Angioscore, Inc. v. Trireme Medical, Inc. et al

Filing 665

FINDINGS OF FACT AND CONCLUSIONS OF LAW. Joint Statement filed by 7/13/15. Signed by Judge Yvonne Gonzalez Rogers on 7/1/2015. (fs, COURT STAFF) (Filed on 7/1/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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ANGIOSCORE, INC.,

Case No. 12-cv-03393-YGR

Plaintiff,
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v.

United States District Court
Northern District of California

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TRIREME MEDICAL, INC., ET AL.,

FINDINGS OF FACT
AND CONCLUSIONS OF LAW

Defendants.
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INTRODUCTION

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This case staged a tension between the inveterate, established law of fiduciary duties held

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by corporate directors and breach of fiduciary duty claims that arise when directors of emerging

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companies are innovators in the technology themselves. In such an instance, plaintiff AngioScore

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would have innovation subverted to duty; defendants would have duty subverted to innovation.

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Neither party’s position admits of any balance, and neither can be wholly right. As set forth in

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this Order, the Court finds that where transparency, loyalty, and good faith predominate, a

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director’s fiduciary duties and his drive to innovate can co-exist, albeit with the duties to the

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corporation taking precedence.

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AngioScore brings state law claims for breach of fiduciary duty against one of its founders

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and former directors, Eitan Konstantino, alleging that while he was a member of AngioScore’s

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board, Konstantino developed a medical device directly competitive with AngioScore’s flagship

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product. Rather than offer the opportunity to acquire the new device to AngioScore, AngioScore

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maintains that Konstantino instead took it for himself. AngioScore also claims that corporate

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defendants Quattro Vascular PTE Ltd. and TriReme Medical, Inc. aided and abetted Konstantino’s

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breach, and that liability for these entities’ wrongdoing runs to QT Vascular Ltd. Defendants

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disagree, arguing in part that the duty was not breached either because no opportunity existed, or

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because AngioScore was not entitled to Konstantino’s intellectual property as a matter of law.

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Following a six-day bench trial on AngioScore’s claims, the parties submitted proposed

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findings of fact and conclusions of law. (Dkt. Nos. 643 (AngioScore’s Opening Post-Trial Brief

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(“AOB”), 645 (Defendants’ Opening Post-Trial Brief (“DOB”), 649 (AngioScore’s Post-Trial

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Reply Brief (“ARB”), 650 (Defendants’ Post-Trial Reply Brief (“DRB”)).) Specifically, those

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claims pertain to Konstantino’s breach of fiduciary duty; that Quattro and TriReme aided and

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abetted the same; QT Vascular is a successor in interest to Quattro and TriReme and therefore
liable for their aiding and abetting; and finally, that defendants have violated California’s Unfair

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United States District Court
Northern District of California

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Competition Law. Having reviewed the evidence of record, the arguments of the parties, and

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relevant case law, for the reasons set forth in these findings of facts and conclusions of law, the

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Court hereby FINDS for AngioScore in all material respects and AWARDS a remedy accordingly.
FACTUAL BACKGROUND1

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I.

The Parties

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Since its founding in 2003, AngioScore has designed, manufactured, and marketed

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specialty angioplasty balloon catheters that are used for the treatment of cardiovascular disease.

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Its signature product line, sold under the brand name AngioSculpt, consists of an nylon balloon

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surrounded by a nitinol structure. The AngioSculpt is sold in an array of dimensions and lengths

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to meet varying patient needs, although the structure of the balloon and cage remain unchanged in

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all material respects at each available sizing option. The purpose of the AngioSculpt is to treat

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cardiovascular disease, whereby plaque deposits along a blood vessel’s wall, forming what are

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called lesions. The plaque deposits harden and block, or occlude, blood flow, with potentially

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severe health risks. The AngioSculpt is used to open occluded or narrowed blood vessels at lesion

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sites by inflating the balloon to compress the plaque deposits against a vessel wall. As the balloon

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Appended to the end of this order are the Court’s detailed factual findings, setting forth
citations to evidence of record. The following narrative factual discussion summarizes the events
giving rise to this case in a manner unencumbered by extensive record citations.
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inflates, the AngioSculpt’s nitinol wire cage expands. The expanded cage sits atop the balloon

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and impresses upon plaque, “scoring it,” in an effort designed to “crack” the plaque and open the

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blood vessel, without injuring or puncturing the vessel wall. It is to this scoring feature that

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AngioScore owes its name. After use, the device can then deflate, returning to its original form,

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for removal from the patient’s body.

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Defendant Eitan Konstantino invented the AngioSculpt. An engineer by training with a

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doctorate in laser surface treatment, optical design, and materials science, Konstantino was a co-

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founder, President, and Chief Scientist of AngioScore, Inc. In this role, Konstantino sought to

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develop and bring the AngioSculpt to market, which involved gaining approval both in Europe
and through the United States Food and Drug Administration (“FDA”). To accomplish these

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goals, Konstantino sought funding from investors, who in turn acquired seats on AngioScore’s

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board of directors. Among those directors were Tom Raffin, a partner with the venture capital

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firm Telegraph Hill Partners, and Lisa Suennen, a partner at Psilos, another such firm.

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In 2005, the board decided that Konstantino would be better suited to a role directed to

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research and development. Tom Trotter then became AngioScore’s chief executive officer. When

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Trotter assumed the position, he and Konstantino discussed what role was most appropriate for

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Konstantino moving forward. In light of that conversation, Trotter offered Konstantino the role of

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Executive Vice President of Research and Development and Chief Scientific Officer.

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AngioScore wanted Konstantino to remain on the AngioScore team because of his central

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role at the company as a co-founder, and his skill as an engineer. Konstantino, however,

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expressed a desire to leave and work full time as President and CEO of TriReme Medical, Inc., a

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company he had founded for the purpose of developing bifurcation stents. Accordingly, in the fall

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of 2005, Trotter started to look for a replacement for Konstantino. Both he and Konstantino

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interviewed the candidates. At the same time, Konstantino requested that he be given permission

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to work on a developing technology with TriReme: endovascular bifurcation stents and delivery

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systems for the same. Although bifurcation stents are not competitive with specialty balloon

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angioplasty catheters, AngioScore’s board took this request seriously, ultimately adopting a

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resolution that granted Konstantino permission to pursue this limited goal, and waived

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AngioScore’s interest in the bifurcation stent technology.

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In late 2006, the role of AngioScore’s Vice President of Research and Development

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transitioned from Konstantino to Feridun Ozdil. While the details remain unclear, the relationship

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between Konstantino and Ozdil soon became strained and culminated in a physical altercation.

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Both Konstantino and Ozdil are intelligent scientists, but both are egotistical and authoritarian.

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The “he said”/“he said” personality conflict was never resolved definitively.

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In April 2007, Konstantino’s employment with AngioScore terminated, although he
remained on its Board of Directors. In his capacity as a board member, he continued to attend
AngioScore’s board meetings and received updates about AngioScore’s financial well-being and

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the status of its new product development up until he was asked to resign in February 2010.

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II.

Chocolate, the Device at Issue

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In the fall of 2009, Konstantino and his brother-like friend and colleague, Tanhum Feld,

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conceived of what was to become “Chocolate” during a telephone “brainstorming” session. Feld

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was discussing frame ideas for a balloon; Konstantino offered the notion of a balloon surface

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defined by pillows and grooves. The concept was that a nitinol cage would surround a nylon

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balloon. As the balloon inflated, it would protrude through the cage. The inflated balloon would

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then display a pattern of pillows and grooves, exerting force against plaque lining a vessel wall.

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With the concept for Chocolate established, Feld undertook to engineer the device,

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directing and coordinating efforts of TriReme employees with Konstantino’s approval. By

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October 2009, Konstantino applied for a provisional patent application, naming himself and Feld

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as co-inventors. Within just a few months, Chocolate had progressed from an intellectual concept

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to physical prototypes. In January 2010, Konstantino and other TriReme employees attended

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animal testing at Stanford for a Chocolate prototype.

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Along with supervising and directing the employees at TriReme in their efforts to develop

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Chocolate, Konstantino assumed the role of the businessman, conceptualizing the marketing of

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Chocolate and pitching it to investors under the guise of a corporate entity called “Proteus.”

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During the second half of 2009, Konstantino met with twenty to thirty investors, offering them the
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opportunity to invest in Chocolate. In these pitches, Konstantino represented that the Chocolate

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was being developed by “Proteus,” and that Chocolate’s intellectual property, design, prototypes,

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business model, team, and partnerships were all completed. With representations of this sort, he

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secured a grant from the Singapore Economic Development Board and continued to solicit

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additional investors.

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The similarities between AngioSculpt and Chocolate are obvious. Both are specialty

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angioplasty balloon catheters. Both are comprised of a nylon balloon surrounded by a nitinol

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structure. Both are used to treat peripheral and coronary artery disease by inflating to open

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occluded blood vessels. Neither leaves any metal behind in a blood vessel after use, unlike a stent.
Both are sold to the same customers and make overlapping marketing claims. Both are sold at

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premium pricing with roughly identical list prices. Given the similarities between the devices,

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Konstantino himself identified AngioScore as a partner for the Chocolate opportunity in investor

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presentations in 2009 and 2010.

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Konstantino knew that the devices would compete with one another and contemporaneous

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documents show that not only did he so intend, but this information was used as part of his

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investment pitch. In pricing Chocolate, Konstantino and employees at TriReme purposefully

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priced Chocolate exactly $25 below the list prices for AngioSculpt and targeted the same

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customers. Communications between Konstantino, Feld, and TriReme employees and officers

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from late 2009 into 2010 confirm that all those involved with the development of Chocolate –

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Konstantino, TriReme, and Quattro – were purposefully seeking to compete with the AngioSculpt

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in the specialty balloon catheter market. This included touting Chocolate for all its competitive

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advantages, including its potential as a drug-eluting balloon.

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While he directed the development of Chocolate as both a medical device and business

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opportunity, Konstantino nonetheless remained on AngioScore’s board of directors. Pursuant

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thereto, he was privy to all manner of confidential financial information, market information, and

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competitive information regarding the performance of the AngioSculpt device and AngioScore’s

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highly sensitive risk assessments. (PX 220 (July 2009 Board Meeting presentation, including

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strategic focus, discussions of business challenges).) He knew that AngioScore was having
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difficulty developing a 100mm version of its AngioSculpt as of July 2009. (Id.) And, he knew

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that the company was interested in pursuing a drug coated specialty balloon. (See PX 217

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(February 21, 2009 email between board members discussing efforts to attain drug coated balloon

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technology); PX 220 (July 2009 board presentation outlining future business strategy including

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“extra long” devices of 100mm and a drug coated device).) In addition, Konstantino knew that the

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financial status of AngioScore in late 2009 to early 2010 was relatively strong. AngioScore was in

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a prime position to raise further capital, had considerable cash reserves, and was in the process of

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dedicating resources to improving its presence in the specialty balloon catheter market, even

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though it had just emerged from the expense of an unwarranted investigation. Indeed,
AngioScore’s December 2009 Monthly Report, distributed for the board meeting, reflected that

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cash on hand totaled $15.3 million. The report described this figure as an “[o]utstanding result.”

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(DX 1199.) That AngioScore could have exploited the Chocolate opportunity, had it been offered,

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is not subject to reasonable dispute.

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Notably, in December 2009, Konstantino had a conversation with AngioScore’s CEO,

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Trotter, regarding TriReme’s development of a plain old balloon angioplasty (“POBA”) device

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called “Glider.” At trial, both Trotter and Konstantino confirmed that this conversation took

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place. Konstantino told Trotter that TriReme was too small to commercialize the Glider product,

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and that he was in search of a funder. He offered the Glider to AngioScore for distribution

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purposes. In his deposition, Konstantino explained that conversation as follows:

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I share[d] with him the specifics of the product, the technical
features of this product. I share[d] with him how do we think this
product may fit in the marketplace, what we view [are] the features
or the advantages of this product. And I offered him to do some sort
of collaboration. Specifically we discussed -- or I offered two
collaborations or two opportunities. I don’t mean opportunities in a
legal context. One was to distribute these. Told him, Tom, we are a
small company. We don’t have commercial capabilities. You have
that. This is not a product you put in the bag. We don't have
commercial capabilities. You do. This is another product you can
put in the bag. You can reduce the overhead or the overhead
location on sale slips. There are many perceived benefits. And I
also talked with him about the what you call the fact, maybe, that
AngioSculpt was not a highly deliverable product, at least this is in
the perception of physicians who are using the product.
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(See Trial Transcript (“Trial Tr.”2) at 136:23-138:1 (reading Konstantino Dep. at 643:7-644:3).)
Trotter confirmed that when Konstantino revealed that TriReme had been working on the

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Glider, he expressed concern that TriReme was venturing into angioplasty balloons at all.

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Because Konstantino had presented TriReme’s Glider as an ordinary POBA, however, the Glider

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would not be acutely competitive with AngioSculpt. Notably absent from this conversation was

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any mention of Chocolate, which had been in development for months, offered to others as a

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corporate opportunity, and was about to undergo porcine testing.

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After sitting through the February 3, 2010 AngioScore board meeting, Konstantino

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approached Trotter and asked to meet privately. Referencing the December 2009 conversation in
which he had offered AngioScore the Glider POBA balloon, Konstantino told Trotter that

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TriReme was “considering developing a specialty balloon catheter for peripheral indications,” and

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that TriReme had been actively working on “something for the future” in specialty balloon

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catheters. To say that Konstantino “downplayed” the facts surrounding Chocolate would be an

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understatement. Konstantino did not inform Trotter that the development of TriReme’s specialty

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balloon, which by that point had been called Chocolate for several months, was well underway.

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He did not disclose his personal role in the development and conceptualization of the device, nor

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did he disclose that a prototype had been created, a patent application and been submitted, animal

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testing had occurred, or that he had already engaged potential investors and funding sources.

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Trotter was nonetheless shocked by this news. Specialty balloons were AngioScore’s focus. He

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was of the belief that prior to that point, TriReme had been focusing on bifurcation stents and had

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only recently started to consider POBA devices, and even then, only the Glider POBA. Trotter

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informed Konstantino that he did not think further discussion was appropriate and asked him to

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leave.

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Immediately following that meeting, Trotter relayed the conversation with Konstantino to

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members of AngioScore’s board. The board expressed a universal belief that Konstantino should

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References to “Trial Tr.” refer to the consolidated transcript of trial, which appears in six,
sequentially paginated volumes at Docket Entries 616, 617, 622, 623, 637, and 638.
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resign as soon as possible. If TriReme developed a specialty balloon, Konstantino would have

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direct a conflict of interest. The board was concerned that TriReme was considering potentially

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competing with AngioScore. At that point, no one at AngioScore knew that a competitive

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specialty balloon device had been developed under Konstantino’s direction and control.
The next day, Trotter sent Konstantino an email entitled “Board of Directors Position,”

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copying AngioScore’s attorney, John Sellers. In it, Trotter restated his concerns about TriReme

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moving into the specialty balloon market, and stated that the board members with whom he had

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spoken saw this as a “clear conflict of interest.” The “consensus opinion” was that Konstantino

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“need[ed] to resign from the Board immediately [and] probably should not have participated in
yesterday’s Board Meeting.” Trotter told Konstantino that Sellers would be in touch to make

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arrangements for his resignation.
Konstantino’s response was brief. Again, he did not disclose the existence, or

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development status of the Chocolate device, nor did he disclose his intimate involvement with the

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project. Rather, and importantly, he began his campaign of active misdirection. Thus, he

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responded: “TriReme has not made any decision to make such [a] change and I was giving you

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very early heads up to something that may take place in the future, or may never happen[.]”

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(emphasis supplied).
On February 4, 2010, John Sellers responded to Konstantino in an email. Sellers informed

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Konstantino that “e[]ven if you are just contemplating . . . you have important fiduciary duties

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[and] ongoing confidentiality obligations.” Later that day, the two men spoke on the telephone for

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five to ten minutes. Sellers again emphasized Konstantino’s fiduciary obligations to AngioScore

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as a director, including that a conflict of interest would exist if TriReme developed a potentially

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competing technology. They also discussed the logistics of Konstantino’s resignation from the

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Board.

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The next day, February 5, 2010, Konstantino replied to Sellers, copying Trotter, Suennen,
and Raffin:
As we discussed, I’m surprised and disappointed that you and the
company jumped to the conclusion that I should resign from the
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board based on assumptions after receiving bits and pieces of
information. I am keenly aware of my obligations as a board
member and this is precisely why I am coming to AngioScore
[now]; before any new project is started.

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(PX 107 (emphasis supplied).) To investigate the issue further, Suennen reached out to former

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AngioScore CEO, co-founder, and one of AngioScore’s largest common stockholders, Ephraim

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Heller, to discuss filling Konstantino’s board seat and to find out whether Heller knew if

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Konstantino was working on a new specialty balloon catheter at that time. (See DX 1292.)

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Although Konstantino had done work previously that Heller suspected may have conflicted with

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his obligations to AngioScore, Konstantino had reassured him that all such activities had been
precleared with AngioScore. Heller also stated that at that time, he believed that Konstantino was

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working to bring a “competitive product” to market, although it was not clear whether such device

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was the Glider, of which AngioScore was already aware, or whether it was a specialty balloon.

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Suennen also spoke with Mike Lynn, a TriReme board member. Lynn stated that he had no

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knowledge or recollection that TriReme was working on a specialty balloon catheter.
Based on the above, the board decided to investigate whether Konstantino or TriReme had

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in fact developed a competitive device. To that end, they questioned Konstantino pointedly. On

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February 10, 2010, John Sellers sent a letter to Konstantino entitled “Obligations to AngioScore,

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Inc.” (PX 419.) Knowing only of the Glider, AngioScore’s board sought information relative to

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whether Konstantino had been working on a device that built off of the Glider model, such as for

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example adding a metal cage around the balloon structure. The top paragraph on the second page

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reads:

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Our current presumption is that you have handled these matters in a
manner that fully protects AngioScore and fully complies with your
obligations to AngioScore.

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AngioScore acknowledged that as of the date of Konstantino’s resignation, he and
TriReme had “every right going forward to develop products that may compete with AngioScore
as long as you do not use or disclose AngioScore[’s] confidential information or intellectual
property.” (Id.) Nonetheless, Sellers requested that Konstantino confirm that no such activities
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took place while Konstantino was on AngioScore’s board: “we respectfully request that you

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promptly provide the AngioScore Board of Directors further information regarding these activities

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in order to allow the Board to assess whether they are competitive to AngioScore.” (Id.)

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In response, Konstantino’s counsel sent a letter on February 23, 2010 in which Konstantino

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disavowed any development of a specialty balloon by TriReme and affirmed that he had no role in

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the development of any such device. Specifically, Konstantino’s counsel reiterated that prior to

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Konstantino’s resignation on February 5, 2010, he was not “involved in any development work or

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licensing of angioplasty balloon technology for the coronary or periphery markets that involves

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specialized features such as scoring, cutting, or drug eluting elements.” (PX 420 (emphasis
supplied).) Likewise, Konstantino represented that he was not involved “in any development or

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licensing of angioplasty balloon technology for the coronary or periphery markets that makes

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similar claims to that of the AngioSculpt product.” (Id.) Konstantino restated that TriReme was

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“considering, in the future, the possibility of entering the field of specialized balloons,” but that

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before February 5, 2010, “TriReme ha[d] not developed any products . . . that compete[d] with

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AngioScore’s products.” (Id. (emphasis supplied).)

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Although the board had no factual basis at the time for believing that such representations

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were false, Konstantino’s letter was technically non-responsive to Sellers’s original question and

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accordingly, AngioScore continued to pursue the matter.

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In an email to the board, Trotter asked for opinions and feedback on Konstantino’s

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response, and speculated that Konstantino may have been involved in developing a scoring

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version of Glider to compete with AngioScore in the future.3 At that point, Trotter began to

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Two days later, Jim Andrews, AngioScore’s Chief Financial Officer, forwarded Trotter a
TriReme press release concerning its receipt of FDA 510K Clearance for the Glider PTA Balloon
Catheter. (DX 1317.) Trotter forwarded the press release to the board of directors less than ten
minutes later. Given that the Glider opportunity was first presented to Trotter in December of
2009, Trotter noted that “obviously this has been in the works for many months (testing,
submission, approval, etc.) while Eitan was a member of our Board[.]” (Id.) He was concerned
that Konstantino had developed the Glider PTA Balloon Catheter while he had possession of a
“considerable amount of [AngioScore’s] confidential Sales & Marketing, Product Development
and Regulatory information.” (DX 1317.) Although at that time Glider was a POBA and not a
specialty balloon, Trotter was concerned that Konstantino “may be planning to add a scoring
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prepare for potential legal action against Konstantino, should any “specialty balloon” come to

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light. He asked AngioScore’s patent counsel, Jim Heslin, to monitor new patent applications for

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scoring/cutting balloons to see what, if anything, Konstantino might file. And he asked Andrews

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to research whether AngioScore’s insurance policy provided coverage for breaches of directors’

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duties and obligations.

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AngioScore continued to investigate its concerns regarding Konstantino’s involvement

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developing a competitive product with Konstantino directly. Sellers followed up with another

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letter on March 5, 2010 directed to counsel for Konstantino, and the boards of both TriReme and

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AngioScore. In it, Sellers remarked that previous representations by Konstantino had avoided
squarely addressing AngioScore’s concern, namely, that during Konstantino’s service as a board

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member, he:

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obtained proprietary and confidential information about AngioScore,
the peripheral market, and the role of specialty balloons in that
market, while at the same time developing and pursuing plans
within TriReme to pursue those same markets with another device.
(PX 421 (emphasis supplied).) Sellers further stated that AngioScore’s board “specifically would
like to know whether prior to February 5, 2010, Mr. Konstantino and/or TriReme evaluated,
negotiated, or otherwise pursued the acquisition or licensing of any technology that competes with

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AngioScore’s products, and if so, why that opportunity was not provided to AngioScore in

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accordance with Mr. Konstantino’s duties as a Board member of AngioScore.” (Id.)

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Again, counsel for Konstantino responded, unequivocally and unambiguously denying that
any such activity had taken place. Characterizing AngioScore’s questioning as predicated on

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element over time.” Raffin speculated that the lead time on Konstantino’s success for any such
scoring product would be three to five years out, and Trotter responded that while he agreed on the
likely timing of any such device, AngioScore “[n]eed[s] to watch him carefully.” (Id.) Raffin and
Trotter both testified that at this time, they were concerned singularly on the Glider balloon, which
was not directly competitive with AngioSculpt, and Konstantino’s possible appropriation of that
POBA platform to make a specialty balloon. Neither suspected that there was a separate specialty
balloon platform already underway. Due to the differences between POBAs and specialty
balloons like AngioSculpt, the Court finds that the fact of Glider’s existence cannot be fairly said
to have put AngioScore on notice of Chocolate’s existence.
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“unsubstantiated accusations” against Konstantino, counsel informed AngioScore that should such

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accusations continue, Konstantino will “have no choice but to consider his legal options.” (PX

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423.)

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With that, AngioScore considered its inquiry complete. Konstantino’s representations had

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sufficiently assuaged any and all concerns about whether he or TriReme had developed a specialty

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balloon. AngioScore was satisfied that nothing of the sort had occurred. Based on the nature and

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strength of Konstantino’s representations, a reasonable person would have come to the same

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conclusion.
AngioScore only learned that Chocolate existed a year and a half later, in the second half

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of 2011, when a sales representative called the Washington Hospital Center and heard that a

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presentation had been made on a new device called “Chocolate.” However, it was only after

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Feld’s deposition in the spring of 2014, in connection with AngioScore’s patent case, that

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AngioScore discovered all of the facts referenced above evidencing that Chocolate had been

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developed while Konstantino sat on AngioScore’s board. That discovery yielded the claims

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herein addressed.
CONCLUSIONS OF LAW

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As a member of AngioScore’s board of directors, Konstantino breached his
fiduciary duty to AngioScore and usurped a corporate opportunity when he
developed Chocolate for his own benefit and failed to offer the opportunity to
AngioScore.

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A. The Corporate Opportunity Doctrine Framework

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I.

The corporate opportunity doctrine “represents but one species of the broad fiduciary

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duties assumed by a corporate director or officer.” Broz v. Cellular Info. Sys., Inc., 673 A.2d 148,

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154 (Del. 1996). As a fiduciary of a corporation, directors agree to “place the interests of the

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corporation before his or her own in appropriate circumstances.” Id. “At the core of the fiduciary

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duty is the notion of loyalty—the equitable requirement that, with respect to the property subject

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to the duty, a fiduciary always must act in a good faith effort to advance the interests of his

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beneficiary.” In re Mobilactive Media, LLC, No. CIV.A. 5725-VCP, 2013 WL 297950, at *21

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(Del. Ch. Jan. 25, 2013) reargument denied, No. CIV.A. 5725-VCP, 2013 WL 1900997 (Del. Ch.
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United States District Court
Northern District of California

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12

May 8, 2013) (citing Dweck v. Nasser, 2012 WL 161590, at *12 (Del. Ch. Jan. 18, 2012)).
Noting that corporate directors stand in fiduciary relationship to the corporations they
serve, the Delaware Supreme Court recognized in Guth v. Loft, Inc., 5 A.2d 503 (Del. 1939) that:
public policy, existing through the years, and derived from a
profound knowledge of human characteristics and motives, has
established a rule that demands of a corporate officer or director,
peremptorily and inexorably, the most scrupulous observance of his
duty, not only affirmatively to protect the interests of the corporation
committed to his charge, but also to refrain from doing anything that
would work injury to the corporation, or to deprive it of profit or
advantage which his skill and ability might properly bring to it, or to
enable it to make in the reasonable and lawful exercise of its powers.
The rule that requires an undivided and unselfish loyalty to the
corporation demands that there shall be no conflict between duty
and self-interest. The occasions for the determination of honesty,
good faith and loyal conduct are many and varied, and no hard and
fast rule can be formulated. The standard of loyalty is measured by
no fixed scale.

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19
20
21
22
23
24
25
26
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Id. at 510. The corporate opportunity doctrine seeks to define the bounds of this duty where a
director may be inclined to take a business opportunity for him or herself. See id. The rule
enunciated in Guth is this:
if there is presented to a corporate officer or director a business
opportunity which the corporation is financially able to undertake,
is, from its nature, in the line of the corporation's business and is of
practical advantage to it, is one in which the corporation has an
interest or a reasonable expectancy, and, by embracing the
opportunity, the self-interest of the officer or director will be
brought into conflict with that of [the] corporation, the law will not
permit him to seize the opportunity for himself.
Id. at 510-11. Thus, under Delaware law, “[t]he elements of misappropriation of corporate
opportunity are: (1) the opportunity is within the corporation’s line of business; (2) the corporation
has an interest or expectancy in the opportunity; (3) the corporation is financially able to exploit
the opportunity; and (4) by taking the opportunity for his own, the corporate fiduciary is placed in
a position inimical to his duties to the corporation.” In re Mobilactive Media, 2013 WL 297950,
at *21. Once the plaintiff has shown the breach of the director’s duty of loyalty, the burden

28
13

1

switches to the fiduciary to show that he or she did not seize a corporate opportunity “because

2

either the corporation was presented the opportunity and rejected it, or because the corporation

3

was not in a position to take the opportunity.” Grove v. Brown, No. 6793-VCG, 2013 WL

4

4041495, at *8 (Del. Ch. Aug. 8, 2013). Delaware courts further recognize that “a director or

5

officer may take a corporate opportunity if: (1) the opportunity is presented to the director or

6

officer in his individual and not his corporate capacity; (2) the opportunity is not essential to the

7

corporation; (3) the corporation holds no interest or expectancy in the opportunity; and (4) the

8

director or officer has not wrongfully employed the resources of the corporation in pursuing or

9

exploiting the opportunity.” Broz, 673 A.2d at 155 (emphasis omitted).4

10

The rule set forth in the Delaware cases accords with economic and public policy, and

United States District Court
Northern District of California

11

civic accountability. Put simply, men are not angels. We require structures to govern conduct.

