“Minnesota’s Medtronic Inc. used the stolen trade secrets of another company in developing a mechanical heart valve that provided $25 million in revenue last year, according to allegations in court documents.”

The second paragraph stated, “A small Twin Cities medical-devices company has said in a court case that it believes an official of a Medtronic subsidiary used its secrets ….” The third paragraph began: “And an attorney for the company, Medical Inc., testified in court proceedings in June that the FBI found Medical Inc. documents in the possession of Medtronic.” The newspaper article reported that Medtronic would not comment whether it had used Medical Inc.’s secrets, but instead said it has fully cooperated in the FBI investigation.

The story continued at considerable length on the inside pages and included the statement that “[a]ccording to an FBI affidavit, one Medical Inc. book of manufacturing specifications allegedly was transformed into a Medtronic book ….” The inside pages were devoted primarily, however, to Robert Kaster, who had formerly been employed by both Medical Inc. and Medtronic and then had formed his own heart valve company and who, it was alleged, had stolen trade secrets from both Medical and Medtronic. The article also said that “the FBI has looked into Medtronic documents as part of its investigation of Kaster and his company, although the main focus remains on Kaster.”

Medtronic claims the newspaper article is inaccurate, unfair and misleading. It claims the article implies that Medtronic was the target of an FBI investigation involving use of stolen trade secrets, and that Medtronic had been sued for use of stolen secrets. In fact, claims Medtronic, the FBI was investigating Kaster and his company, not Medtronic. Furthermore, says Medtronic, its role in the investigation was simply turning over documents requested by the grand jury investigating Kaster. No Medical Inc. documents were found in Medtronic’s possession, says Medtronic, nor had it used any of its competitor’s secrets. The FBI affidavit mentioned in the newspaper article contained no allegation against Medtronic. Further, Medtronic points out, the references in the article to a court case refer to litigation involving Angicor (Kaster’s company), Medical Inc., and the University of Minnesota. Medtronic was never a party to that litigation.

The Minneapolis Star and Tribune claims its story was fair and accurate. It says it relied not only on court documents but on confidential sources. Further, it points out that in preparation for the story, the reporter submitted seven written questions to Medtronic, but that Medtronic chose to answer the questions evasively instead of responding with what it claimed the facts to be.

After the article was published, Medtronic’s CEO sent a letter to the editor in which the allegations of the story were “flatly and completely” denied, and the newspaper was asked to print a front page apology. The letter was never published because, although the newspaper was willing to publish the letter, the editor refused to negotiate its editing. Medtronic, as the second part of its grievance, claims it was unfair for the newspaper not to publish its letter.

Discussion: The FBI affidavit referred to in the newspaper article does not state, as the article says it does, that a Medical Inc. specifications book had been transformed into a Medtronic book. The article’s reference to the affidavit was simply wrong. If the reporter was relying on other unidentified sources, the article should have so stated.

But more troubling, we think, is the generally misleading character of the article. The article’s prominent placement on the front page of the Sunday edition, its startling headline (“Medtronic accused . . .”), its content referring to an unidentified undated court case, to an FBI investigation, and to grand jury subpoenas, all lead the reader to believe this was a late-breaking story revealing likely wrongdoing by Medtronic. In fact, the article was dealing with relatively old news, and news only peripherally involving Medtronic. The court case, in which Medtronic’s competitor expressed a belief that Medtronic had used its secrets, was between Medical Inc. and Kaster, to which Medtronic was not a party, and was contained in a 3-year-old affidavit submitted in that case in 1983. If the article is read in its entirety, the bulk of which appears on the inside pages (including a photograph of Kaster and quotes from his attorney), it appears that the article is mostly about accusations against Kaster. But the headline and lead paragraphs of the article give the misleading impression that it is Medtronic that is in trouble.

Seven questions were submitted by the reporter to Medtronic. The first question, typical of the others, was:

“According to a transcript of proceedings in the University of Minnesota-Medical Inc. case, dated June 19, 1986, the FBI found that Medtronic had copies of Medical Inc. trade secrets. Medical Inc. has said it “believes” that Medtronic used Medical Inc. secrets to speed up development of its heart valve. Any comment?”

