Boston Scientific (Natick, Massachusetts) reported June 20 that the U.S. Court of Appeals for the Seventh Circuit had "substantially affirmed" a U.S. District Court decision in favor of the company in its dispute with Cook (Bloomington, Indiana) over Cook's agreements with Guidant (Indianapolis, Indiana) relating to paclitaxel-coated stents. The Court of Appeals ruled that the Cook-Guidant agreements violated the co-exclusive license agreement among Boston Scientific, Cook and Angiotech Pharmaceuticals (Vancouver, British Columbia). Also affirmed, with a modification, was the District Court injunction against Cook. The court refused the latter firm's request to return the case to District Court for further proceedings.

In 1997, Boston Scientific entered into an agreement with Angiotech and Cook under which Boston Scientific and Cook were granted co-exclusive rights to use paclitaxel to coat stents. In 2001, Cook and Guidant entered into a series of agreements by which, among other things, Cook would enable Guidant to sell paclitaxel-coated stents. Boston Sci challenged those agreements as a violation of the co-exclusive Angiotech agreement. In June 2002, the District Court upheld Boston Scientific's challenge, and in October entered an injunction to remedy the breach of the co-exclusive license.

In last month's decision, the Court of Appeals stated that "Cook broke its contract with [Boston Scientific]." It also leaves in place the court's injunction against activities under the Cook-Guidant agreements, Cook's distribution of paclitaxel-coated stents through another party in a manner inconsistent with the co-exclusive license agreement, and the commercial use of information generated or gathered in connection with the Cook-Guidant agreements.

The appeals court modified the District Court's injunction by deleting language that would have prohibited the use of such information to obtain regulatory approval to sell paclitaxel-coated stents, but held that Cook will "still be enjoined from selling its product."

Only a few days later, however, Boston Scientific found itself on the other side of a court decision as the District Court (Patent Chamber) in Dusseldorf, Germany, ruled in favor of Medinol (Tel Aviv, Israel) regarding the stent maker's infringement lawsuits filed against the U.S. company and its director, Michel Darnaud. In backing Medinol's arguments, the German court ruled that Boston Scientific stole Medinol's intellectual property in constructing its Express stent and has been infringing on European patent EP 0 762 856 and utility model 295 21 206.

Boston Scientific said in a statement that it remains convinced that the Express stent does not infringe on Medinol's intellectual property and that it "expects to prevail on appeal."

Examinations by the patent court in Dusseldorf generally considered the leader in Europe since it handles the highest number of patent cases throughout that region revealed the protected technology of Medinol inside the Express stent, which Boston Scientific has acknowledged in a statement also is in use in its Express2 and Taxus stents. Medinol said Boston Scientific was required to pull all the Express stents from the German market as soon as the decision was formally served to it.

Boston Scientific emphasized that the suit was brought against its German subsidiary. Thus, it said that it expected any impact only on that subsidiary and that the ruling "has no bearing on any jurisdiction outside Germany." It also noted that "both U.S. and Dutch courts have denied similar Medinol claims against a Johnson & Johnson [New Brunswick, New Jersey] stent, finding issues with the validity and infringement of corresponding Medinol patents."

It also contended that the German court "has authority to decide only issues of infringement, not validity." It said that the validity of the Medinol patent and utility model "are being challenged before the European and German patent offices. If they are ruled invalid, then the finding of infringement by Boston Scientific of the patent and utility model would be vacated."

Medinol said that it intended to secure a deposit to enforce its patent and utility model rights, even if Boston Scientific exercises its right to appeal the decision, and it will ask for damages from Boston Scientific, to be determined by ordering the U.S. firm to open its books and records.

Last month's ruling is a small part of an ongoing legal struggle between Medinol and Boston Scientific over the past two years. A one-time purchaser of Medinol stents, Boston Scientific had attempted to purchase the company. Saying it grossly undervalued the company, Medinol rejected the offer and subsequently filed a legal action against Boston Sci in federal court in New York. In that suit, Medinol argued that Boston Scientific "acted systematically over several years with the intent to ruin Medinol, misappropriate its valuable intellectual property, and its highly guarded trade secrets" and that it had secretly built a plant in Ireland for the production of NIR stents, which Medinol produces in its plant in Jerusalem.

