A U.S. District Court judge in Delaware issued an opinion upholding a May 2011 jury verdict that awarded lost profits and reasonable royalty damages to Boston Scientific in its long-running patent infringement suit against Cordis. Kirkland & Ellis and Desmarais, counsel for Boston Scientific, retained Mary Woodford, a senior advisor at Cornerstone Research, to provide damages analysis and testimony in the May 2011 damages trial. In late 2009, Cordis introduced a new 2.25 mm drug-eluting stent (DES) that infringed Boston Scientific’s patent. This same patent was previously found infringed by Cordis in September 2007 and that judgment was affirmed by the Court of Appeals for the Federal Circuit in March 2009.
Ms. Woodford testified to the “existence of a two-supplier market for 2.25 mm DESs” and that “Cordis’s market share ‘was going to come out of the hide of the only other company that was out there with 2.25 [mm] drug eluting stents.’” Ms. Woodford opined that based on market data, Boston Scientific would have made 67.6 percent of Cordis’s 2.25 mm DES sales but for Cordis’s infringement and that a reasonable royalty would have been 30 percent of the sales value of Cordis’s 2.25 mm DES not included in the lost profits calculation. The jury awarded lost profits on almost half of the infringing Cordis sales, and reasonable royalty damages on the rest, for a total amount of $19.5 million.
Following the trial, Cordis moved for judgment as a matter of law on the unavailability of lost profits on the grounds that Boston Scientific had not proven that the introduction of Cordis’s 2.25 mm Cypher stent was the but-for cause of the decline in the sales of Boston Scientific’s 2.25 mm DES. Cordis argued that there was no market for “mini” DESs with paclitaxel, the drug on Boston Scientific’s DES, due to certain published clinical trial results and physicians’ preferences for larger stents. In the latest ruling, the court concluded that a specific market for 2.25 mm DESs existed and the demand for Boston Scientific’s and Cordis’s 2.25 mm DESs was interchangeable. In its March 2012 opinion, the court noted, “As there exists clear and convincing evidence that Cordis’s conduct is sufficiently culpable to justify enhancing damages, the court finds that doubling the jury’s award (of $20,754,192, as amended) is reasonable under the circumstances.” The court also granted Boston Scientific’s motion for an award of an ongoing royalty rate of 32 percent in lieu of a permanent injunction and cited Ms. Woodford’s analysis of the effective damages rate that reflected all of Cordis’s infringing sales based on the jury’s total damages verdict, including both lost profits and reasonable royalty damages.