UC Berkeley IEOR 190G Fall08 Patent Engineering

1. UC BerkeleyIEOR 190G Fall08 Patent Engineering And other patent disputes related to Palmaz ballon expandable stent technology MONTIGNY Marie 2008, Dec 8. École des Ponts (Engineering & Business School) VS.

2. Agenda Companies background Products involved: the bare-metal and drug-eluting stents Overview of the cases Focus on the first case: technical perspectives Result of the case and timeline A few words about the other cases Bibliography IEOR 190G – Boston Scientific vs Cordis

3. Johnson & Johnson is a “global manufacturer of health care products as well as a provider of related health service.” • Cordis is a “worldwide leader in developing and manufacturing interventional vascular technology, and providing physicians with breakthrough treatment solutions for peripheral vascular disease as weel as innovative solutions for neurovascular therapies.” • 3 business groups: Cardiology, Endovascular and Neurovascular The companies Boston Scientific is “a worldwide developer, manufacturer and marketer of less-invasive medical devices, providing medical devices and associated concentrates for use in surgical procedures.” Medical fields: vascular surgery, radiology, pulmonary medicine and urology,… 2 business groups: Cardiovascular and Endosurgery IEOR 190G – Boston Scientific vs Cordis

4. The products: bare-metal and drug-eluting stents “1st generation” Bare-metal stent: a vascular stent without a coating “2nd generation”Drug-eluting stent: a coronary stent (a scaffold) placed into narrowed, diseased coronary arteries that slowly releases a drug to block cell proliferation. A stent: “a tube that is inserted into a natural conduit of the body to prevent or counteract a disease-induced localized flow constriction” Stents involved in our cases: Coronary stent IEOR 190G – Boston Scientific vs Cordis

5. Overview of some cases

6. Why so many cases ? Every year: new cases, trials, verdicts, appeals… So patent disputes are very common in the field. They often involve small differences in the design of the stents or the drugs they’are coated with (for DES). The medical market related to interventional cardiology is very lucrative -> billions dollars in damage… Our detailed example: IEOR 190G – Boston Scientific vs Cordis

7. The technology: the Palmaz ballon expandable stent Cordis is the owner of the ‘762 patent (also called “the Palmaz balloon expandable stent patent”, or simply “the Palmaz patent”) The 762 patent discloses a coronary stent that can be mounted on an angioplasty balloon and delivered to a target location intraluminally (i.e. through the vascular system) by a catheter. Once the stent and balloon reach the targeted location, the balloon is inflated to expand the stent to a desired size. = « expandable prosthesis » IEOR 190G – Boston Scientific vs Cordis

8. The technology: the stent placement (A) A: the catheter is inserted across the lesion. IEOR 190G – Boston Scientific vs Cordis

9. The technology: the stent placement (B) B: the balloon is inflated, expanding the stent and compressing the plaque. IEOR 190G – Boston Scientific vs Cordis

10. The technology: the stent placement (C) C: The catheter and deflated balloon have been removed.. IEOR 190G – Boston Scientific vs Cordis

11. Cross-sectional view of the prosthesis for a body passage-way - Fig3: having a first diameter which permits delivery of the prosthesis into a body passageway - Fig4: in its expanded configuration when disposed within a body passageway IEOR 190G – Boston Scientific vs Cordis

12. Perspective view of the prosthesis for a body passage-way - Fig1A: having a first diameter which permits delivery of the prosthesis into a body passageway - Fig1B: in its expanded configuration when disposed within a body passageway IEOR 190G – Boston Scientific vs Cordis

13. The technology: the issue Cordis asserts that BSC’s NIR stent infringes claim 23 of the ’762 patent. Claim 23“The expandable intraluminal vascular graft of claim 13, wherein the outside of the wall surface of the tubular member is a smooth surface, when the tubular member has the first diameter.” Claim 13“A expandable intraluminal vascular graft, comprising: a thin-walled tubular member having first and second ends and a wall surface disposed between the first and second ends, the wall surface having a substantially uniform thickness and a plurality of slots formed therein, the slots being disposed substantially parallel to the longitudinal axis of the tubular member; the tubular member having a first diameter which permits intraluminal delivery of the tubular member into a body passageway having a lumen; and the tubular member having a second, expanded and deformed diameter, upon the application from the interior of the tubular member of a radially, outwardly extending force, which second diameter is variable and dependent upon the amount of force applied to the tubular member, whereby the tubular member may be expanded and deformed to expand the lumen of the body passageway.” IEOR 190G – Boston Scientific vs Cordis

14. Palmaz ballon expandable stent The technology: the issue NIR BSC’s stent IEOR 190G – Boston Scientific vs Cordis

15. The technology: the issue The NIR stent manufactured from a stainless steel sheet. Slots are formed in the steel sheet by chemical etching. The stent disclosed in the ’762 patent are rectangular. The slots in the NIR stent rounded at the ends, and each slot contains a U-shaped curve in the middle. The U-shaped portions protrude slightly when the stent is in its collapsed form. BSC refers to the U-shaped portions along the stent’s surface as “U-loops.” BSC’s central argument is that those U-loops prevent the NIR stent from infringing claim 23. At the 2000 trial the jury returned a verdict against BSC, finding that BSC infringed claim 23 under the doctrine of equivalents. IEOR 190G – Boston Scientific vs Cordis

16. The technology: what about Medtronic infringement? The second patent involved, the ‘984 patent, discloses a flexible stent manufactured by joining tubular members, such as those disclosed in the ‘762 patent, by a connector that “provides the necessary flexibility to negociate the bends and curves in tortuous body passageways, such as the vascular system.” IEOR 190G – Boston Scientific vs Cordis

