Ashby & Geddes Obtains Judgment in Favor of Medical Device Company and Successfully Defends Against Counterclaims

August 18, 2016

Ashby & Geddes and co-counsel Kaye Scholer LLP have secured a significant post-trial victory in the Delaware Court of Chancery for Medicalgorithmics S.A. (“Medicalgorithmics”), a publicly traded Polish corporation that developed and manufactures a remote cardiac monitoring system known as the PocketECG.  On August 18, 2016, following a five-day trial, Chancellor Bouchard issued a memorandum opinion finding that defendants AMI Monitoring, Inc. and Spectocor LLC (collectively, “Defendants”) materially breached the parties’ exclusive licensing agreement by seeking to develop a product to replace Medicalgorithmics’ PocketECG without first providing notice of termination.

In April 2015, Medicalgorithmics terminated the agreement based on its theory that Defendants were in material breach.  Medicalgorithmics promptly filed a complaint in the Court of Chancery against Defendants, seeking declaratory judgment that Medicalgorithmics’ termination was valid, damages for Defendants’ breach of the agreement, and costs and attorneys’ fees.  Defendant AMI Monitoring, Inc. (“AMI”) counterclaimed, alleging that Medicalgorithmics overcharged AMI for device orders.

In his post-trial opinion, Chancellor Bouchard found that Defendants had secretly sought to develop a product to replace the PocketECG without first giving notice of termination to Medicalgorithmics, which constituted a material breach of the agreement.  As a result, the Court found that Medicalgorithmics was entitled to declaratory judgment that its termination was valid, as well as damages for Defendants’ breach.  In addition, the Court found that Medicalgorithmics was entitled to its costs and attorneys’ fees in the litigation pursuant to an indemnification provision in the agreement.  The Court further found that AMI’s counterclaims were meritless and, accordingly, that Medicalgorithmics was entitled to entry of judgment in its favor dismissing all of AMI’s counterclaims with prejudice.

The case is Medicalgorithmics S.A. v. AMI Monitoring, Inc. d/b/a Spectocor, et al., C.A. No. 10948-CB.  The Court’s decision can be found here.

Ashby & Geddes attorneys Philip Trainer, Jr. and Marie M. Degnan, along with a litigation team from Kaye Scholer LLP, represented Medicalgorithmics in this action.