12

See FEDERALIST NO. 51. The corporate structure necessarily requires a separation of ownership

13

and control, which produces a conflict: the shareholders are the principle bearers of risk, but the

14

board of directors are vested with the power to make managerial decisions. (See Trial Tr. at

15

646:7-21 (Testimony of Prof. Eric Talley).) Centralizing decisionmaking authority in a board of

16

directors presents efficiencies insofar as shareholders can diversify their interests, which, in turn,

17

has contributed to substantial economic growth and development. (Id. at 646:22-647:21.)

18

However, the concentration of decisionmaking power in individuals who do not necessarily bear

19

the risk creates a misalignment of interests. (Id. at 647:23-649-9.) The general purpose of

20
4

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22
23
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25
26
27
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The parties dispute the precise interplay between the test enunciated in Guth, and the
counter-test, or corollary test, enunciated in Broz. The first test sets forth the elements of
misappropriation of a corporate opportunity; the second test recognizes circumstances whereupon
a director or officer may take a corporate opportunity for himself. Although the tests appear at
variance, in substance, they are concordant. The fundamental question is whether a corporate
director, standing in fiduciary relation to a corporation he serves, has fallen short of “the most
scrupulous observance of his duty not only affirmatively to protect the interests of the corporation
committed to his charge, but also to refrain from doing anything that would work injury to the
corporation, or to deprive it of profit or advantage which his skill and ability might properly bring
to it, or to enable it to make in the reasonable and lawful exercise of its powers.” Guth, 5 A.2d at
511. That these tests are concordant is evident from their overlap. Critically, both the Guth test
and the Broz corollary test turn on whether the corporation had an interest or expectancy in the
opportunity. Because the Court finds that AngioScore did have an interest or expectancy in the
Chocolate, under both tests, Konstantino has breached his duty of loyalty.
14

1

corporate governance principles, specifically, the duties of care and loyalty, is to control for the

2

moral hazards that arise when directors either shirk their responsibilities or self-serve. (Id. at

3

649:10-650:25.) Without strong corporate governance principles, the trust that underpins a

4

shareholder’s decision to invest will dissolve, with broader economic consequences to follow. (Id.

5

at 651:17-652:10.)

6
7
8
9

Whether a corporate opportunity has been usurped is “a factual question to be decided by
reasonable inferences from objective facts.” Guth, 5 A.2d at 513.
B. The Corporate Opportunity Doctrine applies to a director who is also an
inventor.
Throughout this case, defendants have argued that the corporate opportunity doctrine

11
United States District Court
Northern District of California

10

cannot apply where, as here, a director invents a technology, even where such technology is

12

directly competitive with that of the corporation he serves. Defendants maintain that because

13

Chocolate was intellectual property belonging to Konstantino and the product of his own

14

innovation, this necessarily obviates any fiduciary obligation to offer Chocolate to AngioScore.

15

(DOB at 2-3.) The Court disagrees.

16

The fact of inventorship does not absolve a director of his fiduciary obligations with

17

respect to inventions he may develop that compete with the corporation he serves. To hold

18

otherwise would work an absurdity. Directors of corporations would be free to invent and develop

19

competing technologies for their own benefit, concealing the same from the companies they serve,

20

even where elements of those inventions would likely benefit the companies. This scenario stands

21

in stark opposition to the foundational principles of corporate governance, which demand that

22

directors exalt the interests of the companies they serve above their own. Guth, 5 A.2d at 510

23

(“the rule . . . demands of a corporate officer or director, peremptorily and inexorably, the most

24

scrupulous observance of his duty, not only affirmatively to protect the interests of the corporation

25

committed to his charge, but also to refrain from doing anything that would work injury to the

26

corporation, or to deprive it of profit or advantage which his skill and ability might properly bring

27

to it, or to enable it to make in the reasonable and lawful exercise of its powers.”). Most seriously,

28

the extension of defendants’ preferred rule would have directors entertain divided loyalty. The
15

1

position is untenable. See id. (“[t]he rule ... demands that there shall be no conflict between duty

2

and self-interest”). The rule makes logical sense. A director can leave the corporation thereby

3

dissolving the duties he owes. A corporation cannot and therefore relies on untarnished fidelity.
Defendants cite no case holding conclusively in their favor, but rather argue by analogy to

5

Equity Corp v. Milton, 221 A.2d 494 (Del. 1966). That case is distinguishable. First, the facts of

6

Milton counseled against a finding that the opportunity to that interest rightfully and in fairness

7

belonged to the corporation. Milton, 221 A.2d 497; see also Thorpe v. CERBCO, Inc., No. CIV.A.

8

11713, 1993 WL 443406 (Del. Ch. Oct. 29, 1993) (“While courts have considered a number of

9

criteria in evaluating whether a director has usurped a corporate opportunity, the essence of this

10

doctrine is ‘that a director may not appropriate something for himself that in all fairness should

11
United States District Court
Northern District of California

4

belong to his corporation.’”) (citing Milton, 221 A.2d at 497). Applying this standard, the Milton

12

court determined that the claimed opportunity was not, in fairness, one belonging to the

13

corporation – it was not of practical advantage to the corporation (see id. at 497), in keeping with

14

the business of the corporation, nor did it fit into an established corporate policy (see id.). Having

15

laid this foundation, the court stated, “if any doubt remains,” the shares that had previously been

16

controlled by Milton were later reacquired by him; simply put, the entire transaction from start to

17

finish concerned Milton’s property. Essentially, because there was nothing wrong with a

18

corporate officer owning and controlling stock of his corporation, the court found that the duty of

19

loyalty is not violated when a director shifts that ownership as he sees fit. (Id. at 498-99.) Thus,

20

there was conclusively no corporate opportunity at issue in Milton.5

21
22
23
24
25
26
27
28

5

Likewise, defendants’ reliance on Science Accessories Corp. v. Summagraphics Corp.,
425 A.2d 957 (Del. 1980) does not aid their position. The question presented in Summagraphics
was exceedingly narrow: did the trial court’s finding that no corporate opportunity existed (which
finding was not appealed to the Delaware Supreme Court), leave room for a separate claim for
breach of fiduciary duty? Id. at 962 (“The thrust of SAC’s fiduciary breach of duty argument is
that the trial court’s conceded finding that Brenner’s concept was not an opportunity available to
SAC but one that defendants could take for themselves is not determinative of SAC’s right to
equitable relief by reason of defendants’ breach of so-called “independent” fiduciary duties owed
to SAC.”). The Delaware Supreme Court thus considered the scope of fiduciary duty law and
concluded that where no corporate opportunity is found to exist, as was the case in
Summagraphics, that conclusion “finally determines the right of the corporate officer to treat the
opportunity as his own.” Id. at 964 (quotation omitted)). The fact that no corporate opportunity
16

1

The logic enunciated in Milton does not compel a finding in defendants’ favor here. The

2

essential question is whether a director has appropriated something for himself that, in all fairness,

3

should belong to his corporation. The determination of this question is always one of fact to be

4

determined from the objective facts and surrounding circumstances. Johnston v. Greene, 121

5

A.2d 919, 923 (Del. 1956). Here, the Court is confronted with facts establishing that Konstantino,

6

aware of AngioScore’s competition-sensitive information, its then-existing financial condition,

7

design challenges, and business objectives, developed a competing device while on AngioScore’s

8

board and took affirmative steps to exploit it himself while concealing it from AngioScore. At the

9

same time, Konstantino was aware that he owed AngioScore fiduciary duties. On these facts, that
Konstantino invented the competitive technology does not serve his argument that he should be

11
United States District Court
Northern District of California

10

absolved of his fiduciary obligations to AngioScore. Rather, it works the opposite effect:

12

Konstantino’s failure to abide by his duty is plainly all the more offensive. For these reasons, the

13

Court finds that it cannot indulge defendants’ position and find that the corporate opportunity

14

doctrine does not apply.

15

At the same time, AngioScore’s position is equally untenable. AngioScore posits that by

16

virtue of Konstantino’s position as a director, AngioScore had a right to the Chocolate outright,

17

and that therefore Konstantino was obligated to give the opportunity to AngioScore. The logical

18

extension of this position demonstrates its implausibility. Were this the case, Konstantino’s

19

invention assignment agreement would have been superfluous in the first instance, and so, too,

20
21
22
23
24
25
26
27
28

existed in Summagraphics was critical to the court’s reasoning, and essential to its holding. See
id. (“No case authority has been cited by appellant to support the proposition that key corporate
personnel are under a duty to disclose to their employer and not divert from him a business
proposition that has been found not to be available and essential to the corporation.”).
Furthermore, to the extent defendants argue that Summagraphics sanctions an employee’s acts in
anticipation of eventual competition, the limits of this freedom are well-defined: a fiduciary’s
right to make such arrangements is “by no means absolute,” particularly in instances where the
fiduciary engages in “usurpation of [the] employer’s business opportunity,” and “the ultimate
determination of whether an employee has breached his fiduciary duties to his employer by
preparing to engage in a competing enterprise must be grounded upon a thoroughgoing
examination of the facts and circumstances of the particular case.” Id. at 965 (citations, quotations
omitted). Here, the Court finds that Konstantino did usurp (indeed, created and then usurped) a
corporate opportunity, and that his machinations were not merely preparatory.
17

1

would all invention assignment agreements between directors and the corporations they serve.

2

The Court cannot overlook the effect such a rule would work in the context of intellectual property

3

and emerging technologies. Critically, holding that directors who are also innovators must

4

relinquish to the corporations they serve technologies falling within that corporation’s line of

5

business, in which the corporation has an interest or expectancy, or which aligns with its business

6

purpose and objectives, would serve to undermine innovation. Indeed, holding as AngioScore

7

requests would subvert fundamental principles of intellectual property respecting inventors’ rights,

8

which are designed to encourage, not discourage, ingenuity and innovation. The fact that this case

9

concerns a medical device, which is currently being used in medical procedures in this country,

10

United States District Court
Northern District of California

11

only serves to underscore the public interest in innovation.
With these positions, the parties posit a tension: do fiduciary duties extend so far as to

12

compromise, potentially fatally, innovation; or, by contrast, does a director’s ingenuity and

13

innovation provide an escape route from his fiduciary duties? Neither extreme prevails. A court

14

must apply the principles of the law in such a way that balances the wise public policy behind the

15

Guth rule, with the public policy counseling in favor of innovation. For this reason, the Court

16

finds that although AngioScore was owed fiduciary duties by Konstantino, those duties did not

17

entitle AngioScore to outright ownership of the Chocolate opportunity at any point in time.

18

Rather, what Konstantino’s fiduciary duty demanded was that he offer AngioScore the opportunity

19

to acquire the rights to the Chocolate. The Court need not venture as to specifics of such a

20

transaction, but having chosen to remain on AngioScore’s board, the offering must occur to satisfy

21

both the law of fiduciary duties and the public interest in innovation. Offering an opportunity to

22

AngioScore meets Delaware’s demand that directors not undertake any activity that would work

23

harm to the corporation they serve and prioritize the interests of those corporations above their

24

own. See In re Mobilactive Media, LLC, 2013 WL 297950, at *21 (“At the core of the fiduciary

25

duty is the notion of loyalty . . . with respect to the property subject to the duty, a fiduciary always

26

must act in a good faith effort to advance the interests of his beneficiary.”). It also accords with

27

directors’ duty not to “do anything” that would “deprive” the corporations they serve “of profit or

28

advantage which [their] skill and ability might properly bring to it.” Guth, 5 A.2d at 510. And, it
18

1

remains faithful to the general principle that a director can establish conclusively no breach of his

2

fiduciary duty where, in keeping the interests of the corporation he serves first in mind, the

3

corporation is presented the opportunity and rejects it. See Grove, 2013 WL 4041495, at *8. By

4

ensuring that transparency and good faith predominate, the application of the rule in this manner

5

assures that any conflict will be resolvable.

6
C. Application of the Corporate Opportunity Doctrine
7
8
9
10

1. Chocolate was an “opportunity” when Konstantino was on
AngioScore’s Board, and as such, falls under the Corporate
Opportunity Doctrine.
Longstanding law requires that certain “opportunities” be offered to the corporation. The

United States District Court
Northern District of California

11

definition of an “opportunity” is “a favorable juncture of circumstances” or “a good chance for

12

advancement or progress.” MERRIAM-WEBSTER, New Collegiate Dictionary (9th ed. 1988). The

13

evidence adduced in this case establishes conclusively that as of the date Konstantino resigned

14

from AngioScore’s board of directors, Chocolate was a concrete business opportunity. By that

15

point, Chocolate had developed from a mere idea into a concrete opportunity. It had been in

16

development for approximately five months. The initial “brainstorming” discussions in the second

17

half of 2009 had resulted in the creation of many engineering design models, followed by physical

18

models and prototypes. By January of 2010, the Chocolate design was so complete that

19

prototypes were suitable for testing, and in fact, was the subject of a porcine study at Stanford,

20

which TriReme employees and Konstantino attended.

21

Not only was Chocolate sufficiently developed to enable testing, development of

22

Chocolate had advanced to the point that Konstantino felt it appropriate to market it as an

23

opportunity for investors. The fact that much development remained is no relevant to whether the

24

opportunity had already manifested. Defendants cannot escape that during the second half of

25

2009, Konstantino offered between twenty and thirty investors the opportunity to invest in

26

Chocolate. In preparation for investor meetings, Konstantino prepared slide presentations in

27

which he described the Chocolate technology, extolled its competitive, medical virtues, and

28

delineated the phases for potential investment. In a November 2009 presentation seeking funding
19

1

from the Singapore Economic Development Board, Konstantino stated that the Chocolate “IP,

2

Concept design, Prototypes, business model, Team, [and] partnerships” were all “completed.” In

3

furtherance of his financial objectives, Konstantino corresponded with potential investors. In such

4

communications, he represented that Chocolate’s “initial design already works well and attracts a

5

lot of attention” and that Chocolate’s product design was completed.
Such claims were not mere puffery designed to solicit investment. In early 2010, design of

7

the Chocolate was essentially complete. Indeed, Chocolate’s 510K application in 2011 referenced

8

testing completed on Chocolate’s nitinol cage designs created in January 2010. Based on these

9

facts, that Chocolate had been developed to the point sufficient to render it a concrete business

10

opportunity prior to Konstantino’s resignation from AngioScore’s board of directors cannot be

11
United States District Court
Northern District of California

6

reasonably disputed. If the Chocolate opportunity was sufficiently concrete for twenty to thirty

12

investors, it was sufficiently developed to be offered to AngioScore. The Court so finds.

13
14

2. Chocolate falls within AngioScore’s line of business.
An opportunity is within a corporation’s line of business if it is “an activity as to which

15

[the corporation] has fundamental knowledge, practical experience and ability to pursue, which,

16

logically and naturally, is adaptable to its business having regard for its financial position, and is

17

one that is consonant with its reasonable needs and aspirations for expansion.” In re Mobilactive

18

Media, 2013 WL 297950, at *21 (citing Guth, 5 A.2d at 514). This factor is to be broadly

19

construed. Id. (citing Dweck, 2012 WL 161590, at *13).

20

The Court finds that Chocolate falls within AngioScore’s line of business. Since its

21

founding in 2003, AngioScore has designed, manufactured, and marketed angioplasty balloon

22

catheters surrounded by a nitinol structure that are used for the treatment of cardiovascular disease

23

and sold under the brand name AngioSculpt. The evidence demonstrates conclusively that

24

AngioSculpt and Chocolate are similar in both purpose and function. AngioSculpt and Chocolate

25

are both angioplasty balloon catheters consisting of a nitinol cage surrounding a semi-compliant

26

balloon. Both are used to open occluded or narrowed blood vessels at lesion sites by inflating to

27

compress plaque deposits against the vessel wall and then deflating for removal from the patient’s

28

body. Both devices were cleared by the FDA with overlapping indications for use. Indeed, there
20

1

are no indications for which the peripheral Chocolate device is cleared that the peripheral

2

AngioScore device is not and the devices make similar marketing claims. Both specialty balloons

3

and as such, enjoy premium pricing over that of plain old balloon angioplasty (POBA) products.

4

In fact, Chocolate is priced at $25 per unit less than the AngioSculpt. Moreover, as set forth in

5

more detail below, Chocolate is a competitor to the AngioSculpt with a common customer base.

6

Under Delaware law, the “line of business” element is to be broadly construed. The Court

7

finds it met here. The similarities in terms of purpose and function establish that AngioScore had

8

“fundamental knowledge and practical experience” to pursue Chocolate. That AngioScore has

9

historically focused on products that “scored” plaque is of no moment, for the devices are
materially similar and their differences amount to variations on a common theme. For example,

11
United States District Court
Northern District of California

10

both devices are comprised of nylon balloons encased in nitinol cages. No other specialty

12

balloons on the market use nitinol cage on a semi-compliant balloon – the Boston Scientific

13

Cutting Balloon uses surgical steel, and the Vascutrak uses stainless steel guide wires.6 Further,

14

given the overlapping features and design, AngioScore’s manufacturing and distribution process

15

could have easily been modified to accommodate Chocolate. All of Chocolate’s component parts

16

were essentially the same as those of the AngioSculpt.

17

Based on the above findings, the conclusion is inescapable that Chocolate is “logically and

18

naturally . . . adapt[ed] to [AngioScore’s] business.” See In re Mobilactive Media, 2013 WL

19

297950, at *21 (citation omitted).
3. AngioScore had an interest or expectancy in Chocolate.

20
21

“[F]or a corporation to have an expectant interest in any specific property, there must be

22

some tie between the property and the nature of the corporate business.” Grove, 2013 WL

23

4041495, at *8 (internal quotes omitted). By requiring “a tie to the ‘nature of the corporate

24

business,’” this factor “implicates many of the issues” discussed above concerning AngioScore’s

25

line of business. See Beam ex rel. Martha Stewart Living Omnimedia, Inc. v. Stewart, 833 A.2d

26

961, 973 (Del. Ch. 2003) (citing Broz, 673 A.2d at 156). Even if there is a “tie” between the line

27
6

28

Nonetheless, those devices also compete with AngioSculpt.
21

1

of a corporation’s business and the potential opportunity, however, the Court may decline to find

2

an interest or expectancy where facts establish that a corporation is shifting away from its

3

historical line of business, where it disavows such interest, and where it lacks the capacity to

4

capitalize on the interest. In Broz, for example, the Delaware Supreme Court found that there was

5

no interest or expectancy where a corporation was divesting in the area of venture from which the

6

potential opportunity arose, and where its business plan did not contemplate any new acquisitions.

7

Broz, 673 A.2d at 156. The inquiry requires a court to use its judgment to discern whether, given

8

the factual context of each particular case, the corporation had an interest, “actual or in

9

expectancy,” or whether the acquisition of property for a director’s own use “may hinder or defeat
the plans and purposes of the corporation in the carrying on or development of the legitimate

11
United States District Court
Northern District of California

10

business for which it was created.” Johnston, 121 A.2d at 924 (citations omitted) (emphasis in

12

original).

13

As detailed in the preceding discussion, the Court finds that “some tie” exists between

14

Chocolate and the nature of AngioScore’s business. The devices are both angioplasty balloon

15

catheters that serve similar purposes and are constructed from the same materials. Well beyond

16

the loose connection that the “some tie” standard evokes, however, the Court finds that in 2009

17

and early 2010, AngioScore had an actual and expectancy interest in Chocolate by virtue of its

18

then-existing needs and business purposes, as well as Chocolate’s unique features and potential

19

benefits to AngioScore. The Court so finds for three main reasons: (1) Chocolate’s design

20

configuration could have proven helpful, and at a minimum, would have been seriously considered

21

in solving AngioScore’s then-existing problem with creating AngioSculpt devices at 100mm

22

lengths; (2) Chocolate’s potential as a drug-eluting specialty balloon technology was in keeping

23

with AngioScore’s business goal to bring such a device to market; and (3) AngioScore had an

24

interest in keeping a direct competitor out of the relatively small specialty balloon market.

25

Collectively, these conclusions compel a finding that AngioScore had an interest and expectancy

26

in Chocolate as of, at the latest, the date Konstantino resigned from its board. The Court

27

elaborates:

28
22

1

First, in late 2009, AngioScore needed a balloon design amenable to longer length

2

catheters. AngioScore was facing design challenges with its 100mm AngioSculpt. At the same

3

time, drawings and prototypes of 100mm Chocolate balloons existed. Jeffrey Bleam,

4

AngioScore’s Vice President of Research and Development, explained the company’s difficulty

5

executing its 100mm AngioSculpt balloon. Part of the engineering challenge had to do with

6

ensuring that the balloon would inflate uniformly while inside the nitinol cage. In the longer

7

lengths, the balloon was less likely to inflate uniformly every time. The concern was that uneven

8

inflation would result in an uneven distribution of force, jeopardizing the safety and effectiveness

9

of the device. The company devoted significant resources to resolving this problem. Although
research began in 2009, AngioScore did not release a 100mm balloon until 2011. Even as

11
United States District Court
Northern District of California

10

AngioScore finalized its first generation 100mm AngioSculpt, there remained issues with

12

deployment. The company then devoted further engineering resources to design a second

13

generation balloon. Ultimately, the engineering team discovered that by adding cross-lengths to

14

the metal struts, they were able to ensure more even deployment of the balloon. The second

15

generation 100mm balloon was released in 2013, presenting the critical cross-struts.

16

Had AngioScore known about the importance of the cross-struts back in 2009 and 2010, it

17

likely never would have released the first generation 100mm AngioSculpt. To that end, the

18

Chocolate’s design would have been of considerable help. The cross-lengths added to the

19

AngioSculpt 100mm resemble, at least conceptually, those which present as radial struts on the

20

Chocolate device, and which had been a part of the Chocolate design since its early development

21

in 2009. Bleam testified that had he gained access to the Chocolate, its unique elements could

22

have benefitted the design of the 100mm AngioSculpt. He stated that the radial strut configuration

23

was “pretty interesting, specifically,” and its cross-application was relatively

24

obvious. Accordingly, the Court finds it plausible that Chocolate’s design would have aided

25

AngioScore’s pursuit of a 100mm balloon.

26

Second, the Court finds that Chocolate’s avowed potential as a drug-eluting specialty

27

balloon as of late 2009 accorded with AngioScore’s business goal of bringing a drug-eluting

28

balloon to market, and AngioScore would have therefore been interested in such technology. As a
23

1

member of AngioScore’s board, Konstantino knew that AngioScore’s strategy included bringing

2

drug-eluting balloon to market. In fact, the issue was discussed at AngioScore’s 2010 board

3

meeting, which Konstantino attended. (See PX 246 (AngioScore February 2010 Board Meeting

4

presentation, giving overview of then-existing cash balance, notably above budget, research and

5

development items, including drug-coated devices).) The fact that Konstantino was soliciting

6

investments upon representations that Chocolate was an “ideal platform for drug delivery” (see PX

7

85) establishes conclusively that Chocolate would have aligned with AngioScore’s stated business

8

objectives, long-term research and development plan, and business purpose. Moreover,

9

Konstantino’s attendance at AngioScore’s board meetings confirms that he both knew and

10

United States District Court
Northern District of California

11

understood AngioScore’s desire to enter this portion of the market.
Third, the Court finds that based on the evidence adduced at trial, AngioScore would have

12

been interested in Chocolate because rejecting the Chocolate opportunity carried financial

13

implications for the company: namely, the potential entry of a competitive device into the

14

specialty balloon catheter marketplace and a likely reduction in AngioScore’s market share. In so

15

finding, the Court notes that AngioScore competes in a relatively small, specialty balloon catheter

16

market. In late 2009 and early 2010, there were only two general types of balloon catheters in the

17

specialty balloon market – those that scored or cut, as in the case of the Boston Scientific Cutting

18

Balloon and the AngioSculpt, and the Vascutrak, which possesses stainless steel guide wires. The

19

market was thus defined by the nature of the devices then available. Chocolate presented a

20

paradigm-shifting design: a cage designed to create pillows and grooves in such a way as to create

21

focal force on the balloon surface as it pushes through the openings in the cage. The entry of such

22

a device into a small, competitive marketplace previously limited to devices whose purpose was to

23

have metal come into contact with a vessel wall would have significant implications for revenues.

24

As a young company, revenue growth was a primary concern for AngioScore. (See Trial Tr. at

25

488:17-22; 489:15-490:4 (Raffin).) The business judgment revealed during the course of

26

testimony, in combination with common sense, leads the Court to conclude that AngioScore

27

would not have simply done nothing had Chocolate been offered in a timely fashion.

28
24

1

Defendants advance primarily three arguments in opposition to the interest and expectancy

2

element. (See DRB at 7-8.) The Court finds none persuasive based on the evidence in this case.

3

First, defendants argue that AngioScore would have rejected Chocolate because it was focused

4

singularly on developing the AngioSculpt line of scoring balloons. Second, defendants argue that

5

AngioScore disclaimed any interest in Chocolate when Konstantino’s invention assignment

6

agreement terminated at the conclusion of his employment with AngioScore, and relatedly, that

7

the only entities with legally cognizable interests in Chocolate were Konstantino and Feld,

8

Chocolate’s inventors. Third, defendants maintain that AngioScore would have passed on the

9

Chocolate opportunity due to personality conflicts with Konstantino. The Court addresses, and

10

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Northern District of California

11

rejects, each in turn.
As to the first argument, for the reasons set forth above, the Court is not convinced that

12

AngioScore would not have been interested in Chocolate. Put differently, the Court is not

13

persuaded that AngioScore would have refused the opportunity. The fact that Chocolate does not

14

engage in an identical mechanism of action to that of the AngioSculpt is not enough to overcome

15

the weight of evidence supporting the Court’s finding that AngioScore would have been interested

16

in Chocolate.

17

Defendants argue that AngioScore’s 2009 rejection of an unnamed scoring device

18

establishes that AngioScore would not have been interested in Chocolate. AngioScore’s mid-2009

19

rejection of a new scoring balloon was based in part on Trotter’s belief that there was no strong

20

need to add another scoring device to the market. (See DX 1099.) The Court is not convinced that

21

this decision bears on whether AngioScore had an interest or expectancy in Chocolate. The

22

opportunity presented in early 2009 related to another concrete product. AngioScore was

23

permitted to evaluate the design features. In light of this concrete opportunity, Trotter explained

24

that AngioScore declined to pursue the proposed technology because “there was nothing

25

particularly impressive about it.” (Trial Tr. at 627:25-628:1 (Trotter direct).) He further added

26

that he “didn’t see that there was any innovation there that would be valuable to AngioScore.” (Id.

27

at 628:1-2.) The fact that Chocolate represented a new concept – focal force through the creation

28

of balloon pillows, rather than scoring – sets it apart from the opportunity AngioScore
25

1

contemplated and rejected. Moreover, as set forth above, AngioScore would have been interested

2

in Chocolate for its presentation of longer lengths and for its potential as a drug-eluting device.

3

Defendants further rely on answers board members provided in response to a survey

4

conducted by a consultant, Sarah Lugaric. Board members were directed to answer the following

5

question: “Do you support acquiring another company, technology, or product line? (yes/no,

6

timing, description).” The board’s responses fell onto a spectrum – some directors were open to it,

7

others less so. Three of the seven directors were opposed to acquiring another company,

8

technology, or product line; four indicated that they would be open to it with certain reservations.

9

Defendants seize on these answers to argue that the board never would have been interested in
Chocolate. The Court disagrees. First, the Lugaric question was hypothetical and abstract.

11
United States District Court
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10

Second, the question related to members’ inclination to acquire more than simply a new product –

12

it also concerned whether the members would be interested in the acquisition of another company.

13

The directors were not considering a concrete, potentially paradigm-changing technology. They

14

did not know that Chocolate existed. The answers to this survey thus cannot undermine the

15

Court’s finding that AngioScore had an interest or expectancy in the Chocolate.

16

Defendants’ second argument reduces to this: AngioScore did not renew Konstantino’s

17

invention assignment agreement. Therefore, AngioScore had no interest in Konstantino’s

18

inventions. Chocolate was one such invention. Therefore, AngioScore had no interest in

19

Chocolate. (DRB at 7.) Under the terms of an invention assignment agreement and as a matter of

20

contract law, this would appear to make sense. However, the rights and obligations to which

21

parties agree in the context of an employee/employer invention assignment agreement are

22

fundamentally different from the nature of the issue presented here: whether, in developing

23

Chocolate, and secreting it from the corporation he served for his own personal benefit,

24

Konstantino violated his duty of loyalty to AngioScore. Simply because AngioScore would no

25

longer automatically have property rights in anything Konstantino invented does not obviate

26

Konstantino’s obligation to adhere scrupulously to his duty to place the interests of AngioScore

27

above his own financial gain. The lack of an invention assignment agreement does not absolve a

28

director of his fiduciary obligations with respect to inventions he may develop that compete with
26

1

the corporation he serves. To hold otherwise would undermine the basic fabric upon which the

2

duty is based.

