Life Spine Says Court Shouldn’t Allow Aegis Spine to Stay Pending Appeal in Trade Secrets Case

After the court granted Life Spine’s motion for a preliminary injunction last month in a trade secrets case, the defendant, Aegis Spine Inc., moved to stay the case pending appeal. On Wednesday, Life Spine opposed the stay.

The lawsuit concerns Life Spine Inc.’s allegation that a former distributor of one of its surgical devices, the ProLift, used its access to confidential and trade secret information to create knock-off surgical devices that compete directly with Life Spine’s product in violation of its legal obligations. 

The court’s March 15 opinion explained the facts of the suit, which dates back to 2019. Reportedly, Life Spine designs, develops, and sells medical devices that are surgically implanted for the treatment of spine disorders. The company spent more than three years creating the ProLift, an expandable cage inserted into the spines of patients suffering from degenerative disc disease. The device received U.S. Food and Drug Administration approval in March 2016, according to the opinion.

According to the opinion, Aegis is a subsidiary of L&K Biomed Inc. (L&K), a South Korea-based medical device company. The Colorado-based subsidiary ostensibly markets and sells medical devices that treat spinal conditions. In early 2018, the opinion stated, Aegis and Life Spine signed a distribution agreement for ProLift, the terms of which reportedly prevented Aegis from creating derivative works or reverse engineering the product, and included protections for Life Spine’s confidential information, among other things.

Aegis allegedly shared confidential information with L&K about ProLift, including details concerning the custom installer, as well as opinions obtained from a surgeon and other hired consultants. The opinion stated both that Aegis’s CEO admitted to shipping a ProLift cage and installer to L&K in South Korea, and that Aegis witnesses “struggled to explain how L&K came to be in possession of ProLift testing data.”

In July 2019, Aegis informed Life Spine that it would not sign a new distribution agreement, allegedly with unilateral understanding that it would soon release a competing version of the product. In September 2019, Aegis launched its AccelFix-XT, which according to the plaintiff’s expert is virtually identical to the ProLift.

In August 2020, Life Spine moved for an injunction preventing Aegis from making and selling AccelFix-line products pending trial. The court acquiesced after finding that Life Spine demonstrated a likelihood of success with respect to its trade secrets and contract claims, and met the other legal prerequisites.

Aegis subsequently appealed the decision, and on April 20, filed a motion to stay proceedings pending appeal. This week’s opposition contends that Aegis’s motion to stay “is nothing more than a repackaging of a narrow subset of arguments that this Court already heard and rejected.” The opposition further pointed out that the after hearing from 15 witnesses and reviewing thousands of pages of documents during the nine-day preliminary injunction hearing, “there is no question, much less a substantial one, that (the court’s) conclusions were correct.”

Life Spine is represented by Quinn Emanuel Urquhart & Sullivan LLP, and Aegis by Jones Day.