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AngleFix, LLC v. Wright Medical Technology, Inc.

United States District Court, W.D. Tennessee, Western Division

November 15, 2016

ANGLEFIX TECH, LLC, Plaintiff,
v.
WRIGHT MEDICAL TECHNOLOGY, Defendant.

          ORDER GRANTING PLAINTIFF'S MOTION TO INTERVENE, DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT FOR LACK OF STANDING, AND LIFTING STAY

          JON P. McCALLA UNITED STATES DISTRICT COURT JUDGE

         Before the Court is the Joint Motion of Plaintiff Anglefix and Third Party Intervener The University of North Carolina to Add The University of North Carolina as Co-Plaintiff in this Matter, filed September 15, 2016. (ECF No. 176.) Defendant Wright Medical Technology (“Wright”) opposes the motion, asserting The University of North Carolina (“UNC”)'s Waiver of Claims (ECF No. 171-1) conveyed a license to the patent-in-suit. (ECF No. 178.) Also before the Court is Defendant's Motion for Summary Judgment for Lack of Standing. (ECF No. 130.)

         For the reasons stated below, the Court GRANTS Plaintiff AngleFix Tech, LLC (“Anglefix”) and UNC's motion to join UNC as a co-plaintiff, DENIES Defendant's Motion for Summary Judgment for Lack of Standing, and lifts the June 27, 2016 stay in the case (ECF No. 169).

         I. BACKGROUND

         On April 25, 2016, Defendant filed a Motion for Summary Judgment for Lack of Standing. (ECF No. 130.) AngleFix responded in opposition on May 11, 2016. (ECF No. 146.) Defendant filed a reply brief on May 31, 2016. (ECF No. 153.) The Court held a motion hearing on June 21, 2016. (Min. Entry, ECF No. 164.)

         On June 27, 2016, the Court granted in-part and denied in-part Defendant's Motion for Summary Judgment for Lack of Standing, determining Anglefix had statutory standing but lacked prudential standing. (ECF No. 169.) To cure prudential standing, the Court ordered AngleFix to join UNC as a co-plaintiff by July 27, 2016, and stayed the case until such joinder was made. (Id. at 20.)

         On July 25, 2016, AngleFix filed a motion, not to join UNC as a co-plaintiff, but to use a Waiver of Claims (hereinafter “the Waiver” or “UNC's Waiver”) from UNC as a substitute for joinder. (ECF No. 171.) Defendant responded in opposition on July 27, 2016. (ECF No. 172.)

         On August 2, 2016, the Court denied AngleFix's motion to accept UNC's Waiver in place of the joinder of UNC as a party in the instant litigation. (ECF No. 175.) The Court ordered AngleFix to join UNC by September 16, 2016, or the Court would dismiss the action with prejudice. (Id. at 4.) On September 15, 2016, AngleFix filed the instant motion to join UNC as a co-plaintiff. (ECF No. 176.) Attached to that motion was UNC's Submission of Authorization to Join as Co-Plaintiff and Appointment of Counsel, wherein UNC also “rescind[ed] it [sic] previous Waiver of Claims Against Wright Medical.” (ECF No. 176-1.) Defendant opposed the motion on October 5, 2016, asserting that UNC could not rescind its Waiver, asserting it provided a license to Defendant under the contested patent, U.S. Patent No. 6, 955, 677 (“the '677 Patent”). (ECF No. 180.) Anglefix filed a reply on October 14, 2016 (ECF No. 183), and Defendant filed a sur-reply on October 18, 2016 (ECF No. 186). On November 3, 2016, the Court held a telephonic motion hearing. (Min. Entry, ECF No. 189.)

         III. LEGAL STANDARD

         The law has numerous nuanced terms by which a party may relinquish its rights, including by release, waiver, or covenant.[1] A party may even relinquish its rights by multiple means.[2] Regardless of the means, however, courts assess the relinquished rights pursuant to the general principles of contract law.[3] Unless the contract contains a choice-of-law provision, a contract is generally subject to the law of the state in which it was formed.[4] This is equally true in the patent context. See, e.g., Already v. Nike, 133 S.Ct. 721 (2013); Wi-LAN USA, Inc. v. Ericsson, Inc., 574 F.App'x 931, 937 (Fed. Cir. 2014)(interpreting New York contract law to a non-assert provision in patent case); Transcore, LP v. Elec. Transaction Consultants Corp., No. CIV.A.3:05-CV-2316-K, 2008 WL 2152027, at *4 (N.D. Tex. May 22, 2008), aff'd, 563 F.3d 1271 (Fed. Cir. 2009) (“examin[ing] the language of the Covenant Not to Sue to determine whether, under applicable contract interpretation principles, it is a conditional license that precludes patent exhaustion.”).

         In the instant case, UNC's Waiver, formed in Tennessee and lacking a choice-of-law provision, is subject to Tennessee contract law.

         Under contract law in Tennessee, an enforceable contract must have an offer, acceptance, and consideration. Generally, an offer is “[t]he act . . . of presenting something for acceptance.” OFFER, Black's Law Dictionary (10th ed. 2014). Offers commonly express how the offeror intends to be bound, and may require a particular type of acceptance. An offer may also be conditional, such that the contract will not take effect until some contingent prerequisite has been satisfied. Safeco Ins. Co. of America v. City of White House, Tenn., 36 F.3d 540, 30 Fed. R. Serv. 3d 598, 1994 FED App. 0345P (6th Cir. 1994) (citing Buchanan v. Johnson, 595 S.W.2d 827 (Tenn. Ct. App. 1979); see also Demoville & Co. v. Davidson Cty., 87 Tenn. 214, 10 S.W. 353, 355 (1889) (finding “the release is conditional upon the existence of certain facts, or upon acceptance of certain terms. . .”). Therefore, irrespective of clear acceptance, the contract is not enforceable until certain facts exist. Real Estate Mgmt., Inc. v. Giles, 41 Tenn.App. 347, 353, 293 S.W.2d 596, 599 (1956)(“A conditional contract is a contract whose very existence and performance depends upon the happening of some contingency or condition expressly stated therein. . .”). To ascertain an offer's terms, whether conditional or otherwise, Tennessee law mandates that courts construe an offer by its clear and unambiguous meaning. Sutton v. First Nat. Bank of Crossville, 620 S.W.2d 526 (Tenn. Ct. App. 1981).

         When a contract is unambiguous, the court's construction is restricted to the four corners of the contract.[5] The court must also consider the entire contract “in determining the meaning of any or all of its parts.” Adkins v. Bluegrass Estates, Inc., 360 S.W.3d 404, 411 (Tenn. Ct. App. 2011) (citing Aetna Cas. & Surety Co. v. Woods, 565 S.W.2d 861, 864 (Tenn. 1978)). Each provision of the contract must be construed “in harmony with each other . . . to promote consistency and to avoid repugnancy between the various contract provisions. . . .” Teter v. Republic Parking Systems, Inc., 181 S.W.3d 330, 342 (Tenn. 2005)(quoting Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95 (Tenn.1999)).

         III. ...


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