Summary
Boston Scientific Corporation (BSX) has announced a significant development through an 8-K filing on February 1, 2010, detailing the settlement of three long-standing patent disputes with Johnson & Johnson and Cordis Corporation (collectively, 'J&J'). These disputes, originating in 2003, pertain to intellectual property within the cardiovascular field, involving patents held by both companies. The settlement includes a substantial payment of $1.725 billion from Boston Scientific to J&J. This payment is structured with $1 billion due on February 1, 2010, and the remaining $725 million payable by early January 2011. To secure the outstanding balance and associated interest, Boston Scientific plans to post a $745 million letter of credit. This resolution aims to put an end to costly litigation and potential future uncertainties related to these patent claims.
Key Highlights
- 1Settlement of three patent disputes with Johnson & Johnson and Cordis Corporation (J&J).
- 2Disputes date back to 2003 and involve cardiovascular intellectual property.
- 3Total settlement payment by Boston Scientific to J&J is $1.725 billion.
- 4Payment terms include $1 billion due on February 1, 2010.
- 5Remaining $725 million payment due on or before the first week of January 2011.
- 6A $745 million letter of credit will be posted to secure the outstanding balance and interest.