Lawsuit target fails to appear

A man alleged to have stolen intellectual property from brain research company Neuronz failed to appear for cross-examination in the High Court at Auckland yesterday.

Neuronz, which is part-owned by Auckland University's commercial arm Uniservices, is suing Lloyd Tran to establish its ownership of the knowledge used in two applications he made for patents covering the use of a drug.

Justice Peter Salmon suppressed the name of the drug, which was referred to as "Drug Y", and details of the two patent applications.

But Neuronz's counsel, Gerard Curry, said the drug "may lead to a treatment for strokes, head injuries and diseases such as Parkinson's disease, Alzheimer's disease and multiple sclerosis. It is of extremely high potential value."

Yesterday's hearing was the first substantive part of the case to have been heard in public.

All earlier affidavits and submissions were suppressed by Justice Tony Randerson when the case was filed last November to protect Neuronz's intellectual property.

In May, Mr Tran and his wife, Fern Tran, were each fined $10,000 for contempt of court for failing to comply with a court order to return all of Neuronz's documents, information and electronic records to solicitors.

Lawyers who visited their Avondale home on December 11 to execute the order found a computer hidden in the ceiling and believed that the Trans deliberately withheld copies of information taken from Neuronz.

Mr Tran, a Vietnamese-born American citizen with experience in preparing applications for clinical trials of new drugs, is now believed to be back in the United States.

His lawyers, John Billington, QC, and Richard Hawk, withdrew from the case yesterday because they did not have sufficient instructions from him.

Justice Salmon accepted a submission from Mr Curry that, as Mr Tran had failed to appear, his affidavit should not be used as evidence.

Mr Curry said Neuronz hired Mr Tran in June last year as an independent contractor for six months to help to establish standard operating procedures and prepare applications for clinical trials.

His contract provided that all "discoveries, inventions and designs" would be the property of Neuronz, although the company might agree to pay him royalties of up to 2 per cent.

Both the contract and a separate confidentiality agreement provided that all information obtained in the course of his work had to be treated as confidential until Neuronz made it public.

Despite these provisions, Mr Curry said, Mr Tran asserted in November last year that he was the inventor and owner of Drug Y, and filed patent applications for it on November 9 and 13.

Mr Curry cited long passages from the two patent applications that were identical to a draft application prepared by Neuronz itself - even to the point of including references to a different drug by mistake.

"Mr Tran had the audacity not only to rely on, copy and steal Neuronz's confidential information, but also to charge Neuronz for the privilege," Mr Curry said. "He billed Neuronz for the time he spent working on Y ... Neuronz paid him $100 an hour plus GST for this work."

Justice Salmon asked for written submissions on the issue of costs. He is expected to issue his decision this week.