FILED: NEW YORK COUNTY CLERK 06/28/ :49 PM INDEX NO /2017 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/28/2017

Transcription

1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK JARVIK HEART, INC., -against- Plaintiff, CALON CARDIO-TECHNOLOGY LTD., STUART MCCONCHIE, JOHN TEAL and ALANI INTINTOLO Defendant. SUMMONS Index No.: Date Purchased: Plaintiff Designates New York County as the Place of Trial The basis of venue is CPLR 503 TO THE ABOVE-NAMED DEFENDANTS: PLEASE TAKE NOTICE THAT YOU ARE SUMMONED to answer Plaintiff Jarvik Heart, Inc. s Complaint and to serve a copy of your answer on Plaintiff s attorney at the address indicated below within 20 days after service of this Summons (not counting the day of service itself), or within 30 days after service is complete if the Summons is not delivered personally to you within the State of New York. YOU ARE HEREBY NOTIFIED THAT should you fail to answer, a judgment will be entered against you by default for the relief demanded in the Complaint. Dated: New York, New York June 28, 2017 TROUTMAN SANDERS LLP By: s/james M. Bollinger James M. Bollinger Stephen G. Rinehart 875 Third Avenue New York, New York Tel. No. (212) Counsel for Plaintiff 1 of 18

2 Defendants Addresses: CALON CARDIO-TECHNOLOGY LTD. Institute of Life Science Swansea University Singleton Park Swansea SA2 8PP STUART MCCONCHIE 110 West 26 th St. Apt 3F New York, NY JOHN TEAL 244 West 10 th Street # 16 New York, NY ALANI INTINTOLO Maiden Ln. Apt 3C New York, NY of 18

3 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK JARVIK HEART, INC., -against- Plaintiff, COMPLAINT Index No: CALON CARDIO-TECHNOLOGY LTD., STUART MCCONCHIE, JOHN TEAL and ALANI INTINTOLO Defendant. COMPLAINT Plaintiff Jarvik Heart, Inc., by its attorneys, Troutman Sanders LLP, alleges as follows: PARTIES 1. Plaintiff Jarvik Heart, Inc. ( Jarvik ) is a corporation organized and existing under the laws of New York, with its principal place of business located at 333 West 52 nd Street, New York, New York Defendant Stuart McConchie ( McConchie ), upon information and belief, is an individual citizen of the United Kingdom. McConchie is a former employee of Jarvik who was employed and/or consulted with Jarvik from at least 2001 until resigning from his last position as Chief Operating Officer on November 27, Defendant John Teal ( Teal ), upon information and belief, is an individual citizen and resident of New York. Teal is a former employee of Jarvik who was employed with Jarvik from August 25, 2008 until May 31, Defendant Alani Intintolo ( Intintolo ), upon information and belief, is an individual citizen and resident of New York. Intintolo is a former employee of Jarvik who was employed with Jarvik from November 13, 2012 until May 31, of 18

4 5. Defendant Calon Cardio-Technology Ltd. ( Calon Cardio ), upon information and belief, is a business located in the United Kingdom, Swansea, Wales. 6. Individual Defendants Teal, Intintolo, and McConchie entered into employment agreements at Jarvik Heart, Inc. which is located in the County of New York. The Individual Defendants were also employed by Jarvik in the County of New York. 7. This Court therefore has jurisdiction over the Individual Defendants in this matter and Defendant Calon Cardio pursuant to CPLR 302(a)(3)(ii). GENERAL ALLEGATIONS 8. Jarvik is a private company that develops and manufactures blood pumping medical devices, specifically miniaturized heart pumps for adults, infants and children with severe heart failure. 9. Jarvik and its founder, Dr. Robert Jarvik, are highly respected among makers of medical devices because of Jarvik s major innovations in the field of mechanical circulatory support, including, the design of the first permanent artificial heart implanted in a patient; invention of the first intraventricular heart assist device, which has sustained patients for 7-10 years; development of a unique post-auricular connector that minimizes infection risk; and the manufacture of highly reliable and durable heart assist systems. Jarvik is also known for maintaining strict quality control of its medical devices by manufacturing blood pumps and many system components in-house at its facility in Manhattan, New York. 10. Highly specialized expertise, knowledge and equipment are required for the production of Jarvik s miniaturized heart assist devices. This specialized information includes both technical and regulatory expertise in establishing market advantages and regulatory approvals for commercializing Jarvik s products and services of 18

