Volcano Corp. and St. Jude Medical Get Split Verdict - No Trade Secret Misappropriation But Volcano Did Engage in Unfair Trade Practices

The Sacramento Bee and many other news organizations are reporting that a Massachusetts judge has ordered medical equipment maker Volcano Corp. to pay $400,000 in damages, plus attorneys' fees, to a competitor that alleged unfair competition and breach of contract.

But in filing with the Securities and Exchange Commission on Monday, San Diego-based Volcano, which operates a manufacturing facility in Rancho Cordova, said the court rejected LightLab

Imaging Inc.'s more serious claims that it misappropriated trade secrets.

LightLab is a unit of Minnesota-based St. Jude Medical Inc., which makes medical imaging equipment. Volcano's subsidiary Axsun Technologies supplies laser products for LightLab.

In a ruling last week, Suffolk Superior Court Judge Margaret Hinkle found that Volcano acquired Axsun in 2008 partly as means of "impeding the growth of a major competitor."

The judge also found that Volcano and Axsun schemed to supply its competitor with a less effective laser, which affected the marketability of LightLab's imaging system.

We bet this is not the end of this matter - there is probably going to be a fight about the reasonableness of St. Jude Medical's (or LightLab's) attorneys' fees. They will likely be many times the $400,000 awarded and it is not uncommon for the Volcanos of this world to argue "why should the other side get millions in fees in order to recover less than the fees expended?"

We'll see if our prediction proves accurate.