Adding to the history of patent wars between the two companies,
) leveled another lawsuit against
Johnson & Johnson
) subsidiary Ethicon Endo-Surgery Inc. Filed in the U.S. District
Court for the District of Connecticut, the lawsuit alleges that
Ethicon's latest ultrasonic surgical product - Harmonic ACE+7 -
infringes three Covidien patents.
The patent infringement lawsuit asks the court to order Ethicon to
terminate production and sale of the Harmonic ACE+7 devices and
grant damages for the same.
In 2010, Covidien accused that Ethicon's Harmonic line of
ultrasonic surgical devices infringed three of the company's
patents. In Mar 2013, the U.S. District Court held that Covidien's
patents were valid, enforceable and infringed by Ethicon.
The 2010 lawsuit resulted in a $176.5 million verdict against
Ethicon. The amount of the verdict, which is currently under
appeal, is based on an 8% royalty rate on infringing sales through
Mar 2012, plus prejudgment interest.
In Dec 2011, Ethicon also brought infringement charges against
Covidien's Sonicision cordless ultrasonic dissection system.
According to a ruling issued by the U.S. District Court for the
Southern District of Ohio on Jan 22, 2012, Covidien did not
infringe any of the seven Ethicon patents in dispute.
In the 2012 ruling, the Court declared that five of Ethicon's
patents were not valid. Based on this judgment, Ethicon's patent
infringement action was dismissed and Covidien was allowed to
continue selling its Sonicision system.
Earlier this month, medical technology giant,
) announced its plans to acquire Covidien for $42.9 billion.
Medtronic's rationale behind this merger is to offset the impact of
high U.S. corporate tax rate by shifting its tax base overseas, to
Ireland. Subject to certain customary conditions, the acquisition
is expected to close in the fourth quarter of 2014 or early 2015.
Post-merger, the combined entity will be known as Medtronic plc and
will boast a comprehensive product portfolio, a diversified growth
profile and broad geographic reach. On successful completion of the
transaction, Medtronic plc is expected to report at least $850
million of annual pre-tax cost synergies by the end of fiscal 2018.
Presently, Covidien carries a Zacks Rank #3 (Hold).
OraSure Technologies, Inc.
) is a better-ranked stock in the medical products industry with a
Zacks Rank #1 (Strong Buy).
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