Justia Contracts Opinion SummariesArticles Posted in Intellectual Property
Direct Biologics v. McQueen
Direct Biologics, LLC (“DB”) brought claims for breach of covenant to not compete and misappropriation of trade secrets against Adam McQueen, DB’s former employee, and Vivex Biologics, Inc. (“Vivex”), McQueen’s new employer. After granting DB a temporary restraining order based on its trade secret claims, the district court denied DB’s application for a preliminary injunction. Finding that DB’s claims were subject to arbitration, the district court also dismissed DB’s claims against McQueen and Vivex and entered final judgment. The Fifth Circuit vacated the district court’s orders denying DB’s motion for a preliminary injunction and dismissing DB’s claims and remanded. The court held that the district court did not abuse its discretion by declining to presume irreparable injury based on McQueen’s breach of his non-compete covenants. The court held that remand is thus proper to allow the district court to make particularized findings regarding irreparable harm; specifically, the likelihood of misuse of DB’s information and the difficulty of quantifying damages should such misuse occur. View "Direct Biologics v. McQueen" on Justia Law
Dmarcian, Inc. v. Dmarcian Europe BV
Dmarcian, Inc. (dInc) and dmarcian Europe BV (dBV)—and a broken business relationship. The original dmarcian, dInc, is a Delaware corporation with headquarters in North Carolina. Its corporate homonym, dBV, is a Dutch entity based in the Netherlands. The two companies negotiated an agreement authorizing dBV to sell dInc’s software in Europe and Africa. The license was done on a handshake, and the parties now dispute its terms. Among other allegations, dInc accuses dBV of directly competing for customers, which prompted dInc to bring claims of copyright and trademark infringement, misappropriation of trade secrets, and tortious interference. The district court exercised personal jurisdiction over dBV and declined to dismiss for forum non conveniens. The district court also issued a preliminary injunction limiting dBV’s use of dInc’s intellectual property. The district court later held dBV in contempt for violating the injunction, and dBV appealed. The Fourth Circuit affirmed except as to one aspect of the contempt order, which the court vacated and remanded for further proceedings as to the proper amount of sanctions. The court explained that the district court did not err in exercising personal jurisdiction, in declining to dismiss for forum non conveniens, and in issuing a preliminary injunction. Further, the court held that the district court was also justified in issuing a contempt sanction; but the court requires a more thorough examination of the sanction amount. While the preliminary injunction may not be the final word on the merits, its entry was also not an abuse of discretion considering the weighty interests and detailed findings discussed at length above. View "Dmarcian, Inc. v. Dmarcian Europe BV" on Justia Law
GSE Consulting, Inc. v. L3Harris Technologies, Inc.
Under the terms of a consulting agreement between GSE Consulting, Inc. (“GSE”) and Harris Corporation (“Harris”), GSE is entitled to a payment of up to four million dollars in the event that certain intellectual property owned by Harris is “sold, merged or transferred” but did not form “the primary basis of the sale.” GSE contends that the relevant intellectual property, held by a subsidiary of one of Harris’s subsidiaries, necessarily “merged” when Harris used a different subsidiary to effectuate a comprehensive reverse triangular merger with an outside company and thus triggered Harris’s payment obligation under the parties’ agreement. L3Harris, however, maintained that Harris’s participation in the reverse triangular merger did not cause the relevant intellectual property to “merge” and has accordingly refused to make the demanded payment. The district court agreed with L3Harris and dismissed GSE’s breach of contract claim on summary judgment. The Eleventh Circuit affirmed. The court reasoned that the reverse triangular merger at issue did not “merge,” i.e., combine, the relevant intellectual property in any ordinary way. The Plan contains assurances regarding the validity, right to continued use, and maintenance of each party’s intellectual property. And, given its broad definitions of “Company Intellectual Property” and “Intellectual Property,” the Plan certainly reaches the intellectual property held by Eagle as subsidiary of one of Harris’s subsidiaries. The Plan neither blends, pools, nor otherwise combines the intellectual property held by Eagle with any other intellectual property. Therefore, the intellectual property discussed in the Consulting Agreement was not “merged” as a result of the reverse triangular merger. View "GSE Consulting, Inc. v. L3Harris Technologies, Inc." on Justia Law
Wild Horse Concepts, LLC v. Hasbro, Inc.
