Intellectual Property Law

A federal jury in Los Angeles has dealt Medtronic a defeat in its efforts to prevent former partner Nova Biomedical from selling a line of blood glucose meters that are able to communicate wirelessly with Medtronic insulin pumps.

At trial, Medtronic alleged that Nova misappropriated its trade secrets and sought $30 million in damages and an injunction removing the meters from the market. But an eight-person jury unanimously rejected all of the claims Friday, after three weeks of trial. Bradford Badke, a New York-based partner at Ropes & Gray who was lead counsel for Nova, contends that the case came down to the testimony of expert witnesses.

"They said that the technology incorporated in Nova's meter was trade secret communication technology that only they had the right to use," says Badke. "The testimony of our experts demonstrated that the information Medtronic said was secret was not, because it was in a publicly available product and anyone could ascertain it from looking at the product."

A team at Gibson Dunn & Crutcher led by Los Angeles-based partner Daniel Floyd represented Medtronic MiniMed, a division of Medtronic, Inc. Floyd could not be reached for comment. In an e-mail, a Medtronic spokesperson wrote, "We're disappointed and certainly do not agree with the outcome of this trial. We continue to believe that Nova Biomedical wrongfully misappropriated Medtronic's trade secrets related to our wireless communication technology."

This case is the coda for what had been a mutually beneficial partnership between Medtronic and Nova. Medtronic MiniMed and Nova had teamed up to market and distribute insulin pumps and blood glucose meters in the same package. The meters, made by Nova, were able to communicate with the Medtronic-made pumps. But Medtronic ended its relationship with Nova and began distributing its pumps with meters made by LifeScan, a division of Johnson & Johnson.

According to Badke, Medtronic wanted Nova to stop manufacturing any meters with the ability to communicate with its pumps. Medtronic also wanted Nova to stop providing test strips for meters already in the market. But Nova refused. "Nova decided it had the right to service its preexisting customers with test strips for the meters and it had the right to continue selling it's meter," Badke says.