Intellectual Property Analysis of Best Medical International, Inc. v. Accuray, Inc. et. al.
On August 9th 2010, Best Medical International, Inc. filed a lawsuit alleging that Accuray Corp. (NASDAQ: ARAY) benefitted from stolen trade secrets along with patent infringement of U.S. Pat No. US 5,596,619. Further, the suit claims that 4 employees, previously employed by Best Medical stole confidential and proprietary information when they quit Best Medical to work for Accuray and that this information was used in an incremental development of the Accuray CyberKnife. MassDevice reported, “The spat began when Hill sued Best Medical for allegedly failing to fully pay the benefits it owed him when he quit. Best Medical counter-sued, saying Hill violated a non-compete agreement in moving to Accuray, and in October 2008 sued the company and its four former workers, claiming that they colluded with Accuray to pilfer trade secrets.” Best Medical’s choice to pursue this patent litigation could result in self inflicted damage as it may place focus on the validity and strength of its patent.
The Vanguard Group, BlackRock, and investors in the Vanguard Total Stock Market Index Fund should be concerned about how this dispute plays out. Reminiscent of the good-old-days of Ciena Corp. v. Corvis Inc., cases like this are usually big winners for lawyers who fan the flames of conflict and big losers for the holders of equity. Because, like many other companies in the Best Medical and Accuray market space, the commercial enforceability of patents is adversely effected by extensive scientific and patent myopia. In a regulated world which includes FDA data and scientific disclosures, the illusion of proprietary positions has more marketing value to early-stage investors than substantive market value. This litigation is likely to drain resources and focus from two companies and result in both being exposed for weaker than promoted proprietary positions. Taxpayers supporting expenses for the Pennsylvania Western District Court could want a tax rebate for the court costs involved in this case.
U.S. Pat No. US 5,596,619, titled, “Method and apparatus for conformal radiation therapy,” The patent describes a manner in which to modulate the width and intensity of a radiation beam used for treatment of tumors. M•CAM has conducted an intellectual property analysis of Best Medical’s U.S. Pat No. US 5,596,619 to understand the strength and defensibility in the face of prior and concurrent art innovations. Using M•CAM DOORS™, the innovation space surrounding the ‘619 patent was examined to determine which patent or patents may provide alternatives to or alter the value of the ‘619 patent.ShareThis