Rick C. Sasso, M.D., and SEE LLC, Appellants-Plaintiffs,
Warsaw Orthopedic, Inc., Medtronic Sofamor Danek, Inc., and Medtronic, Inc., Appellees-Defendants
from the Kosciusko Circuit Court. The Honorable Curtis D.
Palmer, Special Judge. Trial Court Cause No.
FOR APPELLANTS: Frederick D. Emhardt, Brett E. Nelson, Ryan
T. Leagre, Plews Shadley Racher & Braun LLP, Indianapolis,
FOR APPELLEES: Michael T. Nilan, Teresa J. Kimker, Nilan
Johnson Lewis PA, Minneapolis, Minnesota; L. Alan Whaley,
Adam Arceneaux, Mark Alson, Ice Miller LLP, Indianapolis,
SEE LLC appeals the trial court's order denying its
motion for summary judgment and granting the defendants'
cross-motion for summary judgment. It argues that it is
entitled to unpaid royalties stemming from a 1998 contract.
Finding this contract unenforceable as a matter of law, we
affirm the judgment of the trial court.
Dr. Rick Sasso is a spinal surgeon and inventor. The
president of Indiana
Spine Group in Carmel, Indiana, he is the named inventor on
several United States patents related to rehabilitation of
In 1994, Sasso filed his first patent application, with
co-inventor Dan Justin, for a spine implant device. Justin
later assigned his entire interest to Sasso, making Sasso the
sole owner. This device involves screws and rods that provide
stability in the upper neck area. Sasso formed a company, SEE
LLC (SEE), with his brother and father-in-law to manage his
intellectual property. In July 1997, Patent 5,643,259 ("
the Patent" ) issued.
to This Suit
In 1998, Sasso began negotiating a potential business venture
with Sofamor Danek Group (SDG), the predecessor to the
defendants, in which he would transfer the Patent
and provide expertise in exchange for monetary compensation.
SDG's first draft of a contract was written as an
agreement between SDG and Sasso, but Sasso edited the
contract to replace his name with SEE's. Appellants'
App. 569-79. The parties signed this 1998 contract ("
the Agreement" ) after these edits had been made.
Id. at 251-58.
After the edits, one of the representations reads, " See
further warrants and represents that it owns solely, as
evidenced by a copy of an assignment attached hereto in
Schedule A, all right, title, and interest in the Patent and
the Intellectual Property Rights . . . ." Id.
at 571. There is no such document attached to the
contract. Indeed, there is no formal assignment
document establishing SEE's rights to the Patent anywhere
in the record. The right to the Patent was the heart of the
deal, as SEE purported in the Agreement to " irrevocably
transfer, assign, and convey to SDG all its entire
right, title, and interest in and to" the Patent.
Id. at 254.
SDG agreed to pay three types of consideration in exchange
for the rights to the Patent. First, it agreed to pay, and
did in fact pay, $100,000 to SEE. Second, it agreed to grant,
and did in fact grant, 1,500 shares of SDG stock to SEE.
The third form of payment (" 4(B)(iii) payment" )
constitutes the subject of this lawsuit:
A contingency payment in the amount of five percent (5%) of
the worldwide Net Sales of the Medical Device, if covered by
the Intellectual Property Rights, and two and one-half
percent (21/2%) if the Medical Device is not covered by the
Intellectual Property Rights.
Id. at 254. " Medical Device" is defined
as " any device, article, system, apparatus or product
including the Invention." Id. at 252. "
The Invention" is defined as " any product, method
or system relating to spinal or cranial surgery. . . ."
Id. " Intellectual Property Rights" is
defined as the Patent and associated know-how. Id.
Also in the definition of " Medical Device,"
however, is the following statement: " Such Medical
Devices shall be listed in accordance with SDG catalog
numbers and descriptions in an addendum to be attached to
this Agreement as agreed upon in writing between the
parties." Id. Just as there was no "
Schedule A" attached
to the contract to show assignment of the Patent, no such
addendum listing the products covered by the agreement was
ever negotiated, agreed upon, written down, or attached to
the Agreement. The defendants have never made a single
4(B)(iii) payment. Until the commencement of this lawsuit,
SEE never made a demand for 4(B)(iii) payments, nor did ...