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2011.05.06 Sagent Counterclaim Against Infusive

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2011.05.06 Sagent Counterclaim Against Infusive

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2011.05.06 Sagent Counterclaim Against Infusive

  1. 1. Arthur B. Berger (6490) Samuel C. Straight (7638) Ray Quinney & Nebeker P.C. 36 South State Street, Suite 1400 P.O. Box 45385 Salt Lake City, Utah 84145-0385 Telephone: (801) 532-1500 Facsimile: (801) 532-7543 aberger@rqn.com sstraight@rqn.com Attorneys for Defendant Sagent Holding Co. Edwin E. Brooks (admitted pro hac vice) Gary Y. Leung (admitted pro hac vice) Steven D. Hamilton (admitted pro hac vice) MCGUIREWOODS LLP 77 W. Wacker Drive, Suite 4100 Chicago, Illinois 60601 Tel: (312) 849-8100 ebrooks@mcguirewoods.com gleung@mcguirewoods.com shamilton@mcguirewoods.com ______________________________________________________________________________ IN THE UNITED STATES DISTRICT COURT DISTRICT OF UTAH, CENTRAL DIVISION INFUSIVE TECHNOLOGIES, LLC, Plaintiff/Counter-Defendant, v. SAGENT HOLDING CO., Defendant/Counter-Plaintiff. : : : : : : : : : : : DEFENDANT’S ANSWER AND AFFIRMATIVE DEFENSES TO PLAINTIFF’S FIRST AMENDED COMPLAINT and DEFENDANT’S COUNTERCLAIMS Case No. 1:10-CV-220-TC Defendant, SAGENT HOLDING CO. (“Sagent” or “Defendant”)1 , by its attorneys, hereby answers and pleads its affirmative defenses to the First Amended Complaint of Plaintiff Infusive Technologies, LLC (the “First Amended Complaint”) as follows: 1 Sagent Holding Co. (a Cayman Islands company) was converted to Sagent Pharmaceuticals, Inc. (a Delaware corporation), effective on April 26, 2011. Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 1 of 39
  2. 2. PARTIES 1. Defendant denies the allegations contained in Paragraph 1 of the First Amended Complaint. 2. Regarding the allegations set forth in Paragraph 2 of the First Amended Complaint, Defendant admits that Sagent was a holding company incorporated under the laws of the Cayman Islands, with its principal place of business in Schaumburg, Illinois. Defendant denies all remaining allegations in Paragraph 2 of the First Amended Complaint. 3. Regarding the allegations set forth in Paragraph 3 of the First Amended Complaint, Defendant denies that this Court has personal jurisdiction over Defendant pursuant to Utah Code Ann. §§ 78-27-22 and 78-27-24, both of which were repealed or renumbered in 2008. Further answering, Defendant denies the remaining allegations in Paragraph 3 of the First Amended Complaint. 4. Defendant admits the allegations contained in Paragraph 4 of the First Amended Complaint. 5. Regarding the allegations set forth in Paragraph 5 of the First Amended Complaint, Defendant admits that venue is proper pursuant to 28 U.S.C. § 1391, but further states that as set forth in Sagent’s pending motion for a transfer of venue, Defendant has requested that this Court transfer the matter to the United States District Court for the Northern District of Illinois, in accordance with 28 U.S.C. § 1404(a). 6. Regarding the allegations set forth in Paragraph 6 of the First Amended Complaint, Defendant lacks sufficient information to admit or deny the allegations contained in Paragraph 6 of the First Amended Complaint, and therefore denies the same. - 2 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 2 of 39
  3. 3. 7. Defendant admits the allegations contained in Paragraph 7 of the First Amended Complaint. 8. Defendant admits the allegations contained in Paragraph 8 of the First Amended Complaint, but further states that in violation of the Asset Acquisition Agreement, Infusive did not in fact assign the ‘910 patent, the ‘720 patent, and the ‘354 patent to Sagent until fall 2010, two years after the execution of the Asset Acquisition Agreement. 9. Regarding the allegations set forth in Paragraph 9 of the First Amended Complaint, Defendant incorporates by reference its answers to Paragraphs 1 through 8 above as if fully set forth herein. 10. Defendant denies the allegations contained in Paragraph 10 of the First Amended Complaint. 11. Regarding the allegations set forth in Paragraph 11 of the First Amended Complaint, Defendant admits that Paragraph 7.1 of the Asset Acquisition Agreement has been correctly quoted. To the extent that Paragraph 11 of the First Amended Complaint contains any other allegations, Defendant denies such allegations. 12. Regarding the allegations set forth in Paragraph 12 of the First Amended Complaint, Defendant admits that Paragraph 4.1 of the Asset Acquisition Agreement has been correctly quoted. To the extent that Paragraph 12 of the First Amended Complaint contains any other allegations, Defendant denies such allegations. 13. Regarding the allegations set forth in Paragraph 13 of the First Amended Complaint, Defendant admits that “Reasonable Commercial Efforts” is a defined term in the - 3 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 3 of 39
  4. 4. Asset Acquisition Agreement. Defendant denies the remaining allegations in Paragraph 13 of the First Amended Complaint. 14. Defendant denies the allegations contained in Paragraph 14 of the First Amended Complaint. 15. Regarding the allegations set forth in Paragraph 15 of the First Amended Complaint, Defendant admits that Paragraph 4.2 of the Asset Acquisition Agreement has been correctly quoted. To the extent that Paragraph 15 of the First Amended Complaint contains any other allegations, Defendant denies such allegations. 16. Defendant denies the allegations contained in Paragraph 16 of the First Amended Complaint. 17. Defendant denies the allegations contained in Paragraph 17 of the First Amended Complaint. 18. Defendant admits the allegations contained in Paragraph 18 of the First Amended Complaint. 19. Defendant denies the allegations contained in Paragraph 19 of the First Amended Complaint. 20. Regarding the allegations set forth in Paragraph 20 of the First Amended Complaint, Defendant admits that by December 2008 Sagent Technologies (a device division that Sagent established specifically for Bradley Robinson to develop and commercialize the Infusive-technology based products) received a deficiency letter from the federal Food and Drug Administration, explaining that it would not approve the 510k application. Further answering, - 4 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 4 of 39
  5. 5. Defendant denies all other allegations in Paragraph 20 of the First Amended Complaint inconsistent with the foregoing. 21. Defendant denies the allegations contained in Paragraph 21 of the First Amended Complaint. 22. Defendant lacks sufficient information to admit or deny the allegations in Paragraph 22 of the First Amended Complaint, and therefore denies the same. 23. Defendant denies the allegations contained in Paragraph 23 of the First Amended Complaint. 24. Defendant denies the allegations contained in Paragraph 24 of the First Amended Complaint. 25. Defendant denies the allegations contained in Paragraph 25 of the First Amended Complaint. 26. Regarding the allegations set forth in Paragraph 26 of the First Amended Complaint, Defendant admits that Plaintiff properly quotes certain parts of Paragraph 3.1(a), and the entirety of Paragraph 3.1(b) of the Asset Acquisition Agreement. Further answering, Defendant otherwise denies all other allegations in Paragraph 26, (a) and (b) inclusive, of the First Amended Complaint. 27. Defendant denies the allegations contained in Paragraph 27 of the First Amended Complaint. 28. Defendant denies the allegations contained in Paragraph 28 of the First Amended Complaint. - 5 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 5 of 39
