LightLab sues Volcano & Axsun over supply agreement

WESTFORD, MA--In our mid-January 2009 issue, Optoelectronics Report wrote that LightLab Imaging, an optical coherence tomography (OCT) systems supplier for cardiac imaging and other applications, had concerns over potential issues related to its supply agreement with Axsun Technologies.

WESTFORD, MA--In our mid-January 2009 issue, Optoelectronics Report wrote that LightLab Imaging, an optical coherence tomography (OCT) systems supplier for cardiac imaging and other applications, had concerns over potential issues related to its supply agreement with Axsun Technologies (see “Volcano acquires Axsun for OCT; questions remain” at www.laserfocusworld.com/articles/350591). Those concerns have now led to a legal dispute.

In January, Volcano Corporation (San Diego, CA), a developer and manufacturer of products for the diagnosis and treatment of coronary and peripheral artery disease, acquired Axsun Technologies (Billerica, MA) for its OCT expertise. Volcano stated that its focus was not in the sale of Axsun’s light engines to other companies, but to integration of those engines in its own OCT product portfolio.

And as we stated in mid January, “This is where the acquisition gets cloudy, as Axsun currently has development partnerships with companies serving the cardiology and dental markets.” One of those companies is LightLab Imaging, who (in May 2008) entered into a multi-year exclusive agreement wherein Axsun would supply advanced tunable lasers for LightLab’s next-generation of swept-source OCT imaging systems. Even though potential conflict was downplayed by Volcano saying that its development work with Axsun fell outside the technology used for the LightLab agreement, and despite the fact that LightLab president and CEO David Kolstad said at the time, “LightLab values its relationship with Axsun and is monitoring the situation closely,” close monitoring has now led to legal action.

According to a March 10th 10-K report filed by Volcano, LightLab filed a complaint on January 7, 2009 against Volcano and its wholly-owned subsidiary, Axsun, seeking injunctive relief and unspecified damages. The 10-K filing says, “LightLab’s complaint alleges that Volcano interfered with LightLab’s development and supply agreement with Axsun and its advantageous business relationship with Axsun, engaged in unfair competition, engaged in unfair or deceptive acts or practices and engaged in misappropriation and wrongful use of LightLab’s confidential information and trade secrets.” The filing continues, “After a hearing held on January 8, 2009, the Superior Court issued a preliminary injunction against Axsun and Volcano that, among other things, prohibits Volcano from using Axsun tunable lasers in Volcano’s OCT products under development. A hearing was held on March 6, 2009 to reconsider the preliminary injunction and we are currently awaiting the judge’s ruling. Volcano and Axsun have not yet answered the complaint.”

The filing from Volcano also gives some indication of the possible long-term effects of the litigation: “While we [Volcano] believe the complaint is without merit and we opposed the preliminary injunction motion and intend to defend ourselves vigorously, the preliminary injunction has delayed our ability to fully utilize the employees and technology available through Axsun. Consequently, there is a risk that we will be delayed in realizing or may never realize all of the benefits from the Axsun acquisition that we anticipated when we acquired Axsun.”

LightLab would not yet comment on the litigation, as legal proceedings continue. We will continue to follow this story as it unfolds in future issues of Optoelectronics Report.

--Gail Overton


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