[Ip-health] US Court issues compulsory license for know-how protected as trade secret

Jamie Love james.love at keionline.org
Sat Jul 12 11:43:56 PDT 2014


US Court issues compulsory license for know-how protected as trade secret

12. July 2014\

In "Compulsory License as a Remedy for Trade Secret Misappropriation,
Dennis Crouch writes* about a July 1, 2014 decision in Sabatino Bianco,
M.D. v. Globus Medical, 2:12-cv-00147 (E.D. Tex 2014). The decision by
Judge Bryson, a U.S. Circuit Judge in the Eastern District of Texas,
concerns trade secrets which:

"consisted of ideas for the design of a medical device known as an
adjustable intervertebral spacer or implant. Intervertebral spacers are
used in spinal surgery to replace damaged discs in patients’ spines."

A copy of the decision is attached here [2].

In a nutshell, Judge Bryson has denied an injunction to prevent Globus
Medical from selling a medical device which was based upon trade secret
misappropriation, but has granted an ongoing royalty of 5 percent to
Sabation Bianco, the doctor whose ideas were misappropriated, for a period
of 15 years.

"In conclusion, the Court finds that Dr. Bianco is entitled to an ongoing
royalty rate equal to that determined by the jury for past damages. In the
final judgment, to be entered separately, the Court will therefore order
that Globus pay Dr. Bianco 5% of the future “net sales” (as defined in the
exemplary Globus royalty agreements considered by the damages experts in
this case) of Globus’s Caliber, Caliber–L, and Rise products, or products
not colorably different from those products, with the royalty payment
period terminating 15 years after July 1, 2007."

Crouch seems skeptical of the decision, on the grounds the judge did not
cite cases where "ongoing royalties have been awarded for trade secret
misappropriation under Texas law."

The eight page opinion provides a detailed analysis of the rationale for
denying the injunction and setting the royalty at 5 percent for a period of
15 years.

This decision may be an important precedent, and is worth watching. Public
interest groups should considering briefs if there an appeal. The decision
to permit Globus to continue to sell the devices will clearly benefit
patients with damaged spines.

The decision is consistent with the WTO TRIPS Agreement's Section 7 on
Protection of Undisclosed Information, and the remedies and enforcement
provisions of the TRIPS, set out in Article 42, 44 and 45.

The decision also reminds us of the significance of new measures that may
be proposed in secret trade agreements, such as the TTIP negotiations, that
would change global norms on flexibility over confidential information, or
enforcement of intellectual property rights.

*July 10,0 2010, Dennis Crouch, "Compulsory License as a Remedy for Trade
Secret Misappropriation,

Source URL: http://keionline.org/node/2053

[2] http://keionline.org/sites/default/files/Bianco-v-Globus-Medical-Inc.doc

James Love.  Knowledge Ecology International
http://www.keionline.org, KEI DC tel: +1.202.332.2670, US Mobile:
+1.202.361.3040, Geneva Mobile: +41.76.413.6584,   twitter.com/jamie_love

More information about the Ip-health mailing list