A case against 3M opened in a London court last week, with lawyers representing the U.K. government and the Porton Group, a private equity firm, alleging the multinational company breached its obligation on BacLite, a product designed for detecting MRSA in hospitals.
Back in 2007, 3M spent $20.4 million to acquire the BacLite, which incorporated technology developed for the British military to detect an attack by biological weapons, from Acolyte Biomedica. 3M, which makes a range of products that includes Scotch Tape and Post-It Notes, cited disappointing results from the trials as the reason for abandoning BacLite. The technology was already available in the EU at the time.
Porton was extremely disappointed by the company's decision and has accused it of mismanaging the trials to protect Fastman, a 3M-developed detection product, from the less expensive BacLite. And it came out swinging last week. In a June 14 statement, Porton CEO Harvey Boulter called 3M's initial public defense of its actions "feeble." He added that 3M has "resorted to suggesting that Porton and the British Ministry of Defence is attempting some kind of financial shakedown."
For its part, 3M has asserted it decided not to seek regulatory approval in the U.S. for BacLite because it concluded the product would never be commercially viable. "The profit motives of the Porton Group and its publicity campaign will have no bearing on our client's position in the current litigation," William Brewer III, one the company's lawyers, said in a statement. "3M welcomes the opportunity to present its case to the court and is confident in the positions it has taken."
Over the course of the proceedings thus far, attorneys for the government and Porton have accused George Buckley, 3M's chair and CEO, was involved not only in seeking to purchase BacLite, but also in walking away from unconditional contract commitments to market the device. They have asserted Buckley sent an email in March 2008 asking whether the company should "just pull the plug" on BacLite, without making any reference to the contractual commitments, according to a statement from the Porton Group.
And Porton has some prominent names coming to its defense--namely Lanny Davis, who served as special counsel to President Bill Clinton. Davis has challenged Buckley in statements over the past month, asking, "Why Mr. Buckley, when your own 11 Member technical committee identified and detailed clearly 3M failings in the US FDA trials, all of which were easily correctable, did you not try again?"
Porton isn't confining its fight against 3M to the U.K. Last month, Porton called on the FDA to investigate whether 3M botched clinical trials on BacLite.
The case, Porton Capital Technology Funds & 3 otrs v 3M UK Holdings Limited, continues today in the Commercial Court & Admiralty Court.
- see the Porton Group statements here and here
- check out the 3M response