MDS (Canada) Inc. v. Rad Source Technologies, Inc.
720 F.3d 833
| 11th Cir. | 2013Background
- Rad Source Technologies, a Florida corporation, licensed its RS 3000 blood irradiator and entered into a License Agreement with Nordion in August 2003, with FDA clearance in September 2003.
- Rad Source holds three patents ('255, '099, '876) licensed by Nordion; Rad Source also pursued long-tube X-ray technology with patents ('147, '686).
- In 2008 Nordion and Best entered an Asset Purchase Agreement; Nordion later sought to assign the License Agreement to Best, prompting Rad Source’s consent dispute under Article 12 and related provisions.
- Nordion/Sublicense to Best occurred in April 2008; Best assumed Nordion’s obligations, but Nordion’s license expiry and Best’s involvement became central as Rad Source developed the RS 3400 using long-tube tech.
- Rad Source default notices and litigation followed Nordion/Best’s actions; district court held no damages and dismissed on merits, while Nordion/Best appealed challenging multiple grounds.
- Key legal questions included jurisdiction, contract interpretation of Article 3.1, whether RS 3400 embodies the patents, and whether Nordion’s transfer to Best was an assignment or sublicense, plus waiver/estoppel doctrines.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction over the appeal | Federal Circuit exclusive jurisdiction if §1338 applies | Eleventh Circuit has jurisdiction via diversity/supplemental claims | Eleventh Circuit has jurisdiction |
| Article 3.1 ambiguity | Term is ambiguous, allowing extrinsic evidence | Term unambiguous; extrinsic evidence not allowed | Article 3.1 is unambiguous |
| RS 3400 embodiment of the Patents | RS 3400 embodies the Patents; violates Article 3.1 | RS 3400 does not embody the Patents; no infringement | RS 3400 does not literally or substantially infringe |
| Assignment vs sublicense of Nordion's rights | Transfer to Best was an assignment | Transfer to Best was a sublicense | Certification of Florida Supreme Court requested on assignment vs sublicense |
| Waiver/estoppel and damages | Nordion's breaches may excuse Rad Source; Rad Source waived/estopped | No waiver or estoppel; damages otherwise available | District court findings upheld on waiver/estoppel; damages unresolved pending certification |
Key Cases Cited
- Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (U.S. 1988) (interpretation of jurisdictional arising-under and concurrent issues)
- Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (U.S. 2005) ( Substantial federal question for §1338(a) jurisdiction)
- Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677 (U.S. 2006) (factors for substantial federal-question analysis)
- Gunn v. Minton, 133 S. Ct. 1059 (U.S. 2013) (clarifies Grable substantiality factors and federal interest)
- WMS Gaming, Inc. v. Intl. Game Tech., 184 F.3d 1339 (Fed. Cir. 1999) (claim construction and burden of infringement analysis)
- Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (claim construction methodology and intrinsic/extrinsic evidence)
- Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (U.S. 1997) (doctrine of equivalents and element-by-element analysis)
- Continental Cas. Co. v. Ryan Inc. E., 974 So.2d 368 (Fla. 2008) (assignment vs. sublicense bright-line Florida rule)
- Lauren Kyle Holdings, Inc. v. Heath-Peterson Constr. Corp., 864 So.2d 55 (Fla. Dist. Ct. App. 2003) (assignment transfers all rights; sublicense remains liable)
- Estate of Basile v. Famest, Inc., 718 So.2d 892 (Fla. Dist. Ct. App. 1998) (context for assignment vs. lease and related rights)