Hutchins v. Cardiac Science, Inc.

491 F.Supp.2d 136

Donald C. HUTCHINS, Plaintiff v. CARDIAC SCIENCE, INC., Defendant.

C.A. No. 04-30126-MAP.

United States District Court, D. Massachusetts.

June 1, 2007.

Eric H. Chadwick, Randall T. Skaar, Scott G. Uhbrich, Patterson, Thuente, Skaar & Christensen, P.A. Minneapolis, MN, William E. Coughlin, Colleen Moran O'Neil, Jeffrey J. Lauderdale, Calfee, Halter & Griswold LLP, Cleveland, OH, Paul H. Rothschild, Bacon & Wilson, P.C., Springfield, MA, John J. Egan, Egan, Flanagan & Cohen, PC, Springfield, MA, for Defendant.

MEMORANDUM AND ORDER REGARDING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND PLAINTIFF'S MOTION TO COMPEL DISCOVERY

PONSOR, District Judge.

I. INTRODUCTION

In this action, pro se Plaintiff Donald C. Hutchins alleges that Defendant Cardiac Science, Inc. ("Cardiac Science") is liable for copyright infringement (Count One), patent infringement by means of sales (Count Two), patent infringement by means of manufacture (Count Three), abuse of process (Count Six), and tortious interference with contract (Count Seven).¹

Cardiac Science denies Plaintiffs allegations and has moved for summary judgment on all of Plaintiffs claims. Plaintiff opposes this motion and has filed his own motion to compel discovery.

For the reasons set forth below, Defendant's motion for summary judgment will be allowed with respect to Counts One, Two, Three, and Seven and denied with respect to Count Six; Plaintiffs motion to compel discovery will be allowed with respect to documentation concerning the sale of his intellectual property to the Aristotle Corporation ("Aristotle") and denied with respect to the claim for indemnification served on the Complient Corporation ("Complient") by Cardiac Science.

II. BACKGROUND

The genesis and travel of this case has been chronicled in the past and will not be repeated here. See Hutchins v. Cardiac Science, Inc., 456 F.Supp.2d 196, 197-201 (D.Mass.2006). For present purposes, it suffices to state that this is not the first time that Cardiac Science has sought summary judgment.

On June 23, 2005, this court allowed Defendant's previous motion for judgment as a matter of law based both on its merits and Plaintiffs failure to file a timely opposition. At that time, the undisputed facts indicated that Cardiac Science had an exclusive license to various intellectual properties, which Plaintiff and his closely-held company had previously conveyed to a predecessor of Complient. As licensee, Cardiac Science had a valid affirmative defense against Plaintiffs infringement claims, and nothing in the record suggested that the "compulsory" counterclaims filed by Cardiac Science constituted an abuse of process or that Cardiac Science had in any way tortiously interfered with Plaintiffs contract with Complient.

When it later came to light that Cardiac Science had knowingly concealed its sale of Plaintiffs intellectual properties to Aristotle and repeatedly misrepresented itself as the licensee, the court became concerned its earlier ruling lacked an adequate foundation and, upon reconsideration, vacated it. See id. at 202-04.

At a subsequent status conference, counsel for Cardiac Science apologized for his client's actions, but took the position that the effect of these misrepresentations was inconsequential. Ultimately, the court allowed Cardiac Science's request to re-brief its motion for summary judgment "with a factual underpinning that fully corresponds to the real situation confronting the parties." (Dkt. No. 248, Scheduling Order 2.)

On March 2, 2007, Plaintiff filed his pending motion to compel discovery. Cardiac Science offered its opposition to this motion on March 8, 2007, and filed its pending motion for summary judgment the next day. As will be discussed, the memorandum submitted by Cardiac Science in support of summary judgment is, in most respects, a duplicate of its previous brief.

III. DISCUSSION

A. Defendant's Motion for Summary Judgment.

1. Standard of Review.

The purpose of summary judgment is "to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Johnson v. Gordon, 409 F.3d 12, 16-17 (1st Cir.2005) (citation omitted). Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

2. The Infringement Claims.

As previously noted, Cardiac Science initially took the position that summary judgment was proper with respect to Plaintiffs copyright and patent infringement claims — Counts One, Two, and Three — due to its status, at that time, as the current licensee of Plaintiffs intellectual properties. Since a licensee cannot be held liable for infringing a licensed patent or copyright, see, e.g., Intel Corp. v. VIA Technologies Inc., 319 F.3d 1357, 1364 (Fed.Cir, 2003), the argument went, Cardiac Science was free to manufacture and sell CPR Prompt® products with impunity.

