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`IN THE CIRCUIT COURT FOR MONTGOMERY COUNTY, MARYLAND
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`LEWIS J. RUBIN,
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`Plaintiff
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`*3%
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`*
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`UNITED THERAPEUTICS CORPORATION *
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`v.
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`ET. AL,
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`Defendants.
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`Case
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`.
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`men,
`SEP I 4 20,?
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`*
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`*a
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`*
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`OPINION OF COURT
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`This matter came before the Court on August 29, 2017, for a hearing on Defendants“
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`Motion to Dismiss, or in the Alternative, for Summary Judgment (DE#1?), the Plaintist
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`Opposition to Defendants’ Motion to Dismiss or, in the Alternative, for Summary Judgment
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`(DE#47), and the Defendants” Reply to Plaintiffs Opposition to Defendants’ Motion to
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`Dismiss or, in the Alternative, for Summary Judgment (DE-#53). Counsel appeared on behalf of
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`both Plaintiff and Defendants. The Court reviewed submitted memoranda supporting each side,
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`heard both parties in argument, and the matter was taken under advisement. Post-hearing
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`memoranda were filed, to wit, Defendants’ Supplemental Memorandum in Support of Motion
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`to Dismiss or, in the Alternative, for Summary Judgment (DE#60) and Plaintiff's Reply in
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`Further Opposition to Defendant’s Motion to Dismiss or,
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`in the Alternative, for Summary
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`Judgment (DE#61). This Opinion sets forth the Court’s ruling, as effectuated by the attached
`Order.
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`Factual Background
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`Plaintiff, Dr. Lewis Rubin, filed a Complaint and Demand for Jury Trial (DE#1) on
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`April 3, 2017. Plaintiff alleges that Defendants, United Therapeutic Corporation (UTC) and
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`Lung Biotechnology, Inc. (LB), committed constructive fraud, negligent misrepresentation, and
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`breach of contract when Defendants caused Plaintiff to assign certain patent rights to
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`Defendants that were not supposed to be assigned. Plaintiff requests that the Court reform the
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`patent assignments to reflect the appropriate scope of the patent rights.
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`Plaintiff is a Doctor spccializing in pulmonary arterial hypertension (PAH). Defendant
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`UTC is a corporation involved with the development of PAH treatments. Defendant LB is a
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`subsidiary of Defendant UTC. Plaintiff performed consulting work with Defendants from
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`,MontgomegvCountyMd.
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`t3OO
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`523‘
`as
`“‘3‘—
`SEL...—
`mo
`in:h
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`20
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`ENTERED
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`UNITED THERAPEUTICS, EX. 2203
`WATSON LABORATORIES v. UNITED THERAPEUTICS, |PR2017-01621
`Page 1 of 29
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`Euraaao
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`SEF’13”Elli?
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`ClarkottheOtrcmtCourt
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`Montgomery
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`County,Md.
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`approximately 1998 until 2001. Plaintiff took a brief hiatus from consulting in 2001, but
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`resumed his consultancy work with Defendants shortly after until mid-2016. Ln mid-September
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`2003, Plaintiff and Defendant UTC’s CEO, Martine Rothblatt, met at a luncheon to discuss a
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`potential new method of treating PAH. Plaintiff and Rothblatt agreed to develop the new
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`treatment method.
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`On September 23, 2003, Plaintiff executed a Services Agreement (2003 Services
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`Agreement) with Defendant LB encompassing a plan to develop the new PAH treatment
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`method. Pursuant to the 2003 Services Agreement, Plaintiff was to be paid $10,000.00 a month
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`for services performed Under the 2003 Services Agreement. Further, pursuant to Section 9 of
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`the 2003 Services Agreement, Plaintiff agreed to “promptly disclose, grant and assign
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`[Defendant LB] all right, title and interest in and to any patentable or unpatentable inventions,
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`disc0veries, and ideas which are made or conceived in whole or in part by or on behalf of
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`[Plaintiff] in the course of or as a result of services performed under this agreement[.]”
