Boston Scientific accused of "massive fraud and cover up" by Medinol

Boston Scientific Corp has been hit by a lawsuit from Israel-basedmedical device manufacturer Medinol which claims that the former misappropriated Medinol's intellectual property, set up a "dummy" corporation and defrauded the US Food and Drug Administration "all for the purpose of stealing Medinol's business." The lawsuit is the latest round of spats between the two firms following Boston Scientific's attempts to buy the 80% stake it does not already own in Medinol (Marketletter January 21).

Medinol says that, in1995, it entered into a venture with Boston Scientific to distribute various generations of the former's NIR stents, with Medinol being responsible for development and manufacturing, while Boston Scientific would bring these stents to market.

The lawsuit then accuses Boston Scientific of later setting up a shell company to develop a line of products using Medinol's technology and trade secrets and obtaining FDA approval for stents that Boston Scientific would claim to be its own. A statement from the Tel Aviv-headquartered company cites a case last year, whereby Boston Scientific's auditors, Ernst & Young, refused to file fraudulent reports to authorities in Ireland.