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A U.S. District Court jury in New Jersey has ruled against Biomet in a case that could cost the Warsaw orthopedics firm upward of $149 million.
The jury ruled that Biomet and its subsidiary, EBI, breached a distribution agreement with Orthofix SRL.
The jury ruled that EBI's development of a new and substantially improved external fixation system, known as the Dynafix System, prior to expiration of a contract with Orthofix constituted a breach of distribution agreement.
The jury awarded compensatory damages against EBI and Biomet for breach of contract and related claims of $49 million and punitive damages of $100 million.
EBI President James Pastena called the jury decision "unfortunate and shocking. He said the decision would not affect EBI's current market share. The company is poised to launch two new line extensions of its Dynafix Systems later this year, a move that is expected to further expand its market share in that area, he said.
Biomet president Dane Miller said he was astounded by the jury's decision.
"We do not believe we breached the distribution agreement with Orthofix. As a result of Orthofix's decision not to renew the agreement, EBI was forced to design its own device," he said.
Miller said EBI released its Dynafix System subsequent to the expiration of the Orthofix distribution agreement, and that the superior qualities of the Dynafix System allowed EBI to maintain more than 90 percent of its external fixation revenues.
Miller said those revenues represent a substantial portion of EBI's annual sales.
If EBI had not taken the action, the impact on its market share would have been severe, Miller said.
The court has not entered any judgment on the jury's verdict and the company intends to appeal any adverse judgment.
