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Rushing v. Nexpress Solutions

September 14, 2006

ALAN J. RUSHING, PH.D., PLAINTIFF,
v.
NEXPRESS SOLUTIONS, INC. DEFENDANT.



The opinion of the court was delivered by: Siragusa, J.

DECISION AND ORDER

Before the Court is plaintiff's motion (Docket No. 17) for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c), in which he seeks dismissal of defendant's nine counterclaims. Also before this Court is defendant's application (Docket No. 30) to strike a portion of plaintiff's reply memorandum of law along with plaintiff's reply affidavit and attachments. For the reasons stated below, defendant's motion to strike is granted in part, and plaintiff's motion to dismiss defendant's second through eighth counterclaims is denied, except as to defendant's fifth counterclaim.

BACKGROUND

In 2002, defendant's predecessor, Heidelberg Digital L.L.C. ("HDI "), commenced an action against plaintiff in this Court under Civil Action No. 02-CV-633L(F) (the "2002 Federal Action"). On June 6, 2003 HDI voluntarily dismissed the 2002 Federal action without prejudice by filing a notice of dismissal pursuant to Rule 41(a)(1)(i). (Reply ¶¶ 59-60.) On the same day, HDI commenced an action against plaintiff in New York State Supreme Court, Seventh Judicial District, Monroe County (the "State Action"). In the complaint in the State Action, HDI alleged claims under a 1973 Eastman Kodak Company ("Kodak") Employment Agreement between plaintiff and Kodak, and claims under a 1999 employment agreement between plaintiff and HDI. (Reply ¶¶ 61-63.). HDI alleged that plaintiff was obligated to assign his rights under the '832 patent and the '972 patent (referred to in Defendant's Ninth Counterclaim in this action) to HDI. (Reply ¶ 65.) On May 19, 2004, counsel for all parties in the State Action signed a stipulation discontinuing the action with prejudice, and the stipulation was filed with the Monroe County Clerk on May 25, 2004. (Reply ¶ 66.)

Plaintiff also alleges in his reply that the 2002 Federal Action contained a claim identical to defendant's sixth counterclaim here: breach of the HDI contract's non- disclosure provision. When that Federal suit was dismissed and HDI filed the State Action, that claim, referred to by the parties as the "trek episode," was purposely omitted. (Reply ¶¶ 69-70.) Plaintiff alleges that then counsel for HDI sent a June 6, 2003, letter explaining why the trek episode claim was omitted:

Notwithstanding the fact that our recent efforts to resolve this matter informally were unsuccessful, in hopes that such a disposition may still be possible, please note that I have deleted from the complaint any references to the "trek" episode, allegations in the Federal Court complaint which Dr. Rushing took particular exception to. (Reply ¶ 70.) On August 27, 2003, New York State Justice Thomas A. Stander issued a decision, a transcript of which is incorporated into plaintiff's Reply, granting plaintiff partial summary judgment by dismissing all causes of action asserted against him under the 1973 Kodak Employment Agreement, based on the integration clause in the HDI Employment Agreement. (Reply ¶ 75.) HDI and plaintiff then entered into a Settlement Agreement, a copy of which is incorporated into defendant's amended answer. (Amended Answer ¶ 103.) In that document, plaintiff and HDI agreed that plaintiff "Rushing's Patent Rights" meant "U.S. Patent No. 6, 229,972, U.S. Patent No. 6,331,832, and U.S. Patent No. 6,567,171." (Settlement Agreement ¶ 1.1.) They also agreed that "HDI 's Patent Rights" meant, "U.S. Patent No. 6,385, 411 and U.S. Patent No. 6,427,057." (Settlement Agreement ¶ 1.2.) In the section of the Settlement Agreement entitled, "Grant of Rights," the plaintiff and HDI agreed as follows:

2.3 This Settlement Agreement, Assignment and License Agreement ("[sic] collectively referred to as "Agreements") confer no assignment, license, or rights to HDI by implication, estoppel, or otherwise under any patent applications or patents of Rushing other than Rushing's Patent Rights. Specifically, HDI has no rights, ownership or other interests in Rushing: U.S. Application No. 09/873465 (now U.S. Patent No. 6,671,052) and U.S. Patent Application No. 10/095166. (Settlement Agreement ¶ 2.3.)

In this lawsuit, defendant makes the following counterclaims, on which plaintiff is seeking to obtain judgment*fn1 by this Rule 12(c) motion:

Second counterclaim: defendant's claim that plaintiff breached the HDI Employment Agreement;

Third counterclaim: defendant's claim that plaintiff breached his common law duties to defendant by failing and refusing to assign the invention to NexPress;

Fourth counterclaim: defendant's claim that it is entitled to declaratory judgment that plaintiff is the rightful owner of the patent-in-suit (No. '052);

Fifth counterclaim: as an alternative to the Fourth counterclaim, defendant's claim that if it is not the rightful owner of the patent-in-suit, that it is entitled to a final adjudication declaring that plaintiff is not the rightful owner of the patent-in-suit by virtue of the Kodak Agreement and/or by Rushing's common law duties as an employee hired to invent, and a judgment further establishing and declaring the relative rights and responsibilities of the parties;

Sixth counterclaim: defendant's claim that plaintiff breached the HDI non-disclosure agreement;

Seventh counterclaim: defendant's claim of unfair competition on plaintiff's part; Eighth counterclaim: defendant's claim that plaintiff breached his fiduciary duty to defendant ...


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