Kyphon Sues Medtronic Over Trade Secrets

Kyphon Inc. (Sunnyvale, CA), a manufacturer of medical devices to restore spinal function using minimally invasive techniques, and an orthopedic surgeon have jointly filed suit against Medtronic Sofamor Danek (Memphis), the spinal business unit of Medtronic Inc. (Minneapolis). The suit, unsealed in mid January, alleges that Medtronic stole trade secrets surrounding inventions for the treatment of vertebral compression fractures. The complaint claims the inventions were developed by Harvinder Sandhu, MD, who recently granted their exclusive license to Kyphon for $20 million.

“We believe this complaint is without merit,” said Pete Wehrly, Medtronic corporate vice president and president of Medtronic's spinal and surgical navigation divisions. “We believe patients benefit when there is competition in the marketplace, and we will defend our right to be in this segment of the spine market.”

According to Kyphon, the suit was filed in November 2005 and unsealed at Kyphon's request after the two parties failed to reach an agreement. The suit seeks compensatory and punitive damages and injunctive relief for breach of contract, trade secret theft, fraud, unjust enrichment, and correction of inventorship of several patents and patent applications currently owned by Medtronic.

In the lawsuit, Kyphon and Sandhu claim that Sandhu developed the disputed inventions, which are related to an expandable, mechanical bone tamp, in the late 1990s. According to the suit, Sandhu disclosed and discussed his inventions with Medtronic in 1999 under a nondisclosure agreement. The suit states that soon after these discussions, Medtronic filed for several patents encompassing the inventions without Sandhu's permission. The suit claims that Medtronic also incorporated Sandhu's inventions into its internal Equestra project without his permission.