  6. 6. 29. Defendant denies the allegations contained in Paragraph 29 of the First Amended Complaint. 30. Defendant denies the allegations contained in Paragraph 30 of the First Amended Complaint. 31. Regarding the allegations set forth in Paragraph 31 of the First Amended Complaint, Defendant admits that Plaintiff properly quotes parts of Paragraph 2.1(a), and the entirety of Paragraph 2(b) of the Asset Acquisition Agreement. To the extent that Paragraph 31 of the First Amended Complaint contains any other allegations, Defendant denies such allegations. 32. Regarding the allegations set forth in Paragraph 32 of the First Amended Complaint, Defendant admits that Plaintiff properly quotes parts of Paragraph 11.1 of the Asset Acquisition Agreement. To the extent that Paragraph 32 of the First Amended Complaint contains any other allegations, Defendant denies such allegations. 33. Defendant denies the allegations contained in Paragraph 33 of the First Amended Complaint. 34. Defendant denies the allegations contained in Paragraph 34 of the First Amended Complaint. 35. Defendant denies the allegations contained in Paragraph 35 of the First Amended Complaint. 36. Regarding the allegations set forth in Paragraph 36 of the First Amended Complaint, Defendant admits that Plaintiff properly quotes certain parts of an e-mail sent to - 6 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 6 of 39
  7. 7. Robinson on November 1, 2010 and denies all other allegations in Paragraph 36 of the First Amended Complaint. 37. Defendant denies the allegations contained in Paragraph 37 of the First Amended Complaint. 38. Defendant denies the allegations contained in Paragraph 38 of the First Amended Complaint. 39. Defendant denies the allegations contained in Paragraph 39 of the First Amended Complaint. 40. Defendant denies the allegations contained in Paragraph 40 of the First Amended Complaint. 41. Defendant denies the allegations contained in Paragraph 41 of the First Amended Complaint, and denies that Plaintiff is entitled to damages. 42. Defendant incorporates by reference its answers to Paragraphs 1 through 41 above as if fully set forth herein. 43. Defendant denies the allegations contained in Paragraph 43 of the First Amended Complaint. 44. Defendant denies the allegations contained in Paragraph 44 of the First Amended Complaint. 45. Defendant denies the allegations contained in Paragraph 45 of the First Amended Complaint. - 7 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 7 of 39
  8. 8. 46. Defendant denies each and every allegation made in Paragraph 46, A through H inclusive, of the First Amended Complaint. 47. Defendant denies the allegations contained in Paragraph 47 of the First Amended Complaint. 48. Defendant denies the allegations contained in Paragraph 48 of the First Amended Complaint. 49. Defendant denies the allegations contained in Paragraph 49 of the First Amended Complaint, and further denies that Plaintiff is entitled to any damages. 50. Defendant admits the allegations contained in Paragraph 50 of the First Amended Complaint. 51. Defendant denies the allegations contained in Paragraph 51 of the First Amended Complaint. Defendant further denies the allegations contained in the “Wherefore” paragraph, parts A through D inclusive, in the First Amended Complaint, and denies that Plaintiff is entitled to any damages or relief. DEFENDANT’S AFFIRMATIVE DEFENSES By alleging the matters set forth below, Defendants do not allege or admit that they have the burden of proof and/or the burden of persuasion with respect to any of these matters, or that Plaintiff is relieved of its burden to prove each and every element of the First Amended Complaint and the damages, if any, to which it is entitled. Furthermore, Defendants incorporate by reference, each and every numbered paragraph in Sagent’s Counterclaims and Third Party Claims below. - 8 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 8 of 39
  9. 9. First Affirmative Defense (Failure to State a Claim) The First Amended Complaint is barred, in whole or in part, to the extent that Plaintiff has failed to state a claim. In the Complaint at bar, both causes of action Plaintiff alleges fail to plead sufficient facts to meet all the elements of each claim. Additionally, Plaintiff’s breach of contract claim fails because its alleged consideration, a completed and approvable 510k application, completely failed, and its damages are unsupported and speculative. Similarly, Plaintiff’s breach of the covenant of good faith and fair dealing claim fails to allege specific facts, but instead, lists bare and conclusory statements that fail to properly state a claim. Thus, the First Amended Complaint must be dismissed for failure to state a claim upon which relief may be granted. Second Affirmative Defense (Laches) The First Amended Complaint is barred, in whole or in part, by the doctrine of laches. Third Affirmative Defense (Estoppel) The First Amended Complaint is barred, in whole or in part, by the doctrine of estoppel. While Defendant denies that it breached the Agreement, Plaintiff is nevertheless estopped from asserting any breaches because any alleged breaches were caused by Plaintiff through its agent, Brad Robinson. Upon the execution of the Agreement, Defendant hired Mr. Robinson as President of its newly-created device division, called Sagent Technologies. In that role, Mr. Robinson’s duties were to commercialize and market the Patented Products pursuant to the Agreement. At the same time, however, Mr. Robinson, upon information and belief, in part owned and controlled Plaintiff. He therefore, wore two hats, one as President of the Sagent - 9 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 9 of 39
  10. 10. Technologies where he was responsible for execution of the terms of the Agreement, and another as owner and manager of Plaintiff who now complains that the Defendant breached the Agreement. As such, to the extent any breaches of the Agreement occurred, Plaintiff is estopped from asserting any claims under the Agreement. Second, Plaintiff, through its agent Brad Robinson, intentionally concealed material facts, including knowledge that former employees did not properly assign their patent rights to Infusive; was responsible for, and did not properly complete the 510k application process; and failed to notify Sagent of botched international patent filings, all of which, if known, would have caused Sagent not to execute the Agreement. Furthermore, Plaintiff’s intent was for Sagent to rely on the facts asserted, and it knew that Sagent had no reasonable means by which to learn of such facts. As Sagent has relied on these facts to its detriment, Plaintiff should be estopped from claiming any relief. Fourth Affirmative Defense (Waiver) The First Amended Complaint is barred, in whole or in part, by the doctrine of waiver. Fifth Affirmative Defense (Failure of Consideration) The First Amended Complaint is barred, in whole or in part, because the Agreement is not supported by consideration. Plaintiff’s purported consideration in this matter, i.e. intellectual property, including U.S. Patent Nos. 6,997,910, 7,048,720, and 7,101,354, and a related 510k application for the proposed ChaSyr device, proved to be worthless. Accordingly, nothing of value was given in consideration for Sagent’s executing the Agreement, thus Plaintiff’s breach of contract claim is unsupported by consideration and should be dismissed. - 10 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 10 of 39
