MDS(Canada), Inc. v. Rad Source Techs., Inc.

Decision Date30 September 2011
Docket NumberCase No. 09–61652–CIV.
Citation822 F.Supp.2d 1263
PartiesMDS (CANADA), INC., Best Theratronics, Ltd., and Best Medical International, Inc., Plaintiffs, v. RAD SOURCE TECHNOLOGIES, INC., Defendant.
CourtU.S. District Court — Southern District of Florida

OPINION TEXT STARTS HERE

Leonardo N. Ortiz, Jr., Moore & Lee, LLP, Fort Lauderdale, FL, for Plaintiffs.

Anuj Desai, Scott E. Taylor, Arnall Golden Gregory LLP, Richard A. Mitchell, Amall Golden Gregory, LLP, Atlanta, GA, David E. Huizenga, Duluth, GA, Kenneth R. Hartmann, Kozyak Tropin & Throckmorton, Coral Gables, FL, for Defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW FOLLOWING NON–JURY TRIAL

ALAN S. GOLD, District Judge.

THIS CAUSE is before the Court in the above-captioned matter, which came on for a ten-day, non jury trial beginning April 5, 2011 and concluding April 20, 2011. See [ECF Nos. 320–326, 328–330]. A total of twelve witnesses were sworn and testified, and the testimony of two witnesses was introduced by deposition. Counsel presented opening statements and closing arguments with respect to the first two phases of the trial, as described more fully infra. Pursuant to a Pretrial Conference held on March 10, 2011, this matter was intended to be tried in three phases: Phase I—Liability, Phase II—Technical/Patent, and Phase III—Damages. See [ECF No. 315]. Upon the conclusion of Phases I and II,1 I determined that Phase III was unnecessary because based on the evidence presented during Phases I and II, no party was entitled to any damages in this action. [ECF No. 330].2

On April 20, 2011, upon the conclusion of the bench trial, I entered a Preliminary Order to provide definitive rulings on disputed matters as addressed by the parties' operative pleadings. [ECF No. 330]. Entry of the Preliminary Order enabled the parties to proceed with the right of first negotiation pursuant to Article 3.8 of the License Agreement, with the instant detailed Findings of Fact and Conclusions of Law to follow. Id. On August 12, 2011, the mediator filed a report indicating that the parties reached an impasse. [ECF No. 347]. Based on the fact that the parties did not reach a resolution following the mediation—the purpose of which was for the parties to engage in the right of first negotiation—I now enter the instant Findings of Fact and Conclusions of Law pursuant to Fed.R.Civ.P. 52(a).

I. FINDINGS OF FACT 3

A. Introduction

1. This case is before the Court upon Plaintiffs' Third Amended Complaint [ECF No. 286] and Rad Source's counterclaim

for declaratory judgment, or reformation of contract in the alternative [ECF No. 290].4 This case centers upon a written agreement (the “License Agreement”) to license patents and technology for devices that irradiate blood. [ECF No. 286–1].

2. Blood irradiation is the process of eliminating pathogens and other microbes in blood to, inter alia, reduce the risk of Graft Versus Host Disease (a common complication of bone marrow transplants) for the purposes of transfusion. 4/5/11 Tr.5 at 65:6–9.

3. In the License Agreement, Defendant Rad Source Technologies, Inc. (Defendant or “Rad Source”) licensed rights to MDS Nordion, a division of Plaintiff MDS (Canada) Inc. (“MDS” or “Nordion”) to, inter alia, manufacture and sell a blood irradiator system known as the RS 3000.6

4. Essentially, what is at stake in this case is the parties' rights to develop, market, and sell certain blood irradiation devices including the RS 3000 and RS 3400.

5. Since the crux of this case lies in the interpretation of the parties' License Agreement entered into on August 20, 2003 [ECF No. 286–1], a significant portion of the instant Findings of Fact and Conclusions of Law analyzes various provisions of the License Agreement referred to as Articles or Sections.” See generally infra §§ II.F–N.