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`The new treatment method was eventually developed and later became the basis of two
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`patent applications, and ultimately patents. One provisional patent application was filed in
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`2006, and the other provisional patent application was filed in 200?. These applications
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`eventually issued as patents (the m507 and c240 Patents”). After the 2006 Provisional Patent
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`Application was tiled, Plaintiff executed an assignment, as required under the 2003 Services
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`Agreement. The 2006 Assigmnent assigned all of Plaintiffs rights in the 2006 provisional
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`patent application over to Defendants. After the 2007 Provisional Patent Application was filed,
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`Plaintiff signed both a Declaration of Invention and a 2007 Patent Assignment, assigning
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`Plaintiff‘s rights in the 2007 Provisional Patent Application over to Defendants as directed by
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`the 2003 Services Agreement.
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`Plaintiff challenges the scope of the 2006 and 2007 Patent Assignments, alleging that
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`he, pursuant to the 2003 Services Agreement, should have retained a joint ownership interest in
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`the treatment methods contained in the ‘50? and ‘240 patents.1
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`and 2007 Patent Assignments. It is worth noting, however, that the most recent Consulting
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`in his complaint, refers to subsequent Consulting Agreements that he executed
`1 Plaintiff,
`between 2008 and 2014 with Defendants that superseded the 2003 Services Agreement. The
`Court does not see how these later Consulting Agreements affect the challenged Patent 2006
`and 2007 Patent Assignments, as these Consulting Agreements were executed after the 2006
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`UNITED THERAPEUTICS, EX. 2203
`WATSON LABORATORIES v. UNITED THERAPEUTICS, lPR2017-01621
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`Page 2 of 29
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`SEP1320”ClerkofthecircuitCourtMontgomeryCounty,Md.
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`ENTERED
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`Discussion
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`Defendants’ Motion to Dismiss, or in the Altemative, for Summary Judgment (DE#17)
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`argues that Plaintiff’s claims are time-barred by the statute of limitations Defendants’ Motion
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`to Dismiss also argues that Plaintiff s Complaint fails to state claims upon which relief can be
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`granted. Lastly, Defendants’ Motion to Dismiss argues that summary judgment is appropriate.
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`Plaintiff opposes all of Defendants’ arguments. The Court agrees with Defendants that
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`Plaintiff 5 claims are barred by the statute of limitations, and, alternatively, that Plaintiff fails to
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`state claims upon which relief can be granted.
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`In light of these rulings, the Court does not
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`reach the summary judgment issue.
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`1.
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`Standard of Review
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`When reviewing a motion to dismiss a complaint for failure to state a claim upon which
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`relief can be granted, the Court must “assume the truth of all well-pleaded facts and allegations
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`in the complaint, as well as all inferences that can reasonably be drawn from them[.]” Lloyd 1:.
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`Gen. Motors Corp, 397 Md. 108, 121 (2007) (citation omitted). The Court must order
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`dismissal “only if the allegations and permissible inferences, if true, would not afford relief to
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`the plaintiff, i.e., the allegations do not state a cause of action.” Id. (citations omitted). The
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`Court “must assume the truth of all relevant and material facts that are well pleaded and all
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`inferences which can be reasonably drawn from those pleadings[,]” and more “conclusory
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`charges that are not factual allegations may not he considered.” Id.
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`(citations omitted).-
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`Moreover, the Court must “View all well—pleaded facts and the inferences from those facts in a
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`light most favorable to the plaintiff.” Id. at 122.
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`1].
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`Plaintiff" 3 Claims are Time-Barred by the Statute of Limitations
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`Defendant argues that all of Plaintiff’s claims are time-barred by the statute of
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`limitations because Plaintiff was on inquiry notice that Defendants were asserting all rights to
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`the patents when Plaintiff signed the 2006 and 2007 Patent Assignments. Plaintiff counters by
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`claiming that he did not know that Defendants were asserting all rights under the 2006 and
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`2007 Patent Assignments until the year 2016, and therefore, did not know of any wrongdoing
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`by Defendants until 2016.
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`Agreement, which was executed in 2014, contains similar language to Section 9 in the 2003
`Services Agreement, and further states that Maryland Law governs diSputes.
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`DJ
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`UNITED THERAPEUTICS, EX. 2203
`WATSON LABORATORIES v. UNITED THERAPEUTECS, lPR2017-01621
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`Page 3 of 29
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`MontgomeryCounty.Md.
