Justia Contracts Opinion Summaries

Articles Posted in Intellectual Property
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United Aeronautical Corporation and Blue Aerospace, LLC (collectively, Aero) filed suit against the United States Air Force and Air National Guard (collectively, USAF) in the U.S. District Court for the Central District of California. Aero alleges that USAF has for some time violated federal procurement regulations and the Trade Secrets Act by improperly using Aero’s intellectual property. The district court dismissed for lack of subject matter jurisdiction, concluding that the Contract Disputes Act (CDA), precludes jurisdiction over Aero’s action by vesting exclusive jurisdiction over federal-contractor disputes in the Court of Federal Claims.   The Ninth Circuit affirmed. The panel agreed with the district court that the Contract Disputes Act “impliedly forbids” jurisdiction over Aero’s claims by vesting exclusive jurisdiction over federal-contractor disputes in the Court of Federal Claims. A claim falls within the scope of the CDA’s exclusive grant of jurisdiction if (1) the plaintiff’s action relates to (2) a procurement contract and (3) to which the plaintiff was a party. Here, Aero’s claims that USAF improperly received and used MAFFS data (1) relate to the DRA, (2) the DRA is a procurement contract, and (3) Aero is a contractor for purposes of the DRA. The panel held that the test set forth in Megapulse, Inc. v. Lewis, 672 F.2d 959 (D.C. Cir. 1982), is limited to determining whether the Tucker Act—which grants exclusive jurisdiction to the Court of Federal Claims over breach-of-contract actions for money damages—“impliedly forbids” an ADA action because Megapulse addressed implied preclusion only pursuant to the Tucker Act, not pursuant to the CDA. View "UNITED AERONAUTICAL CORP., ET AL V. USAF, ET AL" on Justia Law

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NuVasive, Inc. manufactures medical products and equipment to treat spinal diseases. In central Florida, NuVasive sold its products through an exclusive distribution agreement with Absolute Medical, LLC. Under the agreement, Absolute Medical employed independent-contractor sales representatives who marketed and sold NuVasive’s products to doctors and medical practices in the region. NuVasive sued Absolute Medical, Soufleris, AMS, and two of Absolute Medical’s sales representatives who began working for AMS for breaching the exclusive. The district court enforced a dispute resolution clause in the agreement, ordering NuVasive and Absolute Medical to arbitrate NuVasive’s breach-of-contract claim seeking money damages. Absolute Medical, Soufleris, AMS, and the sales representatives appealed the district court’s order granting NuVasive’s motion to vacate the arbitration panel’s final award.   The Eleventh Circuit affirmed. The court held that the district court did not err by equitably tolling the three-month filing deadline and considering NuVasive’s motion as timely. The court explained that the district court’s findings of fact were not clearly erroneous, and they supported the district court’s conclusion that NuVasive satisfied both prongs of the equitable tolling analysis. Defendants’ conduct presented extraordinary circumstances, and NuVasive was diligent once it learned that there was reason to pursue vacatur. Further, the court held that the district court did not err by vacating the final award. The district court correctly concluded that the fraud was materially related to that issue. Finally, the court held that the district court did not abuse its discretion by declining to direct a rehearing by the arbitration panel. View "Nuvasive, Inc. v. Absolute Medical, LLC, et al." on Justia Law

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CEATS, Inc. is a non-practicing intellectual property company that owns patents for technologies used in online ticketing. TicketNetwork, Inc. and Ticket Software LLC (together “Ticket”) maintain an online marketplace for tickets to live events. More than a decade ago, CEATS filed a patent-infringement lawsuit against Ticket and other providers (the “2010 Lawsuit”). CEATS and Ticket settled that suit. The settlement agreement gave Ticket a license to use CEATS’s patents in exchange for a lump-sum payment from Ticket and for ongoing royalty payments from Ticket and its affiliates (the “License Agreement”). CEATS continued its litigation against the remaining non-settling defendants, but the jury in that case found that CEATS’s patents were invalid. The Court of Appeals for the Federal Circuit affirmed.   The Fifth Circuit affirmed that part of the Sanctions Order that imposes joint and several monetary liability against CEATS. The court vacated those parts of the Sanctions Order that impose joint and several monetary liability against the Individuals, that impose the Licensing Bar, and that deny CEATS’s tolling request. The court vacated the Calculation Order and remanded for further proceedings. The court explained that here CEATS told the district court that a discovery violation “must be committed willfully or in bad faith for the court to award the severest remedies available under Rule 37(b).” CEATS also argued that it did not violate the Protective Order willfully or in bad faith because the “communications . . . were clearly inadvertent.” That argument was enough to put the district court on notice that CEATS opposed any definition of “bad faith” that includes inadvertent conduct. View "CEATS v. TicketNetwork" on Justia Law

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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

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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

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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

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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

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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

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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

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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