3

Last, defendants maintain that AngioScore would have passed on the Chocolate

4

opportunity due to personality conflicts between Konstantino and members of the AngioScore

5

board. Throughout the trial in this case, the defense returned to its theory that at some point

6

between 2006 and 2010, members of AngioScore’s board had essentially blacklisted Konstantino.

7

While the Court agrees that personality conflicts may have existed, defendants’ resort to

8

overstatement undermines their credibility and any relevance the true facts might have had. With

9

the exception of Ozdil, with whom Konstantino had previously had an altercation, and possibly
Tom Trotter, who was less than pleased to hear that in December 2009 Konstantino and TriReme

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Northern District of California

10

were embarking on building a POBA (the Glider), the Court finds that Konstantino was generally

12

well-regarded and respected by his other fellow board members in the time period leading up to

13

his resignation. No board members who testified stated that prior to the events giving rise to this

14

litigation, they had anything but amicable and professional interactions with Konstantino. None

15

witnessed any effort by any other board member to push Konstantino off the board, nor did any

16

board member witness any hostility between AngioScore and Konstantino. No evidence, besides

17

Konstantino’s ruminations, supports any inference that board members possessed anti-Semitic

18

feelings toward Konstantino. Board members Raffin and Suennen testified credibly that no one

19

harbored such feelings and that they themselves are Jewish. Konstantino’s claim that he was

20

ostracized at AngioScore is further undermined by evidence that AngioScore’s CEO, Trotter, was

21

helping Konstantino further his non-AngioScore business pursuits, including fundraising for

22

TriReme, around the same time Konstantino and Feld were developing Chocolate. Specifically, in

23

August of 2009, Trotter emailed Ivan Pirzada in an attempt to get Konstantino funding. (PX 234.)

24

In December 2009, Trotter sent Konstantino a tip on potential funders for TriReme. (PX 241.)

25

The Court thus finds that there is no merit to Konstantino’s claim that AngioScore would not have

26

worked with him on Chocolate. Furthermore, and to state the obvious, personality conflicts

27

between board members do not obviate their fiduciary duties to the companies they serve. The

28

law expects and demands that board members rise above such concerns.
27

1
2
3
4
5

Accordingly, the Court finds that AngioScore had an interest and expectancy in the
Chocolate opportunity.
4. AngioScore had the financial capacity to exploit the Chocolate
opportunity.
The Court finds that AngioScore had the financial ability to exploit Chocolate. In so

6

finding, the Court is mindful that under Delaware law, this prong implicates broader policy

7

concerns more favorable to the corporation. Such concerns stem from the inherent conflict

8

between, on the one hand, a director who has control and responsibility for the financial security

9

of the corporation he serves, and on the other hand, the director’s potential personal interest in
ensuring that the company not have secured financial footing so as to permit usurpation of what

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United States District Court
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10

otherwise might be a corporate opportunity. Thus, once the plaintiff has made such a prima facie

12

showing of financial ability, a fiduciary “faces a significant burden in establishing that a

13

corporation was financially unable to take advantage of a corporate opportunity.” Norman v.

14

Elkin, 617 F. Supp. 2d 303, 312 (D. Del. 2009) (citing Gen. Video Corp. v. Kertesz, No. 1922-

15

VCL, 2008 WL 5247120, at *19 (Del. Ch. Dec. 17, 2008) (finding financial inability must amount

16

to insolvency such that the company is practically defunct); but see Yiannatsis v. Stephanis by

17

Sterianou, 653 A.2d 275, 279 (Del. 1995) (declining to adopt “the ‘insolvency-in-fact test’”;

18

stating instead that courts should consider “a number of options and standards for determining

19

financial inability, including but not limited to, a balancing standard, temporary insolvency

20

standard, or practical insolvency standard”)). Defendants have not established AngioScore’s

21

inability to capitalize on the Chocolate opportunity. To the contrary, AngioScore has established

22

that it could have capitalized on Chocolate had Konstantino offered the opportunity.

23

Evidence regarding what it would have cost to develop Chocolate varies, but in all events,

24

reflects an initial amount that fell below the amount of cash AngioScore had on hand at the end of

25

2009 and beginning of 2010. According to an email from November 17, 2009, Konstantino

26

estimated capital requirement of approximately $3 million. (PX 70.) By May 2010, Konstantino

27

had secured sufficient capital to pursue the Chocolate “all the way to first commercial sale”; the

28

total raised to that point was $4.5 to 5 million. (PX 547; Belson dep., discussing Feb 2010
28

1

Chocolate presentation that placed the cost of developing Chocolate at roughly $2 million USD

2

beyond the Singaporean EDB grant, PX 78).) Finally, with respect to the amount of money

3

required to acquire an assignment of the intellectual property rights to Chocolate, the record places

4

that value in the amount of $370,000 cash and a royalty of 5%. (Trial Tr. at 237:8-18.) In the

5

event such right was acquired, however, there is nothing to suggest that AngioScore would have

6

been obligated to develop Chocolate.

7

Based on the above figures, even assuming that Chocolate would have cost $5 million to
develop, the Court finds that AngioScore was able to exploit this opportunity through several

9

avenues. First, AngioScore had approximately $17 million cash on hand in October 2009, and in

10

excess of $15 million cash on hand at the end of 2009. Second, as a going concern with existing

11
United States District Court
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8

relationships, AngioScore could have obtained funds from external investors, such as Oxford

12

Finance, or other venture capital funds. In December 2009, for example, Oxford Capital

13

expressed a willingness to lend between $10 and $20 million to AngioScore. Third, AngioScore

14

could have redirected research and development money it was currently using to fix the design

15

problems for its 100mm AngioSculpt product. This financial position existed notwithstanding the

16

downsizing and resources expended in response to a Department of Justice investigation.

17

The practicalities of new technology companies further support the Court’s conclusion.

18

Konstantino himself admitted that startup companies in Silicon Valley, such as AngioScore and

19

TriReme, are frequently short on cash and face the prospect of running out of money. He further

20

stated that the fact that such a company is not “profitable” doesn’t mean that the company is “not

21

successful.” For example, TriReme was not able to sell its Antares product, a stent, in the United

22

States, and Antares made only negligible sales abroad. Despite TriReme’s limited financial

23

position, TriReme was able to develop Chocolate.

24

Based on the foregoing, the Court finds that AngioScore was able to exploit the Chocolate

25

opportunity. Despite having been privy to AngioScore’s confidential financial documents as a

26

member of AngioScore’s board of directors (see e.g., PX 246, February 2010 board meeting

27

presentation including proposed budget, discussion of cash on hand), Konstantino never broached

28

the subject of Chocolate with AngioScore.
29

5. By taking the Chocolate for himself, Konstantino placed himself in
a position inimical to his fiduciary duties to AngioScore.

1
2
3
4
5
6
7
8
9
10

United States District Court
Northern District of California

11
12
13
14
15

The result of the above findings compels the conclusion that by taking the Chocolate
opportunity for himself and companies he preferred, to the exclusion of AngioScore, Konstantino
placed himself in a “position inimicable to his duties to the corporation.” Broz, 673 A.2d at 155.
In essence, he became a competitor to AngioScore. It is axiomatic that as such, absent some
knowing waiver by AngioScore, Konstantino could never fulfill his duty of loyalty to AngioScore.
Any financial gain Konstantino enjoyed stemmed from Chocolate’s success in the limited
specialty balloon market, in which AngioScore is a key player. Indeed, while sitting on
AngioScore’s board, Konstantino participated in a strategy where, by design, Chocolate would
compete with AngioScore. Chocolate’s price was explicitly tied to AngioSculpt pricing, i.e.
exactly $25 less than AngioScore’s products. That Chocolate was priced just below the
AngioSculpt was intended to “drive rapid adoption” and “get faster uptick” in the specialty
balloon catheter market. Moreover, Konstantino himself extolled the advantages of Chocolate
compared to scoring balloons, including AngioScore’s devices, as he sought to secure funding for
Chocolate.

16
17
18
19
20
21
22
23

This factor is therefore met, as is each element of AngioScore’s breach of fiduciary duty
claim.
The Statute of Limitations does not bar AngioScore’s claims.

II.

“A claim for breach of fiduciary duty accrues at the time of the wrongful act.” Sutherland
v. Sutherland, No. CIV.A. 2399-VCN, 2010 WL 1838968, at *8 (Del. Ch. May 3, 2010); see
Pomeranz v. Museum Partners, L.P., No. CIV.A. 20211, 2005 WL 217039, at *8 (Del. Ch. Jan.
24, 2005). The parties agree as follows: (i) the relevant statute of limitations for breach of
fiduciary duty claims is three years7; (ii) the acts giving rise to the instant claim occurred in 2009

24
25
26
27
28

7

Under Delaware law, the doctrine of laches governs the timeliness of claims brought in
equity. Courts sitting in equity will apply by analogy the statute of limitations for substantive
claims in order to apply the doctrine of laches. Pomeranz, 2005 WL 217039, at *2. Here, three
years is the relevant limitations period.
30

1

and 2010; and (iii) more than three years elapsed between those acts and when plaintiff brought

2

its claim (here, June 27, 2014). The central issue is whether equitable tolling is available.

3

Plaintiff bears the burden of establishing that such tolling is warranted. Pomeranz, 2005 WL

4

217039, at *2. Defendants claim the statute has run because AngioScore was on notice by no later

5

than February 5, 2010, the date of Konstantino’s resignation.

6

Three bases for tolling exist under Delaware law: (1) the inherently unknowable doctrine

7

(the “Discovery Rule”), (2) equitable tolling, and (3) fraudulent concealment. As set forth in

8

Smith v. McGee, No. CIV.A. 2101-S, 2006 WL 3000363, at *3-*4 (Del. Ch. Oct. 16, 2006), the

9

contours of each of these bases is as follows:

10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20

A limitations period may be tolled under the inherently unknowable
doctrine so long as “the discovery of the existence of a cause of
action is a practical impossibility.” Specifically, “there must have
been no observable or objective factors to put a party on notice of an
injury, and plaintiffs must show that they were blamelessly ignorant
of the act or omission and the injury.” Plaintiffs may establish
“blameless ignorance” by showing justifiable reliance on a person
whom they have “no ostensible reason to suspect of deception.”
Such proof tolls the limitations period until a plaintiff had “reason to
know” of a wrong.
Equitable tolling is appropriate “where a plaintiff reasonably relies
on the competence and good faith of a fiduciary.” Underlying this
doctrine is the idea that “even an attentive and diligent [investor]
relying, in complete propriety, upon the good faith of [fiduciaries]
may be completely ignorant of transactions that ... constitute selfinterested acts injurious to the [Partnership].” This doctrine also
tolls the limitations period until an investor knew or had reason to
know of the facts constituting the wrong.

21
22
23
24
25
26
27
28

Fraudulent concealment, unlike the doctrines of inherently
unknowable injuries and equitable tolling, “requires an affirmative
act of concealment by a defendant-an ‘actual artifice’ that prevents a
plaintiff from gaining knowledge of the facts or some
misrepresentation that is intended to put a plaintiff off the trail of
inquiry.” Nevertheless, “mere ignorance of the facts by a plaintiff,
where there has been no such concealment, is no obstacle to
operation of the statute.” Like the previously mentioned doctrines,
tolling exists only “until his rights are discovered or until they could
have been discovered by the exercise of reasonable diligence.”
Id. (citing In re Dean Witter P'ship Litig., 1998 WL 442456 (Del. Ch. July 17, 1998)). Under
31

1

Delaware law, tolling is proper only until a plaintiff is properly put on inquiry notice. “When

2

plaintiffs are on inquiry notice, the statute of limitations begins to run. Inquiry notice does not

3

require full knowledge of the material facts; rather, plaintiffs are on inquiry notice when they

4

have sufficient knowledge to raise their suspicions to the point where persons of ordinary

5

intelligence and prudence would commence an investigation that, if pursued, would lead to the

6

discovery of the injury.” Pomeranz, 2005 WL 217039, at *3 (citation omitted).

7

The Court finds tolling appropriate here based on the third of these theories: namely,

8

Konstantino’s purposeful, fraudulent concealment, although much of the analysis would also

9

overlap with the first two approaches. Tolling is warranted because Konstantino “engaged in
fraudulent concealment of the facts necessary to put [AngioScore] on notice of the truth.” Albert

11
United States District Court
Northern District of California

10

v. Alex. Brown. Mgmt. Servs., Inc., No. CIV.A. 762-N, 2005 WL 1594085, *19 (Del. Ch. June 29,

12

2005). Specifically, Konstantino’s “affirmative act[s] of concealment” in early 2010, during the

13

time in which AngioScore sought information relating to whether he had developed a specialty

14

balloon, constitutes “an ‘actual artifice’” that prevented AngioScore from gaining knowledge of

15

the facts. In re Dean Witter, 1998 WL 442456, at *5 (citation omitted). Having reviewed the

16

evidence of record and observed the testimony at trial, the conclusion is inescapable that letters

17

authored by Konstantino’s counsel contained intentional misrepresentations that were intended to

18

put AngioScore “off the trail of inquiry.” Id.

19

In Konstantino’s February 3, 2010 meeting with Trotter, Konstantino told Trotter that

20

TriReme was “considering developing a specialty balloon catheter for peripheral indications,” and

21

that TriReme had been actively working on “something for the future” in specialty balloon

22

catheters. (Trial Tr. at 574:8-12; 602:22-25 (Trotter); see PX 107.) This conversation itself was

23

deceptive in nature, for Konstantino did not in any way indicate that the development of

24

TriReme’s specialty balloon, which by that point had been called Chocolate for several months,

25

was well underway. Nor did he disclose his personal role in the development and

26

conceptualization of the device, that a prototype had been created, that animal testing had

27

occurred, or that he had already engaged potential investors and funding sources.

28
32

1

Even lacking these details, the news of a possible specialty balloon at TriReme resulted in

2

an investigation led by AngioScore’s lawyer. Trotter sent Konstantino an email entitled “Board of

3

Directors Position,” copying AngioScore’s counsel, John Sellers. (PX 107.) In it, Trotter restated

4

his concerns about TriReme moving into the specialty balloon market, and stated that the board

5

members with whom he had spoken saw this as a “clear conflict of interest.”

6

Konstantino then engaged in a series of communications intentionally designed to assuage
AngioScore’s concerns, disavowing that any such device existed or had been developed, much

8

less that he had any personal role in the development of a specialty balloon. For example, in

9

response to Trotter’s email, Konstantino stated that “TriReme has not made any decision to make

10

such a change and I was giving you very early heads up to something that may take place in the

11
United States District Court
Northern District of California

7

future, or may never happen[.]” He added, “there is no reason to be trigger happy.” (PX 107

12

(emphasis supplied).)

13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

Thereafter, Konstantino continued in his misdirection. The next day, February 5, 2010,
Konstantino wrote an email to Sellers, cc’ing Trotter, Suennen, and Raffin. (Id.) In it, he stated:
As we discussed, I’m surprised and disappointed that you and the
company jumped to the conclusion that I should resign from the
board based on assumptions after receiving bits and pieces of
information. I am keenly aware of my obligations as a board
member and this is precisely why I am coming to AngioScore now;
before any new project is started.
(Id. (emphasis supplied).)
The board nonetheless continued investigating whether Konstantino or TriReme had in fact
developed a competitive device. At that point, Konstantino himself was the most authoritative
source of information regarding what activities, if any, he had actually undertaken with respect to
bringing a competitive product to market. Thus, the board undertook to ask Konstantino whether
he had done so.
What followed were several letters from Konstantino, through counsel, in which
Konstantino unequivocally refuted any notion that he had worked on a specialty balloon catheter,
or that any such device had been developed, while he was on AngioScore’s board.

28
33

1

In the first such letter, dated February 23, 2010. Konstantino’s counsel specifically

2

reiterated that prior to Konstantino’s resignation on February 5, 2010, he was not “involved in any

3

development work or licensing of angioplasty balloon technology for the coronary or periphery

4

markets that involves specialized features such as scoring, cutting, or drug eluting elements.”

5

(PX 420 (emphasis supplied).) Likewise, Konstantino represented that he was not involved “in

6

any development or licensing of angioplasty balloon technology for the coronary or periphery

7

markets that makes similar claims to that of the AngioSculpt product.” (Id. (emphasis supplied).)

8

Konstantino restated that TriReme was “considering, in the future, the possibility of entering the

9

field of specialized balloons for peripheral applications” but that before February 5, 2010,
TriReme “ha[d] not developed any products . . . that compete[] with AngioScore’s products.” (Id.

11
United States District Court
Northern District of California

10

(emphasis supplied).)

12
13

In response, AngioScore expressed concern that during Konstantino’s service as a board
member, he:

14

obtained proprietary and confidential information about AngioScore,
the peripheral market, and the role of specialty balloons in that
market, while at the same time developing and pursuing plans
within TriReme to pursue those same markets with another
device.

15
16
17
18

(PX 421 (emphasis supplied).) Again, Konstantino unequivocally and unambiguously denied that

19

any such activity had taken place. (PX 423.) Characterizing AngioScore’s questioning as

20

predicated on “unsubstantiated accusations” against Konstantino, counsel informed AngioScore

21

that should such accusations continue, Konstantino will “have no choice but to consider his legal

22

options.” (Id.)

23

At that point, Konstantino’s representations had sufficiently assuaged any and all concerns

24

about whether he or TriReme had developed a specialty balloon. AngioScore was satisfied that

25

nothing of the sort had occurred. Given the nature and strength of Konstantino’s representations, a

26

reasonable person would have come to the same conclusion.

27
28

“Equitable exceptions to statutes of limitations are narrow and designed to prevent
injustice.” Pomeranz, 2005 WL 217039, at *13 (citations omitted). The equitable exception to
34

1

the normal rule is warranted here. AngioScore acted diligently in its 2010 investigation. That

2

Konstantino now disavows the intent of his obvious affirmative, misleading representations,

3

particularly those cloaked in formality as letters from his attorneys, is self-serving and bears on his

4

credibility for truthfulness.8 He cannot now hide behind the “actual artifice” he constructed to

5

prevent AngioScore from gaining knowledge of the facts. AngioScore undertook an earnest,

6

broad-based inquiry into the nature of Konstantino’s activities. Instead of answering

7

AngioScore’s queries in good faith and with candor, Konstantino’s answers were designed to put

8

AngioScore “off the trail of inquiry” and disabuse AngioScore of the notion that any fiduciary

9

breach had occurred. The truth was sharply at odds with Konstantino’s representations.
Because Konstantino’s artifice worked to his desired ends, the three-year statute of

10

United States District Court
Northern District of California

11

limitations cannot now shield him from AngioScore’s claim. AngioScore was not on inquiry

12

notice until it learned, in connection with the discovery in its patent case, that Chocolate had been

13

developed before Konstantino left AngioScore’s board. It filed this claim mere months after that.

14

The claim is timely.

15

TriReme and Quattro aided and abetted Konstantino’s breach of fiduciary duty.

III.

16
17

A. The standard for aiding and abetting liability is met.
Under California law, “‘[l]iability may . . . be imposed on one who aids and abets the

18

commission of an intentional tort if the person (a) knows the other’s conduct constitutes a breach

19

of duty and gives substantial assistance or encouragement to the other to so act or (b) gives

20

substantial assistance to the other in accomplishing a tortious result and the person’s own conduct,

21

separately considered, constitutes a breach of duty to the third person.’” Casey v. U.S. Bank Nat'l

22
23
24
25
26
27
28

8

As a prime example of Konstantino’s artifice, in 2009, while he was on AngioScore’s
board he filed a patent application for Chocolate. In March 2010, after engaging in
correspondence with AngioScore’s lawyers, he switched patent counsel and filed a second
provisional patent application. The strategy underpinning Konstantino’s second patent application
decision is apparent. By filing a second provisional patent application in March 2010,
Konstantino sacrificed five months of patent priority. However, by citing the March 2010
application instead of the earlier 2009 application in his March 2011 patent application,
Konstantino was able to ensure that the patent application from 2009, which listed him as a coinventor of Chocolate at a time when he was on AngioScore’s board, would not become public.
35

Ass'n, 127 Cal. App. 4th 1138, 1144 (2005) (citations omitted); Neilson v. Union Bank of

2

California, N.A., 290 F. Supp. 2d 1101, 1133 (C.D. Cal. 2003) (noting that California courts cite

3

Restatement (Second) of Torts section 876 to hold that “liability may properly be imposed on one

4

who knows that another’s conduct constitutes a breach of duty and substantially assists or

5

encourages the breach.”) (citations omitted). AngioScore must establish that defendant

6

corporations TriReme and Quattro actually knew of Konstantino’s fiduciary duty breach. Casey,

7

127 Cal. App. 4th at 1145 (“[E]ven ‘ordinary business transactions’ . . . can satisfy the substantial

8

assistance element of an aiding and abetting claim if the [defendant] actually knew those

9

transactions were assisting the [fiduciary] in committing a specific tort [breach of fiduciary duty].

10

Knowledge is the crucial element.”). Additionally, “causation is an essential element of an aiding

11
United States District Court
Northern District of California

1

and abetting claim,” and AngioScore must show that the aiders and abettors provided assistance

12

that was a substantial factor in causing AngioScore’s harm. Neilson, 290 F. Supp. 2d at 1135.

13

For corporations, “[i]t is the general rule that knowledge of an officer or director of a

14

corporation will be imputed to the corporation.” See Brown v. Brewer, No. CV 06-3731-GHK

15

(JTLx), 2008 WL 6170885, at *7 (C.D. Cal. July 14, 2008) (quoting Teachers’ Ret. Sys. of La. v.

16

Aidinoff, 900 A.2d 654, 671 n.23 (Del. Ch. 2006)). California follows the well-established

17

principle that the acts and knowledge of an officer or agent can be attributed to a corporation or

18

principal. In re Cal. TD Inv. LLC, 489 B.R. 124, 129 (Bankr. C.D. Cal. 2013).9

19
20
21
22
23
24
9

25
26
27
28

As was recognized in In re Cal. TD Inv. LLC, the attribution or imputation rule is subject
to the “adverse interest” exception, whereby an officer’s acts adverse to a corporation will not
generally be imputed to the corporation, which is in turn subject to the “sole actor” exception,
where courts may impute the actions of officers even where adverse to the corporations if the
officer is the “sole person in control of [the corporation].” 489 B.R. at 129-30. Defendants have
not argued that any such exception would apply in this case.
36

1. TriReme knowingly provided substantial assistance.

1
2

The Court finds that TriReme knew Konstantino’s conduct constituted a breach of duty

3

and gave substantial assistance or encouragement for Konstantino to persist in his breach.

4

Accordingly, TriReme is liable for aiding and abetting Konstantino’s breach of fiduciary duty.

5

First, the record is replete with evidence that TriReme employees provided substantial

6

assistance to Konstantino at every step of the design and modeling process for Chocolate. While

7

Konstantino remained on AngioScore’s board of directors, TriReme engineers helped him develop

8

and build the Chocolate device. Such individuals included Feld10; Jayson Delos Santos, a senior

9

engineer; Maria Pizarro, TriReme’s Director of Research and Development11; and Gary Binyamin,
TriReme’s technology manager. These individuals were engaged in creating and fine-tuning the

11
United States District Court
Northern District of California

10

engineering design of Chocolate. They created prototypes of Chocolate and undertook testing of

12

the devices. They attended the porcine study of the Chocolate device at Stanford in January 2010.

13

Not only did TriReme employees design and test the Chocolate idea prior to the time Konstantino

14

left AngioScore’s board, they did so under his general supervision. Konstantino, as TriReme’s

15
16
17
18
19
20
21
22
23
24
25
26
27
28

10

The role of Feld with respect to TriReme at this time is unclear. On TriReme’s
September 2009 board meeting, Feld is identified as TriReme’s Vice President of Research and
Development. However, in his testimony, Feld stated that around this time, he was a consultant
for TriReme. (Trial Tr. at 863:17-21.) The Court is wary of letting the distinction, however, exalt
form over substance. Feld was a cofounder of TriReme. He testified that he speaks to
Konstantino at least weekly, if not more. Even as a consultant, he was paid by TriReme on a
monthly basis, had access to all the TriReme employees who were working on Chocolate, and
used TriReme employees in the pursuit of Chocolate. (Trial Tr. at 863:17-864:20.)
11

During trial, Pizarro persisted in her efforts to obfuscate the true nature of TriReme’s
involvement in the Chocolate opportunity. During cross-examination, however, this quickly
became apparent. For example, after acknowledging that she had been involved in a December
2009 presentation to MedTronic regarding the status of TriReme’s projects, including Chocolate,
Pizarro denied that “there was development work performed on Chocolate in 2009,” disputing the
meaning of the word “development.” (Trial. Tr. at 1069:2-1070:9.) The evidentiary record,
however, was starkly to the contrary – as Pizarro well knows. As early as October 2009, Pizarro
was on emails concerning Chocolate prototypes, relaying engineering updates including such
information as: “we are building the 100mm balloons over as we speak.” (PX 89.) Despite the
obvious connection, Pizarro maintained that only “possibly” did such reference refer to Chocolate.
(Trial Tr. at 1071:23-25.) Similar attempts to equivocate and evade continued throughout her
testimony, compromising fatally any shred of credibility.
37

1

CEO, was on emails contributing to the discussion. TriReme’s HR and Marketing Manager

2

provided critical support to Konstantino’s efforts by applying for funding for a grant from the

3

Singaporean government.

4

Second, the Court finds that based on the evidence of record, TriReme employees and

5

management knew that Konstantino was on AngioScore’s board while such work was undertaken.

6

The conclusion is all but inescapable that they knew Konstantino’s work on Chocolate constituted

7

a violation of his fiduciary duties as a board member. Throughout the later part of 2009 and early

8

into 2010, TriReme employees, as well as Konstantino, knew well – indeed, intended – that

9

Chocolate would compete with AngioScore, and that Konstantino remained on AngioScore’s
board of directors. As TriReme’s CEO, Konstantino knew he owed AngioScore fiduciary duties

11
United States District Court
Northern District of California

10

solely by virtue of his board seat. (PX 101 (February 2009 letter Konstantino signed confirming

12

that he remained bound by fiduciary duties as a director).) Pizarro, a former AngioScore engineer,

13

knew AngioScore’s line of business and knew that Konstantino was serving on AngioScore’s

14

board of directors while Chocolate work was done at TriReme. (Trial Tr. at 1028:17-23; 1093:25-

15

1094:3.) Feld knew not only that Konstantino remained on AngioScore’s board of directors and

16

remained subject to fiduciary duties, and that Chocolate competed with AngioSculpt, but also that

17

Konstantino had previously obtained a waiver from AngioScore for purposes of working on

18

bifurcated stents with TriReme. Ong, TriReme’s HR Manager, also knew that Konstantino

19

remained on AngioScore’s board while she helped him obtain financing for a product directly

20

competitive with AngioScore’s products.

21
22

2. Quattro/Proteus knowingly provided substantial assistance.
The Court finds that during the development of Chocolate, Quattro existed as “Proteus,” an

23

unincorporated association. In March of 2010, “Proteus” incorporated under the name Quattro.

24

For the reasons set forth below, the Court finds that Quattro/Proteus is liable for aiding and

25

abetting Konstantino’s breach.

26

First, Proteus was an “unincorporated association” that predated Quattro and was capable

27

of being sued. Under California law, an “unincorporated association” is defined in California

28

Corporations Code section 18035. Subsection (a) of that provision provides that an
38

1

“Unincorporated association” is an unincorporated group of two or more persons joined by mutual

2

consent for a common lawful purpose, whether organized for profit or not. Cal. Corp. Code §

3

18035 (West).

4

Although case law on this provision generally concerns entities like churches, political

5

parties, professional or trade associations, social clubs, and homeowners associations, the doctrine

6

and the breadth of what qualifies as an “unincorporated association” was explained in Barr v.

