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Covidien LP v. Esch

United States District Court, D. Massachusetts

January 11, 2017

Covidien LP and Covidien Holding Inc. Plaintiffs,
v.
Brady Esch Defendant.

          MEMORANDUM & ORDER

          Nathaniel M. Gorton United States District Judge

         This dispute arises out of alleged breaches of an employment agreement and a separation agreement between Covidien LP and Covidien Holding Inc. ("plaintiffs" or "Covidien"), on the one hand, and Brady Esch ("defendant"), Covidien's former employee, on the other. Plaintiffs allege defendant breached those agreements by 1) assigning rights to three patents to his new company rather than to Covidien and 2) disclosing plaintiffs' confidential information in the patent applications.

         Pending before this Court is plaintiffs' motion for a preliminary injunction. For the following reasons, plaintiff's motion will be allowed.

         I. Background

         Covidien is global healthcare company and a manufacturer of medical devices and supplies. At issue in this case are Covidien's Endovenous ("EV") products, which are used to treat superficial venous disease, commonly known as varicose veins.

         A. The NNC Agreement

         Brady Esch began working for Covidien in 2009 when Covidien acquired VNUS Technologies, Esch's employer at the time. In or about December, 2009, Esch entered into a "Non-Competition, Non-Solicitation, and Confidentiality Agreement" ("NNC Agreement") with Covidien.

         The NNC Agreement provides that Esch must disclose to Covidien all "inventions" (defined broadly in the NNC Agreement) created during his employment with Covidien or within one year after leaving the company:

You shall promptly disclose to the Company all Inventions (as defined in Subsection II.B), which are made or conceived by you, either alone or with others, during the term of your employment with the Company, whether or not during working hours.... In addition, in order to avoid any dispute as to the date on which Inventions were made or conceived by you, they shall be deemed to have been made or conceived during your employment with the Company if you take affirmative steps to have them reduced to practice either during the term of your employment or within one year after separation from employment.

         The NNC Agreement further states that Esch "hereby assign[s]" all interest in such inventions to Covidien and that Esch will not disclose any of Covidien's confidential information.

         B. The Separation Agreement

         In or about November, 2013, Esch was terminated from Covidien. At that time, he was the Director of Global Marketing for the VNUS business. As part of his termination, Esch signed a "Separation of Employment Agreement and General Release" ("Separation Agreement").

         The Separation Agreement provides in pertinent part, that:

any provisions of [the NNC Agreement] concerning the disclosure or ownership of inventions, methods, processes or improvements shall continue in full force and effect and shall not be superseded by any provision of [the Separation Agreement].

         The Separation Agreement also states that Esch shall abide by all previous agreements with respect to "nondisclosure of confidential information."

         C. Esch's Patent Applications

         Soon after Esch was terminated from Covidien, he formed his own company called Venclose, Inc. In March, 2014, Esch filed a provisional patent application 61/970, 498 ("'498 application"). Along with that patent application, Esch filed a document with the United States Patent and Trademark Office ("USPTO") purportedly assigning all rights to the '498 application to Venclose, Inc.

         A year later in March, 2015, Esch and Darius Pryzgoda filed the patent application 14/670, 339 ("'338 application"), claiming priority to the '498 application. Esch listed himself, Pryzgoda, Rory Christian and Cody Schlinder as inventors in the application. As with the '498 application, Esch assigned his rights to the '338 application to Venclose.

         Also in or about March, 2015, Esch filed a Patent Cooperation Treaty application, PCT/US2015/022849 ("PCT application") with the USPTO as a receiving office for the World Intellectual Property Organization. Venclose was listed as the ...


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