Friday, July 27, 2007, 7/27/2007 01:20:00 PM

Back-Breaking Trade Secrets Trial: Synthes and Globus Medical Go To Trial

By Todd
The Philadelphia Daily News is reporting that Globus Medical Inc., is on trial in federal court in Philadelphia, accused by its founder's former employer, Synthes (USA) L.P., of benefiting from the use of trade secrets and confidential information, including product designs, manufacturing methods and regulatory strategies.

At stake are tens of millions of dollars in damages sought by Synthes, which has North American headquarters and 1,400 employees in West Chester.

Globus and the three executives on trial contend they have done nothing wrong. In thousands of pages filed in the three-year-old lawsuit, Globus also accuses Synthes of defamation, trade libel, interference with prospective contractual relationships, and unfair competition.

A civil jury began hearing testimony yesterday in the courtroom of U.S. District Judge Lawrence F. Stengel, which was packed with dark-suited attorneys.

"In a word, they cheated," attorney Kevin M. Flannery said in an opening statement for Synthes, which is represented by the Center City law firms Dechert L.L.P. and Blank Rome L.L.P.

Synthes contends that Globus improperly used resources and information that Paul and Synthes employee Richard Kienzle obtained while working at Synthes, unlawfully recruited its employees, and improperly misappropriated and passed off Synthes' products as its own.
One of three Globus defendants on trial, Lawrence Binder, is accused of downloading 2,300 computer files that were electronic blueprints for Synthes products.

"Mr. Binder admitted he downloaded at least some of them onto a CD," Flannery told jurors, noting that Binder said he had since misplaced that CD.

"The reason Globus is successful has nothing to do with taking trade secrets," defense attorney John P. McShea countered in an opening statement. Globus and its executives are represented by McShea Tecce P.C. and Conrad O'Brien Gellman & Rohn P.C. "They devised a way to do this business better, smarter. The reason Globus was formed in the first place was, ideas that David Paul brought to Synthes were rejected," McShea said.

The defense portrayed Synthes - the No. 3 maker behind Medtronic Inc. and Johnson & Johnson in the $4.2 billion spinal-implant market - as an "old established" company out to squelch a successful newcomer.

Somebody's going to be in need of an adjustment when this one is over.

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