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Clark Permar v. Spectra Watermakers

November 2, 2011

CLARK PERMAR,
PLAINTIFF,
v.
SPECTRA WATERMAKERS, INC.,
DEFENDANT.



The opinion of the court was delivered by: Maria-Elena James Chief United States Magistrate Judge

ORDER RE TERMS OF SETTLEMENT

I. INTRODUCTION

On April 20, 2010, the parties attended a court-supervised settlement conference, at the 12 conclusion of which terms of settlement were put on the record. Pursuant to the parties' agreement, agreed upon payment plan. Subsequently, a dispute between the parties arose over whether the '414 15 Patent was included in the agreement. On May 19, 2010, the parties filed a Stipulation For D 16 Magistrate to Resolve Dispute Re: Terms of Settlement. Dkt. No. 61. Each party also submitted a

Defendant would purchase Plaintiff's '198 Patent in the total amount of $275,000 with a specific

Proposed Order resolving the dispute and a letter setting forth its arguments in support of its proposed

resolution. On November 30, 2010, the Court issued an Order approving Defendant's Stipulation, 19 which included the '414 Patent in the sale. Dkt. No. 68. Thereafter, the present dispute arose over

what additional documents must be executed to assign the patents.

II. PARTIES' POSITIONS

A. Plaintiff's Position

Plaintiff argues that as part of the documents required to consummate the sale, Defendant 24 must execute a secured payment agreement (SPA) and UCC-1, pursuant to which Defendant grants to 25 Plaintiff a security interest in and a lien on the subject patents until the balance of the purchase price 26 is paid in full. According to Plaintiff, the SPA, along with a UCC-1, was required in exchange for his 27 execution of the Patent Assignments. Defendant, however, refuses to execute the SPA and UCC-1. 28 Plaintiff, in turn, refuses to execute the Patent Assignments of the Stipulation and Order. Plaintiff

claims that because the parties have not executed the final documents, he has not received 2 compensation for his Patents since April 20, 2010, despite the fact that Defendant has continued to 3 use the Patents to manufacture its watermaker. Plaintiff argues that, but for this delay, he would have 4 received an initial $75,000 down payment by June 1, 2011, and $53,333 in monthly payments of 5 $3,333 for 16 months for a total of $128,333. This would leave a remaining purchase price of 6 $146,666. At this point, Plaintiff contends that "[i]nstead of requiring [him] to transfer title to the 7 patents now and accept $3,333.33 per month from [Defendant] for the next 44 months, without that 8 obligation being secured by the SPA and UCC-1, [Defendant] should be required to finance the 9 balance of the purchase price separately, and complete its purchase of the patents now." 10 Plaintiff therefore seeks the following: 11 (1) Defendant shall deposit into the West America blocked account the amount of $87,333, 12 representing the amounts it owes to date for its use of the subject patents since June 1, 2010. This

sum includes the $34,000 balance of the $75,000 down payment, plus $53,333, representing

months of the $3,333.33 monthly payments through September 2011.

(2) Defendant shall deposit $146,667 into the West America blocked account, representing the D 16 balance due ...


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