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`SEP132017_ClarkattheUtrouitCourt
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`ENTERED
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`The Court finds that Plaintiff 5 claims are time-barred under the statute of limitations. In
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`Maryland, a “civil action at law shall be filed within three years from the date it accrues unless
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`another provision of the Code provides a different period of time within which an action shall
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`be commenced.” Md. Code, Crs. cf: Jud. Pros. Art, § 5-101. The statute of limitations accrual
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`date can be extended by the “discovery rule,” which will “toll the accrual of the limitations
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`period until the time the plaintiff discovers, or through the exercise of due diligence, should
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`have discovered, the injury.” thdeshei‘m v. Larocca, 443 Md. 312, 326—27 (2015) (citations
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`omitted). Under the discovery rule, a plaintiff must have actual notice of “the nature and cause
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`of his or her injury" before a cause of action can accrue. Id at 32?. Actual notice is either
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`express or implied. Id. (citations omitted). At issue in this case is implied notice. Implied
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`notice, or inquiry notice, is notice implied from “knowledge of circumstances which ought to
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`have put a person of ordinary prudence on inquiry (thus, charging the individual) with notice of
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`all facts which such an investigation would in all probability have disclosed if it had been
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`properly pursued.== Id.
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`in the first paragraph, “each
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`Here, Plaintist cause of action had accrued, at least, by 200? when he signed the 2007
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`Patent Assignment. The 2006 Patent Assignment
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`states
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`undersigned inventor .
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`.
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`. assigns [Defendant UTC] the .
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`. full and exclusive right, title, and
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`interest .
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`.
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`. relating to [the new treatment method].” Plaintiff s signature rests on the fourth
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`page of the 2006 Patent Assignment. Further, the 2007’ Patent Assignment contains identical
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`language assigning all rights in the new treatment method to Defendant UTC. Again, Plaintiff
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`signed the 2007 Patent Assignment. Moreover, Plaintiff also signed the 2007' Patent
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`Declaration, which stated that “I have reviewed and understand the contents of the above
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`identified specification.” The specification referred to was the 2007 Provisional Patent
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`Application, which was attached to the 2007 Patent Declaration. The 2007 Patent Declaration
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`also stated, “I believe that
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`the above Specification contains a written description of the
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`invention, and of the manner and process of making and using it, in such full, clear, concise,
`3.
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`and exact terms .
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`The plain language of the various documents Plaintiff signed indicated both that
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`Plaintiff had access to the scope of the Patent Assignments and that Plaintiff was assigning all
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`rights over to Defendants. Plaintiff, therefore, was put on inquiry notice that he was assigning
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`all his rights in the patents over to Defendant UTC at the latest in 2007. Plaintiff claims that
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`both the 2003 Services Agreement and the 2006 and 2007 Patent Assignments reserved some
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`UNITED THERAPEUTICS, EX. 2203
`WATSON LABORATORIES v. UNITED THERAPEUTECS, lPR2017-01621
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`Page 4 of 29
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`patent rights to Plaintiff. 2 The plain language, however,
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`in the 2006 and 2007 Patent
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`Assignments and in the 2007 Patent Declaration indicate that Plaintiff was assigning all rights
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`over to Defendant UTC. Plaintiff was on notice that the scope of the 2006 and 2003’ Patent
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`Assignments might be erroneous, and a reasonable inquiry would have revealed any potential
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`causes of action Plaintiff might have had. See Estate ofAdams v. Cont ’l Ins. C0., 233 Md. App.
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`1, 26 (2017) (holding that once “on notice of one cause of action, a potential plaintiff is charged
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`with responsibility for investigating, within the limitations period, all potential claims and all
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`potential defendants with regard to the inj ury”).
