A federal jury in Massachusetts yesterday awarded $70 million to Edwards Lifesciences (NYSE:EW) subsidiary CardiAQ Valve Technologies in a patent infringement lawsuit after finding that Neovasc (NSDQ:NVCN) stole trade secrets and breached a non-disclosure agreement.
The lawsuit, filed in June 2014 in the U.S. District Court for Massachusetts, accused Neovasc of using the misappropriated trade secrets to develop its Tiara transcatheter mitral valve replacement. Edwards inherited the lawsuit when it acquired CardiAQ Valve for $400 million in August 2014.
Neovasc approached CardiAQ Valve in June 2009 and offered to help it develop the TMVI device, according to the lawsuit. The companies signed a non-disclosure agreement and worked together on the replacement heart valve until February 2010, the lawsuit claims.
But in mid-2009, CardiAQ valve alleged, Neovasc breached their NDO by using the CardiAQ Valve technology as the basis for the Tiara device, and filing patent applications covering the ideas.
The jury found Neovasc guilty of breach of contract, but did not award any damages, according to court documents. The panel found that Neovasc misappropriated 3 of the 6 trade secrets claimed in the suit, awarding $70 million to CardiAQ Valve. The jury also found that Neovasc unfair or deceptive trade practices and that CardiAQ Valve co-founder, president & COO Brent Ratz (now an R&D VP for Edwards’ TMVR program) and co-founder Dr. Arshad Quadri (the “AQ” in CardiAQ) contributed to the conception of the CardiAQ Valve patent, according to the documents.
“Through many years of dedicated work with Dr. Quadri, we were able to develop an extensive base of knowledge, make important advancements and create the CardiAQ transcatheter mitral valve to help patients in need who are not well-served by therapies available today,” Ratz said in prepared remarks. “We are proud of this foundational work and grateful that the jury recognized these contributions to the developing field of transcatheter mitral valve replacement.”
Edwards said Judge Allison Burroughs will rule later on the jury’s determination of Neovasc’s unfair or deceptive acts and Quadri’s and Ratz’s contributions to the patent.
“Regrettably, the jury trial phase of this lawsuit was not resolved to our satisfaction. We will be exploring our options regarding post-trial motions in the trial court and, potentially, the appellate process,” Neovasc CEO Alexei Marko said in a press release. “As we have throughout this process, we will remain diligent in our company’s purpose to advance our cardiovascular products to improve patient care by addressing two significant unmet structural heart diseases, mitral regurgitation and refractory angina.”
NVCN shares closed down -7.1% at $1.84 apiece yesterday.
