Rhodes Technologies v. Copley Pharmaceuticals

22 Mass. L. Rptr. 355
CourtMassachusetts Superior Court
DecidedApril 4, 2007
DocketNo. 041717BLS1
StatusPublished

This text of 22 Mass. L. Rptr. 355 (Rhodes Technologies v. Copley Pharmaceuticals) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rhodes Technologies v. Copley Pharmaceuticals, 22 Mass. L. Rptr. 355 (Mass. Ct. App. 2007).

Opinion

van Gestel, Allan, J.

This matter is before the Court on cross motions for summary judgment. The plaintiffs group, referred to here as “Rhodes/Napp,”1 seeks partial summary judgment through Plaintiffs’ Motion for Summary Judgment of Liability on Counts I and II. Paper #60. The defendants, referred to here as “Copley/Teva,”2 have cross moved for summary judgment through Defendants’ Cross Motion for Summary Judgment. Paper #62.

BACKGROUND

Rhodes/Napp has brought a relatively simple three-count complaint. Basically, Rhodes/Napp claims a breach of contract. It has added two trailer counts of breach of the implied covenant of fair dealing in connection with the contract and for violation of G.L.c. 93A in connection with the contract.

Copley/Teva has responded with a counterclaim for breach of the same contract and for disgorgement or restitution for unjust enrichment with regard to payments it made under the contract.

[356]*356The background between Rhodes/Napp and Copley/Teva relates to the marketing of a chemical compound called nabumetone that was developed for the treatment of inflammation. In the background was patent infringement litigation with SmithKline Bee-cham pic and GlaxoSmithKline pic (collectively “SKB”).

Effective January 1, 2000, Rhodes/Napp and Copley/Teva entered into a settlement agreement which is the agreement being sued on here. The agreement provides, among other things, for the termination of a nabumetone supply agreement between Rhodes/Napp and Copley/Teva, a payment of $15,500,000 from Copley/Teva to Rhodes/Napp, and a grant of certain rights from Copley/Teva to Rhodes/Napp concerning attorneys fees in the patent litigation with SKB. In addition, Copley/Teva granted Rhodes/Napp the right to share equally in the recovery of any damages award or settlement from a possible future suit against SKB.

The agreement included the following language which controls the present dispute:

In the event that the Copley Group, following final disposition, settlement or resolution of the Patent Action . . . institutes a lawsuit against SmithKline Beecham Corp. or Beecham Group pic (collectively “SKB”) alleging damages arising from fraudulent conduct in connection with the granting or defense of United States Patent No. 4,420,639 (“ ‘639 Patent”) (such action the “Fraud Action”), the Copley Group and Rhodes shall share equally in the proceeds of any damages award or settlement paid by SKB to the Copley Group and which directly results from the Fraud Action . . .

On August 14, 2001, the United States District Court entered a Memorandum of Findings of Fact and Conclusions of Law in the Patent Action. That Court held that the ‘639 Patent was invalid as anticipated by prior art and unenforceable because of SKB’s inequitable conduct before the United States Patent and Trademark Office (the “PTO”). The District Court then entered judgment in favor of Copley/Teva on August 15,2001.

On August 17, 2001, SKB filed a Notice of Appeal from the District Court’s judgment.

On December 17, 2001, Copley/Teva sued SKB, Beecham Group pic, and GlaxoSmithKline, pic. In this suit it was alleged that SKB had committed fraud on the PTO in connection with its procurement of the ‘639 Patent, and that its procurement and defense of the ‘639 Patent constituted a violation of the Sherman Act and contravened other state statutory and common-law requirements.

On October 23, 2002, the United States Court of Appeals for the Federal Circuit issued its opinion and mandate in the Patent Action. It affirmed the decision of the District Court with respect to the invalidity of the ‘639 Patent. As a result, the Appeals Court did not reach the issue of unenforceability.

On April 30, 2003, Copley/Teva and SKB entered into a settlement agreement relative to nabumetone, the ‘639 Patent, the Patent Action, and the Fraud Action. Under that settlement, Copley/Teva obtained consideration of (i) $3,200,000 in cash for attorneys fees incurred in the Patent Action and (ii) the North American rights to a separate pharmaceutical business, the drug “Purinethol.” In a press release dated July 29, 2003, Copley/Teva reported a “$100 million gain, before tax, resulting from the receipt of the North American rights to Purinethol from GlaxoSmithKline as a litigation settlement between Teva and GSK related to Nabumetone.”