17. The technology: what about Medtronic infringement? A weld point between 2 crowns Cordis alleges that Medtronic stents (the Microstent II and the GFX) infringe the ‘762 and ‘984 patents. Those stents are made from rounded lengths of stainless steel formed into rings. The rings are heated to a temperature sufficient to permit them to be formed, and they are then folded into sinusoidal structures. Each sinusoidal ring has straight portions (“struts”) and curved portions at the ends of the struts (“crowns”). To create the complete stent, adjacent sinusoidal rings are welded together at a point between one of the crowns of each ring. ‘762, Claim 13: “a substantially uniform thickness anda plurality of slots formed therein” ‘984, Claim 1 and 3: “a plurality of thin-walled tubular members” The jury finds that Medtronic’s stents infringes the ‘762 and ‘984 patents under the doctrine of equivalents. IEOR 190G – Boston Scientific vs Cordis

18. Result of the case and timeline 1997: Cordis files a patent infringement action against Medtronic and BSC. 2000: Juries find that Boston Scientific's and Medtronic's bare metal stents infringe Cordis' patent . Cordis wins $324 million against Boston Scientific and $271 million against Medtronic, prior to the addition of interest. 2005, Mar: Both cases are retried with Cordis winning the verdict again. The jury finds that BSC’ stent infringes claim 23 of the ‘762 patent, which jury conclues was non obvious. 2007 Jan: A federal circuit court in Washington, D.C., upholds the jury verdicts 2008 September: a Delaware federal judge granted the company's motion for final judgment against Medtronic and Boston Scientific in the patent litigation. The court awards about $1.2 billion, including accrued interest, to Cordis against the two companies. Medtronic was ordered to pay about $521 million and Boston Scientific about $703 million. IEOR 190G – Boston Scientific vs Cordis

19. A few words about the other cases In June 2005, the following verdicts are returned : “BSC Express stents as well as the Liberty stents literally infriges claim 23 of the ‘762 patent. BSC has induced literal infringement of claim 1 of the ‘762 patent with respect to those stents. The Liberty stent literally infriges claim 2 of the ‘406 patent Claim 2 of the ‘406 patent is neither anticipated nor rendered obvious by the prior art.” IEOR 190G – Boston Scientific vs Cordis

20. A few words about the other cases In July 2005, the following verdicts are returned : “Cordis’s Cypher stent infringes claim 8 of the ‘536 patent. The claim 8 of the ‘536 patent is not invalid for obviousness. Cordis’ Cypher, BX velocity, BX Sonic and Genesis stents do not literally infrige claim 36 of the ‘021 patent. The Cypher, BX velocity, BX Sonic and Genesis stents infringe the “corners” limitation of claim 36 of the ‘021 patent under the doctrine of equivalent. Claim 36 of the ‘021 patent is not invalid for obviousness.” IEOR 190G – Boston Scientific vs Cordis

21. The other cases - Conclusion “a… tubular member having… a wall surface…, the wall surface having a substantially uniform thickness and a plurality of slots formed therein” “the wall surface of the tubular member is a smooth surface” Always the same technology around Cordis’ pioneering Palmaz patent involved ! Potentially, billions of damage in this lucrative market IEOR 190G – Boston Scientific vs Cordis

22. Bibliography Patents: U.S. Patents 4,739,762 (Palmaz), 5,195,984 (Schatz), 5,895,406 (Gray), 5,922,021 (Jang), 6,120,536 (Ding). Websites: Boston Scientific and Cordis websites Wikipedia: “stent” and “coronary stent” http://www.ideasforsurgery.com/2008/10/13/johnson-johnson-jnj-cordis-awarded-12-bln-final-judgment-against-medtronic-and-boston-scientific-in-the-patent-litigation-patent-litigation-against-medtronic-boston-scientific-palmaz/ http://depatentlaw.morrisjames.com/03%20027%2020.pdf http://depatentlaw.morrisjames.com/03%20283%20137.pdf http://depatentlaw.morrisjames.com/97%20550%2022.pdf http://depatentlaw.morrisjames.com/uploads/file/97-550_98-19%20218(2).pdf http://www.cordis.com/active/crdus/en_US/html/cordis/downloads/press/Cordis_InfBy_BSC_PR_062105a.pdf http://www.kenyon.com/pubs/detail_press.aspx?news_id=321405705 http://www.law.com/jsp/article.jsp?id=1202815251042 http://jnj.v1.myvirtualpaper.com/report/2008030701/?page=69 http://www.pharmaceutical-business-review.com/companyprofile.asp?guid=AE9B6B3B-5CCC-4915-B1E5-AC61C3060CD9&CType=Background http://www.pharmaceutical-business-review.com/companyprofile.asp?guid=DDE623F4-24CB-41C6-9B74-AEBC6CEF6369&CType=Background http://www.ptca.org/press_rel/20031122pr_boston.html http://www.smalltimes.com/articles/article_display.cfm?Section=ARCHI&C=Bio&ARTICLE_ID=269270&p=109 http://new.quote.com/news/story.action?id=RTT809302018002603 http://www.deweyleboeuf.com/files/News/5346b9f7-aa15-485e-b682-f9ae70b9235c/Presentation/NewsAttachment/310cdf87-3426-46b3-9db0-fb5aa7c9a17e/080107_IP_Watch_Medtronic%20AVE_248883_v1.pdf http://www.ll.georgetown.edu/Federal/judicial/fed/opinions/06opinions/06-1393.pdf http://www.patenthawk.com/blog/2008/01/unstenting.html IEOR 190G – Boston Scientific vs Cordis

23. Thank you Any question ?