  11. 11. Sixth Affirmative Defense (Release) The First Amended Complaint is barred, in whole or in part, by the doctrine of release. Seventh Affirmative Defense (Statute of Frauds and Limitations) The First Amended Complaint is barred, in whole or in part, by the statute of frauds and/or limitations. Eighth Affirmative Defense (Failure to Mitigate Damages) The First Amended Complaint is barred, in whole or in part, to the extent that Plaintiff has failed to mitigate its damages by commercializing the intellectual property assigned to Sagent under the Agreement, and subsequently assigned back to Infusive. Ninth Affirmative Defense (Unclean Hands) The First Amended Complaint is barred, in whole or in part, by the doctrine of unclean hands. Upon the execution of the Agreement, Defendant hired Brad Robinson as President of its newly-created device division, called Sagent Technologies. In that role, Mr. Robinson’s duties were to commercialize and market the Patented Products pursuant to the Agreement. At the same time, however, Mr. Robinson, upon information and belief, in part owned and controlled Plaintiff. He therefore, wore two hats, one as President of Sagent Technologies, where he was responsible for execution of the terms of the Agreement and another as owner and manager of Plaintiff who now complains that the Defendant breached the Agreement. As such, to the extent any breaches of the Agreement occurred, Plaintiff is barred from asserting any claims under the Agreement due to its unclean hands. - 11 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 11 of 39
  12. 12. Also, Plaintiff falsely induced Sagent into executing the Agreement by, inter alia, misrepresenting the status and quality of its pre-prepared 510k application, failing to disclose that certain employees failed to properly assign their rights to the intellectual property that formed the basis of the parties’ Agreement, and that it had incorrectly prepared certain international patent applications assigned to Sagent under the Agreement. Plaintiff is thus barred by its wrongdoing in executing and performing the Agreement. Tenth Defense (Lack of Harm) The First Amended Complaint is barred, in whole or in part, to the extent Plaintiff has suffered no damages or harm or injury to a legally protected or cognizable interest as a result of the matters alleged in the First Amended Complaint. Plaintiff’s purported damages in its Complaint are speculative and incapable of calculation with specificity, thus Plaintiff’s claims fail for lack of any cognizable harm to its interests. Eleventh Defense (Failure to State A Claim for Attorneys’ Fees, Interest and Compensatory Damages) Plaintiff fails to allege facts or a cause of action against Defendant sufficient to support a claim for compensatory damages, prejudgment interest, attorneys’ fees and/or legal fees, or any other relief. Furthermore, Plaintiff’s claims for damages are speculative and incapable of calculation with specificity, which thus serves to bar Plaintiff from relief. Twelfth Defense (Implied Duty of Good Faith and Faith Dealing) The First Amended Complaint is barred, in whole or in part, to the extent Plaintiff breached its duty of good faith and fair dealing. Plaintiff exercised its discretion to the detriment of Sagent by its wrongful conduct and representations in the negotiation and execution of the - 12 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 12 of 39
  13. 13. Agreement regarding, inter alia, misrepresenting the status and quality of its pre-prepared 510k application, failing to disclose that certain employees failed to properly assign their rights to the intellectual property that formed the basis of the parties’ Agreement, and that it had incorrectly prepared certain international patent applications assigned to Sagent under the Asset Acquisition Agreement. Defendant further relied on these misrepresentations in executing and performing the Agreement. Thus, Plaintiff breached the covenant of good faith and fair dealing implied in the Asset Acquisition Agreement, and is not entitled to relief. Thirteenth Defense (In Pari Delicto) The First Amended Complaint is barred, in whole or in part, barred by Infusive’s own wrongful conduct. Upon the execution of the Agreement, Defendant hired Brad Robinson as President of a newly-created device division, called Sagent Technologies. In that role, Mr. Robinson’s duties were to commercialize and market the Patented Products pursuant to the Agreement. At the same time, however, Mr. Robinson, upon information and belief, in part owned and controlled Plaintiff. He therefore, wore two hats, one as President of Sagent Technologies where he was responsible for execution of the terms of the Agreement and another as owner and manager of Plaintiff who now complains that the Defendant breached the Agreement. As such, to the extent any breaches of the Agreement occurred, Plaintiff is barred from asserting any claims under the Agreement because it was the wrongdoer. Also, Plaintiff falsely induced Sagent into executing the Asset Acquisition Agreement by, inter alia, misrepresenting the status and quality of its pre-prepared 510k application, failing to disclose that certain employees failed to properly assign their rights to the intellectual property that formed the basis of the parties’ Agreement, and that had incorrectly prepared certain - 13 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 13 of 39
  14. 14. international patent applications assigned to Sagent under the Agreement. Thus, Plaintiff’s wrongdoing in executing and performing the Agreement bars it from recovery. Fourteenth Defense (Mutual Mistake) The First Amended Complaint is barred, in whole or in part, by the doctrine of mutual mistake. Pleading in the alternative, Infusive and Sagent, at the time of contract formation, shared a misconception about a vital fact upon which they based their bargain, namely, that if filed, Infusive’s pre-prepared 510(k) application for a pre-filled dual chamber syringe which incorporated certain of the intellectual property assigned under the Asset Acquisition Agreement would be quickly approved by the FDA. Because the Infusive pre-prepared 510(k) application was not approved and instead rejected in its submitted form, the doctrine of mutual mistake bars Infusive from recovering on its First Amended Complaint. Defendant hereby gives notice that it intends to rely upon any other and additional defenses that are now or may become available or appear during, or as a result of, the discovery proceedings in this action and hereby reserves its right to amend its answer to assert such defenses. SAGENT’S COUNTERCLAIMS For its Counterclaims, Defendant-Counterclaimant Sagent Holdings Co., n/k/a Sagent Pharmaceuticals, Inc. (“Sagent”), alleges the following causes of action against Plaintiff/Counter-Defendant Infusive Technologies, LLC (“Infusive”): - 14 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 14 of 39
  15. 15. PARTIES 1. Sagent is a corporation, organized and existing under the laws of the state of Delaware, with its principal place of business in Schaumburg, Illinois. Sagent focuses on developing, manufacturing, and marketing injectable pharmaceutical products in the United States. 2. Infusive was a limited liability company, organized and existing under the laws of the State of Nevada, until January 2009, when the Nevada Secretary of State revoked Infusive’s status as a valid entity. Infusive did not restore its active corporate status until March 16, 2011, after the filing of this lawsuit and after Sagent revealed that the corporate status was revoked. JURISDICTION AND VENUE 3. Federal diversity jurisdiction over this matter exists because the parties are citizens of different states and the matter in controversy exceeds the sum of $75,000. 28 U.S.C. § 1332. 4. Venue is proper in this judicial district under 28 U.S.C. § 1391(a). However, for the reasons set forth in Sagent’s March 4, 2011 motion to transfer venue, this matter should be transferred to the United States District Court for the Northern District of Illinois in accordance with 28 U.S.C. § 1404(a). 5. By virtue of the original complaint filed by Infusive against Sagent on January 3, 2011, there is an actual justiciable controversy between Sagent and Infusive in relation to the parties’ commercial relationship. - 15 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 15 of 39
