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Hollister Incorporated v. Convatec Inc

June 21, 2011

HOLLISTER INCORPORATED, PLAINTIFF,
v.
CONVATEC INC., DEFENDANT.



The opinion of the court was delivered by: Matthew F. Kennelly, District Judge:

MEMORANDUM OPINION AND ORDER

Plaintiff Hollister Incorporated has sued ConvaTec Inc., alleging that ConvaTec's Flexi-Seal® Fecal Management System and Flexi-Seal® SignalTM Fecal Management System products infringe a patent Hollister acquired from Zassi Medical Evolutions, Inc. ConvaTec has moved for summary judgment. For the reasons stated below, the Court grants the motion.

Background

Hollister's claims in this case concern a patent for a bowel management system, U.S. Patent No. 7,722,583 (the '583 patent), the rights to which Hollister acquired from Zassi in September 2006. Zassi applied for the '583 patent in April 2006, and the patent was issued in May 2010. Zassi filed the application as a divisional application, claiming priority to a patent application Zassi had filed in August 2002. That earlier application resulted in the issuance of U.S. Patent No. 7,147,627 (the '627 patent), in December 2006. For the sake of convenience, the Court will refer to the application that led to the '627 patent as the '627 patent application and the application that led to the '583 patent as the '583 patent application -- even though the applications, of course, had different numbers.

On October 6, 2005, Zassi and ConvaTec executed a "Settlement and Release Agreement" regarding their respective bowel management system and ostomy care products. The recitals of the settlement agreement included the following:

WHEREAS, CONVATEC and ZASSI are parties to the Development and License Agreement of October 29, 1999 (the "COP Agreement") for the worldwide development and distribution of certain ostomy care products, including a Continent Ostomy Port ("COP"), and to the Supply Agreement of August 7, 2001 (the "Supply Agreement") pertaining to the manufacturing and supply of products consistent with their prior undertakings under the COP Agreement; and, WHEREAS, pursuant to the terms of the COP Agreement, CONVATEC and ZASSI provided, shared or exchanged information or know-how pertaining to COP and related technology; and, . . . .

WHEREAS, prior to and during 2002, CONVATEC and ZASSI provided, shared or exchanged information or know-how related to Bowel Management System (hereinafter "Bowel Management System"); and, . . . .

WHEREAS, ZASSI engaged in activities directed to the design and development of Bowel Management System(s), and in 2003 commercially launched its ZASSI Bowel Management SystemTM product; and, WHEREAS, CONVATEC engaged in activities directed to the design and development of Fecal Management System(s) ("FMS"), and in 2004 commercially launched its Flexi-Seal® FMS product; and, WHEREAS, disputes have arisen between CONVATEC and ZASSI regarding the COP Agreement, Bowel Management System, FMS and information or know-how provided, shared or exchanged between the Parties prior to the Effective Date;

WHEREAS, the Parties desire to settle and resolve all existing and potential disputes, actions, lawsuits, charges and claims that they may have against each other related to the COP Agreement, Bowel Management System, FMS or information or know-how provided, shared or exchanged prior to the Effective Date, to the fullest extent permitted by the law, . . . ; and, . . . .

WHEREAS, it is the intention of the Parties hereto that CONVATEC will be permitted to continue manufacturing, offering for sale and selling worldwide the present or past commercially available Flexi-Seal® FMS product, a sample of which CONVATEC has designated as "Exhibit A" and has provided to ZASSI, . . . . pursuant to the release granted in Paragraph 10 set forth below; . . . . ConvaTec LR 56.1 Stat., Ex. 9, at 1-2.

The settlement agreement provided that:

10. ZASSI hereby fully and forever releases, acquits, and discharges CONVATEC . . . from any and all past, present or future claims (including, without limitation, claims for patent infringement or misappropriation and/or misuse of confidential information), to the extent such claims relate in any manner or degree to CONVATEC's present or past commercially available FMS design, currently marketed by CONVATEC as the Flexi-Seal® FMS product, a sample of which CONVATEC has designated as "Exhibit A" and has provided to ZASSI, as set forth in the letter attached hereto as Exhibit A of this Settlement Agreement. . . . .

12. Each of the Parties expressly understand that nothing in this Settlement Agreement will be construed to: (i) release the other Party from existing or future parent patent infringement claims directed to new features or subject matter which are not present in CONVATEC's present or past commercially available FMS design as described in Paragraph 10, or ZASSI's present or past commercially available Zassi Bowel Management System design as described in Paragraph 11, respectively; . . . . . . .

28. The releases granted pursuant to Paragraphs 6-11 of this Settlement Agreement shall be full and final releases by which each Party waives all rights or benefits which that Party may now have or in the future may have under the terms of any statute or provision of law. The Parties understand and accept the risk that they may have substantial claims, liabilities, damages, actions and causes of action relating to the releases set forth in Paragraphs 6-11 that have not yet been manifested or are presently unknown, or that have not yet been identified and the Parties nevertheless intend to and do deliberately release these possible future claims, liabilities, damages, actions and causes of action.

Id. at 4-5, 9-10. At the time the parties executed the agreement, Zassi had filed the '627 parent patent application but had not yet filed the '583 patent application.

As required by the settlement agreement, Zassi and ConvaTec simultaneously executed a "Patent and Know-How Cross-License Agreement." In the cross-license agreement, Zassi licensed to ConvaTec nine issued patents and thirty-four pending patent applications relating to ostomy care technology. None of the patents or applications licensed in the cross-license agreement related to bowel management system technology. The cross-license agreement did not reference the '627 patent application.

In September 2006, Zassi assigned the rights to the '627 and '538 patent applications, "including the subject matter of all claims that may be obtained therefrom," to Hollister via an asset purchase agreement. Hollister alleges that ConvaTec's Flexi-SealĀ® Fecal Management System and Flexi-SealĀ® SignalTM Fecal Management System products ...


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