Full Press Release Details
2:07-cv-00250-DF Document 1-1 Filed 06/15/2007 Page 1 of 31
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
| RETRACTABLE TECHNOLOGIES, INC., | |||||
| Plaintiff, | CIVIL ACTION NO. 2:07-cv-250 | ||||
| (FOLSOM) | |||||
| v. | |||||
| BECTON DICKINSON AND COMPANY, | |||||
| JURY TRIAL DEMANDED | |||||
| Defendant. |
Retractable Technologies, Inc. ( Retractable ) files this action complaining of
defendant Becton Dickinson and Company ( BD ), and for causes of action would
INTRODUCTION
has harmed Retractable and is continuing to harm Retractable by infringing
Retractable s patents for safety syringes. BD has also harmed Retractable and
the American public, and is continuing to harm Retractable and the American
public, by falsely advertising BD s inferior, non-infringing syringe products
as safe, safety, or safety engineered, in order to obtain time to switch
the market, at BD s own pace, to BD s infringing version of Retractable s
safety syringes, which BD calls Integra syringes. Finally, BD has harmed
Retractable and the American public, and is continuing to harm Retractable and
the American public by employing unlawful exclusionary schemes to keep Retractable s
technologically superior safety needle products from the market.
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has chosen to file this action in this Honorable Court because venue is proper
in this forum and because this Court already has examined Retractable s
technology at issue and construed claims of two of the patents at issue in this
action (the 011 Patent and the 077 Patent ). See
Memorandum Opinion in Retractable Technologies
v. New Medical Technologies, No. 4:02-CV-34 (LED). BD has copied and
infringed Retractable patented technology that this Court examined in New Medical Technologies.
NATURE OF THIS ACTION
1. Retractable s patented safety syringe technology virtually eliminates the risk of needlestick injuries to healthcare workers. Needlestick injuries can transmit to healthcare workers potentially deadly diseases such as hepatitis B, hepatitis C and Human Immunodeficiency Virus ( HIV ), the virus that causes AIDS. The American Nurses Association estimates that more than 600,000 contaminated needlestick injuries are reported each year in the United States. ( See www.nursingworld.org/readroom/fsneedle.htm.)
2. BD is the nation s dominant maker and seller of disposable syringes and other needle products. BD is using a combination of intentional, unlawful methods, including patent infringement, false advertising, unfair competition, and exclusionary monopolistic behavior, to suppress Retractable s success in the market while BD phases new products into the market that copy Retractable s technology and infringe Retractable s patents. BD is now introducing its infringing new products into the market at a controlled pace that enables BD to continue to extract maximum profits from BD s existing, but obsolete and dangerous, needle product technologies. By its unlawful conduct, BD has denied, and continues to deny, American healthcare workers access to Retractable s products, which are available now, and which incorporate the most innovative and effective safety technology available.
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3. Retractable files this action seeking judicial relief to terminate BD s unlawful conduct. If unchecked, BD will continue to infringe Retractable s patents, deceive the market through false advertising about its own products, and engage in unfair competition and unlawful monopolistic, exclusionary conduct. BD s conduct is greatly and irreparably damaging Retractable and at the same time denying American healthcare workers and patients the immediate benefits of Retractable s superior safety needle products.
4. Retractable seeks all relief the law allows for patent infringement. For Retractable s other claims, Retractable seeks injunctive relief and damages accruing after July 2, 2004.
PARTIES
5. Plaintiff Retractable is a Texas corporation with its principal place of business in Little Elm, Texas, within the Eastern District of Texas. Retractable is a publicly-traded company that employs approximately 150 persons within this District.
6. Defendant BD is a New Jersey corporation with its principal place of business in Franklin Lakes, New Jersey. BD may be served with process in this action by serving its registered agent for the service of process in the State of Texas, CT Corporation System, 350 N. St. Paul St., Dallas, Texas 75201.
