330 So.3d 936
Fla. Dist. Ct. App.2021Background
- Parties were business partners who developed the BlephEx ocular device; Rynerson obtained the BlephEx patent and formed RySurg with Choate, who later left and litigated.
- During litigation Choate filed two patent applications (the ’275 and ’608 apps); the parties settled: Blephex paid Choate, Inc. $162,000 and Choate parties agreed to abandon those apps and not to “file any additional patent application directed to the particular ‘subject matter disclosed’” in those apps.
- Settlement’s breach clause stated that if any Choate Party filed such a patent, Blephex’s payment obligations would cease and “Choate, Inc. shall be obligated to refund” the $162,000 (plus other remedies).
- After settlement Choate filed the ’742 application (an adapter kit for a rotary tool), which issued as the ’203 patent; Blephex moved to enforce the settlement claiming breach.
- Trial court found a breach and entered judgment for $162,000 plus interest against all appellants jointly and severally; the Fourth DCA affirmed breach but reversed joint liability, holding only Choate, Inc. was liable per the settlement language.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did filing the ’742 application breach the settlement by being directed to the same “subject matter disclosed”? | The ’742 covers the same subject matter (devices using swabs to remove eyelid debris); its specification overlaps with the ’275/’608 disclosures. | The ’742 claims an adapter kit distinct from the mechanical BlephEx device; the adapter is a different invention. | Yes. “Subject matter disclosed” covers the specification and background (broader than claims); the ’742 sufficiently overlaps with the disclosed subject matter, so it breached. |
| Who must repay the $162,000 on a breach? | Blephex argued it could seek other remedies at law or equity and effectively hold multiple Choate parties liable. | Appellants argued the settlement expressly limited refund obligation to Choate, Inc., so only Choate, Inc. must refund. | The court erred by imposing joint-and-several liability. The settlement plainly made only Choate, Inc. obligated to refund; reversed as to Choate individually and Myco. |
| How should the contract’s breach language be interpreted (scope of “subject matter disclosed”)? | Blephex: language protects more than patent claims and covers the entire disclosed subject matter. | Choate: scope should be limited so accessories like adapters are not covered. | The phrase means the whole content of a specification/drawings (not just claims); therefore it has broader scope than the claim language. |
| May the court rewrite the settlement or impose liability beyond its plain terms? | Blephex: equitable considerations make it fair to hold multiple parties liable. | Choate: courts must enforce plain terms and may not add parties or rewrite agreements. | The court may not rewrite the contract; plain language controls. Equitable fairness does not override express allocation of refund to Choate, Inc. |
Key Cases Cited
- Klinow v. Island Court at Boca W. Prop. Owners’ Ass’n, 64 So. 3d 177 (Fla. 4th DCA 2011) (contract interpretation reviewed de novo; factual findings require competent substantial evidence)
- Per Jonas Ingvar Gustafsson v. Aid Auto Brokers, Inc., 212 So. 3d 405 (Fla. 4th DCA 2017) (courts must give effect to plain and ordinary contract language and not rewrite agreements)
- Bates v. Coe, 98 U.S. 31 (1878) (subject matter disclosed is determined from the whole face of the specification and drawings)
- Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. 898 (2014) (distinction between claims and specification in defining patent scope)
- Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996) (claims define the invention sought to be protected)
- Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605 (1950) (infringement inquiry begins with words of the claim)
- ArcelorMittal France v. AK Steel Corp., 700 F.3d 1314 (Fed. Cir. 2012) (subject matter disclosed is broader than the claim)
- Dinuro Investments, LLC v. Camacho, 141 So. 3d 731 (Fla. 3d DCA 2014) (language permitting “any other remedies” allows pursuit of additional remedies consistent with law)
- Fla. Inv. Grp. 100, LLC v. Lafont, 271 So. 3d 1 (Fla. 4th DCA 2019) (avoid treating contract terms as surplusage; give each part meaning)