United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER
matter comes before the Court upon Defendants' Motions
for Summary Judgment, filed August 25, 2017. (Docs. 178,
179). Both motions are now fully briefed. (Docs. 186 and
192). Also before the Court are the parties' competing
Motions to Strike certain portions of the summary judgment
record, filed October 13, 2017 and October 17, 2017. (Docs.
193 and 196). Having considered all Motions, relevant
undisputed evidence, and applicable law, the Court will grant
the Motions as to Counts III, IV, and V of the Complaint. The
Court will also grant summary judgment in Defendants'
favor on Plaintiff's claim for breach of confidentiality
agreement contained in Count I of the Complaint.
Background and Uncontested Facts
case arises from a contract dispute between Plaintiff, an
orthopedic surgeon, and Defendants, medical device
manufacturers. Around 1997, Plaintiff began developing
devices and techniques for use in orthopedic surgery,
including a flexible drill system. (Doc. 179) at 3; (Doc. 186)
at 16. On February 29, 2000, Plaintiff and Defendant Stryker
(individually, Defendant) executed a Confidentiality
Agreement “to begin discussions [about] a possible
business relationship” relating to the flexible drill
system technologies. (Doc. 178-3) at 1; (Doc. 179) at 3;
(Doc. 186) at 16. “The form such a relationship might
take, whether one of contract, joint venture, formation of a
business, investment, employment of [Plaintiff] by
[Defendant], acquisition or otherwise, ” was then
“unknown.” (Doc. 178-3) at 1.
order for such discussions to be meaningful, ”
Plaintiff agreed to “make available to [Defendant]
certain highly confidential information, ” including:
endoscopic technology; instruments; instrument designs;
procedures; modifications of procedures; inventions and
methods of treatment; … product design information;
… and other information about [Plaintiff's]
business and endoscopic inventions, designs, technology, and
procedures not known to the public.
(Confidential Information) (Doc. 178-3) at 1. Defendant
agreed not to disclose the Confidential Information to
protect Plaintiff “against … improper
Confidentiality Agreement further provides:
If [Defendant] … discovers, develops, makes, or
manufactures any improvements to the Confidential Information
(hereafter referred to as ‘Improvements'), all such
Improvements and all profits derived from the
commercialization in any form of such Improvements, shall
belong to and be the sole and exclusive property of
(Doc. 178-3) at 2.
2000 and 2007, the parties (or their predecessors/entities)
executed three additional confidentiality agreements. (Doc.
179) at 4; (Doc. 186) at 16. The subsequent agreements each
contain largely identical provisions as the February 2000,
Confidentiality Agreement. (Doc. 179) at 5; (Doc. 186) at 16. The
Confidentiality Agreements are governed by New Mexico law.
Id.; (Doc. 178-3) at 3.
2009, after nine years of intermittent discussions, Plaintiff
and Defendant executed an Assignment and Royalty Agreement
(Royalty Agreement). (Doc. 178-5); (Doc. 186-1) at 3.
assigned certain intellectual property rights to Defendant in
exchange for royalty payments. (Doc. 178-5) at 1, 3. The
Royalty Agreement provides:
[Plaintiff] agrees to assign and hereby sells, assigns,
transfers, and sets over unto [Defendant] … and
assigns all of its right, title and interest in and to any
Intellectual Property and commercial rights inventions
whatsoever that were heretofore or during the term of this
Agreement are conceived, made or developed by [Plaintiff] and
that relate to the design, engineering or marketing of the
(Doc. 178-5) at 2. Intellectual Property is a defined term
that includes Patent Rights, Know-How, and Other Rights.
(Doc. 178-5) at 1. Know-How includes “all inventions,
confidential or proprietary ideas, … technical
information or knowledge, … manufacturing methods
… and other trade secrets relating to the
Products.” Id. It also includes any rights
Plaintiff “hereafter conceives, makes, develops or
reduces to practice or in which [Plaintiff] … may
hereafter acquire any rights as such rights relate to
Products.” Id. The “Products” are
defined as “the Twin Loop FLEX System identified in
Exhibit A, attached hereto and made part
hereof.” (Doc. 178-5) at 2. Exhibit A identifies a
series of drills, guides, and anchors. (Doc. 178-5) at 7.
addition to the assignment, Plaintiff agreed to
“consult and cooperate fully … with respect to
potential … improvements to the Products.” (Doc.