Medtronic’s answer was: “As a matter of policy, Medtronic does not comment about our competition.” Medtronic was free, of course, to say “no comment,” and perhaps hope thereby to avoid involvement in what it felt was not its problem; but, if Medtronic did not wish to explain, it could have at least responded with a denial of the allegations rather than wait to issue its denial in a subsequent letter to the editor. Indeed, Medtronic’s lack of candor may have led the reporter to give some credence to the allegations. We note, in passing, that the June 1986 court proceedings referred to in the reporter’s question involved only an assertion made by Medical Inc.’s attorney in a post-trial motion, where the attorney was offering to show that a witness would testify that while Kaster was at Medtronic, Medtronic had some documents the same as or similar to Medical-originated documents.

The heart valve industry is very complex and highly competitive, and, as the newspaper article observes, “employees jump from company to company, carrying valuable information in their heads.” This much is clear: a year earlier the FBI had begun an investigation of allegations by an Angicor employee that Kaster had stolen trade secrets from both Medical and Medtronic for use in his own company. Because Kaster had formerly worked for both Medical and Medtronic, it was understandable that Medtronic would be mentioned in the newspaper article. Unfortunately, the article’s headline and lead paragraphs gave the misleading impression that Medtronic rather than Kaster was being accused of improper activities.

In fairness, we think it should have been made clear throughout the story that the subject of the FBI investigation was not Medtronic, but Kaster, and that Medtronic had played only a supporting, cooperative role in this investigation. The article should have identified the private litigation, placed it in a proper time frame, and made it clear that Medtronic was not a party to that litigation.

Medtronic, concerned about its reputation, submitted a strongly worded letter to the editor denying the allegations in the news story. The editor agreed to publish the letter, agreeing its length and clarity were appropriate, but reserved the right, in accordance with the newspaper’s established policy, to make minor stylistic changes. Medtronic asked that it be told what these editing changes would be so that it could agree or disagree to the changes. The newspaper refused. The News Council believes that the Star and Tribune acted correctly in refusing to submit its editing of the letter to the sender for approval or disapproval. The editing function must reside with the newspaper editor. To make the editing function a subject of negotiations would be for the newspaper to abdicate its responsibilities.

As to the complaint that the newspaper article and headline were inaccurate, unfair and misleading, the grievance is sustained.

As to the complaint that the newspaper improperly placed editing restrictions on the proposed letter to the editor, the grievance is denied.

Concurring: Chucker, Dornfeld, Falkman, Larson, Orwoll, Ryan, Simonett, Stone, Sundin, Swain, and Tanick

Dissenting: Ashmore and Casey - Medtronic’s presentation was impressive, the charts were informative and the speakers well qualified and prepared, but the company failed to make a convincing case that the Minneapolis Star and Tribune did anything substantially wrong in the preparation and presentation of the article in question. The Star and Tribune’s handling of the article could have been better, but its shortcomings are not sufficient to sustain a grievance.

The FBI’s Talbot’s assertion that Medical Inc. was or was not the source of documents found at Medtronic was not clearly established by either side. It is arguable that the Star and Tribune should have attributed its conclusion on the matter to an unnamed source, but this alone is hardly sufficient to sustain a grievance. The article would have been better had the time frame been better established, but three years is not a long time in the world of litigation. Had Medtronic chosen to engage in reasonable communication with the Star and Tribune, these items would, at worst, have resulted in a correction or clarification the day after publication.

Most important, Medtronic had the opportunity to substantially improve the public’s knowledge of this entire situation and consciously chose not to. Legal documents are generally created not to inform the public but to advance the cause of a particular plaintiff or defendant. They can be misleading, taken by themselves. The Star and Tribune allowed for that fact and asked Medtronic to help clarify the situation. Medtronic declined.

Had Medtronic been as candid with the Star and Tribune as it was in the News Council hearing, there might not have been a complaint. We also strongly disagree with the majority determination that front-page placement contributed to what it perceives as unfairness. This determination suggests that the same information on an inside page would have been “less unfair,” and undermines the majority’s contention that the article’s content is unfair and inaccurate.