The emotion-laden dispute between Boston Scientific (NYSE: BSX) and Israeli company Medinol, controlled by Judith and Kobi Richter, is over. The dispute was over alleged infringement by Boston Scientific of patents on stents that Medinol supplied to it. Yesterday, the two companies officially announced that they had reached a settlement ending the five-year struggle that also establishes a framework for resolving future disputes.
Under the agreement, Boston Scientific will pay Medinol $750 million. The two sides agree to a mutual release of existing claims against each other, effectively dismissing all outstanding stent litigation, including all disputes with respect to the Express and TAXUS Express stents. These two stents are expected to generate revenue of more than $5 billion for Boston Scientific.
The two companies will declare that all agreements between them, including the supply agreement, are canceled.
Medinol agrees not to sue Boston Scientific under certain Medinol patents other than through an established arbitration process. The arbitration process will be the sole forum to hear any future disputes that may arise involving certain Medinol patents, in which Medinol has agreed to limit any relief it seeks to reasonable royalties.
Boston Scientific will relinquish its 21% stake in Medinol. The lawyers for the two sides refused to disclose the company value at which Boston Scientific relinquished the shares.
Although the settlement payment is substantially lower than what the Richters originally claimed, market analysts see it as appropriate compensation, within the range they had expected.
In 2001, Medinol sued Boston Scientist for allegedly copying its unique stents. The two companies were already at loggerheads in 2000 over the agreement between them.
Published by Globes [online], Israel business news - www.globes.co.il - on September 22, 2005