Sientra court win sets stage for new products
Breast implant firm Sientra has prevailed in a lawsuit brought by competitor Mentor Worldwide over allegations that Sientra engaged in unfair business tactics by hiring more than a dozen of Mentor’s sales staff shortly after Sientra’s implants were approved in 2012.
The suit stems from a heated race among implant makers to bring new teardrop-shaped designs to market in the United States. Santa Barbara-based Sientra was the first company to receive U.S. Food and Drug Administration approval in March 2012 for the new kind of implants.
Until that time, Santa Barbara-based Mentor Worldwide, part of Johnson & Johnson, and Allergan’s implant unit, also based on the South Coast, were the only two companies selling implants in the U.S. The two incumbents had also submitted new implant designs to the FDA but had yet to receive approval.
Shortly after the Sientra green light at the FDA, more than a dozen members of Mentor’s sales team quit and started working for Sientra. Mentor sued the company alleging the move was anti-competitive and aimed to decimate its sales operations. Sientra officials countered that the company was increasing competition by bringing a new offering to the marketplace.
After a jury trial in Santa Barbara County Superior Court that lasted nearly eight weeks, a jury found in Sientra’s favor.
“They consumed six and a half weeks calling all kinds of witnesses, all kinds of experts,” Sientra CEO Hani Zeini told the Business Times. “There were over 70 depositions in this case and nearly a quarter million documents and papers. After a year of discovery and draining us, and six and a half weeks in court, they did not show one iota of evidence to support any of the allegations in the complaint. We put on our side of the case in six days.”
Mentor officials could not yet say whether the company planned to appeal. But company officials highlighted the fact that the jury split on some of the questions presented to it and told the Business Times that Mentor planned to push forward with its business and hiring plans as it rolls out its own competing teardrop-shaped implants, which were approved earlier this year.
“While obviously disappointed with the jury’s 9-3 verdict, Mentor continues to believe that pursuing legal action was the right thing to do after Sientra’s anti-competitive attempt to take 35 percent of Mentor’s sales force in a single day. Mentor is proud to continue providing employment and business opportunities in our Santa Barbara community as it has been doing for over 20 years,” David Wilson, president of Mentor Worldwide, said in a statement.
After the jury trial phase of the case, Judge Thomas Anderle heard additional testimony on the question of liabilities and damages. The judge rejected Mentor’s arguments that Sientra had engaged in unfair competition or was unjustly enriched by hiring ex-Mentor sales people.
“The jury got it right on all five of the verdict forms it was asked to answer,” Judge Anderle wrote in his decision. “There was no unfair competition, no unjust enrichment, no proved damages, and no conscionable claim for relief.”
In the decision, Anderle found that Mentor would have needed to prove that Sientra engaged in some form of wrongdoing that interfered with Mentor’s relationship with its sales employees. Merely extending an employment offer didn’t constitute interference. Throughout the case, Sientra maintained that it offered Mentor employees new jobs and those employees took the jobs simply because they were unhappy with the climate within Mentor after the Johnson & Johnson acquisition. Judge Anderle said he was swayed by testimony from those ex-Mentor employees. “The testimony by the Former Mentor Salespersons about why they left the Mentor employment made plenty of common sense and was never adequately challenged; I found them very credible,” Anderle wrote.
Zeini said he could not yet comment on whether Sientra would seek to recover the costs of its defense from Mentor. He said Sientra has remained on track with its business plans despite the litigation.
“The reaction in the marketplace has been heartwarming, and our products are performing better than we anticipated they would,” he said. “We’re working very diligently on the next generation of products. We expect that to happen in the near future, and we’re very excited about it.”
The Santa Barbara region has a long history as an epicenter of the breast implant industry. Longtime implant maker Mentor was acquired by Johnson & Johnson for $1 billion in cash in 2010.
Sientra was founded in 2007 by veterans of Inamed, another successful South Coast implant maker that was acquired for $3.2 billion by Allergan. Sientra has raised $151 million in venture capital and private equity to get its new product line off the ground.
Sientra, Allergan and Mentor have all received FDA approval for teardrop-shaped implants.
