The Federal Third Circuit Court of Appeals has sided with medical device distributor Artoss, Inc. (Artoss) in its dispute with Biocomposites, owner of Artoss GmbH (GmbH), over a bone graft substitute.
The litigation involved NanoBone, an implantable bone graft substitute. Artoss is the North American distributor of NanoBone and Biocomposites GmbH is its manufacturer.
The original lawsuit was filed in 2020 by Artoss, Inc., a U.S. company based in Minnesota. Artoss filed the lawsuit against Artoss GmbH, a company based in Germany, and its owners Thomas Gerber and Walter Gerike. In 2023, U.K.-based medical device company Biocomposites acquired Artoss GmbH.
Artoss sued GmbH for allegedly breaching its distribution agreement with Artoss when it, per the Court of Appeals’ Opinion, “refused to ship new NanoBone products to Artoss without advance payment.” Artoss then pre-paid for inventory and GmbH “unilaterally raised prices on all NanoBone products.” GmbH then allegedly terminated the distribution agreement in 2021 claiming that Artoss “registered certain trademarks on material associated with” NanoBone products.
In 2022, the jury sided with Artoss. The jury found that “GmbH breached the Distribution Agreement and acted wrongfully when it terminated the Agreement” and “Artoss did not breach the Agreement or violate any of GmbH’s trademark rights.” The jury awarded $1,260,821 to Artoss.
GmbH appealed the decision. On appeal GmbH made four arguments, none of which persuaded the Court of Appeals. In its opinion, the Court of Appeals stated, “The jury had sufficient evidence to conclude that GmbH wrongfully terminated the Distribution Agreement, and none of GmbH’s arguments for a new trial or equitable relief is persuasive.” The Court of Appeals then affirmed the judgment of the lower court.
According to a press release by Artoss, it is “currently in the process of collecting that judgment, which (with accrued interest) exceeds $1.5 million. “
Artoss CEO Paul Byerley commented in part, “This has been an extremely challenging period in our company’s history. I am pleased that the court saw fit to reaffirm our rights under our distribution agreement with Biocomposites GmbH.”
