378 F. Supp. 3d 119
D.D.C.2019Background
- Brady Esch was a Covidien employee (joined via acquisition) who signed a Massachusetts-governed Non‑Competition, Non‑Solicitation, and Confidentiality Agreement (NNC) in 2009 that required assignment of "Inventions," and a 2013 Separation Agreement that reaffirmed invention-assignment provisions.
- Esch worked as director on Covidien Project Merge/Cattleya (an RF venous ablation device) and later formed competitor Venclose in Feb 2014; in Mar 2014 he filed a provisional patent (No. 61/970,498) assigned to Venclose describing features similar to Project Cattleya.
- Venclose later filed a utility application (No. 14/670,338) and a PCT application listing additional co‑inventors; Covidien alleges the applications derive from Esch’s Covidien work and contain confidential information.
- Covidien obtained a 2017 preliminary injunction enjoining Esch and related parties from using or disclosing Covidien confidential information; Esch was later removed as Venclose CEO.
- This summary‑judgment stage involves cross‑motions: Esch seeks dismissal (arguing California law/public policy and other defenses); Covidien seeks partial summary judgment enforcing Massachusetts law, dismissing certain defenses, and declaring patents assigned to Covidien.
Issues
| Issue | Plaintiff's Argument (Covidien) | Defendant's Argument (Esch) | Held |
|---|---|---|---|
| Choice of law for contracts | Massachusetts law governs under contract clause; enforceable | California public policy (anti‑noncompete/employee mobility) makes Massachusetts choice unenforceable | Court enforces Massachusetts choice; Esch failed to show a contrary fundamental California policy that controls here |
| Breach of confidentiality/contract (use of Covidien confidential info in patents) | Circumstantial evidence suffices; assignment/holdover covers inventions conceived during employment or 1 year after | No direct proof of theft; used only general skill/knowledge; features were publicly known/obvious | Genuine disputes of material fact exist on misappropriation, secrecy, obviousness and thus summary judgment denied to Esch |
| Enforceability/effect of holdover assignment on patents | One‑year post‑employment holdover is reasonable; Esch assigned rights by filing provisional within that period | Cannot deprive co‑inventors; plaintiffs cannot reassign others' rights; factual disputes on use of confidential info | Court declines to order assignment of all patents to Covidien at summary judgment because factual disputes remain about disclosure/use; assignment of Esch’s own rights remains contested |
| Affirmative defenses (MDTPA, CA §§16600/17200, recoupment, laches/estoppel) | MDTPA and CA statutory defenses fail because Massachusetts law applies; recoupment inapplicable; no laches/estoppel shown | Invokes MDTPA, California statutes, laches/estoppel, recoupment, and unclean hands (DOJ settlements) | Court allows plaintiff’s motions dismissing MDTPA and California statute defenses and recoupment; rejects laches/estoppel arguments; denies Esch leave to rely on DOJ settlement evidence |
Key Cases Cited
- Oxford Glob. Res., LLC v. Hernandez, 480 Mass. 462, 106 N.E.3d 556 (Mass. 2018) (framework for declining contractual choice‑of‑law when contrary to fundamental policy)
- Jet Spray Cooler, Inc. v. Crampton, 361 Mass. 835, 282 N.E.2d 921 (Mass. 1972) (employee memory of confidential information can justify injunction)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden allocation)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (materiality and genuine dispute standard for summary judgment)
- Contour Design, Inc. v. Chance Mold Steel Co., 693 F.3d 102 (1st Cir. 2012) (trade‑secret misappropriation may be shown by circumstantial evidence)
- Beech Aircraft Corp. v. EDO Corp., 990 F.2d 1237 (Fed. Cir. 1993) (distinguishing inventorship from ownership/assignment)
- Preston v. Marathon Oil Co., 684 F.3d 1276 (Fed. Cir. 2012) (upholding one‑year post‑employment invention assignment/holdover as reasonable)