In an effort to mitigate litigation risk, medical devices maker Boston Scientific Corp. (BSX) Monday said it settled three patent disputes with pharmaceutical giant Johnson & Johnson (J&J) by agreeing to pay $1.725 billion. The disputes date back to 2003 and cover Boston Scientific's Jang patent and J&J's Palmaz and Gray patents involving intellectual property in the cardiovascular arena.
As per the settlement, Natick, Massachusetts-based 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 balance $725 million and interest. The remaining balance will be funded from cash on hand, unless the company refinances at an earlier date.
The first dispute involved a claim by J&J that Boston Scientific's Express, TAXUS Express and Liberte stents infringed its Palmaz and Gray patents. In the second, Boston Scientific claimed that J&J's Cypher, BX Velocity and Genesis stents infringed its Jang patent.
In 2005, there were liability trials on these two matters, and both parties were found to have infringed each other's patents. Those findings were upheld on appeal.
Damage claims from these two rulings were scheduled to be decided by two jury trials slated for this month in U.S. District Court in Delaware. Those trials will not take place now.
The third dispute involved a claim by J&J that Boston Scientific's TAXUS Liberte stent infringed its Gray patent. That matter was scheduled to be tried in September and will not take place now.
The District Court last month had found that all four patents in a lawsuit brought against Boston Scientific by J&J were invalid. J&J had alleged that Boston Scientific's Promus Everolimus-Eluting Coronary Stent System infringed its Wright/Falotico patents. A trial on those patents was scheduled to begin February 9, but will not proceed now, the company said.
Boston Scientific said it is trying to mitigate risk throughout the company, including litigation risk. In the past year, the company settled 17 lawsuits with J&J, as well as disputes with other competitors and the government.
In September 2009, the company had said that it would pay Johnson & Johnson $716.3 million to settle 14 patent infringement lawsuits involving coronary stents, balloon catheters and other heart devices. At that time, the settlement resolved Johnson & Johnson's Cordis Corp. unit's Palmaz infringement suit relating to Boston Scientific's NIR stent as well as several other cardiology-related cases relating to patents in the Ding, Kastenhofer, Palmaz, and Fontirroche patent families.
Commenting on the decision, Ray Elliott, President and Chief Executive Officer of Boston Scientific, said, "We believe today's settlement, while substantial, is in the best interest of the company and its shareholders. It resolves major litigation without exposing Boston Scientific to the uncertainties of a jury trial and a potential damages award that was impossible to predict. While we still have a number of litigation matters remaining, this recent settlement has materially reduced our financial risks going forward.''
Elliott added that as part of its efforts to reduce risk, the company would continue to manage its outstanding litigation carefully. There are now no material judgments or jury verdicts pending against the company, he said.
Regarding the latest payments, Boston Scientific said they would not have an appreciable impact on its debt covenants. According to the medical equipment maker, even after the payments, it will still have significant liquidity under its credit facilities. The company continues to expect to refinance its 2011 debt maturities in the middle of this year.
BSX closed Friday's regular trade at $8.63, down from the previous close of $8.72, on 12.24 million shares.
JNJ ended the regular trade Friday at $62.86, lower than the prior close of $63.80, on 17.84 million shares.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.