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`Plaintiff‘s signatures on the 2006 and 2007 Patent Assignments, as well as the 2007
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`Patent Declaration, further indicate that Plaintiff was on inquiry notice of the scepe of the
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`Patent Assignments. It is well-settled in Maryland that one who signs documents is presumed
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`“to have read and understood [the] documents as a matter of law.” Windeshetm, 443 Md. at
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`328—29 (citations omitted); see also Merit Music Service, Inc. v. Somehow, 245 Md. 213, 221—
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`22 (196?) (noting that one executing a document is presumed to understand “at least the literal
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`meaning of its terms”). The plain language in the 2006 and 2007 Patent Assignments indicated
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`that Plaintiff was signing all rights over to Defendant UTC. Further, Plaintiff signed both
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`Assignments, raising the presumption that he read and understood at least the plain language of
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`those documents. If Plaintiff had reservations about the scope of the 2006 and 2007 Patent
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`Assignments, a reasonable investigation would have revealed the alleged erroneous scope of
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`the 2006 and 2007 Patent Assignments. Moreover, the Court finds that a reasonable person in
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`Plaintiff's position would have clarified the 2006 and 2007 Patent Assignments” scope before
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`signing.”
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`2 Plaintiff refers to case law indicating that, according to patent law, there is a presumption that
`co-inventors own a pro rata undivided interest in a patent. See eg, Ethic-on, Inc. v. US.
`Surgical Corp, 135 F.3d 1456, 1465 (Fed. Cir, 1998) (“lndeed,
`in the context of joint
`inventorship, each eo~inventor presumptively .
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`. owns a pro rata undivided interest in the
`entire patent, no matter what their respective contributions"). While this may be true, such a
`presumption is inapplicable here where Plaintiff assigned all his rights to the patents pursuant
`to the 2006 and 2007 Patent Assignments. See Erhteon, 135 F.3d at 1466 (“[W]here inventors
`choose to cooperate in the inventive process, their joint inventions may become joint property
`without some express agreement to the contrary”) (emphasis added).
`3 Plaintiff alleges that when the statute of limitations period accrues is a question of fact that
`should be presented to the jury. The question of when a cause of action accrues, however, is not
`always one for the jury. See Pennwalt Corp. v. Nasios, 314 Md. 433, 450 (1988) (explaining
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`ENTERED
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`SEP132011'ClerkatthecircuitCourtMontgomeryCounty,Md.
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`UNITED THERAPEUTICS, EX. 2203
`WATSON LABORATORIES v. UNITED THERAPEUTICS, lPR2017-01621
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`Page 5 of 29
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`,Md.
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`SEP132017ClemortheL-ijlauiiCourt
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`mereSeen
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`ENTERED
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`Plaintiff argues that his reformation claims [Counts I and IV) are subject to a laches
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`standard, and, therefore, are not time-barred by the statute of limitations. The Court disagrees.
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`Laches is a “defense in equity against stale claims, and is based upon grounds of sound public
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`policy by discouraging firsty demands for the peace of society.” LaSai’le Bank, NA. v. Reeves,
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`173 Md. App. 392, 405 (2007) (citation omitted). Reformation of a contract is purely equitable
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`in nature. Id. at 408 n.9. Under the laches doctrine, a party’s lack of diligence in failing to
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`assert his rights “may result in his being equitably precluded from later asserting these same
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`12. Lexington Charles
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`rights if the opposing party has incurred prejudice or injury.” State Ctr.
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`Ltd. P’shr‘p, 438 Md. 451, 610 (2014). For laches to bar a cause of. action, “there must be both
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`an inexcusable delay and prejudice” to a defendant. LaSalle Bank, 173 Md. App. at 406.
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`“What amounts to ‘prejudice,’ such as will bar the right to assert a claim after the passage of
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`time, depends upon the facts and circumstances of each case, but it is generally held to be
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`anything that places him in a less favorable position.” Id. at 406 (quoting Burton v. Buxron,
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`363 Md. 634, 646 (2001)).
