Legal roundup: St. Jude wins; Covidien, Masimo settle; Novartis sues

January 31, 2011 By MassDevice staff Leave a Comment

St. Jude Medical Inc. (NYSE:STJ) declared victory in the latest round of litigation between its subsidiary, LightLab Imaging Inc., and Volcano Corp. (NSDQ:VOLC) subsidiary Axsun Technologies Inc.

The Mass. Superior Court found that San Diego, Calif.-based Volcano and Billerica, Mass.-based Axsun violated state law “through a pattern of inappropriate conduct directed at key technology used in the company’s Optical Coherence Tomography product platform,” St. Jude said in prepared remarks.

The statutory violations arose in connection with Volcano’s acquisition of Axsun Technologies, a LightLab supplier, in 2008. The court also found that these violations were knowing and willful and entitle LightLab to recover attorneys’ fees. In its decision, the court found that Volcano viewed the Axsun acquisition as a means of “impeding the growth of a major competitor,” that there was a “scheme orchestrated by Volcano and implemented with Axsun’s assistance” to seek to supply LightLab with a less effective laser, and that this would “adversely affect the marketability” of LightLab’s imaging system, according to St. Jude.

Before its acquisition by St. Jude, Westford, Mass.-based LightLab launched a suit against Axsun accusing it of violating a contract the companies signed prior to Axsun’s 2008 acquisition by Volcano.

The latest decision adopts Feb. 2010 findings from a Mass. Superior Court jury that Axsun violated the contract with LightLab, which covers its agreement to supply tunable lasers to LightLab until 2016. The jury also found that Volcano interfered with LightLab’s business relationship with Axsun.

Last October, Volcano was able to declare a victory in the ongoing legal battle when Mass. Superior Court rejected LightLab’s claims for protection of five alleged trade secrets relating to laser technologies and denied all of the coronary imaging firm’s requests for permanent injunctions.

There was news on two other legal fronts as well, between Covidien plc (NYSE:COV)and Masimo Corp. (NSDQ:MASI) and between Novartis AG (NYSE:NVS) and a trio of biopharm companies:

Covidien and Masimo extend royalty agreement
Covidien plc and Masimo Corp. said they amended a settlement agreement initially reached in January 2006. Under the terms of the amendment, Danvers, Mass.-based Covidien will pay Masimo a royalty of 7.75 percent for pulse oximetry products sold in the U.S. for three years, beginning March 15.

Masimo is assessing the full financial impact of the amendment on its 2011 financial outlook ahead of releasing its 2010 results Feb. 15, the company said. As part of that assessment, the Irvine, Calif.-based firm is considering the possibility of re-investing up to 50 percent of the royalty revenue this year.
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