257 F. Supp. 3d 643
D. Del.2017Background
- AgroFresh (plaintiff) contracted with Dr. Nazir Mir/MirTech (defendants) to develop combination technology (RipeLock) pairing 1‑MCP (an ethylene‑inhibitor) with modified atmosphere packaging (MAP); Agreements (Commercial + Consulting) included broad duties and an automatic assignment clause (§12.1) requiring prompt disclosure and assignment of inventions “related to the Products.”
- From 2011–2015 Mir worked with AgroFresh on RipeLock while pursuing separate R&D; in Dec. 2013 he presented cyclodextrin‑based 1‑MCP concepts to AgroFresh but later developed a distinct MOF (metal‑organic framework) 1‑MCP stabilization technology (claimed in U.S. Patent No. 9,394,216, the ’216 patent).
- Beginning in 2014 Mir secretly collaborated with Decco to commercialize the MOF technology (TruPick), accepted payments and helped secure EPA registration, but did not disclose his work or the ’216 patent to AgroFresh while negotiating a Third Extension of the Consulting Agreement in October 2015.
- The Third Extension included clarified language stating that "1‑MCP alone" activities would not violate the Agreement; it had no retroactive effective date and became effective Oct. 28, 2015 going forward.
- AgroFresh sued; the court tried counts I (ownership/assignment of the ’216 patent) and IV (fraudulent inducement of the Third Extension). The court found the §12.1 assignment unambiguous, that the MOF technology related to the Product and therefore was assigned to AgroFresh, and that Mir fraudulently induced the Third Extension by concealing the MOF work—so the Third Extension was rescinded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §12.1 automatically assigned the ’216 patent (MOF technology) to AgroFresh | §12.1’s phrase “related to the Products” is broad; MOF improves 1‑MCP stabilization for the combination product and thus is assigned automatically | §12.1 should be read narrowly (only inventions that are the Product); Mir argued parties limited assignment by negotiation and by excluding certain language | Court: §12.1 is clear and unambiguous; “related to” construed broadly; MOF technology relates to and was assigned to AgroFresh |
| Whether AgroFresh waived assignment rights by conduct (e.g., declining to commercialize Dec. 2013 ideas) | No waiver — waiver requires knowledge of material facts and intent; AgroFresh did not know of MOF tech and had a non‑waiver clause | Mir argued AgroFresh’s conduct (non‑assertion re Dec. 2013 disclosure) amounted to waiver of rights | Court: Waiver standard not met; non‑waiver clause prevents finding waiver; AgroFresh could not waive rights in undisclosed future inventions |
| Whether parties modified the Agreements by course of conduct or estoppel to permit Mir’s MOF activities or to make Third Extension retroactive | No modification or estoppel; no written amendment, parties knew how to make retroactive amendments, and estoppel requires clear & convincing proof of detrimental reliance | Mir claimed AgroFresh’s inaction and oral statements gave him rights / reliance | Court: No oral modification; no waiver of no‑oral‑amendment clause; estoppel not proved by clear & convincing evidence |
| Whether Mir fraudulently induced the Third Extension (rescind it) | Mir concealed material facts (MOF work, Decco relationship, EPA registration, $250k payment, intention to leave) while negotiating Extension; these omissions and misrepresentations were material and induced reliance | Mir contended Third Extension limited AgroFresh’s claims and that he disclosed sufficient information (or that AgroFresh knew) | Court: Mir knowingly omitted material facts and misrepresented intent; AgroFresh reasonably relied and would not have signed; fraudulent inducement proven and Third Extension rescinded |
Key Cases Cited
- Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153 (Del. 2010) (contracts clear on their face are enforced according to plain meaning)
- Alta Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381 (Del. 2012) (contract terms given ordinary meaning; ambiguity required for extrinsic evidence)
- Clouding IP, LLC v. Google Inc., 61 F. Supp. 3d 421 (D. Del. 2014) (same principle on contract interpretation)
- DDB Techs., LLC v. MLB Advanced Media, L.P., 517 F.3d 1284 (Fed. Cir. 2008) (automatic assignment language can effect present assignment of future inventions)
- Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245 (Fed. Cir. 2000) (language construed as present assignment when drafting conveys rights upon invention)
- Filmtec Corp. v. Allied‑Signal Inc., 939 F.2d 1568 (Fed. Cir. 1991) (agreements that "hereby" assign future inventions create present assignment)
- AeroGlobal Capital Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428 (Del. 2005) (waiver requires knowledge of material facts and clear intent to relinquish rights)
- E.I. DuPont de Nemours & Co. v. Florida Evergreen Foliage, 744 A.2d 457 (Del. 1999) (elements for fraudulent inducement under Delaware law)
- Rehoboth Mall Ltd. P’ship v. NPC Int’l, Inc., 953 A.2d 702 (Del. 2008) (effect and purpose of express non‑waiver provisions)
- Sweetman v. Strescon Indus., Inc., 389 A.2d 1319 (Del. Super. 1978) (effective date principles; retroactivity requires clear intent)