19 March 2024Big PharmaLiz Hockley

Wearable tech company fails to land $900m trade secrets suit

ViQual Medical Technology had accused Kaiser Foundation Health Plan of stealing secrets related to monitors for diabetes and other conditions | California judge says no evidence confidential information was taken or used.

A US Superior Court has concluded that healthcare provider Kaiser Foundation Health Plan did not steal trade secrets regarding wireless wearable devices belonging to plaintiff ViQual Medical Technology, which had sought over $900 million in damages.

The Superior Court of the State of California for the County of Alameda granted Kaiser Foundation’s motion for summary judgment on February 28, which was released yesterday (March 18) after the window for ViQual Medical to make redactions had expired.

Judge Stephen Kaus said there was no evidence that Kaiser had breached a non-disclosure agreement (NDA) made with ViQual, or misappropriated its trade secrets, and cited “confusion over what ViQual claims is a trade secret” that had continued throughout the case.

‘Helped competitors’ develop devices

ViQual Medical Technology sued Kaiser Permanente, of which Kaiser Foundation Health Plan is an entity, in 2017, alleging patent infringement, misappropriation of trade secrets and breach of contract.

This referred to technology for wireless wearable devices worn by patients suffering from diabetes, heart conditions and other medical conditions that require monitoring.

In its complaint, filed in the Southern District of California federal court, ViQual said it entered into an NDA with Kaiser in June 2012 and senior figures from both companies met to discuss the technology that month.

Around 2016, ViQual alleged it had discovered that Kaiser had entered into business relationships with its competitors where it had shared trade secrets disclosed in that meeting, and helped them develop wireless wearable devices based on ViQual’s trade secrets and patented technology.

This, ViQual said, included a partnership between Kaiser and Cognizant and/or Microsoft’s Azure that allowed clinicians to view data received from patient devices on a central dashboard, dealings with software company Validic relating to remote patient monitoring, and a programme allegedly launched by Kaiser to provide patients suffering from heart conditions with Samsung smartwatches to track and monitor their rehabilitation.

ViQual, the medical device division of Better Life Technologies Group, asked the court for $50 million in damages, plus additional monetary damages for patent infringement, breach of contract and misappropriation of trade secrets.

The damages amount was later revised based on the purported value of Kaiser using the trade secrets for patient monitoring.

‘No evidence’ trade secrets taken or used

However, in the summary judgment, Judge Kaus said ViQual had failed to define exactly what was covered by its trade secrets and had “not clearly stated what it contends was unknown”.

The biotech had made reference to an encryption component in its wearable device technology as being the trade secret, but other than encryption, did not explain what was unique or secret about its conception for transmitting patient data, the judge said.

Furthermore, it did not explain with admissible evidence how the presentations it made to Kaiser included novel concepts not known in the field.

ViQual also failed to prove that Kaiser had used its trade secrets, with the judge concluding that there was “no evidence that any of the subsequent Kaiser concepts were derived from ViQual’s presentation”.

The case was ViQual Medical Technology v Kaiser Foundation Health Plan. Morrison Foerster represented Kaiser Foundation, with a team comprising Timothy Chen Saulsbury, Allyson Bennett, Whitney O’Byrne, Katherine McNutt, and Joyce Li.

Sallie Blackman of the Law Offices of Timothy Chandler filed the initial complaint on behalf of Better Life Technologies Group.

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