5 11. Jarvik changed the market for ventricular assist devices ( VADs ) by developing the Jarvik The Jarvik 2000 is small and valveless, which significantly differentiated it from other VADs on the market when first introduced. The Jarvik 2000 is designed to minimize patient reliance on mechanical support, minimize risk, and give patients the best quality of life of any mechanical circulatory support system available anywhere in the world. 13. The success of Jarvik s business is highly dependent on its exclusive ownership and control of the design, development and production of medical devices and parts for medical devices. These assets are not shared or readily acquired by competitors and represent a substantial investment of time, money and effort by Jarvik. 14. McConchie consulted with Jarvik from at least 2001 and became officially employed by Jarvik from November 24, 2014 to November 27, 2015, serving as Jarvik s Vice President and Chief Operating Officer. 15. As the Vice President and Chief Operating Officer, McConchie was responsible for manufacturing, marketing, quality and regulatory functions. 16. As an executive, McConchie regularly attended high-level meetings to discuss Jarvik s business strategy and innovative medical devices, as well as other proprietary information and trade secrets. 17. During McConchie s employment he had access to Jarvik s confidential information, including, but not limited to manufacturing drawings for Jarvik s innovative medical devices; clinical data; long-term strategies; key personnel roles and responsibilities; lists of clients and customer contacts; analyses of market opportunities; lists of suppliers; business development efforts; test validation instrumentation; performance reports; documents and of 18

6 information disclosing the Company s cost of doing business, business and financial prospects, and its methods and means of establishing pricing and financial policies; and marketing and sales information; all of which is essential to Jarvik s rightfully protectable business interest in the design, development, and production of Jarvik s medical devices. 18. From August 25, 2008 to May 31, 2017, Teal was employed by Jarvik as a Mechanical Engineer with the title of Pump Engineer, and later promoted to Manufacturing Project Manager. 19. As a Mechanical Engineer, Teal worked closely with the Jarvik 2000 and served a critical role in developing and testing Jarvik s miniaturized heart assist devices. 20. In addition to working with the Jarvik 2000, Teal was the program manager for Jarvik s new product, the Infant Jarvik 2015 VAD, an implantable axial-flow VAD for children. 21. The Infant Jarvik 2015 VAD is one of the most innovative products because it is about the size of an AA battery, yet offers up to liters per minute flow rate, which is sufficient to support children from about one month through 10 years old. 22. Teal was critically involved with achieving FDA approval for the clinical trial of the Infant Jarvik 2015 VAD. He managed the extensive testing required including animal implant studies with good laboratory practices ( GLP ), validation of the electrical components in compliance, battery testing, pump durability tests and accurate measurements of bearing wear for the Infant Jarvik 2015 VAD. He also managed tests of the pumps for blood damage, and worked on decreasing the cost of production of battery cases by injection molding and other production efficiencies. 23. Teal led Jarvik s involvement with the PumpKIN program, a program created by the National Heart, Lung, and Blood Institute as a response to the lack of circulatory support of 18

