Zimmer Biomet (NYSE:ZBH) last week escalated its ongoing war with erstwhile partner Heraeus, filing a complaint with the U.S. International Trade Commission seeking to bar the German company from importing its bone cement products.
The ITC is already running an investigation into Zimmer’s bone cement imports at the behest of Heraeus. It’s all part of a bitter dispute in which each side accuses the other of pilfering trade secrets and poaching talent.
Now Warsaw, Indiana-based Zimmer Biomet is asking the ITC to permanently exclude Heraeus’ bone cement products from the U.S., citing Heraeus’ “tortious interference with Zimmer Biomet’s business relationships, unfair competition, and misappropriation of trade secrets,” according to a recent ITC filing.
Zimmer argued that prohibiting importation of Heraeus’ bone cement products would not harm the public health, safety or welfare of U.S. citizens because other companies – including ZBH and Stryker — make and sell plenty of it in this country.
“Thus, the commission’s strong interest in protecting Zimmer Biomet’s intellectual property rights, as well as in preventing further unfair competition and unfair acts, far outweighs any hypothetical adverse effect on the public,” the company wrote.
In June, a federal appeals court resuscitated part of a 2014 Heraeus lawsuit that accuses Esschem, a chemical supplier to Zimmer Biomet of stealing Heraeus’ bone cement recipe.
The three-judge panel in Philadelphia said that Heraeus can pursue claims stemming from Esschem’s alleged use of Heraeus’ information within three years before Heraeus filed suit. The judges based their opinion on the Pennsylvania Uniform Trade Secrets Act, which allows companies that three-year window from when “the misappropriation was discovered or… should have been discovered” to bring suit. Esschem is based in Linwood, Penn.
Hanau, Germany-based Heraeus sued Biomet in 2008, alleging that Biomet misappropriated trade secrets when developing its Refobacin and Biomet bone cements. In June 2014, a German appeals court enjoined Biomet from making or selling the cements.*
Both sides appealed, but in June 2016, the German Supreme Court dismissed the appeals, prompting Heraeus to restart the proceedings in December of that year to force Zimmer Biomet’s Swiss subsidiary to relinquish its CE Mark approvals for the Refobacin and Biomet cements, Zimmer Biomet said in the filing.
Hereaus’ suit against Esschem accuses Biomet of helping Esschem develop a pair of copolymers used to make cements that compete with Heraeus products, using trade secrets allegedly pilfered from the German company. Zimmer Biomet has said it agreed to indemnify Esschem for any liability with certain exceptions.
*Correction, August 28, 2019: This article originally stated that the German court awarded more than €30 million in damages. We regret the error. Return to the corrected sentence.