JURISDICTION AND VENUE
7. This court has subject matter jurisdiction under the patent laws set forth in Title 35 of the United States Code and in Title 28 of the United States Code, particularly 28 U.S.C. 1331 and 1338(a); Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a)(1)(B); the Sherman Act, 15 U.S.C. 1 et seq .; Sections 3, 4 and 16 of the Clayton Act, 15 U.S.C. 14, 15 and 26; and 28 U.S.C. 1331 and 1337. This Court has supplemental jurisdiction over Retractable s state law claims pursuant to 28 U.S.C. 1367 because they are so related to Retractable s federal
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claims as to form a part of the same case or controversy. In addition, this Court has jurisdiction under 28 U.S.C. 1332(a) because this action is between citizens of different states and the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.
8. This Court has personal jurisdiction over BD. BD holds a certificate of authority to transact business in Texas and regularly transacts business within Texas and the Eastern District of Texas.
9. BD has marketed and continues to market its infringing Integra 1 cc and 3 cc syringes within Texas and the Eastern District of Texas.
10. BD s commercial activities carried on in Texas and elsewhere throughout the United States have had a substantial, direct and reasonably foreseeable effect on business and commerce in the Eastern District of Texas and on interstate commerce.
11. Venue is proper in this District under 28 U.S.C. 1391(b) and (c), 28 U.S.C. 1400(b), and 15 U.S.C. 22.
BACKGROUND FACTS
Retractable s Patented Safety Syringe.
12. Retractable markets patented safety syringes under the name VanishPoint . VanishPoint syringes are covered by a number of patents, including United States Patent Nos. 5,578,011, 5,632,733, and 6,090,077 (the 011, 733 and 077 Patents), the patents-in-suit. VanishPoint syringes protect against needlestick injuries. VanishPoint syringes automatically and permanently retract their needle after an injection is given and before the needle is withdrawn from the patient. Consequently, VanishPoint syringes require no extra action by a healthcare worker to trigger their safety feature after the needle is withdrawn from a patient. Retractable and its VanishPoint products have been reported favorably in major news features, including in the New York Times and on CBS 60 Minutes .
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13. VanishPoint syringes have been recognized as superior safety products. For one example, in 1999 and thereafter the Emergency Care Research Institute ( ECRI ), a respected testing and evaluation service, has awarded VanishPoint syringes its highest rating and listed them as preferred devices. ( HEALTH DEVICES , Sept. 2003, Vol. 32, No. 9, at p. 356.)
BD s Inferior Alleged Safety Syringes Render BD Competitively Vulnerable.
14. In contrast to Retractable s superior safety products introduced in the mid to late 1990 s, BD lacked innovative technology in the field of safety syringes. At the same time, the healthcare market demand for safety syringes was increasing dramatically. BD understood its vulnerability to Retractable. In order to protect its position, BD began to take unlawful actions to copy Retractable s patented technology, prevent and suppress Retractable s sales, and defend, maintain and extend its market dominance. Such unlawful actions by BD continue to the present day.
15. The legal environment for needle products began to rapidly change in 1999. On July 1, 1999, California s Needle Safety Law became effective. The Texas act became effective September 1, 1999. See TEX. HEALTH & SAFETY CODE 81.301, et seq. On November 5, 1999, OSHA issued its Directive for Enforcement Procedures for the Occupational Exposure to Bloodborne Pathogens. On November 6, 2001, the federal Needlestick Safety and Prevention Act, P.L. 106-430 ( Needlestick Prevention Act ) became law. The Needlestick Prevention Act requires healthcare employers to track needlestick injuries and to involve healthcare workers in selecting safer needle products. Since 1999, several other states also have enacted statutes to prevent needlestick injuries to healthcare workers. Beginning in 2001, OSHA regulations codified at 29 C.F.R. 1910.1030 have required hospitals and other medical facilities to track and report needlestick incidents and to involve front line healthcare workers in annual reviews of safety programs and needle devices. The OSHA regulations also require hospitals to employ
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engineering controls, defined to include self-sheathing needles and safer medical devices such as sharps with engineered sharps injury protections, and to evaluate the available needle products on the market and to select and use products that are effective in preventing needlesticks.
16. As a result of these statutes and growing awareness of the needlestick problem, the healthcare industry needed and began to demand safety needle products.