7

United States Methodist Church, 90 Cal. App. 3d 259 (1979). There, the court of appeals

8

explained that the trend in the state and nation was to “assure legal status where in fairness it is

9

appropriate” and included in such consideration the dictates of fairness where “persons dealing
with the association contend their legal rights have been violated.” Barr, 90 Cal. App. 3d at 266-

11
United States District Court
Northern District of California

10

67. An unincorporated association need not have the formalities of quasi-corporate organization.

12

“Courts have even assessed liability against a church association with no officers where there were

13

only nine persons whose sole business transaction (aside from small purchases of printed religious

14

material) was the purchase, by down payment, of a station wagon.” Id. at 267 (citation omitted).

15

Likewise, criminal street gangs have been found to qualify as “unincorporated associations”

16

capable of being sued. People ex rel. Totten v. Colonia Chiques, 156 Cal. App. 4th 31, 41

17

(2007).12

18

Proteus easily satisfies the criteria under Section 18035. During the development of

19

Chocolate, Proteus was held out as if a corporation. It consisted of at least three members, James

20

Dreher, Konstantino, and Feld, and was formed for the lawful purpose of raising money and

21
22
23
24
25
26
27
28

12

In Totten, a criminal street gang was found to be an unincorporated association capable
of being sued for injunctive relief. The court noted that “[s]tatutes must be given a reasonable and
common sense construction in accordance with the apparent purpose and intention of the
lawmakers—one that is practical rather than technical and that will lead to a wise policy rather
than mischief or absurdity.” Id. (citation omitted). Upon review of the purpose of California
Corporations Code 18035, and in view of legislative history, the court of appeal found that “it
would border on absurdity to conclude that, by the 2004 addition of Corporations Code section
18035, subdivision (a) [which included the element of “lawful purpose” in the definition of an
unincorporated association], the Legislature intended to shield criminal street gangs from liability
and injunctive relief by rendering them immune from civil suits. Totten, 156 Cal. App. 4th at 41.
39

1

investor interest in the Chocolate technology. Investors were informed that “Proteus” was the

2

entity developing Chocolate and seeking funds therefor, and Konstantino represented himself as

3

Chairman of the entity. As Proteus’s chairman, Konstantino signed a contract to raise funds for

4

Chocolate’s development. Fairness would dictate that investors who gave money to Proteus

5

would have been able to seek recourse against Proteus. Barr, 90 Cal. App. 3d at 266-67.

6

Konstantino held himself out as a Chairman of Proteus, signed contracts as such, sought money

7

from individuals under the guise of this entity, and later, to investors, characterized Proteus’s

8

transition to “Quattro” as merely a name change. Not only did Konstantino himself understand

9

that Quattro was “previously Proteus,” but by characterizing the transition from Proteus to Quattro
as a simple change in name, he was able to retain for Quattro the benefits Proteus had obtained.

11
United States District Court
Northern District of California

10

Indeed, the lack of distinction between Quattro and Proteus is so complete that on the basis that

12

the difference between these entities was merely one of nomenclature, contracts signed between

13

“Proteus” and third parties were amended to substitute the name “Quattro Vascular Pte Ltd” for

14

“Proteus Vascular Systems Pte Ltd.” (PX 7.) The unfairness of immunizing Quattro is amplified

15

here, where defendants now offer a hypertechnical argument that because Quattro did not formally

16

exist as an incorporated entity at the time of Konstantino’s breach, it cannot be liable for acts it

17

undertook when it was known as Proteus.13 It is not lost on the Court that almost exactly one

18

month after Konstantino resigned from AngioScore’s board, the name change occurred and

19

Quattro officially incorporated, with the agreement of Dreher, Konstantino, and Feld. Thereafter,

20

Quattro continued in Proteus’s efforts. Defendants cannot hide posthumously behind the name

21

change.

22
23

Proteus/Quattro was inextricably involved in, and had actual knowledge of, Konstantino’s
breach. Indeed, it was formed with the specific purpose of furthering that breach. Konstantino, as

24
25
26
27
28

13

Even the term “Proteus” carries a meaning that pointedly undermines defendants’
position. Proteus was a Greek sea god capable of assuming different forms. MERRIAM-WEBSTER,
New Collegiate Dictionary (9th ed. 1988). An entity presenting “protean” qualities has the
“ability to assume different forms.” Id. The Court finds that Proteus lived up to its name by later
assuming the name “Quattro” while retaining its original essence.
40

1

Proteus’s Chairman and Quattro’s Director, formed the organization for purposes of raising funds

2

for Chocolate, which included seeking funding from the Singaporean government, and later, used

3

Quattro as the corporate entity to hold intellectual property rights in Chocolate. Dreher

4

implemented a business strategy for seeking early investors and funds. On this basis, the Court

5

finds that Proteus, as an unincorporated association, knowingly aided and abetted Konstantino’s

6

breach of fiduciary duty. In March of 2010, when Proteus incorporated as Quattro, it maintained

7

its debts and liabilities. See Sec.-First Nat. Bank of L.A. v. Cooper, 145 P.2d 722, 731 (Cal. Ct.

8

App. 1944).

9

IV.

10

United States District Court
Northern District of California

11

QT Vascular is liable as a successor in interest to the liabilities of Quattro and
TriReme.
The decision whether to impose successor liability involves broad equitable considerations.

12

See Ray v. Alad Corp., 19 Cal.3d 22, 34 (Cal. 1977); see also Rosales v. Thermex–Thermatron,

13

Inc., 67 Cal. App. 4th 187, 196 (Cal. Ct. App. 1998). Each case of successor liability must be

14

assessed on its own unique set of facts. See CenterPoint Energy, Inc. v. Super. Ct., 157 Cal. App.

15

4th 1101, 1122 (Cal. Ct. App. 2007). Under California law, a corporation that purchases the assets

16

of another does not assume the liabilities of the selling corporation unless: “(1) there is an express

17

or implied agreement of assumption, (2) the transaction amounts to a consolidation or merger of

18

the two corporations, (3) the purchasing corporation is a mere continuation of the seller, or (4) the

19

transfer of assets to the purchaser is for the fraudulent purpose of escaping liability for the seller's

20

debts.” Ray, 19 Cal.3d at 28.

21

As a preliminary matter, successor liability under California law requires an asset transfer,

22

not merely the purchase of stock. Sunnyside Dev. Co., LLC v. Opsys Ltd., No. C 05 0553 MHP,

23

2007 WL 2462142, at *6 (N.D. Cal. Aug. 29, 2007); Potlatch Corp. v. Superior Court, 154 Cal.

24

App. 3d 1144, 1150-51 (Cal. Ct. App. 1984). The evidence on this point is admittedly limited.

25

However, in view of the evidentiary record, including its observation of the critical witness on this

26

issue, the Court finds that an asset transfer occurred. This conclusion is based on testimony from

27

defendants’ 30(b)6 corporate designee, Momi Brosh, QT Vascular’s Vice President of Business

28

Operations. Brosh was designated by defendants to testify on the relationship between QT
41

1

Vascular, Quattro, and TriReme. He testified that QT Vascular assumed both the assets and

2

liabilities. (See Brosh Dep. at 277:19-281:1514.) Specifically, Brosh testified that the shareholders

3

of Quattro and TriReme agreed to form QT Vascular. In exchange, the shareholders would

4

receive shares of QT Vascular stock, and QT Vascular would receive “100% of all existing stock,

5

shares, assets, and liabilities in each of Quattro, [and] TriReme.” (Id.)

6

Persons designated as corporate representatives “[shall] testify as to matters known or
reasonably available to the organization.” Fed. R. Civ. P. 30(b)(6). A Rule 30(b)(6) deposition

8

notice serves a unique function: it is the sworn corporate admission that is binding on the

9

corporation. Hardin v. Wal-Mart Stores, Inc., No. 08-CV-0617 AWI BAM, 2011 WL 11563217,

10

at *2 (E.D. Cal. Dec. 2, 2011) (citing Gales v. Winco Foods, 2011 WL 3794887 (N.D. Cal. 2011)

11
United States District Court
Northern District of California

7

(“As a 30(b)(6) witness, her testimony is a sworn corporate admission binding on the

12

corporation.”). If the notice of deposition or subpoena served on the entity sufficiently describes

13

the matters on which questions will be asked, the entity is under a duty to designate and produce

14

“one or more officers, directors, or managing agents, or designate other persons who consent to

15

testify on its behalf . . . .” Rule 30(b)(6); Mitchell Eng’g v. City & Cnty. of S.F., 2010 WL

16

455290, at *1 (N.D. Cal. Feb. 2, 2010) (“A 30(b)(6) witness testifies as a representative of the

17

entity, his answers bind the entity and he is responsible for providing all the relevant information

18

known or reasonably available to the entity.”) (quotation marks and citation omitted); Great Am.

19

Ins. Co. of N.Y. v. Vegas Constr. Co., Inc., 251 F.R.D. 534, 541 (D. Nev. 2008). Still, other courts

20

hold that “testimony given at a Rule 30(b)(6) deposition is evidence which, like any other

21

deposition testimony, can be contradicted and used for impeachment purposes[,]” and that such

22

testimony does not “bind” the designating entity “in the sense of [a] judicial admission.” A.I.

23

Credit Corp. v. Legion Ins. Co., 265 F.3d 630, 637 (7th Cir. 2001). The Ninth Circuit has not yet

24
25
26
27
28

14

Designated portions of Brosh’s two-day video deposition testimony were played during
trial (see Trial Tr. at 970) and the designated transcript for that testimony appears at the end of
Day Five of the trial transcript. (See Dkt. No. 637 (Trial Transcript Volume Five) at 205.)
Citations to Brosh’s deposition include only designated portions played during trial.
42

1

decided the issue. Coalition for a Sustainable Delta v. McCamman, 725 F. Supp. 2d 1162, 1172

2

(E.D. Cal. 2010).

3

In the absence of specific direction from the Ninth Circuit, the Court joins those courts

4

who have adopted a middle ground and holds that defendants cannot rebut the testimony of their

5

Rule 30(b)(6) witness when, as here, the opposing party has relied on the Rule 30(b)(6) testimony,

6

and defendants have provided no adequate explanation for the rebuttal offered at trial. See MKB

7

Constructors v. Am. Zurich Ins. Co., 49 F. Supp. 3d 814, 829 n.11 (W.D. Wash. 2014); Hyde v.

8

Stanley Tools, 107 F. Supp. 2d 992, 993 (E.D. La. 2000), aff’d 31 Fed. App’x. 151 (5th Cir. 2001)

9

(per curiam) (unpublished); State Farm Mut. Auto. Ins. Co. v. New Horizont, 250 F.R.D. 203 (E.D.
Pa. 2008) (“The better rule is that the testimony of a Rule 30(b)(6) representative, although

11
United States District Court
Northern District of California

10

admissible against the party that designates the representative, is not a judicial admission

12

absolutely binding on that party,” but the party still may not “retract prior testimony with

13

impunity” and courts can disregard inconsistent testimony when the movant has relied on it); Tex.

14

Technical Inst. v. Silicon Valley, Inc., No. H–04–3349, 2006 WL 237027, at *5 (S.D. Tex. Jan. 31,

15

2006) (affidavit did not create an issue of material fact because it conflicted without explanation

16

with Rule 30(b)(6) testimony).

17

With this in mind, the Court expounds on the basis for its finding. Brosh testified that he

18

prepared for the deposition. He went over materials, spoke with the defendants’ financial team,

19

and with the research and development engineers. (Brosh Dep. at 33:11-19.) He provided specific

20

names of individuals with whom he spoke. (Brosh Dep. at 34:06-35:24; 36:09-14.) He estimated

21

that he spent approximately twenty hours preparing for the deposition, and that he met with

22

counsel in preparation. (Brosh Dep. at 34:06-35:24; 62:08-19; 62:23-63:05.) He also spent time

23

preparing on his own, including reading the QT Vascular IPO documents. (Brosh Dep. at 72:18-

24

73:06.) Because Mr. Brosh is not a native English speaker, a translator was present for his

25

deposition, as was his English-speaking counsel, and he was free to ask for translation assistance

26

during the deposition. (See Brosh Dep. at 59:09-12.)

27

In addition, the pattern of questioning by AngioScore’s counsel during the critical

28

moments of Brosh’s deposition permitted both sufficient review of the relevant documents, and
43

1

was sufficiently clear to provide Brosh an opportunity to understand what was being asked and

2

answer accordingly. Each question was constructed in the following format: counsel identified a

3

document and presented it to Brosh. She then read a brief sentence or phrase from the document

4

supporting a conclusion that certain factual events occurred. She would then ask if the relevant

5

sentence or phrase accurately set forth what actually happened. (See Brosh Dep. at 272:07-10;

6

273:19-21: 273:24-274:04; 277:19-277:22; 280:03-11; 281:02-15.) She did this no fewer than

7

four times. Brosh agreed every time. (See id.)

8
9

To the extent Brosh’s answers were inaccurate or erroneous, he was free to submit errata
following the transmittal of his deposition transcript. He elected to do so. Indeed, Brosh
submitted fairly extensive errata, in two parts, wherein he amended his answers for purposes of

11
United States District Court
Northern District of California

10

accuracy fifty-five times. (Dkt. Nos. 593-7, 593-8.) Tellingly, Brosh did not seek to amend or

12

correct the answers given with respect to QT Vascular’s acquisition of assets from TriReme and

13

Quattro. To the extent defendants believed that his testimony remained in some way deficient,

14

they were free to offer another person for deposition as to these issues. They did not do so.

15

Moreover, Brosh’s testimony that an asset transfer and liability assumption took place was

16

corroborated by contemporaneous documents reflecting that QT Vascular would be the product of

17

a merger between TriReme and Quattro. (PX 32; PX 43.) It is therefore not wholly controverted

18

by the evidence of record. At trial, defendants offered public statements of the corporate group

19

(comprising QT Vascular, TriReme US, TriReme Singapore, and Quattro), such as their initial

20

public offering documents and their 2013 annual report, to controvert Brosh’s statements. Those

21

documents purport to demonstrate that by virtue of an arms’-length corporate reorganization, QT

22

Vascular acquired all stock in Quattro and TriReme, with only certain liabilities. In exchange

23

therefor, the shareholders in each of TriReme and Quattro received shares of QT Vascular’s stock.

24

The Court is not convinced that these representations, standing alone, overcome the weight of

25

evidence to the contrary – Brosh’s testimony, the manner in which the defendants’ key players,

26

including Konstantino, Brosh, Haig, Pizarro, and Feld, conducted business affairs, and the fact that

27

the bulk of the management of these three defendant companies is entrusted to the same people.

28

Although some of these individuals simultaneously occupy different roles in the various defendant
44

1

corporations, these roles do not appear to be distinct. It also cannot be overlooked that Brosh, an

2

insider himself, reviewed the IPO document in preparation for his testimony and nonetheless

3

testified that QT Vascular acquired all assets and liabilities of TriReme and Quattro.

4

Based on the foregoing, the Court finds Brosh’s answers to the questions most relevant to

5

whether QT Vascular assumed all of TriReme’s and Quattro’s assets and liabilities and that given

6

the sufficiency of their reliability, AngioScore appropriately relied upon his answers. To the

7

extent that defendants seek to rely on contradictory testimony provided by Randall Farwell, QT

8

Vascular’s CFO, who was never deposed, and was first disclosed as a witness on the eve of trial,

9

long after discovery had closed, they cannot do so. Rule 30(b)(6) is a powerful and necessary
discovery tool, and AngioScore was entitled to rely upon Brosh’s representations in developing its

11
United States District Court
Northern District of California

10

case. To the extent Brosh’s testimony on this subject was inaccurate, there were multiple ways for

12

defendants to correct or clarify the evidentiary record and they have failed to provide any adequate

13

reason for why they did not do so, or why Brosh’s testimony should be rebutted. Their failure to

14

do so cannot be the basis for permitting an eleventh-hour witness to offer defendants’ preferred

15

version of events. To hold otherwise would be to permit a trial by ambush, which the federal

16

discovery rules are designed to avoid.
Having found that underlying the formation of QT Vascular was a transfer of assets and

17
18

liabilities from TriReme and Quattro, the Court now turns to whether QT Vascular is a successor

19

in interest to the liabilities of Quattro and TriReme. Again, a corporation acquiring the assets of

20

another corporation will be found to have succeeded in interest to the acquired corporation’s

21

liabilities if any one of the following applies: “(1) there is an express or implied agreement of

22

assumption, (2) the transaction amounts to a consolidation or merger of the two corporations, (3)

23

the purchasing corporation is a mere continuation of the seller, or (4) the transfer of assets to the

24

purchaser is for the fraudulent purpose of escaping liability for the seller’s debts.” Ray, 19 Cal.3d

25

at 28.

26
27

AngioScore argues that the first and second of the above theories apply here. As to the
first – express or implied agreement to assume liabilities – as explained above, the Court finds that

28
45

1

QT Vascular assumed the liabilities of Quattro and TriReme. Accordingly, imposing successor

2

liability is proper.

3

As to the second – whether the transaction amounted to a de facto merger – the Court also

4

finds that evidence supports a finding that this occurred. The de facto merger doctrine applies

5

under California law when “one corporation takes all of another’s assets without providing any

6

consideration that could be made available to meet claims of the other’s creditors” or when “the

7

consideration consists wholly of shares of the purchaser’s stock which are promptly distributed to

8

the seller's shareholders in conjunction with the seller’s liquidation.” Ray, 136 Cal. Rptr. at 578.

9

To determine whether a transaction “cast in the form of an asset sale actually achieves the same
practical result” as a merger, the Court considers the following factors: “(1) was the consideration

11
United States District Court
Northern District of California

10

paid for the assets solely stock of the purchaser or its parent; (2) did the purchaser continue the

12

same enterprise after the sale; (3) did the shareholders of the seller become shareholders of the

13

purchaser; (4) did the seller liquidate; and (5) did the buyer assume the liabilities necessary to

14

carry on the business of the seller?” Schwartz v. Pillsbury Inc., 969 F.2d 840, 846 (9th Cir. 1992)

15

(citing Marks v. Minn. Mining and Mfg. Co., 187 Cal. App. 3d 1429, 1436 (Ct. Ct. App. 1986)).

16

Here, QT Vascular assumed the assets and liabilities of Quattro and TriReme, and in

17

consideration, gave QT Vascular stock to the former shareholders of Quattro and TriReme. The

18

purchasing company, QT Vascular, continued in the enterprise of Quattro and TriReme after its

19

formation: manufacturing and selling the Chocolate device. The shareholders of Quattro and

20

TriReme became shareholders of QT Vascular, and QT Vascular assumed the liabilities of each.

21

It cannot be said that under these facts, the transaction resulting in QT Vascular did not achieve

22

the same practical result as a merger. See Marks, 187 Cal. App. 3d at 1437-38 (finding a

23

“reorganization” between a parent and a subsidiary constituted a de facto merger).

24
25

For these reasons, the Court finds that QT Vascular is the successor in interest to the
liabilities of Quattro and TriReme.

26
27
28
46

1

By usurping a corporate opportunity, defendants violated California’s Unfair
Competition Law.

V.

2
3
4
5
6
7
8
9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Under California Business and Professional Code section 17200, et seq., “any unlawful,
unfair or fraudulent business act or practice” is prohibited. Cal. Bus. & Prof. Code § 17200
(West). “Because . . . section 17200 is written in the disjunctive, it establishes three varieties of
unfair competition—acts or practices which are unlawful, or unfair, or fraudulent . . . .” Aleksick
v. 7–Eleven, Inc., 205 Cal. App. 4th 1176, 1184 (Cal. Ct. App. 2012). AngioScore argues that one
of these three bases apply here: that defendants’ acts constitute “unlawful” predicate acts to
establish liability under California’s Unfair Competition Law (“UCL”).15
A “violation of another law is a predicate for stating a cause of action under the UCL's
unlawful prong.” Graham v. Bank of Am., N.A., 226 Cal. App. 4th 594, 610 (Cal. Ct. App. 2014)
(citing Berryman v. Merit Prop. Mgmt., Inc.,152 Cal. App. 4th 1544, 1554 (Cal. Ct. App. 2007)).
“By proscribing any unlawful’ business practice, [S]ection 17200 borrows violations of other laws
and treats them as unlawful practices that the unfair competition law makes independently
actionable. Virtually any law—federal, state or local—can serve as a predicate for a [UCL]
action.” Law Offices of Mathew Higbee v. Expungement Assistance Servs., 214 Cal. App. 4th 544,
553 (2013) (quotations omitted); Cel-Tech Commc'ns, Inc., 20 Cal. 4th at 195 (Kennard, J.,
concurring and dissenting) (explaining that in 1963, the state legislature added “unlawful”
business practices to the list of proscribed conduct and thereby “expanded the definition of unfair
competition with respect to conduct violating statutory prohibitions, for now any business practice
that violated an independent statutory duty was an instance of unfair competition that could be
enjoined even if the underlying statute did not specifically authorize injunctive relief”) (citation
omitted). Common law violations may suffice as predicate acts under the UCL. Yanting Zhang v.
Superior Court, 57 Cal. 4th 364, 380 (Cal. 2013). Under the statute, “[p]revailing plaintiffs are
15

Although in prior briefing, AngioScore argued that defendants’ actions qualify as
“unfair” predicate acts for purposes of establishing UCL liability, the Court understands that
AngioScore has essentially withdrawn that argument. (Dkt. No. 658 (“AngioScore does not
request that the Court find that Defendants’ conduct also constitutes “unfair” acts and practices
under the UCL.”)).
47

1

generally limited to injunctive relief and restitution.” Korea Supply Co. v. Lockheed Martin

2

Corp., 29 Cal.4th 1134, 1144 (Cal. 2003) (quoting Cel-Tech Commc'ns, Inc., 20 Cal.4th at 179).

3

Accordingly, the Court addresses the issue below.

4

AngioScore seeks the extraordinary remedy of injunctive relief and asks that the Court

5

permanently enjoin defendants from continuing to sell Chocolate. In evaluating this request, the

6

Court has considered whether AngioScore has met its burden to establish that: (1) it has suffered

7

an irreparable injury; (2) remedies available at law, such as monetary damages, are inadequate to

8

compensate for that injury; (3) considering the balance of hardships between the plaintiff and

9

defendant, a remedy in equity is warranted; and (4) the public interest would not be disserved by a
permanent injunction. eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 390 (2006). Having

11
United States District Court
Northern District of California

10

considered these factors, the Court declines to award AngioScore’s requested injunction.

12

The Court possesses broad discretion in imposing equitable remedies upon finding a

13

violation of the UCL. Yanting Zhang, 57 Cal. 4th at 371 (citations omitted). Even when an unfair

14

business practice has been shown, the UCL does not require the imposition of equitable relief. See

15

Cortez v. Purolator Air Filtration Prods. Co., 23 Cal.4th 163, 180 (Cal. 2000) (“The court's

16

discretion is very broad. Section 17203 does not mandate restitutionary or injunctive relief when

17

an unfair business practice has been shown.”). Here, the Court is satisfied that the remedies set

18

forth below fully and fairly compensate AngioScore for its past and future harms, and adequately

19

addresses defendants’ wrongdoing. AngioScore has conceded that the existence of such relief

20

obviates the need for an injunction. (Dkt. No. 658 at 5.) See E.B.C. Trust Corp. v. JB Oxford

21

Holdings, Inc., 2005 WL 6214851, at *5 (C.D. Cal. Aug. 26, 2005) (injunctive relief “requires a

22

showing that other adequate relief is not available” and where “the plaintiff pursues other remedies

23

in addition to seeking relief under [UCL] the court may conclude that those other remedies obviate

24

the need for injunctive relief.”) (citations omitted). Furthermore, as discussed more below, an

25

injunction is directly contrary to the public interest. Accordingly, the Court declines to award

26

AngioScore its requested injunction.

27
28
48

REMEDY

1
2
3

I.

Legal Framework
The law abhors one who betrays his or her fiduciary duty. Thus, “[i]f an officer or director

4

of a corporation, in violation of his duty as such, acquires gain or advantage for himself, the law

5

charges the interest so acquired with a trust for the benefit of the corporation, at its election, while

6

it denies to the betrayer all benefit and profit.” Guth, 5 A.2d at 510. The bounds of this rule are

7

considerable, for it rests upon the “broader foundation of a wise public policy that, for the purpose

8

of removing all temptation, extinguishes all possibility of profit flowing from a breach of the

9

confidence imposed by the fiduciary relation. Given the relation between the parties, a certain
result follows; and a constructive trust is the remedial device through which precedence of self is

11
United States District Court
Northern District of California

10

compelled to give way to the stern demands of loyalty.” Id. at 270 (emphasis supplied). Where a

12

plaintiff has proved that its interests have been subverted by a disloyal fiduciary, “the corporation

13

may elect to claim all of the benefits of the transaction for itself, and the law will impress a trust in

14

favor of the corporation upon the property, interests and profits so acquired.” Id. at 273.

15

While it is true that damages flowing from a breach of fiduciary duty are to be liberally

16

calculated, Thorpe by Castleman v. CERBCO, Inc., 676 A.2d 436, 444 (Del. 1996) (citing

17

Milbank, Tweed, Hadley & McCloy v. Boon, 13 F.3d 537, 543 (2d Cir. 1994)), the Delaware

18

Supreme Court has held that where certain claimed damages were not proximately caused by the

19

breach, those damages were not recoverable. Id. Thus, causation remains a consideration for

20

damages even in the context of fiduciary duty breaches. Thorpe, 676 A.2d at 444; Boyer v.

21

Wilmington Materials, Inc., 754 A.2d 881, 907 (Del. Ch. 1999) (noting lack of causal relationship;

22

finding authority to award damages where the breach of duty caused economic harm to a

23

corporation) (citing Thorpe, 676 A.2d at 445). So, too, does causation remain at issue in the case

24

of aiding and abetting the commission of a tort. See Bancroft-Whitney Co. v. Glen, 64 Cal. 2d

25

327, 352 (1966) (“It is clear from the evidence . . . that Bender was aware of or ratified Glen's

26

breach of his fiduciary duties in all but a few respects, that he cooperated with Glen in the breach,

27

and that he received the benefits of Glen’s infidelity . . . . Under all the circumstances, Bender and

28
49

1

Bender Co. must be held liable for their part in Glen’s breach of his fiduciary duties. They

2

encouraged the sowing and reaped the benefit. They cannot now disclaim the burden.”).

3
4

II.

Defense of Causation
Defendants have argued throughout this case that AngioScore has failed to prove that

5

defendants’ behavior caused harm to AngioScore either because (i) the devices do not compete, or

6

(ii) Feld had an independent right to develop Chocolate. The Court is unpersuaded.

7

First, Chocolate and AngioSculpt compete. More than sufficient evidence exists in the

8

record to support a finding that Chocolate’s presence in the market has harmed AngioScore. The

9

Court explains:

10

In the angioplasty balloon market, there are two basic categories of products. First are the

United States District Court
Northern District of California

11

plain old balloon catheters, or POBAs, which come in three basic forms: compliant, semi-

12

compliant, and non-compliant. Within that field, POBAs come in different types (small, large,

13

standard, and high-pressure). (PX 294 at 251.) POBAs are priced between approximately $150 to

14

$200 per unit. (Trial Tr. at 412:7-9 (Viano direct).) Specialty balloons comprise a sub-market

15

within the broader angioplasty balloon market, and are priced as high as $1000, depending on

16

length. (See id.) Within that sub-market, there are relatively few players. (Id. at 249.) As of

17

2013, the specialty balloon catheter market was primarily occupied by four companies: Boston

18

Scientific, C.R. Bard, Abbott Laboratories, and AngioScore. The market share at that time reflects

19

that AngioScore was in close competition with Boston Scientific’s flagship product, the Cutting

20

Balloon: AngioScore occupied 48.1% of the specialty balloon market and Boston Scientific

21

occupied 47.1%. C.R. Bard held only 3.3% of the market with its specialty balloon, the

22

Vascutrak. Abbott Laboratories held only 1.3%. (PX 294 at 249.)

23

The similarities between Chocolate and AngioSculpt from a competitive viewpoint are

24

overwhelming. Both are specialty balloons. Both contain balloons made with nylon elements.

