United States District Court, E.D. Pennsylvania
Decided March 20, 2015.
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
For THOMAS SKOLD, Plaintiff: CHRISTOPHER J. MICHIE, LEAD ATTORNEY, PRO HAC VICE, BRUCE W. CLARK, CLARK MICHIE LLP, PRINCETON, NJ; MICHAEL D. LIPUMA, LEAD ATTORNEY, PHILADELPHIA, PA.
For GALDERMA LABORATORIES, L.P., GALDERMA LABORATORIES, INC., Defendants: JEFFREY M. BECKER, LISA NORMAND, LEAD ATTORNEYS, PRO HAC VICE, HAYNES & BOONE LLP, DALLAS, TX; JOSEPH LAWLOR, RICHARD D. ROCHFORD, LEAD ATTORNEYS, PRO HAC VICE, HAYNES & BOONE LLP, NEW YORK, NY; FREDERICK A. TECCE, PANITCH, SCHWARZE, BELISARIO AND NADEL, LLP, PHILADELPHIA, PA.
For GALDERMA S.A., Defendant: JOSEPH LAWLOR, RICHARD D. ROCHFORD, LEAD ATTORNEYS, HAYNES & BOONE LLP, NEW YORK, NY; FREDERICK A. TECCE, PANITCH, SCHWARZE, BELISARIO AND NADEL, LLP, PHILADELPHIA, PA.
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 Skö ld's 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 Plaintiff's 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 Skö ld 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. Skö ld alleges that S.A. is the ultimate owner of both Inc. and L.P. Id. ¶ 8.
In Summer 2001, Skö ld 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, Skö ld 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. Skö ld 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. Skö ld and Collagenex executed a Letter of Intent in December 2001 and signed a Co-operation, Development, and Licensing Agreement on February 11, 2002 (the " 2002 Agreement" ). Id. ¶ ¶ 22-23. Under the 2002 Agreement, Skö ld 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, Skö ld and Collagenex signed a Consulting Agreement under which Skö ld 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 Skö ld." Id. ¶ 28. On August 19, 2004, Skö ld and Collagenex restructured the 2002 Agreement into an Asset Purchase and Product Development Agreement (the " 2004 Agreement" ), which " formalized Skö ld's 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 Skö ld 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 Skö ld. Id. ¶ 35 & Ex. A at 19. Skö ld alleges that the " parties' contractual intent was that the Restoraderm trademark would be returned to Skö ld 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 Skö ld in accordance with this provision. Id. ¶ ¶ 36-37.
After terminating the 2004 Agreement, Skö ld 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. Skö ld 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 Skö ld's Restoraderm technology." Id. ¶ 43.
Skö ld filed an action in this Court on September 15, 2014, alleging three counts under the Lanham Act--trademark infringement, false advertising, and unfair competition--and three counts under Pennsylvania state law--unfair competition, breach of contract, and unjust enrichment. Id. ¶ ¶ 48-80. Skö ld 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 Pennsylvania's 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 agreement's dispute resolution and mediation clause. Third, the unjust enrichment claim should be dismissed because the complained-of conduct is governed by contract, which precludes Skö ld 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, Skö ld 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, Skö ld 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. Opp'n at 10-13. In reply, L.P. and Inc. argue that Skö ld 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 Defendant's 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 Skö ld " transparent[ly] attempt[s] to avoid dismissal on statute of limitations grounds." Id. They also argue that Skö ld 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, Skö ld 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. Opp'n at 9-10. Furthermore, Skö ld 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 Skö ld's 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, Skö ld brought to the Court's attention that the TTAB proceeding has been stayed pending the outcome of this litigation. Pl.'s S.A. Opp'n 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 Agreement's 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 Skö ld 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. Skö ld 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. Opp'n 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 Skö ld 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 party's 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 Skö ld's 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 Skö ld did fail to bring in a senior-level executive to try to resolve the dispute--as he was required to do under the dispute resolution provision--Inc.'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 contract's alternative dispute resolution provision" ); Smith v. IMG Worldwide, Inc., 360 F.Supp.2d 681, 687 (E.D. Pa. 2005) (finding that a party's engaging in motion practice and providing " substantial discovery" constituted ...