A long-running dispute between W.L Gore & Associates and GI Dynamics (ASX:GID) stepped closer to trial when an Arizona District Judge affirmed that all but 1 of GI Dynamics’ counterclaims in the patent infringement lawsuit may proceed to trial.
All claims on both sides are ready for trial, and a pretrial conference between the companies is set for July. No trial date has yet been determined.
Gore filed the lawsuit in 2010, alleging that it was the co-inventor and co-owner of GI Dynamics’ patents, including for the company’s flagship EndoBarrier gastrointestinal liner.
GI Dynamics filed a countersuit later that year alleging misappropriation of trade secrets, breach of confidence, breach of contract, unjust enrichment, misrepresentation and unfair and deceptive trade practices.
The lawsuit came to light last fall when GI Dynamics filed its initial public offering in Australia.
The dispute goes back to supplier agreements both companies signed in 2003 and 2004 to have Gore develop materials for the EndoBarrier sleeve. As part of those agreements, GI Dynamics agreed to "make milestone payments and to pay royalties in connection with sales of products manufactured from the tubes," according to court documents.
But by 2009 Gore officials were claiming they had a different interpretation of the agreements and that the company "has the right to make, use, and sell material disclosed under the CDA or MTA to any party in any form for any use, including completed intestinal sleeve devices."
In November 2010 Gore filed a motion for summary judgement on all of GI Dynamics’ counterclaims, except those claiming that Gore is not a co-owner or co-inventor of the patents, a move that GI Dynamics opposed, according to a press release.
The Arizona court decided this week that GI Dynamics may pursue all but 1 of the trade secret claims and take them to trial. The breach of confidence and enrichment claims were preempted by the trade secret claim, as was part of the misrepresentation claim, according to the release.
"We are pleased with these rulings and look forward to presenting our claims to a jury," GI Dynamics president & CEO Stuart Randle said in prepared remarks.
