Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

2011.01.03 Infusive v. Sagent

24 views

Published on

2011.01.03 Infusive v. Sagent

Published in: Business
  • Be the first to comment

  • Be the first to like this

2011.01.03 Infusive v. Sagent

  1. 1. MARK A. LARSEN mlarsen@larsenrico.com (3727) LISA C. RICO lrico@larsenrico.com (8901) LARSEN CHRISTENSEN & RICO, PLLC Attorneys for Plaintiff Infusive Technologies, LLC 50 West 300 South, Suite 400 Salt Lake City, Utah 84101 Telephone: (801) 364-6500 IN THE UNITED STATES DISTRICT COURT DISTRICT OF UTAH, CENTRAL DIVISION INFUSIVE TECHNOLOGIES, LLC, Plaintiff, vs. SAGENT HOLDING CO., Defendant. : : : : : : : : : Case No. 1:10-cv-00220-BCW COMPLAINT and JURY DEMAND Judge Brooke C. Wells Filed Electronically Plaintiff Infusive Technologies, LLC, alleges as follows: PARTIES 1. Plaintiff Infusive Technologies, LLC (“Infusive”), is a limited liability company, organized and existing under the laws of the State of Nevada, with its principal place of business in Bountiful, Utah. 2. Defendant Sagent Holding Co. (“Sagent”) is a corporation, organized and existing under the laws of the Cayman Islands, with its principal place of business in Schaumburg, Illinois. JURISDICTION & VENUE 3. This Court has personal jurisdiction over Sagent pursuant to Utah Code Ann. §§ 78-27-22 and 78-27-24 because Sagent subjected itself to the general jurisdiction of Case 1:10-cv-00220-TC Document 2 Filed 01/03/11 Page 1 of 11
  2. 2. -2- this Court, having conducted business in the State of Utah or having caused injury in the State of Utah. 4. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1332(a) because the amount in controversy exceeds $75,000, exclusive of interest and costs, and is between citizens of different states. 5. Venue of this matter is proper pursuant to 28 U.S.C. § 1391(2). BACKGROUND 6. By September of 2008, Infusive developed and patented syringe-based devices or other infusion therapy related products or devices, including U.S. Patent Nos. 6,997,910 (“the ‘910 patent”) 7,048,720 (“the ‘720 patent”) and 7,101,354 (“the ‘354 patent”). Infusive also had other patents pending, both in the United States and in foreign countries. 7. Sagent is a pharmaceutical company primarily focused on generic injectable products. Sagent offers its customers a broad range of pharmaceutical products across anti-infective, oncolytic and critical care indications in a variety of forms, including single- and multi-dose vials, and prefilled ready-to-use syringes and premix bags. 8. In September of 2008, Infusive and Sagent entered into an Asset Acquisition Agreement. Among other things, the Asset Acquisition Agreement transferred to Sagent the ‘910 patent, the ‘720 patent and the ‘354 patent. FIRST CLAIM FOR RELIEF (Breach of the Asset Acquisition Agreement) 9. Infusive incorporates by reference paragraphs 1 through 8, inclusive, of this Complaint. Case 1:10-cv-00220-TC Document 2 Filed 01/03/11 Page 2 of 11
  3. 3. -3- 10. Infusive fully performed all of its obligations set forth in the Asset Acquisition Agreement. 11. Paragraph 7.1 of the Asset Acquisition Agreement states: After the Effective Date, Sagent shall own any and all Patent Rights, Technology Rights, and Technical Information, whether first conceived or discovered by either Infusive or Sagent or jointly, or by their respective employees or agents. 12. Paragraph 4.1 of the Asset Acquisition Agreement states: Upon the Effective Date, Sagent shall assume full responsibility for the research and development related to the Patented Products and use reasonable commercial efforts to develop and commercialize the Patented Products. 13. Although “Reasonable Commercial Efforts” is a defined term in the Asset Acquisition Agreement (Paragraph 1.8), it is not used as a defined term in Paragraph 4.1 of the Asset Acquisition Agreement. When used as a defined term, reasonable commercial efforts is in initial capitals. See, e.g., Paragraph 11.3. 14. Under the terms of the Asset Acquisition Agreement, therefore, Sagent assumed full responsibility for the research and development related to the Patented Products, the development and commercialization of the Patented Products. 15. Paragraph 4.2 of the Asset Acquisition Agreement states: Sagent shall be responsible for all design verification, design validation, regulatory submissions and activities, marketing, launch and sale activities, related to the Patented Products. 16. Under the terms of the Asset Acquisition Agreement, therefore, Sagent also solely was responsible for all design verification, design validation, regulatory submissions and activities, marketing, launch and sale activities, related to the Patented Products. Case 1:10-cv-00220-TC Document 2 Filed 01/03/11 Page 3 of 11