25

Both have a nitinol cage surrounding the balloon. Neither device leaves anything behind in a

26

vessel after it has inflated; no stent remains, for example. The purposes for the devices are the

27

same: to open occluded blood vessels and enable more blood flow. The devices share the same

28

target customers, both of which are specialized: interventional cardiologists and vascular surgeons.
50

1

(Trial Tr. at 407:20-408:3 (Viano).) The fact that the two products do not use identical

2

mechanisms of action does not mean that they do not compete.

3

The obviousness of the competitive relationship between the devices becomes undeniable

4

upon a review of defendants’ own pre-litigation communications regarding their goals for

5

Chocolate, then being developed and marketed. Konstantino himself made multiple written

6

references that touted the competitive benefits of the Chocolate compared to the AngioSculpt.

7

(See PX 66 (November 2009 Chocolate presentation referencing that Chocolate would “reduce

8

dissections”; dissections would occur with a scoring balloon, i.e., AngioSculpt); PX 124 (January

9

2010 email from Konstantino forwarding information memorandum outlining benefits of
Chocolate as Proteus’s proprietary device; identifying AngioScore as one of “only a couple

11
United States District Court
Northern District of California

10

companies” marketing specialty balloon products); PX 132 (October 2011 email from Vardit

12

Benjamin to Konstantino and Haig attaching “TriReme’s Competitor Analysis” spreadsheet;

13

identifying the AngioSculpt as competitor); PX 127 (February 2011 email Konstantino forwarded

14

his wife for purposes of his patent application background discussion, identifying AngioSculpt as

15

an “alternative tool” to Chocolate).) Chris Haig further confirmed the market similarities between

16

Chocolate and AngioSculpt. As Chocolate was being developed, TriReme faced the question of

17

where to price its new specialty balloon catheter device. In October 2011, an email from Steve

18

Dreaden entitled “AngioScore Competitive Information” relayed “competitive field intel on

19

AngioScore” in terms of their pricing. (PX 130.) The email itself and responses make clear that

20

TriReme priced Chocolate just $25 under AngioScore’s prices. (See also PX 135.)

21

Thus, for every size Chocolate was available, it was priced at exactly $25 below its

22

AngioScore counterpart. Notably, Haig admitted that pricing for the Chocolate was keyed off

23

AngioSculpt, as opposed to Vascutrak, because AngioSculpt was “on the higher side” of the

24

pricing spectrum and had higher clinical value. However, at that time they were first pricing

25

Chocolate, TriReme lacked clinical data on the value of Chocolate, further evidencing that

26

defendants believed AngioSculpt was the “closest competitor” to Chocolate. (PX 143.)

27

Konstantino himself approved the pricing.

28
51

1

Ample other evidence of record reveals that TriReme considered Chocolate competitive

2

with AngioSculpt. On December 30, 2011, following Chocolate’s 510K approval, for example,

3

Haig forwarded a powerpoint deck to Konstantino extolling the virtues of Chocolate. (PX 137.)

4

Included was a slide entitled “Chocolate – pricing strategy” that stated that Chocolate was “price

5

competitive to other “specialty” catheters to drive rapid adoption” and noted specifically that

6

AngioSculpt was priced at $852. (Id.) Sales discussions at TriReme focused substantially on

7

distinguishing Chocolate from AngioSculpt in order to gain market share over the other

8

competitive specialty balloons. To that end, in December 2012, high level discussions occurred at

9

TriReme concerning such things as how to describe Chocolate’s relative advantages compared to
the AngioScore and Vascutrak when communicating with potential customers. (PX 142.)

11
United States District Court
Northern District of California

10

Although the devices are different in some ways, “all of these balloons fall under the “specialty

12

balloon” category.” (Id.) The differences are finely tuned. In defendants’ parlance, AngioScore

13

was described as a “focal force” balloon; Chocolate was described as a “distributed force” balloon.

14

Defendants maintain that Chocolate is “the opposite of a scoring balloon” because when inflated,

15

the balloon itself protrudes through the nitinol cage, forming crowns or pillows that impress upon

16

the plaque. This, they claim, contrasts with the AngioSculpt, which is designed such that the

17

nitinol element itself presses into the plaque. Again, the Court finds that these differences do not

18

do not demonstrate lack of competition. TriReme acknowledged as much when it was marketing

19

Chocolate. The differences, to the extent the parties’ documents acknowledge them, were focused

20

on helping each side market its own product as against the other side’s product – indeed, the

21

Court finds that such documents, on the whole, reaffirm that the devices were competing with one

22

another, not that they were so different that they did not compete.

23

Defendants’ succeeded in their attempt to compete with the AngioSculpt. Frank Viano,

24

Eastern Area of VP of Sales for Spectranetics (which acquired AngioScore), testified on the

25

competitive relationship between Chocolate and AngioSculpt. With over 20 years of experience

26

in the area of selling cardiovascular angioplasty devices, including experience working with

27

AngioScore’s other competitors such as Boston Scientific, Viano attested that he has personally

28

seen sales of AngioScore products affected by the advent of Chocolate. According to Viano,
52

1

Chocolate is the closest competitor to AngioSculpt in the field of specialty balloons. Viano also

2

confirmed that POBAs and stents are not competitors with AngioSculpt.

3

Loss of AngioSculpt sales have been directly attributed to Chocolate. (Trial Tr. at 444:20445:21 (Viano, discussing losing five to ten units a month to Chocolate, including its sales to Dr.

5

Garcia, defendants’ industry expert).) Viano testified that he has been asked to reduce prices for

6

AngioSculpt approximately twenty-five to thirty times. Corroborating that testimony, in March

7

2013, for example, Viano was asked via email by a sales and service representative in Maryland

8

and Rhode Island to reduce the AngioSculpt price because Chocolate had been offered at a lower

9

price. (PX 152.) He estimated that requests to reduce prices for AngioSculpt sales have occurred

10

at approximately ten to fifteen percent of the 200 or 250 hospitals falling under his jurisdiction. In

11
United States District Court
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4

response to the competition from Chocolate, Viano explained that he has directed his sales

12

representatives to provide more sales focus time on the AngioSculpt, to “sell our features, clinical

13

success, and track record to the hospitals in a much more robust fashion.” (Trial Tr. at 418:18-

14

419:5 (attesting to diversion of resources at AngioScore due to counter market threats by

15

Chocolate and including lowering prices for AngioSculpt).)

16

Defendants place much reliance on the fact that AngioScore initially disclaimed any

17

similarity between the devices when Chocolate was first released. The Court finds such

18

arguments unpersuasive. Initial reactions to Chocolate on behalf of AngioScore’s marketing team

19

expressing skepticism that Chocolate could compete with AngioSculpt,16 are not dispositive of the

20

question of whether, in fact, these devices compete. As explained above, the fact that the devices

21

are different in design does not undermine their competitiveness with one another. Based on

22

similar reasoning, the fact that in June 2014, Viano created a chart outlining the advantages of

23

AngioSculpt as compared to Chocolate for distribution to the AngioSculpt sales team does not

24

support a finding that the devices are not competing with one another. If anything, it affirms it.

25
26
27
28

16

Notwithstanding these assessments, which the Court finds reflected an optimistic
viewpoint designed to motivate AngioScore’s sales force, Viano confirmed that even at the
beginning he viewed Chocolate as a “competitive threat” to the AngioSculpt and instructed his
sales team to “knock it down right away.” (DX 1581.)
53

1

(DX 1770.) Viano testified that he and a colleague created the chart in response to TriReme’s

2

recent acquisition of a 510(k) clearance for their Chocolate PTCA Balloon. At that point, they

3

understood that the Chocolate device was an “immediate competitive threat.” Accordingly, the

4

chart was designed to identify all the ways in which AngioScore’s device was superior.

5

Defendants’ criticism that AngioScore’s submission of sales documents do not
demonstrate a direct corroboration or one-to-one link between decrease in sales, and, in particular,

7

Chocolate as the source of the loss, is not dispositive. The proffered evidence more than meets the

8

legal standard. Leaving aside the weight of evidence confirming that AngioScore was forced to

9

lower its prices on its products due to pressure from Chocolate, and that defendants themselves

10

claimed that clinicians were replacing AngioScore devices with Chocolate (PX 164), defendants

11
United States District Court
Northern District of California

6

argue that Chocolate did not impede AngioScore’s market share because the two devices are

12

“complementary.” The only practitioner evidence directly supporting this notion is testimony

13

from Dr. Garcia, defendants’ industry expert. Defendants place more weight on this testimony

14

than it can bear. Dr. Garcia, whose testimony is of marginal weight given his pre-existing

15

relationship with the defendants, testified that Chocolate and AngioSculpt are complementary, and

16

stated that Chocolate and AngioSculpt can be used “in concert, in the same patient.” (Trial Tr. at

17

911:16-25.) But Dr. Garcia himself could not recall ever having used a Chocolate and

18

AngioSculpt in this manner. Nor could he recall any medical studies recommending such

19

complementary usage. Furthermore, he admitted that defendants’ promotional materials did not

20

tout Chocolate as “complementary” to another product. (Trial Tr. at 932:4-933:3.) Indeed,

21

defendants’ goal was to have physicians replace their use of AngioSculpt with Chocolate, and gain

22

market share. (PX 164 (noting that clinicians are replacing the use of Scoring/Cutting

23

(AngioScore) devices with Chocolate).)

24

Defendants’ second argument is that due to Feld’s independent right to assign his interest

25

in Chocolate, defendants enjoyed an independent right to develop Chocolate. Thus, they reason

26

that AngioScore cannot demonstrate that their actions caused AngioScore’s harm, and that

27

AngioScore cannot establish that had the opportunity been offered by Konstantino, it would have

28
54

1

been able to acquire an exclusive right to Chocolate. The Court rejects this conclusion as contrary

2

to the facts of record and reasonable inferences therefrom.

3

Defendants’ position hinges on the notion that Feld would never have assigned his rights to

4

AngioScore under any circumstances. The Court finds this argument implausible. Feld testified

5

that while he was the engineering leader on the device, Konstantino was the one with the business

6

acumen. Indeed, in deposition, Feld stated that he had no involvement with “the business side.”

7

(Trial Tr. at 862:21-863:1.) He had incomplete knowledge of who Chocolate’s first investors

8

were and was not involved in determining who could be a potential partner for Chocolate. (Trial

9

Tr. at 863:10-14.) Konstantino was responsible for handling such things. Based on this and other
of Feld’s testimony, the Court finds that Feld would have assigned his interest wherever and to

11
United States District Court
Northern District of California

10

whomever Konstantino recommended. That Feld was subject to Konstantino’s business decisions

12

and did not exert any independent control over these decisions is further evidenced by the fact that

13

despite Feld’s critical role in designing the device, he was paid only $70,000 for his interest in

14

Chocolate while Konstantino was paid $250,000. Feld’s undeniable deference to Konstantino’s

15

independent business decisions is further underscored by the fact that Konstantino received a

16

2.85% royalty in Chocolate where Feld received only 2.15%. Had Konstantino offered the

17

opportunity to AngioScore, the Court is steadfastly confident that based on Feld’s lack of business

18

acumen, allegiance to Konstantino, and fundamental character, he would have followed

19

Konstantino’s lead. For this reason, defendants’ insistence that Feld’s independent right somehow

20

undermines AngioScore’s harm does not persuade. Feld’s claim he disliked AngioScore and

21

would not have wanted Chocolate to belong to AngioScore, is belied by the objective facts and

22

only raised conveniently in the context of ongoing litigation.

23

In sum, the Court finds that plaintiffs have offered sufficient evidence to establish that

24

defendants’ conduct – Konstantino’s breach and defendants’ aiding and abetting that breach –

25

intentionally, and directly caused AngioScore harm.

26
27
28
55

1
2
3

III.

Remedy Awarded
A. Konstantino may retain no benefit he received as a result of his breach.
Under Guth, the remedies available in a breach of duty case are designed to “den[y] to the

4

betrayer all benefit and profit.” Guth, 5 A.2d at 510. AngioScore has proved that its interests

5

have been subverted by a disloyal fiduciary, and may now “elect to claim all of the benefits of the

6

transaction for itself.” Id. at 273; see also Thorpe, 676 A.2d at 445 (“Once disloyalty has been

7

established, the standards . . . require that a fiduciary not profit personally from his conduct, and

8

that the beneficiary not be harmed by such conduct.”).

9

Accordingly, Konstantino may retain no benefit of his breach. The result, while
potentially viewed as harsh, is designed to deter such conduct from occurring in the first place. It

11
United States District Court
Northern District of California

10

differs from contractual remedies and does more than return AngioScore to the position that it

12

would have been in had the breach never occurred. It serves to deter future transgressions. To

13

wit, Konstantino’s personal disgorgement shall include the $250,000 he received in agreeing to

14

assign his intellectual property rights to Chocolate, as well as the 2.85% royalty on Chocolate

15

sales. It also includes his shares in QT Vascular stock, which total roughly 15 million, and his

16

existing stock options. Furthermore, Konstantino must disgorge any and all monies he collected

17

in any sale of such stock, the monies he has received relative to his royalty share, and any monies

18

he has made in connection with his monthly consulting retainer relative to Chocolate.

19
20
21

B. The Court awards AngioScore its past and future lost profits as the most
appropriate equitable remedy.
In light of the fact that the underlying claim is equitable in nature, the Court has broad

22

discretion to address inequity. See Gotham Partners, L.P. v. Hallwood Realty Partners, L.P., 817

23

A.2d 160, 175 (Del. 2002) (citing Weinberger v. UOP, Inc., 457 A.2d 701, 715 (Del. 1983)

24

(noting “the broad discretion of the Chancellor to fashion such relief as the facts of a given case

25

may dictate”); Int’l Telecharge, Inc. v. Bomarko, Inc., 766 A.2d 437, 439 (Del. 2000) (noting that

26

this Court “defer[s] substantially to the discretion of the trial court in determining the proper

27

remedy”)). Beyond the disgorgement of benefits Konstantino personally received as a result of his

28

breach, the Court finds it appropriate, given the totality of the circumstances, to fashion a remedy
56

1

in order that defendants may be deterred from future breaches and to compensate AngioScore, as

2

“the beneficiary must not be harmed by such conduct.” Boyer, 754 A.2d at 906.

3

As set forth above, AngioScore has proved that Chocolate’s market presence has cost it

4

market share and resulted in lower profits; the causation element is satisfied. But it must be noted

5

that the harms resulting from defendants’ wrongdoing are difficult to quantify, especially given the

6

industry and the infancy of Chocolate. The Court, “fortunately, has broad discretion to tailor

7

remedies to suit the situation as it exists.” Cantor Fitzgerald, L.P. v. Cantor, No. CIV.A. 16297,

8

2001 WL 536911, at *3 (Del. Ch. May 11, 2001). Cognizant of this framework, AngioScore has

9

presented myriad alternative remedies that it believes would work to the same equitable ends. For
example, AngioScore has presented measurements of the following alternative remedies: (i)

11
United States District Court
Northern District of California

10

disgorgement of defendants’ past profits from Chocolate; (ii) an injunction on the sale of

12

Chocolate; (iii) awarding AngioScore its lost profits sustained to date, and a reasonable estimate

13

into the future; and (iv) awarding AngioScore the present value of Chocolate, which represents its

14

value into the future. The Court first explains why a lost profits award is, in its estimation, the

15

most appropriate for this case, and next explains why the other proposed remedies are wanting.

16

The Court finds that AngioScore’s calculated lost profits, reflective of both its harm to this

17

point and into the future, is sufficiently well-established to remedy AngioScore’s harm, and

18

represents an appropriate degree of opprobrium for defendants’ wrongful behavior. Thus, the

19

Court awards AngioScore (i) its current lost profits of $2.97 million, representing the profits it

20

would have generated had business not been diverted to defendants, and (ii) its future lost profits

21

where, as here, the Court declines to issue an injunction and permits Chocolate to stay on the

22

market. That value is $17.064 million, representing AngioScore’s lost profits on future sales from

23

2014 through the second quarter of 2019. (PX 383; Trial Tr. at 759:22-760:2.)

24

Defendants’ dispute as to AngioScore’s lost profits calculation centers on the definition of

25

the “market” in which AngioSculpt and Chocolate compete, and the corresponding market share

26

used to calculate AngioScore’s lost sales.17 For reasons explained extensively above and

27
17

28

As explained extensively above, although defendants maintain that Chocolate has not
caused AngioScore to suffer lost profits, the Court disagrees. The evidence demonstrates
57

1

incorporated by reference, the Court finds the specialty balloon market to be the relevant market

2

for purposes of analysis, not the whole angioplasty balloon catheter market. Of particular import

3

is that specialty balloons are priced significantly higher than POBAs and are designed to address

4

more complex medical problems where only four devices are employed: AngioSculpt, Chocolate,

5

Vascutrak, and Cutting Balloon. Defendants themselves have long recognized that Chocolate

6

would compete with AngioSculpt and priced their device accordingly. Thus, AngioScore’s lost

7

profits model, which limits the relevant market to that of specialty balloons rather than POBAs,

8

provides an accurate estimation of losses AngioScore has suffered due to Chocolate’s market

9

presence.18 Having addressed this objection, the Court awards AngioScore $2.97 million,
representing its lost profits from December 2011, when Chocolate entered the market, to June

11
United States District Court
Northern District of California

10

2014, when AngioScore filed its claim.

12

Next, AngioScore is awarded $17.064 million, which represents one measure to address

13

future harms, namely, AngioScore’s calculation of its future lost profits through mid-2019.19 In

14

declining to award AngioScore’s estimated present values for Chocolate, which total either $46 or

15

$96 million, the Court weighed and balanced myriad considerations. The Court has endeavored to

16

remain faithful to the purposes of remedies for breach of fiduciary duty: the deprivation to the

17

wrongdoer of benefits borne of the breach, and the goal of ensuring that a plaintiff will not

18

continue to be harmed. The Court also finds that an award must be commensurate with the

19
20
21
22
23
24
25

conclusively that the devices do compete, and that defendants in fact intended that AngioScore
would experience lower profits due to Chocolate.
18

Defendants’ expert, Prowse, used an iData report in his competing calculation.
Although in their briefing, defendants do not dispute the suitability of the Millennium Research
Group Reports for the calculation AngioScore’s relevant market share 2013 and 2014, and upon
which Gary Olsen, AngioScore’s expert, relied in formulating his market share lost profits
analysis, the Court notes that both parties use the Millennium Research Group reports regularly in
the course of their business. Thus, the Court finds it the more reliable of the two for purposes of
this analysis.

26
19

27
28

The end date certain is defined by the useful life of the AngioSculpt product with which
Chocolate has been shown to compete. (Trial Tr. at 761:19-762:2.) Notably, the time period here
reflects a conservative approach. (Trial Tr. at 763:3-8.)
58

1

highest degree of opprobrium for defendants’ wrongful conduct, cognizant that here, had

2

Konstantino resigned from AngioScore’s board before Chocolate became an opportunity, this

3

dispute would not exist. AngioScore possessed no right to be offered the Chocolate opportunity

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absent Konstantino’s board membership. Thus, the appropriate remedy is also one that does not

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work to the destruction of new innovative technology. This is critical, as there is a public benefit

6

derived from healthy advancement and competition in the marketplace, particularly in the area of

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medical devices. Put differently, the Court finds that equity demands that any remedy be

8

sufficient to repair and deter without being gratuitously extreme.

9

With these principles in mind, AngioScore’s alternative remedies are less satisfying. For
example, AngioScore’s first proposed remedy – an injunction barring the sale of Chocolate – is

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not appropriate here, where the parties concede that a monetary award will serve as an adequate

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remedy. Moreover, the Court cannot overlook the harm such an injunction would work on the

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public interest. That AngioScore asks the Court to remove from the quiver of practicing

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physicians one arrow with which they might treat a patient is brazen, particularly where they also

15

seek monetary damages, albeit as an alternative. The Court sees limited benefits in removing from

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the avowedly limited field of specialty balloon catheters a device that has been approved for

17

medical use in treating complex disease. An injunction is plainly inappropriate.

18

Next, given the infancy of Chocolate, calculating an award based on defendants’ past

19

profits is less satisfying.20 Here, AngioScore contends that profits defendants have earned to date

20

due to Chocolate total $5,038,000. (ARB at 21.) Unsurprisingly, defendants dispute this amount.

21

The disagreement turns on the fact that Chocolate is a new product being developed in a start-up

22

environment.

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20

In cases concerning aiding and abetting a breach of fiduciary duty, disgorgement is one
available remedy. See Am. Master Lease LLC v. Idanta Partners, Ltd., 225 Cal. App. 4th 1451,
1481 (2014), as modified (May 27, 2014); see also Triton Const. Co. v. E. Shore Elec. Servs., Inc.,
No. CIV.A. 3290-VCP, 2009 WL 1387115, at *28 (Del. Ch. May 18, 2009) aff'd, 988 A.2d 938
(Del. 2010) (finding that where defendants aided and abetted the breach of fiduciary duty, they are
jointly and severally liable for the damages imposed to remedy those breaches) (citing Gotham
Partners, 817 A.2d at 173).
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AngioScore’s calculation centers on the delta between the sales price of the device less the

2

actual cost to manufacture, less a deduction for some marginal costs. Defendants, by contrast,

3

argue that all their research and development (“R&D”) costs should be considered in determining

4

past and future lost profits. Both positions suffer from want of certainty, and were proffered to the

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Court without any industry context or a fulsome record,21 as R&D costs can be treated in various

6

ways from an accounting perspective.22 Further, Defendants cannot dispute that the product has

7

been successful enough to generate revenues of approximately $11 million in 2014 and an

8

anticipated $20 million in 2015; and that optimism in the product is great, as evidenced by

9

defendants’ ability to raise $40 million in an initial public offering and a market capitalization
estimated at $170 million. On the whole, this approach is not as compelling as a remedy based on

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AngioScore’s established record of profits.

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For example, AngioScore contends that the only evidence the Court should consider
with respect to defendants’ costs should be the testimony of defendants’ 30(b)(6) witness. (Brosh
Dep. at 235:04-14.) The position does not persuade. Brosh was designated as a witness to answer
questions relating to annual revenues and annual profits realized in connection with the
manufacture and sale of Chocolate devices in the United States and worldwide. (Dkt. No. 593-3 at
4, Topic 5.) The topic, although connected conceptually to the notion of R&D costs, did not
expressly state that Brosh’s testimony would concern the same. Importantly, counsel’s questions
of Brosh, which form the substance of his designated testimony, did not seek to elicit testimony
concerning the R&D costs associated with Chocolate. Rather, the designated portions of his
deposition concern the costs to defendants of manufacturing each unit, the amount TriReme pays
Quattro for the manufactured units, and the profit margin realized upon market sale. (See Brosh
Dep. at 228:01-05; 228:14-17; 229:06-14.) Thus, Brosh was not asked, nor did he testify to, costs
incurred as part of defendants’ development of Chocolate. AngioScore cannot reasonably be
heard to argue that it in any way understood Brosh’s designated testimony to concern such costs,
nor that the testimony of Randall Farwell, QT Vascular’s Chief Financial Officer, as to such costs,
should be barred. Accordingly, the Court finds the Brosh testimony inconclusive and unhelpful in
the Court’s endeavor to discern the most appropriate measure for assessing defendants’ profits in
this particular industry for this particular product. See Restatement Third of Restitution § 51, com.
h (“Denial of an otherwise appropriate deduction, by making the defendant liable in excess of net
gains, results in a punitive sanction that the law of restitution normally attempts to avoid.”).
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Not only are R&D costs treated differently across industries, but at times they are sunk
costs. Further, prior to Chocolate, defendants had never manufactured a specialty balloon. Thus,
they had to invest in some amount of infrastructure in order to develop Chocolate. It is not clear
that such costs should not be considered sunk costs as well. Ultimately, defendants chose not to
be fully forthcoming with their financial information, with the result that they cannot now hide
behind their own lack of disclosures and claim no profit.
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Next, the Court finds both of AngioScore’s present value calculations lack adequate

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foundation. First, AngioScore relies upon terminal value for purposes of determining Chocolate’s

3

present value. Such calculations formed the basis for Gary Olsen’s present value calculation. (See

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PX 381; PX 383.) The use of a terminal value is most commonly used to evaluate the value of a

5

firm, rather than the future value of a discrete device or invention. (Trial Tr. at 1220:1-17.)23 The

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application of a terminal value to a going concern company assumes that the company will

7

continue beyond an explicit forecast period. Plaintiffs have failed to provide sufficient foundation

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showing that such a measurement is appropriate in the context of valuing a new device or product.

9

As an alternative to its terminal value calculation for Chocolate’s present value,
AngioScore contends in its post-trial briefing that the application of a multiple to current revenue

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in order to calculate Chocolate’s present value is appropriate. Applying that multiple to

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AngioScore’s 2014 revenue results in a total of $35 million, which AngioScore argues represents

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another measure of Chocolate’s present value. The Court finds that this, too, lacks foundation.

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Olsen’s testimony does not support a finding that this is a satisfactory method of calculating the

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value of a technology, as opposed to a going concern. As with the use of a terminal value,

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AngioScore’s proof at trial concerning the appropriateness of using a revenue multiple effectively

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relied on the fact that this valuation technique was used in valuing QT Vascular as a going concern

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with a stabilized revenue stream, not the Chocolate as a new technology. (Trial Tr. at 777:5-13

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(Olsen, testifying that use of a revenue multiple is a common way to value a company and noting

20

that AngioScore and QT Vascular have been valued using a multiple applied to revenue); Trial Tr.

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at 780:2-7; see also Trial Tr. at 1246:18-1251:25 (Prowse, testifying that such measures are used

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to value companies).)

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Terminal value calculations play a part in appraisal proceedings which require valuation
of a company. See Del. L. of Corp. and Bus. Org § 9.45 VALUATION IN A DELAWARE APPRAISAL
PROCEEDING, 2006 WL 2454231 (noting that the discounted cash flow analysis utilizing a terminal
value is a valid methodology for purposes of determining the value of appraised shares; “the value
of a company is equal to the present value of its projected future cash flows” ). AngioScore’s cited
case in support of applying a terminal value, In re Orchard Enterprises, Inc., No. CIV.A. 5713CS, 2012 WL 2923305 (Del. Ch. July 18, 2012), concerned an appraisal of stock values and did
not apply a terminal value to a brand new technological device.
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In sum, the Court finds that equitable considerations counsel in favor of awarding

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AngioScore a remedy in the form of its past and future lost profits. Such a remedy repairs and

3

deters without being punitive.

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C. Corporate defendants are liable for damages AngioScore has sustained.
As aiders and abettors of Konstantino’s breach of fiduciary duty, defendants are jointly and
severally liable. See Casey, 127 Cal. App. 4th at 1144; Neilson, 290 F. Supp. 2d at 1133 (noting

7

that California courts cite Restatement (Second) of Torts section 876 to hold that “liability may

8

properly be imposed on one who knows that another’s conduct constitutes a breach of duty and

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substantially assists or encourages the breach.”) (citations omitted); see also Gotham Partners,

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817 A.2d at 160. Based upon the detailed discussion above, this liability should extend to the

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corporate defendants. See Bancroft-Whitney, 64 Cal.2d at 352 (finding that where defendant

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aiders and abettors were “aware of or ratified a director’s breach of his fiduciary duties in all but a

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few respects, . . . cooperated with [the director] in the breach, and . . . received the benefits of [the

14

director’s] infidelity . . . . [they] must be held liable for their part in the director’s breach of his

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fiduciary duties. They encouraged the sowing and reaped the benefit. They cannot now disclaim

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the burden.”).

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CONCLUSION
In summary, the Court finds that Konstantino not only breached his fiduciary duties, he

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actively hid his transgressions to avoid detection. As a result, he exploited the Chocolate

20

opportunity for his own gain rather than providing the opportunity to AngioScore, as he was duty

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bound to do. While such a duty would not have existed had he resigned before Chocolate became

22

an opportunity, Konstantino’s breach resulted in measurable harm to AngioScore.

23

A director’s duty to the corporation he serves cannot be ignored under the mantra of

24

innovation. Should a director walk that path, the innovation must be offered, the conduct

25

transparent, and the fidelity to one’s duty paramount. While conflicts between the desire to

26

innovate and the obligations of board membership may arise, a director always has the option to

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resign. Here, Konstantino did neither, and thus, a remedy must be awarded to address the breach.

