A small biotech startup is taking Johnson & Johnson to court on Monday, alleging the company cheated it out of intellectual property and millions of dollars in contract revenue.
The startup, Pittsburgh-based medical imaging company ChemImage, is suing the multinational biomedical goliath, claiming it improperly terminated a contract for the company’s imaging software used in robotic surgery and tied up patents that hampered its business. The company is seeking damages worth about $109 million plus other fees worth tens of millions of dollars for improperly breaching the contract.
Opening statements in the bench trial for the case, which was filed last year, began in Manhattan federal court on Monday. ChemImage is represented by the law firm Quinn Emannuel Urquhart & Sullivan, LLP. Its team of lawyers includes Alex Spiro, who is representing Mayor Eric Adams in his federal corruption trial.
ChemImage entered a deal with Johnson & Johnson’s subsidiary Ethicon in 2019 to develop the imaging software in conjunction with Johnson & Johnson’s work to advance its robotic surgery technology. The contract included $7 million for ChemImage plus milestone payments and up to $167 million in research and development and milestone payments.
But in 2023, Ethicon terminated the contract for what it said were mounting delays, which it blamed on ChemImage’s failures to advance its project. In court filings, ChemImage’s lawyers argued the contract did not stipulate failure to meet subsets of milestones as cause for termination and that delays were due to Ethicon’s mismanagement of its own hardware development.
The company is seeking a $40 million termination fee plus $109 million in damages, including for tying up patents developed during the contract period. ChemImage also wants the ability to market the patents it developed under the contract to other companies, which would have been allowed if the contract was terminated without cause as the startup alleges.
