A medical technology company is suing the University of Maryland, College Park for allegedly disclosing trade secrets and misappropriating licensed technology.
California-based MedSense LLC alleges the university failed to produce a working prototype of its “ultra-miniature fiber optic sensors” and misled the company about the product’s readiness for mass production.
Researchers also published articles about the technology, used to measure pressure and temperature, without allowing MedSense to make sure the publication did not disclose any proprietary information as required by the agreement, according to the complaint.
“In every contract, including the Agreement, there is an implied covenant of good faith and fair dealing,” states the complaint, filed in U.S. District court in Greenbelt. “Defendant UM breached the implied covenant of good faith and fair dealing when they: (i) failed to disclose the Plaintiff the publications, (ii) disclosed trade secrets and confidential information related to the licensed technology without Plaintiff’s knowledge or consent, and (iii) otherwise prevented Plaintiff from realizing its expected benefits flowing from the agreement.”
The university signed an exclusive licensing agreement for the sensors in 2010 with a company that later transferred its interest to MedSense. Before entering the agreement, the university allegedly demonstrated the technology and promised it was state-of-the-art and ready for commercialization for medical and industrial uses, according to the complaint. But the lawsuit alleges the defendants had not yet developed a working prototype at the time and still did not have one by 2012.
MedSense agreed to outsource manufacturing of a prototype to Washington State University but efforts were unsuccessful. The parties applied for several grants to fund the project and continued to work on developing the technology.
MedSense also claims it learned about the unauthorized publications sometime last year after being told again the technology was still not ready for production.
The UM researchers working on the project, Miao Yu and Hyung Dae Bae, published articles about their work beginning in 2012 which allegedly disclosed MedSense’s trade secrets and confidential information. MedSense claims it was never provided written notice and a review period as required.
One article was published in conjunction with individuals employed at a university in China, which MedSense claims also breached the agreement because it only allowed for use by entities in the country.
The complaint seeks damages for breach of contract, misrepresentation, constructive fraud, misappropriation of trade secrets and unjust enrichment.
MedSense is represented by Gregory A. Dorsey of Kelly Dorsey PC in Columbia. He did not respond to a request for comment Tuesday.
A spokesman for the University System of Maryland declined to comment Tuesday.
The case is MedSense LLC v. University System of Maryland et al., 8:18-cv-03262.