  16. 16. STATEMENT OF FACTS The Commercial Failure of Infusive’s 510(k) Application 6. Each person who wants to market a medical device in the United States, for which a Premarket Approval (PMA) is not required, must submit a 510(k) to the FDA. 7. A 510(k) is a premarket submission made to FDA to demonstrate that the device to be marketed is at least as safe and effective—i.e., substantially equivalent—to a legally marketed device (21 CFR 807.92(a)(3)) that is not subject to Premarket Approval. In order for a 510(k) to be successfully reviewed by the FDA, the author of the 510(k) must compare the proposed device to one or more similar legally marketed devices and make and support its substantial equivalency claims. 8. On September 16, 2008, Sagent and Infusive executed an Asset Acquisition Agreement (“Agreement”) relating to the assignment of certain intellectual property by Infusive to Sagent. 9. Prior to execution of the Agreement, Infusive, through its agents, Brad Robinson and others, represented to Sagent that it had prepared a complete, ready-to-be-filed 510(k) application for a pre-filled dual syringe which incorporated certain patented inventions included in the assigned intellectual property (the “Pre-Prepared Infusive 510(k) Application”). 10. Infusive repeatedly represented, prior to and subsequent to contract formation, that once filed, the Pre-Prepared Infusive 510(k) Application would be approved by the FDA in approximately 90 days. For example, on August 17, 2007, Mr. Robinson, as Infusive’s managing member and agent, traveled to Schaumburg to meet with Joe Mase, Sagent’s Director - 16 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 16 of 39
  17. 17. of Marketing. At that meeting, Mr. Robinson represented that Infusive had prepared a 510(k) application and that he expected regulatory approval within 90 days of the application. 11. Most significantly, the Pre-Prepared Infusive 510(k) Application was a dual chamber syringe (called “ChaSyr”) that would be pre-filled with any appropriate medication prior to being supplied to physicians and other medical professionals. 12. On September 11, 2008, shortly before the Agreement was executed, Mr. Robinson confirmed to Sagent that “[t]he 510k is ready to file and only requires Sagent, the sponsor, going on the FDA website and paying the fee.” 13. Pursuant to the Agreement, Infusive agreed to assign certain intellectual property to Sagent. The intellectual property assigned by Infusive consisted of “Patent Rights,” “Technical Information,” and “Technology Rights,” which the Agreement defines as follows: A. “Patent Rights” are defined as U.S. Patent Nos. 6,997,910 (the ‘910 patent), 7,048,720 (the ‘720 patent), and 7,101,354 (the ‘354 patent) (all claiming syringe-related inventions), and certain patent applications in the same field of invention. (Agreement at Art. 1.9). B. “Technical Information” is defined as all Infusive inventions, know-how, and trade secrets relating to the “Patent Rights.” (Agreement at Art. 1.12). C. “Technology Rights” is defined as all other intellectual property “developed by Infusive” which “relat[e] to infusion therapy,” even if this intellectual property does not intersect with the “Patent Rights.” (Agreement at Art. 1.13). - 17 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 17 of 39
  18. 18. 14. In return for the assignment of the intellectual property (hereinafter “Patented Products”), Sagent agreed to pay to Infusive certain set payments as follows: A. Sagent agreed to pay Infusive a First Assignment Payment of $1.25 million five days after signing the Agreement (Art. 3.1(a)). Infusive required this payment to be made at the same time as filing the Pre- Prepared Infusive 510(k) Application because Infusive had prepared the that application and the parties’ intended to file the Pre-Prepared Infusive 510(k) Application without any modifications because it was for a specific product—i.e., a pre-filled dual chambered syringe. B. Sagent agreed to pay Infusive a Second Assignment Payment of $1.25 million, which was due 10 days after regulatory approval of the Pre- Prepared Infusive 510(k) Application for the first product to market which practices the “Patent Rights” (Art. 3.1(b)), or due on December 15, 2008 in the event that Sagent failed to file the 510(k) within five business days after contract execution. However, because Infusive filed the 510(k) within five business days after contract execution, this payment did not become due until after regulatory approval of the Pre-Prepared Infusive 510(k) Application as prepared by Infusive for a pre-filled dual syringe. C. Third, Sagent agreed to pay Infusive two types of “Commercialization Payments”—a sliding scale percentage of net proceeds if Sagent later sold, assigned, or licensed the Infusive intellectual property to a third-party (Art. 3.2(a)), and a sliding scale percentage of net sales for Sagent - 18 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 18 of 39
  19. 19. products covered by the “Patent Rights.” (Art. 3.2(b) (10% for first $2 million in net sales during contract year, 4% on sales in excess of $2 million during the same year)). 15. Pursuant to the Agreement, Sagent filed the Pre-Prepared Infusive 510(k) Application after the parties’ execution of the Agreement, and paid the initial $1.25 million assignment payment to Infusive. 16. On or around the same time, Sagent executed an employment agreement with Mr. Robinson (the “Employment Agreement”), and hired him to become the President of Sagent’s newly-created device division, called Sagent Technologies. Sagent specifically established that division for Robinson to develop and commercialize the Infusive-technology based Patented Products pursuant to the Agreement. 17. As set forth in his Employment Agreement, Robinson was “responsible for the commercialization of the technology acquired from Infusive Technologies, Inc. and shall have such other and further responsibilities, duties and authority reasonably assigned by [Sagent] from time to time.” Robinson was paid an annual salary of $200,000 and was also entitled to bonus compensation based upon his performance and the commercial success of the Patented Products. 18. Thereafter, as the President of Sagent Technologies, Robinson led Sagent’s efforts to perform under the Agreement including to secure FDA approval of the Patented Products and to develop commercial opportunities for the Patented Products and related technology. 19. The Pre-Prepared Infusive 510(k) Application proved to be seriously deficient. On November 18, 2008, only two months after the Agreement was executed, the FDA issued a deficiency letter, in which it determined that the Pre-Prepared Infusive 510(k) Application had - 19 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 19 of 39
