Citations
- 836 F. Supp. 2d 1203
Full opinion text
MEMORANDUM AND ORDER
JOHN W. LUNGSTRUM, District Judge.
TABLE OF CONTENTS
Introduction...................................................................1210
I. Motions Relating to Experts.............................................1211
A. Plaintiffs’ Motion to Exclude Troxel Testimony (Doc. # 426)..............1211
B. Plaintiffs’ Motion to Exclude Sur-Rebuttal Reports (Doc. # 428) ..........1211
C. Purolite’s Motion to Exclude Clifford Testimony (Doc. # 430).............1212
D. Plaintiffs’ Motion for Leave to File Declaration (Doc. # 542)..............1212
II. Summary Judgment Standard............................................1213
III. Purolite’s Counterclaims................................................1213
A. Consequential Damages..............................................1213
B. Breach of the Agreement — Specifications ...............................1214
1. STATUTE OF LIMITATIONS....................................1214
2. MERITS OF THE CLAIM........................................1216
C. Breach of the Agreement — Pursuit of Suspected Infringer.................1218
D. Breach of the Agreement — Competitive Acts.............................1219
1. DAMAGES......................................................1219
2. MERITS OF THE CLAIM........................................1220
E. Breach of the Implied Covenant of Good Faith and Fair Dealing..........1221
1. DAMAGES......................................................1222
2. MERITS OF THE CLAIM........................................1222
F. Unfair Competition..................................................1223
G. Restraint of Trade...................................................1223
IV. Layne’s Claims for Breach of Contract...................................1226
A. Purolite’s Defense of a Prior Material Breach...........................1227
1. PROVISION OF SPECIFICATIONS ..............................1227
2. COMPETITIVE ACTS...........................................1227
3. PURSUIT OF SUSPECTED INFRINGER.........................1227
4. FAILURE TO PAY FOR PRODUCT ..............................1228
B. Claim for Unpaid Royalties................... 1229
C. Claim for Breach of Section 11.2. ......................................1229
1. SURVIVAL OF TERMINATION..................................1230
2. UNREASONABLE RESTRICTION ON COMPETITION............1231
3. MERITS OF THE CLAIM........................................1234
D. Claim for Breach of Section 10.1.......................................1235
1. INCORPORATION OF THE OTHER AGREEMENT...............1236
2. USE OF INTELLECTUAL PROPERTY...........................1236
V. Plaintiffs’ Patent Claims................................................1237
A. Infringement........................................................1237
1. MARKING ESTOPPEL..........................................1237
2. EQUIVALENTS, INDIRECT INFRINGEMENT...................1238
3. “DISPERSAL THROUGHOUT” (CLAIMS 1 AND 15)...............1239
4. “BY THE ACTION OF THE OXIDANT” (CLAIM 1) ................1241
5. “SALT OF SAID METAL” (CLAIM 1).............................1242
6. SUMMARY OF INFRINGEMENT ISSUES........................1243
B. Invalidity...........................................................1244
1. LICENSE ESTOPPEL...........................................1244
2. SCOPE OF INVALIDITY DEFENSES............................1244
3. INOPERABLE PROCESS (CLAIM 1).............................1244
4. WRITTEN DESCRIPTION (CLAIM 1)............................1246
5. ENABLEMENT (CLAIM 1)......................................1249
6. ANTICIPATION BY PRIOR ART (CLAIM 15)......................1252
7. OBVIOUSNESS (CLAIM 15)......................................1256
8. SUMMARY OF INVALIDITY ISSUES............................1257
Summary of Orders 1257
MEMORANDUM AND ORDER
This case arises from an agreement (“the Agreement”) by which SolmeteX, Inc. (“SolmeteX”) licensed certain technology for the removal of arsenic from water, to which it held rights under a patent, to defendant Bro-Tech Corporation, d/b/a The Purolite Company (“Purolite”). Plaintiff Layne Christensen Company (“Layne”) acquired SolmeteX and asserts SolmeteX’s rights under the patent and the Agreement. Layne terminated the Agreement. Layne now asserts claims against Purolite for patent infringement, and pursuant to a prior order of the Court, Arup SenGupta, the owner of the patent, was added as a required plaintiff. Layne also asserts claims against Purolite for breach of the Agreement. Purolite has asserted counterclaims against Layne for breach of contract, breach of the implied covenant of good faith and fair dealing, unfair competition, and restraint of trade.