17. Even though BD began to market product lines of needle products as safe, safety, or safety-engineered, those products were not safe. Rather, BD s first alleged safety products incorporate nothing more than ineffective add-ons to BD s conventional disposable syringe products. BD s first alleged safety products are no safer than conventional syringes. In some ways, they are even more dangerous because they require a nurse or other healthcare worker to place a second hand in contact with the syringe after the needle is extracted from the patient to activate the alleged safety feature.
18. BD s first generation alleged safety syringe was the Safety-Lok. The Safety-Lok contains an outer sleeve that a user must slide over the needle after an injection is complete and the needle is withdrawn from the patient. To operate this mechanism a user must use both hands, one to hold the syringe and the other to slide the sleeve from its position around the barrel to its extended position over the needle. This places the user s free hand at an increased risk of contacting the exposed, contaminated needle. BD s Safety-Lok mechanism is not automatic. It requires a user to actively cover the needle of the syringe. If a user takes no action, the needle remains exposed and the syringe is more bulky, harder to manipulate and no safer than a conventional syringe. It also requires more space in a sharps container, increasing costs and risks of disposal.
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19. BD s second generation alleged safety syringe was the Safety Glide. The Safety Glide incorporates a small hinged lever between the base of the needle and the pointed tip that, when pressed forward, extends a cover over the needle tip. Activation can only occur after the contaminated needle is removed from the patient. Like the Safety-Lok, a nurse or doctor must, after injecting a patient, reach down to the syringe to engage the lever. This action again places the user s hand in close proximity to the contaminated needle, thereby increasing the risk of a needlestick injury. Like the earlier Safety-Lok, BD s Safety Glide requires a user to take an additional physical action to press the hinged lever before the safety device engages. There have been reports that the safety feature on these earlier generation BD products from time to time would simply fall off the syringe, thereby exposing the contaminated needle. ( CBS 60 Minutes, broadcast Feb. 25, 2001. )
20. Another alleged safety syringe marketed by BD is the Eclipse, which features a hinged shield at the base of the needle that can be pivoted to cover the needle. After injecting a patient, a user must withdraw the needle from the patient, reach down to the exposed, contaminated needle, and flip the Eclipse shield into place by hand or place the syringe with its exposed needle on a table-top or other firm surface against which the shield can be flipped into place. Flipping the shield into place also can throw blood or aerosolized medicine from the needle and onto healthcare providers, patients, or surrounding surfaces.
21. As the healthcare industry began to comply with the Needlestick Prevention Act, OSHA requirements, and state needlestick safety laws, BD needed to accelerate the conversion of its product line from conventional to safety syringes. At the same time, BD began to take a series of actions to protect its dominant market positions in needle products from Retractable s innovative, patented technology.
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22. BD was unable to replace its inferior safety product line overnight. Nor did it want to do so when it was reaping substantial profits from the stop-gap alleged safety products that used parts from already-existing manufacturing facilities and tools. Instead, BD, misusing its power in the markets, continued to market its inferior alleged safety products.
BD S UNLAWFUL ACTS
Patent Infringement
23. Upon information and belief, BD copied Retractable s syringes during the course of developing BD s fourth generation of so-called safety syringe, the Integra. During a 2001 interview, the CEO of BD admitted that BD was not the first to invent many of its products and that we re just good adapters. (Philip Siekman, Becton Dickinson Takes a Plunge With Safer Needles; By Gearing Up to Make Devices Like These the Company is Giving its Profits a Shot in the Arm , FORTUNE (October 2001) at 2 (Lexis print).)
24. Once BD had made a syringe incorporating much of the technology disclosed in Retractable s syringes and patents, BD unveiled the Integra syringe in 2003. Unlike BD s earlier alleged safety syringes, Integra is a retractable syringe.