  20. 20. failed to “identify a legally marketed predicate device” for the proposed dual-chamber syringe— i.e., the ChaSyr syringe. 20. In a December 9, 2008 letter submitted under Infusive’s letterhead, Robinson wrote the FDA in an effort to explain the Pre-Prepared Infusive 510(k) Application’s predicate device position, which was essentially a “combination” of predicate devices argument. 21. After meeting with Robinson and Sagent in January 2009, the FDA continued to have strong reservations about the Pre-Prepared Infusive 510(k) Application. By September 2009, the FDA had made it clear that it would not approve the 510(k) application as prepared by Infusive. Rather, the FDA determined that 510(k) approval was dependent on, at least: (i) the proposed device being filled by a medical professional in a hospital pharmacy, rather than pre- filled; and (ii) limitations on and a specific identification of the exact drugs that would be delivered by the ChaSyr syringe. Under those conditions, the Pre-Prepared Infusive 510(k) Application could not be approved as filed. 22. By early 2010, a viable alternative to the Pre-Prepared Infusive 510(k) Application had not been identified by the parties. 23. In reliance on Infusive’s pre-contract formation misrepresentations concerning the speedy FDA approval of the Pre-Prepared Infusive 510(k) Application, Sagent executed the Agreement, paid Infusive an initial assignment payment of $1.25 million, and made additional significant and substantial monetary expenditures, including hiring Robinson, to develop Patented Products which—contrary to Infusive’s representations—were not approvable by the FDA and otherwise could not form the basis of a viable business opportunity. - 20 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 20 of 39
  21. 21. Infusive’s Failure to Cooperate in the Prosecution of the Assigned Intellectual Property 24. After the Agreement was executed, Infusive did not cooperate, as it was required to do by the parties’ Agreement, in the prosecution of the assigned intellectual property. 25. The Agreement defines the assigned Patent Rights, in full, as: [T]he patents and patent applications listed on Exhibit 1.2, and all patents and patent applications filed in any country which claim the benefit of the filing date of any of the patents or applications listed on Exhibit 1.2, including all continuing, divisional, and renewal applications thereof, all patent applications, all patents which may be granted thereon, and all reissues, re-examinations and extensions thereof, and including all related patents and patent applications. (Agreement at Art. 1.9). Exhibit 1.2 lists: (i) the ‘910 patent, the ‘720 patent, and the ‘354 patent; (ii) four pending U.S. utility patent applications; and (iii) 16 pending international patent applications. 26. Article 8.2 of the Agreement provides that: The Parties shall provide each other with reasonable opportunity to advise the other, and shall cooperate with each other, regarding the prosecution of all patent applications included in the Patent Rights. (Agreement at Art. 8.2). 27. After execution of the Agreement, the relevant patents remained in Infusive’s name and Infusive failed to take the appropriate action to protect the intellectual property and failed to apprise Sagent of the regulatory status of the intellectual property, which resulted in, among other things, the abandonment of several patent applications. - 21 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 21 of 39
  22. 22. Infusive’s Failure to Notify Sagent of and Take Appropriate Action In Connection With the Later-Issued Thorne Improvement Patent 28. Under Article 2.1, Infusive agreed to not only assign the Patent Rights, but also to assign certain Technical Information and Technology Rights to Sagent. (Agreement at Art. 2.1). 29. “Technology Rights” is defined by the Agreement as: Infusive’s rights in any technical information, inventions, processes, devices, procedures, compositions, methods, formula, protocol, technique, data, trade secrets and other intellectual property developed by Infusive, as well as improvements thereof, relating to infusion therapy, which are not covered by Patent Rights. (Agreement at Art. 1.13) (emphasis added). 30. In Article 13.4(c) of the Agreement, Infusive expressly warranted and represented that: All former and current employees of Infusive have executed written contracts with Infusive that assign to Infusive all rights to any inventions, improvements, discoveries or information relating to the Patent Rights or Technology Rights. (Agreement at Art. 13.4(c)) (emphasis added). 31. Article 7.3 of the Agreement provides that: During the Term of this Agreement, Infusive shall promptly disclose to Sagent in writing the existence and nature of any additional Patent Rights, Technical Information, and Technology Rights not in existence or known to Sagent as of the Effective Date . . . Infusive acknowledges that its failure to promptly disclose such information to Sagent could result in loss of intellectual property rights, loss of competitive advantage, and other harm to Sagent. (Agreement at Art. 7.3). 32. On information and belief, Gale H. Thorne and Gale H. Thorne Jr. are currently non-managing members of Infusive. - 22 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 22 of 39
  23. 23. 33. On information and belief, Gale H. Thorne was a manager of Infusive prior to spring 2007. During the time of their involvement with and management of Infusive, Gale H. Thorne and Gale H. Thorne Jr. invented and prosecuted the ‘910 patent, the ‘720 patent, and the ‘354 patent, which were the three issued patents that Infusive was to assign to Sagent under the Agreement. 34. Gale H. Thorne and Gale H. Thorne Jr. are listed as named inventors of: (i) the ‘354 patent, which discloses a “Mixing Syringe With and Without Flush” invention; (ii) the ‘720 patent, which discloses a “Multi-Chamber, Sequential Dose Dispensing Syringe”; and (iii) the ‘910 patent, which also discloses a “Multi-Chamber, Sequential Dose Dispensing Syringe” invention. 35. Gale H. Thorne is listed as the patent agent who prosecuted the patent applications which issued into the ‘910 patent, the ‘720 patent, and the ‘354 patent. 36. On information and belief, Gale H. Thorne was removed as a manager of Infusive on or about spring 2007 due to personal conflicts between Thorne and Robinson. 37. The patent applications for the ‘354 patent, the ‘720 patent, and the ‘910 patent were filed by Thorne in 2004 to 2006, prior to Thorne’s departure from Infusive. 38. Shortly after leaving Infusive, and unbeknownst to Sagent, Thorne filed U.S. patent application No. 11/899,254 on September 5, 2007. The inventor of the claimed invention was stated to be Gale H. Thorne Jr. The September 5, 2007 patent application claimed a “multi- chamber, sequentially dispensing syringe apparatus,” and it issued into U.S. Patent No. 7,789,862 on September 7, 2010. - 23 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 23 of 39
  24. 24. 39. The invention disclosed by the Thorne’s September 5, 2007 patent application was closely related to the inventions previously patented under the ‘720 patent and ‘910 patent (which were to have been assigned to Sagent under the Agreement). 40. All three patents claimed a multi-chamber syringe apparatus, and indeed, the ‘720 patent and ‘910 patent were expressly disclosed in the patent specification for the ‘862 patent as relevant prior art. The ‘862 patent purports to be an improvement over the ‘720 patent and ‘910 patent prior art. 41. It was “a basic object [of Thorne’s later invention] to provide a discharge assembly which deters gas from being dispensed from the proximal chamber,” or stated simply, a dual-chamber syringe which prevents air in the second chamber from being injected into the patient. While the ‘720 patent and the ‘910 patent also achieved this outcome, the invention claimed by the Thorne’s later-issued ‘862 patent claimed to solve the following problem associated with the earlier patents: It should be noted that solution for the problem of retaining gas within the proximal chamber as disclosed in [the ‘910 patent] and [the ‘720 patent] is an intermediary filter which passes liquid, but not gas. * * * It is Applicants’ opinion that the filter disclosed in [the ‘910 patent and the ‘720 patent] can only be injection molded in relatively low cavitation molds, therefore limiting production efficiency and leading to increased cost. Similarly, a requirement to slit a molded part requires at least one additional step after molding, again leading to increased cost. Instead of the slit filter disclosed in the ‘910 patent and the ‘720 patent, the ‘862 patent uses a stopper structure which incorporates a “hollow, proximally-extending conduit sleeve,” i.e., a sleeve that uses surface tension in the same manner as a baby bottle. - 24 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 24 of 39
