A surgeon who designed a cushioned seat for patients in shoulder operations won a final court ruling Wednesday for more than $2 million in damages from a Hayward orthopedics company that cut off his royalties.
The state Supreme Court rejected an appeal by Orthopedic Systems Inc. after a lower court ruled in December that the surgeon, Allen Schlein, was entitled to recover his losses and recoup the company’s profits from selling the product.
Schlein, an orthopedic surgeon in Connecticut, had invented other medical products in the 1980s and marketed them through Orthopedic Systems. In 1992, the company agreed to pay him 5 percent of its proceeds from the sale of the “Schlein Shoulder Positioner,” a beach chair-style seat for patients undergoing arthroscopic shoulder surgery.
In 2005, however, the company’s new owners told Schlein the agreement was not binding and had become “economically unfeasible.” It kept his name on the device for the next seven months, with sales of more than $2 million, and later changed the product’s name, according to evidence cited by a state appeals court.
An Alameda County jury concluded in 2008 that Orthopedic Systems was bound by the 1992 contract and owed Schlein damages. A judge awarded him $616,000 for lost royalties, and in December, the First District Court of Appeal in San Francisco said someone whose name is used on a product without permission is also entitled to the seller’s profits.
In its Supreme Court appeal, the company denied misappropriating Schlein’s name or violating their contract. The court denied review unanimously, without comment.
The case is Orthopedic Systems vs. Schlein, S199952.
Bob Egelko is a San Francisco Chronicle staff writer. email@example.com