ST. PAUL, Minn.--(BUSINESS WIRE)--3M announced today that it achieved a decisive victory in a London trial concerning 3M’s decision to cease its support for BacLite, a product it acquired from Acolyte Biomedica Limited (“Acolyte”) in 2007. The High Court of the United Kingdom (“U.K.”) issued a judgment today in favor of 3M on virtually every important issue of the dispute.
Porton Technology Fund, Porton Capital, Inc. (together, “Porton”) and Ploughshare Innovations Limited, a subsidiary of the U.K. Ministry of Defence (collectively “Claimants”), investors in Acolyte, filed a lawsuit in December 2008 against 3M seeking approximately $40 million in damages. The Court rejected Claimants’ outlandish demands and awarded them only $1.3 million.
“This judgment reaffirms what 3M believed all along – that it acted appropriately in attempting to market this product, and ultimately deciding the product was not commercially viable,” says Maureen A. Harms, 3M assistant general counsel and general counsel for the company’s Healthcare Business. “The outcome of this trial confirms our decision to cease our support for BacLite.”
The judgment announced today followed a 24-day bench trial that took place from June 15 to July 18, 2011.
While today’s judgment resolves the claims in the U.K. High Court, a lawsuit filed by 3M against Porton and its CEO, Harvey Boulter, and legal and public relations advisor Lanny Davis remains pending in Washington, D.C. That legal action alleges, among other things, that defendants participated in an illegal campaign to extort more than $34 million from 3M to settle the BacLite case prior to a final judgment or else Boulter and Davis would use their influence with recently resigned U.K. Minister of Defense Dr. Liam Fox to interfere with 3M’s business in the U.K. It has been widely reported that this campaign included e-mail communications Mr. Boulter sent to 3M’s counsel on June 17, and 18, 2011 that allegedly sought to pressure 3M into paying more than $30 million to settle the London litigation.
“With the London matter now successfully resolved, 3M is anxious to press forward with its claims against Mr. Boulter and his affiliates,” says William A. Brewer III, partner at Bickel & Brewer and counsel for 3M. “In our view, the judgment in London demonstrates that Mr. Boulter and others clearly were not entitled to the tens of millions of dollars that they sought from 3M.”
3M acquired BacLite in February 2007 from Acolyte. In connection with the acquisition, the Claimants alleged that 3M breached its contractual obligations to actively market the product, diligently seek regulatory approvals, and provide the technology with the necessary level of financial resources. Claimants had asserted they were entitled to significant earn-out payments based on their claims. 3M successfully proved otherwise, establishing that it discontinued marketing BacLite in 2008 because, after diligent efforts and spending substantial resources, it believed the product did not meet performance and customer expectations. The company demonstrated at trial that after thorough investigation and analysis, it concluded BacLite was not a commercially viable product for the detection of Methicillin-resistant Staphylococcus aureus (MRSA), an antibiotic resistant bacteria commonly found in hospitals.
Among other things, the U.K. High Court found that 3M had acted with reasonable care and judgment in seeking regulatory approval for BacLite from the U.S. Food and Drug Administration. While the High Court did find that 3M had technically breached the Sale and Purchase Agreement (“SPA”) by ceasing BacLite’s sales without final consent from the Claimants, it nevertheless agreed with 3M that “BacLite as it was would never have been a commercial success…and future sales of the product would have been limited” if 3M had continued to market the technology.
The High Court rejected Claimants’ damages evidence, adopted the evidence put forward by 3M’s damages experts, and found that Claimants were entitled to only $1,299,808 in damages – at least $38 million less than what they had sought.
Brewer was joined in representing 3M by Bickel & Brewer partners Michael J. Collins and Ken Hickox and attorney Farooq A. Tayab; Mark Howard, QC, and Simon Salzedo, QC, of Brickcourt Chambers; Paolo Caldato of Simmons & Simmons; and Tim Maloney, Matt Blower, Theresa Bevilacqua and Paul Klaas of Dorsey & Whitney.
About 3M:
3M captures the spark of new ideas and transforms them into thousands of ingenious products. Our culture of creative collaboration inspires a never-ending stream of powerful technologies that make life better. 3M is the innovation company that never stops inventing. With $27 billion in sales, 3M employs about 80,000 people worldwide and has operations in more than 65 countries. For more information, visit www.3M.com or follow @3MNews on Twitter.
About Bickel & Brewer:
Bickel & Brewer has earned a reputation as one of the most successful law firms in the United States practicing exclusively in the field of complex commercial litigation and dispute resolution. With offices in New York and Dallas, Bickel & Brewer represents a wide spectrum of industry leaders – from entrepreneurs to Fortune 500 corporations – facing the most challenging of legal issues. Visit Bickel & Brewer at www.bickelbrewer.com.
3MDonna Fleming Runyon, 651-736-7646dlfleming@mmm.comorBickel & BrewerTravis J. Carter, 214-653-4856tcarter@bickelbrewer.com
