Bates v. Cook, Inc., No. 84-512-ORL-CIV-18.

• Court: United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
• Writing for the Court: GEORGE KENDALL SHARP
• Citation: 615 F. Supp. 662
• Parties: H. Richard BATES, Personal Representative of the Estate of Dr. Philip O. Littleford, deceased, Plaintiff, v. COOK, INC., Defendant.
• Decision Date: 20 December 1984
• Docket Number: No. 84-512-ORL-CIV-18.

615 F. Supp. 662

H. Richard BATES, Personal Representative of the Estate of Dr. Philip O. Littleford, deceased, Plaintiff,
v.
COOK, INC., Defendant.

No. 84-512-ORL-CIV-18.

United States District Court, M.D. Florida, Orlando Division.

December 20, 1984.

615 F. Supp. 663

COPYRIGHT MATERIAL OMITTED

615 F. Supp. 664

COPYRIGHT MATERIAL OMITTED

615 F. Supp. 665

Herbert L. Allen, Orlando, Fla., for plaintiff

Michael P. McMahon, Orlando, Fla., C. David Emhardt, Vincent O. Wagner, Indianapolis, Ind., for defendant.

ORDER

GEORGE KENDALL SHARP, District Judge.

This case is before the Court upon defendant's motions: (1) for sanctions; (2) to amend its answer and counterclaim; (3) for summary judgment on collateral estoppel grounds; and (4) for summary judgment on statute of limitations grounds. Both parties have submitted memoranda and materials in support of and opposition to these motions. For the reasons discussed below, defendant's motions for sanctions, to amend and for summary judgment on collateral estoppel grounds are DENIED. Defendant's motion for summary judgment on statute of limitations grounds is GRANTED.

STATEMENT OF FACTS

This diversity action involves an alleged misappropriation of trade secrets and head start in connection with the development and marketing of a method and related apparatus for the rapid insertion of permanent pacemaker electrodes through the subclavian vein. Although the facts in this case are complicated, no facts material to the resolution of defendant's motions are in dispute.

The original plaintiff in this action was Dr. Philip O. Littleford, a cardiologist on the staff of Florida Hospital South in Orlando, Florida. After Dr. Littleford's death in August 1984, H. Richard Bates, the personal representative of Dr. Littleford's estate, was substituted as the plaintiff. During the years prior to 1977, Dr. Littleford developed a method and associated equipment for insertion of permanent pacemaker electrodes through the subclavian vein. One of the major features of Dr. Littleford's invention is the use of split, peelaway sheath for insertion of the electrodes. His research on this project was conducted at Florida Hospital South and in his Orlando offices. In the fall of 1977, Dr. Littleford reached an oral agreement concerning his technique and apparatus with Larry Junker, a medical device sales representative from Clearwater, Florida. Under the terms of this oral agreement, Dr. Littleford was to clinically evaluate his invention and Medical Life Systems, Inc. (Junker's company), was to seek to market the related apparatus. Dr. Littleford applied for a patent for his inventions on December 13, 1977. Affidavit of Philip O. Littleford, M.D. at 1-3, Ex. 1.

The first surgical use of Dr. Littleford's invention was performed by Dr. David

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Spector in December, 1977, at Florida Hospital South. Affidavit of Philip O. Littleford, M.D. at 2, Ex. 2. Extensive clinical evaluation of Dr. Littleford's apparatus began in January, 1978 and continued through late July, 1978. Although a small number of evaluations were performed at a number of hospitals including Miami Heart Institute in Miami, Florida, Lakeland General Hospital in Lakeland, Florida, and Winter Park Hospital in Winter Park, Florida, the majority of the evaluations were performed at Florida Hospital South in Orlando, Beth-Israel Medical Center in Newark, New Jersey (NBIMC), and St. Thomas Hospital in Nashville, Tennessee. See Affidavit of Philip O. Littleford, M.D., Ex. 3205

Defendant Cook, Inc. (Cook) is a corporation organized and incorporated under the laws of Indiana which has its principal place of business at Bloomington, Indiana. Affidavit of Brian Bates at 1. In mid-December, 1977, Larry Junker telephoned Brian Bates, the Manager of Marketing for Cook, at Cook's Indiana offices. Deposition of Brian Bates, June 28, 1984 at 23-26. Junker's call was not solicited by Cook or Bates. During this conversation, Junker described Dr. Littleford's technique and the necessary equipment, particularly the peelaway sheath, to Bates. Deposition of Brian Bates at 24-25.

In response to this call, Bates sent Junker several conventional, non-peel-away sheaths. Deposition of Brian Bates at 23, 46-47. Junker sent a letter from Florida dated December 26, 1977 to Bates in Indiana reiterating Dr. Littleford's procedure and necessary equipment. Junker enclosed a set of drawings of the equipment and the insertion technique. Deposition of Brian Bates at 47, plaintiff's Ex. 7. Junker sent the December 26, 1977, letter before receipt of the samples sent in response to his earlier call. Deposition of Brian Bates at 48.

