A California company alleges that Mayo Clinic failed to deliver original technology that the firm says it was created to commercialize, according to a lawsuit filed Monday.
Filed in U.S. District Court in Minnesota, OmegaGenesis Corp. says it was formed to develop and market technology from Mayo Clinic related to angiogenesis, which is the creation of blood vessels.
But Mayo Clinic employees had done very little to develop the technology, and instead sold OmegaGenesis on technology that previously had been developed elsewhere, according to the lawsuit.
"The failure to deliver original work product foreclosed the opportunity to obtain patents, and an entity that had obtained a valuation of $28 million became virtually worthless," the lawsuit said.
The lawsuit was filed against the Mayo Foundation for Medical Education and Research, which is the legal entity from which the Rochester-based clinic was created.
"Mayo Clinic denies the allegations in the lawsuit," Mayo spokesman Brian Kilen said. "While we will not discuss the details of this pending litigation, we will vigorously defend ourselves."
The lawsuit alleges fraud, negligent misrepresentation, breach of contract and breach of implied covenant of good faith. The amount in controversy exceeds $75,000, according to the lawsuit, which claims OmegaGenesis no longer operates and exists as a shell.
"As part of the license agreement, defendant represented that it was the owner of the technology which was the subject of pending patent applications," the lawsuit states.
"Ultimately, the patent was denied due to the existence of prior art," according to the lawsuit. "The prior art revealed that the exact same invention had already been developed at Bar Ilan University in Israel."
The lawsuit alleges that one of Mayo's Clinic's claimed inventors had been a graduate assistant at Bar-Ilan University when the prior art was developed.