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`Here, the Court finds that Plaintiff was inexcusably delayed in bringing his claims and
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`that Defendants were prejudiced by the delay. Accordingly, laches will bar the Plaintiff’ s
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`reformation claims. The mere passage of time does not alone constitute laches but is simply one
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`of many circumstances “fi'om which a determination of what constitutes an unreasonable and
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`unjustifiable delay may be made." Lexington Charles, 438 Md. at 590 (citations omitted). The
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`Court of Appeals has held that, in determining whether a delay is unreasonable, the Court
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`“must analyze (i) when, if ever, the claim became ripe (i.e., the earliest time at which [a
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`plaintiff is] able to bring [his] claims); and (ii) whether the passage of time between then and
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`when [a plaintitt] filed the complaint was unreasonable.” Id. Here, the Court has already found
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`that “the question of whether the plaintiffs were on inquiry notice of their cause of action more
`than three years before filing suit was a question of fact determinative of the limitations
`defense, [and] the trial court erred in granting summary judgment unless reasonable men could
`norfind otheflvise”) (emphasis added}; James v. Weishet'r, 279 Md. 41, 46 (1977) (recognizing
`the general rule that “whether a cause of action is barred by the statute of limitations is
`ordinarily a mixed question of law and fact that may be taken from the jury only when the court
`determines as a matter of law that the suit was not instituted within the proper time”). The
`Court finds here that a reasonable person would have been put on inquiry notice of potential
`claims concerning the scope of the 2006 and 2007 Patent Assignments based on the plain
`language of the Assignments, and therefore, that Plaintiff’s suit was not instituted within the
`appropriate amount of time as a matter of law.
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`UNITED THERAPEUTICS, EX. 2203
`WATSON LABORATORIES v. UNITED THERAPEUTECS, lPR2017-01621
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`Page 6 of 29
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`ENTERED
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`ClerkoftheCircuitCourtMontgomelyCounty,Md.
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`SEP13201.?
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`that Plaintiff was on inquiry notice of any claims at the latest in 2007, when he signed both the
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`2007 Patent Assignment and the 2007 Patent Declaration. Therefore, Plaintiff’s alleged claims
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`Were ripe, and thus justiciable, around 2007, and at
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`the latest, 2010 when the statute of
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`limitations period ran. See id. at 591 (“[The Court of Appeals] has defined a justiciable
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`controversy as one wherein there are interested parties asserting adverse claims upon a state of
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`facts which must have accrued wherein a legal decision is sought or demanded").
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`The Court further finds that Plaintiff waited an unreasonable amount of time to file his
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`analogous to the one in equity.” Id. If there is not a legal action directly comparable to an
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`reformation claims. “Choosing the applicable measure of impermissible delay for cases where
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`an equitable remedy is sought is most straightforward in cases when there are c0ncurrent legal
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`and equitable remedies and the applicable statute of limitations for the legal remedy is equally
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`applicable to the equitable one.” Id. at 604. Accordingly, in cases involving “an exclusively
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`equitable remedy, we refer to the limitations period for the cause of action at
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`law most
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`equity action, the general three-year statute of limitations timeline found in the Maryland Code
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`of the Courts and Judicial Proceedings Article will be applied. Id; sec oIso Frederick Rd. Lid.
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`P ’sht‘p v. Brown cf: Storm, 360 Md. 76, ll?r (2000) (“When a case involves concurrent legaland
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`equitable remedies,
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`the applicable statute of limitations for the legal remedy is equally
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`applicable to the equitable one”) (citation omitted). In the present case, the Court has already
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`found that Plaintiff 3 causes of action accrued at the latest in 2007, well outside the three-year-
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`statute of limitations period. Accordingly, Plaintiff waited an unreasonable amount of time to
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`assert his claims.
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`Moreover, the Court finds that Defendants would be prejudiced by allowing Plaintiff to
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`assert his claims so far outside of the statute oflimitations period. See Liddy v. Lomone, 398
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`Md. 233, 244 (2007) (“It is .
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`.
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`. well settled that laches applies when there is an unreasonable
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`delay in the assertion of one’s rights and that delay results inprejudice to the opposing party”)
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`(citations omitted) (emphasis added). Under the doctrine of laches, prejudice is determined
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`upon the facts and circumstances, but is generally anything placing a defendant “in a less
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`favorable position." Lexington Charles, 438 Md. at 586 (citing Ross v. State Bd. of Elections,
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`387 Md. 649, 669-70 (2005)). Allowing Plaintiff to bring suit several years beyond the statute
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`of limitations period would prejudice Defendants. Reforming the 2006 and 2007 Patent
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`Assignments to vest an interest
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`in lhe 2006 and 2007 Patents to Plaintiff would affect
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`Defendants” ownership interests in those patents. Each patent has already issued in Defendants“
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`UNITED THERAPEUTICS, EX. 2203
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`Page 7 of 29
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`name. Defendants would have to share ownership interests in the Patents with Plaintiff,
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`detracting from any royalties that Defendants would derive from the patents. Accordingly, the
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`Court finds that Plaintiff's reformation claims are also barred by the statute of limitations, even
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`under a latches standard.
