Interface Biomedical Laboratories Corp. v. Axiom Medical, Inc.

600 F. Supp. 731, 225 U.S.P.Q. (BNA) 146, 1985 U.S. Dist. LEXIS 23499
CourtDistrict Court, E.D. New York
DecidedJanuary 11, 1985
Docket84 Civ. 3447
StatusPublished
Cited by40 cases

This text of 600 F. Supp. 731 (Interface Biomedical Laboratories Corp. v. Axiom Medical, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Interface Biomedical Laboratories Corp. v. Axiom Medical, Inc., 600 F. Supp. 731, 225 U.S.P.Q. (BNA) 146, 1985 U.S. Dist. LEXIS 23499 (E.D.N.Y. 1985).

Opinion

MEMORANDUM AND ORDER

GLASSER, District Judge:

Plaintiff in this action seeks injunctive and declaratory relief, and damages, for defendant's activities in connection with the manufacture and marketing of a medical product known as SUPERSTAT. 1 Plaintiff’s complaint alleges four claims for relief: (1) for a declaratory judgment that the parties have not entered a joint venture agreement and defendant is not plaintiff’s exclusive distributor and licensee (“Count 1”); (2) for injunctive relief restraining defendant from engaging in trade secret misappropriation (“Count 2”); (3) for injunctive relief restraining defendant from engaging in unfair competition (“Count 3”); and (4) for damages for unjust enrichment (“Count 4”).

Defendant has moved under Rule 12(b)(2) of the Federal Rules of Civil Procedure for an order dismissing the complaint for lack of personal jurisdiction, and under Rule 12(b)(3) for an order dismissing the complaint for improper venue insofar as Counts 3 and 4 allege patent infringement. For the reasons that follow, defendant’s motion is denied with respect to Count 1, and granted with respect to Count 2, 3 and 4. I find it unnecessary to decide defendant’s motion with respect to venue. Background

Plaintiff is a New York corporation, with its principal place of business in Brooklyn, New York, engaged in the research and *733 development of medical products. Plaintiff maintains that it is in the business of licensing patents and associated trade secrets to responsible organizations, but that it is not presently engaged in the sale of medical products. Defendant is a California corporation, with its principal place of business in California, engaged in the manufacture and sale of medical products. Plaintiff has developed a medical product called SUPERSTAT, for which it claims to have acquired various trademarks, patents, trade secrets and other confidential proprietary information. Prior to the events that gave rise to the present action, SUPERSTAT was manufactured by Smith Laboratories Company and marketed by Superstat Corporation, a corporation which was jointly formed by plaintiff and Orange Medical for the purpose of marketing SUPERSTAT. In early 1983, both Smith and Orange withdrew from the manufacture and sale of SUPERSTAT, and plaintiff acquired the rights to manufacture and market SUPERSTAT.

Byron Economidy, the president of defendant, and Philip Sawyer, the president of plaintiff, initially met at a medical convention in San Francisco during June of 1983. Defendant claims that the parties entered into an oral joint venture agreement at that meeting, under which defendant was to manufacture and market SUPERSTAT under an exclusive licensing and distributorship arrangement with plaintiff. Plaintiff claims that the parties merely discussed the “possibility” of such an agreement. Letters exchanged by the parties after the meeting tend to confirm plaintiffs contention. In defendant’s June 20, 1983 letter to plaintiff, Economidy stated that he was “excited about the opportunity to possibly work with you.” Exhibit 1 to Sawyer Affidavit (emphasis added). Plaintiff’s responsive letter, dated July 12, 1983, ■ stated: “This letter is sent to you to produce a formal relationship between [plaintiff and defendant] assuming that an attempt will be made by the co-joint companies to market SUPERSTAT____ I would be willing to consider placing the current manufacturing and marketing of SUPERS-TAT in Axiom’s hands on the presumption that Impra and Mr. Boyd Baker do not pick up their option on SUPERSTAT.” Exhibit 2 to Sawyer Affidavit.

During the following year, Sawyer and Economidy met three times in New York. Plaintiff claims that the parties negotiated the terms of a potential joint venture agreement at all three meetings. Defendant claims that no negotiations with regard to a joint venture agreement occurred at any of the three meetings. The parties agree that at the first meeting, in July 1983, Sawyer demonstrated the use of SUPERSTAT in surgery; at the second meeting in October 1983, the parties discussed certain matters unrelated to the SUPERS-TAT agreement; and the third meeting in May 1984 occurred at a trade convention. During the same time period, the parties and their attorneys engaged in numerous written and telephonic communications with regard to the negotiation of a written joint venture agreement. Also during this period, plaintiff sent defendant various trademarks, existing inventories of SUPERSTAT, and information on trade secrets and processes involved in the manufacture of SUPERSTAT. Defendant subsequently contracted for the manufacture of SUPERSTAT by a third party, and began selling the product.

On July 20, 1984, plaintiff sent the defendant a letter withdrawing “all offers and proposals” and demanding that defendant cease and desist from making, using, selling, or offering for sale any products involving plaintiff’s patents, trademarks and know-how. Exhibit 5 to the Sawyer Affidavit. Defendant responded in a letter dated July 27, 1984, asserting that the parties had entered into a joint venture agreement regarding the manufacture and marketing of SUPERSTAT, advising plaintiff that defendant intended to continue its marketing of SUPERSTAT, and formally *734 refusing to comply with the demands expressed in the July 20, 1984 letter. 2

In a letter to the Food & Drug Administration dated July 30, 1984, defendant stated:

Axiom Medical, Inc., as exclusive distributor and licensee under Interface Biomedical Laboratories Corp., for the manufacture of SUPERSTAT, is requesting permission to have a new additional manufacturing site for our SUPERSTAT Hemostatic Collagen Sponge.

Exhibit 6 to the Sawyer Affidavit. Plaintiffs attorney admitted at oral argument that defendant has not manufactured SUPERSTAT since it received plaintiffs July 20, 1984 letter, but states that he has reason to believe that defendant is seeking to manufacture SUPERSTAT outside the United States. Transcript of Oral Argument held on October 26, 1984, at 28-29.

Discussion

In determining the amenability of a foreign corporation to a suit in federal district court, the court must apply the standards for personal jurisdiction of the state in which it sits. Arrowsmith v. United Press International, 320 F.2d 219, 223 (2d Cir.1963); Round One Productions Inc. v. Greg Page Enterprises, Inc., 566 F.Supp. 934, 935-36 (E.D.N.Y.1982). Defendant has conceded that the assertion of jurisdiction in this ease would be constitutional. Therefore, the only question remaining for determination is whether “long-arm” jurisdiction can be asserted in this case under § 302 of the New York Civil Practice Law and Rules (“CPLR”). 3 The court must “determine the issue of personal jurisdiction separately for each cause of action asserted in [the plaintiffs] complaint.” Sterling Television Presentations v. Shintron, 454 F.Supp. 183 (S.D.N.Y.1978). Cf. Darby Drug Company, Inc. v. Zlotnick,

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Bluebook (online)
600 F. Supp. 731, 225 U.S.P.Q. (BNA) 146, 1985 U.S. Dist. LEXIS 23499, Counsel Stack Legal Research, https://law.counselstack.com/opinion/interface-biomedical-laboratories-corp-v-axiom-medical-inc-nyed-1985.