6. In particular, interpretation of the following three Articles of the License Agreement—and their relation to each other—is at issue:

(1) 3.1—Grant of License

(2) 5.3—non-compete provision

(3) 3.8—right of first negotiation

7. To provide a useful overview of this case, I begin with key documents and relevant witnesses. The critical written agreements in this case are:

(1) August 20, 2003 License Agreement (“License Agreement”) between Nordion and Rad Source

(2) 2008 Sublicense Agreement (“Sublicense Agreement”) between Nordion and Best

(3) May 2008 Asset Purchase Agreement (“Asset Purchase Agreement”) between Nordion and Best

Relevant witnesses in this case are:

(1) Neil Gotfrit—Nordion Associate General Counsel

(2) Randol Kirk—Rad Source Chief Executive Officer

(3) Carolin Vandenberg—Nordion Former Director of Marketing

(4) Shawn Weingast—Best Medical General Counsel

(5) Phil Larabie—Nordion Vice President and Business Development Officer

(6) Paul Moses—Best Theratronics Director of Global Sales, Service and Marketing

(7) Will Hartman—Rad Source Chief Financial Officer and Executive Vice President,

(8) Gord Ashfield—Nordion Former Vice President

The following expert witnesses testified on behalf of the parties:

(1) Dr. Jon Roberts—Plaintiffs (patents)

(2) Stephen Szeglin, MS—Plaintiffs (physicist)

(3) David Mullis—Defendant (FDA 510(k) process)

(4) Dr. Roberto Uribe—Defendant (patents)

8. In addition to the License Agreement, this case involves Rad Source's development of an x-ray blood irradiator known as the RS 3400. Accordingly, a significant portion of the instant Findings of Fact and Conclusions of Law discusses whether the RS 3400 “embodies in whole or in part the Patents” in the License Agreement. Plaintiffs' position is that because the RS 3400 embodies the Patents, Plaintiffs hold the exclusive right and license to, inter alia, manufacture and sell the RS 3400. Conversely, Rad Source argues that the RS 3400 does not embody the Patents and therefore Rad Source can continue to develop and market the RS 3400.

9. A third critical subject matter in this case is the effect of a Sublicense Agreement between Plaintiffs MDS (Canada), Inc., Best Theratronics, Ltd., and Best Medical International, Inc.'s (collectively Plaintiffs) on all parties' rights and obligations under the License Agreement.

10. Finally, a technical/patent analysis of the RS 3400 and the Patents at issue in the License Agreement comprises the last aspect of this case.

B. Procedural history1. Preliminary injunction

11. On October 15, 2009, Plaintiffs brought this action and simultaneously filed an Emergency Motion seeking a temporary restraining order and preliminary injunction (Emergency Motion). [ECF No. 2]. The basis for Plaintiffs' Emergency Motion was because Rad Source intended to promote and market the RS 3400 at the American Association of Blood Banks (“AABB”) Annual Meeting on October 24, 2009 which—according to Plaintiffs—violated the non-compete provision (Article 5.3) in the License Agreement. [ECF No. 2, p. 2]; see also id. at ¶ 7.

12. On October 21, 2009, I held an evidentiary hearing on Plaintiffs' Emergency Motion where the parties had the opportunity to present arguments and examine witnesses. See [ECF No. 36]. On October 22, 2009, I issued an Interim Order, ordering Rad Source “to immediately refrain from exhibiting, distributing, promoting, marketing, selling, or leasing—whether directly or indirectly—the RS 3400 blood irradiation device or a substantial equivalent” until a subsequent evidentiary hearing and subject to the terms of a Final Order to be issued following the subsequent evidentiary hearing. [ECF No. 37].

13. On October 24, 2009, I held a subsequent hearing on Plaintiffs' Emergency Motion. See [ECF No. 39]. On October 27, 2009, I issued a Preliminary Order on Plaintiffs' Emergency Motion for Preliminary Injunction Setting Forth Findings of Fact and Conclusions of Law (October 27, 2009 Order”). [ECF No. 40]. By this order, I granted Plaintiffs' Emergency Motion, concluding that entry of a preliminary injunction was appropriate upon making various findings of fact and conclusions of law for the limited purpose of deciding Plaintiffs' Emergency Motion. [ECF No. 40]. This order also preliminarily enjoined Rad Source from “directly or indirectly exhibiting, promoting, marketing, selling or leasing the RS 3400 or any other blood or blood product irradiation device or technology” pending a further order following a hearing on the injunction's scope and bond. [ECF No. 40, p. 18].

