Nevro, Boston Scientific bury the hatchet

Nevro (NYSE:NVRO) said today that it agreed to bury the hatchet with Boston Scientific (NYSE:BSX) in their patent infringement spat over high-frequency spinal cord stimulation technology, sending its share prices up in mid-day trading.

Last week a federal judge in California issued a mixed ruling in the case, finding that six claims in three of the Nevro patents are eligible but also that Boston’s SCS devices don’t infringe those claims (Boston doesn’t have a competing high-frequency SCS device on the U.S. market).

Judge Vince Chhabria of the U.S. District Court for Northern California, who ruled earlier this month that any claims in the patents describing a non-paresthesia-producing therapy effect are indefinite, also found that Boston’s use of the Spectra WaveWriter device in its Accelerate study doesn’t infringe because it falls under the clinical trial safe harbor even after the patients have completed the study.

The judge also found that Spectra WaveWriter in commercial use doesn’t infringe because it does not operated at high frequencies; that claims Nevro asserted in four of the patents are invalid as indefinite; and that practicing those claims in Europe does not infringe according to U.S. patent laws.

Today Nevro said the companies filed a joint statement proposing the dismissal of the case without prejudice, “on the basis of Boston Scientific’s representations to the court that it has no plans to launch a high frequency product in the U.S.”

Nevro had assumed that Boston would seek FDA approval immediately following the planned release of Accelerate high-frequency data in early 2017, but the release was delayed and last week Boston extended the timeline by another nine months.

“In the parties’ joint statement, Boston Scientific represented to the court that, as of now, it has not decided whether to launch a high frequency product and has not established a timeline for when such a decision might be made, if ever,” Nevro said today. “On the basis of Boston Scientific’s representations, Nevro and Boston Scientific agreed to dismissal of Nevro’s declaratory judgment claims without prejudice on the grounds that the dispute between the parties is not ripe.”

Nevros said it still thinks that Chhabria’s decision precludes its rival from launching a high-frequency system in the U.S. and still plans to appeal the portions of his ruling that went against it.

NVRO shares ticked up 0.2% to $55.98 apiece today in the face of wide declines across the market. BSX shares were off -2.2% to $33.03 each, likely reflecting those declines.

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