Courts clogged with stent patent cases
- International Herald Tribune
10/04/2007 - Why would a company argue in court that its medical product was dangerous, even as it played down the risks in public?
Johnson & Johnson did just that recently as part of its long battle for supremacy in cardiac stents. Its lawyers told a judge in Delaware that because medical studies had linked the company's drug-coated Cypher stent to blood clots, it could not have infringed on a competitor's patent.
How so? Because, the lawyers said, the patent in question, held by Boston Scientific, claimed that the coating did not cause clots.
That reasoning - in essence, that J&J's product is not covered by Boston Scientific's patent because it is a health hazard - did not impress the judge, Sue Robinson of the U.S. District Court, who affirmed last week a jury's patent infringement verdict against Cypher.
But the argument of the lawyers, so at odds with Johnson & Johnson's public efforts to depict Cypher as exceptionally safe, indicates just how tortured logic can become in the industry's long, multipronged patent war over stents - the tiny mesh cylinders inserted in blood vessels to keep them propped open after blockages are cleared.
Since coronary artery stents were first marketed in the United States in 1994, they have grown into a $6.5 billion worldwide business in which profit margins can approach 80 percent. Because of the money at stake and the complexity of the products, the stent business is an unusually litigious field, with court cases around the world embroiling all the industry's major players and many smaller ones.
"About $24 billion of these coronary stents have been sold since they went on the market in the United States, with pretty much every dollar attached to one of these cases," said Matthew Dodds, a Citigroup analyst. "It looks like billions of dollars of profits are at stake."
Not only do the competing intellectual property claims make it uncertain which companies might ultimately own those profits, but some medical experts say they are also impeding introduction of new products that might be beneficial to patients.
The legal battles are "a horrendous waste of money," said Dr. Julio Palmaz, a radiologist who invented one of the earliest stents more than two decades ago and has often been a witness in patent cases.
"I see my life in three phases," Palmaz said. "The early years in the lab, the middle years on the road training physicians and the last third in court."
The stent companies refuse to publicly comment on the litigation, to avoid revealing their legal strategies and for fear of offending judges. And Wall Street analysts say none of the major battles are likely to be resolved soon enough to be of immediate concern to most investors.
But at the very least, the uncertainty and the legal costs have played a major role in forcing many of the field's start-up companies to sell out to the bigger players.
One major new legal fault line began developing last year after a Canadian start-up, evYsio Medical Devices, sold exclusive rights to its stent design patents to Medtronic, a medical device giant that currently has only a small presence in the stent market. An evYsio patent has already become the basis for an injunction in France against the sale of the Xience V heart stent from Abbott Laboratories, a ruling that Abbott is appealing.
Medtronic is pursuing similar actions against Abbott in four other European countries, and is challenging both Abbott and Boston Scientific in the U.S. District Court in San Francisco, while also taking on Johnson & Johnson in a similar court in Texas.
Wall Street analysts expect another new line of cases to spring from Johnson & Johnson's claim that it controls the use of an entire family of anti-inflammatory compounds for use on drug-coated stents - not just the particular compound that it uses on Cypher. Variations of the compounds are used on stents that Abbott, Medtronic and Boston Scientific hope to begin selling in the United States next year.
Meanwhile, disputes dating to the 1990s continue to ricochet through the court system, even as the names of some of the litigants change through mergers or spinoffs.
For now, the biggest battles center on Boston Scientific and Johnson & Johnson. Boston Scientific's drug-coated Taxus, introduced in April 2004, quickly surpassed Cypher to become the market leader when it achieved $2 billion in sales its first year on the U.S. market - a record debut for a health care product.
Johnson & Johnson entered the business first by licensing a bare-metal stent in 1988 that Palmaz had developed with the help of a cardiologist, Dr. Richard Schatz. The original patent expired nearly two years ago, but the company is seeking damages from alleged infringers before then.
In 1998, Palmaz sold full control of all his patents to J&J. One factor, he said, was the company's argument that he would be a more convincing witness in the court battles if he no longer had a financial stake in the outcomes.
The company and Boston Scientific have already been through three jury trials in Robinson's court. The latest round, in 2005, led separate juries to conclude that each company was infringing on patents owned by the other. In arguing recently that new medical evidence indicates that Cypher can cause clots, Johnson & Johnson was making a last-ditch effort to get Robinson to throw out one of the infringement verdicts against it.
While money is a main reason stent companies sue and slug it out, the complexity of the devices is also a factor.
When a drug company invents a new medicine, for example, the basic patent is typically on a particular molecule, and it is relatively easy to determine who owns it. Stents, though, can vary in many ways: in their material; their shape, flexibility and strength; their coatings, and their interplay with the catheters that are used to implant them. Tinkerers are drawn to the field because it does not take a high-powered research lab to create potentially valuable improvements.
"With somewhere between 8,000 to 10,000 stent patents, the field is very crowded," said Douglas Portnow, an intellectual property lawyer in Palo Alto, California, and co-author of a 2004 study on the stent wars.
The bigger companies, many doctors say, can now use their patent portfolios to delay or stifle innovations that might help patients.
One lawyer for a company involved in the litigation said many medical devices had been through extensive patent battles in the early years of their development. He predicted that exchanges of licenses would eventually replace lawsuits for resolving overlapping patent claims. That happened among manufacturers of heart pacemakers, which were also the subject of patent battles after they were initially developed in the 1960s.
"But the pace of change in stents may be faster, which would delay maturing of the market," he added.
If you or a loved one have been injured during surgical placement of a stent or have been injured as a result of an implanted drug eluting stent (drug coated stent) such as the Boston Scientific Taxus stent or the Johnson & Johnson Cypher stent you may be entitled to compensation. To learn more about the stent recalls, for information regarding your legal rights, or the possiblilty of a class action lawsuit contact our stent lawyers for a free, confidential, case evaluation today. Fill out our online case evaluation form or call us toll free at 1-800-856-6405. |
