Boston Scientific Sues Medinol for Fraud and Breach of Contract

Apr 30, 2001, 01:00 ET from Boston Scientific Corporation

    NATICK, Mass., April 30 /PRNewswire/ -- Boston Scientific Corporation
 (NYSE:   BSX) today filed a lawsuit in the U.S. District Court for the Southern
 District of New York charging Medinol, Ltd., and its principals, Judith and
 Jacob Richter, with fraud, multiple breaches of contract, unfair and deceptive
 practices, and defamation.  Medinol is the supplier of the NIR(R) stent sold
 exclusively by Boston Scientific.
     The suit alleges that: "Medinol, and its principals, Judith and Jacob R.
 Richter, have engaged in a consistent course of unfair, deceptive, malicious
 and fraudulent conduct.  They have repeatedly and blatantly failed to fulfill
 Medinol's obligations under its Supply Agreement with [Boston Scientific].
 They have extorted and attempted to extort concessions out of [Boston
 Scientific] under threat of terminating Medinol's supply of stents.  They have
 manipulated and even interrupted the supply of stents.  They have wantonly and
 willfully damaged [Boston Scientific's] position and reputation in the market
 by refusing to ship [Boston Scientific] the NIRFlex(TM) stent, Medinol's most
 current product.  And they have consistently attempted to manipulate Medinol's
 relationship with [Boston Scientific] by making knowingly false statements to
 the industry, the market, the U.S. Food and Drug Administration (FDA), and the
 media."
     Boston Scientific is seeking an injunction against Medinol providing its
 technology to any company other than Boston Scientific.  The Company is also
 asking the court to order Medinol to grant a fully paid, perpetual and
 exclusive license to manufacture and distribute all NIR(R) stents, and to pay
 compensatory damages, punitive and multiple damages, and attorneys' fees.
     "From the beginning, we have bent over backwards to try to make this
 relationship work," said Jim Tobin, President and Chief Executive Officer of
 Boston Scientific.  "Although the relationship has always been contentious, in
 recent years it has progressively deteriorated to the point that Medinol and
 the Richters have caused us real harm.  It is clear they are not committed to
 the success of our relationship.  We are now focusing on recovering damages
 for the harm we have suffered at the hands of Medinol and the Richters.  They
 should not underestimate our resolve.  We are confident that at the end of the
 day, the court will find that it was Medinol that acted illegally and in bad
 faith."
     Boston Scientific's filing also includes a detailed and thorough response
 to the claims in Medinol's April 6 lawsuit.  In particular, the Company points
 out that its independent stent manufacturing line which Medinol claims was
 "fraudulent" and used intellectual property "stolen" from Medinol, was
 actually provided for in the Supply Agreement between the companies.  In fact,
 Medinol had agreed to design, build, and make operational an independent
 manufacturing line at Boston Scientific in order to protect the Company and
 its customers in the event Medinol could not or would not provide Boston
 Scientific with stents.  Medinol failed to honor the agreement.
     Boston Scientific's response explains that "[c]onfronted with Medinol and
 the Richters' twin actions of preventing [Boston Scientific] from having the
 independent line needed for its protection against an interruption of supply
 and at the same time threatening that very interruption, [Boston Scientific]
 had every right to establish the independent line itself."  The Company was
 merely exercising its legal rights in response to Medinol's breaches of the
 Supply Agreement in a way entirely consistent with that Agreement.
     The Company's response points out that Medinol's claim of Boston
 Scientific "defrauding" the FDA is completely baseless.  Boston Scientific
 never made any filings with the FDA on the independent line and in fact never
 completed it.  The Company also points out that Medinol is well aware that
 Boston Scientific did not produce or sell any commercial stents from the line
 and, therefore, Medinol did not lose a single stent sale or a single dollar of
 revenue.
 
     Boston Scientific is a worldwide developer, manufacturer and marketer of
 medical devices.  The Company's products are used in a broad range of
 interventional medical specialties.
 
