A company licensed to develop and manufacture rotary rehabilitation medical devices is accused of failing to pay royalties on the products and services in breach of a licensing agreement.
Hurford Global LLC filed the complaint May 26 in the U.S. District Court for the Southern District of Illinois against ROM3 California LLC, also known as ROM3 Rehab LLC, and Peter Arn. Arn is a co-founder of ROM4 Rehab and currently serves as the company’s chief executive officer.
According to the complaint, Dr. Kenneth Johnson was issued patent number 7,226,394 on June 5, 2007, and patent number 7,594,879 on September 29, 2009, together known as ROM3 patents. The two patents made up the “Rotary rehabilitation apparatus and method” invention, known as ROM3.
The ROM3 invention was “designed to assist rehabilitation and improve recovery time for patients with knee or hip injuries, or those who have undergone surgery. The device is meant to help reverse or reduce pain and stiffness in these parts of the body and to recover range of motion.”
On Jan. 29, 2015, Brainchild Medical Inc., which includes Johnson as a chairman, entered into a licensing agreement with ROM3 California. According to the agreement, the defendant would develop, market, and sell inventions based upon the ROM3 patents.
Johnson resigned as chairman from Brainchild Medical on March 10, 2016. Then on June 1, 2016, the ROM3 patents were assigned to Brainchild Medical, making it the exclusive owner of the ROM3 tradename and trademarks.
The licensing agreement allowed the defendants to use the intellectual property associated with ROM3, including the ROM3 patents, trademarks, and other protectable intellectual property to develop, market, and sell inventions.
In exchange for allowing the defendants to use Brainchild Medical’s intellectual property, the agreement provided that the defendants must pay Brainchild Medical royalty payments of 5 percent of the unit price of each licensed product or service; develop, manufacture, market and sell ROM3 products and services in quantities sufficient to meet the market demand; and provide semi-annual progress reports regarding the licensed products and services, and quarterly royalty reports thereafter.
Brainchild Medical assigned the ROM3 patents and trademarks to Hurford Global on Aug. 7, 2017.
Hurford Global alleges that despite obtaining the patents and trademark rights, they’ve never been provided with royalty payments in the amount stipulated by the licensing agreement or royalty reports.
Then on Oct. 16, 2019, the defendants allegedly gave Hurford Global the three-month notice required under the agreement that they intended to terminate the agreement.
The plaintiff alleges it has been damaged by the defendants’ breach of their contractual obligations.
Hurford Global seeks damages in excess of $1 million for each of the four counts, plus all other relief deemed just and proper.
The plaintiff is represented by Mark Goldenberg of Goldenberg Heller & Antognoli PC in Edwardsville.
U.S. District Court for the Southern District of Illinois case number 3:20-cv-484