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Huntley, Illinois-based medical device maker Life Spine Inc fended off an appeal of a Chicago federal court's preliminary injunction against its former distributor Aegis Spine Inc, that Life Spine accused of stealing its trade secrets for its parent company to make a competing device, at the 7th U.S. Circuit Court of Appeals on Monday.
U.S. Circuit Judge Amy St. Eve, writing for a three-judge panel, rejected Aegis' argument that Life Spine's trade secrets weren't protected because they were publicly available.
Life Spine's attorney Dan Lombard of Quinn Emanuel Urquhart & Sullivan said in an email that they were pleased with the decision and "look forward to trying this case in front of a jury and securing permanent relief."
Aegis' attorney Greg Castanias of Jones Day declined to comment. Aegis didn't immediately respond to a request for comment.
Colorado-based Aegis — owned by South Korea-based L&K Biomed Inc — once distributed Life Spine's ProLift spinal implant device to hospitals and surgeons. Life Spine sued Aegis in Chicago federal court in 2019 for allegedly misusing its trade secrets and breaching a confidentiality agreement by funneling information about the ProLift to L&K, which allegedly used it to develop a competing device.
U.S. District Judge Young Kim granted Life Spine's request for a preliminary injunction in March blocking Aegis and its partners from marketing the competitor. He noted expert testimony about the short time frame for the development of L&K's device, the "shocking" and "unprecedented" fact that the ProLift installer was compatible with it, and a review of 20 different devices where he concluded that Life Spine's and L&K's were the only two that were "essentially the same."
Aegis appealed, arguing the information at issue wasn't secret because ProLift devices were "described at length in patents, displayed at trade shows, depicted in detail on the internet, and ultimately sold to numerous purchasers."
But St. Eve, joined by Circuit Judges Michael Scudder and Thomas Kirsch, said the trade secrets at issue in the case — including the ProLift's exact dimensions and measurements — hadn't been publicly disclosed.
A patent covering the ProLift didn't disclose the device's precise specifications, St. Eve said, which were also "not easily derived" from the patent. St. Eve also said Life Spine takes "many precautions" to protect its trade secrets from buyers, noting that ProLift boxes remain sealed until surgery, Life Spine requires its distributors to inspect the devices before the operation, and distributors must be present during surgery to answer questions about it.
And "it seems doubtful that the hospitals or surgeons purchasing the device for use in planned surgeries would secretly unpackage the device, measure all its components with specialized measurement technology, reassemble the device, and then use the device in the surgery," St. Eve said.
St. Eve also affirmed that Aegis likely breached its confidentiality obligations and other aspects of their distribution agreement, and that Life Spine was likely to suffer irreparable harm without an injunction.
The case is Life Spine Inc v. Aegis Spine Inc, 7th U.S. Circuit Court of Appeals, No. 21‐1649.
For Life Spine: Dan Lombard of Quinn Emanuel Urquhart & Sullivan
For Aegis: Greg Castanias of Jones Day
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August 10, 2021 at 05:19AM
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7th Circ upholds injunction in spine device trade-secret fight - Reuters
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