Sure, anyone can sue for $662 trillion, but rare is the litigator who actually gets even a billion-dollar judgment. Deal lawyers, on the other hand, get to tell their mothers about three-comma deals all the time.
Last week, we lowered our standards to give the “slip & fall” departments their moment in the sun, writing about the Samsung-Rambus $900 million settlement.
We shouldn’t have been so quick to settle (no pun intended).
Thank you, Johnson & Johnson, for convincing us to keep our standards high. If there’s not a billion dollars (or at least some sort of vice) involved, we’re not going to be featuring the lawyers.
How J&J joined the club, and the lawyers who got them there, after the jump.
Boston Scientific has been shelled by J&J in multiple lawsuits claiming that their cardiac stents infringed the company’s IP. In September, they had agreed to settle the majority of the cases relating to those particular products for $716 million (again, simply not newsworthy by our high standards).
That settlement seems to have opened the floodgates, as Boston Scientific and J&J decided it was worth $1.73 billion to settle (some of – see below) the remaining suits in the 17-lawsuit legal barrage. It could have been worse, Boston Scientific actually won an infringement suit against J&J, so that was probably netted out against the total amount, which will be paid $1 billion up front and the balance by January 2011. J&J also had an infringement victory at trial, and the companies were gearing up to go to the damages phase on both trials, which are now off the table.
Amazingly, that doesn’t clear up all the stent litigation.
The legal wrangling over heart stents isn’t over, however. J&J’s stent-making Cordis unit noted in a release that other litigation between the companies continue, including lawsuits Cordis filed regarding Boston Scientific’s Promus-brand stents.
On the Promus front, Boston Scientific noted the court in Delaware found last month that four patents in a lawsuit J&J brought regarding Promus were invalid, and that a trial on those patents won’t proceed. Cordis plans to appeal seeking reversal of those rulings and is also pursuing litigation against Promus stents based on other patents.
Promus stents are made by Abbott Laboratories, which sells the same devices under the name Xience, and sold by Boston Scientific under a profit-sharing deal. Boston Scientific now sells new home-grown Promus Element stents in Europe that don’t come from Abbott.
Even though the net payment is just $2.4 billion or so, the total fees to counsel are orders of magnitude more than deal lawyers would earn on a similarly sized transaction.
So who were the lawyers racking up the big fees?
Johnson & Johnson was represented by Sidley Austin Chicago partner David Pritikin (Cornell BA ’71, Harvard JD ’74), as well as their own lavishly-paid GC Russell Deyo (Dartmouth BA ’72, Georgetown JD ’75). On a sidenote – does anyone actually know which NYC firm Deyo worked at before his position with J&J? We have been looking, but so far have been unsuccessful.
Boston Scientific was represented by Kenyon & Kenyon partner Richard DeLucia and GC Timothy Pratt, formerly of Shook Hardy.
This isn’t Boston Scientific’s first loss in the stent field, either. Two years ago Gary Hoffman of Dickstein Shapiro represented another plaintiff who got a $432 million judgment against the company. DeLucia was also on the wrong end of that one.
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