Medical company in trade secrets dispute with employee

Medical company Scion Biomedical Inc has launched a lawsuit accusing a senior employee of breaching trade secrets to file a patent for her new start-up company.

The claims have been made against Alison London Brown, a board member at Scion who had been due to become chief strategy officer, and her own company Women’s Health Technologies, Inc.

In a lawsuit, filed at the US District Court for the Southern District of Florida on November 21, Scion says Brown abused her position and “deliberately, without justification and dishonestly ... usurped" confidential information.

Scion, which has been in business since 1996, researches, develops, manufactures and distributes medical devices and products for the health care industry in the US and abroad.

It is seeking a trial by jury along with $75,000 in damages alongside attorney’s costs.

The complaint is related to Scion’s ‘Clo-Sur P.A.D’ products, which it says is manufactured from a unique and high-molecular-weight chitosan.

Chitosan, which has a number of medicinal uses, is a sugar taken from the hard outer skeleton of shellfish.

The product, which has clearance from the US Food and Drug Administration, has wound-healing properties if properly processed and manufactured.

According to Scion, Brown filed a patent application at the US Patent and Trademark Office on behalf of her own company shortly after carrying out a study of Scion’s confidential chitosan technology.

The patent, Scion says, may have included similar uses of chitosan.

The relationship between Brown and Scion can be traced back to 2011 when Scion’s chief executive Louis Rose met with Brown, who was then acting chief executive for Georgia-based company Chemence Medical Products.

After learning Brown had studied chitosan at degree level, Rose hired her to join Scion’s board of directors and discussions began about how to develop new products.

The complaint says that earlier this year, Brown revealed to Scion that she had previously started another company called Women’s Health Technologies, but that its products were unrelated.

In March, Brown requested a sample of Scion’s chitosan, to conduct research and development regarding a chitosan-based gel, and Scion acquiesed.

“It was understood that Brown, as a Scion board director, would share her research and development with Scion,” the complaint says, adding that Brown said she would keep the two businesses “completely separate.”

“Brown was in a position of trust and had complete access to all of Scion’s information, including confidential information which among other things included Scion’s trade secrets for its source, processing and manufacturing of its high molecular weight biomedical grade chitosan,” the complaint says.

It adds that Brown was obligated to act with the “utmost good faith and loyalty” to Scion, which she did not.

“As a direct and proximate result of the foregoing breaches, Scion has suffered substantial damages in excess of $75,000, in an amount to be proven at trial,” the complaint adds.