Poly-Med, Inc. v. Novus Scientific Pte. LTD

330 F. Supp. 3d 1067
CourtDistrict Court, D. South Carolina
DecidedAugust 31, 2018
DocketCivil Action No.: 8:15-cv-01964-JMC
StatusPublished

This text of 330 F. Supp. 3d 1067 (Poly-Med, Inc. v. Novus Scientific Pte. LTD) is published on Counsel Stack Legal Research, covering District Court, D. South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Poly-Med, Inc. v. Novus Scientific Pte. LTD, 330 F. Supp. 3d 1067 (D.S.C. 2018).

Opinion

J. Michelle Childs, United States District Judge

Plaintiff Poly-Med, Inc. ("Plaintiff") filed this action seeking monetary damages and equitable relief from Defendants Novus Scientific Pte. Ltd., Novus Scientific, Inc., and Novus Scientific AB (collectively "Defendants") as a result of alleged violations of the parties' business agreement. (ECF No. 181.)

This matter is before the court pursuant to Plaintiff's Motion for Summary Judgment (ECF No. 268). For the reasons set forth below, the court GRANTS IN PART and DENIES IN PART1 Plaintiff's Motion for Summary Judgment (ECF No. 268).

I. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

The court adopts its prior recitation of the facts from its April 24, 2018 Order and Opinion (ECF No. 252) granting Defendants' Motion for Partial Summary Judgment (ECF No. 209) on Plaintiff's hernia only and patent application breach *1070of contract claims. As brief background, in June 2005, Plaintiff and Radi Medical Systems AB ("Radi AB"), a Swedish corporation in Uppsala, Sweden, entered into a Sale of Materials and License Agreement (the "Agreement") for the development and manufacture of Absorbable Composite Meshes. (ECF No. 181 at 4-5.) Pursuant to this Agreement, Plaintiff manufactured and Defendants developed and sold TIGR®Matrix Surgical Mesh ("TIGR®Mesh"). (Id. at 9 ¶ 42-46.) In December 2008, Radi AB assigned the Agreement to Novus Scientific Pte. Ltd. or Novus Scientific, Inc., which own subsidiaries Novus Scientific AB and Novus Scientific, Inc. (Id. at ¶ 19-20).

Under Section 5 of the Agreement,

Unless [Defendants'] exclusive right terminates as provided in this Section 5, [Plaintiff] shall not sell, donate or otherwise transfer, or license or grant any rights in or to the Select Absorbable Composite Hernial Mesh (including but not limited to its chemical composition or manufacturing processes) to any other person or company for any purpose whatsoever without [Defendants'] prior written consent, the granting of which shall be in [Defendants'] sole and absolute discretion, and shall use its best efforts to keep the chemical composition, manufacturing processes, and [Plaintiff] Know-How employed to create, develop or manufacture such Select Absorbable Composite Meshes a proprietary trade secret (but this obligation shall not prevent [Plaintiff] from filing patent applications with respect to the Select Absorbable Composite Meshes).

(ECF No. 268-H at 71370.)2

On January 15, 2007, Dr. Torbjorn Mathisen, Senior Scientist of Novus Scientific AB,3 emailed Dr. Shalaby with several questions, including one about a suture product made using SMC-7, one of the two polymers used in TIGR®Mesh:

During our last visit[,] we discussed a suture made from the same material as used in the long[-]lasting multifilament in the surgical mesh (SMC-7). I think the name was Osseoprim and it was FDA registered according to your information. I have searched for the 510K filing on [the] FDA[']s homepage, but cannot find such a suture.4

*1071(ECF No. 268-EE at 39020.) That same day, Plaintiff responded to Dr. Mathisen's inquiries with a memo identifying the product Dr. Mathisen called "Osseoprim" as "Osteoprene" and informing him of the registration number of the 510K application. (ECF No. 268-FF at 39833.) Dr. Mathisen again inquired about Osteoprene on October 23, 2008, this time in reference to developing a similar suture product. (ECF No. 268-GG at 6157.) Then, on November 6, 2009, Dr. Mathisen, for a third time, inquired about Osteoprene in an email on which Magnusson and Dr. Roger Johansson5 were copied, but did not mention the polymers used in Osteoprene. (ECF No. 301-I at 1-2.)6

In addition to inquiring about Osteoprene, earlier in 2008, Dr. Mathisen, emailed Thomas Engstrom, Chief Executive Officer (CEO) of Novus Scientific Pte. Ltd.,7 and Magnusson, expressing a desire

to expand the current [A]greement so we can actually use [TIGR®Mesh] for applications other than hernias. As the current [A]greement is worded, we only have rights to the mesh for the hernia indication....Sat with [Dr.] Roger [Johansson] yesterday and reviewed the [A]greement. I will be writing down a few things that we would like to amend and for you and [Dr. Johansson] to look over before we take up these items with [Dr.] Shalaby.

(ECF No. 268-Z at 5509.) During his deposition on May 17, 2018, Dr. Mathisen stated he was not "completely familiar with the [A]greement," and that apart from himself and the Regulatory Department, he did not know if anyone else was aware that SMC-7 was being used in Osteoprene. (ECF 290-21 at 133.)

Two years later on April 20, 2010, during a meeting between Plaintiff and Defendants, Dr. Shalaby "mentioned that he [wa]s working on a short-term resorbable mesh for another company. He would not specify the polymer, the product or the polymer, other than to say that mesh would absorb in less than four weeks and was to be used to 'make a pouch.' " (ECF No. 268-HH at 65843.) Defendants speculated the pouch was for "a pacemaker/ICD pouch." (Id. )

On August 4, 2010, in an email to James Archetto, President of Novus Scientific, Inc., Thomas Engstrom, CEO of Novus Scientific Pte. Ltd., wrote,

[Dr. Shalaby] is obviously not aware of the fact that he has already breached the [Agreement] by using confidential info from us on the mesh design by filing his own patents on the same basic concept. [F]ortunately we soon can spin our own fibres - without any confidential info from [Dr. S]halaby or [S]hawn [Peniston]. We plan to test knit in Europe *1072by [the] end of the year. Hopefully we can have a knitting machine delivered first Q 2011 and after that it will not be long until we can tell [Dr. Shalaby] to F....k off.

(ECF No. 268-KK at 146872.)

On May 8, 2015, Plaintiff commenced the present action against Defendants. (ECF No. 1.) Plaintiff filed its Second Amended Complaint on June 10, 2017, alleging breach of contract, tortious interference with contract, and violation of the South Carolina Unfair Trade Practices Act ("SCUTPA"), S.C. Code Ann. §§ 39-5-10 to -560 (2016). (ECF No. 181 at 14-29.) On August 29, 2017, Defendants filed their Answer, Affirmative and Other Defenses to the Second Amended Complaint and Amended Counterclaims, alleging breach of contract, intentional interference with existing contractual relations, business defamation, violation of SCUPTA, and conversion. (ECF Nos. 197 at 52-66, 198 at 52-63.) On October 5, 2017, Defendants moved for partial summary judgment on Plaintiff's breach of contract claims (ECF No. 209), which the court granted on April 24, 2018, as to Plaintiff's "hernia only" and "patent application" breach of contract claims (ECF No.

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Bluebook (online)
330 F. Supp. 3d 1067, Counsel Stack Legal Research, https://law.counselstack.com/opinion/poly-med-inc-v-novus-scientific-pte-ltd-scd-2018.