In its most recent brief, Cardiac Science takes the position that summary judgment remains proper on Plaintiffs infringement claims because it was the owner of Plaintiffs intellectual properties at the time in the past when it made and sold CPR Promp® products and because it stopped making and selling such products when it sold the license to Plaintiffs intellectual properties to Aristotle on August 11, 2004. (See Dkt. No. 253, Ex. 8, Mathur Decl. ¶ 2.)

In response, Plaintiff concedes that Cardiac Science ceased making and selling products covered by his patents and copyrights after entering into the asset purchase agreement with Aristotle. The crux of his opposition stems from Plaintiffs continued belief that Cardiac Science never lawfully acquired a license to his intellectual properties in the first place. (See Dkt. No. 255, Pl.'s Opp'n to Def.'s Mot. for Summ. J. 2 ("Plaintiffs claims of patent infringement must succeed because the facts show that Cardiac Science had no license rights to any of Hutchins' patents and trademarks....").)

This contention is foreclosed by the plain language of the 1994 License Agreement. Under the terms of that agreement, Complient's predecessor was required to assign its license to Plaintiffs intellectual properties to an affiliate (Dkt. No. 253, Ex. 1, 1994 License Agreement § 3.10), which would retain "the right to assign this Agreement and all of its rights, licenses and obligations hereunder to any person or entity" (id. § 2.1). Cardiac Science became that entity on October 21, 2003 when Complient caused the affiliate, CPR Limited Partnership ("CPR L.P."), to convey its interest in Plaintiffs intellectual properties to Cardiac Science. (See Dkt. No. 253, Ex. 3, Asset Purchase Agreement § 1.1A.)

Since there is no allegation, let alone evidence, that Cardiac Science sold CPR Prompt® products before it acquired the license from CPR LP or after it sold the license to Aristotle, the court will allow Defendant's motion for summary judgment with respect to Counts One, Two, and Three.

3. Tortious Interference with Contract.

Under Massachusetts law, a plaintiff asserting tortious interference with contract must show that: "(1) he had a contract with a third party; (2) the defendant knowingly induced the third party to break that contract; (3) the defendant's interference, in addition to being intentional, was improper in motive or means; and (4) the plaintiff was harmed by the defendant's actions." Draghetti v. Chmielewski, 416 Mass. 808, 816, 626 N.E.2d 862 (1994) (citations omitted).

Although it appears that a colorable argument might perhaps be made that Cardiac Science tortiously interfered with Plaintiffs contract with Aristotle, Plaintiff has elected not to offer that claim. Instead, he continues to maintain that Cardiac Science tortiously interfered with his contract with Complient.

The premise of this argument seems to be that Cardiac Science knew, or should have known, that Complient could not sell the rights to Plaintiffs intellectual properties without paying Plaintiff 7.5% of the proceeds. Since Cardiac Science knew, or should have known, that Complient had no intention to honor this obligation, Cardiac Science (according to Plaintiff) effectively induced Complient to breach its contract with Plaintiff by executing the Asset Purchase Agreement on October 21, 2003.

Paramount among the several problems with this contention is its failure to incorporate the fact that several courts, including this one, have already concluded that the "7.5% exit payment" referenced in § 3.10 of the License Agreement was not triggered by the sale of Plaintiffs intellectual properties to Cardiac Science. See Hutchins v. Cardiac Science, Inc., 456 F.Supp.2d 173, 185-89 (D.Mass.2006). Given the groundless nature of the allegations set forth in Count Seven, summary judgment must be allowed on Plaintiffs tortious interference with contract claim.²

4. Abuse of Process.

Count Six is a different story. To succeed on an abuse of process claim, a litigant must show that "(1) process was used (2) for an ulterior or illegitimate purpose (3) resulting in damage." Gutierrez v. Mass. Bay Transp. Authy., 437 Mass. 396, 407, 772 N.E.2d 552 (2002) (citations omitted).

In this case, the record reveals that a number of the allegations contained in Cardiac Science's counterclaim as filed on September 22, 2004 were predicated upon its status as the current licensee of Plaintiffs intellectual properties, despite the fact that Cardiac Science well knew that it had ceased being the licensee on August 11, 2004, when it sold Plaintiff's intellectual properties to Aristotle.

After Plaintiff asserted, in his amended complaint, that Cardiac Science's counterclaims constituted an abuse of process, Cardiac Science stated that it was entitled to judgment as a matter of law with respect to this claim since "[t]he record clearly shows that the only claims Cardiac Science filed against Plaintiff are Compulsory Counterclaims, pursuant to ...