This matter presently comes before the Court on various motions by the parties involving expert witnesses. As more fully set forth below, the Court rules on those motions as follows: Plaintiffs’ motion to exclude testimony by Richard Troxel (Doc. #426) is granted in part and denied in part; the motion is granted with respect to opinions concerning Layne’s claim for royalties and Purolite’s claim for unpaid invoices, but is denied as moot with respect to damages on Purolite’s other counterclaims. Plaintiffs’ motion to exclude certain expert sur-rebuttal reports (Doc # 428) is denied. Purolite’s motion to exclude testimony by Dennis Clifford (Doc. #430) is denied. Plaintiffs’ motion for leave to file a declaration by Dr. Clifford (Doc. # 542) is granted, and the proposed declaration is deemed filed.
This matter also comes before the Court on Layne’s motion for summary judgment on certain of Purolite’s counterclaims (Doc. # 404). That motion is granted, and Layne is awarded summary judgment on Purolite’s counterclaims at issue in the motion, namely all claims for breach of contract other than Purolite’s claim of a breach based on the failure to pay for product, and Purolite’s claims for unfair competition, restraint of trade, and breach of the implied covenant of good faith and fair dealing.
The matter is also before the Court on Layne’s motion for partial summary judgment on its claims for breach of contract (Doc. # 406). That motion is granted in part and denied in part. As it relates to Layne’s claim for damages for unpaid royalties, the motion is granted with respect to Purolite’s liability, but denied with respect to the amount of damages. As it relates to Layne’s claim for a permanent injunction for breach of Section 11.2 of the Agreement, the motion is granted, and Purolite is hereby permanently enjoined from making, selling, or using the product FerrIX A33E or any substantially similar product that uses “Intellectual Property” (as defined in the Agreement) resulting from Purolite’s activities under the Agreement.
The matter is also before the Court on plaintiffs’ motion for summary judgment on its claims of patent infringement (Doc. #408). That motion is granted in part and denied in part. The motion is granted with respect to the following, on which plaintiffs are awarded summary judgment: Purolite’s theories that Claim 1 of the patent is not infringed based on the “by the action of the oxidant” and “salt of said metal” limitations; and Purolite’s invalidity defenses based on an inoperable process under 35 U.S.C. § 112 (Claim 1), the lack of a written description under 35 U.S.C. § 112 (Claim 1), and obviousness under 35 U.S.C. § 103 (Claim 15). The motion is denied in all other respects.
The matter is also before the Court on Purolite’s motion for summary judgment on certain of plaintiffs’ claims (Doc. # 410). That motion is granted in part and denied in part. The motion is granted with respect to the following, on which Purolite is awarded summary judgment: Layne’s claim for breach of Section 10.1 of the Agreement, to the extent that such breach is based on an underlying breach of a separate non-disclosure agreement between SolmeteX and Purolite; with respect to patent infringement, plaintiffs’ marking estoppel theory and any claims by plaintiff based on indirect infringement or the doctrine of equivalents; and with respect to patent invalidity, plaintiffs’ license estoppel theory and Purolite’s defense that Claim 15 of the patent is anticipated by prior art pursuant to 35 U.S.C. § 102 — and thus also plaintiffs’ claim for infringement of Claim 15. The motion is denied is all other respects.
I. Motions Relating to Experts
A. Plaintiffs’ Motion to Exclude Troxel Testimony (Doc. #126)
Plaintiffs Layne and Dr. SenGupta move to exclude expert testimony by Purolite’s damages expert, Richard Troxel. This motion is granted in part and denied in part.
First, the motion is granted with respect to Mr. Troxel’s opinions concerning the amount of unpaid invoices for product sold to Layne on which Purolite seeks to recover. In his report, Mr. Troxel merely totaled up the balance due on three invoices to arrive at a total amount due. Purolite has not addressed this opinion in its response brief, and thus it has not disputed that at trial Mr. Troxel would be doing nothing more than simply adding three numbers. Because the Court agrees with plaintiffs that adding up the three invoices does not require expert testimony and because this argument is unopposed, the motion is granted as it relates to this opinion.
Second, by this opinion, the Court has granted Layne summary judgment on all other counterclaims asserted by Purolite. See infra Part III. Accordingly, the motion is denied as moot to the extent that it relates to Mr. Troxel’s opinions concerning damages for those counterclaims.