  4. 4. -4- 17. Sagent failed to use reasonable commercial efforts to develop and commercialize the Patented Products. 18. As a result of Sagent’s failure to use reasonable commercial efforts to develop and commercialize the Patented Products, the Approval of the 510k for the first product application of the Patented Products was not obtained. 19. A pertinent part of Paragraph 3.1 of the Asset Acquisition Agreement states: Sagent shall remit or allow the following payments to or for the benefit of Infusive: a) One million two hundred fifty thousand dollars ($1,250,000) within five (5) days after the Effective Date, … b) One million dollars ($1,250,000) within ten (10) days after the Approval of the 510k for the first product application of the Patented Products (the payments described in Section 3.1(a) and (b), are collectively referred to as the (“Assignment Payments”). Sagent agrees to file the 510k with the appropriate administrative agencies for the first product application of the Patented Products no later than five business days after this Agreement is executed by the Parties. If the 510k is not filed within said five business day period then the Assignment Paymentreferenced in this Section 3.1(b) shall be due and payable in full no later than the earlier of the (i) December 15, 2008 or (ii) upon Approval of the 510k for the first product application of the Patented Products. . . . . 20. As a result of Sagent’s failure to use reasonable commercial efforts to develop and commercialize the Patented Products, and obtain the Approval of the 510k for the first product application of the Patented Products, Sagent avoided paying the Assignment Payment to Infusive of $1,250,000. If Sagent had used reasonable commercial efforts to develop and commercialize the Patented Products, and obtain the Approval of the 510k for the first product application of the Patented Products, the Case 1:10-cv-00220-TC Document 2 Filed 01/03/11 Page 4 of 11
  5. 5. -5- Assignment Payment to Infusive of $1,250,000 would have become due no less than six months ago. 21. The Asset Acquisition Agreement also contains the following relevant provisions, among others: (a) A pertinent part of Paragraph 2.1 of the Asset Acquisition Agreement states: Until the date on which Sagent remits payment up to the amount of two million five thousand dollars ($2,500,000) pursuant to Section 3.1(a) and (b) hereinbelow (the “Transfer Date”), Infusive shall retain a lien against the Assignment. . . . (b) A pertinent part of Paragraph 2.2 of the Asset Acquisition Agreement states: To secure the payment of the Assignment Payments (defined below), Sagent hereby grants a security interest to Infusive, its successors and assigns, in the Patent Rights, Technical Information and Technology Rights (the “Collateral”). If Sagent does not pay the Assignment Payments to Infusive when due, then, upon written notice from Infusive to Sagent and Sagent’s failure to pay the amount owing within ten (10) days after such notice, Sagent shall assign all right, title and interest in and to the Collateral to Infusive free and clear of any claims from Sagent or otherwise. . . . 22. A pertinent part of Paragraph 11.2 of the Asset Acquisition Agreement states: In the event this Agreement is terminated by Sagent pursuant to Section 11.1, Sagent shall assign to Infusive all right, title and interest in and to the Patent Rights, Technical Rights, Technical Information, and related proprietary information. . . . 23. Sagent claims to have terminated the Asset Acquisition Agreement. 24. Because Sagent did not paythe Assignment Payments to Infusive when due, on November 18, 2010, counsel for Infusive demanded in writing that Sagent pay the amount owing within ten days after such notice and demanded that Sagent assign all right, title and interest in and to the Collateral – the ‘910 patent, the ‘720 patent and the ‘354 patent – to Infusive free and clear of any claims from Sagent. Despite such notice, Sagent Case 1:10-cv-00220-TC Document 2 Filed 01/03/11 Page 5 of 11
  6. 6. -6- did not pay the amounts due and did not assign all right, title and interest in and to the Collateral to Infusive free and clear of any claims from Sagent. 25. Sagent’s failure to pay the Assignment Payments to Infusive constitutes a breach of the Asset Acquisition Agreement, damaging Infusive in the sum of $1,250,000, plus interest. 26. Further, Sagent’s failure to use reasonable commercial efforts to develop and commercialize the Patented Products, including its failure to fund and pursue all design verification, design validation, regulatorysubmissions and activities, marketing, launch and sale activities, related to the Patented Products, constitutes a breach of the Asset Acquisition Agreement. 27. Additionally, Sagent’s failure to obtain the Approval of the 510k for the first product application of the Patented Products, including its failure to fund and pursue all design verification, design validation, regulatory submissions and activities, relating to the Patented Products, constitutes a breach of the Asset Acquisition Agreement. 28. If Sagent had not breached the Asset Acquisition Agreement in these, and other ways, Infusive would have received Commercialization Payments in the minimum amount of at least $2,000,000 per year for the remaining life of the ‘910 patent, the ‘720 patent and the ‘354 patent. The present value of these payments, the past and future damage, is at least $15,000,000. 29. As a result of Sagent’s multiple breaches of the Asset Acquisition Agreement, Infusive has been damaged in a sum of at least $15,000,000, plus interest. Case 1:10-cv-00220-TC Document 2 Filed 01/03/11 Page 6 of 11
