Bard Wins Ruling Upholding $371 Million Award Against Gore

C.R. Bard Inc., a maker of catheters, won a U.S. court ruling that upholds a $371 million patent-infringement judgment against W.L. Gore & Associates Inc.

There was “substantial evidence” to support a verdict that Gore infringed a patent for vascular grafts, the U.S. Court of Appeals for the Federal Circuit in Washington said today in a ruling. Including interest, royalties and fees, Gore owed $783 million as of June, Bard said in a regulatory filing last year.

The case began in 2003 and involves a dispute dating back to 1974 over a tube that helps retain the shape of non-coronary blood vessels using a substance known as ePTFE that is similar to DuPont Co.’s Teflon, according to the patent. Closely held Gore, a Newark, Delaware-based maker of surgical products and fibers, said it uses the substance for its Gore-Tex fabrics.

Resolution of the case may bring in about $1 billion for Bard, adding $1 a share to annual earnings, Raj Denhoy, an analyst with Jefferies & Co. in New York, said in a note to clients. While the litigation isn’t over, Bard “is very close to the finish line,” Denhoy said.

Bard rose 3.6 percent to $95.67 at the close of New York trading, the biggest percentage gain since Nov. 30. The stock has climbed 12 percent this year.

Scott Lowry, a spokesman for Murray Hill, New Jersey-based Bard, said the company is pleased with the ruling.

Michael Ratchford, a spokesman for Gore, said in an e-mailed statement that “undoubtedly, we are disappointed with the court’s decision. But the company is as strong as it’s ever been, and this does not change our plans to continue to bring to market innovative and reliable products that improve health and save lives.”

‘Arduous Journey’

A federal jury found in 2007 that Gore infringed a Bard patent and awarded $185.6 million in damages. U.S. District Judge Mary Murguia later doubled that amount, based on the jury’s finding that the infringement was intentional.

The judge also ordered Gore to start paying royalties of 12.5 percent to 20 percent, depending on the type of Gore grafts. The three-judge appeals panel said Murguia acted within her discretion to reject Bard’s request to halt Gore’s sales.

Murguia ruled that Gore should be able to keep its products on the market because “it was in the public interest to allow competition in the medical device arena,” the appeals court said.

‘Arduous Journey’

While Bard originally filed the complaint in 2003, the appeals court described the dispute as a “long and arduous journey” that dates back to 1974. The patent was first requested that year and issued almost 28 years later largely because of a dispute over who first discovered the invention.

The Federal Circuit, which had earlier ruled that a researcher with Gore wasn’t the first inventor, said in its 2-1 decision today that the judge was correct to rule that the researcher wasn’t a co-inventor either.

The case is Bard Peripheral Vascular Inc. v. W.L. Gore & Associates Inc., 2010-1510, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Bard Peripheral Vascular v. W.L. Gore & Associates, 03cv597, U.S. District Court, District of Arizona (Phoenix).

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