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`Ill.
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`Alternatively. Plaintiff Fails to State anv Claims Upon Which Relief can be
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`Granted
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`Even if Plaintiff‘s claims were not barred by the statute of limitations, the Court finds,
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`alternatively, that Plaintiff fails to state any claims upon which relief can be granted.
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`A. Count]: Constructive Fraud
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`Plaintiff s constructive fraud claim (Count I) fails to state a claim because he fails to
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`allege facts sufficient to prove a special relationship from which a duty of care arose between
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` Plaintiff and Defendants. Constructive fraud amounts to a “breach of a legal or equitable duty
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` confidence, purporting to act or direct with that plaintiff‘s interest in mind. Id. at 70. Business
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`which, irrespective of moral guilt of the fraud feasor, the law declares fraudulent because of its
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`tendency to deceive others, to violate public or private confidence, or to injure public interests.”
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`Thompson 1:. UBS Fin. Sam’s, Inc, 443 Md. 47, 69 (2015). Constructive fraud requires a
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`defendant to owe “an equitable duty to a plaintiff where the parties are in a confidential
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`relationship.” Id. A confidential relationship exists when a defendant has gained a plaintifis
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`MELcircuitCourtCountv.
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`Montgomery
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`35p13.2011
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`dealings at arm’s length do not create a confidential relationship, as something more than a
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`business relationship is needed. Brass Metal Prods v. E—J Enters, 189 Md. App. 310, 357
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`(2009). “The mere fact that one reposes trust and confidence in another’s integ‘ity does not
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`create a confidential relationship.” Id. at 359 (citation omitted).
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`Here, Plaintiff has not alleged sufficient facts indicating that a special relationShip,
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`beyond a business relationship, existed between him and Defendants. From the Complaint, it
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`appears that Plaintiff’s relationship with Defendants was primarily business in nature. Plaintiff
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`and Defendants formally documented their dealings in the 2003 Services Agreement, as well as
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`the later various Consulting Agreements. In fact, Plaintiff and Defendant memorialize-d their
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`agreement (the 2003 Services Agreement) to develop the new treatment methods shortly after
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`meeting for lunch to discuss the matter. Although Plaintiff asserts that he and Dr. Rothblatt
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`maintained a personal relationship, it appears that Plaintiff predominantly perfmmed consulting
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`work for Defendants and later work developing the new PAH treatment methods. Plaintiff has
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`failed to show that he and Defendants maintained a relationship beyond a business relationship
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`UNITED THERAPEUTICS, EX. 2203
`WATSON LABORATORIES v. UNITED THERAPEUTICS, lPR2017-01621
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`Page 8 of 29
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`CourtEligrrtfggmerytheUll’cultCounty,Md.
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`SEP1‘3201.7
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`ENTERED
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`upon which Defendants owed a duty of care. Accordingly, Plaintist constructive fraud clairn
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`cannot stand.
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`B. Count II: Negligent Misrepresentation
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`Plaintiff fails to state a claim upon which relief can be granted with respect to his
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`(3) the defendant has knowledge that the plaintiff will probably rely on the statement, which, if
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`negligent misrepresentation claim (Count II). A negligent misrepresentation claim requires a
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`plaintiff to show “(1) the defendant, owing a duty of care to the plaintiff, negligently asserts a
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`false statement; (2) the defendant intends that his statement will be acted upon by the plaintiff;
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`erroneous, will cause loss or injury; (4) the plaintiff, justifiably, takes action in reliance on the
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`statement; and (5)
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`the plaintiff suffers damage proximately caused by the defendant’s
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`negligence.” Thompson, 217 Md. App. at 525 (citations omitted).
