A separate trial to assess monetary damages is set for August and will follow a third related jury trial, expected to get under way later Tuesday, in which Boston Scientific is claiming the reverse -- that J&J infringed on its patents for the polymer technology that controls release of the drug.
Boston Scientific and J&J are the only two device makers currently on the market with drug-coated stents, tiny wire tubes inserted into the blood vessels of patients with coronary artery disease to help keep the vessels clear of blockages.
On Tuesday, the Delaware jury found that Boston Scientific's Taxus drug-eluting stent and its Liberte and Express bare-metal stents infringed J&J's core Palmaz patent for balloon expandable stents.
The jury also found the Liberte stent infringed another patent, called the Gray patent, that covers flexible stent technology and expires in 2016.
A spokesman for Boston Scientific, based in Natick, Massachusetts, said the company plans to appeal the decision.
The verdict against Boston Scientific was largely expected by Wall Street after a separate jury in March ruled in a retrial that Boston Scientific's older-model Nir stent infringed on a J&J patent.
"What is less certain is the outcome of part two of the lawsuit, which involves BSX suing JNJ for infringement of the Ding drug-coated patent," J.P. Morgan analyst Michael Weinstein wrote in a note to clients Tuesday.
Analysts said monetary damages could surpass $1 billion if Boston Scientific lost on appeal, but the appeals process could take several years.
The jury trial set for August will determine damages owed to J&J's Cordis unit and whether the infringement was willful. If the jury found willful infringement, U.S. District Court Judge Sue Robinson could triple the damages judgment.
New Brunswick, New Jersey-based J&J, in a statement, said it would assert a patent claim against the drug-eluting version of Boston Scientific's next-generation Liberte stent once the product was launched, based on the jury's finding that the bare-metal Liberte stent infringed its Gray patent.
Boston Scientific expects to launch Taxus Liberte in Europe later this year and in the United States in mid-2006.
The amount Boston Scientific ultimately could owe J&J will depend on whether J&J is found to have infringed Boston's Ding patents and whether Boston can convince the jury to limit damages because J&J would not have been able to supply the market with enough stents to meet demand in the past year, Weinstein said.
"Already Boston has been positioning itself to make this argument," he said.
Morgan Stanley analyst Glenn Reicin, in a note, said a favorable outcome for Boston Scientific in the upcoming trial over the Ding polymer patents could give Boston some leverage.
"Although we do not see these patents as a game changer, this pending trial should be viewed as a potential bargaining chip for Boston Scientific to work toward a negotiated settlement with JNJ," he said.
Boston Scientific shares ended up 8 cents to $28.70 and Johnson & Johnson shares were off 2 cents to $66.53.
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