Third, the motion is granted with respect to Mr. Troxel’s opinions on plaintiffs’ claims for damages for infringement of the patent. Plaintiffs object to this testimony on the basis that Mr. Troxel did not do any analysis himself, but merely relied on the opinion of a Purolite executive concerning an appropriate royalty percentage. Purolite has not responded to this argument. Based on the evidence submitted by plaintiffs, it does appear to the Court that Mr. Troxel has not articulated an independent opinion on that issue. See Ash Grove Cement Co. v. Employers Ins. of Wausau, 246 F.R.D. 656, 661 (D.Kan.2007) (Lungstrum, J.) (expert may not simply parrot or recite opinions and knowledge of other witnesses). For that reason and because the motion is unopposed with respect to these opinions, Mr. Troxel’s opinions on this issue of plaintiffs’ infringement damages will not be admitted.
B. Plaintiffs’ Motion to Exclude SurRebuttal Reports (Doc. # 128)
Plaintiffs move to exclude expert reports by Mr. Troxel and by Daniel Stack, another Purolite expert, that were provided after the expiration of the Court’s expert disclosure deadlines. Purolite concedes that these two reports were submitted in rebuttal to plaintiffs’ rebuttal expert reports. This motion is denied.
First, given the Court’s rulings, see supra Part I.A, Mr. Troxel will not be offering expert testimony at trial. Accordingly, the motion is moot with respect to Mr. Troxel’s additional report.
Second, the Court agrees that the sur-rebuttal report by Dr. Stack was not authorized by the Court’s scheduling order. Nevertheless, as long as he does not offer any new opinions separate from those offered in his authorized report, Dr. Stack will of course be permitted at trial to comment on criticisms by plaintiffs’ expert of Dr. Stack’s opinions. Moreover, Purolite could have submitted Dr. Stack’s surrebuttal opinions in the form of a declaration to be considered at summary judgment. Thus, plaintiffs have suffered no prejudice from the fact that those surrebuttal opinions were formalized in a report, and in fact plaintiffs may be better able to prepare to cross-examine Dr. Stack at trial. In ruling on summary judgment, the Court will not consider any new opinion offered by Dr. Stack that is not fairly contained in his other report, and any such objection to a new opinion may be asserted at trial when appropriate. Accordingly, the Court denies the motion to exclude the sur-rebuttal report by Dr. Stack. Plaintiffs’ request for sanctions is also denied.
C. Purolite’s Motion to Exclude Clifford Testimony (Doc. #480)
The Court also denies Purolite’s motion to exclude testimony by plaintiffs expert, Dennis Clifford. First, with respect to his opinions concerning infringement, the Court concludes that Dr. Clifford’s opinions are sufficiently based on his experience and that Purolite’s objections concerning his analysis and the lack of testing go to the weight of the opinions and not to their admissibility. Second, the Court will not exclude Dr. Clifford’s invalidity opinions on the basis that they are too short, as Dr. Clifford addressed the issues at greater length in his rebuttal report. Of course, Dr. Clifford may not offer an opinion on a legal issue at trial, but the Court will defer consideration of any such objection in order to rule on it in the context of his testimony at trial as a whole. Third, the Court does not agree with Purolite that Dr. Clifford’s opinions concerning contract issues constitute an improper attempt to construe terms in the Agreement.
D. Plaintiffs’ Motion for Leave to File Declaration (Doc. # 542)
In opposing Purolite’s summary judgment motion, plaintiffs have cited to Dr. Clifford’s expert reports. Purolite has objected to those citations, on the basis that the reports were not sworn or supported by an affidavit or declaration, as required by the local rule. See D. Kan. 56.1(d). To address that objection, plaintiffs now seek leave to file a declaration by Dr. Clifford supporting his prior reports. Purolite opposes the motion, arguing that the declaration is untimely and that an extension is unwarranted.
Because it concludes that an extension of time is warranted for plaintiffs’ reliance on such a declaration, the Court grants this motion. See Bishop v. Corsentino, 371 F.3d 1203, 1206 (10th Cir.2004) (noting factors relevant to a determination of excusable neglect). Because Purolite addressed Dr. Clifford’s evidence in its summary judgment briefs, Purolite will not suffer any unfair prejudice from the extension. Although Purolite ominously suggests that further discovery could result, it has not identified any additional discovery that it would seek leave to pursue. The delay in the submission of the declaration will not affect judicial proceedings. Plaintiffs’ failure to include a declaration with its summary judgment response is reasonable in light of the fact that Purolite cited to and attached Dr. Clifford’s unsworn report (also in violation of the local rule) in the summary judgment brief to which plaintiffs were responding. Finally, Purolite’s argument that plaintiffs lacked good faith appears nonsensical, as there could be no conceivable advantage gained by delaying compliance with the requirement of a declaration.
