CORDIS CORP.
v.
MEDTRONIC, INC.
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The court granted the motion to establish an escrow fund for royalty payments and a preliminary injunction against termination of the license agreement.
Cordis Corporation sought to deposit royalty payments into an escrow account and prevent Medtronic, Inc. from terminating their License Agreement pend…
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Order GRANTING Cordis’ Motion For Establishment Of Escrow Fund And For Preliminary Injunction
ATKINS, District Judge.
This cause is before the court on plaintiff, Cordis Corporation’s Motion For Establishment Of Escrow Fund And For Preliminary Injunction. Based upon careful consideration of the record and oral arguments in this case, it is hereby
ORDERED AND ADJUDGED that the Motion is GRANTED.
Until final judgment is rendered in this action, Cordis will be permitted to deposit any royalty payments due and owing to Medtronic, Inc. into an interest-bearing escrow account, provided that upon final judgment, all funds accumulated in the escrow account are to be paid over to the prevailing party, and Medtronic, Inc. is enjoined from terminating the License Agreement during the pendency of this action.
The court notes that the circuits are split on the issue of whether to establish escrow accounts for the collection of royalty payments during the pendency of patent infringement suits. I have decided, however, that
Precision Shooting Equipment Co. v. Allen,
646 F. 2d 313 (7th Cir.1981) and
Atlas Chemical Industries, Inc. v. Moraine Products,
509 F. 2d 1 (6th Cir.1974) are more faithful to the spirit of
Lear, Inc. v. Adkins,
395 U.S. 653, 89 S.Ct. 1902, 23 L.Ed.2d 610 (1969), where the Supreme Court held that licensee estoppel is no longer valid law.
Under well-established case law, the party requesting a preliminary injunction bears the burden of establishing to the District Court that: 1) It has a substantial likelihood of eventual success on the merits; 2) Irreparable injury will be suffered unless the injunction issues; 3) The threatened injury to the movant outweighs the damage which the injunction may cause the opponent; and 4) The injunction would not be adverse to the public interest.
Productos Carnic, S.A. v. Central American Beef and Seafood Trading Co.,
621 F. 2d 683, 685 (5th Cir.1980);
Dallas Cowboy Cheerleaders, Inc. v. Scoreboard Posters, Inc.,
600 F. 2d 1184, 1187 (5th Cir.1979);
Texas v. Seatrain International, S.A.,
518 F. 2d 175, 179 (5th Cir.1975). The Affidavit of Harry W. Fletcher sets forth the fact that PACESETTER publicly disclosed and/or developed certain devices covered by the claims of U.S. Patent No. 3,902,501 prior to the alleged invention defined by the claims of such patent. If this allegation is proven true, then the patents-in-suit would arguably be invalid under the provisions of 35 U.S.C. § 102(a) and (b). Second, if Cordis fails to make its royalty payments to Medtronic, it will be vulnerable to a patent infringement action, with the prospect of paying treble damages and of being enjoined from manufacture and sale of the licensed products. If Cordis continues to make royalty payments while seeking to invalidate the patents in suit in this action, the royalty payments made to Medtronic cannot be recovered under
Troxel Manufacturing Co. v. Schwinn Bicycle,
465 F. 2d 1253 (6th Cir.1972). Once the royalty payments are made, there is no legal remedy available for repayment. If there is no legal redress, Cordis would be irreparably damaged. This damage far outweighs any damage Medtronic would suffer by the issuance of an injunction preventing the termination of the license agreement and the establishment of an escrow account for
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payment of royalties. Finally, the public has a clearly established interest in having invalid patents challenged in Federal courts. Should Cordis be successful, the claimed subject matter of the patents at suit would enter the public domain and Medtronic would no longer be entitled to maintain a legal monopoly in the claimed subject matter. The public interest would clearly be served by providing Cordis with reasonable protection so that it may challenge two patents which it believes invalid.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Intermedics Infusaid v. The Regents OF the Univ. OF Minn., 804 F.2d 129 (Fed. Cir. 1986)…the parent and subsidiary but to the Venture as well. . Intermedies also began escrowing royalties, rather than paying them to the University as required by the license. In so doing, they relied on Cordis Corp. v. Medtronic, Inc., 606 F.Supp. 132, 225 USPQ 135 (S.D.Fla.1985), which was, however, subsequently reversed on appeal to this court. 780 F. 2d 991, 228 USPQ 189 (Fed. Cir.1985), cert. denied, — U.S. —, 106 S.Ct. 1971, 90 L.Ed.2d 655 (1986). . Intermedies' motion stated: Though artfully worded to…
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Cordis Corp. v. Medtronic, Inc., 780 F.2d 991 (Fed. Cir. 1985)…BISSELL, Circuit Judge. This appeal is from the Order of the District Court for the Southern District of Florida, No. 84-2479-CIV-Atkins, (January 10, 1985), 606 F.Supp. 132, granting the motion for relief pendente lite of Cordis Corporation (Cordis): (a) permitting Cordis to deposit into an escrow account all future royalty payments due Medtronic, Inc. (Med-tronic) pursuant to the license agreement between the parties…
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Cordis Corp. v. Medtronic, Inc., 835 F.2d 859 (Fed. Cir. 1987)…due Medtronic on the tined leads could be deposited during the litigation, and to enjoin Medtronic from terminating the license agreement during the pendency of the action. The district court granted Cordis’ motion. Cordis Corp. v. Medtronic, Inc., 606 F.Supp. 132, 225 USPQ 135 (S.D.Fla.1985). We, however, vacated and remanded for further consideration. Cordis Corp. v. Medtronic, Inc., 780 F. 2d 991, 228 USPQ 189 (Fed.Cir.1985) [hereinafter Cordis /], cert. denied, 476 U.S. 1115, 106 S.Ct. 1971, 90 L.Ed.2d 65…
Authorities Cited
- Lear, Inc. v. Adkins, 395 U.S. 653 (U.S. 1969)
- State OF Tex. v. Seatrain Int'l, 518 F.2d 175 (5th Cir. 1975)
- Dallas Cowboys Cheerleaders, Inc. v. Scoreboard Posters, Inc., 600 F.2d 1184 (5th Cir. 1979)
- The Troxel Mfg. Co. v. Schwinn Bicycle Co., 465 F.2d 1253 (6th Cir. 1972)
- Productos Carnic, S.A. v. Cent. Am. Beef & Seafood Trading Co., 621 F.2d 683 (5th Cir. 1980)
- Atlas Chem. Indus., Inc. v. Moraine Prods., 509 F.2d 1 (6th Cir. 1974)
- Precision Shooting Equip. Co. & Paul E. Shepley, Jr. v. Holless W. Allen & Allen Archery, Inc., 646 F.2d 313 (7th Cir. 1981)