Mentor Worldwide Drops Unfair Competition Lawsuits
A litigation campaign by Johnson & Johnson subsidiary Mentor Worldwide met its demise this week when the company agreed to drop the last two unfair competition lawsuits it had filed against its much smaller rival, breast implant developer Sientra Inc.
Santa Barbara, Calif.-based Sientra had doubled the size of its sales force in early 2012 when it recruited 20 workers from Mentor, which is based in the same city. Mentor responded by bringing 14 unfair competition lawsuits in 11 different states against Sientra and its new employees.
In a motion filed Wednesday in state court in Portland, Ore., Mentor agreed to dismiss a case against two of its former employees who left for Sientra. The move came on the heels of the company dropping a similar suit against a former employee in Chicago on Sept. 26. The two cases represent the last of the 14 lawsuits Mentor and its lawyers at Littler Mendelson brought in the wake of the 2012 employee migration, and Sientra and its lawyers at Proskauer Rose—Mark Saloman and John Barry—are claiming a complete defense victory.
Mentor didn't say in its motions why it was dropping the two cases. But it's clear that the company didn't like its odds. In several jurisdictions, judges denied Mentor's requests for injunctive relief, ruling that Mentor was unlikely to prevail on the merits. Sientra has also been steadily winning dismissals of the cases without paying a cent in settlements.
The final blow came on Aug. 30 when after just four hours of deliberation, a state court jury in Santa Barbara returned a verdict that Sientra and two of its employees didn't interfere with Mentor's prospective business or misappropriate its trade secrets. Mentor had sought $27 million in damages in that case—a potentially crippling fine for Sientra, a start-up with fewer than 100 employees.
"The goal of this lawsuit was to put Sientra out of business," said Barry, who squared off at trial against Littler's Dylan Wiseman.
The victory is doubly sweet for Proskauer because the firm advised Sientra on the logistics of the mass hire in the first place. The firm had Sientra's new hires sign multiple confidentiality agreements and return hundreds of boxes of documents to Mentor. Mentor complained that those precautions failed to prevent the workers from taking customer lists and pricing data with them and then using them to Sientra's advantage.
In an unusual turn of events during the Santa Barbara trial, Barry had to get up from the lead counsel table and take the witness stand at Mentor's request. Judging by how quickly the jury sided with Sientra, the gambit didn't help Mentor's case. "In our interviews with jurors, one thing they told us was that Sientra's documentation was very thorough," Barry said. "It clearly didn't hire these people for an improper purpose."
According to Saloman and Barry, Sientra is frustrated by the toll the litigation has taken on its bottom line, but also thrilled to have won vindication in the end. "As a startup, they really did the unthinkable. They stood up to the big guy, went toe-to-toe, and won," Saloman said.
Wiseman was not available for comment. A Mentor representative did not immediately return a call for comment.