United States District Court, E.D. Pennsylvania
WENDY BEETLESTONE, J.
Before the Court are Defendants Galderma Laboratories, L.P. and Galderma Laboratories, Inc.s Motion to Dismiss and Motion to Stay Pending the Outcome of the Administrative Proceeding, Plaintiff Thomas Skölds Response in Opposition thereto, and Galderma L.P. and Galderma Inc.s Reply, as well as Defendant Galderma S.A.s Motion to Dismiss and Motion to Stay Pending the Outcome of the Administrative Proceeding, the Plaintiffs Response in Opposition thereto, and Galderma S.A.s Reply. The Court held oral argument on all pending motions on March 19, 2015.
For the reasons that follow, the motion to stay shall be denied as moot, the motions to dismiss for failure to state a claim shall be granted in part, and the motion to dismiss for lack of personal jurisdiction shall be denied.
II. FACTUAL HISTORY AND PROCEDURAL BACKGROUND
According to the facts alleged in the Complaint, Plaintiff Thomas Sköld is a citizen of Sweden. Compl. ¶ 4. Defendant Galderma S.A. (S.A.) is a Swiss corporation with its principal place of business in Switzerland, while Defendant Galderma Laboratories, Inc. (Inc.) is a Delaware corporation with its principal place of business in Texas and Defendant Galderma Laboratories, L.P. (L.P.) is a Texas limited partnership with its principal place of business in Texas. Id. ¶¶ 5-7. All three Defendant entities are involved in the research, development, marketing, and sale of pharmaceutical and therapeutic skin care products. Id. Sköld alleges that S.A. is the ultimate owner of both Inc. and L.P. Id. ¶ 8.
In Summer 2001, Sköld began developing the technology that would eventually become known as Restoraderm and set out to find entities interested in licensing the technology and developing the resulting product to be marketed and distributed for mass consumption. Id. ¶ 11. In September 2001, Sköld met with Collagenex Pharmaceuticals, Inc. (Collagenex) of Newtown, Pennsylvania, and presented it formulations of his Restoraderm technology, using the phrase Restoraderm technology both in his oral presentation and written materials. Id. ¶ 12. Sköld used the term Restoraderm in similar meetings he had with other pharmaceutical companies throughout the remainder of 2001. Id. ¶¶ 14-18. He first manufactured a Restoraderm product in its current form in about October 2001, and delivered samples of a material with the Restoraderm label to Collagenex in November and December 2001 and January 2002. Id. ¶¶ 19-21. Sköld and Collagenex executed a Letter of Intent in December 2001 and signed a Cooperation, Development, and Licensing Agreement on February 11, 2002 (the 2002 Agreement). Id. ¶¶ 22-23. Under the 2002 Agreement, Sköld continued developing the Restoraderm technology, while Collagenex developed and maintained the Restoraderm intellectual property rights, including registering and protecting the Restoraderm trademark, a process Collagenex began in 2002. Id. ¶¶ 24-26.
In August 2004, Sköld and Collagenex signed a Consulting Agreement under which Sköld would provide technical consulting and development services with respect to Restoraderm Technology in such manner as shall be requested by the Company from time to time, defining Restoraderm Technology as the topical drug delivery technology developed by Sköld. Id. ¶ 28. On August 19, 2004, Sköld and Collagenex restructured the 2002 Agreement into an Asset Purchase and Product Development Agreement (the 2004 Agreement), which formalized Skölds control of the Restoraderm development. Id. ¶¶ 27, 29. In the course of negotiating this agreement, Collagenex confirmed that the Restoraderm trademark was included in the assets contemplated in the agreement. Id. ¶ 30.
Inc. acquired Collagenex in March 2008 and terminated the 2004 Agreement with Sköld on November 27, 2009. Id. ¶¶ 33-34. Section 8.5(b) of the 2004 Agreement provides that should Collagenex terminate the Agreement, the assets, including the Restoraderm intellectual property, and additional related records shall be transferred to Sköld. Id. ¶ 35 & Ex. A at 19. Sköld alleges that the parties contractual intent was that the Restoraderm trademark would be returned to Sköld if the 2004 Agreement were cancelled by Collagenex (or its successors-in-interest), but that the Defendants have yet to return the Restoraderm trademark to Sköld in accordance with this provision. Id. ¶¶ 36-37.
