Berkeley HeartLab Sues Health Diagnostic Lab for 'Conspiracy, Trade Secret Violations'

By Kirell Lakhman

Berkeley HeartLab, the CLIA lab unit of Celera, sued Health Diagnostic Laboratory and several former employees Jan. 14 for alleged "trade secret violations, breach of contract, conspiracy, [and] unfair competition," among other charges, according to a recent blog post.

The suit was filed two weeks after five BHL sales reps decamped to HDL and claims that in October 2008 a former BHL senior vice president founded Health Diagnostic "with the alleged intent to compete with Berkeley by providing diagnostic clinical tests that target cardiovascular disease and disease management similar to Berkeley’s clinical programs."

BHL is located in Alameda, Calif., while HDL is based in located in Richmond, Va. The suit was filed in the Eastern District of Virginia.

According to a post on the EBG Trade Secrets & Noncompete Blog, on Jan. 1 "five sales representatives resigned from Berkeley within thirty minutes of each other, and allegedly began working for Health Diagnostic soon thereafter."

The post says BHL "asserts that within the first two weeks of January, several health care providers, who had previously conducted business with Berkeley, had switched their business to Health Diagnostic, causing an approximate 35-percent decline in Berkeley’s sales volume from the previous year."

BHL's test menu offers testing exclusively for cardiovascular indications, while HDL offers testing services for cardiovascular diseases, diabetes, metabolic syndrome and glycemic control, inflammatory diseases, and renal and pancreatic diseases.

The EBG Trade Secrets & Noncompete post also says that "[w]hile unclear from the court papers, it appears that Berkeley’s support for its CFAA claim is its allegation that two individual defendants accessed their Berkeley work computers without authorization, or in excess of their authorization, while still employed by Berkeley, to remove data to benefit Health Diagnostic."

BHL is seeking "preliminary and permanent injunctive relief, including an order restricting the defendants from using or disclosing confidential or proprietary information, misrepresenting Berkeley’s ability to perform clinical tests, soliciting healthcare providers, and soliciting Berkeley employees."

The Celera unit is also seeking "an order to prevent the individual defendants from working at Health Diagnostic, and $350,000 in punitive damages from each defendant."

However, court documents say BHL is seeking $6 million in damages.