Marshall v. Miles Laboratories, Inc.

• Decision Date: 07 November 1986
• Docket Number: No. S 84-676.,S 84-676.
• Citation: 647 F. Supp. 1326
• Parties: J. John MARSHALL, Plaintiff, v. MILES LABORATORIES, INC., Frank J. Geks, Walter E. Goldstein, and Richard B. Kocher, Defendants.
• Court: U.S. District Court — Northern District of Indiana

647 F. Supp. 1326

J. John MARSHALL, Plaintiff, v. MILES LABORATORIES, INC., Frank J. Geks, Walter E. Goldstein, and Richard B. Kocher, Defendants.

No. S 84-676.

United States District Court, N.D. Indiana, South Bend Division.

November 7, 1986.

Peter Kneski, Miami, Fla., for plaintiff.

Carl L. Taylor, Chicago, Ill., Brian S. Schuster, Victor Arko, Elkhart, Ind., Betty S. Womack, Washington, D.C., for defendants.

ALLEN SHARP, Chief Judge.

MEMORANDUM AND ORDER

I.

This case is before the court on the defendants' Motion for Summary Judgment, filed on November 27, 1985, pursuant to Rule 56 of the Federal Rules of Civil Procedure. The plaintiff filed a response on March 24, 1986, and the defendants filed a reply on April 21, 1986. In addition, the plaintiff, on May 20, 1986, filed a Motion for Partial Summary Judgment; the defendants filed their opposition on May 29, 1986. The court heard oral argument on May 30, 1986, and granted the plaintiff until July 6, 1986, to supplement the record regarding the motions for summary judgment. In addition the defendants were given until August 1, 1986, to respond. Due in part to the withdrawal of plaintiff's counsel and the appearance of a new counsel the plaintiff received an extension of time until August 11, 1986, to supplement the record. All parties have supplemented the record and the matters are ripe.

A.

The material facts pertinent to the resolution of the federal issues are recited below. An association between the plaintiff and one of the defendants, Miles Laboratories, Inc. (Miles), began in February, 1976. On February 13, 1976, the plaintiff signed a letter dated February 12, 1986. That letter was the first consulting agreement;¹ which was renewed in 1977, 1978 and 1979. On June 23, 1980, the plaintiff became Director of Enzyme Research and Development at Miles. The job description, prepared by Miles, for that position states in pertinent part:

To direct, plan, implement and supervise a balanced program of short, intermediate and long range research projects in protein chemistry, carbohydrates and enzymes that will assure the technological future of the IPG and the Corporation... To translate ideas and concepts into products, prototypes and working models... Develop, summarize and report information about advances in technologies of interest to IPG and maintain an awareness of the latest scientific advances in his specialty.

The plaintiff included the job description as an exhibit to his sworn affidavit. Further, the plaintiff testified during his deposition that the job description "in terms of the principal job function — `responsibility' is a better word — yes it was reasonable."

During the plaintiff's term of employment he became familiar with procedures Miles required employees to follow to obtain patents on inventions and obtain approval to publish articles or abstracts related to work done within the scope of employment. On March 26, 1982, the plaintiff, utilizing those procedures, sought approval to publish an abstract and article. The text of the request is as follows:

Request is hereby made for approval to submit for publication the attached abstract entitled "The Potential of Immobilized Biocatalysts for the Production of Industrial Chemicals" by G.B. Borglum and J.J. Marshall. The paper will be presented in a symposium, of which I am co-chairman, at the 184th ACS National Meeting, Kansas City, September 1982. The full text in the form of a paper to be published in a book, Immobilized Biocatalysts, by J.J. Marshall and R.A. Messing will be submitted for approval at a later date, but certainly before presentation.

In paragraph 41 of the second amended complaint the plaintiff alleges:

Defendant Miles, in reliance upon such agreement, fraudulently acquired or claims to have acquired Plaintiff's rights in the copyright of an article to which Plaintiff contributed, which article was written not as a requirement of his employment with Miles, but rather at his own expense and on his own time. Miles has wrongfully misrepresented that such copyright belongs to Miles and that the article was written for the Defendant.

