Mahavisno v. Compendia Bioscience, Inc.

164 F. Supp. 3d 964, 2016 WL 716866, 2016 U.S. Dist. LEXIS 21588
CourtDistrict Court, E.D. Michigan
DecidedFebruary 23, 2016
DocketCase No. 2:13-CV-12207-SFC-MAR
StatusPublished
Cited by3 cases

This text of 164 F. Supp. 3d 964 (Mahavisno v. Compendia Bioscience, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mahavisno v. Compendia Bioscience, Inc., 164 F. Supp. 3d 964, 2016 WL 716866, 2016 U.S. Dist. LEXIS 21588 (E.D. Mich. 2016).

Opinion

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ COMPENDIA BIOSCIENCE, INC.’S ' AND LIFE TECHNOLOGY CORPORATION’S MOTIONS FOR SUMMARY JUDGMENT (Doc. ##89, 90)

Sean F. Cox, United States District Judge

I. Introduction

This is a case alleging copyright infringement and breach of contract. Before the Court are Defendant Compendia Bios-cience, Inc.’s Motion for Summary Judgment or Partial Summary Judgment (Doc. # 89) and Defendant Life Technologies Corporation’s Motion for Summary Judgment or Partial Summary Judgment (Doc. #90). The motions have been fully briefed by the parties, and the Court heard oral argument.

For the reasons set forth below, the Court shall GRANT IN PART and DENY IN PART Defendants’ motions for summary judgment or partial summary judgment.

II. Facts and Procedural Background

In 2002, Plaintiff Vasudeva Mahavisno was a student at the University of Michigan (“UM”) working as a computer consultant in the Department of Pathology, under the direction of Professor Arul Chinnaiyan, M.D., Ph.D. (“Chinnaiyan”). (Am. Compl. at ¶¶ 19, 21.)

During Plaintiffs employment with UM, Dr. Chinnaiyan and a Ph.D. candidate, Daniel Rhodes (“Rhodes”), together conceived an idea for a computer program that would allow cancer researchers to process and analyze data over the internet related to cancer genes. (Id. at ¶ 21.) Chin-naiyan and Rhodes approached Plaintiff about writing the source code for their computer software product, which was to be called “Oneomine.” (Id. at ¶23.) Plaintiff began writing software code in 2002 and finished his first version, entitled On-comine 2.0, in November 2003. (Id. at ¶ 26.)

After he graduated in 2003, Plaintiff continued to work at UM as a full-time employee. (Id. at ¶ 25.) Plaintiff wrote additional code for, and made enhancements to, the Oneomine 2.0 software, which even[966]*966tually culminated in the release of Onco-mine 3.0 in 2005. (Id. at ¶¶ 28, 29.) Because Plaintiff was an employee of UM, and subject to an employment agreement, UM owned all intellectual property rights in Oncomine versions 2.0 and 3.0.

In 2006, Chinnaiyan and Rhodes formed a company named Compendia Bioscience, Inc. to more fully commercialize their research and the Oncomine academic product that they had developed at UM. {Id. at ¶ 30.) Compendia and UM then entered into a licensing agreement, whereby UM granted Compendia an exclusive license to use, market, distribute, and exploit its copyright and other rights in Oncomine 3.0. {Id. at ¶¶ 31-32.) Several amendments were made to this licensing agreement over ,the course of the parties’ professional relationship. {Id. at ¶¶ 33-34; Id. at Exs. E and F.)

Plaintiff was never an employee of Com-pendia. {Id. at ¶¶44, 50.) Nevertheless, from January 2006 until April 2007, Plaintiff states that he “developed and created software upgrades and improvements for the Oncomine software for Compendia and at Compendia’s request.” {Id. at ¶ 35; Pl.’s CSF ¶ 20, Doc. #109-1.) Plaintiff alleges that his work was done separate and distinct from his employment at UM. {Id. at ¶ 54.) In fact, according to Plaintiff, Com-pendia was not allowed to use UM employees to commercialize Oncomine as Com-pendia was now a private company.

