Boston Scientific Corp. (Natick, MA) earlier this month agreed to pay $750 million to Medinol Ltd. (Tel Aviv, Israel) in order to resolve a long-standing dispute over the manufacture and sale of coronary stents. Under the terms of the out-of-court settlement, the two companies also terminated all agreements and existing claims against one another in both Europe and Israel, particularly with respect to Boston Scientific's Express and Taxus stents.
Additionally, Boston Scientific agreed to return its 22% stake in the Israeli medtech manufacturer. For its part, Medinol stipulated that any future dispute involving alleged patent infringement by Boston Scientific would be settled through an established arbitration process and that any relief would be limited to reasonable royalties. Medinol also agreed not to seek an injunction against the sale of Express or Taxus stents.
|
|
|---|
|
|
|
Medinol founders Kobi (top) and Judith Richter: Settling big.
|
The dispute between the two companies stemmed from a contractual relationship established in 1995, in which Boston Scientific agreed to use its worldwide marketing clout to distribute the Nir stent manufactured by Medinol. The agreement ran into difficulty early on, as Boston Scientific began to express concern about Medinol's reported difficulties in meeting its manufacturing commitments. As the dispute simmered, a U.S. Department of Justice investigation involving a product recall inadvertently uncovered the fact that Boston Scientific had set up a secret stent production facility in Ireland in 1997, known within the company as "Project Independence." In 2000, Boston Scientific CEO James Tobin was forced to acknowledge the existence of its Ireland facility to Medinol.
