My last column discussed the decision in Biotronik v. Conor Medsystems Ireland1 that the Court of Appeals handed down as the column was about to go to press. I promised to further address that opinion.

Background

To briefly summarize, Conor Medsystems Ireland, Ltd., a manufacturer of medical products, entered into a distribution agreement with Biotronik A.G., pursuant to which Biotronik would sell in certain countries other than the U.S. Conor’s drug-eluting stent used in the treatment of coronary artery disease that had the trade name CoStar. The agreement contained a “no consequential damages” clause. In February 2006, after Conor obtained European regulatory approval for CoStar, Biotronik began distributing the product. In February 2007, Johnson & Johnson acquired Conor. At the time of the acquisition, Johnson & Johnson marketed another drug-eluting stent, known as Cypher, that directly competed with CoStar. Also at this time, Conor was engaged in a trial to secure FDA approval to distribute CoStar in the U.S. In May 2007, Conor announced that the FDA trial could not establish that CoStar was equivalent to Taxus, a widely marketed stent manufactured by Boston Scientific. Conor then terminated its FDA application and notified Biotronik that Conor would recall CoStar and remove that product from the worldwide market.