Texas federal court denies Retractable Tech’s appeal in false advertising case against BD

Retractable Technologies (NYSE:RVP) said late last week that the US District Court for the Eastern District of Texas denied its motion to appeal a judgement that found Becton Dickinson (NYSE:BDX) owed nothing in an ongoing false advertising claims case.

Retractable Technologies sought to amend a judgement from August which ruled that nemesis BD owed nothing for making false advertising claims about its syringes.

The dispute dates back to 2001, when Little Elm, Texas-based RTI sued BD for patent infringement that settled for $100 million in 2004. RTI sued again barely 3 years later, alleging further patent infringement and anti-trust violations. That case was split, with the anti-trust portion stayed while the patent infringement claims were litigated. A federal appeals court decided in July 2011 to reverse an earlier jury finding that both the 1m and 3ml sizes of BD’s Integra retractable syringe infringed the Retractable patent, ruling that only the smaller size trespassed on the intellectual property.

The anti-trust phase of the proceedings began in 2010; eventually BD was found to have advertised false claims that its Integra, Safety-Lok, SafetyGlide and Eclipse safety syringes boast the “world’s sharpest needle” and about the amount of “waste space” in RTI’s VanishPoint syringe. In September 2013 a jury found for RTI, awarding $113.5 million after finding that BD violated the Lanham Act’s false advertising proscription.

Franklin Lakes, N.J.-based BD later lost an initial bid to toss the case, after the Eastern Texas court ruled that infringement can constitute anti-competitive behavior. In October that court declined BD’s bid to overturn the verdict and ordered the company in January 2015 to pony up more than $352.2 million in damages, including more than $11.7 million in attorneys’ fees, plus pre- and post-judgment interest and costs.

But in December 2016 the U.S. Court of Appeals for the 5th Circuit ruled that RTI’s claim that BD violated a section of the Sherman Antitrust Act was “infirm as a matter of law,” but upheld the false advertising claim, sending it back to the U.S. District Court for Eastern Texas for a decision on how much profit BD must disgorge.

The sum decided upon was zero, according to Judge Amos Mazzan, who ruled in August that BD’s notification of more than 750 distributors, 10,000 employees and all the major group purchasing organizations about the claims’ inaccuracy was sufficient.

Judge Mazzant also denied the appeal from Retractable, writing that the company had “not shown manifest errors of law or newly discovered evidence,” and suggested that the company was merely rehashing arguments that “could have been offered or raised before the judgement was issued,” according to court documents.

“The court, having made its findings of fact and conclusions of law, finds an award of disgorgement of profits would be inequitable. It is therefore ordered that defendant Becton, Dickinson & Co. shall not disgorge any profits to Retractable Technologies Inc. for its violation of the Lanham Act. The previously ordered injunctive relief adequately achieves equity between the parties,” Mazzant wrote.

Retractable Technologies said that as a result of the ruling, its appeal to the US Court of Appeals for the Fifth Circuit is “no longer stayed as a matter of law,” according to an SEC filing.

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