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The Court further finds that Quattro and TriReme aided and abetted the breach of fiduciary duty,
62

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and that QT Vascular is liable for the acts of Quattro and TriReme.

2

Accordingly, the Court ORDERS the following measures of damages:

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1. Konstantino shall disgorge the benefits he obtained by way of his breach; and

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2. Defendants are liable for AngioScore’s past and future lost profits, totaling $2.97

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million and $17.064 million, respectively, for a total of $20.034 million.
No later than July 13, 2015, the parties shall submit a joint statement including language
for a form of judgment, approved as to form, to be issued upon conclusion of the patent trial.
IT IS SO ORDERED.
Dated: July 1, 2015
______________________________________
YVONNE GONZALEZ ROGERS
UNITED STATES DISTRICT COURT JUDGE

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FINDINGS OF FACT

1
2
Findings of Fact

3
4

Supporting Evidence

1.

Konstantino and Feld began
development of Chocolate while
Konstantino served on AngioScore’s
Board. Konstantino and Feld jointly
conceived of the idea for Chocolate
no later than the Fall of 2009.

Trial Tr. at 846:20-847:13, 850:3-25 (Feld
direct), 1290:25-1293:6 (Konstantino
4/21/2015 direct); DX 1609.

2.

Konstantino was a member of
AngioScore’s Board of Directors from
March 2003 until February 5, 2010.

Trial Tr. at 133:7-11, 1275:21-23, 1288:251289:3.

3.

Konstantino knew he owed fiduciary
duties to AngioScore as a member of
its Board of Directors.

Trial Tr. at 133:7-11; PX 101 (letter of
February 10, 2009, confirming matters
relating to Konstantino’s transition from
employee and board member, to solely board
member; noting that as such, he remained
subject to fiduciary duties to the Company.)

4.

Konstantino and non-party Feld
jointly conceived of the idea for
Chocolate during a telephone call.
While serving on AngioScore’s
Board, Konstantino conceived of an
idea for an angioplasty balloon that
had pillow and groove formations
when inflated, and had a telephone
call with Feld. The two men then
“brainstormed” together. Konstantino
conceived of the notion of a balloon
with pillows and grooves; Feld
suggested this could be achieved with
a nitinol cage. This was the balloon
catheter that later became known as
Chocolate.

Trial Tr. at 1290:25-1291:21 (Konstantino
4/21/2015 direct stating that Feld was the first
to suggest a nitinol cage to achieve pillows
and grooves); 1292:22-1293:6; Trial Tr. at
846:20-847:13 (Feld direct, explaining that
Konstantino and Feld were “brainstorming”
and Feld was talking about using a frame or
cage for what would eventually become
Chocolate; later clarifying that he later
thought that “it might be a good idea and that
I should spend some time trying to create a
model for this”); DX 1609; PX 109 at 0004.

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Findings of Fact

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Supporting Evidence

2
5.

While the precise extent of
development of Chocolate as of
February 5, 2010 is not certain, it was
developed sufficiently to constitute a
corporate opportunity as of that date.

Trial Tr. at 139:20-141:21 (Konstantino
direct, “In 2009, and before I left the
AngioScore board, I had an idea, one of three
or four other ideas that I had at the same time.
Around mid-January 2010, I made a decision
to pursue this idea, and that’s pretty much
it.”); 328:6-15 (Haig direct, noting that as of
February 3, 2010, Chocolate was sufficiently
developed such that it could be presented as
part of the “scope of products that TriReme
was working on”); see also PX 80.

6.

3

In October 2009, TriReme’s Board
was notified of the Chocolate
opportunity.

Trial Tr. at 1096:19-1097:11 (Pizarro crossexam). See also Trial Tr. at 1291:22-1292:3
(Konstantino 4/21/2015 direct) (Konstantino
stated that he met with “maybe 20 to 30”
different investors in the second half of 2009).

7.

On October 12, 2009, while serving
on AngioScore’s Board, Konstantino
drafted and applied for a provisional
patent application on the Chocolate
technology, naming himself and Feld
as co-inventors.

Trial Tr. at 200:15-201:10; PX 63; PX 64
(October 2009 patent application listing Feld
as co-inventor).

8.

While Konstantino was serving on
AngioScore’s Board, Feld and
TriReme employees assisted with the
Chocolate design, prepared
engineering drawings on TriReme
templates, built prototypes, and
performed bench tests.

Trial Tr. at 152:5-153:4, 153:11-154:21,
155:3-156:25, 850:18-851:18, 863:17-864:3,
881:5-24, 1070:17-1073:1, 1078:11-1079:8;
PX 65; PX 67; PX 72; PX 74; PX 87; PX 89;
PX 90; PX 91; PX 92; PX 93; PX 109 at
0004; PX 618; PX 619; PX 620; Delos Santos
Dep. at 48:23-25, 51:4-9, 76:23-77:7, 77:1218, 77:21-25; 78:1, 90:23-91:11, 96:19-22,
96:23-25, 97:1-2.

9.

While Konstantino was serving on
AngioScore’s Board, a TriReme
employee showed Chocolate to
physicians.

PX 76 (January 2010 email between Ong,
Pizarro, Haig re physician feedback;
confirming Chocolate was shown to at least
one physician); Trial Tr. at 364:13-365:15
(Haig direct).

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Findings of Fact

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Supporting Evidence

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10.

While Konstantino was serving on
AngioScore’s Board, he and seven
other TriReme employees attended
animal testing on Chocolate at
Stanford sponsored by Quattro, then
known as Proteus, in January 2010.

PX 11 (Report from Stanford study); PX 18
(recording attendees from TriReme at test);
Trial Tr. at 172:13-173:6, 248:11-23.

11.

While serving on AngioScore’s
Board, Konstantino sought to raise
funds from third-party investors and
the Singapore Economic Development
Board in connection with Chocolate,
with assistance from several TriReme
employees.

Trial Tr. at 239:8-240:24, 243:19-244:3,
1292:1-3 (Konstantino direct); PX 2
(December 2009 email between Cheng and
Ong re Proteus’s Chocolate device, attaching
powerpoint presentation for Singapore
Economic Development Board); PX 3
(January 2010 engagement letter between
Proteus and Maida Vale Associates signed by
Konstantino referring to financial advisor
arrangement for Proteus); PX 85 (December
2009 email between Konstantino, Ong, and
Foo (Maida Vale) re Proteus’s executive
summary on Chocolate, requesting Foo sign a
nondisclosure agreement); Ong Dep. at 16:39, 16:11-19, 16:23-17:8, 17:11, 21:4-10,
22:21-23:2, 29:22-30:17, 127:19-22, 128:410.

12.

During the second half of 2009,
Konstantino offered 20 to 30 investors
the opportunity to invest in Chocolate.

Trial Tr. at 1292:1-3 (Konstantino direct); see
also Trial Tr. at 878:15-21, 879:1-9 (Feld
examination by Court, stating that
Konstantino met with “dozens of investors” in
the 2009 time frame).

13.

In presentations seeking to raise funds
for Chocolate, Konstantino described
Chocolate as an “Investment
Opportunity.”

PX 2 at 0013 (December 2009 email between
Cheng and Ong re Proteus’s Chocolate
device, attaching powerpoint presentation for
Singapore Economic Development Board);
PX 85 at 0014 December 2009 email between
Konstantino, Ong, and Foo (Maida Vale) re
Proteus’s executive summary on Chocolate,
requesting Foo sign a nondisclosure
agreement).

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Findings of Fact

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Supporting Evidence

2
3

14.

In a November 2009 presentation
seeking funding from the Singapore
Economic Development Board,
Konstantino stated that the Chocolate
“IP, Concept design, Prototypes,
business model, Team, [and]
partnerships” were all “completed.”

PX 2 at 0010 (November 2009 presentation);
Trial Tr. at 239:8-240:24; see also PX 85 at
0011 (email to Kah Foo transmitting
November 2009 presentation); Trial Tr. at
162:12-19 (Konstantino direct).

15.

In December 2009 correspondence
with Dr. Kah Foo, with whom
Konstantino was working to get
financing for Chocolate, Konstantino
represented that the “initial
[Chocolate] design already works well
and attracts a lot of attention.”

PX 73 at 0001 (December 2009 email
between Konstantino, Foo, and Ong); Trial
Tr. at 160:23-25, 1319:17-1320:2
(Konstantino).

16.

In January 2010, Konstantino sent Dr.
Kah Foo, with whom Konstantino was
working to get financing for
Chocolate, a memorandum stating that
the “Proof-of-Concept of the
[Chocolate] design has been
completed.”

PX 124 at 0003 (January 2010 email wherein
Konstantino transmits “Proteus Information
memorandum” reflecting status of Chocolate
development to that point); Trial Tr. at 144:913, 160:23-25.

17.

Other presentations dated before
Konstantino left AngioScore’s Board
stated that the Chocolate “product
design” was “completed.”

PX 585 at 0015 (October 2009 powerpoint re
status of Chocolate, reflecting that “Front-end
R&D: product design completed”); see also
PX 78 at 0014 (February 2010 presentation re
Chocolate).

18.

The first Chocolate 510(k) was
submitted on April 8, 2011.

PX 197 (510K notificaton for Chocolate PTA
Balloon catheter); PX 201; Trial Tr. at
1009:14-1010:5.

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Findings of Fact

1

Supporting Evidence

2
3

19.

The two kinds of testing on which the
first Chocolate 510(k) relied to get
FDA clearance—mechanical bench
testing and pre-clinical animal
testing—used samples of Chocolate
products with constraining structure
designs created before Konstantino
left AngioScore’s Board.

PX 11 at 0004; PX 197 at 0003, 0011 (510K
notificaton for Chocolate PTA Balloon
catheter); PX 599 at 0004 (Stanford report
RPTA013-2, June 18, 2010, noting device
used was RD 18.20); PX 618; PX 619; PX
620; Trial Tr. at 870:17-871:13, 1009:141011:7, 1089:20-1091:6, 1331:11-1332:22.

20.

The mechanical bench testing
submitted to the FDA with the first
Chocolate 510(k) used samples of
design version RD_20, which was
drawn on January 13, 2010.

PX 197 at 0003 (510K notificaton for
Chocolate PTA Balloon catheter); PX 618;
PX 619; PX 620; Trial Tr. at 870:17-871:13,
1089:20-1091:6.

21.

The pre-clinical animal testing
submitted to the FDA with the first
Chocolate 510(k) was performed on
samples of design version RD_18.20,
the same version used in the January
2010 animal testing.

PX 11 at 0004 (Stanford report reflecting
RPTQ013-1); PX 197 at 0011 (510K
notificaton for Chocolate PTA Balloon
catheter noting in vivo study RPTQ-013-2);
PX 599 at 0004 (Stanford report reflecting
RPTA013-2, testing on RD 18.20); Trial Tr.
at 1331:11-1332:22.

22.

Chocolate was a sufficiently concrete
concept in October 2009 for
Konstantino to so describe and define
in an application to the U.S. Patent
and Trademark Office.

Trial Tr. at 200:15-201:10; PX 63 (October
2009 email confirming filing of patent
application); PX 64 (October 2009 patent
application).

23.

Konstantino’s filing of a provisional
patent application for Chocolate
evidences that Chocolate was a
sufficiently concrete opportunity at
that time such that an entity or
individual could acquire rights.

Trial Tr. at 200:15-201:10, 201:21-23; 202:620 (Konstantino discussing his filing of patent
applications for Chocolate); PX 64 (October
2009 patent application); PX 422; PX 427
(patent documents; applications).

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Findings of Fact

1

Supporting Evidence

2
24.

Konstantino’s filing of a provisional
patent application was specifically
identified in his presentations to
investors.

PX 2 at 0007, 0013 (December 2009 email
between Cheng and Ong re Proteus’s
Chocolate device, attaching powerpoint
presentation for Singapore Economic
Development Board); PX 85 at 0008, 0014;
PX 124 at 0003; Trial Tr. at 144:15-145:6,
242:12-17.

25.

Since its founding in 2003,
AngioScore has designed,
manufactured, and sold specialty
angioplasty balloon catheters under
the brand name AngioSculpt.

Trial Tr. at 68:12-22.

26.

Konstantino was the principal
inventor of AngioSculpt and filed a
patent application that described a
drug-coated angioplasty balloon
before AngioScore was founded and
incorporated.

Trial Tr. at 841:1-22 (Feld direct), 1276:151277:12, 1277:19-1278:4 (Konstantino
4/21/2015 Direct); DX 1371; DX 1652 at 5;
DX 2015 (Konstantino’s resume).

27.

AngioSculpt and Chocolate are both
specialty angioplasty balloon
catheters.

Trial Tr. at 159:7-16, 180:6-8, 325:18-326:10,
326:20-22, 408:23-409:12, 526:12-19,
577:25-578:3, 924:5-17.

28.

AngioSculpt and Chocolate both have
a nitinol structure surrounding a nylon
semi-compliant balloon.

Trial Tr. at 180:22-25, 410:5-21, 411:5-18,
579:13-21; PX 195 at 0002; PX 197 at 0005;
PX 501.

29.

3

No other specialty balloons on the
market use nitinol cage on a semicompliant balloon – the Boston
Scientific Cutting Balloon uses
surgical steel and the Vascutrak uses
stainless steel guide wires.

Trial Tr. at 896: 16-23 (Garcia); 410:12-21
(Viano); Trial Tr. at 411:5-18 (Viano).

30.

AngioSculpt and Chocolate are both
used for the treatment of peripheral
and coronary artery disease by
opening occluded blood vessels

Trial Tr. at 181:1-10, 579:13-21; PX 189; PX
195; PX 201; PX 211.

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Supporting Evidence

2
without leaving metal behind.
3
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31.

AngioSculpt and Chocolate have both
been cleared by the FDA with
overlapping indications for use.

Trial Tr. at 420:12-20, 1015:12-16, 1016:811; PX 195; PX 201.

32.

There are no indications for which the
peripheral Chocolate device is cleared
that the peripheral AngioScore device
is not.

Trial Tr. at 1016:8-11; see also PX 195; PX
201.

33.

AngioSculpt and Chocolate are sold
to the same customers.

Trial Tr. at 181:11-20, 749:15-751:20; PX
152; PX 164.

34.

AngioSculpt and Chocolate make
overlapping marketing claims.

Trial Tr. at 422:11-428:5; PX 501; PX 531;
PX 533.

35.

AngioSculpt and Chocolate are both
sold at premium pricing over plain old
balloon angioplasty (“POBA”)
products.

Trial Tr. at 158:22-23, 159:2-3, 411:19412:11, 746:8-749:2; PX 294 at 0219; PX 137
at 0014.

36.

AngioSculpt and Chocolate have
approximately the same list price.

Trial Tr. at 336:16-340:7; PX 135 (December
2011 email from Dreaden to other TriReme
employees regarding Chocolate pricing,
attaching tables confirming that at each
available size, Chocolate is exactly $25 less
per unit than AngioSculpt); PX 137 at 0014.

37.

While Chocolate is a specialty balloon
catheter, it is not a “scoring device.”
Testing of Chocolate however
confirms that the device bears into or
impresses upon plaque before the
balloon inflates to the point of
protrusion beyond the nitinol cage.

Trial Tr. at 538:9-539:9; PX 452 (photograph
of molding clay). Based on its classification
of the Chocolate PTCA balloon as a Class II
device, the FDA does not consider Chocolate
to be a scoring balloon. Trial Tr. at 995:2-14,
1002:14-20, 1003:7-13 (Kuehn direct).

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38.

To determine whether Chocolate
scores, Jeffrey Bleam, an AngioScore
engineer with over 20 years of
experience in the medical device
industry, performed an experiment in
which he inflated the Chocolate
device within a cylinder of modeling
clay. Chocolate’s nitinol struts left
impressions in the modeling clay.

Trial Tr. at 538:9-539:9, 525:9-526:11; PX
452; PX 610.

39.

There is no evidence of record that
rebuts the findings from Bleam’s test,
nor any reason that the impressions in
the modeling clay observed by Mr.
Bleam were not reflective of how
Chocolate would perform in a vessel.

See DX 1985; DX 1986 (noting diameter at
various levels of pressure); Trial Tr. at
378:15-381:14-60, 382:5-22 (Haig testifying
that Chocolate is not a scoring device).

40.

A 2010 TriReme document states that
Chocolate has a “[d]ual mechanism of
action” whereby the first stage
involves “[p]laque disruption by
initial metal to plaque contact.” At the
second stage, when inflated, the
balloon protrudes past the cage.

PX 78 at 0010; Trial Tr. at 1083:21-24,
1084:3-1085:18.

41.

Defendants’ FDA submissions state
PX 599 at 0003; Trial Tr. at 1331:11-13.
that Chocolate’s nitinol constraining
structure “provides for focal force
transmission up to nominal pressure
and multiple balloon pillows
expanding beyond the CS at high
pressure. Pillow dilatation is regional,
providing for strain relief within the
vascular wall and a gentle expansion
mechanism.”

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Supporting Evidence

42.

Defendants’ FDA submissions state
that “the inflation of the Chocolate
Balloon closely resembles the
commercially available VascuTrak
balloon with the potential for
increased focal force at low pressure.”

PX 207 at 0004; Trial Tr. at 1087:2-1088:5.

43.

Even if Chocolate did not score,
AngioScore would still have been
interested in the opportunity.

Trial Tr. at 91:22-92:6, 490:17-22, 540:9-14,
579:13-581:2; see also Trial Tr. at 208:24209:7, 1295:19-1296:7; PX 2 at 0012; PX 78
at 0018; PX 85 at 0013.

44.

Konstantino’s actions demonstrate
that he thought that AngioScore
would have been interested in
participating in the Chocolate
opportunity.

Trial Tr. at 207:22-25, 208:24-209:7,
1295:19-1296:7.

45.

Konstantino repeatedly referred to
AngioScore as a potential partner in
the Chocolate opportunity in
presentations in 2009 and 2010.

PX 2 at 0012 (December 2009 email between
Cheng and Ong re Proteus’s Chocolate
device, attaching powerpoint presentation for
Singapore Economic Development Board);
PX 78 at 0018; PX 85 at 0013; Trial Tr. at
207:22-25, 208:24-209:7.

46.

On February 3, 2010, Konstantino
approached Tom Trotter with the
intent to present Chocolate as an
investment opportunity because he
thought AngioScore would be
“interested in investing” in it.

Trial Tr. at 1295:19-1296:7; see also Trial Tr.
at 207:22-25, 208:24-209:7.

47.

In December 2009, Konstantino
pitched Tom Trotter about
AngioScore distributing the Glider
product.

Trial Tr. at 136:4-138:6, 571:25-572:14; PX
423 at 0002.

48.

Glider is a POBA, not a specialty
balloon.

Trial Tr. at 138:7-21, 158:15-20, 571:25572:14, 573:3-4; PX 423 at 0002.

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Supporting Evidence

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49.

AngioSculpt is more similar to
Chocolate than it is to Glider.

Trial Tr. at 138:13-21, 158:15-159:16,
325:18-326:10, 326:20-22, 408:23-409:12,
526:12-19, 571:25-572:14, 573:3-4, 577:25578:3, 924:5-17.

50.

Distributors of medical devices
sometimes also invest in the company
manufacturing the device.

Trial Tr. at 247:2-10.

51.

AngioScore could have found
Chocolate’s nitinol cage design useful
in the 2009 to 2010 timeframe to
address the challenge it faced in
designing devices longer than
100mm.

Trial Tr. at 87:23-88:10, 91:1-16, 530:5-16
(Bleam direct), 532:7-536:5 (describing
process of adding cross-struts to the
AngioSculpt device to ensure even inflation,
difficulties with 100mm length balloon)s,
539:15-25 (Bleam direct, explaining that
Chocolate’s radial struts could have assisted
AngioScore’s development of a 100mm
device), 540:22-541:1 (Bleam direct, stating
that he would have considered Chocolate for
development despite its not being a “scoring
balloon,” describing modeling clay
experiment, stating that it is “definitely a
possibility” that AngioScore could have
released a more ideal 100mm balloon sooner
had it been aware of Chocolate), 541:12-20
(Bleam direct, stating that had someone
shown him the Chocolate design while he was
working on developing the 100mm
AngioSculpt, that could have affected the
money AngioScore spent developing these
balloons), 564:1-23 (Trotter direct, discussing
July 2009 board meeting presentation
referring to AngioScore’s difficulty with
developing extra long catheters), 579:22581:2 (Trotter direct, discussing same, stating
that Chocolate opportunity could have saved
AngioScore cost and development money for
its longer length balloons).

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Supporting Evidence

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52.

While Konstantino served on
AngioScore’s Board, drawings and
prototypes of 100mm Chocolate
devices existed.

PX 67 (November 2009 email between Feld
and Delos Santos discussing performance of
Chocolate prototypes, including a 100mm
device); PX 89; PX 620; Trial Tr. at 871:1013, 1070:17-1071:25, 1090:23-1091:6; Delos
Santos Dep. at 76:23-77:7, 77:12-18, 77:2125, 78:1.

53.

The first Chocolate 510(k) submission
sought FDA clearance for devices as
long as 120mm.

PX 197 at 0002; Trial Tr. at 1012:4-25.

54.

After the initial generation of its
longer length product experienced
design challenges, AngioScore
introduced a new version of its
100mm AngioSculpt in 2013 with
improvements.

Trial Tr. at 532:7-533:8, 534:1-535:24; PX
596; PX 622; DX 1706 at 20.

55.

While Konstantino was on
AngioScore’s board, AngioScore was
having difficulty designing a 100mm
AngioSculpt, and Konstantino knew
of the same.

Trial Tr. at 87:23-88:10, 91:1-16, 530:5-16;
532:7-536:5, 564:1-23, 579:22-581:2; PX 220
(July 2009 board meeting presentation
discussing business challenges).

56.

The Chocolate device possibly could
have assisted in AngioScore’s work to
address the design problems
associated with the 100mm
AngioSculpt.

Trial Tr. at 91:1-16, 539:15-25, 540:22-541:1,
541:12-20, 579:22-581:2.

57.

The Chocolate opportunity could have
aided AngioScore’s effort in
developing longer-length specialty
balloons.

Trial Tr. at 87:23-88:10, 91:1-16 (Andrews
direct discussing difficulty designing 100mm
AngioSculpt), 530:5-16 (Bleam direct re
same), 532:7-536:5 (“the challenge for this
particular device . . . [was ensuring] even
deployment of the struts around the balloon” .
. . “we added cross-links to the metal that goes
over the balloon” to “help[] with even
deployment”), 539:15-25 (testifying that
knowledge of the Chocolate design could

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have been of assistance in developing the
100mm device), 540:22-541:1, 541:12-20,
564:1-23, 579:22-581:2, 871:10-13, 1012:425, 1070:17-1071:25, 1090:23-1091:6; PX 67;
PX 89; PX 197; PX 620.

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58.

AngioScore could have been
interested in Chocolate in the 2009 to
2010 timeframe insofar as it presented
long-term potential as a drug-eluting
specialty balloon.

Trial Tr. at 490:5-16 (Raffin direct), 579:22581:2, 697:7-698:2; PX 217 (February 2009
email between board members discussing
effort to attain drug coated balloon
technology; PX 220 (July 2009 board
presentation outlining future business strategy
including “extra long” devices of 100mm and
drug coated device).

59.

While Konstantino was on
AngioScore’s Board, AngioScore was
working on developing drug-eluting
specialty balloon technology.

Trial Tr. at 87:23-88:10, 164:14-165:17,
166:9-15, 214:15-215:6, 566:6-568:13,
579:22-581:2; PX 226; PX 246 (AngioScore
February 2010 Board Meeting presentation,
giving overview of then-existing cash balance,
notably above budget (p.6), research and
development items, including drug-coated
devices (p.13)); DX 1199.

60.

Konstantino did not disclose
Chocolate or its potential as a drugeluting specialty balloon to
AngioScore. Instead, in a letter to
AngioScore’s counsel dated February
23, 2010, he denied involvement in
“any development work . . . of
angioplasty balloon technology . . .
that involves specialized features [. .
.].”

PX 420 at 0004.

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2

Supporting Evidence

61.

While serving on AngioScore’s
Board, Konstantino was promoting
Chocolate as an “ideal platform for
drug delivery” in his efforts to obtain
financing for his undisclosed project.

Trial Tr. at 160:20-162:4; PX 85 (November
2009 Proteus presentation) at 0008; see also
PX 2 at 0007 (December 2009 email between
Cheng and Ong re Proteus’s Chocolate
device, attaching powerpoint presentation for
Singapore Economic Development Board).

62.

Given the limited specialty balloon
catheter market, AngioScore would
not have simply done nothing had
Chocolate been presented. During the
relevant time period, there were only
two general types of balloon catheters
in the specialty balloon market –
those that scored or cut, as in the case
of the Boston Scientific Cutting
Balloon and the AngioSculpt, and
Vascutrak, which had stainless steel
guide wires. Chocolate presented a
paradigm-shifting design: a cage
designed to create pillows and
grooves in such a way as to create
focal force on the balloon surface as it
pushes through the openings in the
cage. As a young company, revenue
growth was a primary concern for
AngioScore. It would have, at a
minimum, issued an offer to acquire
rights to the technology.

Trial Tr. at 488:17-22; 489:15-490:4 (Raffin
direct; 408:18-410:21 (Viano); 438:19439:21.

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Supporting Evidence

63.

AngioScore’s earlier rejection of an
offer of a new scoring balloon does
not establish that it had no interest or
expectancy in Chocolate. The
opportunity then presented related to
another concrete product.
AngioScore was permitted to evaluate
the design features. In light of this
concrete opportunity, Trotter
explained AngioScore declined to
pursue the proposed technology
because “there was nothing
particularly impressive about it.” He
further added that he “didn’t see that
there was any innovation there that
would be valuable to AngioScore.”
The fact that Chocolate represented a
new concept – focal force through the
creation of balloon pillows, rather
than scoring – sets it apart from the
opportunity AngioScore contemplated
and rejected.

See DX 1099; Trial Tr. 627:25-628:1 (Trotter
direct); 628:1-2.

64.

Personality conflict issues would not
have prevented AngioScore from
being interested in the Chocolate, nor
would AngioScore have declined to
exploit the Chocolate opportunity.
On the whole, Konstantino was wellregarded by members of the board.

FF supra 51-61; PX 234 (August 2009 email
in which Trotter emailed Ivan Pirzada in an
attempt to get Konstantino funding); PX 241
(In December 2009, Trotter sent Konstantino
a tip on potential funders for TriReme); Trial
Tr. at 483:14-484-1 (Raffin); 692:16-21
(Suennen).

65.

As a member of AngioScore’s Board,
Konstantino had long-standing
exposure to, and access to,
AngioScore’s confidential
information. Certain of this
information was forwarded to others
involved in the development of
Chocolate.

PX 246 (February 2010 board meeting
presentation); PX 444; PX 445; Trial Tr. at
174:7-15, 175:2-19, 176:4-11, 177:3-24,
213:7-15, 214:15-215:6.

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66.

Konstantino used information
obtained by virtue of his role on
AngioScore’s board when developing
Chocolate.

PX 246 (AngioScore February 2010 Board
Meeting presentation, giving overview of
then-existing cash balance, notably above
budget (p.6), research and development items,
including drug-coated devices (p.13)); PX 444
(October 2009 email from Konstantino
forwarding China Market information sent to
AngioScore board); PX 445 (November 2009
email from Konstantino to Dreher forwarding
Trotter’s analysis of the VascuTrak device);
Trial Tr. at 174:7-15, 175:2-19, 176:4-11,
177:3-24, 213:7-15, 214:15-215:6. That
Konstantino and Feld jointly developed
Chocolate does not undermine the fact that by
virtue of his seat on AngioScore’ board,
Konstantino had access to information on the
angioplasty balloon market, AngioScore’s
competitive standing in that market, and
utilized such information in his pursuit of
Chocolate.

67.

Konstantino attended AngioScore’s
February 2010 Board meeting.

Trial Tr. at 138:22-139:4, 213:7-15.

68.