25. BD s Integra syringes infringe Retractable s patents. Like VanishPoint syringes, Integra syringes have a spring loaded needle that is fired by continuing to push the plunger after the injection is complete. This releases the needle holder from a retaining ring so the needle retracts back into the syringe body. The Integra syringes also use the same breakaway feature for releasing the needle holder from the retainer ring that is taught in Retractable s patents. The Integra 3 cc syringe has a plunger thumb cap that tucks down into the top of the syringe barrel so that it cannot be easily pulled out and reused, and has vents to relieve air pressure from the retraction cavity and prevent splattering when the needle is retracted. These features are disclosed and claimed in Retractable s patents.
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26. As BD sells infringing syringes and engages in other illegal activities, Retractable is losing the value of its most valuable asset, which is the remaining term of its patents. Retractable s patents are assets with definite expiration dates. Once Retractable s patents expire, its lost opportunity in the marketplace cannot be fully reclaimed.
27. BD s infringement of Retractable s patents, together with its unlawful exclusion of Retractable from the markets, is greatly damaging both Retractable and healthcare workers. Through BD s infringing manufacture and sale of its Integra products, BD can control the demand for retractable syringes that occurs when healthcare workers are made aware of the superior safety and ease of use of Retractable s patented technology. BD can claim, in effect, Oh, we have one of those retractable needles, while continuing to sell its older safety products on which BD maintains substantially higher profit margins. In this way, BD can maintain control of the entire market and use the Integra products as an aid to extending its profits and sales of its earlier non-retractable safety syringe products such as the Safety-Lok, the Safety Glide and the Eclipse. Hundreds of thousands of needlestick injuries, each representing possible disease or death to a healthcare worker, will continue to occur if BD s unlawful conduct continues unchecked. BD s actions have caused and will continue to cause irreparable harm to Retractable, medical personnel, and the general public.
False Advertising
28. BD s Safety Lok, Safety Glide, and Eclipse products are no safer than, and can be less safe than, conventional needle products. At least one study has shown that the number of needlestick injuries decreased after a test group ceased using the Safety-Lok syringe and resumed using conventional syringes. Nevertheless, BD continues to advertise the Safety Lok, Safety Glide, and Eclipse products as safe, safety, or safety-engineered products.
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29. A recent study by an independent hospital found that needlestick injuries increased when the hospital began to use BD s alleged safety products in 2003. The same study showed that needlestick injuries were virtually eliminated when the hospital switched to VanishPoint products in 2004 and 2005.
30. Public records show that most current so-called safety needles sold, most of which are the BD Safety-Lok, Safety Glide and Eclipse needles described above, are ineffective. For example, in 2004 the State of Texas received reports of 370 needlestick incidents involving so-called safety engineered products. In 243 of those incidents, the alleged safety mechanism had not even been activated (www.state.tx.us/ idcu/health/bloodborne_pathogens /report/ Tables 18 and 19). Accordingly, BD s Safety-Lok, Safety Glide and Eclipse products are dangerous for the additional reason that the alleged safety features on those products are feared or not trusted by, and thus not activated by, the healthcare workers they purport to protect.
31. Since on or about July 2004, and continuing to the present, BD has in connection with its Safety-Lok, Safety Glide, and Eclipse products, used in interstate commerce words, terms, names, and combinations thereof, and false and misleading descriptions and representations of fact, in commercial advertising and promotion to misrepresent the nature, characteristics, and qualities of the Safety-Lok, Safety Glide, and Eclipse products, all in violation of Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a)(1)(B).
32. BD s Safety-Lok is no safer, and indeed can be more dangerous, than conventional syringes because the Safety-Lok contains an outer sleeve that a user must physically push over the exposed needle after an injection is complete. This action places the user s hand at increased risk of contacting the contaminated needle. BD nevertheless uses the words, terms, and names safe, safety, safety-engineered and similar descriptions in
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commercial advertising and promotion to describe the nature, characteristics, and qualities of the Safety-Lok syringe, all in violation of Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a)(1)(B).
