Supreme Court disses Stryker in product liability case | Legal Roundup

November 1, 2011 by MassDevice staff

The Supreme Court refuses to hear Stryker Corp.'s appeal in a product liability lawsuit over its recalled Trident hip implant; also, Globius Medical accuses former sales rep of being a spy for rival Innovasive; Retractable Technologies loses bid for appeal in case against Becton Dickinson; and Phyton Biotech starts patent spat with Samyang.

Stryker Corp.

The U.S. Supreme court refused to hear an appeal by Stryker Corp. (NYSE:SYK) in a product liability lawsuit filed over its recalled Trident hip implant.

The Kalamazoo, Mich.-based orthopedics giant wanted the Supremes to hear its appeal of a lower court's ruling that Margaret Bausch's state lawsuit was not preempted by federal rules. The U.S. Appeals Court for the 7th Circuit ruled in December 2010 that Bausch could press her suit, despite a 2008 Supreme Court decision establishing preemption, because her state suit presents a "parallel claim" that Stryker violated FDA rules.

Bausch was implanted with the Trident device in March 2007, six days after the federal watchdog agency warned Stryker about problems at the Cork, Ireland, plant where here implant was made. Stryker subsequently recalled hip and knee implants made at the plant.

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The preemption doctrine, enshrined into law in the Supreme's 2008 decision in Riegel v. Medtronic, holds that patients can't sue medical device makers in state courts over products that went through the FDA's most stringent review process, called pre-market approval. But the justices left open a loophole to allow state suits that allege a "parallel claim" that the company in question broke FDA regulations.

The 7th Circuit judges found that the Supreme Court "made clear" in Riegel that FDA rules protect medical device manufacturers from liability "to the extent that it has complied with federal law, but it does not extend protection from liability where the claim is based on a violation of federal law. In other words, where state law is parallel to federal
law, [the FDA rule] does not preempt the claim," according to court documents.

"Nothing in the more recent Riegel case calls into question the ability of a patient to sue a Class III device manufacturer under state law for violations of federal law. In fact, the Riegel court went out of its way to explain that such claims are not preempted," according to the documents. "Just as a plaintiff in an auto accident may use the other driver's speeding violation as evidence of negligence, plaintiff Bausch claims that she was injured by Stryker's violations of federal law in manufacturing the device implanted in her hip. It remains to be seen whether she can prove those allegations, including causation and damages. But if she can prove those allegations of harm caused by violations of federal law, her claims under state law would not impose on defendants any requirement 'different from, or in addition to, any requirement' imposed
by federal law. Her claims are not preempted."

Stryker's petition for a certiori from the high court was denied yesterday.

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Globus accuses former rep, Innovasis of poaching scheme

Globus Medical Inc. accused a former sales rep and his new employer, rival Innovasis Inc., of conspiring to poach Globus business while the rep was still working for that company.

Globus filed a lawsuit in the U.S. District Court for Kansas, alleging that Tim Lazenby and Innovasis schemed to recruit another Globus employee and to divert business from Globus clients to Innovasis.

"Since Lazenby resigned from his employment on September 23, 2011, [Globus] has discovered gross breaches of his duty of loyalty. Lazenby has solicited Globus customers and employees on behalf of Innovasis (a direct competitor of Globus), and did so while still employed by [Globus]," according to court documents.

Lazenby even went so far as to email a request for proposals from a Kansas hospital to an Innovasis sales rep, according to the lawsuit, seeking to sell both companies' spine products even though he was employed by Globus.

"Since as early as October 2010, Lazenby has served two employers," according to the documents. "Lazenby sold Innovasis products to Globus customers, and he introduced at least one Innovasis sales representative to Globus customers to further facilitate Innovasis sales. Lazenby did not engage in this reprehensible conduct sporadically. To the contrary, Lazenby sold Innovasis products to his Globus customers with such frequency and volume that the customers began to presume Innovasis was a subsidiary of Globus. As a result of Lazenby’s efforts, Globus sales to its top two customers in Kansas precipitously declined during the last five months of his employment with Globus."

Globus wants a federal judge to bar Lazenby from working for Innovasis for one year in his Kansas territory and from soliciting Globus customers or former co-workers there.

"Should an injunction not issue in this case, and Lazenby instead be permitted to continue to flout his agreement by actively performing services for or on behalf of Innovasis and soliciting Globus’ customers, directly and through others, Globus will suffer immediate and irreparable harm, including lost customer good will and disclosure of confidential information," according to the documents.

Retractable Technologies loses appeals bid in case against BD

A federal appeals court won't reconsider its decision to roll back part of a $5 million award to Retractable Technologies Inc. (AMEX:RVP) in its legal battle against industry giants like Becton, Dickinson & Co. (NYSE:BDX) and the group purchasing organizations that dominate the hospital supplies market ended with a partial win for BD.

The U.S. Court of Appeals for the Federal Circuit rejected RTI's bids for a re-hearing of the case and for en banc review, according to court documents, with three of the appeals judges dissenting.

Over the summer, the appeals court overturned part of a $5 million patent infringement verdict against BD and its Integra retractable syringe line, ruling that BD's 3ml version of the device doesn't violate the RTI patents, but upheld a finding that the 1ml version does infringe.

Because BD dropped the smaller syringe, "there is no impact to our customers," BD spokeswoman Liz Ryan Sax said at the time.

Little Elm, Texas-based Retractable sued BD in June 2007, claiming the Becton syringes infringe patents covering its VanishPoint devices. But RTI's battle began in the early 1990s, when founder Thomas Shaw invented the first retractable syringe after seeing a news program about a doctor who contracted HIV from an accidental needle stick.

Large medical device makers and the GPOs that act as sales liaisons between them and hospitals effectively kept the RTI syringes off the market until the device makers could come up with competing devices, according to a series of lawsuits Shaw and RTI have filed over the years. In fact, the Federal Circuit decision could bolster another RTI lawsuit accusing BD of anti-trust violations, according to the company.

"BD used Retractable Technology’s own patented technology to maintain their monopoly in the syringe market," RTI lawyer Roy Hardin said at the time. "If you’re monopolist in a marketplace, there are certain things you can’t do."

Phyton Biotech sues Samyang in patent spat

Phyton Biotech GmbH said it filed a patent infringement lawsuit in Germany against Samyang Corp (SEO:000070), alleging that the Korean firm's use of cell lines derived from Taxus species to produce paclitaxel violates its intellectual property.

"Phyton developed, patented, and commercialized plant cell fermentation technology, and believes Samyang’s paclitaxel production system is infringing on Phyton’s patented technology," according to a press release. "Among other things, the complaint requests the German court to order Samyang to cease and desist from offering, putting on the market, selling, owning, or otherwise using paclitaxel active pharmaceutical ingredient (API) in the Federal Republic of Germany."