The plaintiff testified that that allegation refers to the article entitled "The Potential of Immobilized Biocatalysts for Production of Industrial Chemicals." That article was published as: G.B. Borglum and J.J. Marshall, The Potential of Immobilized Biocatalysts for Production of Industrial Chemicals, 9 Applied Biochemistry and Biotechnology 117 (1984). Both the abstract, submitted to Miles on March 26, 1982, and the published article associate the authors and the research with "Biotechnology Research, Miles Laboratories." The abstract and article discuss the "... translation from conception to practice of processes based on immobilized biocatalyst technology ..." Dr. Borglum, a Miles scientist, did the research which preceded the abstract and article at Miles. The plaintiff while he was a Miles employee met with Dr. Borglum, in plaintiff's office at Miles, to discuss the abstract and presentation. In addition, Dr. Borglum and the plaintiff attended at Miles' expense, the conference where Dr. Borglum presented the paper.

On June 1, 1983, the plaintiff resigned from his position at Miles. Subsequently, the article was published, and the Humana Press, Inc., after attempting to contact the plaintiff, contacted Dr. Borglum regarding the acquisition of the copyright rights to the article. Dr. Borglum consulted the legal staff at Miles and it was determined that the article was a "work made for hire." Miles believed that the copyright rights were owned by them. Subsequently, Miles transferred the copyright rights to the Humana Press, Inc.

With the exception of the work completed with Dr. Borglum in the plaintiff's office at Miles, the plaintiff's contributions to the article are alleged to have been completed at places other than his office, laboratory, or the library at Miles.

Miles decided, in the Spring of 1983, that the employer-employee relationship with the plaintiff was not working out. In addition, Miles was concerned that the plaintiff's involvement in certain outside ventures, including one called "Starch Blockers" which was embroiled in controversy with the FDA, was having a negative impact on Miles' reputation. During several news reports about the starch blockers controversy the reports indicated that the plaintiff was a scientist employed by Miles. Consequently, Dr. Goldstein, met with the plaintiff and requested his resignation. Apparently at that meeting, it was suggested that if the plaintiff did not resign he would be terminated. The plaintiff did not immediately consent to voluntary resignation. Miles asked the plaintiff to submit a proposed list of terms under which he would resign. Subsequently, the plaintiff did submit a list of proposed terms which were incorporated in a consulting agreement which the plaintiff signed. The "Consultant Agreement" contained eighteen (18) numbered paragraphs. Those paragraphs contained substantially all of the terms that the plaintiff had proposed. Miles prepared the document entitled "Consultant Agreement." The plaintiff and Dr. Goldstein met and reviewed the document on May 18, 1983. When the parties met, on May 31, 1983, to sign the consulting agreement the plaintiff requested that certain modifications be made to the document which was to be signed by the parties. Those modifications were made and initiated by the plaintiff and by Dr. Walter. E. Goldstein, Vice-President Research and Development, Biotechnology Group, at Miles. The modifications made involved the effective date of the agreement, the effective date of the plaintiff's resignation, an extension of Health and Life Insurance Benefits, and the reduction from $10,102 to $7,576 of an amount owed by the plaintiff to Miles "in connection with equipment purchased by the Company and located at the University of Notre Dame." After those modifications were made and initialed, by both parties, the plaintiff signed the agreement.

The Consultant Agreement was to continue for ten (10) months, which was a compromise between a request for twelve (12) months and an offer of six (6) months. In addition, the agreement included a clause, in paragraph three (3), which gave the plaintiff the right to "terminate this consultantship at any time by giving the Company a thirty (30) day written notice of termination ..." Further, the agreement prohibited the plaintiff from consulting for "any firm producing products or product lines directly competitive to the products and product lines of the Company," but the same paragraph provided a method whereby Miles, in its sole discretion, could "grant reasonable exceptions to that prohibition." The plaintiff admits that he never attempted to terminate the consulting agreement and never requested an exception to that prohibition.

B.

To prevail, the party seeking summary judgment has the burden of establishing the lack of a genuine issue of material fact. Celotex Corp. v. Catrett, ___ U.S. ___, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Backes v. Valspar Corp., 783 F.2d 77 (7th Cir.1986). A material question of fact is a question which will be outcome-determinative of an issue in that case. Anderson v. Liberty Lobby, Inc., ___ U.S. ___, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Big O Tire Dealers, Inc. v. Big O Warehouse, 741 F.2d 160 (7th Cir.1984); Egger v. Phillips, 710 F.2d 292 (7th Cir.1983) (en banc), cert. denied, 464 U.S. 918, 104 S.Ct. 284, 78 L.Ed.2d 262 (1983). Any reasonable inference to be drawn from the facts presented must be viewed in a light most favorable to the non-moving party. Korf v. Ball State University, 726 F.2d 1222 (7th Cir.1984). However, "if the evidence in favor of the non-moving party is merely colorable or is not significantly probative, summary judgment may be granted." Anderson, ...