A California jury awarded St. Jude Medical a $2.3 billion judgment, finding that a former employee and a Chinese firm were liable for stealing trade secrets.
St. Jude wins $2.3B in trade secrets suit
The firm accused a former employee and a Chinese firm of stealing proprietary information.
By WENDY LEE, Star Tribune
Pacesetter Inc., the cardiac rhythm management division of St. Jude Medical, won $947 million for past damages in its case against former employee Yongning Zou and his employer, Chinese medical device business Nervicon Co. Pacesetter also won $868.5 million for future economic loss and $500 million for punitive damages against Zou.
"We did not expect such a high damages result and we were pleased with the outcome," Rita Bojalian, senior counsel for Little Canada-based St. Jude Medical, said Monday. "The jury told us they wanted to send a message: Don't steal trade secrets from your company and expect to profit from them for yourself."
Pacesetter accused Zou, the company's former principal hardware design engineer, of stealing a document relating to a crystal oscillator unique to St. Jude's products. Zou had access to documents relating to parts involved with the cardiac rhythm management division after he had signed a nondisclosure agreement.
Zou could not be reached for comment Monday.
Zou left St. Jude in late June 2009 and became a shareholder in Nervicon Co., a medical device business based in Suzhou, China. Nervicon was formed in early June 2009, according to court documents filed by St. Jude attorneys. Zou holds a 47.5 percent stake.
The problem arose a month later when Statek Corp., the manufacturer of the crystal oscillator, was asked by Nervicon to make the product using the same specifications as St. Jude. Nervicon gave a document that had the words "SJM Part Number," according to the court documents.
"Zou has and will continue to provide Nervicon with additional proprietary and confidential documents and information in an effort to deceivingly and unfairly compete against St. Jude or its affiliates," Pacesetter said in court documents.
Pacesetter initially was hoping for about $300 million, excluding punitive damages.
St. Jude's stock closed at $51.71 a share, down 90 cents on Monday.
Staff writer Susan Feyder contributed to this report.
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WENDY LEE, Star Tribune
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