The Supreme Court affirmed the judgment of the superior court in favor of Hasbro, Inc. in this action alleging breach of an implied contract and other causes of action, holding that Appellants were not entitled to relief on appeal.Appellants, former Hasbro employees who now develop toy concepts, brought this complaint stemming from an action figure concept and play pattern that they developed, alleging that changes incorporated by Hasbro in its line of "Mashers" were virtually identical to the concept they had developed. Appellants brought this complaint alleging fraud, theft of intellectual property, and other causes of action. Judgment entered for Hasbro. The Supreme Court affirmed, holding that there existed no genuine issues of material fact precluding summary judgment. View "Wild Horse Concepts, LLC v. Hasbro, Inc." on Justia Law
Posted in: Contracts, Intellectual Property, Rhode Island Supreme Court
Uniloc 2017 LLC v. Google LLC
Uniloc brought multiple infringement suits against Google concerning patents directed to innovations in multimedia content delivery, IT security, high-resolution imaging, network connectivity, video conferencing, and image and text searching. Google alleged Uniloc lacked standing because its predecessors had granted Fortress a license and an unfettered right to sublicense to the asserted patents as part of a financing arrangement. Uniloc argued that any license had been eliminated by a Termination Agreement executed between Uniloc’s predecessors and Fortress before the suits commenced.The district court dismissed, finding that a license had been granted and survived the Termination Agreement. The Federal Circuit reversed. The district court erred in interpreting the Termination Agreement. The License Agreement granted Fortress a “non-exclusive, transferrable, sub-licensable, divisible, irrevocable, fully paid-up, royalty-free and worldwide license” to several of Uniloc’s patents, including those at issue. The Termination Agreement stated that the License Agreement “shall terminate and shall be of no further force or effect without any further documentation or action and without liability to any party hereto, and the rights of each of the applicable parties under the applicable agreement shall terminate.” By terminating the License Agreement and rights under that agreement, the Termination Agreement terminated Fortress’s license. Although the License Agreement describes the license as “irrevocable” the context clearly refers to the license’s being “irrevocable” by the licensor and does not preclude revocation by mutual agreement. View "Uniloc 2017 LLC v. Google LLC" on Justia Law
Amyndas Pharmaceuticals, S.A. v. Zealand Pharma A/S
The First Circuit affirmed the judgment of the district court dismissing Amyndas Pharmaceuticals, S.A.'s claims against Zealand Pharma A/S and vacated the dismissal of Amyndas's claims against Zealand Pharma U.S., Inc., holding that the district court erred in dismissing Amyndas's claims against Zealand Pharma U.S.When Amyndas was considering separate joint ventures with Zealand Pharma and Alexion Pharmaceuticals, Inc. it shared trade secrets before understanding that neither of the joint ventures would materialize. Zealand Pharma and Zealand US, its newly established affiliate, subsequently announced a partnership with Alexion Pharmaceuticals, Inc. Amyndas sued for misappropriation of trade secrets and other confidential information. The district court (1) dismissed Amyndas's claims against Zealand Pharma on the ground that Amyndas was required to litigate those claims in Denmark; and (2) dismissed Amyndas's claims against Zealand US for failure to state a claim. The First Circuit vacated in part and remanded the case for further proceedings, holding that the district court (1) correctly dismissed Amyndas's claims against Zealand Pharma; and (2) erred in concluding that Amyndas's claims against Zealand US were futile. View "Amyndas Pharmaceuticals, S.A. v. Zealand Pharma A/S" on Justia Law
REXA, Inc. v. Chester
The Seventh Circuit affirmed the judgment of the district court granting summary judgment to Defendants on all claims asserted against them, including misappropriation of trade secrets and breach of an implied contractual obligation to assign patent rights but vacated the judgment awarding attorneys' fees, holding that a reduction in fees was warranted.REXA, Inc. sued Mark Chester and MEA, Inc. for misappropriation of trade secrets and breach of an implied contractual obligation to assign patent rights, alleging that Chester and MEA incorporated and disclosed confidential designs. The district court granted summary judgment to Defendants. The Seventh Circuit affirmed in part and vacated in part, holding that the district court (1) properly granted summary judgment in favor of Defendants; but (2) abused its discretion in awarding Chester and MEA approximately $2.357 million in attorneys' fees, which they requested as a sanction for REXA's litigation conduct, where the court did not make specific findings about each of REXA's objections to the fee petition. View "REXA, Inc. v. Chester" on Justia Law
Cardiovascular Systems, Inc. v. Cardio Flow, Inc.