For these reasons, the Court finds that plaintiffs’ failure to submit the declaration previously resulted from excusable neglect and that an extension of the deadline to submit the declaration is therefore warranted. Thus, the Court grants the present motion for leave, and the proposed declaration is deemed filed. The Court further overrules Purolite’s objections to plaintiffs’ citations to Dr. Clifford’s reports in the summary judgment briefs.
II. Summary Judgment Standard
Summary judgment is appropriate if the moving party demonstrates that there is “no genuine dispute as to any material fact” and that it is “entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(a). In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Burke v. Utah Transit Auth. & Local 382, 462 F.3d 1253, 1258 (10th Cir.2006). An issue of fact is “genuine” if “the evidence allows a reasonable jury to resolve the issue either way.” Haynes v. Level 3 Communications, LLC, 456 F.3d 1215, 1219 (10th Cir.2006). A fact is “material” when “it is essential to the proper disposition of the claim.” Id.
The moving party bears the initial burden of demonstrating an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Thom v. Bristol-Myers Squibb Co., 353 F.3d 848, 851 (10th Cir.2003) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). In attempting to meet that standard, a movant that does not bear the ultimate burden of persuasion at trial need not negate the other party’s claim; rather, the movant need simply point out to the court a lack of evidence for the other party on an essential element of that party’s claim. Id. (citing Celotex, 477 U.S. at 325, 106 S.Ct. 2548). If the movant carries this initial burden, the nonmovant may not simply rest upon the pleadings but must “bring forward specific facts showing a genuine issue for trial as to those dispositive matters for which he or she carries the burden of proof.” Garrison v. Gambro, Inc., 428 F.3d 933, 935 (10th Cir.2005).
Finally, the Court notes that summary judgment is not a “disfavored procedural shortcut;” rather, it is an important procedure “designed to secure the just, speedy and inexpensive determination of every action.” Celotex, 477 U.S. at 327, 106 S.Ct. 2548 (quoting Fed.R.Civ.P. 1).
III. Purolite’s Counterclaims
Layne moves for summary judgment on various counterclaims asserted by Purolite (Doc. # 404).
A. Consequential Damages
Layne asserts that any claim by Purolite for consequential damages is barred by Section 9.4 of the Agreement, which precludes the recovery of such damages, including lost profits. Purolite does not dispute that the damage limitation applies in this case to preclude such damages generally; rather, Purolite only notes that the limitation contains an exception for breaches of Section 11 of the Agreement and that it has indeed brought a claim against Layne for breach of Section 11 (relating to alleged acts of competition by Layne). Layne agrees that the prohibition against consequential damages would not apply to Purolite’s claim under Section 11. Accordingly, Layne is granted summary judgment on all claims by Purolite for consequential damages other than Purolite’s claim for breach of Section 11 of the Agreement.
B. Breach of the Agreement— Specifications
Purolite claims that Layne’s predecessor, SolmeteX, breached Section 1.2 of the Agreement by “providing a deficient and inoperable product specification.” (See Pretrial Order ¶ 5.b.) Layne seeks summary judgment on that counterclaim based on both the statute of limitations and the merits of the claim.
1. STATUTE OF LIMITATIONS
The Court applies Kansas limitations law in this case. See Miller v. Armstrong World Indus., 949 F.2d 1088, 1089 n. 3 (10th Cir.1991) (for state-law claim, court applies substantive law, including statutes of limitation, that forum courts would apply); see also Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) (federal court sitting in diversity jurisdiction must apply forum state’s choice of law rules to determine which state’s substantive law applies). Kansas courts apply their own state’s statutes of limitations. See Green v. Kensinger, 199 Kan. 220, 223, 429 P.2d 95 (1967). The Court also applies Kansas’s borrowing statute, K.S.A. § 60-516, as necessary. See Garcia v. International Elevator Co., 358 F.3d 777, 779 (10th Cir.2004).
Layne asserts that SolmeteX provided the specifications to Purolite prior to November 2004, and that Purolite’s claim therefore accrued at the latest on November 15, 2004, when SolmeteX and Purolite executed the Agreement, to which the specifications were attached. Purolite did not assert this counterclaim until January 2010 at the earliest. Therefore, Layne argues that Purolite’s claim is barred by Kansas’s five-year statute of limitations. See K.S.A. § 60-511(1) (five years for action on written agreement).
