Boston Scientific Corporation (Boston Scientific), a Massachusetts-based medical device company, has announced special items that will reduce its GAAP earnings for the first quarter of 2009. The company will record an accrual of $237 million ($197 million after-tax) in the first quarter of 2009 in connection with a long-running patent dispute with Johnson & Johnson (J&J) over stent systems, in accordance with accounting regulations.

The accrual of $237 million represents an estimate of the low end of the range of potential outcomes related to this matter. The range is subject to substantial estimation, including attempting to determine the possible future findings of a jury. As such, the high end of the range cannot be reasonably estimated at this time.

A damages trial on the above infringements has not been scheduled. No payments are expected to be due until 2010 or later, from either Boston Scientific or J&J.

“We were gratified the appeals court upheld the finding that the BX Velocity and Cypher stents infringe our patent,” said Jim Tobin, president and chief executive officer of Boston Scientific. “We believe this ruling has the potential to result in a significant award from J&J. More broadly, the ultimate resolution of these matters will represent a further reduction in the risk and uncertainty associated with outstanding litigation.”

In addition, Boston Scientific will also record restructuring and restructuring-related charges of $37 million ($26 million after-tax) in the first quarter of 2009 associated with its previously announced plant network optimization and expense and head count reduction initiatives. These charges are in line with those included in the company’s first quarter GAAP earnings per share guidance.

Lastly, the company said that it will record a net gain of $63 million (on both a pre-tax and after-tax basis) in the first quarter of 2009 related to the resolution of the rate of taxation on proceeds received by the company in 2008 for one of its divested businesses.