J&J reaches $6m settlement over counterfeit surgical tools

Johnson & Johnson (J&J) has settled its case against Advanced Inventory Management (AIM), trading as eSutures, which it accused of distributing counterfeit and contaminated surgical tools.

J&J subsidiary Ethicon sued Illinois-based eSutures last year, claiming it had sold counterfeit J&J tools which posed a risk to patient health.

Under the terms of the settlement, eSutures is barred from buying, selling, or distributing any products sold by J&J. The Illinois company will also be barred from mentioning J&J, Ethicon, or other J&J subsidiaries in its marketing. The deal also involves a payment of $6 million to Ethicon, currently held in a frozen eSutures account.

The settlement agreement follows a preliminary injunction issued by the US District Court for the Northern District of Illinois last October.

The J&J lawsuit alleged that eSutures had sourced counterfeit Ethicon surgical tools from a “known counterfeiter” in India.

During a raid of the counterfeit supplier, Ethicon said it found the owner of the company “on the floor of his non-sterile and unsanitary apartment, inserting the fake surgical devices into counterfeit Ethicon packaging with his bare hands”.

J&J also accused eSutures of selling genuine but fraudulently obtained, Ethicon surgical tools without permission. The tools include hemostats, surgical clips, and fixation devices, designed to be left in the body after surgery.

AIM responded to the Ethicon suit with counterclaims including wrongful seizure and tortious interference with business relationships. Neither party has admitted liability or wrongdoing as part of the settlement.

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