ThermoTek scores $7.6m win in battle with distributor

ThermoTek last week won a $7.6 million judgment plus interest from a distributor of its VascuTherm body heating and cooling system it accused of stealing trade secrets to develop its own competing product.

ThermoTek alleged that Mike Wilford and various entities he controlled used their distribution agreement to purloin the design for the wraps used with the VascuTherm system.

“Under the guise of being a concerned distributor, Wilford used Wabash Medical, Motion Medical, and Orthoflex, Inc. to obtain information about ThermoTek’s wrap designs. Relying on Wilford’s representations that he only sought the information to assist in modifications to the design of the VascuTherm system and associated wraps for the benefit of ThermoTek and its distribution network and the protection of the distributor agreement, ThermoTek supplied the requested information to Wilford with the expectation that the confidential and proprietary information would be used exclusively for the benefit of ThermoTek,” the company alleged in its complaint.

“Instead, Wilford used ThermoTek’s confidential and proprietary information in his new venture, WMI, which competes directly with ThermoTek. Without the burden of extensive research and development, WMI is able to compete with ThermoTek in the sale and marketing of wraps to be used with the VascuTherm system with little to no start-up costs associated with design development and product testing. Defendant’s and WMI’s marketing of unauthorized wraps interferes with ThermoTek’s existing and prospective customers and other business relationships, by using data that was provided to ThermoTek’s distributor for exclusive use in connection with the sale of ThermoTek products pursuant to the distributor agreement,” the company alleged.

In a Nov. 20 verdict, a jury in the U.S. District Court for Northern Texas found for ThermoTek on its fraud and unfair competition claims and the defendants’ breach of express warranty counterclaim, but shot down a breach of contract claim. Judge Sidney Fitzwater ordered Wilford and his companies to fork over nearly $7.6 million, plus 5% pre-judgment interest from Nov. 16, 2010, to Nov. 20 of this year, and post-judgment interest of 0.5%. Fitzwater dismissed with prejudice the Wilford companies’ suits against ThermoTek and ordered all but 1 to cover court costs, according to court documents.

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