33. BD s Safety Glide is no safer, and indeed can be more dangerous, than conventional syringes because it has a small hinged lever at the base of the needle that, when pressed by the user, extends a cover over the needle. Consequently, after using the syringe to inject a patient and withdrawing the needle from the patent, the user must reach down to the needle and engage the lever. This action places the user s hand in close proximity to the blood-contaminated needle, thereby increasing the risk of a needlestick injury. BD nevertheless uses the words, terms, and names safe, safety, safety-engineered, and similar descriptions in commercial advertising and promotion to describe the nature, characteristics, and qualities of the Safety Glide syringe, all in violation of Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a)(1)(B).
34. BD s Eclipse products are no safer, and indeed can be more dangerous, than conventional products because they include a hinged shield at the base of the needle that when hit or pushed flips into place over the needle. A user must, after injecting a patient and withdrawing the needle from the patient, reach down to the needle with a hand to flip the shield into place, or else move the syringe, with its exposed, blood-contaminated needle exposed, to a table-top or other firm surface against which the hinged shield can be flipped into place. Flipping the shield into place has been observed to throw blood and/or aerosolized medicine from the needle and onto healthcare providers, patients, or surrounding surfaces, thus, increasing the risks of infection. BD nevertheless uses the words, terms, and names safe, safety, safety-engineered and similar descriptions in commercial advertising and promotion to
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describe the nature, characteristics and qualities of the Eclipse syringe, all in violation of Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a)(1)(B).
35. This false advertising is damaging both Retractable and the public and, in particular, healthcare workers. By promoting the Safety-Lok, the Safety Glide and the Eclipse as safe when they are in fact not, BD implies to healthcare workers and healthcare employers not only that the products provide protection from needlestick injuries, but also, and just as damaging, that purchase and use of such products will place the healthcare entity in compliance with the provisions of the Needlestick Prevention Act. Thus, the false advertising allows BD to sell its high profit margin unsafe safety products and needles as a dodge around the intent of Needlestick Prevention Act and thereby block adequate consideration of Retractable s clearly safer technology.
Antitrust Violations
A. Relevant Markets and BD s
36. BD s conduct alleged in this Complaint affects interstate trade and commerce. BD s annual revenues are measured in billions of dollars, and BD s products are manufactured and sold throughout the United States, including in Texas. BD s conduct was intended to maintain and extend its market power in the nationwide markets for safety syringes and needles and safety blood collection devices ( Safety Needle Devices ).
37. By way of background, in 1964 BD entered into a consent judgment with the United States Department of Justice that prohibited BD s continuation of monopolistic practices in the glass syringe market. That judgment, which is technically still in force, specifically related to only glass syringes even though BD was in the process of shifting its entire manufacturing and the same illegal marketing practices to plastic disposable syringes. Its Plastipak plastic
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disposable syringe was introduced in the 1960 s and allowed BD to continue its monopolistic practices with impunity.
38. For decades now, BD has maintained dominance in the market for disposable syringes (conventional and safety), which replaced glass syringes. In 2005 BD was estimated to control over 70% of the United States market for syringes and needles. ( U.S. Syringes and Needle Markets , F876-54, 2-29, Frost & Sullivan, 2006.)
39. Additionally, BD has long enjoyed monopoly power in the conventional (non-safety) injection and drug infusion market. Even as the market for safety needle products has grown, conventional needle products still possess a significant share of the overall market. A recent study projected there will still be a 50-50 split of the market as late as 2012. ( U.S. Syringes and Needle Markets , F876-54, 1-5, Frost & Sullivan, 2006.) As a result, BD has a strong economic incentive to keep Retractable out of the market for safety needle products, not only so BD can maintain its prices for those products, but also so it can maintain its monopoly in non-safety product lines.
40. Almost all needle products sold today are marketed in both alleged safety and non-safety forms. Although safety and non-safety products perform the same function, safety products should reduce the risk of needlestick injury. The Needlestick Prevention Act has mandated use of safer products. BD and other manufacturers are able to charge, and healthcare workers are willing to pay, a higher price for Needle Products marketed as safe, safety or safety-engineered products. As a consequence, safety and non-safety versions of these products are today in separate product sub-markets and have been since at least early 2004.
41. The relevant product markets impacted by BD s antitrust violations are the nationwide markets for manufacture and distribution of safety blood collection devices,
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