Cardiovascular Systems, Inc. (“CSI”) brought this action against Cardio Flow, Inc. (“Cardio Flow”), alleging the breach of a settlement agreement that resolved ownership of intellectual property rights related to atherectomy devices. Cardio Flow was not a named party to the settlement, however, and moved for summary judgment on that basis. In response, CSI asserted that principles of equitable estoppel and agency bound Cardio Flow to abide by the agreement. The district court rejected CSI’s arguments and dismissed its claims and the Eighth Circuit affirmed. The court held that equitable estoppel provides no basis to enforce the settlement agreement against Cardio Flow. The court reasoned that the doctrine of equitable estoppel generally involves some type of misrepresentation. Given the Minnesota Supreme Court’s unequivocal holdings elsewhere that a representation or concealment is essential, the court declined to supplant the usual equitable estoppel elements. Further, the party who signed the agreement with Plaintiff was not acting as Defendant's agent when she signed the settlement; there was no joint venture between the signer and Defendant, and Defendant did not control the signer's lawsuit against Plaintiff which led to the settlement agreement. View "Cardiovascular Systems, Inc. v. Cardio Flow, Inc." on Justia Law
Wildhawk Investments, LLC v. Brava I.P., LLC
Boor and Edson owned Brava, which had intellectual property and technical knowledge related to composite roofing. Wildhawk inquired about purchasing Brava. Boor proposed “an exclusive license for manufacturing current roofing products” with “a right of first refusal on all new product [d]evelopments.” The parties executed asset purchase and license agreements. Wildhawk paid $4 million and obtained an automatic license to “any Improvements” to the technology, whether patentable or not. Before executing the agreement, the parties removed a “New Product” section as required by Wildhawk’s lender but entered into an oral agreement for a right of first refusal. Wildhawk retained Boor and Edson as paid consultants, with non-compete agreements.Boor notified Wildhawk: “As per our handshake agreement” we offer you first right of refusal “on the below products.” The parties entered into a confidentiality and nondisclosure agreement regarding “possible R&D ‘new or enhanced product’ agreements.” They negotiated but failed to reach an agreement. Boor and Edson formed Paragon while Boor was still employed by Wildhawk. Paragon began producing the new products.Wildhawk sued. The district court granted Wildhawk a preliminary injunction, prohibiting Paragon from manufacturing or selling composite roofing. The Eighth Circuit vacated. Wildhawk had a fair chance of proving the defendants violated the agreement but the district court erred in rejecting an equitable estoppel defense. Wildhawk waited until Paragon had been producing the products for 10 months before making its claim, failing to show either reasonable diligence or harm that cannot be compensated by damages. View "Wildhawk Investments, LLC v. Brava I.P., LLC" on Justia Law
Nippon Shinyaku Co., Ltd. v. Sarepta Therapeutics, Inc.
Shinyaku and Sarepta executed an Agreement concerning “a potential business relationship relating to therapies for the treatment of Duchenne Muscular Dystrophy.” During the Agreement’s term the parties would “not directly or indirectly assert or file any legal or equitable .. claim or otherwise initiate any … form of legal or administrative proceeding against the other Party . . . in any jurisdiction … concerning intellectual property in the field of Duchenne Muscular Dystrophy,” including “patent infringement litigations, declaratory judgment actions, patent validity challenges” before the U.S. Patent and Trademark Office (PTO) or Japanese Patent Office, and reexamination proceedings before the PTO. A forum selection, governing intellectual property disputes between the parties after the term’s expiration named the District of Delaware. The term ended in June 2021; the two-year forum selection clause took effect. That same day, Sarepta filed seven Patent Trial and Appeal Board petitions for inter partes review (IPR). Shinyaku filed suit in the District of Delaware asserting breach of contract (alleging that the IPR petitions violated the forum selection clause), declaratory judgment of noninfringement and invalidity concerning Sarepta’s patents, and infringement of Shinyaku’s patents.The Federal Circuit directed that the district court enter an injunction, requiring Sarepta to withdraw the petitions. The plain language of the forum selection clause resolved the dispute. View "Nippon Shinyaku Co., Ltd. v. Sarepta Therapeutics, Inc." on Justia Law