FTC Has Ended Obligation of Boston Scientific CorporationTo Obtain Commission Approval Before Acquiring Companies Engaged in Researching, Developing or Manufacturing Intravascular Ultrasound (IVUS) Catheters

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The Federal Trade Commission has ended the obligation of Boston Scientific Corporation to obtain Commission approval before acquiring any company engaged in researching, developing or manufacturing intravascular ultrasound (IVUS) catheters for sale in the United States and before acquiring any asset used in manufacturing the catheters, and has replaced the priorapproval requirement for acquisitions of exclusive rights to U.S. patents or patent applications to improve the IVUS catheter technology with a priornotice requirement. Prior approval was required under a 1995 consent order stemming from Boston Scientific's acquisition of Cardiovascular Imaging Systems, Inc. (CVIS) and SCIMED Life Systems, Inc., competitors in the market for IVUS catheters, used in the diagnosis and treatment of heart disease.

Boston Scientific had petitioned the FTC last July to reopen and set aside the May 1995 order, pursuant to the FTC's new prior-approval policy. Under that policy, the Commission no longer routinely includes prior-approval provisions in orders stemming from merger cases, and presumes the public interest requires reopening such provisions in outstanding merger orders to make them consistent with the policy.

The modified order announced by the Commission today deletes the priorapproval requirement but requires prior notification for five years of acquisitions of exclusive rights to U.S. patents or patent applications related to the manufacture or sale of IVUS catheters in the United States.

In modifying the order, the Commission said the record in this case shows a credible risk that Boston Scientific's acquisition of patents or patent applications would not otherwise be reportable to the FTC in advance. Patents or patent applications relating to the manufacture or sale of IVUS catheters would facilitate the use of BSC's technology, but could not be used without a license to use BSC/s IVUS catheter technology. Without a license from BSC, the patent holder could sell the patent only to BSC or HewlettPackard, a BSC IVUS license holder. Given its limited marketability, the value of the improvement patent may not exceed thresholds that trigger automatic reporting requirements. "To the extent that this category of acquisitions is not reportable... prior notification is appropriate," the Commission said.

The Commission vote to reopen and modify the order was 4-0 with Chairman Robert Pitofsky recused.

Copies of the Commission order reopening and modifying the 1995 consent order, as well as other documents associated with this matter, are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov

 

(FTC Docket No. C-3573)
(BSC4)

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