Germany ruling suggests that the lengthy patent battle between Boston Scientific and Edwards Lifesciences may end in a cross-licensing agreement.

Amanda Pedersen

A cross-licensing agreement may inevitably be in Edwards Lifesciences' and Boston Scientific's future, but for now the two companies are still going toe-to-toe with one another over patent litigation related to transcatheter aortic valve replacement (TAVR) technology.

A German court found that Boston Scientific's Lotus valve infringes one of Edwards' patents (known as the '550 patent) for TAVR, and that the Edwards Sapien 3 valve infringes two of Boston Scientific's patents (known as the '254 and '766 patents) for outer seals of transcatheter heart valves. The court delayed ruling on Edwards' '753 patent until April 6, pending the outcome of a March 28 European Patent Office (EPO) hearing on its validity.

The German court ruling follows last week's UK patent court ruling that one of Boston Scientific's patents related to the outer seals is invalid, but that a second patent is valid and infringed by the Sapien 3 valve.

Edwards said it would appeal the German court's decision, as it also plans to appeal part of the UK patent court ruling. Both sides have the option to ask for an injunction to remove each other's product from market if they post a bond, according to Larry Biegelsen, an analyst at Wells Fargo Securities. "However, a more likely scenario in our legal consultant's opinion is cross-licensing where each company would license its IP to one another, which would allow both [Edwards] and [Boston Scientific's] products to stay on the market in Germany," Biegelsen said.

Just as importantly, such a cross-licensing agreement would allow Boston Scientific to freely enter the U.S. market where the companies are also suing each other for infringement.

"Although today's decision gives the upper hand to [Boston Scientific] in the Germany litigation because [Edwards] was found to infringe two of their patents, it remains early in the litigation process," Biegelsen said.

Biegelsen also noted that Edwards' '753 patent could be key to this ongoing battle, because if the EPO decides that patent is valid and that Boston Scientific's valve infringes on it, it could "even the score" in Germany. "This could be a factor and strengthen [Edwards'] argument/terms should the two sides move down a path of cross-licensing," the analyst said.

Amanda Pedersen is Qmed's news editor. Contact her at [email protected].

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