Purolite does not dispute that its claim accrued on November 15, 2004, or that it first asserted the claim more than five years later. Nevertheless, Purolite contends that, despite the running of the statute of limitations, it may assert the claim as a defense, to the extent of any recovery by Layne under the Agreement. Indeed, K.S.A. § 60-213, relating to counterclaims, provides as follows:
If a party’s claim arises out of the contract or transaction that is the basis of an opposing party’s claim ... and it could have been asserted as a counterclaim or crossclaim against a person if the person had asserted a claim against the party previously, the party’s claim is not extinguished by ... the expiration of the statute of limitations. However, the party’s claim may be asserted in these circumstances only to the extent that it does not exceed the amount awarded to the opposing party.
See id. § 60 — 213(d). Under this statute, a time-barred claim may nonetheless be used to obtain a setoff against the opposing party’s recovery under the same contract if the two parties’ claims were coexisting at any particular time. See Mynatt v. Collis, 274 Kan. 850, 866, 57 P.3d 513 (2002) (citing Lightcap v. Mobil Oil Corp., 221 Kan. 448, 464, 562 P.2d 1 (1977)). Purolite argues that Layne’s claim for royalties under the Agreement, which Purolite allegedly failed to pay beginning in “late 2008” (see Pretrial Order ¶ 5.a), did coexist for a period with its own claim, which did not become time-barred under the Kansas statute until November 2009.
Layne argues that the claims did not coexist. Layne argues that Purolite’s claim arose in Pennsylvania, the home of Purolite’s manufacturing facilities where Purolite would have received the specifications from SolmeteX. Thus, Layne argues that Kansas would borrow Pennsylvania’s four-year statute of limitations for a claim for breach of a written agreement, 42 Pa. Cons.Stat. § 5525(a)(8). See K.S.A. § 60-516 (borrowing statute). Finally, Layne argues that because its own claim did not accrue until after November 15, 2008, the parties’ claims did not coexist and Purolite therefore cannot assert its claim even in defense. Purolite does not dispute that its claim arose in Pennsylvania or that a four-year statute of limitations would govern Purolite’s assertion of an affirmative claim. Nevertheless, Purolite argues, without analysis or citation to authority, that the borrowing statute would not apply because it is asserting its claim only defensively.
The Court agrees with Layne that the Pennsylvania four-year statute of limitations applies through the Kansas borrowing statute for purposes of determining whether the two claims coexisted here at any point in time. The Kansas Supreme Court has described the coexistence requirement as follows:
The statute, 60-213(d), supra, requires that before the cross-claim can be asserted the two demands, the plaintiffs demand and the defendant’s demand, must have coexisted between persons under such circumstances that if one had brought an action against the other, a counterclaim could have been set up. In all cases this prerequisite requires that at some point in time there must be a coexistence of the two claims together. If the cross-claim asserted is barred pri- or to the existence of the claim asserted in the damage action by [the plaintiff], then the statute does not allow the assertion of the cross-claim, since the two claims at no time coexisted in time.
J.A. Tobin Constr. Co. v. Holtzman, 207 Kan. 525, 534, 485 P.2d 1276 (1971); see also Lightcap, 221 Kan. at 464, 562 P.2d 1 (considering when claims were “alive” under applicable statutes of limitations in determining whether claims coexisted for purposes of K.S.A. § 60-213(d)). Thus, for Purolite to assert its claim as a defense, the claim must have been alive, and not time-barred as an affirmative cause of action, at the time Layne’s own cause of action accrued. At any time after November 15, 2008, Layne could have relied on the borrowing statute and the Pennsylvania statute of limitations, and thus Purolite could not have maintained an affirmative claim after that date. Thus, the parties’ claims coexisted only if Layne’s own claim accrued before November 15, 2008.
The Pretrial Order is not helpful in resolving this issue of fact; that document notes Layne’s contention that Purolite stopped paying royalties under the Agreement in “late 2008,” and it contains a stipulation that “Purolite suspended payment of royalties to Layne at the end of 2008.” (Pretrial Order ¶¶ 4.a(7), 5.a.) Layne has provided a copy of a letter that it sent to Purolite on November 19, 2008, in which it demanded unpaid royalties. First, this evidence was submitted only with Layne’s reply brief, and the Court will not consider Layne’s argument, made for the first time in that brief, that its claim accrued on that specific date. Second, Layne has not explained how the letter establishes that its claim did not accrue earlier. In fact, the letter stated that the demand was based on an audit performed in June 2008. Therefore, the Court concludes that an issue of fact remains concerning the accrual date of Layne’s claim and whether the parties’ claims coexisted for purposes of K.S.A. .§ 60-213(d).
