45 N.E.3d 835
Ind. Ct. App.2015Background
- Sasso developed a spinal implant patent and formed SEE LLC to manage IP rights.
- SEE and Medtronic predecessor SDG entered into a 1998 Agreement in which SEE allegedly transferred IP rights and would receive royalties.
- The Agreement defined a contingent 4(B)(iii) royalty of 5% (or 2.5% if not IP-covered) of worldwide net sales for Medical Devices.
- There was no attached Schedule A or addendum listing the products to be covered, though reach of royalty depended on such an addendum.
- Medtronic and its affiliates paid Sasso substantial royalties on other spinal devices; SEE sought 4(B)(iii) royalties under the 1998 Agreement in 2013.
- The trial court granted summary judgment for defendants, holding the patent transfer and the addendum were conditions precedent and the contract unenforceable; SEE appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the 1998 Agreement enforceable as a contract? | SEE argues the Agreement binds parties to pay 4(B)(iii) royalties. | Medtronic argues the Agreement is unenforceable due to missing patent transfer and addendum. | Unenforceable as a matter of law. |
| Does the missing addendum prevent breach and damages under the Contract? | SEE contends the defined Medical Device scope is determined by the addendum. | Defendants say no addendum means no basis to determine breaches or damages. | Addendum absence renders the contract unenforceable. |
| Were patent transfer and addendum conditions precedent to royalty obligations? | SEE asserts royalty rights arise from the transfer and future addendum. | Defendants contend royalties depend on completed condition precedents. | Court rejects condition-precedent framework as controlling here; contract unenforceable regardless. |
| Are equities a basis to deny relief given knowledge and silent behavior? | N/A in summary of decision | Equity concerns argued against enforcement due to timing and related agreements. | Equity does not save an unenforceable contract; court maintains contract unenforceable. |
Key Cases Cited
- Wolkos v. Meyer, 668 N.E.2d 671 (Ind. 1996) (contract to make a contract; essential terms require mutual agreement on addendum; not enforceable if incomplete)
- Scott-Reitz Ltd. v. Ren Warsaw Assocs., 658 N.E.2d 98 (Ind. Ct. App. 1995) (contract to make a contract; missing essential terms; not enforceable as to conditions precedent)
- Conwell v. Gray Loon Outdoor Mktg. Group, Inc., 906 N.E.2d 805 (Ind. 2009) (contract definiteness; must provide basis for breach and remedy)
- McLinden v. Coco, 765 N.E.2d 606 (Ind. Ct. App. 2002) (need for a definite basis to determine breach and damages)
- Money Store Inv. Corp. v. Summers, 849 N.E.2d 544 (Ind. 2006) (equitable estoppel considerations; knowledge of facts and mutual awareness)