Boston Scientific to settle patent disputes for $1.7b

Boston Scientific, which has extensive medical device manufacturing operations in the Twin Cities, will pay $1.7 billion to Johnson & Johnson to settle patent disputes.

The three disputed patents date back to 2003. They involve drug-eluting heart stents--metal tubes that prop open clogged arteries and release a drug to help keep the blood vessel open.

The hefty price tag surprised some analysts, but Jan Wald, an analyst with Noble Financial Group, says the settlement makes sense. Wald says Boston Scientific has made a lot of money off the disputed patents and seems positioned to make more.

"The company has been able to generate maybe $6 billion of profits off a drug-eluting stent that it now has to pay $1.7 billion for," she said.

Boston Scientific will pay Johnson & Johnson $1 billion Monday and the rest by the first week of January 2011. Some analysts speculate the settlement may spur job cuts, but the company wouldn't comment on the impact of the settlement.