8-KOther Events

BOSTON SCIENTIFIC CORP 8-K Report, Corporate Update (Mar 20, 2009)

Filed March 20, 2009For Securities:BSX

Summary

Boston Scientific Corporation (BSX) announced a settlement on March 16, 2009, to resolve all outstanding litigation with Bruce N. Saffran, M.D., Ph.D. This settlement resolves a significant legal dispute concerning patent infringement related to BSX's TAXUS® Express® and TAXUS® Liberté® coronary stent products. The company expects to record a pre-tax charge of $50 million in the first quarter of 2009 related to this settlement. This development is crucial for investors as it brings closure to a protracted legal battle that resulted in a jury award of $431 million in damages plus $69 million in pre-judgment interest in February 2008. The settlement avoids further legal costs and uncertainty associated with an ongoing appeal and a second complaint filed by Dr. Saffran. While the $50 million charge will impact Q1 2009 earnings, it provides a definitive resolution and removes a significant overhang for the company.

Key Highlights

  • 1Boston Scientific has settled all outstanding litigation with Dr. Bruce N. Saffran.
  • 2The settlement resolves a patent infringement dispute concerning BSX's TAXUS® stent products.
  • 3A pre-tax charge of $50 million is expected to be recorded in Q1 2009 due to the settlement.
  • 4The settlement concludes a legal case where a jury previously awarded Dr. Saffran $431 million plus pre-judgment interest.
  • 5A joint motion to dismiss the appeal in the Federal Circuit was filed on March 17, 2009.
  • 6A second complaint filed by Dr. Saffran seeking damages for continued sales will also be dismissed.

Frequently Asked Questions

Boston Scientific expects to record a pre-tax charge of $50 million in the first quarter of 2009 related to this settlement. This charge will impact the company's earnings for that quarter.

The original lawsuit, filed in December 2005, alleged that certain Boston Scientific coronary stent systems (TAXUS® Express® and TAXUS® Liberté®) infringed a patent owned by Dr. Saffran. A jury found infringement in February 2008 and awarded substantial damages.

This settlement is important because it resolves a significant and costly legal dispute that had been ongoing since 2005. It removes the uncertainty and potential for much larger financial liabilities associated with the appeal and further litigation, providing a clearer financial picture for the company.

Based on the filing, the settlement appears to resolve past disputes and claims. The continued sale of TAXUS stent products was a point in a second complaint, which will now be dismissed as part of the settlement, suggesting that these products can continue to be sold.