Carl Zeiss Meditec AG Reaches Favorable Legal Settlement with Topcon

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Feb 01, 2024, 09:00 ET

Landmark legal settlement protects customers, patients and the company's extensive digital innovation in ophthalmology

The settlement includes undisclosed financial payment to Carl Zeiss Meditec as well as other penalties for Topcon's role in trade secret theft and misappropriation

DUBLIN, Calif., Feb. 1, 2024 /PRNewswire/ -- Carl Zeiss Meditec AG announced today that it has reached a favorable resolution with Topcon to settle its lawsuit against the Japanese company's U.S.-based subsidiaries that had been pending in U.S. federal court for the Northern District of California. The settlement reinforces the protection of ZEISS's trade secrets and restores a level playing field for fair competition. The lawsuit asserted that Topcon had illicitly obtained stolen ZEISS files that included highly confidential information. Previously, the court had issued a preliminary injunction against Topcon, and more recently denied Topcon's motion for summary judgment on ZEISS's claims of trade secret misappropriation. Jury trial had been set to begin in February 2024.

As part of the settlement, Topcon agreed to several major concessions, including to:

pay a substantial undisclosed financial award to Carl Zeiss Meditec AG's U.S. subsidiary within 30 days;
destroy and not use any stolen ZEISS information within Topcon and by its external developers;
return a ZEISS CIRRUS device and related software that was improperly procured and wrongfully used by Topcon;
destroy all copies of source code for Topcon's HFA Extractor and DICOM Decoder software applications, which were developed using information stolen from ZEISS; and
remove DICOM Decoder from customers worldwide who have versions of Topcon's Harmony with that feature.

Additional terms of the legal settlement place a permanent ban on using the source code for Topcon's HFA Extractor or DICOM Decoder to develop similar products, and a two-year worldwide ban on Topcon regarding the future development or release of any features that are equivalent to its HFA Extractor or DICOM Decoder offerings. Furthermore, Topcon agreed to an additional consecutive two-year worldwide ban on the development of such features by any employee or consultant involved in this case, or by reverse engineering using ZEISS proprietary data. The court will retain jurisdiction to enforce the settlement for a period of five years.

"We have invested heavily over the years to earn our strong market position in ophthalmology and leadership in digital innovation," said Euan S. Thomson, Ph.D., CEO of Carl Zeiss Meditec Inc. "Developing market-shaping healthcare innovations to improve patients' lives is what we do at Carl Zeiss Meditec; it's in our DNA. And we cannot tolerate theft of our technologies of any kind."

"In today's digital world, it's more important than ever to safeguard our trade secrets and other sensitive business information in order to protect our customers and their patients worldwide," said Aaron Kim, General Counsel for Carl Zeiss Meditec Inc. "We're pleased with the outcome of this case as it addresses Topcon's illicit activities of the past, and serves to preserve these new protections going forward in the years ahead."

According to the lawsuit filed by Carl Zeiss Meditec AG's U.S. subsidiary, beginning in 2018 Topcon illegally obtained stolen ZEISS files. The lawsuit also described Topcon's efforts to compete with ZEISS by improperly obtaining and using ZEISS medical equipment and software licenses to develop products.

The settlement is effective as of January 9, 2024. The case is Carl Zeiss Meditec, Inc. v. Topcon Medical Systems, Inc., Topcon Healthcare Solutions, Inc., et al., United States District Court, Northern District of California, Oakland Division (case no. 19-cv-04162-YRG).

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SOURCE Carl Zeiss Meditec AG