Adv. Rory O. Millson, the leading attorney representing Israeli stent manufacturer Medinol in its lawsuit against Boston Scientific (NYSE: BSX), announced in his opening statement yesterday that Medinol was demanding $2-4 billion.
This is the first time that Medinol has announced publicly and officially the minimum sum that it was demanding from Boston Scientific as compensation for violation of the contract between the two companies, which provided for a joint development, production, and market system for stents.
As far as is known, Medinol’s claim is the largest ever filed by an Israeli company in a legal proceeding, whether in Israel or overseas. Several weeks ago, in a separate trial unrelated to Medinol, a jury found that Boston Scientific had violated Johnson and Johnson’s (NYSE: JNJ) patent rights to two types of stents. It is believed that this verdict will cost Boston Scientific almost $1 billion. It is not clear how Boston Scientific would deal with a court order to pay an additional $2 billion, or possibly more, to Medinol.
Millson harshly criticized Boston Scientific, painting a picture of a greedy and predatory corporation with no inhibitions about trampling anyone who stood in its way.
Millson devoted a large part of his address to one of the most important questions in the affair: what possessed Boston Scientific CEO James Tobin to tell Medinol owners Dr. Kobi and Judith Richter on his own initiative about his company’s secret plant in Ireland, the purpose of which was actually to strip Medinol of its assets? Did he wish to do the right thing, thereby restoring relations with Medinol to their former state?
That is the version that Boston Scientific and Tobin are supporting, but Millson shot it full of holes. He said that Boston Scientific had discovered that the US Federal Bureau of Investigation (FBI) had come across a document shedding light on the secret plant during an investigation of a production failure at Boston Scientific. Boston Scientific was afraid that the FBI would report the document to Medinol, and therefore decided on its own initiative to disclose the existence of the plant to the Richters, hoping that relations would improve, and that Tobin’s apparent honesty would impress them. This did not occur.
Using charts to back his allegations, Millson also said that Boston Scientific’s newer Express stent was nothing but a simple copy of Medinol’s NIRflex stent.
Published by Globes [online] - www.globes.co.il - on June 28, 2005