  25. 25. 42. Infusive attempted to have Gale H. Thorne and Gale H. Thorne Jr. execute new assignment agreements and inventor declarations for all pending patent applications in the Infusive intellectual property portfolio. Gale H. Thorne and Gale H. Thorne Jr. eventually prepared the requested inventor declarations, but refused to sign assignment agreements. 43. On information and belief, Gale H. Thorne and Gale H. Thorne Jr. have never executed invention assignment agreements with Infusive, thus rendering Infusive’s express warranty and representation in Article 13.4(c) of the September 16, 2008 Agreement false. 44. Infusive and Mr. Robinson never disclosed to Sagent in writing the existence and nature of the September 7, 2007 Thorne patent application, as required by Article 7.3 of the Agreement. 45. Sagent did not learn of the September 7, 2007 Thorne patent application until 2011. 46. Infusive, however, has known of the Thorne patent application since at least November 2009 and was aware of options for thwarting the Thorne’s later patent application (which was then still pending). For instance, Infusive could have filed a continuation application on either the ‘910 patent or ‘720 patent which would cover the improvement described in the Thornes’ new multi-chamber syringe patent application; because those patents issued out of a parent application that had been filed in 2005, they would have priority over the Thornes’ later application. 47. Despite those options, Infusive took no action. Infusive did not advise Sagent of the Thornes’ pending patent application for a dual-chamber syringe technology that was closely- related to the assigned Patent Rights. Infusive did not advise Sagent of any of the options for - 25 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 25 of 39
  26. 26. preventing the PTO from issuing a patent on the Thorne’s pending application. On information and belief, Mr. Robinson and Infusive affirmatively decided to conceal these facts from Sagent, given Mr. Thorne’s prior involvement and ownership stake in Infusive Infusive’s Failure to Notify Sagent and Take Corrective Action In Connection with the Thorne’s Botched International Patent Filings 48. Two of the international patent applications listed in Exhibit 1.2 to the Agreement are International Patent No. PCT/US2006/03957 and International Patent Application No. PCT/US2007/001848. 49. These two patent applications sought international patents on the inventions claimed by the U.S. ‘720 patent and ‘354 patent (which were assigned to Sagent under the terms of the Agreement). 50. Both international applications were prepared and filed by Gale H. Thorne on behalf of Infusive; however, both applications were incorrectly prepared. 51. The international applications failed to claim priority to the original U.S. patents on which they were based. Because of that error, nearly all foreign jurisdictions considered the underlying U.S. ‘720 and ‘354 patents (although prosecuted by the same patent agent and claiming the same inventions) to be invalidating prior art with respect to the international applications, thereby limiting international patent protection to Canada and Brazil. 52. Mr. Robinson and Infusive knew of this fact as early as February 2008. Although the Agreement with Sagent was executed on September 16, 2008, Infusive nonetheless listed these two incorrectly prepared international patent applications in Exhibit 1.2 as being a component of the Patent Rights to be assigned. - 26 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 26 of 39
  27. 27. 53. Mr. Robinson and Infusive did not inform Sagent prior to the Agreement’s execution that the obtainable patent coverage for International Patent No. PCT/US2006/03957 and International Patent Application No. PCT/US2007/001848 was limited to only two foreign jurisdictions. 54. Despite knowing that the international applications were invalid, Mr. Robinson and Infusive never told Sagent about the existence or impact of Gale Thorne Sr.’s errors in connection with the PCT/US2006/039576 and PCT/US2007/001848 international patent applications. On information and belief, Mr. Robinson and Infusive affirmatively decided to conceal these facts from Sagent, given Mr. Thorne’s prior involvement and ownership stake in Infusive. COUNT I FRAUDULENT INDUCEMENT 55. Sagent realleges Paragraphs 1-54 of its Counterclaims as if fully set forth herein. 56. Sagent and Infusive entered into the Agreement on September 16, 2008. 57. On repeated occasions, including, but not limited to, statements made to Sagent on August 17, 2007 and September 11, 2008, Infusive falsely represented to Sagent that its Pre- Prepared Infusive 510(k) Application for a pre-filled dual chamber syringe product was ready to file and would be approved by the FDA within 90 days of submission. 58. At the time that Infusive made those representations, it either knew that the representation was false, or knew that it had an insufficient basis for making the representation. - 27 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 27 of 39
  28. 28. 59. By representing that its Pre-Prepared Infusive 510(k) Application for a pre-filled dual chamber syringe product was ready to file and would be approved by the FDA within 90 days of submission, Infusive intended to induce Sagent’s consent to the Agreement’s formation. 60. Before contract formation, Infusive failed to disclose to Sagent that two of the international patent applications listed in Exhibit 1.2 to the Agreement and assigned to Sagent (International Patent No. PCT/US2006/03957 and International Patent Application No. PCT/US2007/001848) had been incorrectly prepared by Gale H. Thorne. 61. No later than February 2008, well in advance of the September 16, 2008 Agreement signing, Infusive knew that Thorne’s errors had limited the obtainable patent coverage for International Patent No. PCT/US2006/03957 and International Patent Application No. PCT/US2007/001848 to only two foreign jurisdictions 62. By failing to disclose that the obtainable patent coverage for International Patent No. PCT/US2006/03957 and International Patent Application No. PCT/US2007/001848 was limited to only two foreign jurisdictions, Infusive intended to induce Sagent’s consent to the Agreement’s formation. 63. Sagent justifiably relied on Infusive’s material false representations. 64. Sagent has been harmed by Infusive’s false representation including, but not limited to, by entering into the Agreement and paying sums to Infusive under the Agreement. PRAYER FOR RELIEF – COUNT I WHEREFORE, Sagent requests the following relief: A. Judgment in favor of Sagent on Count I and rescission of the Agreement, including an order returning the parties to the position they occupied prior to contract formation by awarding the return of the $1.25 million initial assignment payment from Infusive to Sagent; - 28 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 28 of 39