  7. 7. -7- SECOND CLAIM FOR RELIEF (Breach of the Covenant of Good Faith and Fair Dealing) 30. Infusive incorporates by reference paragraphs 1 through 29, inclusive, of this Complaint. 31. Sagent breached the covenant of good faith and fair dealing implied in every contract under Utah law. The breach of the duty of good faith and fair dealing is not limited to the express terms of the Asset Acquisition Agreement. It is fundamental that every contract imposes a duty on the parties to exercise their contractual rights and perform their contractual obligations reasonably and in good faith. 32. Even though the express terms of a contractual provision may appear to permit unreasonable actions, the implied duty of good faith and fair dealing limits the parties’ ability to act unreasonably in contravention of the other party’s reasonable expectations. 33. Sagent breached the covenant of good faith and fair dealing found in the Asset Acquisition Agreement by exercising its discretion in contravention of Infusive’s reasonable expectations. 34. Sagent exercised its discretion in contravention of Infusive’s reasonable expectations in the following ways, among others: A. Sagent failed to use reasonable commercial efforts to develop and commercialize the Patented Products. Sagent failed to devote sufficient resources to properly develop and commercialize the Patented Products. Case 1:10-cv-00220-TC Document 2 Filed 01/03/11 Page 7 of 11
  8. 8. -8- B. As a result of Sagent’s failure to use reasonable commercial efforts to develop and commercialize the Patented Products, the Approval of the 510k for the first product application of the Patented Products was not obtained. C. As a result of Sagent’s failure to use reasonable commercial efforts to develop and commercialize the Patented Products, and obtain the Approval of the 510k for the first product application of the Patented Products, Sagent avoided paying the Assignment Payment to Infusive of $1,250,000. If Sagent had used reasonable commercial efforts to develop and commercialize the Patented Products, and obtain the Approval of the 510k for the first product application of the Patented Products, the Assignment Payment to Infusive of $1,250,000 would have become due no less than six months ago. D. Sagent failed to devote sufficient resources to properly develop and commercialize the Patented Products to avoid having to pay the Assignment Payment to Infusive of $1,250,000. E. Further, Sagent’s failure to use reasonable commercial efforts to develop and commercialize the Patented Products, including its failure to fund and pursue all design verification, design validation, regulatory submissions and activities, marketing, launch and sale activities, related to the Patented Products, constitutes a breach of the Asset Acquisition Agreement. F. Additionally, Sagent’s failure to obtain the Approval of the 510k for the first product application of the Patented Products, including its failure to fund and pursue all design verification, design validation, regulatory submissions and Case 1:10-cv-00220-TC Document 2 Filed 01/03/11 Page 8 of 11
  9. 9. -9- activities, relating to the Patented Products, constitutes a breach of the covenant of good faith and fair dealing. G. Sagent failed to devote sufficient resources to properly develop and commercialize the Patented Products to avoid having to pay the Commercialization Payments to Infusive of at least $2,000,000 a year. 35. Sagent did not pay the Assignment Payments to Infusive, which constitutes a breach of the Asset Acquisition Agreement, damaging Infusive in the sum of $1,250,000, plus interest. 36. If Sagent had not breached the Asset Acquisition Agreement in these, and other ways, Infusive would have received Commercialzation Payments in the minimum amount of $2,000,000 per year for the remaining life of the ‘910 patent, the ‘720 patent and the ‘354 patent. The present value of these payments, the past and future damage, is at least $15,000,000. 37. As a result of Sagent’s multiple breaches of the Asset Acquisition Agreement, Infusive has been damaged in a sum of at least $15,000,000, plus interest. 38. Paragraph 13.10 of the Asset Acquisition Agreement states: “This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada.” 39. Through these acts and others, Sagent intentionally or recklessly breached the covenant of good faith and fair dealing found in the Asset Acquisition Agreement in complete disregard of Infusive’s property interests. 40. As a result, under Nevada law, Infusive is entitled to punitive damages against Sagent in the amount of at least $50,000,000, or such other amount as may be proven at trial. Case 1:10-cv-00220-TC Document 2 Filed 01/03/11 Page 9 of 11
  10. 10. -10- WHEREFORE, Infusive requests judgment against Sagent as follows: A. On the First Claim for Relief, for a judgment in favor of Infusive and against Sagent for compensatory damages in the sum of at least $15,000,000, plus interest, or such other amount as may be proven at trial. B. On the Second Claim for Relief, for a judgment in favor of Infusive and against Sagent for compensatory damages in the sum of at least $15,000,000, plus interest, or such other amount as may be proven at trial. C. On the Second Claim for Relief, for a judgment in favor of Infusive and against Sagent for punitive damages in the sum of at least $50,000,000, plus interest, or such other amount as may be proven at trial. D. On all Claims for Relief, for attorneys’ fees and costs in an amount to be proven at trial. E. On all Claims for Relief, for such other and further relief as the Court may deem appropriate. Case 1:10-cv-00220-TC Document 2 Filed 01/03/11 Page 10 of 11
  11. 11. -11- JURY DEMAND Pursuant to Fed. R. Civ. P. 38(b), Infusive demands a trial by jury of any issue triable of right by jury and tendered the statutory jury fee upon the filing of this Complaint. Dated: January 3, 2011. LARSEN CHRISTENSEN & RICO, PLLC /s/ Mark A. Larsen ________________________________ Mark A. Larsen Attorneys for Plaintiff Infusive Technologies,LLC Case 1:10-cv-00220-TC Document 2 Filed 01/03/11 Page 11 of 11

×