SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
July 3, 2001
Date of Report (Date of earliest event reported)
ST. JUDE MEDICAL, INC.
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(Exact name of registrant as specified in its charter)
Minnesota 0-8672 41-1276891
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
One Lillehei Plaza, St. Paul, MN 55117
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(Address of principal executive offices) (Zip Code)
(651) 483-2000
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Registrant's telephone number including area code
Not applicable
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Former name or former address, if changed since last report
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ITEM 5. OTHER EVENTS
Jury Verdict in Guidant Litigation
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On July 3, 2001, St. Jude Medical, Inc. (the "Company" or "St. Jude") issued a
press release announcing the jury's verdict in a lawsuit brought by Guidant
Corporation ("Guidant") against the Company and its subsidiaries (see Attachment
A). The jury's verdict in this case has not been entered as a judgement by the
judge overseeing the trial pending any post-trial motions filed by the Company
or Guidant.
The jury's verdict stated that St. Jude's implantible cardioverter
defribrillator ("ICD") products did not infringe Guidant's '288 patent but did
state that certain of the Company's ICD products infringed Guidant's '472
patent, which expired on March 4, 2001. The jury awarded damages of $140 million
to Guidant. The Company anticipates filing various post-trial motions which
would effectively eliminate any damage award on the '472 patent if these motions
were ruled upon favorably by the trial judge. The Company will also file
alternative post-trial motions seeking to reduce the damage amount. Under these
circumstances, the Company is unable to determine the amount of a loss, if any,
and consequently will not record any additional liability for this lawsuit in
its financial statements.
Since the date of St. Jude's acquisition of Ventritex in May 1997 and the
inception of the Company's sales of ICD products, St. Jude has accrued a 3%
royalty on its ICD sales under a license it believed it had with Guidant. As a
result of the jury's verdict that St. Jude's ICD products do not infringe
Guidant's '288 patent, future royalty accruals are no longer necessary. The
historical accruals under this license, which total approximately $15 million,
will remain on the Company's balance sheet pending future developments in this
case.
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ST. JUDE MEDICAL, INC.
Date: July 5, 2001 By: /s/ John C. Heinmiller
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John C. Heinmiller
Vice President - Finance
and Chief Financial Officer
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ATTACHMENT A
Contacts: Laura Merriam Peter Gove
Investor Relations Media Relations
(651) 766-3029 (651) 481-7790
JURY VERDICT ANNOUNCED IN ST. JUDE MEDICAL -
GUIDANT PATENT LAWSUIT
ST. PAUL, MN, July 3, 2001 -- St. Jude Medical, Inc. (NYSE:STJ) announced today
that a jury has reached a verdict in a patent lawsuit filed by Guidant
Corporation against St. Jude Medical. The case involved two patents related to
St. Jude Medical's implantable cardioverter defibrillator (ICD) devices.
The jury found that both patents, known as '288 and '472, were valid. The jury
ruled that St. Jude Medical did not infringe the '288 patent. It found that the
Company did infringe the '472 patent, but that the infringement was not willful.
The '472 patent expired on March 4, 2001. The jury awarded damages of $140
million to Guidant, although Guidant had asked for damages of $313 million.
"We are pleased with the jury's decision on '288 and plan to continue to
vigorously defend our position on '472," said Michael J. Coyle, President of St.
Jude Medical's Cardiac Rhythm Management Division. "Since we prevailed on the
'288 patent, which is the only patent that has not already expired, there is no
possibility of an injunction in this case. Therefore, today's decision will have
no impact on St. Jude Medical's current ICD revenues or any future ICD product
introductions. We continue to strongly believe that the '472 patent is not valid
and that we do not infringe it. We plan to promptly present motions to the judge
asking him to set aside the jury's verdict on '472 or to reduce the damage
award."
The patent infringement case was heard in the United States District Court for
the Southern District of Indiana. Judge David Hamilton presided at the trial.
Judge Hamilton has set a schedule for post-trial motions, requiring all
post-trial briefs to be filed within 10 weeks. No post-trial decision is
expected prior to that time.
Guidant Corporation filed the initial lawsuit on November 26, 1996, claiming
that St. Jude Medical had infringed four ICD patents controlled by Guidant.
Since the initial case was filed, Guidant elected to drop claims involving the
'678 patent, which expired May 3, 1998. The court dismissed claims on a second
patent, '191, although Guidant has appealed this decision.
Any statements regarding the Company's anticipated success in litigation are
forward-looking statements which are subject to risks and uncertainties, such as
those described in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000 (see pages 4-6). Actual results may differ materially from
anticipated results.
St. Jude Medical, Inc. (www.sjm.com) is dedicated to the design, manufacture and
distribution of innovative medical devices of the highest quality, offering
physicians, patients and payers unmatched clinical performance and demonstrated
economic value.
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