Decco U.S. Post-Harvest, Inc. v. Mirtech, Inc.

CourtCourt of Chancery of Delaware
DecidedNovember 29, 2018
DocketCA 2018-0100-JTL
StatusPublished

This text of Decco U.S. Post-Harvest, Inc. v. Mirtech, Inc. (Decco U.S. Post-Harvest, Inc. v. Mirtech, Inc.) is published on Counsel Stack Legal Research, covering Court of Chancery of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Decco U.S. Post-Harvest, Inc. v. Mirtech, Inc., (Del. Ct. App. 2018).

Opinion

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

DECCO U.S. POST-HARVEST, INC., ) ) Petitioner, ) ) v. ) C.A. No. 2018–0100–JTL ) MIRTECH, INC., ) ) Respondent, ) ) and ) ) ESSENTIV LLC, ) ) Nominal defendant. )

MEMORANDUM OPINION

Date Submitted: September 11, 2018 Date Decided: November 28, 2018

Brock E. Czeschin, Sara C. Hunter, Angela Lam, RICHARDS, LAYTON & FINGER, P.A., Wilmington, Delaware; John M. Williamson, Rajeev Gupta, Karthik Kumar, FINNEGAN, HENDERSON, FARABOW, GARRET & DUNNER, LLP, Washington, D.C.; Counsel for Petitioner.

Glenn A. Brown, REAL WORLD LAW, P.C., Wilmington, Delaware; Counsel for Respondent.

LASTER, V.C. 1-Methylcyclopropene (“1-MCP”) is a gas used to delay the ripening of fruit and

other produce. MirTech, Inc. claimed to own intellectual property rights in 1-MCP.

In April 2016, MirTech and Decco U.S. Post-Harvest, Inc. (“Decco”) established a

joint venture to commercialize products based on 1-MCP. As the vehicle for their venture,

they formed a Delaware limited liability company called Essentiv LLC (the “Company”).

As part of the business arrangement, MirTech granted the Company a license to use its

intellectual property rights in 1-MCP.

Non-party AgroFresh Inc. disputed whether MirTech owned any intellectual

property rights in 1-MCP. In September 2017, MirTech settled litigation brought by

AgroFresh. In the settlement agreement, MirTech agreed that AgroFresh owned the

intellectual property rights which MirTech had licensed to the Company.

After learning of this development, Decco brought this proceeding to dissolve the

Company. Decco proved at trial that it is not reasonably practicable for the Company to

carry on its business given that MirTech has agreed that it does not own the intellectual

property rights the Company was created to commercialize.

Based on the evidence presented at trial, the Company is dissolved. Francois Girin

is appointed as receiver to wind up the Company’s affairs.

I. FACTUAL BACKGROUND

The factual record in this case is mercifully sparse. Trial lasted only one day. The

parties submitted just eleven joint exhibits. They presented live testimony from two fact

witnesses, lodged two depositions, and consented to the use of one affidavit. The parties

proved the following facts by a preponderance of the evidence.

1 A. Mir And AgroFresh Develop 1-MCP Technologies.

In 1996, Edward Sisler and Sylvia Blankenship patented 1-MCP.1 At the time, Nazir

Mir was studying how to extend the shelf life of apples using modified atmosphere

packaging.2 As part of his research, he began experimenting with 1-MCP technologies.3

In late 2009, Mir entered into discussions with AgroFresh about using 1-MCP in

modified atmosphere packaging.4 One of Mir’s contacts at AgroFresh was Lynn Oakes,

who will re-emerge in the story later after moving over to Decco.5

Through his entity, MirTech, Mir entered into an interim consulting services

agreement with AgroFresh dated January 1, 2010. The agreement called for joint

ownership of “any and all inventions conceived or reduced to practice jointly by the

[p]arties.”6

1 See U.S. Patent No. 5,518,988 (filed June 3, 1994); JX 8 at 17. Citations in the format “[Name] Dep.” refer to witness testimony from a deposition transcript. Citations in the form “[Name] Tr.” refer to witness testimony from the trial transcript. Citations in this format “PTO ¶ —” are stipulated facts in the pre-trial order. Citations in the form “JX ––– at ––––” refer to trial exhibits using the JX-based page numbers generated for trial. 2 Mir Dep. 15–17. 3 Id. at 17–18. 4 JX 9 at 4; see Mir Dep. 29–30. 5 Mir Dep. 30–33. 6 JX 9 at 5 (internal quotation marks omitted).

