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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
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Showing 7 posts in Intellectual Property.
STMicroelectronics N.V. v. Agere Sys., Inc., C.A. No. 08C-09-099 MMJ (Del. Super. May 19, 2009) (applying New York law per choice of law provision)
This case illustrates the series of events that may arise when a subsidiary is party to a licensing agreement, but its parent is not.
Here, the licensor sued the parent company for patent infringement in the Eastern District of Texas and before the International Trade Commission. In response, the parent and subsidiary brought this action in Delaware, claiming that the filing of the patent infringement actions, though only naming the non-signatory parent, violated the licensing agreement’s covenant not to sue.
The Superior Court permitted the claim to move forward, denying the defendant-licensors’ McWane motion on the basis that the Delaware action did not present the same legal and factual issues as the first-filed proceedings. Further, the Court denied the defendants’ motion to dismiss for failure to state a claim and for lack of standing on the basis that additional discovery was necessary to resolve those issues.
Boyce Thompson Institute For Plant Research v. MedImmune, Inc., C.A. No. 07C-11-217 JRS (Del. Super. May 19, 2009) (applying New York law per choice of law provision)
This opinion discusses some interesting contractual interpretation and jurisdictional issues arising out of a licensing agreement. The dispute arose because the licensees denied any obligation to pay royalties to the licensor for products they are manufacturing in a country where, they claim, the licensor does not hold a patent.
The Superior Court found that the contract was ambiguous on whether “covered” products included those that were protected by the licensor anywhere or only those that were protected by a patent in the locations where they were manufactured. In any case, the Court denied the licensees’ motion to dismiss on the basis that there was no evidence presented to rule out the possibility that the licensees are, in fact, infringing on the patent by their acts in this other country.
The Court also raised the issue of whether it had subject matter jurisdiction to decide the case. While the Court deferred resolution of the issue, it noted that, if the contract claim requires the Court to determine whether the patent was infringed, then it would likely follow that patent law is a “necessary element” of the breach of contract claim and the federal courts have exclusive subject matter jurisdiction.
This decision demonstrates the willingness of Delaware courts to uphold the plaintiff’s choice of forum (between the Superior Court and the Court of Chancery), despite an argument by the defendant that transferring courts would allow the hearing of all claims and thus promote judicial economy. More ›
Court of Chancery Finds Majority Stakeholder, Chief Executive Officer and General Partner of Limited Partnership Breached His Fiduciary and Contractual Duties to Limited PartnershipMcGovern v. General Holding, Inc., C.A. No. 1296-N, 2006 WL 1468850 (Del. Ch. May 18, 2006). Plaintiffs brought action individually and on behalf of limited partnership against 90% owner of limited partnership for, among other things, breach of fiduciary duty and breach of limited partnership agreement. More ›
Court of Chancery Allows Employer To Recover Its Confidential Information From Former Employee's ComputerRockwell Automation, Inc. v. Kall, C.A. No. 526-N, 2005 WL 2266592 (Del. Ch. September 9, 2005). Plaintiff Rockwell Automation, Inc. filed complaint against Defendant, a former employee of Plaintiff, to obtain documents containing its confidential and proprietary information. More ›
Court of Chancery Finds Misappropriation of Trade Secrets and Awards Attorneys' Fees for Defendants' Willful and Malicious Misappropriation
NuCar Consulting, Inc. v. Doyle, 2005 WL 820706 (Del. Ch. April 5, 2005). Plaintiff NuCar Consulting, Inc., claimed that Defendants, former employee Timothy Doyle and Doyle's newly created company, Dealer Rewards, Inc., misappropriated certain of NuCar's trade secrets. NuCar requested that the court determine whether Defendants misappropriated NuCar's trade secrets under the Delaware Uniform Trade Secrets Act and the extent to which NuCar should receive monetary damages or injunctive relief for the alleged misappropriation. NuCar also sought an award of attorney's fees pursuant to 6 Del. C. - 2004 for Defendants' allegedly willful and malicious misappropriation. The Court granted NuCar's request for a permanent injunction prohibiting Defendants' further use of the contract used for automotive deals and found Defendants liable for $69,750 in unjust enrichment damages for their misappropriation of the potential client list. Finally, the Court found that Defendants' misappropriation was willful and malicious and awarded NuCar its reasonable attorney's fees expended on its misappropriation of trade secrets claims. More ›