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Pacesetter Inc. D/B/A St. Jude Medical Crmd, A Delaware v. Surmodics

October 25, 2011

PACESETTER INC. D/B/A ST. JUDE MEDICAL CRMD, A DELAWARE CORPORATION PLAINTIFF,
v.
SURMODICS, INC., A MINNESOTA CORPORATION DEFENDANT.



The opinion of the court was delivered by: Honorable Ronald S.W. Lew

STATEMENT OF UNCONTROVERTED FACTS AND CONCLUSIONS OF LAW

After considering the papers and arguments in support of and in opposition to Plaintiff Pacesetter Inc. d/b/a St. Jude Medical CRMD's ("St. Jude" or "Plaintiff") Motion for Summary Judgment and Defendant SurModics, Inc.'s ("SurModics" or "Defendant") Cross-Motion for Summary Judgment, this Court makes the following findings of fact and conclusions of law:

UNCONTROVERTED FACTS

1. On December 6, 2002, St. Jude and SurModics entered into a Master License Agreement ["License Agreement"] that licensed St. Jude to use SurModics's patented chemical coatings on St. Jude's products. Holdreith Decl. ¶ 2, Ex. 1; Cruz Decl. ¶3, Ex. A.

2. A true and correct copy of the License Agreement is attached to the Complaint. Holdreith Decl. ¶ 2, Ex. 1; Cruz Decl. ¶3, Ex. A.

3. During the term of the License Agreement, St. Jude made quarterly payments to SurModics. Frankel Decl. ¶ 6.

4. In early 2008, the patents on SurModics's chemical coatings expired, and St. Jude stopped paying royalties in April 2008. Frankel Decl. ¶ 8, Cruz Decl. Ex. D.

5. On May 20, 2009, SurModics did an audit of St. Jude's books to validate St. Jude's royalty payments paid over the course of the License Agreement. Cruz Decl. ¶ 5, Ex. C.

6. On March 23, 2010, SurModics sent St. Jude an audit report that requested additional royalties of over $3 million for products that had been manufactured during the License Agreement but sold after the expiration of SurModics's patents. Cruz Decl. ¶ 6, Ex. D.

CONCLUSIONS OF LAW

1. Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).

2. Given that patent license agreement are governed by ordinary principles of state contract law, this Court follows the choice of law provisions indicated by the license agreement and interpret the contract based on Minnesota law. Power Lift, Inc. v. Weatherford Nipple-up Systems, Inc., 871 F.2d 1082, 1085 (Fed. Cir. 1989).

3. Whether a contract is ambiguous is a question of law. City of Virginia v. Northland Office Props Ltd. P'ship, 465 N.W.2d 424, 427 (Minn. Ct. App. 1991).

4. Determining whether a contract is ambiguous "depends, not upon words or phrases read in isolation, but rather upon the meaning assigned to the words or phrases in accordance with the apparent purpose of the contract as a whole." Art Goebel, Inc. v. ...


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