A Delaware federal jury has awarded $12.2 million to surgery-device maker Lexion Medical LLC, including $10 million in punitive damages, agreeing with Lexion that rival SurgiQuest Inc. committed false advertising in its fight over tubes used in laparoscopic procedures. SurgiQuest had sued Lexion in Delaware federal court in March 2014 in connection with a SurgiQuest laparoscopy system called AirSeal. Lexion’s rival devices are called Insuflow and Synergy. All three devices facilitate the injection of gas into a patient’s body between the abdominal wall and the organs that are being worked on, which gives the surgeon more maneuvering room.

According to SurgiQuest, Insuflow and Synergy use a traditional design with one-way valves that can leak, trap instruments, and cause camera blurriness, where AirSeal “establishes a horizontal air barrier” that serves the same function but doesn’t give rise to the same problems. In the claims and counterclaims the two companies filed over the years, each accused the other of misleading clients and prospects with regard to the other’s product. But the jury found for Lexion, awarding $2.2 million in damages for lost profits and $10 million in punitives. The jury failed to award anything to Lexion for “corrective advertising damages.” U.S. District Judge Gregory Sleet presided over the trial.

The jury found that SurgiQuest’s statements were false regarding “heat and humidification,” regarding “air,” and regarding “smoke.” The latter comes into play during certain laparoscopies that utilize burning and thus create smoke that may need to be cleared out of the abdomen. The one area in which the jury disagreed with Lexion was on its claim that SurgiQuest had committed a deceptive trade practice.

On all of SurgiQuest’s claims against Lexion – false advertising, deceptive trade practices, and unfair competition – the jury found for Lexion. Initially, the core of SurgiQuest’s claims was on Lexion’s stance over the need to warm and humidify gas that goes into the abdomen. Lexion had told customers its “devices are the only products on the market that effectively reduce side effects allegedly because they are the only products that actively heat and humidify insufflation gas.”

Lexion filed counterclaims, saying SurgiQuest bent the truth when it called its tubes “airtight,” named them “AirSeal,” saying their safety level had never been achieved before. It was stated further that SurgiQuest told customers the tubes obviated the need to heat and humidify gas before injection into abdomens. Lexion contended that SurgiQuest had violated the Lanham Act, Delaware trade-practices law, and, by way of misleading statements, unfair-competition law. Lexion said:

These statements actually deceived or have the tendency to deceive a substantial segment of purchasers or prospective purchasers of medical devices.

SurgiQuest’s suit was initially a response to a Minnesota federal court suit by Lexion that was dismissed for jurisdiction reasons. SurgiQuest believed that Lexion would try to refile the suit elsewhere and filed its own lawsuit.

Lexion is represented by David Moore and Richard Horwitz of Potter Anderson & Corroon LLP and David Wille of Baker Botts LLP. SurgiQuest is represented by Denise Kraft of DLA Piper. The case is SurgiQuest v. Lexion (case number 1:14-cv-00382) in the U.S. District Court for the District of Delaware.

Source: Law360.com



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