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Guidant Corp. holds patents on implantable heart defibrillators that deliver shocks at a rate below that of external defibrillators. The market for such devices is estimated at about $1 billion a year, says plaintiffs’ attorney Timothy J. Malloy. Guidant has licensed them for years to companies including Ventritex Inc. and Telectronics Inc. In 1996, Malloy says, St. Jude Medical Inc. announced that it was acquiring Ventritex. Guidant contended that the Ventritex license expired with the acquisition in May 1997, but “St. Jude commenced selling the same items,” Malloy says. Guidant sued St. Jude Medical, Ventritex and Pacesetter Inc., charging infringement on four patents. One claim was dropped and another dismissed, leaving charges of infringement on Guidant’s patent issued in 1982 on the external programmability of the shock level and infringement on a later patent defining the therapy. St. Jude contended that the Ventritex license was transferable. It had acquired assets of another licensee, Telectronics, and contended that its license should be transferable as well. Last year, it lost on that issue before an arbitrator. St. Jude contended, however, that the Guidant patents were not valid, not infringed on and not enforceable. At trial, an Indianapolis jury found both patents valid and found infringement on the earlier patent; it awarded $140 million. It found no infringement on the later patent. St. Jude says that the decision will have no impact on the company’s revenues or future products because the jury found infringement only on the patent that expired in March 2001. This means, the company says, that Guidant cannot get an injunction on future sales. Post-trial motions have not yet been filed. Plaintiff’s attorneys: Timothy J. Malloy and Stephen Sherry of Chicago’s McAndrews, Held & Malloy; Robert Stanley and John Schaiblen of Indianapolis’ Baker & Daniels. Defense attorneys: John Swenson and Denis Salmon of Los Angeles’ Gibson, Dunn & Crutcher; Michael Rackman of New York’s Gottlieb, Rackman & Reisman; Philip Whistler of Indianapolis’ Ice Miller; Geoffrey Olsen of Los Angeles’ Lyon & Lyon.

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