coronary Stent System infringed on a key Cordis patent, according to J&J.;

Stents are tiny metal scaffolds inserted in a heart artery to keep it open after a blockage has been cleared. Johnson & Johnson spokesman Jeffrey Leebaw said the Cordis patent covers stents that have a tiny balloon inside to inflate the stent once it has been moved into position.

That includes Cordis’ popular new Cypher stents, the first ones coated with a drug released slowly over months to prevent further blockages. J&J; has been having trouble keeping up with demand since they were introduced four months ago.

Marie Weller, spokeswoman for Guidant, said the company will pay Johnson & Johnson the $425 million in the fourth quarter of this year. Guidant set the money aside at the end of the second quarter, after the preliminary ruling.

“There’s no financial implications going forward,” Miss Weller said.

That’s because the two companies agreed to license their stent products to each other, as well as to remove the dispute from court and have it settled by the arbitration panel, Mr. Leebaw said.

In the other dispute, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit in Washington, ruled last week that Medtronic Inc. of Minneapolis infringed on Cordis stent patents and should pay the company $270 million in damages.

A jury had awarded that amount to Cordis in December 2000, but the trial judge then overturned that verdict; J&J; appealed the case to the federal court.

“We are disappointed with the decision, but we’re planning to petition the full court for a hearing,” Medtronic spokeswoman Chris Campbell-Loth said.

She said the stent products in question were made by a company called Arterial Vascular Engineering before Medtronic bought it several years ago and have since been replaced by other products.

In trading on the New York Stock Exchange, Johnson & Johnson shares fell 3 cents to close at $50.03, while Guidant shares dropped 50 cents to end at $47.41 and Medtronic shares fell 30 cents to $51.30.



Click to Read More

Click to Hide