Quantum, Inc. v. Akeso Health Sciences, LLC
3:16-cv-00334
D. Or.Jun 5, 2017Background
- Quantum (Oregon corp.) and Akeso (California corp.) entered a 2002 written agreement under which Quantum would market/sell Akeso’s patented migraine formula and license the MIGRELIEF trademark to Akeso for non–health-food channels; initial term 30 months with optional two‑year extensions by Quantum.
- The parties continued commercial dealings through 2015 and negotiated repeatedly but never executed a final new contract; they signed a 2005 Agreement Memo that included a mutual release clause.
- Quantum declined to exercise the extension option and produced communications asserting the 2002 contract expired October 31, 2004; Akeso disputed expiration and later terminated the 2002 Contract in a 2015 letter and attempted to exercise a $25,000 trademark‑purchase right.
- After commercial relations broke down in 2016, Quantum revoked Akeso’s trademark permission and began selling a reformulated product (Alternate Formula) under the MIGRELIEF mark; Akeso alleged numerous counterclaims including ownership, infringement, cancellation, and related unfair‑competition claims.
- The motion: Quantum moved for summary judgment in several discrete submotions; the court resolved which contract and trademark disputes present genuine issues of material fact and which are appropriate for judgment as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2002 Contract expired Oct. 31, 2004 | Quantum: plain terms set 30‑month term with optional extensions; Quantum declined third extension so entire contract expired | Akeso: only the Guaranteed‑Supply/ exclusivity term expired; other contract rights (including trademark purchase right) survived | Court: Contract language unambiguous; entire 2002 Contract expired Oct. 31, 2004 (MSJ granted) |
| Effect of 2005 Agreement Memo (release) | Quantum: 2005 memo is a mutual release of prior agreements | Akeso: (implicitly) memo did not revive or release Akeso’s claimed rights | Court: Memo’s release language is mutual and effective on signing (MSJ granted) |
| Implied‑in‑fact contract / promissory estoppel to transfer MIGRELIEF | Quantum: parties repeatedly negotiated and Quantum declined to extend; no conduct manifests intent to form a new implied contract | Akeso: course of conduct and communications support an implied agreement carrying forward trademark purchase rights; relied on promises | Court: Genuine factual disputes exist on whether an implied contract or promissory estoppel claim is supported — MSJ denied as to these claims (equitable estoppel counterclaim dismissed as mis‑pled) |
| Ownership / abandonment of MIGRELIEF mark and related infringement counterclaims | Quantum: it is sole owner; distributor status does not transfer ownership; no evidence of abandonment or assignment in gross | Akeso: public associates MIGRELIEF with Akeso’s patented formula; Quantum thus lost source‑significance | Court: Trademark denotes source (Quantum); no evidence of abandonment or unrestricted assignment — summary judgment for Quantum on those counterclaims granted |
| Use of PURACOL mark and website metatags | Quantum: limited, inadvertent metatag use; selling off existing inventory and corrected website promptly | Akeso: Quantum continued to use PURACOL (including in metatags) after termination; online use can infringe | Court: Genuine factual disputes about extent/effect of PURACOL use remain — MSJ denied on these counterclaims |
| Applicable statute of limitations for contract claims | Quantum: predominant purpose is sale of goods → UCC 4‑year rule | Akeso: general 6‑year contract limitations applies | Court: Predominant purpose not sale of goods; apply 6‑year limitations (MSJ denied as to SOL issue) |
| Injunctive relief pleading | Quantum: injunctive relief is a remedy, not a stand‑alone cause of action | Akeso: conceded error | Court: Counterclaim for injunctive relief dismissed (MSJ granted) |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden and standards)
- Anderson v. Liberty Lobby, 477 U.S. 242 (evidence and inferences at summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (no genuine issue when record could not support nonmoving party)
- Yogman v. Parrott, 325 Or. 358 (Oregon three‑step contract interpretation, ambiguity analysis)
- Defiance Button Mach. Co. v. C & C Metal Prod. Corp., 759 F.2d 1053 (trademark rights attach to goodwill and source; abandonment/assignment in gross principles)