nView Health, Inc. v. Sheehan
| Decision Date | 14 November 2022 |
| Docket Number | 8:21-cv-385-VMC-TGW |
| Parties | NVIEW HEALTH, INC., Plaintiff, v. DAVID V. SHEEHAN, M.D., Defendants. |
| Court | U.S. District Court — Middle District of Florida |
This matter comes before the Court upon consideration of Plaintiff Nview Health, Inc.'s Motion for Summary Judgment (Doc. # 121), Nview's Daubert Motion to exclude the expert report and testimony of one of Dr. Sheehan's expert witnesses (Doc. # 122), Defendant Dr. David V Sheehan's Motion for Summary Judgment (Doc. # 124), and Dr. Sheehan's Daubert Motion to limit the testimony of two of Nview's experts (Doc. # 123), all filed on July 21, 2022. Dr. Sheehan has responded to both of Nview's Motions (Doc. ## 125; 127), and Nview has replied to its Motion for Summary Judgment, (Doc. # 129). Nview has responded to both of Dr. Sheehan's Motions (Doc. # 126 128), and Dr. Sheehan replied to his Motion for Summary Judgment. (Doc. # 130). For the reasons that follow Nview's Motion for Summary Judgment is granted to the extent stated herein, Nview's Daubert Motion is denied, Dr. Sheehan's Motion for Summary Judgment is granted to the extent stated herein, and Dr. Sheehan's Daubert Motion is denied.
Dr. Sheehan is a doctor, Harvard-trained neuropsychiatrist, and Distinguished University Health Professor Emeritus at the University of South Florida Morsani College of Medicine. (Doc. # 124 at 2). He created the technology at issue in this case. (Id.). The technology consists of “widely used mental health assessment instruments, including the Mini International Neuropsychiatric Interview (M.I.N.I.), which helps researchers and physicians diagnose a wide array of the most common mental health disorders.” (Id.). Dr. Sheehan granted Nview an exclusive license to his technology on February 15, 2016. (Id. at 4).
Nview is a software company that distributes versions of Dr. Sheehan's tests in several different formats. (Id. at 34). From February 2016 to September 2019, David Schuster was Nview's President, and Thomas Young was its CEO. (Doc. # 124 at 3). Dr. Sheehan was an Nview founder and was the company's Chief Scientific Officer. (Doc. # 121 at 4).
Nview and Dr. Sheehan entered into a License Agreement effective February 15, 2016 (the “February Agreement”). (Doc. # 121-2). The February Agreement includes the following provisions:
1.2. “Field” means behavioral healthcare and healthcare technology specifically in any format. This includes all commercial and research applications for these technologies. 2.1.1. Sheehan hereby grants to Nview a worldwide, transferable, exclusive license, with the right to sublicense in multiple tiers, to develop, make, have made, use, sell, offer to sell, import, reproduce, distribute, modify, display and otherwise commercialize products utilizing the Sheehan Technology [as defined] in the Field. 2.1.3. Sheehan shall retain the right to continue to use and bill for the use of the Sheehan Technology in paper format[.]
(Id. at 2, 4) (emphasis added). The February Agreement also limited Dr. Sheehan's right to “[g]rant a license under the Sheehan Technology in the Field of Use or authorize any party to use the Sheehan Technology in the Field of Use, except in paper format for all of his structured diagnostic interviews and rating scales.” (Id. at 4).
The February Agreement also contains a provision that limits the parties' liability. It states that “neither Dr. Sheehan nor Nview shall have any liability to the other party for any indirect, special, consequential or punitive damages, including loss of profits . . . incurred by any party, whether in an action in contract (including breach of warranty), tort or otherwise.” (Doc. # 121-2 at 7).
Dr. Sheehan represented that he reviewed the February Agreement with his attorney, and it was in line with what the parties discussed. (Doc. # 121 at 3). The February Agreement contains an integration clause which states that it “constitutes the complete understanding between the parties with respect to the terms and conditions set forth in this Agreement and supersedes all previous written or oral agreements and representations” and “may be modified only in writing that expressly references this Agreement and is executed by both of the parties to this Agreement.” (Doc. # 121-2 at 7-8).