  29. 29. B. Judgment in favor of Sagent on Count I, including an award of damages sufficient to compensate Sagent for the harm suffered by Infusive’s fraudulent inducement; C. An award to Sagent of its reasonable costs and attorneys’ fees; and D. Such other and further relief as this Court and/or a jury may deem just and appropriate. COUNT II BREACH OF EXPRESS CONTRACT (Pled In the Alternative to Count I under Fed. R. Civ. P. 8(d)) 65. Sagent realleges Paragraphs 1-54 of its Counterclaims as if fully set forth herein. 66. Sagent and Infusive entered into the Agreement on September 16, 2008. 67. The Agreement is a valid and binding agreement that is enforceable against Infusive. 68. Sagent has performed its material obligations to Infusive under the Agreement. 69. Under Article 8.2 of the Agreement, Infusive was contractually obligated to cooperate with regard to the prosecution of all patent applications included in the Patent Rights. (Agreement at Art. 8.2). 70. Infusive breached its contractual obligations by working in concert with its owner, manager, and agent, Mr. Robinson, to fail to properly pay for, direct, and monitor the prosecution of the patent applications included in the Patent Rights, thereby resulting in, inter alia, several abandoned patent applications. 71. Under Article 7.3 of the Agreement, Infusive was contractually obligated to promptly disclose to Sagent in writing the existence of any additional Patent Rights, Technical - 29 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 29 of 39
  30. 30. Information, and Technology Rights not in existence of known to Sagent as of contract signing. (Agreement at Art. 7.3). 72. Infusive breached Article 7.3 of the Agreement by concealing and failing to disclose the September 5, 2007 patent application filed by Gale H. Thorne and Gale H. Thorne Jr. for an invention that was closely related to the assigned ‘720 patent and ‘910 patent. The invention claimed by the September 5, 2007 patent application was in all likelihood conceived of while Thorne and Thorne Jr. were affiliated with Infusive. 73. In Article 13.4(c) of the Agreement, Infusive expressly represented and warranted that: All former and current employees of Infusive have executed written contracts with Infusive that assign to Infusive all rights to any inventions, improvements, discoveries or information relating to the Patent Rights or Technology Rights. (Agreement at Art. 13.4(c)). 74. On information and belief, Infusive breached this express warranty because Gale H. Thorne and Gale H. Thorne Jr. have never executed invention assignment agreements with Infusive. 75. Under Article 2.1 of the Agreement, Infusive was contractually obligated to assign to Sagent “all rights, title and interest to the Patent Rights” “[c]oncurrent with the execution of this Agreement.” (Agreement at Article 2.1). 76. Infusive breached its contractual obligations by failing to assign, concurrent with the signing of the Agreement, the Patent Rights to Sagent. Assignment did not occur until September 2010. - 30 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 30 of 39
  31. 31. 77. Sagent has been harmed by Infusive’s various breaches of the Agreement in an amount to be determined at trial. PRAYER FOR RELIEF – COUNT II WHEREFORE, Sagent requests the following relief: A. Judgment in favor of Sagent on Count II, including an award of damages sufficient to compensate Sagent for the harm suffered by Infusive’s breach of the Agreement; B. An award to Sagent of its reasonable costs and attorneys’ fees; and C. Such other and further relief as this Court and/or a jury may deem just and appropriate. COUNT III BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING (Pled In the Alternative to Count I under Fed. R. Civ. P. 8(d)) 78. Sagent realleges Paragraphs 1-54 of its Counterclaims as if fully set forth herein. 79. Sagent and Infusive entered into an Agreement on September 16, 2008. 80. The Agreement is a valid and binding agreement that is enforceable against Infusive. 81. Sagent has performed its obligations to Infusive under the Agreement. 82. Infusive owes Sagent a duty of good faith and fair dealing with respect to the rights and obligations it obtained from Infusive under the Agreement; however, Infusive breached that duty of good faith and fair dealing by depriving Sagent of the fruits of the bargain under the Agreement. - 31 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 31 of 39
  32. 32. 83. Infusive exercised its discretion in a manner outside the contemplation of the parties and deprived Sagent the fruits of the bargain by failing to provide Sagent with a pre- prepared 510(k) application that would be approved by the FDA in a commercially viable form. 84. Infusive exercised its discretion in a manner outside the contemplation of the parties and deprived Sagent the fruits of the bargain by failing to advise Sagent that, because of Gale H. Thorne’s mistakes when preparing the applications, the obtainable patent coverage for International Patent No. PCT/US2006/03957 and International Patent Application No. PCT/US2007/001848 was limited to only two foreign jurisdictions. 85. Infusive exercised its discretion in a manner outside the contemplation of the parties and deprived Sagent the fruits of the bargain by failing to protect the intellection property; failing to apprise Sagent on the status of the intellection property; and failing to make the timely payments necessary to avoid the abandonment of patent applications included within the assigned Patent Rights. 86. Infusive exercised its discretion in a manner outside the contemplation of the parties and deprived Sagent the fruits of the bargain by concealing from Sagent the Gale H. Thorne, Sr. and Gale H. Thorne, Jr.’s September 7, 2007 patent application for a dual-chamber syringe technology that was closely-related to and purported to be an improvement on certain of the assigned Patent Rights, and by failing to take action that would have prevented the issuance of the Thorne’s ‘862 patent. 87. Sagent has been harmed by Infusive’s breach of its covenant of good faith and fair dealing in an amount to be determined at trial. - 32 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 32 of 39
  33. 33. PRAYER FOR RELIEF – COUNT III WHEREFORE, Sagent requests the following relief: A. Judgment in favor of Sagent on Count III, including an award of damages sufficient to compensate Sagent for the harm suffered by Infusive’s breach of the implied covenant of good faith and fair dealing; B. An award to Sagent of its reasonable costs and attorneys’ fees; and C. Such other and further relief as this Court and/or a jury may deem just and appropriate. COUNT IV UNJUST ENRICHMENT (Pled In the Alternative to Count II under Fed. R. Civ. P. 8(d)) 88. Sagent realleges Paragraphs 1-54 of its Counterclaims as if fully set forth herein. 89. On or about September 16, 2008, Sagent paid Infusive $1.25 million, thereby conferring a benefit on Infusive, which Infusive was aware of and had appreciation for. 90. Because Infusive failed to provide Sagent with a pre-prepared 510(k) application that would be approved by the FDA in a commercially viable form and failed to deliver and protect the Patented Products, it would be inequitable for Infusive to retain the $1.25 million paid to it by Sagent. 91. Infusive’s inability to provide Sagent with a pre-prepared 510(k) application that would be approved by the FDA in a commercially viable form has caused Sagent to expend, to no avail, significant and substantial amounts of money in an effort to develop and commercialize an irretrievably flawed product. - 33 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 33 of 39