After terminating the 2004 Agreement, Sköld alleges the Defendants gave mixed messages regarding their intentions for future use of the Restoraderm trademark and Restoraderm technology. Id. ¶ 38. On September 14, 2010, L.P. issued a Press Release announcing the launch of Cetaphil® Restoraderm® products in the United States, which, according to the Complaint, made it clear that the Defendants intended to use the mark Restoraderm in connection with a product to be sold by them in the United States. Id. ¶¶ 39-40. Sköld alleges that this press release was the first time that the Defendants had used the term Restoraderm in connection with a U.S. product that did not involve Skölds Restoraderm technology. Id. ¶ 43.
Sköld filed an action in this Court on September 15, 2014, alleging three counts under the Lanham Acttrademark infringement, false advertising, and unfair competitionand three counts under Pennsylvania state lawunfair competition, breach of contract, and unjust enrichment. Id. ¶¶ 48-80. Sköld previously initiated a proceeding before the U.S. Patent and Trademark Office seeking to cancel the Defendants registration of the Restoraderm trademark, id. ¶ 37, but that proceeding has been stayed by the Trademark Trial and Appeal Board (TTAB) pending the outcome of this litigation. See infra Section IV.A.
L.P. and Inc. filed a motion to dismiss on December 1, 2014. They contend as follows. First, the breach of contract and unjust enrichment claims are barred by Pennsylvanias four-year statute of limitations because the claims began to accrue prior to September 15, 2010. Second, the breach of contract claim should also be dismissed for failing to comply with the agreements dispute resolution and mediation clause. Third, the unjust enrichment claim should be dismissed because the complained-of conduct is governed by contract, which precludes Sköld from availing himself of quasi-contract theories of recovery. And finally, the unfair competition claim is precluded by the gist of the action doctrine because he impermissibly attempts to recast a breach of contract claim as a tort claim. See L.P./Inc. Mot. to Dismiss at 8-9.
On December 22, 2014, Sköld filed his response in opposition. He argues that he filed the Complaint within the four-year limitations period because he was unaware the contract was breached until September 14, 2010, when L.P. issued the press release announcing the Restoraderm product. In the alternative, Sköld contends he is entitled to equitable tolling of the statute of limitations. Furthermore, he argues that the unjust enrichment claim is not precluded against all parties by the contract and the gist of the action doctrine does not bar his unfair competition claim. See Pl.s L.P./Inc. Oppn at 10-13. In reply, L.P. and Inc. argue that Sköld knew about the Defendants use of Restoraderm no later than August 16, 2010, when he initiated the TTAB proceeding, attaching a May 26, 2010 press release demonstrating Defendants widespread public use of the RESTORADERM mark for its products. L.P./Inc. Reply at 2. Based on that press release, L.P. and Inc. contend that Sköld transparent[ly] attempt[s] to avoid dismissal on statute of limitations grounds. Id. They also argue that Sköld is not entitled to equitable tolling and reaffirm their arguments on the other grounds. See Id. at 4-8.
S.A. filed its own motion to dismiss on January 15, 2015. See S.A. Mot. to Dismiss; see also supra note 1. In opposition to S.A.s jurisdictional argument, Sköld argued that jurisdiction is proper under the federal long-arm statute, Federal Rule of Civil Procedure 4(k)(2), because S.A. has sufficient contacts with the United States such that the exercise of jurisdiction comports with due process. See Pl.s S.A. Oppn at 9-10. Furthermore, Sköld alleges that the forum selection clause in the 2004 Agreement operates to subject S.A. to jurisdiction in this Court. See Id. In Reply, S.A. argues that: (1) Rule 4(k)(2) does not apply; (2) the forum selection clause does not apply to S.A. as a non-signatory third party to the 2004 Agreement; and (3) the forum selection clause does not apply to the Skölds claims against it. See S.A. Reply at 2-9.
