Question of fact on fraudulent concealment prevents dismissal on statute of limitations grounds
Capricorn Pharma, Inc. v. Matrixx Initiatives, Inc. and Zicam, LLC, Civil Action No. 08-873-JJF, August 19, 2009.
Farnan, J. Defendants’ Motion to Dismiss Counts V through X of Plaintiff’s First Amended Complaint is granted in part and denied in part.
Defendants move to dismiss claims for breach of contract, specific performance relating to ownership and inventorship of certain of defendants’ patents, misappropriation of trade secrets, fraud and negligent misrepresentation. Plaintiff had agreed to develop and manufacture Zicam-brand cold remedies for the defendants and the parties signed a mutual confidential disclosure agreement (CDA) in which they agreed not to disclose any confidential information received. In 2003 Zicam filed two provisional patent applications related to the cold remedies. A year later Matrixx filed two Patent Cooperative Treaty (PCT) applications claiming the benefit of priority from the provisional application and listing the vice president of Matrixx as the sole inventor. Thereafter the parties executed an addendum to the CDA in which the defendants agreed not to use plaintiff’s confidential information relating to Zicam-brand Rapid-Melt tablets for any purpose other than for regulatory approval. The parties dispute whether, in seeking the two patents at issue, defendants violated the CDA. Defendants move to dismiss based on Delaware’s three-year limitations. Specifically, defendants contend that the provisional application and/or the PTC filing should have put plaintiff on notice of its claim. Defendants also contend that plaintiff’s inventorship claim is not cognizable. Plaintiff responds that defendants fraudulently concealed their misappropriation. The Court concludes that plaintiff has adequately plead fraudulent concealment. There is no per se rule that the publication of a patent application starts the limitations period, and plaintiff has presented evidence that the defendants actively concealed their alleged misappropriation of plaintiff’s technology. As for the inventorship claims, the Court does not have jurisdiction to hear the issue on a pending patent. Therefore that count will be dismissed.