On January 9, 1978, Bates wrote to Junker regarding the feasibility of manufacturing an introducer set for placement of permanent pacemaker electrodes and indicated that sample sets were being forwarded. Deposition of Brian Bates at 56-62, Ex. 8. Bates again wrote to Junker concerning the introducer sets on March 1, 1978, and also sent introducer sets with tear-away sheaths. Deposition of Brian Bates at 65, Ex. 10. Junker and Bates then met briefly at a trade show in Anaheim, California, where problems with the sheath wall thickness were likely discussed. Deposition of Brian Bates at 72-73. In May, 1978, Bates called Junker to check the progress on the introducer set project and was informed that Junker was not satisfied with the Cook design and was working with another party in the development of the desired introducer sets. Deposition of Brian Bates at 79-80.

Also sometime in May, 1978 Bates was contacted by Jean Linn, the nurse in charge of the cardiac catheter laboratory at NBIMC, concerning the possibility of Cook's supplying introducer sets similar to samples supplied to NBIMC by Junker. Deposition of Brian Bates at 85-58; Deposition of Jean Linn at 12,31. Ms. Linn's call to Cook also was not solicited by Cook or Brian Bates. Samples of the sets supplied by Junker were sent to Cook by Ms. Linn. See Deposition of Brian Bates at 84-85; Deposition of Jean Linn at 14-15. After initially being contacted by Ms. Linn, Bates corresponded with Dr. Victor Parsonnet of NBIMC through the remainder of 1978 concerning the proper construction of the split-sheath introducer sets which could be peeled away. Deposition of Brian Bates at 93 et seq.; Deposition of Dr. Victor Parsonnet, at 29 et seq. Dr. Parsonnet, a prominent cardiovascular surgeon, was participating in the clinical evaluation of Dr. Littleford's technique and apparatus, and earlier had attempted unsuccessfully to develop such an apparatus himself. Deposition of Dr. Parsonnet at 3-6.

On August 24, 1978, Dr. Littleford, through his attorney, informed Bates that he considered Cook's activities in testing their pacemaker electrode introducer set a breach of confidence as to information supplied to Cook by Junker. Defendant's

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Memorandum in Support of Motion for Summary Judgment, Ex. F. Nevertheless, Cook began manufacturing and publicly marketing its peel-away introducer sheath during approximately September of 1978. Affidavit of Brian Bates at 2. In October, 1978, Larry Junker's company was terminated as licensee for Dr. Littleford's invention. Affidavit at of Dr. Littleford at 4. The United States Commissioner of Patents and Trademarks issued United States Letters Patent 4,166,469 to Dr. Littleford for his invention on September 4, 1979. Defendant's Memorandum in Support of Motion for Summary Judgment, Ex. A. at 1118 (Complaint in Case No. 79-447-CIV-ORL-Y). Dr. Littleford admitted that he knew in October 1978 that Cook was manufacturing commercial kits allegedly incorporating his designs. Affidavit of Dr. Littleford at 5

The events surrounding the development and marketing of Dr. Littleford's invention led to numerous suits in various courts. In 1979, two suits were filed in state court by Larry Junker and his associated companies against Dr. Littleford. In Junker v. Littleford, Circuit Civil No. 79-3451-16, Sixth Judicial Circuit, Larry Junker claimed co-inventorship of Dr. Littleford's patent. An opinion and final judgment were entered in that case in favor of Dr. Littleford by Judge Charles M. Phillips on October 19th, 1979. See Plaintiff's Memorandum in Opposition to Defendant's Motion for Sanctions. In the second case, Introstat, Inc. v. Littleford, Circuit Civil No. 79-3452-16, Sixth Judicial Circuit, Introstat, Inc. (Introstat), the assignee of Medical Life Systems, Inc. (Med. Life), alleged that Dr. Littleford improperly terminated the licensing agreement. Dr. Littleford counterclaimed against Introstat and sued Med. Life for, inter alia, breach of the license agreement and rescission. After an October 31, 1980, jury verdict against Introstat on its specific performance claim and for Dr. Littleford on his breach of the license agreement counterclaim, final judgment was entered in accordance with the jury verdict on December 16, 1980. Final Judgment as to the damages recoverable by Dr. Littleford was entered on January 8, 1981. Plaintiff's Memorandum in Opposition to Motion for Sanctions, Ex. D, E, H, I, and J.

In one of the counterclaim counts for rescission in Introstat, Inc. v. Littleford, Dr. Littleford alleged that Junker disclosed the introducer process to three or more potential manufacturers, including Cook, without attempting to obtain the customary signed confidentiality agreement. Dr. Littleford further alleged that before entering into the licensing agreement, Med. Life had a duty to disclose to Dr. Littleford that it had made the disclosures of Dr. Littleford's invention to potential manufacturers. Dr. Littleford claimed he was entitled to rescission because of Med. Life's failure to report its disclosures. Plaintiff's Memorandum in Opposition to Motion for Sanctions, Ex. D. In a letter filed October 31, 1980, Judge Phillips indicated that because Dr. Littleford had not required a non-disclosure document from Larry...