A. Motions to Stay
The Court first addresses the Defendants motions to stay this action pending a decision of the TTAB in the cancellation proceeding. In his Opposition to S.A.s motion to dismiss and motion to stay, Sköld brought to the Courts attention that the TTAB proceeding has been stayed pending the outcome of this litigation. Pl.s S.A. Oppn at 11 (citing Michie Decl. ¶ 13 & Ex. J). In its Reply, S.A., on behalf of all three Defendants, recognized this action by the TTAB and withdrew the motions to stay. S.A. Reply at 1 n.1. Accordingly, the Defendants motions to stay are moot.
B. Alternative Dispute Resolution Clause
The Defendants contend that the Complaint should be dismissed in its entirety for failure to comply with the 2004 Agreements dispute resolution and mediation clause. L.P./Inc. Mot. to Dismiss at 12-13. The clause provides that [a]ny dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof shall first be referred by the parties to their senior-level executives for attempted resolution through good-faith negotiations. Compl. Ex. A § 9.1 (emphasis added). Should negotiations fail, thirty days after making a written request to initiate those negotiations, either Party may, by written notice to the other, require that the Dispute be referred to non-binding mediation administered by the American Arbitration Association. Id. (emphasis added). The Defendants assert that Sköld did not refer a dispute to a senior-level executive for negotiations and failed to make a written request that the dispute be referred to nonbinding mediation. L.P./Inc. Mot. to Dismiss at 12-13. Sköld responds that the language of the mediation clause is permissive (either Party may . . . require) and also argues that, in any event, Inc. has waived its right to invoke the clause because it participated in litigation over the dispute in the cancellation action before the TTAB. See Pl.s L.P./Inc. Oppn at 14-15.
The dispute resolution clause in the 2004 Agreement contains two clauses, one of which is mandatory (the parties shall refer the matter to senior executives to attempt to negotiate a resolution) and the other which is permissive (the parties may refer the matter to nonbinding mediation). Given the voluntary nature of the latter, this Court agrees with Sköld that he was not required to refer this dispute to mediation before bringing suit here against Inc.
L.P. and S.A., who are not parties to the 2004 Agreement, also contend that the dispute resolution clause requires their dismissal from this action. In essence, they urge this Court to accept the contention that a nonparty to an agreement should be permitted to force a signatory party to engage in negotiations pursuant to a permissive mediation clause in that agreement as a condition precedent to filing suit but cite no relevant case or statute in support of this contention. See United States v. Benish, 5 F.3d 20, 26 (3d Cir. 1993) (rejecting a partys claim where the party provid[ed] no legal support for his argument or any persuasive reason for the court to find in his favor). The Court sees no persuasive reason to dismiss Skölds entire Complaint based on this unsupported argument. Accordingly, the motion to dismiss the Complaint against L.P. and S.A. on this ground shall be denied.
Regarding Inc.: although Sköld did fail to bring in a senior-level executive to try to resolve the disputeas he was required to do under the dispute resolution provisionInc.s participation in the TTAB proceedings waived any rights it may have had to seek to have the parties executives negotiate an end to the dispute. See, e.g., LBL Skysystems (USA), Inc. v. APG-Am., Inc., No. 02-5379, 2005 WL 2140240, at *30 (E.D. Pa. Aug. 31, 2005) (holding that a party that engages in discovery and files pretrial motions waives a contracts alternative dispute resolution provision); Smith v. IMG Worldwide, Inc., 360 F.Supp.2d 681, 687 (E.D. Pa. 2005) (finding that a partys engaging in motion practice and providing substantial discovery constituted waiver of contractual alternative dispute resolution provision).
Viewing the four years worth of docket entries in the TTAB action, the Court considers that Inc. did not file a motion to stay the TTAB proceedings pending executive-level negotiations and instead filed, inter alia, motions to dismiss, a protective order, multiple summary judgment motions (one of which was partially granted in its favor), and a final brief in preparation for trial. See, e.g., Sköld v. Galderma Labs., Inc., Cancellation No. 92052897, 2012 WL 5902083 (T.T.A.B. Nov. 8, 2012) (granting Inc.s motion for partial summary judgment on Skölds abandonment claim). See also generally Registrants Trial Brief, Sköld v. Galderma Labs., Inc., Cancellation No. 92052897 (T.T.A.B. Aug. 13, 2014), Docket No. 81. This four-year history of litigation in the cancellation ...