Johnson & Johnson - Index

Johnson & Johnson - report - Index

Multiple products of Johnson & Johnson subsidiaries are
subject to numerous product liability claims and lawsuits,
including ORTHO EVRA®, RISPERDAL®, DURAGESIC® and the
CHARITÉ™ Artificial Disc. There are approximately 4,000
claimants who have filed lawsuits or made claims regarding
injuries allegedly due to ORTHO EVRA®, 613 claimants with
respect to RISPERDAL®, 260 with respect to CHARITÉ™ and
49 with respect to DURAGESIC®. These claimants seek substantial
compensatory and, where available, punitive damages.
With respect to RISPERDAL®, the Attorneys General of five
states and the Office of General Counsel of the Commonwealth
of Pennsylvania have filed actions seeking reimbursement of
Medicaid or other public funds for RISPERDAL® prescriptions
written for off-label use, compensation for treating their citizens
for alleged adverse reactions to RISPERDAL®, civil fines or
penalties, punitive damages, or other relief. The Attorney General
of Texas has joined a qui tam action in that state seeking
similar relief. Certain of these actions also seek injunctive relief
relating to the promotion of RISPERDAL®. The Attorneys General
of a number of other states have indicated a potential interest
in pursuing similar litigation against the company’s Janssen
subsidiary, and have obtained a tolling agreement staying the
running of the statute of limitations while they inquire into the
issues. In addition, there are six cases filed by union health plans
seeking damages for alleged overpayments for RISPERDAL®,
several of which seek certification as class actions.
Numerous claims and lawsuits in the United States relating
to the drug PROPULSID®, withdrawn from general sale by the
Company’s Janssen subsidiary in 2000, have been resolved or
are currently enrolled in settlement programs with an aggregate
cap below $100 million. Litigation concerning PROPULSID® is
pending in Canada, where a class action of persons alleging
adverse reactions to the drug has been certified.
AFFIRMATIVE STENT PATENT LITIGATION
In patent infringement actions tried in Delaware Federal District
Court in late 2000, Cordis Corporation (Cordis), a subsidiary of
Johnson & Johnson, obtained verdicts of infringement and patent
validity, and damage awards against Boston Scientific Corporation
(Boston Scientific) and Medtronic AVE, Inc. (Medtronic)
based on a number of Cordis vascular stent patents. In December
2000, the jury in the damage action against Boston Scientific
returned a verdict of $324 million and the jury in the Medtronic
action returned a verdict of $271 million. The Court of Appeals
for the Federal Circuit recently upheld liability in these cases and
returned the cases to the District Court for further proceedings,
including on damages.
Cordis also has an arbitration claim against Medtronic
accusing Medtronic of infringement by sale of stent products
introduced by Medtronic subsequent to its products subject to
the earlier action referenced above. Those subsequent products
were found to have been licensed to Medtronic pursuant to a
1997 license by an arbitration panel in March 2005. Further arbitration
proceedings will determine whether royalties are owed
for those products.
In January 2003, Cordis filed a patent infringement action
against Boston Scientific in Delaware Federal District Court
accusing its Express2™, Taxus® and Liberte® stents of infringing
the Palmaz patent that expired in November 2005. The
Liberte® stent was also accused of infringing Cordis’ Gray
patent that expires in 2016. In June 2005, a jury found that the
Express2™, Taxus® and Liberte® stents infringed the Palmaz
patent and that the Liberte® stent also infringed the Gray patent.
Boston Scientific has appealed to the U.S. Court of Appeals for
the Federal Circuit.
PATENT LITIGATION AGAINST VARIOUS
JOHNSON & JOHNSON SUBSIDIARIES
The products of various Johnson & Johnson subsidiaries are the
subject of various patent lawsuits, the outcomes of which could
potentially adversely affect the ability of those subsidiaries to sell
those products, or require the payment of past damages and
future royalties.
In July 2005, a jury in Federal District Court in Delaware
found that the Cordis CYPHER® Stent infringed Boston Scientific’s
Ding ’536 patent and that the Cordis CYPHER® and BX
VELOCITY® Stents also infringed Boston Scientific’s Jang ’021
patent. The jury also found both of those patents valid. Boston
Scientific seeks substantial damages and an injunction in that
action. The District Court denied motions by Cordis to overturn
the jury verdicts or grant a new trial. Cordis has appealed to the
Court of Appeals for the Federal Circuit. The District Court indicated
it will consider damages, willfulness and injunctive relief
after the appeals have been decided.
Boston Scientific has brought actions in Belgium, the
Netherlands, Germany and France under its Kastenhofer patent,
which purports to cover two-layer catheters such as those used
to deliver the CYPHER® Stent, to enjoin the manufacture and
sale of allegedly infringing catheters in those countries, and to
recover damages. A hearing in the Belgian case is scheduled for
May 2008. A decision by the lower court in the Netherlands in
Boston Scientific’s favor was reversed on appeal in April 2007.
Boston Scientific has filed an appeal to the Dutch Supreme
Court. In October 2007, Boston Scientific prevailed in the nullity
action challenging the validity of the Kastenhofer patent filed by
Cordis in Germany. Cordis intends to appeal. No hearings have
been scheduled in the French action.
Trial in Boston Scientific’s U.S. case based on the Kastenhofer
patent concluded in Federal Court in California in October
2007, with a jury verdict in favor of Cordis. The jury found the
Kastenhofer patent invalid and found for Cordis with respect to
infringement of the patent asserted by Cordis in its counterclaim.
Post trial motions and appeals are anticipated.
In Germany, Boston Scientific has several actions based
on its Ding patents pending against the Cordis CYPHER® Stent.
Cordis was successful in these actions at the trial level, but
Boston Scientific has appealed.
NOTES TO CONSOLIDA TED FINANCIAL ST A TEMENTS 67