Medtronic, Equipment Manufacturer Meet Again in Court

They’re at it again.

Just months after resolving a patent dispute, Medtronic Inc. and Lenox MacLaren Surgical Corp. are headed back to court. But this time, it’s over a distribution deal gone bad.

Lenox MacLaren, a Louisville, Colo.-based manufacturer of bone-milling equipment, claims Medtronic stole its market. In a lawsuit filed earlier this month in U.S. District Court in Colorado, Lenox MacLaren accuses the medical device behemoth of using its position as a distributor for the smaller firm to build a market for its own competing product.

The relationship between Lenox MacLaren and Medtronic wasn’t always so adversarial. The two entities met in 2000, when they signed a distribution agreement to disseminate Lenox MacLaren’s hand-cranked bone mill, a device considered advanced at the time due to its ability to create uniform pieces regardless of the cranking speed. The company’s owner, Linda Lenox, hoped the distribution deal would put the bone mills in every orthopedic surgical suite worldwide.

Bone mills are used to grind bone samples taken from patients into uniform pieces, which are packed into voids or fractures during spinal fusion procedures to help damaged vertebrae heal.

At first, Lenox’s grand expectations seemed possible as Minneapolis, Minn.-based Medtronic agreed to buy the bone mills and resell them to surgeons and hospitals. But the medical device designer’s hopes faded quickly after Medtronic bought only 500 of the mills and lent them to surgeons to create market demand, Lenox charges in her lawsuit.

When Medtronic was ready to launch its competing bone mill, it recalled the Lenox MacLaren device, destroying its reputation, the company claimed in the lawsuit. In addition, Medtronic’s monopoly of the market has prevented Lenox MacLaren from reentering the sector, the company further alleged.

Medtronic officials said the latest charges echo concerns raised by Lenox MacLaren in a 2007 lawsuit that was dismissed in June.

Before the 2007 lawsuit was dismissed, the case was referred to an arbitration panel that considered a dozen claims against Medtronic raised by Lenox MacLaren, according to court documents, the St. Paul Pioneer Press (in St. Paul, Minn.) reported. The panel sided with Lenox MacLaren in one of those cases and awarded the company damages of $321,870.

“We do not comment on pending litigation,” Medtronic spokesman Brian Henry told the Pioneer Press. “However, it does not appear that there is anything raised that was not already resolved in the first case.”