UK government takes 3M to court in £41M claim over MRSA diagnostic

The UK government and the private investment group Porton Capital are accusing the US multinational 3M of breaching its obligation to bring a potentially life-saving medical device invented by the Ministry of Defence to market, in a case that opened at the High Court in London last Friday (17 June).

The case centres around BacLite, a technology for detecting the hospital-acquired infection MRSA (Methicillin-resistant Staphylococcus aureus) which was acquired by 3M from investors including Porton and the UK government in February 2007. The terms of the sale required 3M to “actively market and diligently seek regulatory approval” for BacLite and to pay the investors one hundred per cent of BacLite’s 2009 sales, up to a limit of £41million.

The opening statement set out the decision by 3M to effectively terminate development of BacLite December 2008. The UK government is now asking the High Court to award the full £41 million that would have been accrued had 3M met its obligations.

The court heard that BacLite obtained EU regulatory approval by 2005, demonstrating 95 per cent reliability, and quickly penetrated the diagnostics market in the UK. The deviceoffered MRSA detection that was faster than traditional culture methods but cheaper than molecular diagnostics.

Upon acquiring BacLite in February 2007, 3M axed the UK sales team that had been in place since May 2005, but did not reassign a new team until September 2007. By May 2008, 3M had functionally ceased its marketing efforts in Europe, the court heard.

In a statement defending its handling of the BacLite technology 3M said it was not commercially viable and, therefore, the company discontinued efforts to sell it in 2008.

3M maintains it made “diligent efforts” and spent “substantial resources”, on BacLite but the product did not meet performance and customer expectations.

“A hallmark of 3M is its unwavering commitment to providing effective and reliable products,” according to William Brewer, partner at Bickel & Brewer and counsel for 3M.  “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.”

The case is being heard at the High Court in London.