Guidant to shutter Ancure business

Guidant (Indianapolis, Indiana) in mid-June said it would discontinue its Ancure Endograft System product line for the treatment of abdominal aortic aneurysms (AAA). The decision to discontinue the product line came about a week after the company's EndoVascular Technologies (EVT; Menlo Park, California) subsidiary said it planned to settle government charges that it made fraudulent statements to regulators concerning the device, pleading guilty to 10 felony counts and making a settlement of more than $92 million. That announcement was followed by a small avalanche of shareholder suits, but the company said that, overall, these suits and potential civil litigation will have no material impact on operations.

The 10 counts of felony charges include nine related to selling a misbranded product and one related to making false statements to the FDA. The company intentionally misled an FDA inspector, giving him 55 complaints vs. several hundred that the company was aware of. Over an 18-month period from September 1999, when the FDA approved the device, to March 2001 when the company voluntarily removed the product from market Guidant reported 172 medical device reports (MDRs) but has admitted that an additional 2,628 MDRs occurred out of 7,632 Ancure devices sold.

Guidant acquired EVT in 1997, and the AAA business represented less than 1% of total sales in fiscal 2002, or about $63 million of Guidant's $3.2 billion total for that year. The company stressed during a conference call and in its press statements that patients implanted with the Ancure are not at risk as a result of this decision. "If you are a patient with an Ancure implant, I want to assure you and reassure you that your implant is safe," said Ronald Dollens, president and CEO of Guidant. "Guidant management acknowledges and regrets what happened at EVT. We are committed to insuring that our company and all of our businesses have the best compliance system in the industry." He said that people who should have known better acted improperly and displayed poor judgment and "once that improper conduct was recognized, Guidant promptly overhauled the business."

The company said it would continue to ship product and provide support to implanting Ancure physicians and their patients through Oct. 1, 2004. Beyond that date, Guidant will continue to support implanted patients and physicians for long-term follow-up and device tracking needs. But other than these activities, EVT will cease operations. Beverly Huss, president of Guidant's Endovascular Solutions unit, in a statement said, "We understand that the discontinuation of the product will involve a time of transition, which we pledge to make as smooth as possible." The company also said that most affected employees will be offered other positions within Guidant and that carotid, biliary, neurovascular and peripheral product development initiatives will not be impacted by the reorganization.

Dollens termed as "unacceptable" the series of events that occurred at EVT leading up to the withdrawal of Ancure in March of 2001. "EVT had MDR information and intentionally failed to report it," he said. "This is not the way we conduct our business." Dollens noted that the new management team put in place at the beginning of 2001 and the current employees "have undergone extensive efforts to put the house in order." He said these efforts culminated in the reintroduction of the device in August 2001.

Cook rolls out Zenith AAA graft

While Guidant has taken its Ancure system off the market, that gap should be more than filled by the newest entrant to the AAA sector. Cook (Bloomington, Indiana) received FDA approval for its Zenith AAA Endovascular Graft, once again making a threesome in the sector with Medtronic (Minneapolis, Minnesota) and its Aneuryx system, and W.L. Gore (Flagstaff, Arizona), maker of the Excluder system. David Biggs, director of advanced technology management at Cook, said the company expects much more than gap-filling from the Zenith. "We're not looking at [just] capturing the void left by Guidant," Biggs told CDU. "We're looking at the entire AAA market in the U.S. as potentially being Zenith customers." And he projects that within one to two years, the Zenith will be the No. 1 product in this field, based on its technology, clinical validation and its long-term record in other countries.

Biggs is directing physician training for the Zenith, saying the company is attempting to strike a "fine balance between getting it out to everyone but ensuring that we support the product properly" and he projects that by the end of the year, implantations will reach "close to" 1,000 a month. By the end of 2004, he expects "significant market share" that translates to "a majority of the AAA endovascular procedures using the Zenith in the U.S."

The Zenith already has a 10-year track record, first being used in Perth, Australia, in 1993, where it was initially developed. Having gone through "several iterations," according to Biggs, the version FDA-cleared via premarket approval application in May is dubbed a "third-generation" device. Clearance was based on a 15-center, 352-patient clinical trial.

Marking what Biggs believes is its superiority is the device's method of deployment. While he said competitive systems are deployed by "popping open" or "springing open," Biggs says that Zenith deployment is characterized by "controlled, deliberate placement," with Cook reporting a deployment success rate of 99.7%.