178-5) at 3. “No additional compensation [would] be
paid” if Defendant accepted the improvements and
incorporated them into the Products. Id. Plaintiff
further agreed to assist Defendant in filing or prosecuting
patent applications on any Intellectual Property incorporated
in the Products. (Doc. 178-5) at 3. Finally, Plaintiff agreed
not to assist in the development of any product that would
compete “with the Products related to curved or
flexible implant delivery systems” or perform
consulting work “on the same or similar subject
matter” as the Royalty Agreement. Id.
in turn, agreed to “pay a one-time licensing fee [of
$273, 649.76] for exclusive rights to [Plaintiff's]
technology related to flexible drill technology.” (Doc.
178-5) at 3. The flexible drill technology included
“prior patent submissions, engineering drawings,
sketches, and prior disclosures.” Id.
Defendant also agreed to pay royalties (3% for
instrumentation and 1.5% for implants) on the net worldwide
sales of the Products. (Doc. 178-5) at 4.
Royalty Agreement contains an intergration clause and a
no-conflict clause. Section 13 provides: “This
Agreement … constitute[s] the entire agreement between
the Parties with respect to the subject
matter….” (Doc. 178-5) at 5. Section 5 further
provides: “[Plaintiff] represent[s] that there are no
agreements in effect … that conflict with the rights
granted by [Plaintiff] to [Defendant] hereunder or …
with [Plaintiff's] obligations hereunder.” (Doc.
178-5) at 3. The Royalty Agreement is governed by New Jersey
law. (Doc. 178-5) at 6.
paid royalties as agreed on the TwinLoop FLEX device
(TwinLoop). (Doc. 186) at 20. Defendant also obtained a
patent on “[a]n apparatus for inserting a suture anchor
into an internal anatomical site….” (Doc.
the Royalty Agreement was executed, Defendant developed a
line of devices called Iconix. (Doc. 186-1) at 6-7. Defendant
initially paid Plaintiff about $93, 000 in royalties on the
Iconix devices between late 2012 and 2013. (Doc. 186-1) at 6.
The parties also exchanged three draft amendments specifying
that the Iconix devices were covered by the Royalty
Agreement. (Doc. 186-1) at 48-58. The parties could not reach
an agreement, and Defendant ceased paying royalties. (Doc.
186-1) at 6.
currently market and sell devices called Iconix, VersiTomic,
and MicroFX. (Doc. 186-1) at 6-7. Those devices constitute
Improvements to the confidential flexible drill technology
disclosed pursuant to the Confidentiality Agreements. (Doc.
186-1) at 7; (Doc. 178-1) at 6. VersiTomic was first advertised,
marketed, and offered for commercial sale in March 2010.
(Doc. 179) at 10; (Doc. 186) at 16. Aside from the initial
$93, 000 or so, Defendant has not paid Plaintiff royalties on
the Iconix, VersiTomic, or MicroFX devices. (Doc. 186-1) at
ceased practicing medicine in 2010. (Doc. 186-1) at 1. He
currently works as a technical consultant for the trustee in
the NuOrtho Surgical bankruptcy proceedings. (Doc. 179) at 2;
(Doc. 186) at 16. Plaintiff formed NuOrtho in 2008 to develop
medical technologies and market products. (Doc. 186-1) at 7.
The bankruptcy docket reflects NuOrtho is not operating.
See Bankr. No. 15-10476. Plaintiff has not purchased
or sold the Iconix, VersiTomic, or MicroFX products. (Doc.
179) at 9; (Doc. 186) at 16.
12, 2016, Plaintiff filed his First Amended Complaint for
Breach of Contract (Complaint). (Doc. 34). Plaintiff contends
the Iconix, VersiTomic, and MicroFX devices constitute
“Improvements” as defined by the Confidentiality
Agreements. (Doc. 186-1) at 7. Hence, he claims ownership of
both devices and any profits therefrom. Id. If the
Court disagrees, Plaintiff alternatively argues he is
entitled to royalties on the Iconix, VersiTomic, and MicroFX
devices. (Doc. 186-1) at 6. Plaintiff also asserts
non-contract state law claims based on the theory that
Defendant misappropriated his intellectual property. (Doc.
instant Motions, Defendants seek summary judgment on all
claims. (Docs. 178, 179). With respect to the contact claims,
Defendants argue the Royalty Agreement superseded the
Confidentiality Agreements, and that no additional royalties
are due on the new devices. (Doc. 178). Defendants also seek
summary judgment on Plaintiff's non-contract claims for:
(1) unfair trade practices; (2) misappropriation of trade
secrets; (3) unfair competition; (4) quantum meruit; and (5)
unjust enrichment. (Doc. 179). Plaintiff opposes the summary
judgment motions in their entirety. (Doc. 186).