Cook Inc. v. Boston Scientific Corp.

Angiotech Pharmaceuticals (Angiotech) owned the patent rights for use of the drug paclitaxel on stents. Stents were metal tubes used in a specified medical procedure. The medical procedure had better patient outcomes if the stents were coated in paclitaxel. Angiotech did not itself manufacture stents or drugs, so in a single contract, Angiotech granted both Cook Incorporated (Cook) (plaintiff) and Boston Scientific Corporation (BSC) (defendant) co-exclusive licensees under Angiotech’s patents. Both Cook and BSC were authorized to use, manufacture, distribute, and sell paclitaxel for use in stents. The licenses were exclusive in the sense that neither Cook nor BSC could assign its license or sublicense unless all the parties consented, and co-exclusive in the sense that both licensees had the same rights. Cook and BSC had different methods of coating stents with paclitaxel, and neither company’s method was superior to the other. In addition, neither company had gained approval from the Food and Drug Administration (FDA), which was required for marketing a coated-stent product. A few years later, Cook entered a contract with Advanced Cardiovascular Systems, Inc. (ACS), which was in the business of manufacturing stents. Cook agreed to purchase ACS’s stents, coat them with paclitaxel, and sell the coated stents back to ACS for resale to hospitals and others. ACS was responsible for packaging the product into a branded stent system and for obtaining FDA approval. Cook sued BSC, seeking a judgment that it had not breached the Cook-BSC-Angiotech contract. BSC counterclaimed for breach of contract. The trial court found that the Cook-ASC transaction was a de facto assignment of Cook’s license and a breach of the anti-assignment provision. The court granted broad injunctive relief in BSC’s favor. Cook appealed.