Accordingly, the Court grants Layne’s motion for summary judgment on the basis of the statute of limitations on Purolite’s claim relating to the provision of specifications under Section 1.2 of the Agreement to the extent that that claim is asserted affirmatively. The Court denies the motion based on the statute of limitations to the extent that the claim is asserted defensively to the extent of any recovery by Layne on the Agreement.
2. MERITS OF THE CLAIM
Layne also argues that it is entitled to summary judgment on this claim because Purolite has failed to provide evidence that SolmeteX in fact breached the contract. The relevant contract provision, Section 1.2 of the Agreement, follows:
Specifications. Purolite and SolmeteX will finalize and attach to this Agreement the Manufacturing Specifications (as defined below) for the Media. The “Manufacturing Specifications” will include finished product specifications for the Media, and certain testing standards to determine compliance therewith. The Manufacturing Specifications will be attached to this Agreement as Appendices A [sic] hereto, respectively. The Manufacturing Specifications will be developed such that (a) Purolite need disclose no proprietary manufacturing information and (b) SolmeteX’s disclosure of proprietary information is minimized. After the initial Manufacturing Specifications are established, (i) SolmeteX will be promptly notified of all changes made thereto, and (ii) Purolite agrees to use best efforts to promptly implement any change thereto requested by SolmeteX.
Purolite has stated its claim for breach of this provision as follows:
Purolite contends that both parties to the Contract had the understanding that SolmeteX had produced a finalized, completed, and marketable “resin primarily used in arsenic removal from aqueous streams” and that the Manufacturing Specifications attached to the Contract as Appendix A provided a finished and finalized manner of manufacturing the ArsenXnp product. SolmeteX breached the Contract by providing a deficient and inoperable product specification that caused Purolite to experience a number of manufacturing problems and incur additional, unanticipated costs.
(Pretrial Order ¶ 5.b.)
In seeking summary judgment, Layne argues that SolmeteX did provide specifications before the Agreement was executed and that Purolite in fact manufactured and sold the product before the date of the Agreement. Layne disputes that the Agreement imposed any obligation to provide “operable” product specifications or specifications that would need no improvement, and it cites other portions of the Agreement that refer to anticipated improvements to the Media. Layne further argues that any obligation to provide a “marketable” product (although it disputes the existence of such an obligation) was satisfied because Purolite did sell the product. Finally, Layne notes that the Agreement imposed the obligation regarding the specification jointly on SolmeteX and Purolite, although it does not explain how that would reheve SolmeteX of any obligation under Section 1.2.
In response, Purolite argues that the requirement for the provision of “finished product specifications” (from the definition of “Manufacturing Specifications”) demanded SolmeteX’s provision of “finalized specifications for a finished product,” from which “Purolite could manufacture non-defective, commercially marketable Media.” In that regard, Purolite notes the introductory language to the Agreement stating that “SolmeteX has developed a resin primarily used in arsenic removal from aqueous streams ..., comprised of SolmeteX’s chemistry applied to a Purolite base bead ... (the ‘Media ’).” Purolites cites to evidence that in late 2004 and early 2005, the product had problems (the product easily broke up, was fragile, had a bad odor, and left a precipitate); and that the product finally reached a “commercially ready point” in May 2005. Purolite argues that that evidence raises a question of fact concerning whether SolmeteX “initially provided finished product specifications that yielded a commercially viable product.”
The Court rejects Purolite’s arguments. First, contrary to Purolite’s interpretation, Section 1.2 does not require the provision of specifications that yield a perfect product, a marketable product, or a product free of any problems. The only obligation is to provide “finished product specifications.” Thus, applying the ordinary meaning of the word “finished”, SolmeteX was required only to provide specifications in their completed form, and not from some initial or earlier stage. As noted by Layne, the contract clearly contemplated that improvements would be made to the initial specifications — indeed, Section 1.2 itself speaks to future changes by Purolite to the “initial Manufacturing Specifications.” Although Purolite points to the introductory language, it has not provided any evidence that SolmeteX in fact had not developed an arsenic removal resin comprising its chemistry and Purolite’s bead. Purolite’s evidence that there were issues demanding improvement to the product and that the product was not “commercially ready” does not constitute evidence that SolmeteX did not provide its “finished product specifications.” Purolite does not controvert the fact that it did sell the product, based on SolmeteX’s specifications, even before the execution of the Agreement. Thus, Purolite has not submitted evidence that SolmeteX breached Section 1.2 of the Agreement. Accordingly, the Court awards summary judgment in favor of Layne on this claim for breach of contract (whether asserted affirmatively or merely as a defense).
