This is an old article but important: J&J Faces Contempt For Contacting Glucose-Strip Sellers
Share us on: By Jonathan Randles
Law360, New York (August 30, 2013, 4:44 PM ET) -- The Johnson & Johnson subsidiary that makes OneTouch Ultra glucose monitors could be held in contempt for using privileged information to contact distributors of allegedly patent-infringing glucose test strips after obtaining a preliminary injunction, a California federal judge said Wednesday.
J&J's LifeScan Inc. unit violated a protective order when it used confidential information to contact distributors for defendants Shasta Technologies LLC, Decision Diagnostics Corp., Pharma Tech Solutions Inc. and Conductive Technologies Inc., U.S. District Judge William H. Orrick ruled.
The court ordered LifeScan to explain why it should not be held in contempt for violating the protective order and to respond to penalties the defendants are seeking. In light of LifeScan's breach, the defendants are requesting several sanctions, including that the since-stayed preliminary injunction be dissolved and that the lawsuit be terminated.
LifeScan filed the lawsuit in 2011, accusing the companies of marketing a patent-infringing test strip marketed under the GenStrip brand. In March, the court issued a preliminary injunction against the defendants that prohibited the companies from continuing to sell GenStrip test strips.
At LifeScan's request, Shasta, DDC, Pharma Tech Solutions and Conductive Technologies produced purchase orders and invoices showing GenStrip sales and identifying their customers. The companies designated the information “HIGHLY CONFIDENTIAL—ATTORNEYS EYES ONLY.”
Beginning in April, LifeScan sent letters to nine of the defendants' distributors notifying them of the preliminary injunction. LifeScan has admitted that it learned the identities of two of the distributors from the defendants' confidential material.
The Federal Circuit stayed the injunction shortly after the letters were sent, according to the ruling.
The defendants claim that the cease-and-desist letters LifeScan sent out have caused them headaches. One customer has demanded that the defendants buy back its remaining inventory of GenStrips, according to the companies. They say the confidential information LifeScan used was meant to be used for limited purposes directly related to litigating the case.
On Wednesday, Judge Orrick said that although LifeScan did not intend to violate the protective order, the company's use of the information was not permitted. Judge Orrick said LifeScan's actions “[risk] disrupting defendants' commercial relationships, which is precisely what the Protective Order seeks to avoid.”
LifeScan was ordered to submit a memo to the court on Sept. 11 explaining why it should not be held in contempt.
Bill Rudy, a Lathrop & Gage LLP attorney representing Shasta, said Friday that he was pleased with the decision and said LifeScan's actions prompted his clients' customers to discontinue purchases of GenStrip test strips. Rudy said he hoped the court will hold LifeScan's "feet to the fire."
LifeScan could not immediately be reached for comment.
Attorneys representing LifeScan and the defendants could not immediately be reached Friday for comment.