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`As mentioned, the Court has already found that no special relationship existed between
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`Plaintiff and Defendant upon which a duty of care arose. Further, Plaintiff only asserts bald
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`conclusions that Defendants misrepresented that the 2006 and 2007 Patent Assignments were
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`appropriate in scope. Plaintiff points to no Specific misrepresentations that Defendants ever
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`made when Plaintiff signed the 2006 and 2007 Patent Assignments as well as the 2007 Patent
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`Declaration. Plaintiff only alleges a general misrepresentation that Defendants made about the
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`alleged erroneous scope of the 2006 and 2007 Patent Assignments, which defeat Plaintiff's
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`negligent misrepresentation claim. See Lloyd v. GMC, 397 Md. 108, 137 n.10 (2007)
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`(“Although the tort of negligent misrepresentation is generally rooted in negligence, in that,
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`like negligence, it requires a duty, breach of duty, injury and causation, the major difference is
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`that negfigent misrepresentation focuses an affirmative Statements made by the defendant that
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`were intended to, and indeed, had the effect qr,” inducing the pininrz‘ffro carry out some antic}?
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`i n reiiance on the false statements”) (emphasis added).
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`C. Counts HI and IV:
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`ReformationfMutual Mistake and Refonnatiom'Unilateral
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`M
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`Plaintiff fails to state a claim of reformation upon which relief can be granted.
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`Reforming a written instrument is “unusual relief: that differs from “rescission, cancellation or
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`annulment of [a] document.” Mayer v. Title Guarantee Ca, 227 Md. 499, 504 (1962).
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`Reformation leaves a written instniment in effect, but in modified form. Id. Accordingly,
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`before “granting the high remedy of reformation, the proof must not only establish that the
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`written agreement was not the agreement intended by the parties, but also what was the
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`UNITED THERAPEUTICS, EX. 2203
`WATSON LABORATORIES v. UNITED THERAPEUTICS, lPR2017-01621
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`Page 9 of 29
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`agreement contemplated by them at the time it was executed.” Id. “Before performing the
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`difficult and delicate task of reforming an agreement after the parties have solemnized it by
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`reducing it to writing and executing the same, [the Court of Appeals] has consistently required
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`proof of the highest order.” Higgins v. Barnes, 310 Md. 532, 538 (1987) (quoting Mayer, 22'?
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`Md. at 504).
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`In the present case, Plaintiff has alleged no facts to indicate how the 2006 and 2007
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`Patent Assignments failed to reflect what was intended by the parties. The plain language of the
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`2003 Services Agreement as well as the 2006 and 2007 Patent Assignments indicate that
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`Plaintiff was to assign to Defendants all patent rights. Plaintiff offers no facts, other than
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`conclusory statements, indicating that the parties intended to reserve Plaintiff any rights in the
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`patents. See Poiek v. JP. J’Mforgan Chase Bank NA, 424 Md. 333, 350—51 (2012) (holding
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`that, to survive a motion to dismiss, the facts asserted “in the complaint must be pled with
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`specificity; bald allegations and conclusory statements are not sufficient
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`to support a
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`complaint") (citation omitted); see also LaSar’t‘e Bank, NA. v, Reeves, 173 Md. App. 392, 408
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`n. 9 (2007) (citation omitted) (“[A] court of equity will reform a written instrument to make it
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`conform to the real
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`intention of the parties, when the evidence is so clear, strong and
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`convincing as to leave no reasonable doubt that a mutual mistake was made in the instnnnent
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`contrary to their agreement”). Plaintiff has not met the high burden of proof necessary for
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`reforming the 2006 and 200’? Patent Assignments, and further, has not even alleged any
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`specific facts indicating what exactly the parties actually--_ according to Plaintiff—meant in
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`executing the 2006 and 2007 Patent Assignments. See Meyer, 227 Md. at 504 (noting that a
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`plaintiff “must not only show clearly and beyond doubt that there has been a mistake, but he
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`must also be able to show with equal clearness and certainty the exact and precise form and
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`import that the instrument ought to be made to assume,
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`in order that it may express and
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`effectuate what was really intended by the parties") (citation omitted). Accordingly, Plaintiff’s
`reformation claims fail.