C. Breach of the Agreement — -Pursuit of Suspected Infringer
Purolite also claims that Layne breached Section 4.6.1 of the Agreement by failing to “pursue” parties suspected of infringing the patent. Layne argues that Purolite cannot produce evidence that it has suffered any damage from any such breach. In support of that argument, Layne notes that Purolite’s damage expert could not identify any specific sales that Purolite lost because Layne did not pursue infringers, and he did not offer any opinion as to whether any such failure by Layne caused damage to Purolite. In response, Purolite concedes that it cannot establish the amount of its damages for this breach with the necessary certainty, but it argues that because it did suffer some damage from this breach, it may seek nominal damages. Purolite cites evidence that one suspected infringer, Resin Tech, did make some sales of an infringing product, and it argues that it was damaged because “those sales necessarily could have been made by Purolite.”
The Court rejects this claim by Purolite for nominal damages for several reasons. First, Purolite has not explained why the Court should permit it essentially to seek a declaration of breach, in the guise of a claim for nominal damages, without pursuing any meaningful relief. Second, any such damage in the form of lost sales would constitute consequential damages (which includes lost profits), the recovery of which the Agreement precludes — nominal or otherwise — as set forth above. Third, Purolite’s statement in its brief that it could have made the sales that Resin Tech made is not sufficient to withstand summary judgment on this point. The only actual evidence cited by Purolite in support of that bit of speculation is the statement in the declaration of a Purolite executive that “[t]o the extent that Resin Tech sold its ASM-10-HP product in or around September of 2008, those requirements for an arsenic removal product could have been satisfied by the ArseneX product made by Purolite at that time.” Purolite has not provided any evidence concerning when any sales by Resin Tech occurred, however; nor is there evidence that the declarant had any personal knowledge about the volume or other details of any sales by Resin Tech, or whether Resin Tech actually made any sales in September 2008. Thus, Purolite has not provided evidence that it could and would have made specific sales that Resin Tech made, and thus it has not shown that it did suffer actual damage from the alleged breach. Accordingly, Layne is awarded summary judgment on this claim by Purolite for breach of contract.
D. Breach of the Agreement— Competitive Acts
Purolite also claims a breach of Section 11.1 of the Agreement, which provides as follows:
11. Non-Competition
11.1 Restrictions on SolmeteX. Except as otherwise set forth in this Agreement, SolmeteX agrees not to use any third party distributor as defined in section 3.2 for the Media in the Licensed Channels other than Purolite during the Term. Except as otherwise set forth in this Agreement, Solmetex agrees not to use any other supplier for Media and not to license any third party to manufacture Media for commercial sale during the Term. Notwithstanding anything herein to the contrary, there will be no limitation on SolmeteX’s non-sales activities, including research and development related to Media.
Purolite claims that Layne breached this provision by engaging in the following “acts of competition” against Purolite:
(1) activities with Thermax, including a purchase order to Thermax Inc. for 2,000 cubic feet of ArseXnp in July of 2005 and the subsequent production of ArseXnp by Thermax; (2) work with Mobile Process Technology (“MPT”) on the development, promotion, and sale of “npRio”, a competing arsenic removal product; (3) other activities with MPT, consisting of the formation and promotion of certain partnerships and joint ventures, MPT’s manufacture of ArsenX on behalf of SolmeteX, and the project known as “Compliant Water”; and (4) the development, promotion, and sale of Layne’s own competing products called Layne33 and Layne RT.
(Pretrial Order ¶ 5.b.)
1. DAMAGES
In seeking summary judgment on this claim, Layne argues that Purolite has not produced any evidence of damage attributable to this alleged breach. Layne notes that Purolite’s damage expert could not attribute specific amounts of damages to the alleged anti-competitive acts involving Thermax or MPT or Layne RT.
With respect to the amount of its damages, Purolite points to its expert’s opinion by which he calculated a specific amount of damages suffered by Purolite for all of the competitive acts alleged (based on Purolite’s lost sales to SolmeteX directly and to one other customer). Thus, Purolite has submitted evidence of the amount of its damages for this alleged breach. The Court does not agree with Layne that the expert’s inability to allocate his damage amount for this breach among the alleged anti-competitive acts precludes this claim at this stage.
