Hutchins v. Cardiac Science, Inc.

456 F. Supp. 2d 196, 66 Fed. R. Serv. 3d 457, 2006 U.S. Dist. LEXIS 71735, 2006 WL 2942790
District Court, D. Massachusetts·Decided September 29, 2006·No. C.A. 04-30126-MAP·Published·Cited by 1 cases

Opinion

MEMORANDUM AND ORDER REGARDING PLAINTIFF’S MOTIONS FOR MISCELLANEOUS RELIEF (Dkt. Nos. 107,108, and 191)

PONSOR, District Judge.

I. INTRODUCTION

This is a suit brought by pro se Plaintiff Donald C. Hutchins against Cardiac Science, Inc. (“Cardiac Science”) and Com-plient Corporation (“Complient”). Plaintiff alleges that Cardiac Science is liable for copyright and patent infringement, abuse of process, and tortious interference with contract.

Cardiac Science has denied Plaintiffs allegations and asserted counterclaims against Plaintiff seeking damages, certain declaratory judgments, and injunctive relief.

Plaintiff has filed three motions presently before the court. Two of these motions are fairly straightforward. For the reasons set forth below, the court will: (1) deny Plaintiffs Motion for Relief from the Court’s September 28, 2005 Order Denying His Emergency Motion for a Temporary Restraining Order (Dkt. No. 107); and (2) deny Plaintiffs Motion for Sanctions Against Counsel for Cardiac Science (Dkt. No. 191).

The third motion, Plaintiffs Motion for Relief from the Court’s June 23, 2005 Order Allowing Cardiac Science’s Motion for Summary Judgment (Dkt. No. 108), raises disturbing issues. Plaintiff contends, and Cardiac Science now appears to concede, that Cardiac Science made repeated misrepresentations regarding its possession of certain license rights to Plaintiffs intellectual property, when it knew that these license rights, in fact, had been transferred to a third party. Because these misrepresentations have generated serious questions about Cardiac Science’s entitlement to summary judgment on any of Plaintiffs claims, the court will, upon reconsideration, deny Cardiac Science’s motion and set the case for a scheduling conference to determine future proceedings.

II. BACKGROUND 1

On June 1, 1994, Plaintiff and his closely-held company, CPR Prompt Corporation (“CPR Prompt”), entered into a license agreement (the “License Agreement”) with County Line Limited Partnership (“County Line”). Under the terms of this agreement, Plaintiff and his company provided County Line with an exclusive license to various intellectual properties, including CPR Prompt®-a device designed to instruct individuals in the performance of cardiopulmonary resuscitation. 2 (See Dkt. No. 56, Ex. 1, License Agreement.)

*198 Pursuant to § 3.10 of the License Agreement, County Line also agreed to assign its interest to an “Affiliate” that would

cause each partner of such Affiliate who purchases or otherwise acquires a partnership interest of such Affiliate directly from such Affiliate to agree to pay CPR-PROMPT seven and one-half percent (7.5%) of the net proceeds of any sale of any or all of such partnership interest to any person or entity which is not an Affiliate to such partner.

(License Agreement § 3.10.)

On September 19, 1994, County Line assigned all of its rights and obligations under the License Agreement to CPR Limited Partnership (“CPR L.P.”), an Ohio entity that initially had two partners: Catalog Products, Inc., a 1% limited partner, and County Line itself, the 99% general partner.

In December, 1997, County Line’s corporate successor transferred its general partnership interest in CPR L.P. to CPR Prompt LLC, which subsequently converted to Complient, a Delaware corporation. Like the previous general partners, Com-plient retained a 99% partnership interest in CPR L.P. and performed various services related to the License Agreement.

On October 21, 2003, unbeknownst to Plaintiff, Complient and CPR L.P. entered into an Asset Purchase Agreement (“APA”) with Cardiac Science. Under the terms of the APA, Complient, as the general partner of CPR L.P., caused CPR L.P. to convey to Cardiac Science all of its “assets, properties, rights, and interests,” including the License Agreement. (See Dkt. No. 56, Ex. 3, Asset Purchase Agreement § 1.1A.) Complient also transferred to Cardiac Science “substantially all of [its] assets, properties, rights and interests,” but retained its general partnership interest in CPR L.P. (Id. at § 1.2(i).)

In return, Complient received $47 million in Cardiac Science common stock. (Dkt. No. 40, Ex. H, Wedbush Morgan Securities Report 4, Oct. 29, 2003.) According to Plaintiff, in November of 2003, Cardiac Science began to manufacture and sell products covered by Plaintiffs patents and bearing the CPR Prompt® trademark. (Dkt. No. 40, Ex. L., Hutchins Aff. ¶ 12, July 1, 2004.)

In the spring of 2004, Plaintiff noticed that he had not received any royalty payments or reports from Complient since the previous summer. (Id. at ¶ 8.) When Plaintiff called Complient’s Cleveland headquarters he discovered that CPR L.P.’s general partner was no longer in business. (Id.)

Plaintiff subsequently contacted the law firm of Fish & Richardson and learned that Complient, for the first time since 1995, had recently failed to pay certain fees related to Plaintiffs patents. Under the circumstances, Plaintiff concluded that Complient had abandoned his intellectual properties, and he began discussing the possibility of licensing these properties to another entity. (Id. at ¶ 9.)

*199 On April 29, 2004, Plaintiff received a phone call from Attorney Randall Skaar, a representative of Cardiac Science, who informed Plaintiff that Cardiac Science had acquired his intellectual properties. (Id. at ¶ 11.) After familiarizing himself with the terms of the APA, Plaintiff concluded that the 7.5% exit payment described in § 3.10 of the License Agreement had been triggered. On July 2, 2004, in response to Cardiac Science’s refusal to recognize his right to an equity interest of $3,525,000, Plaintiff filed his original complaint against Cardiac Science, alleging: copyright infringement (Count I); patent infringement by means of sales (Count II); patent infringement by means of manufacture (Count III); negligence (Counts IV and V); and breach of contract (Count VI). 3

It now appears undisputed that on August 11, 2004, Cardiac Science conveyed its interest in the License Agreement to Aristotle Corporation (“Aristotle”). (See Dkt. No. 210, Skaar Decl. ¶ 2.) This marked the second time in less than ten months that Plaintiffs intellectual properties were transferred without Plaintiffs knowledge or consent.

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Hutchins v. Cardiac Science, Inc., 456 F. Supp. 2d 196, 66 Fed. R. Serv. 3d 457, 2006 U.S. Dist. LEXIS 71735, 2006 WL 2942790 (D. Mass. 2006).

456 F. Supp. 2d 196 (Hutchins v. Cardiac Science, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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