Wednesday, June 10, 2009
Luna challenges $36.3 million verdict
The tech firm filed motions in California, saying the jury's verdict was based on an incorrect legal interpretation.
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Luna Innovations Inc. has asked a California judge to throw out a $36.3 million jury verdict against it, arguing the award is based on a flawed interpretation of law.
The Roanoke-based technology company filed several post-trial motions Monday offering for the first time since the verdict was issued in late April its concerns with how the trial was carried out and jury verdict rendered.
Even as the legal battle with Hansen Medical Inc. continues, Luna's chief operating officer said there is no bad blood between the two companies and he would be willing to work with Hansen to apply Luna's technology to Hansen's medical device.
"We would like our technology to be used in as many places and as many procedures that could help save lives," COO Scott Graeff said about the application of Luna's technology to medical devices.
Specifically, Luna's lawyers argued Luna is not responsible for lost profits to Hansen. The vast majority of the verdict awarded was for lost profits.
"That a finding of breach of this agreement has somehow resulted in an award of over $26 million in lost profits and other damages is exactly the kind of nightmarish outcome that parties seek to avoid when they negotiate these critical limitations -- and one that cries out for immediate correction here," Luna's lawyers wrote.
The agreement referred to is an $84,100 feasibility study that Luna and Hansen entered into in 2006 to apply Luna's fiber-optic shape-sensing technology to Hansen's catheter. Luna contends that the feasibility study explicitly ruled out an award of lost profits if the deal went sour.
In addition to arguing the $26 million award should be tossed out, Luna argued the $10.2 million awarded for misappropriation of trade secrets was based on poor jury instructions and bad interpretation of the law.
Luna also said while Hansen claimed nine trade secrets were violated, each violation wasn't argued separately. That was an improper application of the law governing misappropriation of trade secrets, Luna said.
"Apparently, Hansen hoped that the jury would be unable to see through the smoke and could be led to find liability through sheer confusion," a portion of one motion reads. "And it succeeded."
Finally, Luna asked that if the judge doesn't agree to throw out the jury award, a new trial be held.
Hansen also filed several motions with the California court in advance of a July 20 hearing where the judge is expected to enter final judgment on the verdict. Until then the jury award is not finalized.
In its motions, Hansen asked for an undisclosed sum for attorney fees and expert costs, $20.4 million in additional damages, an injunction preventing Luna from using the product developed during the initial feasibility study and a license to certain intellectual property related to the case.
Graeff emphasized that other aspects of Luna's business continue to do well.
Most recently Luna has had discussions with Nasdaq because it is out of compliance with some of the rules governing the qualifications to trade on the stock exchange. Graeff said Luna has explained to Nasdaq that much of its business continues to do well and that Luna plans to fight the legal matters.
Luna stock closed up 1 cent at 46 cents Tuesday.