At the same time Konstantino
attended AngioScore’s February 2010
Board meeting, TriReme’s Vice
President of Marketing & Business
Development, Christopher Haig,
traveled to Germany to meet with a
drug coating technology company
about Chocolate.

PX 222 (Feb. 5, 2010 email between
Konstantino and Haig re meetings to discuss
Chocolate); PX 223 (Feb. 9, 2010 emails re
same); Trial Tr. at 163:5-164:2, 164:8-16,
331:3-333:6 (Konstantino direct discussing
Haig’s visit to Germany in February 2010).

69.

AngioScore never disavowed an
interest in Chocolate.

FF infra 70-85.

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70.

The survey of AngioScore Board
members and management by Sarah
Lugaric was directed to an abstract
and hypothetical opportunity—i.e.,
the acquisition of “another company
technology or product line.”

PX 214 at 0002 (Lugaric survey responses
summary); Trial Tr. at 578:4-15, 696:7-13.

71.

The Lugaric survey did not present
either the specific Chocolate
opportunity or a product resembling
the Chocolate opportunity—i.e., a
specialty balloon with a nitinol
structure surrounding the balloon that
would leverage AngioScore’s existing
sales force and that had been
developed by AngioScore’s cofounder and co-creator of the
AngioSculpt technology.

PX 214 at 0002 (Lugaric survey responses
summary); Trial Tr. at 68:14-16, 91:17-21,
131:6-21, 136:8-137:22, 159:7-16, 180:22-25,
181:11-20, 325:18-326:10, 326:20-22,
408:23-409:12, 410:5-21, 526:12-19, 577:25578:3, 579:13-21; 924:5-17, 1276:15-17.

72.

Several participants in the Lugaric
survey testified that they interpreted
the question about “acquiring another
company, technology or product line”
as referring to products outside of
AngioScore’s core business of
specialty balloons.

Trial Tr. at 129:15-25, 578:16-579:21.

73.

A majority of the Board members
surveyed by Lugaric were receptive to
the possibility of “acquiring another
company, technology or product line.”

PX 214 at 0002 (Lugaric survey responses
summary).

74.

Thomas Raffin responded to the
Lugaric survey that he “[w]ould
consider” “acquiring another
company, technology or product line”
and noted that this would “not [be]
easy.” Dr. Raffin would have
considered Chocolate as such a
possibility if it had been presented.

PX 214 at 0002 (Lugaric survey responses
summary); Trial Tr. at 488:7-22, 489:15490:22.

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75.

Lisa Suennen responded to the
Lugaric survey that she would have
been “[p]otentially” interested in
“acquiring another company,
technology or product line,” if that
acquisition “is accretive or adds some
significant strategic value.” Ms.
Suennen was open to having
AngioScore incorporate new
technology into its product lineup and
would have considered pursuing
Chocolate had that opportunity been
presented.

PX 214 at 0002 (Lugaric survey responses
summary); Trial Tr. at 696:24-698:2.

76.

Jeanette Welsh responded to the
Lugaric survey that she would have
been interested in “acquiring another
company, technology or product line”
“only if the acquisition leverages the
very expensive Sales force
AngioScore has.”

PX 214 at 0002 (Lugaric survey responses
summary); Trial Tr. at 131:6-21, 181:11-20.

77.

Konstantino responded to the Lugaric
survey that he would support
“acquiring another company,
technology or product line” “to
leverage sales force,” and that
AngioScore “[c]an identify
complementary or adjacent vascular
technology” “[p]referably for the
peripheral market” and “should be
looking for product with premium
pricing for distribution and[/]or
acquisition.”

PX 214 at 0002 (Lugaric survey responses
summary).

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Supporting Evidence

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78.

Although Tom Trotter responded to
the Lugaric survey by stating that he
did not think “acquiring another
company, technology or product line”
was necessary to get AngioScore
where it needed to go, he interpreted
the question as referring to products
outside the area of the balloon
angioplasty and would have been
interested in Chocolate had it been
offered.

PX 214 at 0002 (Lugaric survey responses
summary); Trial Tr. at 578:4-581:2.

79.

AngioScore’s Board—not its
management—would have made the
ultimate decision whether to accept or
reject the Chocolate opportunity had it
been offered.

Trial Tr. at 488:23-489:13.

80.

AngioScore did not consent to
Konstantino’s pursuit of the
Chocolate opportunity, nor did it
waive any interest or expectancy in
that opportunity.

FF infra 81-85.

81.

Konstantino never disclosed
Chocolate to AngioScore while
serving on AngioScore’s Board.

Trial Tr. at 71:25-72:18, 138:7-12, 138:22139:19, 212:25-213:15, 271:14-272:4,
272:18-19, 280:1-25, 282:6-283:24, 486:2487:10, 523:12-16, 571:25-573:4, 580:15-17,
633:7-14, 634:5-7, 693:6-11; PX 107 at 0001,
0003; PX 420 at 0004 (February 23, 2010
letter from Konstantino through counsel); PX
423 at 0006.

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2

Supporting Evidence

82.

AngioScore’s Board took
Konstantino’s request to pursue
“endovascular bifurcation stents and
delivery systems for bifurcation
stents” with TriReme very seriously
and adopted a formal resolution that
granted Konstantino permission to
pursue this limited business
opportunity and waived AngioScore’s
rights solely in that particular
opportunity.

PX 98; Trial Tr. at 264:6-22.

83.

AngioScore’s original Board
resolution dated July 26, 2005 only
allowed Konstantino to provide
advisory services to TriReme and
specified that such services would be
without compensation.

PX 98 at 0001.

84.

AngioScore later gave Konstantino
permission to pursue additional roles
at TriReme but never waived its
interest in anything other than
bifurcation stents.

DX 1014; Trial Tr. at 561:24-562:4, 689:4690:13, 721:13-722:2, 864:4-8.

85.

Chocolate is not a bifurcation stent.

Trial Tr. at 1322:2-3, 1322:8-9, 1322:14-16.

86.

Konstantino did not offer testimony
that contradicted Lisa Suennen’s
testimony that he told her TriReme
would not compete with AngioScore.

Trial Tr. at 689:4-690:13.

87.

Konstantino’s claim that he did not
believe he needed AngioScore’s
consent to develop Chocolate is not
credible.

PX 101 (letter of February 10, 2009,
confirming matters relating to Konstantino’s
transition from employee and board member,
to solely board member; noting that as such,
he remained subject to fiduciary duties to the
Company.)

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Findings of Fact

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Supporting Evidence

2
88.

On February 10, 2009, Konstantino
signed a letter confirming that “[a]s a
member of the Company’s Board of
Directors,” he was “of course also . . .
subject to fiduciary duties to the
Company under applicable law, like
all directors.”

PX 101 (letter of February 10, 2009,
confirming matters relating to Konstantino’s
transition from employee and board member,
to solely board member; noting that as such,
he remained subject to fiduciary duties to the
Company).

89.

Immediately before his resignation
from AngioScore’s Board,
Konstantino told AngioScore that
“precisely” because he was “keenly
aware of [his] obligations as a board
member,” he approached AngioScore
supposedly “before any new project is
started.”

PX 107 at 0001.

90.

In late 2006, Feridun Ozdil and
Konstantino had an argument and
their relationship soured. Despite the
conflict of interest, Konstantino
remained respected by other members
of the board.

Trial Tr. at 1280:14-17; 1281:17(Konstantino); DX 1993; Trial Tr. at 483:14484-1 (Raffin); 692:16-21 (Suennen).

91.

AngioScore had the financial capacity
to exploit the Chocolate opportunity.

DX 1199 (AngioScore’s December 2009
Monthly Report noting $15.3 million cash on
hand).

92.

Konstantino told potential investors
that it would cost between $1.5
million and $5 million to
commercialize Chocolate.

PX 547; Trial Tr. at 209:17-211:21; PX 258;
PX 78 at 0017.

93.

Amir Belson, a TriReme Board
Member, testified that that $3.5
million to $4 million would be
sufficient to commercialize Chocolate
and that he had “done things like this
for less.”

Belson Dep. at 238:12-16, 238:21-23, 239:0410, 239:13-19; PX 78 at 0017.

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94.

Bleam, AngioScore’s Vice President
of R&D, testified it would cost
AngioScore $1 million to $2 million
to develop a “specialty balloon with
nitinol over the balloon,” with
potentially more money needed for
more complex versions.

Trial Tr. at 542:23-543:4.

95.

Given that AngioScore already had
the infrastructure to produce a
specialty angioplasty balloon using a
nitinol exterior structure, the cost to
exploit Chocolate would have been
incremental. All the Chocolate’s
component parts were essentially the
same as those of the AngioSculpt.

FF supra 27-28; infra 106.

96.

As of the date of its sale to
Spectranetics, AngioScore had spent
approximately $100 million
developing different varieties of the
AngioSculpt.

Trial Tr. at 582:6-15; 593:21-594:14.

97.

AngioScore had approximately $17
million cash on hand in October 2009,
when Konstantino filed a provisional
patent application on Chocolate.

Trial Tr. at 76:4-9; PX 63; PX 64 (October
2009 patent application).

98.

AngioScore had in excess of $15
million cash on hand at the end of
2009, just over a month before
Konstantino resigned from
AngioScore’s Board.

PX 621; Trial Tr. at 74:4-75:21; see also PX
246 at 0016; Trial Tr. at 213:4-215:6; DX
1199.

99.

AngioScore could have exploited the
Chocolate opportunity by borrowing
the necessary funds.

PX 242 (December 2009 email from Trotter
to AngioScore board detailing meeting with
Oxford Financial and Oxford’s willingness to
lend up to $20 million); Trial Tr. at 76:1379:16.

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100.

In December 2009, Oxford Finance
stated a willingness to lend
AngioScore up to $20 million, and
even more if necessary.

PX 242 (December 2009 email from Trotter
to AngioScore board detailing meeting with
Oxford Financial and Oxford’s willingness to
lend up to $20 million).

101.

AngioScore borrowed $10 million
from Oxford in late 2010, and an
additional $5 million in 2011.

Trial Tr. at 79:4-16.

102.

AngioScore could have exploited the
Chocolate opportunity through equity
financing.

Trial Tr. at 79:18-80:3 (Andrews Direct),
696:14-697:11 (Suennen Direct).

103.

AngioScore successfully raised
“about $111 million” through six
different equity rounds, including in
2011.

Trial Tr. at 79:18-80:3.

104.

Psilos, an AngioScore investor with a
Board seat, and others invested more
money in AngioScore in 2011.

Trial Tr. at 696:14-697:11 (Suennen direct);
PX 320 at 0050-0051.

105.

AngioScore could have redirected
R&D money it spent to develop the
100mm AngioSculpt in order to
exploit the Chocolate opportunity.

Trial Tr. at 91:1-16, 539:15-25, 540:22-541:1,
541:12-20, 579:22-581:2.

106.

AngioScore would not have needed to
incur many of the postcommercialization costs that
defendants attribute to Chocolate.

PX 214 at 0002; Trial Tr. at 131:6-21, 136:8137:22, 1170:21-1172:15, 1174:12-1176:17;
PX 388.

107.

Several AngioScore Board members,
including Konstantino, specifically
called out AngioScore’s excess sales
capacity in responding to the Sarah
Lugaric survey.

PX 214 at 0002; see also Trial Tr. at 136:8137:22.

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108.

By taking the Chocolate opportunity
for himself, Konstantino placed
himself in a position inimical to his
duties to AngioScore.

See e.g., FF infra 110-162; 200-220.

109.

By taking the Chocolate opportunity
for himself, Konstantino did not act in
good faith or in the best interest of
AngioScore. By taking the Chocolate
opportunity for himself, Konstantino
placed his own financial interest
above AngioScore’s. Konstantino did
not reasonably believe he was acting
in the best interest of AngioScore or
in a way that was not adverse to
AngioScore.

See e.g., FF infra 110-162; 200-220.

110.

Konstantino viewed placing his own
interests above AngioScore’s interests
as acceptable.

Trial Tr. at 133:23-134:1 (“‘Q. Did you
believe that you had a duty to place
AngioScore’s commercial interests above
your own personal financial interests? A. No,
I did not believe that.’”).

111.

While sitting on AngioScore’s Board
of Directors, Konstantino knew that
AngioScore “might be interested” in
the Chocolate opportunity.

Trial Tr. at 91:1-16, 161:12-162:4, 164:14165:17, 166:9-15, 208:24-209:7, 530:5-16,
564:17-565:5, 579:22-581:2, 1012:4-25,
1070:17-1071:25, 1295:19-1296:7; PX 2
(December 2009 email between Cheng and
Ong re Proteus’s Chocolate device, attaching
powerpoint presentation for Singapore
Economic Development Board identifying
AngioScore as potential partner for Chocolate
at p. 12); PX 69; PX 78 at 0018; PX 85; PX
89; PX 197; PX 226; PX 620.

112.

Konstantino profited from taking the
Chocolate opportunity for himself.

Trial Tr. 775:5-13; Brosh Dep. At 228:1-5,
14-17, 229:6-14; 235:4-5, 235:21-236:14;
254:25-255:12.; PX 383; PX 388.

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113.

AngioScore was harmed by
Konstantino’s decision to develop
Chocolate, because it competes in the
same specialty balloon market.

Trial Tr. at 139:20-141:23, 149:13-152:17,
159:7-16, 185:1-186:3, 186:7-189:4, 325:2124; PX 15 at 0005; PX 66; PX 107; PX 419;
PX 420.

114.

While sitting on AngioScore’s Board
of Directors, Konstantino intended
that Chocolate would compete with
AngioSculpt.

PX 124 at 0007; PX 125 at 0009; Trial Tr. at
185:1-186:3 (Konstantino admitting that a
December 13, 2009 presentation described
Chocolate as “[a] step up from scoring,”
which “refer[s] to AngioScore”); id. at 186:7189:4 (Konstantino admitting that a
November 2009 TriReme presentation made
the identical claim regarding reducing
dissections that AngioScore makes).

115.

Konstantino claimed that Chocolate
was a “step up from scoring”
balloons, such as AngioSculpt.

Trial Tr. at 185:1-186:3; PX 15 at 0005.

116.

TriReme’s sales force directly
compared Chocolate to the
AngioSculpt.

Trial Tr. at 343:19-344:7.

117.

TriReme’s sales force named
AngioSculpt as Chocolate’s “closest
competitor.”

Trial Tr. at 343:19-344:7; PX 127; PX 132 at
0002; PX 143; PX 154.

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118.

TriReme used AngioSculpt to set the
price of Chocolate, believing it would
give Chocolate a competitive
advantage.

Trial Tr. 335:9-336:15 (Haig admitting that
TriReme targeted “AngioScore accounts” to
“get a faster uptick on Chocolate” because
these were accounts where “pricing had
already been established for specialty
balloons”); id. at 336:16-340:7 (TriReme
setting Chocolate list price at launch in
December 2011 to be exactly $25 below the
price of AngioSculpt); id. at 348:10-349:4
(pricing Chocolate “competitive with other
specialty catheters to drive rapid adoption,”
and listing AngioSculpt and two other
balloons); PX 130; PX 135 (December 2011
email from Dreaden to other TriReme
employees regarding Chocolate pricing,
attaching tables confirming that at each
available size, Chocolate is exactly $25 less
per unit than AngioSculpt); PX 137 at 0014;
PX 143.

119.

Konstantino never disclosed
Chocolate to AngioScore, including
during his December 2009
conversation with Trotter regarding
Glider.

Trial Tr. at 71:25-72:18, 138:7-12, 138:22139:19, 212:25-213:15, 271:14-272:4, 272:1819, 280:1-25, 282:6-283:24, 486:2-487:10,
523:12-16, 571:25-573:4, 633:7-14, 634:5-7,
693:9-11; PX 107 at 0001, 0003; PX 420 at
0004; PX 423 at 0006.
Trial Tr. at 136:4-7, 138:7-12, 580:15-17.

120.

While sitting on AngioScore’s Board
of Directors, Konstantino concealed
the Chocolate opportunity from
AngioScore.

PX 107 at 0001, 0003; Trial Tr. at 71:2572:18, 138:7-12, 138:22-139:19, 212:25213:15, 271:14-272:4, 272:18-19, 486:2487:10, 575:19-24, 580:15-17, 633:7-14,
634:5-7, 693:6-11.

121.

While serving on AngioScore’s
Board, Konstantino did not seek
funding from any current AngioScore
Board member.

Trial Tr. at 212:25-213:3 (Konstantino).

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122.

Two days before Konstantino
resigned from AngioScore’s Board,
Konstantino sat through an entire
AngioScore Board meeting without
disclosing Chocolate to AngioScore.

Trial Tr. at 138:22-139:4, 213:7-15 (Trotter).

123.

After the February 3, 2010
AngioScore Board meeting,
Konstantino had a brief discussion
with Tom Trotter and told him that he
and TriReme were considering
pursuing a specialty balloon, and
Trotter asked Konstantino to leave.

Trial Tr. at 574:1-19, 602:17-25 (Trotter).

124.

During Konstantino’s brief discussion
with Trotter on February 3, 2010,
Konstantino did not disclose
Chocolate or defendants’ ongoing
development work on a specialty
balloon.

Trial Tr. at 138:22-139:19 (Konstantino).

125.

On February 4, 2010, Trotter emailed
Konstantino relaying the board’s
unanimous belief that he should
resign. Konstantino emailed
AngioScore’s Board on February 4,
2010 stating that AngioScore was
being “trigger happy” by asking him
to resign from AngioScore’s Board of
Directors.

PX 107; PX 108 at 0002-0003.

126.

Konstantino’s February 4, 2010 email
to AngioScore’s Board stating that
AngioScore was being “trigger
happy” by asking him to resign from
AngioScore’s Board was incorrect
because defendants began developing
Chocolate in 2009.

Trial Tr. at 141:1-21 (Konstantino direct,
explaining that “around mid-January 2010, I
made a decision to pursue this idea”), 152:5153:4 (same, “Q. . . . [P]rior to . . . your
February 5 resignation, you were involved in
development work relative to Chocolate? A.
Yes, I agree with you.”, 153:11-154:21 (same,
discussing TriReme employee involvement in
Chocolate development); 155:3-156:25
(same), 171:5-172:6 (same, discussing
Stanford porcine study), 172:13-173:6 (same),

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883:8-23 (Feld cross, discussing development
in fall 2009), 1070:17-1073:1 (Pizarro cross,
discussing models), 1078:11-1079:8 (same);
PX 67; PX 72; PX 74; PX 87; PX 89; PX 90;
PX 91; PX 92; PX 93; PX 108 at 0002-0003;
Delos Santos Dep. at 48:23-25, 51:4-9, 76:2377:7, 77:12-18, 77:21-25; 78:1, 90:23-91:11,
96:19-22, 96:23-25, 97:1-2.

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127.

Konstantino emailed AngioScore’s
Board on February 4, 2010 stating
that “TriReme has not made any
decision to make such a change and I
was giving you very early heads up to
something that may take place in the
future, or may never happen.”

PX 108 at 0002-0003.

128.

Konstantino’s February 4, 2010 email
to AngioScore’s Board stating
“TriReme has not made any decision
to make such a change and I was
giving you very early heads up to
something that may take place in the
future, or may never happen” was
incorrect because defendants began
developing Chocolate in 2009.

Trial Tr. at 141:1-21, 152:5-153:4, 153:11154:21; 155:3-156:25, 171:5-172:6, 172:13173:6, 883:8-23, 1070:17-1073:1, 1078:111079:8; PX 67; PX 72; PX 74; PX 87; PX 89;
PX 90; PX 91; PX 92; PX 93; PX 108 at
0002-0003; Delos Santos Dep. at 48:23-25,
51:4-9, 76:23-77:7, 77:12-18, 77:21-25; 78:1,
90:23-91:11, 96:19-22, 96:23-25, 97:1-2.

129.

Konstantino spoke to John Sellers on
February 4, 2010 and did not disclose
Chocolate or that defendants were
already developing a specialty
balloon.

Trial Tr. at 145:8-14, 271:14-272:4, 272:1819, 318:18-19; PX 108 at 0001.

130.

Konstantino emailed AngioScore’s
Board on February 5, 2010 stating
that he was “keenly aware of my
obligations as a board member and
this is precisely why I am coming to
Angio[S]core at this juncture; before
any new project is started.”

PX 108 at 0001-0002.

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131.

Konstantino’s February 5, 2010 email
to AngioScore’s Board stating he was
“keenly aware of my obligations as a
board member and this is precisely
why I am coming to Angio[S]core at
this juncture; before any new project
is started” was incorrect because
defendants began developing
Chocolate in 2009.

Trial Tr. at 141:1-21, 152:5-153:4, 153:11154:21; 155:3-156:25, 171:5-172:6, 172:13173:6, 883:8-23, 1070:17-1073:1, 1078:111079:8; PX 67; PX 72; PX 74; PX 87; PX 89;
PX 90; PX 91; PX 92; PX 93; PX 108 at
0001-0002; Delos Santos Dep. at 48:23-25,
51:4-9, 76:23-77:7, 77:12-18, 77:21-25; 78:1,
90:23-91:11, 96:19-22, 96:23-25, 97:1-2.

132.

After Konstantino’s resigned on
February 5, 2010, AngioScore
investigated whether Konstantino had
done competitive work while on
AngioScore’s Board.

Trial Tr. at 693:12-694:12; DX 1292 (email
from Suennen recounting conversations with
Heller and Lynn); DX 1295; PX 419; PX 421;
see also; DX 1329.

133.

On February 10, 2010, AngioScore
sent Konstantino a letter requesting
“confirmation” that Konstantino
and/or TriReme were not developing
a specialty balloon prior to
Konstantino’s resignation from
AngioScore’s Board on February 5,
2010.

PX 419 at 0002.

134.

Konstantino knowingly and
intentionally misled his counsel and
AngioScore in emails and letters in
which he denied, among other things,
that he or TriReme had engaged in
any “development work” on balloons
with “specialized features” or that
“compete[] with” or “make[] similar
claims” to AngioSculpt, and insisting
that AngioScore was being “trigger
happy.”

PX 103 at 0001; PX 107 at 0001, 0003; PX
420 at 0004; PX 423 at 0006; Nguyen Dep. at
38:10-14; see also Trial Tr. at 150:11-24,
151:5-153:4, 153:11-154:21, 155:3-156:25,
158:6-159:14, 159:19-161:7, 161:14-162:4,
163:5-164:2, 164:8-13, 167:14-22, 168:6169:2, 169:8-170:24, 171:5-172:6, 172:13173:6.

135.

In a letter to AngioScore’s counsel
dated February 23, 2010, Konstantino
stated that “TriReme is considering,
in the future, the possibility of
entering the field of specialized

PX 420 at 0004.

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balloons.”

3
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136.

Konstantino’s February 23, 2010
letter stating that “TriReme is
considering, in the future, the
possibility of entering the field of
specialized balloons” was incorrect
because Konstantino and TriReme
had made the decision to enter the
field of specialized balloons before
Konstantino left AngioScore’s Board.

Trial Tr. at 141:1-21, 328:6-15; PX 420 at
0004.

137.

In a letter to AngioScore’s counsel
dated February 23, 2010, Konstantino
stated that “TriReme has not
developed any products . . . that
competes with AngioScore’s
products.”

PX 420 at 0004.

138.

Konstantino’s February 23, 2010
letter stating that “TriReme has not
developed any products . . . that
competes with AngioScore’s
products” was incorrect because
TriReme began developing Chocolate
in 2009 and considered Chocolate a
“[d]irect competitor[]” to
AngioSculpt.

Trial Tr. at 141:1-21, 152:5-153:4, 153:11154:21; 155:3-156:25, 171:5-172:6, 172:13173:6, 185:1-186:6, 193:21-195:6, 883:3-23,
1070:17-1073:1, 1078:11-1079:8; PX 15 at
0005; PX 67; PX 72; PX 74; PX 87; PX 89;
PX 90; PX 91; PX 92; PX 93; PX 124 at
0007; PX 125 at 0009; PX 420 at 0004; Delos
Santos Dep. at 48:23-25, 51:4-9, 76:23-77:7,
77:12-18, 77:21-25; 78:1, 90:23-91:11, 96:1922, 96:23-25, 97:1-2.

139.

In a letter to AngioScore’s counsel
dated February 23, 2010, Konstantino
stated that he “was not involved in
any development work . . . of
angioplasty balloon technology for
the . . . periphery markets that
involves specialized features such as
scoring, cutting , or drug eluting
elements.”

PX 420 at 0004.

140.

Konstantino’s February 23, 2010

Trial Tr. at 141:1-21, 152:5-15, 153:11-

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letter stating that he “was not
involved in any development work . .
. of angioplasty balloon technology
for the . . . periphery markets that
involves specialized features such as
scoring, cutting, or drug eluting
elements” was incorrect because
Konstantino was engaged in the
development of Chocolate before he
resigned from AngioScore’s Board
and because Chocolate is a specialty
balloon having a nitinol structure
surrounding a semi-compliant nylon
balloon.

154:21, 155:3-156:25, 159:7-14, 171:5-172:6,
172:13-173:6, 180:20-25, 325:18-326:10,
326:20-22, 408:23-409:12, 410:5-21, 526:1219, 575:25-578:3, 579:13-21, 883:8-23,
924:5-17, 1070:17-1073:1, 1078:11-1079:8;
PX 67; PX 72; PX 74; PX 87; PX 89; PX 90;
PX 91; PX 92; PX 93; PX 420 at 0004; Delos
Santos Dep. at 48:23-25, 51:4-9, 76:23-77:7,
77:12-18, 77:21-25; 78:1, 90:23-91:11, 96:1922, 96:23-25, 97:1-2.

141.

Konstantino’s February 23, 2010
letter stating that he “was not
involved in any development work . .
. of angioplasty balloon technology
for the . . . periphery markets that
involves specialized features such as
scoring, cutting , or drug eluting
elements” was incorrect because
Konstantino was engaged in the
development of Chocolate before he
resigned from AngioScore’s Board
and because Konstantino was
promoting Chocolate in 2009 as an
“ideal platform for drug delivery” in
his efforts to obtain financing for his
undisclosed project.

Trial Tr. at 141:1-21, 152:5-153:4, 153:11154:21; 155:3-156:25, 160:20-162:4, 171:5172:6, 172:13-173:6, 883:8-23, 1070:171073:1, 1078:11-1079:8; PX 67; PX 72; PX
74; PX 85 at 0008; PX 87; PX 89; PX 90; PX
91; PX 92; PX 93; PX 420 at 0004; Delos
Santos Dep. at 48:23-25, 51:4-9, 76:23-77:7,
77:12-18, 77:21-25; 78:1, 90:23-91:11, 96:1922, 96:23-25, 97:1-2.

142.

Konstantino’s February 23, 2010
letter stating that he “was not
involved in any development work . .
. of angioplasty balloon technology
for the . . . periphery markets that
involves specialized features such as
scoring, cutting , or drug eluting
elements” was incorrect because
TriReme’s Vice President of
Marketing & Business Development,

Trial Tr. at 163:5-164:2, 164:8-16, 331:3333:6; PX 222; PX 223; PX 420 at 0004.

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Christopher Haig, traveled to
Germany and met with a drug coating
technology company about Chocolate
on February 5, 2010.

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143.

Konstantino’s February 23, 2010
letter stating that he “was not
involved in any development work . .
. of angioplasty balloon technology
for the . . . periphery markets that
involves specialized features such as
scoring, cutting , or drug eluting
elements” was incorrect because
Konstantino was engaged in the
development of Chocolate before he
resigned from AngioScore’s Board
and because TriReme’s
contemporaneous documents state
that Chocolate has a “[d]ual
mechanism of action” whereby the
first stage involves “[p]laque
disruption by initial metal to plaque
contact.”

PX 78 at 0010; see also Trial Tr. at 141:1-21,
152:5-153:4, 153:11-154:21; 155:3-156:25,
171:5-172:6, 172:13-173:6, 883:8-23,
1070:17-1073:1, 1078:11-1079:8, 1083:21-24,
1084:3-1085:18; PX 67; PX 72; PX 74; PX
87; PX 89; PX 90; PX 91; PX 92; PX 93; PX
420 at 0004; Delos Santos Dep. at 48:23-25,
51:4-9, 76:23-77:7, 77:12-18, 77:21-25; 78:1,
90:23-91:11, 96:19-22, 96:23-25, 97:1-2.