Plaintiff alleges and testified in his deposition that he wrote the additional code because “Compendia made various promises to [him] regarding how Compendia would compensate him for usé of his work including a promise that he would be receive an ownership interest in Compendia commensurate with his contributions to the enterprise_” {Id. at ¶ 46.) Plaintiff further alleges that “these promises include the following: the promise of a salary; the promise of a bonus; the promise of stock options; and the promise of a percentage interest in Compendia.” {Id. at ¶ 89; Pl.’s Dep. 537:13-17, Doc. #109-19.) Compendia was unable to pay a salary because there was a limitation with Plaintiffs work visa, but Compendia promised to modify Plaintiffs visa. (PL’s Dep. 53-54:15-19, Doc. # 109-7.) According to Plaintiff, Compendia encouraged Plaintiff to keep writing the software and in return Compendia would give him an ownership interest in Compendia. {Id.; see also pL’s dep. 373:9-25, doc. 109-19.) For example, Plaintiff testified as follows at his deposition:

I believed that I was part of a startup and an equal share and ownership of it. That was always cloudy because of my visa status. So I felt misled by Daniel Rhodes and Aral Chinnaiyan, because they kept making promises saying, Vasu, you’ve created something really good here, continue working on it, because of your visa status it’s a little complicated at this point, don’t worry about all the legal stuff, we will take care of it, but continue working. That’s the impression I got and that was the— that was what I was basing my work on. That, number one, I was working for Compendia, not as just an employee but as an owner, as a stakeholder building a software that is going to benefit the company that I’m going to be part of.

(PL’s Dep. 373:9-25, Doc. # 109-19.)

In spite of promises of an ownership interest, stock options, a salary, and a bonus, Plaintiff alleges that he never received any compensation from Compendia for use of his computer source code. {Id. at ¶ 43.) Plaintiff never entered into a written agreement with Compendia regarding the compensation or ownership of intellectual property for his work on the Oncomine software. (Id. at ¶ 52-53.)

[967]*967On or about April 2007, Plaintiff stopped writing software code for Compendia. (Pl.’s CSF ¶ 17, Doc. 109-1.) Plaintiff testified that he stopped working for Compendia because Compendia did not live up to its promises to pay him a salary and to give him the position he wanted at Compendia. (Pl.’s Dep 498:1-11, Doc. #109-19.) In fact, Plaintiff never received any compensation from Compendia. (Id.) Although he did not receive the promised salary, Plaintiff still expected Compendia to keep their promise of giving him an ownership interest in Compendia if the company was ever sold. (Id. at 498:15-22, 529:8-17, and 532:5-8.)

On or about September 21, 2012, Com-pendia’s shareholders, including UM, consented to “the proposed acquisition of Compendia by Life” Technologies Corporation (“Life Technologies” or “Life”). (Am. Compl. ¶ 59 and Ex. I.)

Shortly before the purchase of Compen-dia was finalized by Life Technologies, on September 24, 2012, Rhodes, on behalf of Compendia, contacted Plaintiff and offered to pay him $25,000 in exchange for Plaintiffs irrevocable assignment of “any and all intellectual property rights” in the On-comine Software. (Id. at ¶ 60; September 24, 2012 Letter, id. at Ex. J.) That offer letter, entitled “Payment of Appreciation Bonus upon Change in Control,” refers to Plaintiff as an “independent contractor.” (Id.) Plaintiff refused Compendia’s offer of $25,000 for his intellectual property rights. (Id. at ¶ 60.) Plaintiff felt he was entitled to more money based on the promises that Compendia had made to him.

Defendant Life Technologies Corporation finalized its purchase of Compendia in October 2012, when Compendia became a wholly owned subsidiary of Life Technologies. (Pl.’s CSF ¶ 6, Doc. #109-1.)

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164 F. Supp. 3d 964, 2016 WL 716866, 2016 U.S. Dist. LEXIS 21588, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mahavisno-v-compendia-bioscience-inc-mied-2016.