PETERBOROUGH — SoClean, the company that makes devices to clean CPAP machines, has settled the $10 million lawsuit brought by a former international distributor.
CPAP machines assist people who suffer from sleep apnea.
The terms of the settlement between SoClean and the Australia-based distributor, SoClean 2 Pty Ltd., have not been made public, but court records show both parties requested the case be dismissed in August. The parties first informed the court in June that they were working out a settlement agreement.
SoClean 2 Pty Ltd. brought the lawsuit in the U.S. District Court in Massachusetts claiming that the Peterborough company had violated the distribution agreement by selling the devices directly to consumers.
According to the lawsuit, distributor SoClean 2 was supposed to have exclusive rights to distribute SoClean’s products in Australia, New Zealand, Singapore, Malaysia, Indonesia, the Philippines, Thailand, Japan, Hong Kong, Macau, South Korea and Taiwan.
SoClean’s attorney in this case, H. Joseph Hameline, countered that SoClean 2 was essentially a one-man company that was underfunded, understaffed and unable to keep up with the terms of the distribution agreement. Attempts to address the distributor’s deficiencies were unsuccessful, according to Hameline.
According to the counter claim, SoClean 2 is an Australian firm owned by Rischeh Kumarasinghe.
During meetings with SoClean management to get the distributor operating, SoClean 2 made an illegal audio recording to help Kumarasinghe with his planned lawsuit, according to Hameline’s filing.
“At no point during the dinner, however, did Plaintiff inform SoClean that the conversation was being taped,” Hameline wrote.
SoClean is still facing another lawsuit, this one filed by Florida-based competitor 3B Medical Inc., which makes the Lumin CPAP cleaner. 3B’s lawsuit claims that SoClean makes false statements about its device’s cleaning method, giving SoClean a market advantage over 3B.
SoClean started out as a DVD cleaning company, and evolved to develop and market the devices to clean CPAP machines. The company moved into Peterborough last year and quickly started expanding. It is moving into a new, 100,000-square-foot facility. This summer, the company launched an advertising campaign featuring actor William Shatner.