144.

In a letter to AngioScore’s counsel
dated February 23, 2010, Konstantino
stated that he was “not involved in
any development . . . of angioplasty
balloon technology for the . . .
periphery markets that makes similar
claims to that of the AngioSculpt
product.”

PX 420 at 0004.

145.

Konstantino’s February 23, 2010
letter stating he was “not involved in
any development . . . of angioplasty
balloon technology for the . . .
periphery markets that makes similar
claims to that of the AngioSculpt
product” was incorrect because
Konstantino was engaged in the
development of Chocolate before he
resigned from AngioScore’s Board

Trial Tr. at 141:1-21, 152:5-153:4, 153:11154:21; 155:3-156:25, 171:5-172:6, 172:13173:6, 181:1-10, 883:8-23, 1070:17-1073:1,
1078:11-1079:8; PX 67; PX 72; PX 74; PX
87; PX 89; PX 90; PX 91; PX 92; PX 93; PX
189 at 0002; PX 195 at 0001; PX 201 at 0001;
PX 211 at 0001; PX 420 at 0004; Delos
Santos Dep. at 48:23-25, 51:4-9, 76:23-77:7,
77:12-18, 77:21-25; 78:1, 90:23-91:11, 96:1922, 96:23-25, 97:1-2.

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Findings of Fact

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Supporting Evidence

2
and because both AngioSculpt and
Chocolate are used for the treatment
of peripheral and coronary artery
disease by opening occluded blood
vessels without leaving metal behind.

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146.

Konstantino’s February 23, 2010
letter stating he was “not involved in
any development . . . of angioplasty
balloon technology for the . . .
periphery markets that makes similar
claims to that of the AngioSculpt
product” was incorrect because
Konstantino was engaged in the
development of Chocolate before he
resigned from AngioScore’s Board
and because both AngioSculpt and
Chocolate have been cleared by the
FDA with overlapping indications for
use.

Trial Tr. at 141:1-21, 152:5-153:4, 153:11154:21; 155:3-156:25, 171:5-172:6, 172:13173:6, 420:12-20, 883:8-23, 1015:12-16,
1016:8-11, 1070:17-1073:1, 1078:11-1079:8;
PX 67 (November 2009 email between Feld
and Delos Santos, discussing testing of
Chocolate prototypes); PX 72 (December
2009 email discussing coating for Chocolate);
PX 74 (December 2009 email between Feld
and TriReme employees, including
Konstantino, re findings from testing
Chocolate prototypes); PX 87 (October 2009
email discussing same); PX 89 (October 2009
email re shorties of Chocolate); PX 90
(November 2009 email re Chocolate
prototype production); PX 91 (email re
Chocolate development); PX 92 (same); PX
93 (same, referring to “upcoming animal
study”); PX 195 at 0001 (AngioScore 510K
Summary for AngioSculpt Scoring Balloon
Catheter); PX 201 at 0001 (TriReme 510K
Summary for Chocolate PTA Balloon
Catheter); PX 420 at 0004; Delos Santos Dep.
at 48:23-25, 51:4-9, 76:23-77:7, 77:12-18,
77:21-25; 78:1, 90:23-91:11, 96:19-22, 96:2325, 97:1-2.

147.

Konstantino’s February 23, 2010
letter stating he was “not involved in
any development . . . of angioplasty
balloon technology for the . . .
periphery markets that makes similar
claims to that of the AngioSculpt
product” was incorrect because
Konstantino was engaged in the
development of Chocolate before he
resigned from AngioScore’s Board

Trial Tr. at 141:1-21, 152:5-153:4, 153:11154:21; 155:3-156:25, 171:5-172:6, 172:13173:6, 422:20-428:5, 883:8-23, 1070:171073:1, 1078:11-1079:8; PX 67; PX 72; PX
74; PX 87; PX 89; PX 90; PX 91; PX 92; PX
93; PX 420 at 0004; PX 501 (QT Vascular
website describing Chocolate product); PX
531 at 0005-0006 (AngioSculpt marketing
materials); PX 533 at 0004 (AngioSculpt XL
marketing materials); Delos Santos Dep. at

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Supporting Evidence

2
and because both AngioSculpt and
Chocolate make similar marketing
claims.

48:23-25, 51:4-9, 76:23-77:7, 77:12-18,
77:21-25; 78:1, 90:23-91:11, 96:19-22, 96:2325, 97:1-2.

148.

Konstantino provided the information
for, and approved the contents of, the
February 23, 2010 letter to
AngioScore’s counsel.

Trial Tr. at 150:11-24, 151:5-16; Nguyen
Dep. at 38:10-14.

149.

On March 5, 2010, AngioScore sent
PX 421 at 0002.
Konstantino a second letter inquiring
whether “Konstantino and/or TriReme
evaluated, negotiated, or otherwise
pursued the acquisition or licensing of
any technology that competes with
AngioScore’s products” prior to
Konstantino’s resignation from
AngioScore’s Board on February 5,
2010.

150.

In a letter to AngioScore’s counsel
dated March 21, 2010, Konstantino
stated that before February 5, 2010
“neither Mr. Konstantino nor
TriReme evaluated, negotiated or
otherwise pursued the acquisition or
licensing of any technology that
competes with AngioScore’s
products.”

PX 423 at 0006.

151.

Konstantino’s March 21, 2010 letter
stating that before February 5, 2010
“neither Mr. Konstantino nor
TriReme evaluated, negotiated or
otherwise pursued the acquisition or
licensing of any technology that
competes with AngioScore’s
products” was intentionally
misleading because defendants,
particularly TriReme, were evaluating
Chocolate prior to February 5, 2010.

Trial Tr. at 168:9-18, 169:8-170:13, 171:5173:6; PX 18; PX 70; PX 93; PX 423 at 0006.

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Findings of Fact

1
2

Supporting Evidence

152.

Konstantino’s March 21, 2010 letter
stating that before February 5, 2010
“neither Mr. Konstantino nor
TriReme evaluated, negotiated or
otherwise pursued the acquisition or
licensing of any technology that
competes with AngioScore’s
products” was intentionally
misleading because defendants
thought Chocolate was a “[d]irect
competitor[]” to AngioSculpt.

PX 125 at 0009; see also Trial Tr. at 185:1186:6, 193:21-195:6; PX 15 at 0005; PX 124
at 0007; PX 423 at 0006.

153.

In a letter to AngioScore’s counsel
dated March 21, 2010, Konstantino
stated AngioScore made
“unsubstantiated accusations” that
Konstantino “somehow breached his
duties as a Board member of
AngioScore.”

PX 423 at 0006.

154.

In a letter to AngioScore’s counsel
dated March 21, 2010, Konstantino
stated that “AngioScore has provided
no details to support [] an accusation”
that Konstantino has “somehow
breached his duties as a Board
member of AngioScore.”

PX 423 at 0006.

155.

In a letter to AngioScore’s counsel
dated March 21, 2010, Konstantino
stated that AngioScore should “refrain
from making these unsubstantiated
accusations” or “Mr. Konstantino will
have no choice but to consider his
legal options.”

PX 423 at 0006.

156.

AngioScore sent the February 10,
2010 and March 5, 2010 letters to
Konstantino to investigate the
“specific details” of Konstantino’s
development activities prior to his
resignation from AngioScore’s Board

Trial Tr. at 275:19-276:4, 282:6-283:2,
283:10-24; PX 419; PX 421.

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Findings of Fact

1

Supporting Evidence

2
on February 5, 2010.
3
4

157.

Konstantino’s repeated
misrepresentations, misdirection, and
threats of legal action prevented
AngioScore from becoming aware of
when defendants began developing
Chocolate.

Trial Tr. at 280:1-25, 283:21-24, 522:1523:16, 633:7-14, 634:5-7.

158.

AngioScore did not file a claim in
2010 because AngioScore did not
know that “Chocolate existed at that
point” and was intentionally led to
believe that no specialty balloon
existed.

Trial Tr. at 634:5-7; see also Trial Tr. at
271:14-272:4, 272:18-19, 486:5-487:10;
693:9-11.

159.

While serving on AngioScore’s
Board, Konstantino filed a provisional
patent application for Chocolate in
October 2009.

Trial Tr. at 200:15-201:10; PX 63; PX 64
(October 2009 patent application).

160.

After receiving two letters from
AngioScore’s counsel, Konstantino
switched patent counsel and filed a
second provisional patent application
sometime in March 2010 without
informing either of his patent lawyers
of the substantially similar application
from five months earlier.

Trial Tr. at 203:19-206:18; Heslin Dep. at
88:9-18; Shay Dep. at 39:14-19; PX 64
(October 2009 patent application); PX 419;
PX 421; PX 422.

161.

By filing a second provisional patent
application in March 2010,
Konstantino lost five months of patent
priority. However, by citing to the
second provisional patent application
from March 2010 instead of the first
provisional patent application from
October 2009 in his March 2011
utility patent application, Konstantino
ensured that the first provisional
patent application from October 2009

Trial Tr. at 201:15-203:13, 205:2-4; PX 64
(October 2009 patent application); PX 422;
PX 427.

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Findings of Fact

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Supporting Evidence

2
would not become public.
3
4

162.

Konstantino’s actions with respect to
the patent application demonstrate an
intent to deceive.

See FF supra 159-161.

163.

TriReme provided substantial
assistance to Konstantino’s breach of
fiduciary duty.

PFF 146-159.

164.

Before Konstantino left AngioScore’s
Board of Directors, TriReme
engineers helped develop and build
the Chocolate device. Tanhum Feld,
in his various roles at TriReme,
worked with several TriReme
employees to develop Chocolate,
including Jayson Delos Santos, a
TriReme Senior R&D Engineer,
Maria Pizarro, TriReme’s Director of
R&D, and Gary Binyamin, TriReme’s
Technology Manager.

PX 109 at 0004 (September 2009 TriReme
board meeting presentation containing
organizational chart); PX 92 (December 2009
email between TriReme employees and
Konstantino relating to design and prototype
development for Chocolate); PX 87 (October
2009 email between Feld, Delos Santos, and
Konstantino re same); PX 90 (November 2009
email between Feld and Delos Santos re
same); Trial Tr. at 850:18-851:5, 863:17864:15.

165.

Konstantino and the TriReme
employees who worked on Chocolate
referred to themselves as the “Team.”

PX 92; Trial Tr. at 156:4-25.

166.

The TriReme Chocolate team created
prototypes, solved technical issues
such as bonding the nitinol cage to the
balloon, and tested the device.

PX 87; PX 92; Trial Tr. at 328:23-329:14;
851:16-852:4.

167.

Eight TriReme employees attended
the January 15, 2010 testing of the
Chocolate device at Stanford.

PX 18 at 0002 (recorded attendance at
Stanford study, Konstantino included).

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Findings of Fact

1
2

Supporting Evidence

168.

In February 2010, Trireme’s Vice
President of Marketing and Business
Development traveled to Germany to
meet with a company specializing in
drug coating technology about a
partnership involving Chocolate.

PX 222; PX 223; Trial Tr. at 331:7-22.

169.

TriReme repeatedly listed Chocolate
as a TriReme product in its
presentations in late 2009 and early
2010.

PX 15 at 0005; PX 17 at 0004.

170.

By February 3, 2010 TriReme had
already decided “that Chocolate was
going to be brought into the scope of
products that TriReme was working
on.”

Trial Tr. at 328:6-15; PX 80.

171.

The TriReme Chocolate team worked
on Chocolate during TriReme’s
business hours, via TriReme’s email
system, using TriReme’s engineering
templates.

Trial Tr. at 879:17-880:6, 881:5-8, 22-24,
882:14-20; PX 65.

172.

TriReme had the requisite knowledge
for aiding and abetting.

FF infra 173-176.

173.

Konstantino was TriReme’s CEO in
2009 and 2010.

PX 109; Trial Tr. at 134:6-8.

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Findings of Fact

1

Supporting Evidence

2
174.

As a co-creator of AngioSculpt and a
co-founder of AngioScore, Feld knew
AngioScore’s line of business, knew
that Konstantino was serving on
AngioScore’s Board, knew that
Konstantino owed AngioScore
fiduciary duties, knew AngioScore
had only granted Konstantino a
waiver to pursue bifurcated stents
with TriReme, and knew that
Chocolate and AngioScore were
alternative tools—all while helping
Konstantino develop the Chocolate
device.

Trial Tr. at 840:25-843:3, 864:4-8 (Feld
direct, confirming Feld’s knowledge that
Konstantino had been granted a waiver from
AngioScore for his work with TriReme on
Glider), 882:10-13 (confirming Feld’s
knowledge that Konstantino was on
AngioScore’s board while developing
Chocolate), 879:13-16 (confirming that Feld
knew that in such capacity, Konstantino had
fiduciary duties to AngioScore); PX 127.

175.

As a former employee of AngioScore
who had worked on AngioSculpt,
Maria Pizarro knew AngioScore’s
line of business, and knew that
Konstantino was serving on
AngioScore’s Board.

Trial Tr. at 1028:12-14, 1028:25-1029:7;
1093:25-1094:3; PX 442.

176.

GimMoey Ong, TriReme’s HR and
Marketing Manager, knew
Konstantino was on AngioScore’s
Board, and knew that Chocolate
would compete with AngioSculpt.

Trial Tr. at 969:10-21; Ong Dep. at 46:1-7;
PX 124 at 0001, 0007; PX 125 at 0001, 0009.

177.

Proteus Vascular Systems was an
unincorporated association founded in
2009 that sought to develop and
market the Chocolate device.

PX 124; PX 2 at 0002-0014; Trial Tr. at
241:7-20.

178.

Proteus consisted of at least three
individuals: James Dreher,
Konstantino, and Feld. Dreher “led”
Proteus, while Konstantino was the
Chairman of the Board.

PX 124 at 0002; PX 445.

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Findings of Fact

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Supporting Evidence

2
179.

As part of his entrepreneurial practice,
Dreher would quickly form a
company and raise early money, and
sell the company soon thereafter. He
applied this model to Chocolate and
helped attract potential acquirers.

Trial Tr. at 175:17-19; 1324:8-22; PX 70 at
0001; PX 124.

180.

Konstantino recruited employees,
presented Chocolate to the Economic
Development Board of Singapore, and
sought funds for Proteus.

PX 70; PX 2 (December 2009 email between
Cheng and Ong re Proteus’s Chocolate
device, attaching powerpoint presentation for
Singapore Economic Development Board);
PX 124; Trial Tr. at 239:8-241:1; PX 3.

181.

On January 1, 2010, Konstantino
signed a contract as Proteus’
Chairman to help raise funds for the
Chocolate project.

PX 3; Trial Tr. 242:18-244:11.

182.

Konstantino represented that Quattro
was “previously Proteus.”

PX 6 at 0002; Trial Tr. at 246:3-9; PX 7.

183.

According to an addendum to the
January 10, 2010 fundraising contract
Konstantino had signed as Chairman
of Proteus, a few months later,
Konstantino represented that “[t]he
name Proteus Vascular Systems Pte
Ltd was changed to Quattro Vascular
Pte Ltd.” The addendum noted this
name change and “Quattro” assumed
the role previously held by “Proteus,”
with its rights and obligations.

PX 7; Trial Tr. at 247:15-248:4.

184.

While still serving on AngioScore’s
Board, Konstantino held himself out
as the Chairman of Proteus and later
as a Director at Quattro.

PX 3; Trial Tr. 242:18-244:11; PX 7.

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Findings of Fact

1

Supporting Evidence

2
185.

On January 15, 2010, the company
(apparently still known as Proteus at
that time) sponsored a study at
Stanford involving the Chocolate
device. Later that year, the report
from the study was released reflecting
that “Quattro Vascular Pte Ltd” had
sponsored the study.

PX 11; Trial Tr. at 248:5-23.

186.

Quattro formally incorporated in
March 2010. James Dreher,
Konstantino, and others involved in
the organization all agreed to the
incorporation.

PX 1 at 0004.

187.

Konstantino and Feld assigned their
rights to the Chocolate device to
Quattro for a 5% royalty and a cash
payment.

Trial Tr. at 237:8-13.

188.

Konstantino and Feld were founders
and shareholders of Quattro when
they transferred their rights to
Chocolate.

PX 1 at 0004-0005.

189.

QT Vascular is the product of a
merger between TriReme and
Quattro.

PX 43; Trial Tr. at 256:7-21 (Konstantino
discussing representation he made on behalf
of QT Vascular wherein he stated that “QTV
is a result of a merger between Quattro
Vascular and TriReme Medical”).

190.

QT Vascular assumed the assets and
liabilities of TriReme or Quattro
wholesale in the final transaction.

PX 32; Brosh Dep. at 277:19-22, 280:3-11,
281:2-15.

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Findings of Fact

1
2

Supporting Evidence

191.

Momi Brosh, QT Vascular’s
corporate designee on the relationship
among TriReme, Quattro, QT
Vascular, stated that QT Vascular
took on Quattro’s and TriReme’s
assets and liabilities.

Trial Tr. at 969:22-970:2; Brosh Dep. at
277:19-22, 280:3-11, 281:2-15; PX 32.

192.

While defendants significantly
changed the answers of Brosh’s
30(b)(6) testimony after the fact, they
did not dispute his answers on the
above facts, and did not seek to
amend his answers on the same.

See Dkt. Nos. 593-7; 593-8.
Trial Tr. at 1126:6-12, 1127:22-1128:8
(Farwell direct); DX 1746 at 82-83; DX 1652
at 43-45.

193.

Documents describing the terms for
the QT Vascular transaction refer to it
as a merger.

PX 32 at 0001 (Summary of terms for
proposed merger, signed November 5, 2012);
Trial Tr. at 252:13-254:23.

194.

The TriReme Board minutes say that
TriReme will merge with Quattro.

PX 30 at 0001-0002; Trial Tr. at 251:11252:12.

195.

Quattro wrote to its shareholders that
it will merge with TriReme.

PX 33 (letter to Quattro shareholders dated
November 6, 2012, explaining decision to
merge, need for merger between TriReme and
Quattro, “a merged entity would provide a
complete platform for an IPO and a far more
compelling story for a potential acquirer”);
Trial Tr. 254:24-255:13.

196.

Konstantino described the transaction
to form QT Vascular as a merger.

PX 40; Trial Tr. at 255:19-256:6.

197.

QT Vascular presentations state that
QT Vascular “is a result of a merger
between Quattro Vascular and
TriReme Medical.”

PX 43 at 0002; Trial Tr. at 256:7-21.

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Findings of Fact

1

Supporting Evidence

2
198.

Along with the assets and liabilities of
Quattro and TriReme, QT Vascular
“acquired 100% of the issued and
outstanding capital stock” of Quattro
and TriReme and that the “purchase
consideration for the acquisition” was
“satisfied by the allotment and
issuance” of QT Vascular shares,
“credited as fully paid.”

Trial Tr. at 1328:3-17; PX 45 at 0080; Trial
Tr. at 1125:16-23; 1128:5-8; PX 32 at 0001;
Brosh Dep. at 277:19-22, 280:3-11, 281:2-15.

199.

The shareholders of TriReme and
Quattro became the shareholders of
QT Vascular.

Trial Tr. at 1328:3-17; see also PX 45 at
0073.

200.

AngioScore has experienced financial
losses due to Chocolate’s entry into
the marketplace.

PX 152; PX 164; PX 130; Trial Tr. at 1235:11239:20.

201.

AngioSculpt and Chocolate compete.
As a result of defendants’ competition
and targeted pricing strategy,
AngioScore lost share in the specialty
balloon market.

PX 15 at 0005; PX 124 at 0007 (Proteus
investor document noting AngioScore as
potential competitor); PX 127 (February 2011
email between Feld and Konstantino noting
AngioSculpt as competitor to Chocolate); PX
130 (October 2011 email between Dreaden,
Konstantino, Haig, Benjamin re competitive
information on AngioScore’s pricing,
discussing Chocolate pricing strategy); PX
132 at 0002 (TriReme competitor analysis
spreadsheet noting AngioSculpt PTA and
PTCA devices compete with Chocolate); PX
135 (December 2011 email from Dreaden to
other TriReme employees regarding
Chocolate pricing attaching tables confirming
that at each available size, Chocolate is
exactly $25 less per unit than AngioScore);
PX 137 (December 2011 email re Chocolate
noting pricing strategy keyed off of other
balloons including AngioSculpt); PX 143
(December 2012 email between Haig and
Borrell reflecting Chocolate pricing $25 less
per unit than AngioSculpt); PX 154 (March
2013 sales email noting that “the closest

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comparable product [to Chocolate] is the
AngioSculpt”); PX 164 (June 2013 email
between TriReme sales to customer noting
that “most clinicians are replacing the use of
Scoring/Cutting (AngioScore) devices with
Chocolate”); PX 264 at 0163 (Millennium
Research Group Report table noting that
AngioScore had 12.5% of specialty balloon
catheter market share in 2009); PX 294 at
0251 (Millennium Research Group Report
table noting that AngioScore had 48.1% of
the specialty balloon market share in 2013);
Trial Tr. at 159:7-16 (Konstantino direct,
noting that “specialty balloon” is a balloon
that costs more than an average POBA),
520:3-13 (noting field of competitive
specialty balloons consists of AngioSculpt,
Chocolate, Vascutrak, and the Cutting
Balloon), 185:1-186:3 (Konstantino direct,
establishing that Konstantino considered
Chocolate competitive (“a step up”) with
respect to AngioSculpt), 218:6-21
(Konstantino confirming that he utilizes
Millennium Research Group reports), 335:9340:17 (Konstantino direct, re competition
between Chocolate and AngioSculpt),
343:19-344:7 (Haig direct, with respect to
pricing), 348:10-349:4 (same), 353:18-25
(same, discussing Millennium Research
Group report), 355:25-357:1 (Haig,
discussing competitive products in specialty
balloon market), 571:6-11 (same, discussing
metal impressing upon plaque in the case of
scoring or cutting balloons), 741:10-17
(Olsen direct, discussing lost profits from the
end of 2011 to the end of 2Q14 for
AngioScore), 1235:1-1239:20 (Prowse cross,
discussing AngioSculpt and Chocolate as
competitors occupying the same market).

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Supporting Evidence

202.

The parties’ damages experts
generally agree on the methodology to
calculate AngioScore’s lost profits,
and used the same numerical values
for AngioScore’s lost revenue, profit
margin, and the applicable discount
rate.

Trial Tr. at 1228:5-1229:25 (defendants’
expert, Prowse, testifying that the material
change in his calculation was with respect to
market share percentages; revenue, profits,
profit margin, gross profit margin remain the
same).

203.

Chocolate and the AngioSculpt
products are specialty balloons.

Trial Tr. at 159:7-16, 180:6-8, 325:18-326:10,
326:20-22, 408:23-409:12, 526:12-19,
577:25-578:3, 924:5-17; PX 142.

204.

The Chocolate and AngioSculpt
FF supra 200-201; infra 205-220.
products compete with each other in
PX 294 at 249-51; PX 142.
the specialty balloon market. Within
the specialty balloon sub-market, there
are relatively few players. As of
2013, the Millennium Research Group
found the specialty balloon catheter
market was primarily occupied by
four companies: Boston Scientific,
C.R. Bard, Abbott Laboratories, and
AngioScore. The market share
reflects that AngioScore was in close
competition with Boston Scientific
and its product, the Cutting Balloon:
AngioScore occupied 48.1% of the
specialty balloon market and Boston
Scientific occupied 47.1%. C.R. Bard
held 3.3% of the market with its
specialty balloon, the Vascutrak.
Abbott Laboratories held only 1.3%.

205.

Once a doctor decides “to use a
specialty balloon for a particular
procedure,” the competition narrows
to just four devices: “the AngioSculpt,
the Chocolate, the Vascutrak, and the
Cutting Balloon” and a drug-coated
balloon, which recently entered the
specialty balloon market.

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Trial Tr. at 520:3-13; Trial Tr. at 922:11-19,
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Findings of Fact

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Supporting Evidence

2
206.

AngioScore has lost sales due to
Chocolate’s entry into the specialty
balloon catheter marketplace.

Trial Tr. at 418:18-419:5 (attesting to
diversion of resources at AngioScore due to
threat from Chocolate); 444:20-445:21
(Viano discussing losing five to ten units a
month to Chocolate, including losing sales to
Dr. Garcia, defendants’ industry expert); PX
152; PX 164 (defendants’ email reflecting
observation that clinicians were replacing
AngioScore devices with Chocolate).

207.

TriReme used specialty balloons to set
their initial prices for Chocolate.

PX 137 at 0014; Trial Tr. at 336:11-15,
339:19-340:7, 340:10-17, 341:16-24, 348:10349:4.

208.

TriReme’s sales force targeted doctors
who used specialty balloons.

PX 164; PX 124 at 0007; PX 130; PX 132 at
0002; PX 137 at 0014; PX 152; PX 154; Trial
Tr. at 336:11-15.

209.

Documents show that TriReme
employees stated that AngioScore was
Chocolate’s “closest competitor.”

PX 143; PX 154; PX 132 at 0002; PX 127;
Trial Tr. at 343:19-344:7.

210.

TriReme employees gathered pricing
information on AngioScore, and
strategically priced Chocolate $25
below AngioSculpt to “get faster
uptick” in AngioScore accounts.

PX 130; PX 143; PX 137 at 0014; PX 135
(December 2011 email from Dreaden to other
TriReme employees regarding Chocolate
pricing, attaching tables confirming that at
each available size, Chocolate is exactly $25
less per unit than AngioSculpt); Trial Tr. at
335:14-336:15.

211.

TriReme’s Vice President of
Marketing & Business Development
regarded AngioScore accounts as “an
opportunity for TriReme” because
premium “pricing had already been
established for specialty balloons.”

Trial Tr. 336:11-15.

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212.

POBAs are priced around $150 to
$200 per unit. Specialty balloons are
priced much higher than that, up to
$1000 per unit, depending on length.

Trial Tr. at 412:7-9 (Viano direct).

213.

AngioScore and defendants use the
Millennium Research Report in the
course of their businesses.

Trial Tr. at 218:6-21; 353:18-25; 571:6-18.

214.

No trial evidence established that
either party used the iData Research
Report, nor did Dr. Prowse offer any
reason to use the iData Research
Report to determine AngioScore’s
market share.

Trial Tr. at 571:19-23.

215.

According to the Millennium
Research Reports, AngioScore had
between a 39% and 48% of the
specialty balloon catheter market
between 2011 and 2014.

PX 264 at 163; PX 294 at 251; Trial Tr. at
218:6-21; 353:18-25; 571:6-11.

216.

Chocolate made $11,269,00 in
revenue from 2011 to 2014.

PX 388; Trial Tr. 742:1-742:7; PX 381 at
0028.

217.

Applying AngioScore’s market share
to Chocolate’s revenue, AngioScore
lost $5,335,000 in revenue to
Chocolate.

Trial Tr. at 757:9-17; PX 264 at 163; PX 294
at 251; Trial Tr. at 218:6-21; 353:18-25;
571:6-11; PX 381 at 0028.

218.

AngioScore had profit margins
between 55% and 58%.

Trial Tr. at 758:5-760:2; PX 351; PX 369372; PX 381 at 0028.

219.

Applying AngioScore lost revenue
shows that AngioScore lost $2.97
million to Chocolate from 2011 to
2014.

Trial Tr. at 741:10-24; PX 381 at 0028.
See also Trial Tr. at 444:20-445:21 (Viano
cross, discussing losing five to ten units a
month to Chocolate, including losing sales to
Dr. Garcia, defendants’ industry expert).

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Supporting Evidence

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220.

If Chocolate remains on the market
through 2019, AngioScore will suffer
$17.064 million in lost profits.

Trial Tr. at 759:22-760:2, 772:21-25.

221.

Konstantino received $250,000 by
agreeing to an invention assignment
agreement of Chocolate.

DX 1435 at 0003.

222.

Konstantino receives a 2.85% royalty
on Chocolate sales.

Trial Tr. at 1342:13-22.

223.

Konstantino has 15 million shares of
QT Vascular stock.

Trial Tr. at 1336:23-1338:4.

224.

Konstantino has stock options in QT
Vascular.

Trial Tr. at 1336:23-25.

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