3M Sued by U.K. Over Development of Superbug Detection Product
3M Co. (MMM), the maker of products including Scotch tape and Post-it Notes, is being sued by investors including the U.K.’s Ministry of Defence for failing to market and develop technology that detects hospital superbug MRSA.
A U.K. unit of 3M bought the superbug detector in 2007 and then let it “wither,” Stephen Phillips, a lawyer for Porton Capital Ltd. and Ploughshare Innovations Ltd., a civilian unit of the the Ministry of Defence, said today. The investors are seeking $54 million in lost profits, he said.
Porton and Ploughshare Innovations sold 3M a company called Acolyte, which had obtained regulatory approval for MRSA detection product BacLite, Phillips said. Part of the sales price was a payment based on net Acolyte sales in 2009, capped at 41 million pounds ($66.5 million) according to court documents.
“By a mixture of delay, incompetence and lack of due diligence by the 3M group, BacLite was allowed to whither on the vine,” Phillips said on the first day of trial.
In 2008, 3M scaled back, and then terminated the marketing of Acolyte’s sales activities, resulting in no payment for the claimants, Phillips said.
The St. Paul, Minnesota-based company said in a statement on its website that it ceased marketing BacLite because it proved not to be “commercially viable.”
“In the view of the company, BacLite was not commercially viable and it failed to meet certain standards of the marketplace, so the company discontinued its efforts to sell the product,” 3M lawyer William A. Brewer III said in the statement.
Lawyers for 3M will present their case later in the trial.
The case is 2008-877 Porton Capital Technology Funds & 3 otrs v 3M UK Holdings Limited.