Zimmer Clears Hurdle in 'Trojan Horse' Case Against Stryker

A federal judge in northern Indiana will allow orthopedic medical device manufacturer Zimmer to move ahead with five counts of its "Trojan horse" lawsuit against competitor Stryker.

In a lawsuit filed in January 2014, Zimmer accused Stryker of hiring a Zimmer employee to poach its Amarillo, TX-business. Specifically, Zimmer claims Stryker induced Amarillo employee Cody Stovall to leave Zimmer to sell a Stryker biologic plasma spray in the area. Zimmer claims that Stovall's real reason for leaving was to help Stryker poach Zimmer business, with a chance to earn a $30,000 bonus for every $500,000 in deals he converted.

Zimmer claims Stovall bragged about his arrangement with Stryker to former colleagues at Zimmer. The selling of the biologic plasma spray was meant to get Stovall into the same surgeries his former Zimmer colleagues were attending, just like the wooden horse in Homer's celebrated tactic that appeared to be a gift for Troy but was instead stuffed full of Greek soldiers, according to the lawsuit filing.

Rather than answer the claims in the suit, Stryker filed a motion to dismiss it. (Stovall filed an answer on Feb. 21.) U.S. District Court Judge Jon DeGuilio agreed to dismiss Zimmer's claims against Stryker (but not against Stovall) of interfering with a contract. He threw out Zimmer's complaint of civil conspiracy against Stryker, based on Indiana law.

"However," DeGuilio wrote, "the allegations of the Complaint do make it clear that Zimmer has properly alleged the existence of a conspiracy in the commission of the other torts raised in its Complaint, relevant then as a potential and alternative theory for damages."

DeGuilio also wrote that the "allegations that Stryker induced Stovall to breach his fiduciary duties to Zimmer, or conspired with Stovall to do so ... are sufficient to survive a motion to dismiss."

Zimmer initially claimed that Stovall conspired with Stryker while still at Zimmer. Zimmer also accuses Stryker of convincing Stovall to breach his non-competition, non-solicitation, and confidentiality agreements with Zimmer, and scheming to get Stovall in operating rooms with Stovall's former Zimmer customers while circumventing his non-compete agreement.

This is not the first time that legal accusations have flown between Zimmer and Stryker. The two companies settled a lawsuit last year in which Stryker accused Zimmer of poaching its employees and trade secrets, according to Law360.

Also last year, a federal judge ordered Zimmer to pay $228 million to Stryker as part of a patent infringement lawsuit involving Zimmer's Pulsavac Plus, designed to remove organic debris from inside a patient during orthopedic surgeries.

Nancy Crotti is a contributor to Qmed and MPMN.

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