Boston Scientific Corp. (BSX) announced the settlement of three patent disputes with Johnson & Johnson (JNJ). The disputes date back to 2003 and cover Boston Scientific's Jang patent and J&J's Palmaz and Gray patents, all of which involve intellectual property in the cardiovascular arena. Boston Scientific said that it will make a $1.725 billion payment to J&J in connection with the settlement.
As per the settlement, Boston Scientific will pay J&J $1 billion today and the balance on or before the first week of January 2011. The Company plans to post a $745 million letter of credit, which will cover the $725 million balance and interest. The company expects to fund the $725 million remaining balance from cash on hand, unless it refinances at an earlier date.
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