2 In May 2011, MirTech and AgroFresh replaced the interim agreement with a

commercial agreement and a consulting agreement. These agreements granted AgroFresh

sole ownership over the parties’ joint inventions.7

While working with AgroFresh, Mir developed “RipeLock,” a modified atmosphere

package that used 1-MCP.8 Mir also developed technology underlying what became U.S.

Patent Numbers 8822382, 8802140, 9394216, and 9561894.9 This decision refers to this

intellectual property collectively as the “RipeLock Patents.”

B. The Letter Of Intent

By October 2014, Oakes had moved to Decco from AgroFresh. Decco’s primary

business involves the post-harvest treatment and packaging of produce.10 Decco hired

Oakes to develop its apple storage business.11

7 Id. at 5–7. 8 See Mir Dep. 41–43, 53–54. 9 See JX 11 ¶¶ 4(a), 7(a) (Final Consent Judgment where Mir acknowledges and consents to a judgment establishing AgroFresh’s ownership of the listed patents). The Final Consent Judgment uses the former title of the ‘894 patent, U.S. Patent Publication Number 2014/0326620. See Public Patent Application Information Retrieval, https://portal.uspto.gov/pair/PublicPair (last visited Nov. 26, 2018) (search application number 13969393). 10 See Girin Tr. 6. 11 Girin Dep. 15.

3 On October 18, 2014, Oakes met with Mir during a meeting of the Produce

Marketing Association in Anaheim, California.12 Oakes discussed Decco’s interest in using

1-MCP for the long-term storage of produce.13 Within a few days, Mir had entered into a

confidentiality agreement with Decco.14

Over the next several weeks, Mir had a series of meetings with members of Decco

management including Francois Girin, Decco’s Chief Executive Officer.15 The discussions

revolved around a potential partnership between MirTech and Decco that would develop

post-harvest packaging solutions using 1-MCP.16 During their initial meeting, Mir

informed Girin that MirTech had partnered with AgroFresh to produce RipeLock.17 Mir

did not provide Decco with, and Decco did not ask to see, any of the agreements that Mir

or MirTech had with AgroFresh.18

On November 30, 2014, Decco and MirTech executed a letter of intent for a joint

venture involving the ‘382 Patent, the ‘140 Patent, their child applications, and US

12 Mir Dep. 32, 36–38; see Girin Tr. 6–7, 42; Mir Tr. 73. 13 Mir Dep. 37–39 (“Q. What did he explain that Decco was looking for? A. 1- MCP.”); Mir Tr. 73. 14 See Mir Dep. 39–40. 15 Mir Tr. 73; Girin Tr. 42; Mir Dep. 45–46; see Girin Dep. 12–16. 16 Mir Dep. 40, 46, 49, 52; Mir Tr. 73. 17 Girin Dep. 16–17; see Dkt. 46 at 5. Cf. Mir Dep. at 41–43, 53–54. 18 Mir Tr. 74 (“Q. [Y]ou did not provide Decco with a copy of your agreement with Agrofresh, did you? A. That’s correct.”); see Mir Dep. 54–58.

4 Provisional Patent Application 32077867.19 The ‘382 Patent and the ‘140 Patent were part

of the RipeLock Patents.20 Although Provisional Patent Application ‘867 was not

specifically identified as a RipeLock Patent, Mir testified that this patent application related

to the ‘216 Patent, which was one of the RipeLock Patents.21 The letter of intent

documented the parties’ plan “to collaborate in the assessment of the right to practice,

ability to register, biological performance, manufacturing cost and commercialization

potential of MirTech’s 1-MCP ‘MPM’ technology . . . and other related technologies.”22

The letter of intent identified three overarching tasks for the joint venture: (i) secure

the legal rights of the listed patents; (ii) coordinate research, regulatory approvals, and other

pre-commercial activity; and (iii) commercialize the developed technology.23 To facilitate

JX 1; Mir Dep. 53 (“Q. And do you recall when [you signed a letter of intent with 19

Decco]? A.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Seneca Investments LLC v. Tierney
970 A.2d 259 (Court of Chancery of Delaware, 2008)

Cite This Page — Counsel Stack

Bluebook (online)
Decco U.S. Post-Harvest, Inc. v. Mirtech, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/decco-us-post-harvest-inc-v-mirtech-inc-delch-2018.