14. On October 29, 2009, I held a hearing on the scope of the injunction and issuance of bond. See [ECF No. 44]. On November 4, 2009, I issued a Supplemental Order Setting Injunction Bond and Clarifying Scope of Preliminary Injunction (November 4, 2009 Order”). [ECF No. 48]. By this order, I modified the scope of the preliminary injunction entered in my October 27, 2009 Order [ECF No. 40] as follows:

Defendant Rad Source and its agents, directors, employees, officers, affiliates, attorneys, and all others in active concert or participation with any of them are hereby PRELIMINARILY ENJOINED from directly or indirectly designing, developing, promoting, manufacturing, distributing, marketing, selling, leasing, providing service for, or providing maintenance for the RS 3400 blood irradiation technology, device, or any substantial equivalent and shall not carry on any other activities which compete in any way with the blood irradiation business (including the irradiation of blood and blood products) carried on by Plaintiff MDS directly or through its sublicensees, Plaintiffs Best Theratronics and Best Medical. This injunction shall remain in full force and effect until further Order of this Court or until September 26, 2010, whichever comes first.

[ECF No. 48].

15. On December 21, 2010, through an omnibus order, I denied Rad Source's Motion for Partial Summary Judgment; Rad Source's Second Motion for Partial Summary Judgment; and Plaintiff's Motion for Summary Judgment. [ECF No. 265].

2. Preliminary Order following trial

16. On April 20, 2011, upon the conclusion of the trial, I entered a Preliminary Order to provide...

To continue reading

Request your trial
21 cases
  • Partylite Gifts, Inc. v. MacMillan
    • United States
    • U.S. District Court — Middle District of Florida
    • 11 d2 Setembro d2 2012
    ...Whether a non-compete covenant is reasonable or overbroad is a question of fact, not of law. See MDS (Canada), Inc. v. Rad Source Technologies, Inc., 822 F.Supp.2d 1263, 1313 (S.D.Fla.2011); Orkin Exterminating Co. v. Girardeau, 301 So.2d 38, 40 (Fla. 1st DCA 1974), cert. denied,317 So.2d 7......
  • Brown Jordan Int'l, Inc. v. Carmicle
    • United States
    • U.S. District Court — Southern District of Florida
    • 1 d2 Março d2 2016
    ...provision within a contract, unless the chosen law contravenes Florida public policy." MDS (Canada), Inc. v. Rad Source Techs., Inc., 822 F. Supp. 2d 1263, 1295 (S.D. Fla. 2011) (citing Florida Evergreen Foliage v. E.I. Du Pont De Nemours, Co., 135 F. Supp. 2d 1271, 1277 (S.D. Fla. 2001)). ......
  • Brown Jordan Int'l, Inc. v. Carmicle, CASE NO. 0:14-CV-60629-ROSENBERG/BRANNON
    • United States
    • U.S. District Court — Southern District of Florida
    • 1 d2 Março d2 2016
    ...provision within a contract, unless the chosen law contravenes Florida public policy." MDS (Canada), Inc. v. Rad Source Techs., Inc., 822 F. Supp. 2d 1263, 1295 (S.D. Fla. 2011) (citing Florida Evergreen Foliage v. E.I. Du Pont De Nemours, Co., 135 F. Supp. 2d 1271, 1277 (S.D. Fla. 2001)). ......
  • Acheron Portfolio Tr. v. Mukamal
    • United States
    • U.S. District Court — Southern District of Florida
    • 24 d5 Setembro d5 2021
    ...itself [would] not [then] provide sufficient insight into the parties' intent.” MDS (Canada), Inc. v. Rad Source Techs., Inc., 822 F.Supp.2d 1263, 1297-98 (S.D. Fla. 2011), aff'd in part, question certified, 720 F.3d 833 (11th Cir. 2013), certified question answered, 143 So.3d 881 (Fla. 201......
  • Request a trial to view additional results
1 books & journal articles
  • Rising Confusion About "arising Under" Jurisdiction in Patent Cases
    • United States
    • Emory University School of Law Emory Law Journal No. 69-3, 2019
    • Invalid date
    ...question of infringement was not substantial because the patent had expired").170. See MDS (Can.), Inc. v. Rad Source Techs., Inc., 822 F. Supp. 2d 1263, 1312-13 (S.D. Fla. 2011) (determining that the licensor's failure to pay maintenance fees was not a material breach of the licensing agre......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT