Anglefix Tech, LLC v. Wright Med. Tech.
| Decision Date | 15 November 2016 |
| Docket Number | No. 13-cv-2407-JPM-tmp,13-cv-2407-JPM-tmp |
| Parties | ANGLEFIX TECH, LLC, Plaintiff, v. WRIGHT MEDICAL TECHNOLOGY, Defendant. |
| Court | U.S. District Court — Western District of Tennessee |
Before the Court is the Joint Motion of Plaintiff Anglefix and Third Party Intervener The University of North Carolina to Add The University of North Carolina as Co-Plaintiff in this Matter, filed September 15, 2016. (ECF No. 176.) Defendant Wright Medical Technology ("Wright") opposes the motion, asserting The University of North Carolina ("UNC")'s Waiver of Claims (ECF No. 171-1) conveyed a license to the patent-in-suit. (ECF No. 178.) Also before the Court is Defendant's Motion for Summary Judgment for Lack of Standing. (ECF No. 130.)
For the reasons stated below, the Court GRANTS Plaintiff AngleFix Tech, LLC ("Anglefix") and UNC's motion to join UNC as a co-plaintiff, DENIES Defendant's Motion for Summary Judgment for Lack of Standing, and lifts the June 27, 2016 stay in the case (ECF No. 169).
I. BACKGROUND
On April 25, 2016, Defendant filed a Motion for Summary Judgment for Lack of Standing. (ECF No. 130.) AngleFix responded in opposition on May 11, 2016. (ECF No. 146.) Defendant filed a reply brief on May 31, 2016. (ECF No. 153.) The Court held a motion hearing on June 21, 2016. (Min. Entry, ECF No. 164.)
On June 27, 2016, the Court granted in-part and denied in-part Defendant's Motion for Summary Judgment for Lack of Standing, determining Anglefix had statutory standing but lacked prudential standing. (ECF No. 169.) To cure prudential standing, the Court ordered AngleFix to join UNC as a co-plaintiff by July 27, 2016, and stayed the case until such joinder was made. (Id. at 20.)
On July 25, 2016, AngleFix filed a motion, not to join UNC as a co-plaintiff, but to use a Waiver of Claims (hereinafter "the Waiver" or "UNC's Waiver") from UNC as a substitute for joinder. (ECF No. 171.) Defendant responded in opposition on July 27, 2016. (ECF No. 172.)
On August 2, 2016, the Court denied AngleFix's motion to accept UNC's Waiver in place of the joinder of UNC as a party in the instant litigation. (ECF No. 175.) The Court ordered AngleFix to join UNC by September 16, 2016, or the Court would dismiss the action with prejudice. (Id. at 4.) On September 15, 2016, AngleFix filed the instant motion to join UNC as a co-plaintiff. (ECF No. 176.) Attached to that motion was UNC's Submission of Authorization to Join as Co-Plaintiff and Appointment of Counsel, wherein UNC also "rescind[ed] it [sic] previous Waiver of Claims Against Wright Medical." (ECF No. 176-1.) Defendant opposed the motion on October 5, 2016, asserting that UNC could not rescind its Waiver, asserting it provided a license to Defendant under the contested patent, U.S. Patent No. 6,955,677 ("the '677 Patent"). (ECF No. 180.) Anglefix filed a reply on October 14, 2016 (ECF No. 183), and Defendant filed a sur-reply on October 18, 2016 (ECF No. 186). On November 3, 2016, the Court held a telephonic motion hearing. (Min. Entry, ECF No. 189.)
III. LEGAL STANDARD
The law has numerous nuanced terms by which a party may relinquish its rights, including by release, waiver, orcovenant.1 A party may even relinquish its rights by multiple means.2 Regardless of the means, however, courts assess the relinquished rights pursuant to the general principles of contract law.3 Unless the contract contains a choice-of-law provision, a contract is generally subject to the law of the state in which it was formed.4 This is equally true in the patent context. See, e.g., Already v. Nike, 133 S. Ct. 721(2013); Wi-LAN USA, Inc. v. Ericsson, Inc., 574 F. App'x 931, 937 (Fed. Cir. 2014)( New York contract law to a non-assert provision in patent case); Transcore, LP v. Elec. Transaction Consultants Corp., No. CIV.A.3:05-CV-2316-K, 2008 WL 2152027, at *4 (N.D. Tex. May 22, 2008), aff'd, 563 F.3d 1271 (Fed. Cir. 2009) ().
In the instant case, UNC's Waiver, formed in Tennessee and lacking a choice-of-law provision, is subject to Tennessee contract law.
Under contract law in Tennessee, an enforceable contract must have an offer, acceptance, and consideration. Generally, an offer is "[t]he act . . . of presenting something for acceptance." OFFER, Black's Law Dictionary (10th ed. 2014). Offers commonly express how the offeror intends to be bound, and may require a particular type of acceptance. An offer may also be conditional, such that the contract will not take effect until some contingent prerequisite has been satisfied. Safeco Ins. Co. of America v. City of White House, Tenn., 36 F.3d 540, 30 Fed. R. Serv. 3d 598, 1994 FED App. 0345P (6th Cir. 1994) (citing Buchanan v. Johnson, 595 S.W.2d 827 (Tenn.Ct. App. 1979); see also Demoville & Co. v. Davidson Cty., 87 Tenn. 214, 10 S.W. 353, 355 (1889) (). Therefore, irrespective of clear acceptance, the contract is not enforceable until certain facts exist. Real Estate Mgmt., Inc. v. Giles, 41 Tenn. App. 347, 353, 293 S.W.2d 596, 599 (1956)("A conditional contract is a contract whose very existence and performance depends upon the happening of some contingency or condition expressly stated therein. . ."). To ascertain an offer's terms, whether conditional or otherwise, Tennessee law mandates that courts construe an offer by its clear and unambiguous meaning. Sutton v. First Nat. Bank of Crossville, 620 S.W.2d 526 (Tenn. Ct. App. 1981).
When a contract is unambiguous, the court's construction is restricted to the four corners of the contract.5 The court must also consider the entire contract "in determining the meaning of any or all of its parts." Adkins v. Bluegrass Estates, Inc., 360 S.W.3d 404, 411 (Tenn. Ct. App. 2011) (citing Aetna Cas. & Surety Co. v. Woods, 565 S.W.2d 861, 864 (Tenn. 1978)). Each provision of the contract must be construed"in harmony with each other . . . to promote consistency and to avoid repugnancy between the various contract provisions. . . ." Teter v. Republic Parking Systems, Inc., 181 S.W.3d 330, 342 (Tenn. 2005) (quoting Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95 (Tenn.1999)).
III. LEGAL ANALYSIS
In the instant action, the parties differ as to whether UNC's Waiver is enforceable, and if so, to what extent. Anglefix and UNC assert five arguments. First, Anglefix and UNC assert that UNC tendered the Waiver to the Court for acceptance in lieu of joining this action. (ECF No. 183 at 4.) Second, Anglefix and UNC argue that neither Defendant nor the Court accepted the Waiver. (Id.) Third, Anglefix and UNC contend that UNC did not receive consideration for its Waiver. (Id.) Fourth, Anglefix and UNC assert that UNC properly rescinded the Waiver. (Id.) Fifth, Anglefix and UNC aver that UNC's license to Anglefix renders UNC unable to convey a license to Defendant for the field of use relevant to Defendant's patent infringement in this case. (Id. at 2-4.)
Defendant opposes each of these arguments, and asserts that it has received an irrevocable and unconditional license from UNC via UNC's Waiver. (ECF No. 186 at 3.) Defendant sets out a series of legal propositions in support of this argument:(1) UNC's Waiver is the functional equivalent of a unilateral covenant not to sue; (2) the Waiver's scope renders it unconditional and irrevocable; (3) in patent law, a covenant not to sue operates as a license; and (4) UNC's Waiver provided Defendant with an unconditional and irrevocable covenant not to sue and thus a license. (See ECF Nos. 178, 186.)
The threshold issue underlying the parties' filings is whether the Waiver constitutes an offer that ripened into an enforceable and binding obligation. For the reasons stated below, the Court finds the Waiver does not.
The parties and the Court agree that the Waiver is unambiguous. (Hr'g Tr. at 17:1-5, 23:2-5, ECF No. 190.) Defendant argues that an unambiguous reading of the Waiver would show that "[n]othing contained in the [Waiver] states that it is conditional upon acceptance" (ECF No. 186 at 3), and that the scope of the specific Waiver language is so broad that it negates any qualifying statements. (ECF No. 178 at 5.) Anglefix and UNC contend that the "[W]aiver was tendered to the Court conditional on acceptance as a substitute for joinder," and that Defendant "ignores the language of the offer of waiver. . ." (ECF No. 183 at 1-2.)
As the Waiver is unambiguous, the Court must construe the Waiver's terms by their clear and unambiguous meaning within the four corners of the document. See Sutton v. First Nat. Bank of Crossville, 620 S.W.2d 526 (Tenn. Ct. App. 1981).
The Waiver reiterates the license relationship between UNC and Anglefix, and notes that the Court's June 27 Order determined that "it is prudent to compel UNC to join the suit." (ECF No. 171-1 at 1.) It then expresses UNC's "desire[] to avoid the unnecessary cost associated with participation as a party Plaintiff. . . ." (Id. at 2.) In light of this, UNC agrees to be legally bound "to the full extent as it would be bound as if joined as a Co-Plaintiff with Anglefix." (Id. at 2.) The Waiver then goes on to state that UNC "waives the assertion of any rights it may have to assert the '677 patent-in-suit against [Defendant]. . . for the entire term of the '677 [Patent]." (Id.) The Waiver further asserts that UNC "does not grant [Defendant] any license nor any right in or to the '677 patent," and is "undertak[en]. . . for the sole purposes [sic] of complying with this Court's Order of June 27, 2016. . . to allow Anglefix to assert the patent in suit against [Defendant]...
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