7 devices that could be used for infants awaiting a transplant because of congenital heart defects or advanced heart failure. Specifically, Teal developed and handled all associated detail design work, engineering, testing and production related to mechanical engineering for the PumpKIN program. 24. Teal was also responsible for the required design control tasks, creation of all manufacturing drawings, and development of required new processes for the J2000-C Left Ventricular Assistive Device ( LVAD ), an implantable heart pump for humans with weak circulation due to failing hearts. 25. Additionally, Teal managed the Child Pump and Infant Pump development projects. Specifically, Teal oversaw the creation of all engineering drawings, design control documentation, test documents and production documents for both projects. 26. Teal lead the research and development department and was responsible for production levels for Jarvik s most innovative projects. 27. During the course of employment, Teal had access to and acquired knowledge of Jarvik s innovative designs, development and production of medical devices, which is essential to Jarvik s rightfully protectable business interests. 28. From November 13, 2012 to May 31, 2017, Intintolo was employed by Jarvik as a Mechanical Engineer, with the title of VAD Engineer. 29. As the VAD Engineer, Intintolo worked closely with the Jarvik 2000 and served a critical role in eliminating production bottlenecks, improving polishing to obtain a perfect surface, upgrading the clean room and documentation, testing, and conducting failure analysis for Jarvik s miniaturized heart assist devices, and many other responsibilities of 18

8 30. Intintolo increased the productivity of Jarvik medical devices by recognizing and curing developmental issues and creating risk assessments. 31. Intintolo was responsible for research and development for the production of infant stators, rotor fixes, and other parts for Jarvik s medical devices. 32. Additionally, Intintolo was responsible for drawing and diagram management systems and approvals, risk assessment, confidential document generation and editing, and developing corrective action plans. 33. During the course of employment, Intintolo had access to and acquired knowledge of Jarvik s innovative designs, development and production of medical devices, which is essential to Jarvik s rightfully protectable business interests. 34. Both Teal and Intintolo were employed with Jarvik during McConchie s employment. Upon information and belief, McConchie had detailed knowledge regarding the key roles Teal and Intintolo played in enhancing Jarvik s products and accelerating regulatory approval thereof, as described above. 35. McConchie, Teal and Intintolo (the Individual Defendants ) entered into nondisclosure and non-solicitation agreements pursuant to their employment with Jarvik. RESTRICTIVE COVENANTS A. McConchie s Employment Agreement 36. On November 24, 2014, Jarvik and McConchie entered into an agreement that outlined non-disclosure and non-solicitation terms and conditions pursuant to McConchie s employment ( McConchie Employment Agreement ). A copy of the Agreement is annexed hereto as Exhibit A of 18

9 37. The non-disclosure and non-solicitation terms and conditions were supported by adequate consideration in the form of Jarvik s agreement to employ McConchie. 38. The purpose of the McConchie Employment Agreement was to preserve and protect Jarvik s proprietary information, including but not limited to trade secrets, manufacturing drawings and standard operating procedures, processes, techniques, marketing plans, clinical data, strategies, budgets, unpublished financial statements, forecasts, and customer lists. See Exhibit A at Pursuant to the McConchie Employment Agreement, McConchie agreed he would not acquire Jarvik s proprietary information by improper means and would maintain in confidence all proprietary information he possessed or acquired at Jarvik both during his employment and after his termination. See Exhibit A at The McConchie Employment Agreement contains provisions prohibiting McConchie, for a period of two years after the termination of McConchie s employment, from soliciting Jarvik employees to leave Jarvik, and further prohibits McConchie from offering employment, or causing an offer of employment to be made, to any person who was employed at Jarvik at any time during the six months prior to the termination of McConchie s employment with Jarvik. See Exhibit A at 10 & Pursuant to the McConchie Employment Agreement, McConchie attested that he had no intention to disclose Jarvik s confidential information to any competitor, and agreed to allow Jarvik to enjoin future use or disclosure of its trade secrets if it had reasonable grounds to believe such action was necessary to protect such trade secrets. See Exhibit A at 15. B. McConchie Terminates His Employment With Jarvik, Accepts A Position As CEO Of Calon Cardio, And Recruits Key Jarvik Employees 42. McConchie resigned from Jarvik on November 27, of 18

10 43. Pursuant to the McConchie Employment Agreement, McConchie s restrictions on competition and recruitment continued for two years following the termination of his employment, specifically, until November 27, See Exhibit A at On or about October 11, 2016, Calon Cardio announced through a press release on its website that McConchie was appointed Chief Executive Officer ( CEO ) and that he was joining the Board of Directors of Calon Cardio. 45. Accordingly, upon information and belief, McConchie has been employed as CEO of Calon Cardio, and served on its Board of Directors, since at least October 11, Like Jarvik, Calon Cardio manufactures blood pumps and is therefore a direct competitor of Jarvik. Since McConchie became Calon s CEO, Calon Cardio has been developing a miniaturized blood pump of reduced size and weight, called the MiniVAD, which will be sold in the United States in direct competition with the Jarvik Calon Cardio s website boasts that McConchie brings exceptional technical, clinical and regulatory experience to Calon as it moves through the key development stages of the MiniVAD. See (accessed June 27, 2017). 48. Jarvik specializes in miniaturized heart pumps. Therefore, Calon Cardio s MiniVAD will be in direct competition with Jarvik s products, including but not limited to the Jarvik 2000 and Jarvik It is no coincidence that during McConchie s employment with Jarvik he had access to proprietary information and trade secrets concerning the development of the Jarvik 2000 and other Jarvik miniaturized heart pumps. 49. On May 31, 2017, Teal and Intintolo, two of Jarvik s mechanical engineers who worked on the manufacturing and development of the Jarvik 2000 and 2015, resigned from employment with Jarvik to work for Calon Cardio of 18

11 50. Upon information and belief, McConchie solicited and induced Teal and Intintolo to terminate their employment with Jarvik and to begin employment with Calon Cardio. 51. While employed with Jarvik, McConchie worked and communicated with Teal and Intintolo on a regular basis. As the Vice President and Chief Operating Officer of Jarvik, McConchie had a supervisory relationship over Teal and Intintolo. 52. On information and belief, McConchie had detailed knowledge regarding the key role Teal and Intintolo played in enhancing Jarvik s products and accelerating regulatory approval thereof. This knowledge was paramount in McConchie s decision to recruit and hire Teal and Intintolo at Calon Cardio. C. Teal s Employment Agreement 53. Teal s acceptance of employment with Calon Cardio is in direct violation of his non-disclosure and non-compete agreement with Jarvik. 54. On August 25, 2008, Jarvik and Teal entered into an Employment Agreement and a Confidentiality, Proprietary Information, and Inventions and Non-Compete Agreement pursuant to Teal s employment (respectively, Teal s Employment Agreement and Non- Compete Agreement ). Copies of the Agreements are respectively annexed as Exhibits B and C. 55. Teal s Employment Agreement and Teal s Non-Compete Agreement were supported by adequate consideration in the form of Jarvik s agreement to employ Teal. 56. The purpose of Teal s Non-Compete Agreement was to preserve and protect Jarvik s proprietary information, including but not limited to trade secrets, manufacturing drawings and standard operating procedures, processes, techniques, marketing plans, clinical data, strategies, forecasts, and customer lists. See Exhibit C at p. 1, B of 18

12 57. Pursuant to Teal s Non-Compete Agreement, Teal agreed he would not acquire Jarvik s proprietary information by improper means and he would maintain in confidence all proprietary information he possessed or acquired at Jarvik both during his employment and after his termination. See Exhibit C at p. 2, C(1). 58. Teal expressly agreed to not provide any information concerning Jarvik s proprietary information to any party for publication both during and after his employment. See Exhibit C at p. 3, C(5). 59. Teal s Non-Compete Agreement requires Teal to deliver to Jarvik all documents and data of any nature pertaining to his work with Jarvik in the event of termination and prohibits Teal from taking any documents or data pertaining to Jarvik s proprietary information. See Exhibit C at p. 3, C(6). 60. Teal s Employment Agreement and Teal s Non-Compete Agreement both contain a non-compete provision that prohibits Teal, for a period of five years after the termination of Teal s employment, from engaging in any activities, by direct employment or as a consultant, which involve development, manufacture, sales, financing, or any other business activity related to implantable blood pumps and blood pumping products. See Exhibit B at 7(a) & (b) and Exhibit C at p. 4, C(9)(a) & (b). 61. Teal resigned from Jarvik on May 31, Pursuant to Teal s Employment Agreement and Non-Compete Agreement, Teal s restrictions on competition continued for five years following the termination of his employment, specifically until May 31, See Exhibit B at 7 and Exhibit C at p. 4, C(9) of 18

13 63. Calon Cardio develops and manufactures implantable blood pumps and other nonimplanted external components of blood pumping products. Calon Cardio advertises its lead product, the MiniVAD, on its website as an implantable blood pump. 64. Thus, Teal s acceptance of employment with Calon Cardio is in direct violation of his Employment Agreement and Non-Compete Agreement. D. Intintolo s Employment Agreement 65. Intintolo s acceptance of employment with Calon Cardio is in direct violation of her non-disclosure and non-compete agreement with Jarvik. 66. On November 13, 2012, Jarvik and Intintolo entered into an Employment Agreement and a Confidentiality, Proprietary Information, and Inventions and Non-Compete Agreement pursuant to Intintolo s employment (respectively, Intintolo s Employment Agreement and Non-Compete Agreement ). Copies of the Agreements are respectively annexed as Exhibits D and E. 67. Intintolo s Employment Agreement and Intintolo s Non-Compete Agreement were supported by adequate consideration in the form of Jarvik s agreement to employ Intintolo. 68. The purpose of Intintolo s Non-Compete Agreement was to preserve and protect Jarvik s proprietary information, including but not limited to trade secrets, manufacturing drawings and standard operating procedures, processes, techniques, marketing plans, clinical data and strategies. See Exhibit E at p. 1, B. 69. Pursuant to Intintolo s Non-Compete Agreement, Intintolo agreed she would not acquire Jarvik s proprietary information by improper means and she would maintain in confidence all proprietary information she possessed or acquired at Jarvik both during her employment and after her termination. See Exhibit E at p. 2, C(1) of 18

14 70. Intintolo expressly agreed to not provide any information concerning Jarvik s proprietary information to any party for publication both during and after her employment. See Exhibit E at p. 3, C(5). 71. Intintolo s Non-Compete Agreement requires Intintolo to deliver all documents and date of any nature pertaining to her work with Jarvik in the event of termination and prohibits Intintolo from taking any documents or data pertaining to Jarvik s proprietary information. See Exhibit E at p. 3, C(6). 72. Intintolo s Employment Agreement and Intintolo s Non-Compete Agreement both contain a non-compete provision that prohibits Intintolo, for a period of five years after the termination of Intintolo s employment, from engaging in any activities, by direct employment or as a consultant, which involve development, manufacture and analysis of implantable blood pumps and blood pumping products. See Exhibit D at 7(a) & (b) & Exhibit E at p. 4, C(9)(a) & (b). 73. Intintolo resigned from Jarvik on May 31, Pursuant to Intintolo s Employment Agreement and Intintolo s Non-Compete Agreement, Intintolo s restrictions on competition continued for five years following the termination of her employment, specifically until May 31, See Exhibit D at 7 and Exhibit E at p. 4, C(9). 75. Calon Cardio develops, manufactures, and sells implantable blood pumps and other blood pumping products. Calon Cardio advertises its lead product, the MiniVAD, on its website as an implantable blood pump. 76. Thus, Intintolo s acceptance of employment with Calon Cardio is in direct violation of her Employment Agreement and Non-Compete Agreement of 18

15 COUNT I: TORTIOUS INTERFERENCE WITH CONTRACT (Against McConchie and Calon Cardio) 77. Jarvik repeats and incorporates by reference all of the allegations set forth in the above paragraphs as if set forth fully herein. 78. Jarvik had valid employment and non-compete contracts with Teal and Intintolo. 79. McConchie and Calon Cardio willfully and intentionally interfered with the covenants not to compete between Jarvik and Teal and between Jarvik and Intintolo. McConchie and Calon Cardio, while not parties to Teal and Intintolo s employment and non-compete contracts with Jarvik, tortiously interfered with the contracts. 80. McConchie and Calon Cardio s interference proximately caused Jarvik s injuries and Jarvik incurred actual damages as a result of such interference. 81. As a result of McConchie s breach, Jarvik has been damaged. COUNT II: BREACH OF CONTRACT (Against McConchie) 82. Jarvik repeats and incorporates by reference all of the allegations set forth in the above paragraphs as if set forth fully herein. 83. The McConchie Employment Agreement is an enforceable contract. 84. McConchie breached the Employment Agreement non-competition covenants. 85. The provisions of the covenants not to compete are reasonable as to time, geographic area, and scope of activity to be restrained. The covenants limitations do not impose a greater restraint than is necessary to protect Jarvik s business interest. The non-compete covenant is therefore legally enforceable under New York law of 18

16 86. Upon information and belief, McConchie breached the McConchie Employment Agreement non-competition covenants with Jarvik by recruiting and soliciting Jarvik s employees, Teal and Intintolo, to terminate their employment with Jarvik to begin employment with Calon Cardio. 87. Upon information and belief, McConchie also breached the McConchie Employment Agreement noncompetition covenants with Jarvik by assisting Calon Cardio in employing Jarvik s employees, Teal and Intintolo. 88. As a result of McConchie s breach, Jarvik has been damaged. COUNT III: BREACH OF CONTRACT (Against Teal) 89. Jarvik repeats and incorporates by reference all of the allegations set forth in the above paragraphs as if set forth fully herein. 90. Teal s Employment Agreement and Non-Compete Agreement are enforceable contracts. 91. Teal breached the Agreements non-competition covenants with Jarvik by accepting employment with Calon Cardio. 92. The provisions of the covenants not to compete in Teal s Employment Agreement and Non-Compete Agreement are reasonable as to time, geographic area, and scope of activity to be restrained. The covenant s limitations do not impose a greater restraint than is necessary to protect Jarvik s business interest. The non-compete covenant is therefore legally enforceable under New York law. 93. As a result of Teal s breach, Jarvik has been damaged of 18

17 COUNT IV: BREACH OF CONTRACT (Against Intintolo) 94. Jarvik repeats and incorporates by reference all of the allegations set forth in the above paragraphs as if set forth fully herein. 95. Intintolo s Employment Agreement and Non-Compete Agreement are enforceable contracts. 96. Intintolo breached the Agreements noncompetition covenants with Jarvik by accepting employment with Calon Cardio. 97. The provisions of the covenants not to compete in Intintolo s Employment Agreement and Non-Compete Agreement are reasonable as to time, geographic area, and scope of activity to be restrained. The covenant s limitations do not impose a greater restraint than is necessary to protect Jarvik s business interest. The non-compete covenant is therefore legally enforceable under New York law. 98. As a result of Intintolo s breach, Jarvik has been damaged. PRAYER FOR RELIEF WHEREFORE, Plaintiff Jarvik Heart, Inc. requests entry of judgment in its favor and against Defendants Calon Cardio-Technology Ltd., Stuart McConchie, John Teal, and Alani Intintolo as follows: (a) Injunctive relief restraining and enjoining Defendant Calon Cardio-Technology Ltd. from employing Defendants John Teal and Alani Intintolo and prohibiting Defendants John Teal and Alani Intintolo from accepting employment or consulting for any company that is involved with the development, manufacture, sales, financing, or other activities related to blood pumping products; (b) For an award of compensatory damages in an amount to be proven at trial; and of 18

18 (c) For any and all such other and further relief as the Court may deem appropriate. Dated: June 28, 2017 Respectfully submitted, s/james M. Bollinger James M. Bollinger Stephen G. Rinehart TROUTMAN SANDERS LLP 875 Third Avenue New York, NY Telephone: Facsimile: of 18