  34. 34. PRAYER FOR RELIEF – COUNT IV WHEREFORE, Sagent requests the following relief: A. Judgment in favor of Sagent on Count IV, including an award of $1.25 million to Sagent; B. An award to Sagent of its reasonable costs and attorneys’ fees; and C. Such other and further relief as this Court and/or a jury may deem just and appropriate. COUNT V NEGLIGENT MISREPRESENTATION 92. Sagent realleges Paragraphs 1-54 of its Counterclaims as if fully set forth herein. 93. Infusive owed Sagent a duty to convey accurate information with respect to the viability of the 510(k) Application because Infusive prepared the application and knew the true facts relating to the viability of the application. Moreover, by virtue of Mr. Robinson’s employment as the President of Sagent’s medical device division, Robinson owed Sagent a duty to convey accurate information as Sagent’s fiduciary. 94. On repeated occasions, including, but not limited to, statements made to Sagent on August 17, 2007 and September 11, 2008, Infusive and Mr. Robinson falsely represented to Sagent that its Pre-Prepared Infusive 510(k) Application for a pre-filled dual chamber syringe product was ready to file and would be approved by the FDA within 90 days of submission. 95. By representing that its Pre-Prepared Infusive 510(k) Application for a pre-filled dual chamber syringe product was ready to file and would be approved by the FDA within 90 days of submission, Infusive and Mr. Robinson supplied false information for the guidance of Sagent in its business transactions. - 34 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 34 of 39
  35. 35. 96. Sagent justifiably relied on that false information when conducting its business affairs. 97. Infusive failed to exercise reasonable care or competence in communicating its representation that the Pre-Prepared Infusive 510(k) Application for a pre-filled dual chamber syringe product was ready to file and would be approved by the FDA within 90 days of submission. 98. Before contract formation, Infusive and Mr. Robinson failed to disclose to Sagent that two of the international patent applications listed in Exhibit 1.2 to the Agreement and assigned to Sagent (International Patent No. PCT/US2006/03957 and International Patent Application No. PCT/US2007/001848) had been incorrectly prepared by Gale H. Thorne. 99. No later than February 2008, well in advance of the September 16, 2008 Agreement, Infusive knew that Thorne’s errors had limited the obtainable patent coverage for International Patent No. PCT/US2006/03957 and International Patent Application No. PCT/US2007/001848 to only two foreign jurisdictions 100. By failing to disclose that the obtainable patent coverage for International Patent No. PCT/US2006/03957 and International Patent Application No. PCT/US2007/001848 was limited to only two foreign jurisdictions, Infusive and Mr. Robinson supplied false information for the guidance of Sagent in its business transactions. 101. Sagent justifiably relied on that false information when conducting its business affairs. 102. Infusive and Mr. Robinson failed to exercise reasonable care or competence in failing to advise Sagent that the obtainable patent coverage for International Patent No. - 35 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 35 of 39
  36. 36. PCT/US2006/03957 and International Patent Application No. PCT/US2007/001848 was limited to only two foreign jurisdictions. 103. Sagent has been harmed by Infusive’s negligent misrepresentation and omission in an amount to be determined at trial. PRAYER FOR RELIEF – COUNT V WHEREFORE, Sagent requests the following relief: A. Judgment in favor of Sagent on Count III, including an award of damages sufficient to compensate Sagent for the harm suffered by Infusive’s negligent misrepresentation and omission; B. An award to Sagent of its reasonable costs and attorneys’ fees; C. An award to Sagent of punitive damages; and D. Such other and further relief as this Court and/or a jury may deem just and appropriate. COUNT VI CONSUMER FRAUD – ILLINOIS CONSUMER FRAUD AND DECEPTIVE BUSINESS PRACTICES ACT (815 ILCS 505/1 et seq.) 104. Sagent realleges Paragraphs 1-54 of its Counterclaims as if fully set forth herein. 105. On repeated occasions, including, but not limited to, statements made to Sagent on August 17, 2007 and September 11, 2008, Infusive falsely represented to Sagent that its Pre- Prepared Infusive 510(k) Application for a pre-filled dual chamber syringe product was ready to file and would be approved by the FDA within 90 days of submission. 106. At the time that Infusive made that representation, it either knew that the representation was false, or knew that it had an insufficient basis for making the representation. - 36 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 36 of 39
  37. 37. 107. By representing that its Pre-Prepared Infusive 510(k) Application for a pre-filled dual chamber syringe product was ready to file and would be approved by the FDA within 90 days of submission, Infusive engaged in a deceptive act or practice that is prohibited by the Illinois Consumer Fraud Act. 815 ILCS 505/1 et seq. 108. The circumstances that relate to the foregoing deceptive act and underlying Agreement of the parties occurred primarily and substantially in Illinois. 109. Before contract formation, Infusive failed to disclose to Sagent that two of the international patent applications listed in Exhibit 1.2 to the Agreement and assigned to Sagent (International Patent No. PCT/US2006/03957 and International Patent Application No. PCT/US2007/001848) had been incorrectly prepared by Gale H. Thorne. 110. No later than February 2008, well in advance of the September 16, 2008 contract signing, Infusive knew that Thorne’s errors had limited the obtainable patent coverage for International Patent No. PCT/US2006/03957 and International Patent Application No. PCT/US2007/001848 to only two foreign jurisdictions 111. By failing to disclose that the obtainable patent coverage for International Patent No. PCT/US2006/03957 and International Patent Application No. PCT/US2007/001848 was limited to only two foreign jurisdictions, Infusive engaged in a deceptive act or practice that is prohibited by the Illinois Consumer Fraud Act. 815 ILCS 505/1 et seq. 112. The circumstances that relate to the foregoing deceptive act and underlying Agreement of the parties occurred primarily and substantially in Illinois. 113. Sagent justifiably relied on Infusive’s deceptive acts. - 37 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 37 of 39
  38. 38. 114. Sagent has been harmed by Infusive’s deceptive acts in an amount to be determined at trial. PRAYER FOR RELIEF – COUNT VI WHEREFORE, Sagent requests the following relief: A. Judgment in favor of Sagent on Count VI, including an award of damages sufficient to compensate Sagent for the harm suffered by Infusive’s violations of the Illinois Consumer Fraud Act; B. An award to Sagent of its reasonable costs and attorneys’ fees; C. An award to Sagent of punitive damages; and D. Such other and further relief as this Court and/or a jury may deem just and appropriate. Dated: May 16, 2011 Respectfully submitted, RAY QUINNEY & NEBEKER P.C. /s/ Arthur B. Berger Arthur B. Berger Samuel C. Straight MCGUIREWOODS LLP Edwin E. Brooks (admitted pro hac vice) Gary Y. Leung (admitted pro hac vice) Steven D. Hamilton (admitted pro hac vice) Attorneys for Defendant Sagent Holding Co. - 38 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 38 of 39
  39. 39. CERTIFICATE OF SERVICE I hereby certify that on the 16th day of May, 2011, I caused and true and correct copy of the foregoing to be filed with the Clerk of Court using the CM/ECF system, which will send notification of such filing to the following: Mark A. Larsen Lisa C. Rico Deborah R. Chandler LARSEN CHRISTENSEN & RICO, PLLC 50 West 300 South, Suite 400 Salt Lake City, Utah 84101 /s/ Lori McGee - 39 - Case 1:10-cv-00220-TC Document 38 Filed 05/16/11 Page 39 of 39

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