MiMedx (NSDQ:MDXG) enjoyed a rare spot of good news when a federal judge in Maryland this week dismissed a trade theft and breach-of-contract lawsuit brought by Osiris Therapeutics over MiMedx’s Stability Biologics acquisition.
Columbia, Md.-based Osiris said it inked a distribution deal back in 2013 to have Stability sell a pair of its products through the end of 2015. But after MiMedx paid $10 million for Stability in January 2016, it allegedly gained access to Osiris trade secrets and fostered a series of events leading to $6.8 million in losses for Osiris.
(In an about-face in August 2017, MiMedx agreed to sell Stability back to its original owners; that sale closed last October.)
The lawsuit, filed in April in the U.S. District Court for Maryland, alleged that MiMedx held on to Osiris inventory worth $2.2 million, plus $1.3 million in pre-paid commissions, and directed Stability not to pay another $2.9 million allegedly owed under a payment plan; Osiris allegedly incurred another $321,000 in legal fees from its attempt to recoup its losses in arbitration.
MiMedx filed a motion to dismiss for lack of jurisdiction. In a Dec. 11 ruling, Judge Catherine Blake ruled that Osiris failed to prove either general or specific jurisdiction in the case.
“None of MiMedx’s alleged contacts with Maryland – which, even by Osiris’s characterization are limited to the acquisition of a subsidiary that owed debts to a Maryland corporation and the operation of a single tissue bank in-state – suffice to give rise to general jurisdiction,” Blake wrote.
“Osiris improperly merges Stability’s contacts with MiMedx’s contacts,” she wrote. “MiMedx’s only contact with Maryland is its distribution of amniotic tissue through a Maryland tissue bank. … [T]his contact is insufficient to support specific jurisdiction in Maryland. “