Nview's corporate formation documents, effective as of August 12, 2016, included a document entitled “Action by Unanimous Written Consent of the Board of Directors” (“Unanimous Consent”) and a set of related exhibits. (Doc. # 124 at 6). Dr. Sheehan had previously raised with Mr. Schuster and Dr. Young concerns that the February Agreement did not allow him to retain exclusive rights to his technology in paper and PDF formats. (Doc. # 124 at 4). Mr. Schuster and Dr. Young told Dr. Sheehan that the License Agreement would be updated to include the language Dr. Sheehan was seeking.
(Id. at 5). In the Unanimous Consent, Nview's Board “adopt[ed] and approve[d] a series of resolutions,” including one which expressly directed Mr. Schuster to execute a license with Dr. Sheehan that was “in substantially the form” of a term sheet attached as an exhibit to the Unanimous Consent. (Id.). One provision in the August 2016 Term Sheet states that Dr. Sheehan “shall retain the right to continue to use and bill for the use of his Technology in paper and PDF format” and “shall retain the exclusive copyrights, ownership of and all rights [to the IP] in these formats.” (Id. at 7).
In August 2016, the Nview Board approved a Founder's Stock Purchase Agreement for each of the three cofounders and directors of Nview as part of the Unanimous Consent. (Id. at 8). Dr. Sheehan's Stock Purchase Agreement expressly incorporated four exhibits, including a new License Agreement. (Id.). The August Agreement includes the following provisions:
(Doc. # 121-9 at 9) (emphasis added).
Both the February and August Agreements contain a provision entitled “Press Releases,” which states that “[n]either party shall make any public statements or issue any press releases relating to this Agreement without the prior approval of the other party.” (Id.; Doc. # 121-2 at 9).
The parties executed an amendment to the License Agreement on April 3, 2019. (Doc. # 121-6). The April Amendment includes the following provisions:
1.2 “Field” means all fields of use, in any format, including behavioral healthcare, healthcare technology and commercial research applications. 2.1.1 Dr. Sheehan hereby grants to Nview and its affiliates a worldwide, perpetual (subject to the termination provisions set forth herein), royalty free, fully paid, transferable, exclusive license, with the right to sublicense in multiple tiers, to develop, make, have made, use, sell, offer to sell, import, reproduce, distribute, modify, display and otherwise commercialize products utilizing the Sheehan Technology in the Field.
(Id. at 2) (emphasis added). The April Amendment states that it amends the “License Agreement (‘the Agreement') dated as of February 15, 2016,” and that it “together with the [February License] Agreement, as amended, all agreement referenced therein and all exhibits thereto represent the entire agreement of the parties with respect to the subject matter herein.” (Id. at 3). The April Amendment removed milestones that were contained in the February Agreement. (Id. at 2).
On June 24, 2019, Nview and Dr. Sheehan entered into a consulting agreement. (Doc. # 121-7). The Consulting Agreement states that “[a]ll capitalized terms in this Exhibit B shall have the meaning provided in that certain License Agreement between the Company and Dr. Sheehan dated February 15, 2016 as amended.” (Id. at 13). In the June 23, 2019, email providing the Consulting Agreement, Dr. Young wrote to Dr. Sheehan that Nview “clearly recognizes that any ‘new' scales, changes to old scales or interviews all remain your property and you have exclusive rights to the paper versions.” (Doc. # 124-10 at 583). Dr. Young stated that “this is now in two places the licensing agreement we previously executed and this consulting agreement.” (Id.).
In September 2019, BIP Capital, Inc., a venture capital firm, invested $4.65 million in Nview and installed James Szyperski as the new CEO. (Doc. # 124 at 11). In 2019, Nview was dealing with a “technical mess” related to its software. (Id.). During Mr. Szyperski's tenure from June 2019 to February 2022, Nview did not turn on a profit on its digital platform on an annual basis. (Id. at 11-12).
Prior to around 2019, Nview referred customers to Dr. Sheehan “for licensing or permissions to use the paper or PDF versions of [his] M.I.N.I. or rating scales.” (Id. at 10). In March 2020, a third party approached Nview about licensing the technology in paper format. (Id. at 12). Dr. Young wrote to Mr. Szyperski “This is an example where we loose [sic] the agreement because it is the paper version.” (Id.). Another...
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