Stent pioneer Jang wants another run at Boston Scientific in patent spat

Coronary stent pioneer Dr. David Jang this week asked a federal appeals court for a re-hearing after it upheld a Boston Scientific (NYSE:BSX) win last month in a long-running patent infringement spat.

The case dates back to 1999, when Jang won approval from the U.S. Patent & Trademark Office for a stent design featuring lateral struts. In 2002, Jang inked a deal worth up to $160 million to license the patents to Marlborough, Mass.-based Boston Scientific; Jang received $50 million up front, according to court documents, but only $10 million of the remaining $110 million in milestone payments.

Jang sued in 2005, alleging breach of contract and other claims. Boston Scientific filed a counterclaim in 2006 “denying any obligation to make additional contingent payments to Jang on the ground that that the accused stents did not infringe,” and thus were not covered under the deal with Jang, according to the documents.

Judge Virginia Phillips of the U.S. District Court for Central California initially ruled that the Boston Scientific stents did not infringe the Jang patents, shot down the breach of contract claim and decided the other claims in Boston’s favor. After Jang appealed, the Federal Circuit in 2012 vacated the ruling and remanded it to Phillips.

A Patent Office re-examination in 2013 found the Jang patents invalid, prompting Boston Scientific to argue that it shouldn’t be required to pay royalties on invalid patents. Phillips denied that bid for summary judgment, ruling that Jang has the right to demand royalties covering the time up until Boston Scientific asked for the re-examination, according to the documents. Boston appealed, asking the Federal Circuit to review the Phillips decision; the appeals court in September 2014 declined to hear the petition. At trial the jury sent up a split verdict, finding that Boston Scientific did not literally infringe the Jang patents but did infringe under the doctrine of equivalents. Phillips found in 2015 that Jang’s claims covered previous patents, triggering an ensnarement defense barring a patentee from asserting a scope of equivalency that would encompass, or ensnare, the prior art.

Jang moved for judgment as a matter of law on the jury’s finding of no literal infringement, but Phillips found enough evidence to support the verdict and rejected Jang’s bid for a new trial. Jang appealed that decision, arguing that a reasonable jury couldn’t have found no literal infringement because the undisputed facts showed otherwise and Boston Scientific’s non-infringement arguments were legally erroneous. In September the U.S. Court of Appeals for the Federal Circuit upheld Phillips’ ruling, according to the documents.

In an Oct. 30 motion for a re-hearing, Jang argued that the appeals court was wrong in its decision regarding the ensnarement defense.

“The panel misapprehended or overlooked that: (1) legal questions must be raised in the pretrial order, no less than factual ones; and (2) the district court made the ruling in question at the end of trial, not before it. The panel also held, based on its own new rationale, that a hypothetical claim Dr. Jang had proposed to guide the ensnarement inquiry improperly narrowed the claims. The panel misapprehended or overlooked that, under its new rationale, another hypothetical claim proposed by Dr. Jang was proper,” he argued. “The panel’s misapprehension of the chronology also infected its factual analysis under Rule 50. The panel stated that ‘[w]e see nothing legally unsound in BSC raising ensnarement through its pretrial motion in limine, and the district court conducting a post-trial hearing on the defense contingent on an infringement verdict under the doctrine of equivalents.’ As discussed below, the panel applied the wrong legal standard. But the panel also misperceived the facts, because the two events were completely unconnected. BSC’s motion in limine (which sought to exclude Dr. Jang’s equivalents case altogether, and mentioned ensnarement only in support of that complete-exclusion argument) was denied three months before trial, in a ruling that never mentioned ensnarement or a post-trial hearing. That ruling gave Dr. Jang no notice that ensnarement would be tried, must less tried to the court post-verdict. As discussed above, it was not until the end of trial — after Dr. Jang had presented his case — that the district court first announced it would hold an ensnarement hearing. That is the height of unfair surprise.” [emphasis theirs]

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