Nuance Communications (NSDQ:NUAN) CEO Paul Ricci allegedly tried to lay $5 million bribes before a trio of executives at competitor Vlingo Inc. in an effort to force through a below-market-price buyout, according to a lawsuit filed by Vlingo against its Massachusetts peer.
The lawsuit, filed in the U.S. District Court for Massachusetts, accuses Nuance and Ricci of unfair competition, interfering in its dealing with other firms and of commercial bribery in the pursuit of its fellow speech recognition software maker.
After Vlingo spurned a series of acquisition overtures, beginning in 2006, Ricci and Nuance chief marketing officer Steve Chambers allegedly called Vlingo’s co-founders, CEO David Grannan and CTO Mike Phillips, in September 2009 and put some serious skin in the game, according to the complaint.
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"Mr. Ricci, the CEO and Chairman of the Board of Nuance, a public company, offered to pay Messrs. Grannan, Phillips and Nguyen $5 million dollars each if they could convince the Vlingo board of directors to approve the acquisition of Vlingo on the terms previously proposed by Nuance," according to court documents. "Alternatively, Mr. Ricci offered Messrs. Phillips, Grannan and Nguyen $5 million each plus the monies they would have received had the acquisition went through, if they would quit Vlingo and work for Nuance. Mr. Ricci made this offer knowing full well that Messrs. Grannan, Phillips and Nguyen were key persons whose departure from Vlingo would cripple the company and, thus put Vlingo out of business."
The bribery attempts allegedly followed a visit by Rich Palmer, then head of Nuance’s corporate development unit, and Vlingo CTO Phillips. Palmer "informed Mr. Phillips that Mr. Ricci can be vindictive if he does not get his way and that Vlingo would not be happy if Mr. Palmer and Mr. Phillips could not work out a technology partnership and the matter was placed in the hands of people with big egos, such as Mr. Ricci,” according to the documents.
“Finally, Mr. Palmer threatened Mr. Phillips with bearing the exorbitant cost of intellectual property litigation and told Mr. Phillips to inform his Board that they can either take the technology partnership deal offered by Nuance or pay $20 million in legal fees vindicating themselves in intellectual property litigation,” according to the lawsuit.
The lawsuit also accuses Nuance and Ricci of filing a patent infringement in a Texas federal court, rather than in the Bay State, even though both companies are based in the Commonwealth "with the intent to increase the expense of litigation to Vlingo, so as to leverage a potential acquisition of Vlingo." And it slaps Nuance with the accusation that it poached a Nokia executive, Bruce Bowden, to be its senior vice president of corporate development after Bowden became privy to confidential information about Vlingo while it and Nokia were negotiating a potential deal.
The suit seeks a jury trial, an injunction barring further unfair competition by Nuance or its officers, damages and legal fees.
Read more medical device legal news from MassDevice.com
Analyst: Medtronic/NuVasive patent spat too complex to call
A patent spat between Medtronic Inc. (NYSE:MDT) and NuVasive Inc. (NSDQ:NUVA) is so complex that it’s impossible to handicap at this point, according to a patent law expert consulted by investment bank Leerink Swann.
Opening arguments in the jury trial of the 2008 lawsuit, which involves spinal implant technology, began two weeks ago. Medtronic accuses NuVasive of infringing a trio of patents covering MDT’s lateral lumbar interbody fusion procedure and a cervical plating system; NuVasive counters that the Twin Cities Colossus trespasses on a patent covering its Neurovision platform.
The case has so many unknowns that "we’re not
sure it’s possible to handicap thoughtfully the outcome of the trial," wrote Leerink analyst Rick Wise.
"However, in our view, a final resolution is not likely any time soon, and we don’t expect a material near-term P&L impact on NUVA," Wise added. "The patent attorney specialist seemed to think neither MDT nor NUVA had a clear edge heading into Phase I of the trial, at least not based on publicly available documents. In the specialist’s view, the final decision will likely hinge on which expert witnesses provide the most compelling testimony for the jury."
Here are three ways it break down, according to Wise:
- NuVasive’s best-case scenario: "NUVA would not have to pay any damages/royalties and may even be entitled to collect damages/royalties from MDT – that is if the court were to find that MDT’s neuromonitoring solution infringes on NUVA’s neuromonitoring patent."
- NuVasive’s middle ground: "A less favorable scenario for NUVA could involve payments to MDT for past damages and/or ongoing royalties."
- The “in-between”: "Ultimately the specialist was inclined to think both a worst case and best case scenario are unlikely and that NUVA will likely end up winning on some claims and losing on others."
At any rate, it’s likely to be a while, the analyst noted, citing his source’s expectation that both companies will be quick to appeal any unfavorable decisions and that "a final resolution to the dispute will likely take a long time to play out."
CareFusion sues Hospira over infusion pump patents
CareFusion Corp. (NYSE:CFN) slapped rival Hospira Inc. (NYSE:HSP) with a patent infringement lawsuit, alleging that some of HSP’s drug infusion pumps infringe a pair of CFN patents when used with software made by co-defendant MedNet Inc.
The suit, filed in the U.S. District Court for Delaware, claims that Hospira’s Symbiq, Plum A+, Plum A+3 and LifeCare PCA infusion systems violate its patents, for "System and Method for Controlling the Delivery of Medication to a Patient" and "Medication Management System" – but only when used with the Hospira MedNet software package.
The lawsuit seeks a jury trial, judgments of infringement and willful infringement, an injunction barring further infringement, damages, costs and legal fees.