Retractable Technologies (NYSE:RVP) said a Texas jury ended a 6-year legal battle against Becton Dickinson & Co. (NYSE:BDX) with a $113.5 million ruling that BD violated the Lanham Act’s false advertising proscription.
The award is liable to be tripled under the antitrust statute. Judge Leonard Davis of the U.S. District Court for Eastern Texas is slated to decide whether BD should disgorge any profits, according to a press release.
"After a six year battle, the verdict vindicates Retractable’s claim that industry giant Becton, Dickinson and Company illegally engaged in anticompetitive conduct with the intent to acquire or maintain monopoly power in the safety syringe market and engaged in false advertising under the Lanham Act," Little Elm, Texas-based Retractable said in a press release.
"We’re disappointed with the portion of the verdict that favored RTI, and we believe this aspect of the verdict was erroneous," BD general counsel Jeffrey Sherman said in prepared remarks. "We will file an appeal at the earliest opportunity."
The verdict will prompt Franklin Lakes, N.J.-based BD to set aside about $340 million in pre-tax charges during it fiscal 4th quarter, or about $1.06 per share. Absent that adjustment, the company affirmed its guidance for the full year of 5% growth for the full year and EPS between $5.65 and $5.68. Thatworks out to adjusted EPS of $4.59-$4.62.
Last week BD lost its bid to toss the case, after Davis ruled that infringement can constitute anti-competitive behavior.
The jury verdict is the latest development in a long-running patent battle between the companies that dates back to 2007, when Retractable sued on allegations that Becton’s Integra syringes infringe patents covering its competing VanishPoint devices. It’s the 1st time that both antitrust and false advertising claims were heard, as previous judges ruled to split the claims into separate lawsuits.
A federal appeals court decided in July 2011 to reverse an earlier jury finding that both the 1m and 3ml sizes of the BD syringe infringed the Retractable patent, ruling that only the smaller size trespassed on the intellectual property. That same court later denied Retractable’s bid for a re-hearing, setting the stage for an appeal to the U.S. Supreme Court. But the high court refused to hear Retractable’s appeal, prompting the current lawsuit. Last month Davis dismissed BD’s move to nix the trial, finding sufficient evidence "suggesting that [Becton’s] contracts have anti-competitive effects."
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