     This press release contains forward-looking statements.  The Company
 wishes to caution the reader of this press release that actual results may
 differ from those discussed in the forward-looking statements and may be
 adversely affected by, among other things, uncertainties associated with
 litigation, relationships with third party suppliers, and other factors
 described in the company's filings with the Securities and Exchange
 Commission.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X93383840
 
 

SOURCE Boston Scientific Corporation
    NATICK, Mass., April 30 /PRNewswire/ -- Boston Scientific Corporation
 (NYSE:   BSX) today filed a lawsuit in the U.S. District Court for the Southern
 District of New York charging Medinol, Ltd., and its principals, Judith and
 Jacob Richter, with fraud, multiple breaches of contract, unfair and deceptive
 practices, and defamation.  Medinol is the supplier of the NIR(R) stent sold
 exclusively by Boston Scientific.
     The suit alleges that: "Medinol, and its principals, Judith and Jacob R.
 Richter, have engaged in a consistent course of unfair, deceptive, malicious
 and fraudulent conduct.  They have repeatedly and blatantly failed to fulfill
 Medinol's obligations under its Supply Agreement with [Boston Scientific].
 They have extorted and attempted to extort concessions out of [Boston
 Scientific] under threat of terminating Medinol's supply of stents.  They have
 manipulated and even interrupted the supply of stents.  They have wantonly and
 willfully damaged [Boston Scientific's] position and reputation in the market
 by refusing to ship [Boston Scientific] the NIRFlex(TM) stent, Medinol's most
 current product.  And they have consistently attempted to manipulate Medinol's
 relationship with [Boston Scientific] by making knowingly false statements to
 the industry, the market, the U.S. Food and Drug Administration (FDA), and the
 media."
     Boston Scientific is seeking an injunction against Medinol providing its
 technology to any company other than Boston Scientific.  The Company is also
 asking the court to order Medinol to grant a fully paid, perpetual and
 exclusive license to manufacture and distribute all NIR(R) stents, and to pay
 compensatory damages, punitive and multiple damages, and attorneys' fees.
     "From the beginning, we have bent over backwards to try to make this
 relationship work," said Jim Tobin, President and Chief Executive Officer of
 Boston Scientific.  "Although the relationship has always been contentious, in
 recent years it has progressively deteriorated to the point that Medinol and
 the Richters have caused us real harm.  It is clear they are not committed to
 the success of our relationship.  We are now focusing on recovering damages
 for the harm we have suffered at the hands of Medinol and the Richters.  They
 should not underestimate our resolve.  We are confident that at the end of the
 day, the court will find that it was Medinol that acted illegally and in bad
 faith."
     Boston Scientific's filing also includes a detailed and thorough response
 to the claims in Medinol's April 6 lawsuit.  In particular, the Company points
 out that its independent stent manufacturing line which Medinol claims was
 "fraudulent" and used intellectual property "stolen" from Medinol, was
 actually provided for in the Supply Agreement between the companies.  In fact,
 Medinol had agreed to design, build, and make operational an independent
 manufacturing line at Boston Scientific in order to protect the Company and
 its customers in the event Medinol could not or would not provide Boston
 Scientific with stents.  Medinol failed to honor the agreement.
     Boston Scientific's response explains that "[c]onfronted with Medinol and
 the Richters' twin actions of preventing [Boston Scientific] from having the
 independent line needed for its protection against an interruption of supply
 and at the same time threatening that very interruption, [Boston Scientific]
 had every right to establish the independent line itself."  The Company was
 merely exercising its legal rights in response to Medinol's breaches of the
 Supply Agreement in a way entirely consistent with that Agreement.
     The Company's response points out that Medinol's claim of Boston
 Scientific "defrauding" the FDA is completely baseless.  Boston Scientific
 never made any filings with the FDA on the independent line and in fact never
 completed it.  The Company also points out that Medinol is well aware that
 Boston Scientific did not produce or sell any commercial stents from the line
 and, therefore, Medinol did not lose a single stent sale or a single dollar of
 revenue.
 
     Boston Scientific is a worldwide developer, manufacturer and marketer of
 medical devices.  The Company's products are used in a broad range of
 interventional medical specialties.
 
     This press release contains forward-looking statements.  The Company
 wishes to caution the reader of this press release that actual results may
 differ from those discussed in the forward-looking statements and may be
 adversely affected by, among other things, uncertainties associated with
 litigation, relationships with third party suppliers, and other factors
 described in the company's filings with the Securities and Exchange
 Commission.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X93383840
 
 SOURCE  Boston Scientific Corporation