Rhodes/Napp, in this suit, claims a 50% share in the Copley/Teva settlement with GlaxoSmithKline. Count I of the complaint is in breach of contract for failing “to provide plaintiffs with a portion of the recovery in the Antitrust Action to which plaintiffs are contractually entitled.” Complaint, para. 36. Count II of the complaint is for breach of the covenant of good faith and fair dealing because the “defendants have failed to share the antitrust recovery from SKB with plaintiffs.” Complaint, para. 39.

Count III of the complaint asserts violations of G.L.c. 93A, secs. 2 and 11 “by committing unfair or deceptive acts of trade or commerce by way of the conduct herein alleged.” Complaint, para. 43. Count III is not involved in the plaintiffs’ motion but is challenged in the defendants’ motion.

Copley/Teva has paid Rhodes/Napp $3,190,391.57, which it claims is more than should be due under the agreement.

Copley/Teva, in its counterclaim, alleges that it has overpaid Rhodes/Napp under the agreement and seeks to have Rhodes/Napp disgorge some, or all, of what it received from Copley/Teva.

DISCUSSION

Summary judgment is granted where, viewing the evidence in the light most favorable to the non-moving party, there are no issues of genuine material fact, and the moving party is entitled to judgment as a matter of law. Cabot Corporation v. AVX Corporation, 448 Mass. 629, 636-37 (2007); Hakim v. Massachusetts Insurers’ Insolvency Fund, 424 Mass. 275, 281 (1997); Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991); Cassesso v. Commissioner of Correction, 390 Mass. 419, 422 (1983); Mass.R.Civ.P. 56(c). “[T]he moving party must establish that there are no genuine issues of material fact, and that the non-moving party has no reasonable expectation of proving an essential element of its case.” Miller v. Mooney, 431 Mass. 57, 60 (2000). See also Pederson v. Time, Inc., 404 Mass. 14, 17 (1989).

Here, of course, both sides are moving parties, a fact that may force the Court into drawing inferences [357]*357and assessing burdens differently depending upon which motion is in play.

Both sides agree that a key element in this case is the meaning of the phrase “final disposition ... of the Patent Action” as appearing in Article 9 of the settlement agreement set forth above. Both sides also argue with vigor that the phrase is unambiguous. That said, however, each side proffers a different meaning to the phrase; a meaning that suits that side for which the entity is advocating.

Khodes/Napp says “final disposition” means “final disposition of the Patent Action pending in the United States District Court for the District of Massachusetts [which] occurred in August 2001 when Judge Lindsay found the ‘639 Patent invalid and unenforceable and entered final judgment for Copley and Teva.” See Mem. in Supp. of Plaintiffs’ Mtn., at p. 7.

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

Related

Pederson v. Time, Inc.
532 N.E.2d 1211 (Massachusetts Supreme Judicial Court, 1989)
Brooksbank v. Epstein
363 N.E.2d 291 (Massachusetts Appeals Court, 1977)
Kourouvacilis v. General Motors Corp.
575 N.E.2d 734 (Massachusetts Supreme Judicial Court, 1991)
Cassesso v. Commissioner of Correction
456 N.E.2d 1123 (Massachusetts Supreme Judicial Court, 1983)
Hakim v. Massachusetts Insurers' Insolvency Fund
424 Mass. 275 (Massachusetts Supreme Judicial Court, 1997)
Miller v. Mooney
431 Mass. 57 (Massachusetts Supreme Judicial Court, 2000)
Rogaris v. Albert
730 N.E.2d 869 (Massachusetts Supreme Judicial Court, 2000)
Seaco Insurance v. Barbosa
435 Mass. 772 (Massachusetts Supreme Judicial Court, 2002)
Kuwaiti Danish Computer Co. v. Digital Equipment Corp.
781 N.E.2d 787 (Massachusetts Supreme Judicial Court, 2003)
Cabot Corp. v. AVX Corp.
863 N.E.2d 503 (Massachusetts Supreme Judicial Court, 2007)
Kobayashi v. Orion Ventures, Inc.
678 N.E.2d 180 (Massachusetts Appeals Court, 1997)
Suffolk Construction Co. v. Lanco Scaffolding Co.
716 N.E.2d 130 (Massachusetts Appeals Court, 1999)
Massachusetts Municipal Wholesale Electric Co. v. City of Springfield
726 N.E.2d 973 (Massachusetts Appeals Court, 2000)
President & Fellows of Harvard College v. PECO Energy Co.
787 N.E.2d 595 (Massachusetts Appeals Court, 2003)
Prozinski v. Northeast Real Estate Services, LLC
797 N.E.2d 415 (Massachusetts Appeals Court, 2003)

Cite This Page — Counsel Stack

Bluebook (online)
22 Mass. L. Rptr. 355, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rhodes-technologies-v-copley-pharmaceuticals-masssuperct-2007.