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`D. Count V: Breach of Contract
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`Plaintiff fails to allege sufficient facts to support a breach of contract claim. For a
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`plaintiff to prevail in a breach of contract claim, a plaintiff bears the burden of proving that a
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`defendant owed him a contractual obligation and that the defendant breached that obligation.
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`Taylor v. NationsBank, NA, 365 Md. 166, 175 (2001). “It is well—established in Maryland that
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`a complaint alleging a breach of contract must of necessity allege with certainty and
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`UNITED THERAPEUTICS, EX. 2203
`WATSON LABORATORIES v. UNITED THERAPEUTICS, lPR2017-01621
`Page 10 of 29
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`definiteness facts showing a contractual obligation owed by the defendant to the plaintiff and a
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`breach of that obligation by defendant.” RRC Na, LLC v. BAA Md, Inc, 413 Md. 638, 655,
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`(2010) (citation omitted).
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`Plaintiff fails to allege with specificity any contractual duty that Defendants breached.
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`Plaintiff makes conclusory statements throughout the Complaint alleging that Defendants failed
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`to act in accordance with the patent ownership provisions contained in the 2003 Services
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`Agreement. This, however, is at odds with the 2003 Services Agreement’s plain language; that
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`language reserved no patent rights to Plaintiff. The 2003 Services Agreement, in fact, does the
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`opposite, granting Defendants complete ownership in all “patentable and unpatentable
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`inventions, discoveries or ideas." Plaintiff cannot allege that Defendants breached a contractual
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`duty by failing to reserve hiln rights in the patents if there was never a contractual term
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`reserving Plaintiff any rights from the beginning. 4
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`4Plaintiff referred to the case TriReme Medical, LLC. v. AngioScore, Inc, 812 F.3d 1050
`(Fed. Cir. 2016), at Oral Arguments and the parties addressed the case in supplemental
`memoranda. Plaintiff insists that TriReme prevents Plaintiff's claims from being disposed of at
`the motion to dismiss stage. Plaintiff, however, mischaracterizes TrfReme and the Court does
`not find it apposite, let alone diSpositive in favor of Plaintiff.
`TrfReme involved a doctor who developed a special catheter and entered into a
`consulting agreement with AngioScore to assist in testing the catheter. TriReme, 312 F.3d at
`1052. The catheter later became the subject of patents. Id. At issue was whether the doctor had
`assigned all rights in the patents over to AngioScore pursuant to two provisions in the
`consulting agreement, Section 9(a) and Section 90)).
`Id. Section 9(a) required identifying
`inventions pre-dating the consulting agreement and granting AngioScore a non—exclusive
`license to those patents. Id. at 1053. Section 9(b) required the doctor to assign to AngioScore
`“all right, title and interest in and to all inventionS, original works of authorship, developments,
`concepts, know—how, improvements .
`.
`. that [the doctor] may solely or jointly conceive or
`develop or reduce to practice during the terms of this Agreement.” Id. The Federal Circuit held
`that a more developed record was needed to determine whether the doctor’s continued work on
`the catheter after executing the consulting agreement amounted to conceiving, developing, or
`reducing to practice an invention, consistent with Section 9(b). Id. at 1055. If the doctor’s
`continued work did amount to developing or reducing to practice the invention, then he would
`have assigned his rights pursuant to the consulting agreement. Id.
`The language of the consulting agreement at
`issue in TriReme contained language
`different than that of the 2003 Services Ageement at issue in this case. The 2003 Services
`Agreement contained language that Plaintiff was to assign to Defendants any rights to an
`invention conceived “in whole or in part” under the 2003 Services Agreement. In fact, Plaintiff
`executed two Patent Assignments consistent with this provision (the 2006 and 2007 Patent
`Assignments) several years after the 2003 Services Agreement. Further, Plaintiffs invention
`was conceived in whole or in part under the 2003 Services Agreement. Plaintiff, after executing
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`11
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`mymi03:31.1”
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`emeryCount-j,Md.
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`is:r.anthe:iMontgC
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`UNITED THERAPEUTICS, EX. 2203
`WATSON LABORATORIES v. UNITED THERAPEUTECS, lPR2017-01621
`Page 11 of 29
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`ENTERED
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