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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
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Showing 6 posts in superior court.
A jury verdict tainted by a juror's internet search may be set aside due to the "egregious circumstance" that misconduct presents.
by Edward M. McNally
Originally published in the Delaware Law Weekly l 08-31-2011
In years gone by, Delaware’s courts had much of the same flavor as a small town. The local bar was small. Few firms from outside Delaware had Delaware outposts. The lawyers were part of a community where everyone at least knew someone who knew who they were and how they practiced law. As a result, it was often true that lawyers got away with not complying with scheduling orders and continuances were freely granted. Even today, some of that atmosphere remains, with Delaware lawyers maintaining civility.
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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 case illustrates the exception to the statute of frauds of "substantial part performance."
The seller of a $5MM home, and other items, brought a breach of contract action, because the buyer backed away. The buyer moved to dismiss on the grounds that there was no meeting of the minds, and, in any case, the statute of frauds bars enforcement of such a handshake agreement.
But the Superior Court denied the motion to dismiss, holding, among other things, that the fact that the buyer took possession and began making modifications to the home supported an inference that there was substantial part performance, an exception to the statute of frauds.
This decision will be of interest to any parties drafting or negotiating D&O policy exclusions.
This coverage dispute arose out of stockholder litigation brought against certain AT&T directors, alleging false and misleading statements. That action settled during trial, with AT&T agreeing to pay $100 million to the plaintiffs. National Union, AT&T’s excess D&O carrier, denied coverage.
The issue before the Superior Court here, on AT&T’s motion for partial summary judgment, was whether National Union could deny coverage based on the policy’s fraud exclusion. AT&T argued that the fraud exclusion requires an adjudication and does not apply to settlements. More ›