By Larisa Brass, The Knoxville News-Sentinel, Tenn. Knight Ridder/Tribune Business News
Dec. 2--Knoxville-based CTI Molecular Imaging, a member of its senior management team and two others have been sued by General Electric for allegedly stealing trade secrets and other proprietary information concerning GE's PET imaging business.
In response to one GE's of complaints, a Kansas judge has issued a temporary restraining order preventing former GE employee Lawrence Kessler from attending this week's Radiological Society of North America conference, a top annual trade show both CTI and GE plan to attend.
A response from two of the defendants filed last week stated that neither acted inappropriately nor violated confidentiality agreements with GE. CTI spokesman Mike Lawless said the company 'vigorously denies' the accusations.
CTI and GE compete in the field of positron emission tomography, or PET. The medical imaging technology is used to diagnose cancer and other diseases. Both companies sell PET scanners and the cyclotrons used to make the radioactive drugs PET needs to seek out breast cancer, heart disease, Alzheimer's and other health problems.
GE filed the lawsuits last month, one in Wisconsin where GE Medical Systems' business is based and one in Kansas, where Kessler lives and worked for GE Medical Systems.
The Wisconsin complaint names as defendants Thomas Hook, a former executive for GE Medical Systems whom CTI hired as senior vice president in July, and Joseph Sardano, a former national sales manger for GE who went to work for CTI in September as vice president for global sales.
According to the lawsuit, GE promoted Hook to general manager of global function imaging on July 1, just three weeks before he left the company to go to CTI. The suit accuses Hook of sharing confidential information he was privy to in his GE position with CTI and luring Sardano to join CTI and continue feeding the company GE's trade secrets.
Specifically, the lawsuit states that Hook obtained confidential information from an employee of a company that partners with GE.
The lawsuit alleges that Hook grilled the employee during a Major League baseball game in Milwaukee in July about how the partner intended to compete against one of CTI's businesses. During the exchange, the filing states, Hook did not disclose he would soon be working for CTI.
After Hook left GE, 'in spite of several reminders of his legal obligations to refrain from using or disclosing GE's trade secrets, Hook began wrongfully using and/or disclosing that information to the detriment of GE,' the filing states. The lawsuit said Sardano's more recent employment by CTI 'threatens to' compromise the company's business even further.
Responses filed on behalf of the defendants last week denied the allegations.
'Hook avers that he did not assume those positions (with CTI) or begin work with CTI for almost one month following his resignation from GE, and that he took with him from GE no documents (computerized or otherwise) or any other information allegedly belonging to GE,' the filing stated. 'Hook denies that he was recruited by competitors of GE because of any knowledge he had of GE's alleged trade secrets, but instead avers that he was targeted for hire because of his talents as a leader and manager.'
James Boyle, the Milwaukee attorney representing Hook and Sardano, said the lawsuit 'seems rather aggressive to us, given especially Tom and Joe's adamant denial that they have taken anything.'
Boyle said it's common for corporate employees to be hired by a competitor and still hold to their confidentiality agreements.
'They are basically saying they can't do their jobs without disclosing information. All sorts of people do that every day, change jobs and are able to maintain their confidences,' Boyle said. 'It's for GE to prove really what their secrets are and how it is that Tom and Joe are improperly using them. We just don't see it at this point.'
The second complaint, filed in Kansas, accuses CTI of using Kessler, who worked as a 'PET specialist' for GE Medical Systems, to continue obtaining confidential information, specifically information pertaining to the Radiological Society of North America's annual meeting in Chicago, which began Sunday.
The law suit said GE asked Kessler to resign Nov. 16 after learning that he planned to join CTI the following week. Lawless confirmed Kessler is employed by CTI.
According to the complaint, Kessler did not leave the company before learning confidential GE trade secrets for the upcoming conference, including 'GE strategies for the RSNA Annual Meeting, the presentations it intended to make at RSNA about current and new PET products, and the data upon which such presentations were based. That data included specifications and performance data for PET products and new methods for quantifying performance data for GE PET scanners.'
The complaint said a CTI customer informed GE that on Nov. 7 a CTI salesman said Kessler would attend the society trade show as a CTI employee, but that Kessler had not yet informed GE of his plans.
Kansas District Court Judge William Isenhour Jr. issued a temporary restraining order Nov. 21 barring Kessler from attending the trade show and sharing confidential information with CTI. The order also barred CTI from disclosing or using any proprietary information it had obtained from GE.
Kessler did not return calls for comment on the lawsuit.
Lawless had no comment on the suit last week, saying that CTI had not yet filed its response.
GE officials would not comment on either case.
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(c) 2002, The Knoxville News-Sentinel, Tenn. Distributed by Knight Ridder/Tribune Business News.
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