US medical devices company Boston Scientific has agreed to pay Tel Aviv-based Medinol $750 million in an out-of-court settlement following a dispute over revenue from the sale of coronary stents, bringing to a close a five-year legal battle.
The two companies had gone to court in a trial that started in June, with Medinol saying that Boston Scientific illegally copied the design of its stents and that it should therefore receive up to 30 percent of the profits.
The companies had been in a partnership in which Medinol designed and manufactured the stents and Boston Scientific marketed and distributed them, but this fell apart in early 2002.
The companies said on Thursday that under the terms of the settlement, they will drop existing claims against each other, effectively dismissing all outstanding stent litigation, including the disputes over Boston Scientific's Express and Taxus Express stents.
Medinol, which is run by run by Kobi and Judith Richter, has pledged not to sue the US company over certain Medinol patents, with the two sides agreeing to establish an arbitration process to resolve any further disputes. The sides have also cancelled all the agreements they had with each other, including a supply agreement.
Boston Scientific spokesman Paul Donovan welcomed the settlement.
"We're pleased to close this chapter and put this matter behind
us. We can now direct our full attention to developing our life-saving products and technologies," he said.
Medinol said that "the large sum of money reflects the recognition of the high value of Medinol's groundbreaking products."
However, the amount Boston Scientific will pay is half the $1.5 billion that Medinol claimed, while the US company had argued that there was no conceivable way Medinol's demands could exceed $300m. It had also made its own claim against Medinol for $400m.
Medinol said the US corporation broke the agreement between the companies by constructing its own secret stent-manufacturing facility in Ireland
and then basing its Taxus Express stent, which is one of the top-selling stents in the US, on the Israeli company's patented Nir stent.
Boston Scientific disputes the latter point and said it was Medinol that failed to live up to its side of the partnership.