The Court does agree with Layne, however, that Purolite has failed to provide any evidence of the fact of any damage suffered as a result of this alleged breach. On this issue of damages, Purolite’s entire argument is as follows:
Finally, [Layne] argues that there is no evidence of any damage to Purolite for any of these acts of competition. Not true. Those acts of competition directly led to the breakdown of the Agreement. SOF at ¶ 71. Indeed, without those acts of competition, the parties would still be working together to produce ArsenX today. SOF at ¶ 71. And the damage amounts to Purolite have been extensively explained by Purolite’s damages expert Mr. Troxel. SOF ¶ 92. What’s more, Purolite has suffered intangible, yet real, damage as result [sic] of these acts of competition including the loss of business and diminished reputation. SOF ¶ 71.
First, the citation to the expert report of Mr. Troxel (Purolite’s damage expert) in Paragraph 92 of Purolite’s Statement of Facts, as noted above, provides evidence of the amount of damage, but it does not provide any evidence of the fact of damage to Purolite. In his report, Mr. Troxel stated that in making his calculations, he assumed proof of the alleged breach, and he calculated his lost sales figure for this claim based on Purolite’s “belief’ that it lost sales because of Layne’s actions in the marketplace. Mr. Troxel did not provide any expert opinion that Purolite lost sales because of the alleged acts (and it is hard to imagine that he could do so as an expert); rather, he opined that if Purolite in fact lost sales, those sales totaled to a certain figure.
Purolite’s only other citation to the record in support of its argument that it suffered damages (the breakdown of the Agreement and the relationship, “intangible” damages) is to Paragraph 71 of its statement of facts. That paragraph, however, relates only to Purolite’s ability to make sales made by Resin Tech (addressed above). Neither that paragraph nor any other paragraph in Purolite’s Statement of Facts in its response to this motion cites to evidence that Purolite suffered actual harm from the alleged anti-competitive acts by Layne. Accordingly, Purolite has not provided evidence, as required in opposing summary judgment, that it suffered damages as a result of the alleged breach, and summary judgment is therefore appropriate on this claim.
2. MERITS OF THE CLAIM
Layne is also entitled to summary judgment for another reason. In arguing that it did not breach Section 11.1 of the Agreement, Layne notes that all of the restrictions in that section relate to activities involving “Media”. That term is defined in the introduction the Agreement:
Whereas, SolmeteX has developed a resin primarily used in arsenic removal from aqueous streams, which is referred to as “AsXnp” or “ArsenXnp”, comprised of SolmeteX’s chemistry applied to a Purolite base bead (in this case, Purolite’s A-500P base bead or improved alternate) (the “Media ”);
Layne has provided evidence that the alleged competitive acts involved products that did not use a Purolite bead, but instead used beads manufactured by others. Thus, Layne argues that any such acts did not involve “Media”, which must by definition include a Purolite bead, and that it therefore cannot be said to have breached Section 11.1.
Purolite does not dispute that the alleged acts of breach did not involve any product or resin using a Purolite bead. Rather, Purolite argues that the Court should not interpret “Media” to require the use of a Purolite bead, despite the plain language of the Agreement’s definition. Purolite instead asks the Court to interpret “Media” to be a resin product with SolmeteX’s chemistry on any substrate, which interpretation Purolite asserts would be in keeping with the parties’ intent. Purolite argues that following the plain language of the definition would be absurd and unreasonable, although it does not explain that absurdity. In support of its interpretation, Purolite argues that the title of the Agreement (“Exclusive ... Agreement”) and other terms in the Agreement show that the intent was for Purolite to be the exclusive manufacturer for the product (Purolite appointed as “exclusive manufacturer and supplier of the Media”) and to prevent SolmeteX from competing with Purolite (Solmetex may not direct sell the Media to third party distributors, Purolite is lead distributor of the Media, Solmetex will use its best efforts to avoid competing directly at the same customers, and Purolite and SolmeteX will work together to penetrate the market).
The Court rejects Purolite’s alternative definition. The Agreement’s definition of “Media” to include a Purolite base bead is unambiguous. The Agreement as a whole does not show that definition to be unreasonable or absurd, as the parties quite reasonably could have intended to restrict competing acts only to the extent that they involve the unique combination of SolmeteX’s chemistry and Purolite’s base bead, with which the product was originally constructed. The other terms from the Agreement cited by Purolite also relate to the Media and do not contradict the definition’s plain language or Section 11.1; nor do they suggest that the parties intended to restrict SolmeteX’s activities involving the use of a different bead. The Court therefore interprets Section 11. 1, in conjunction with the Agreement’s unambiguous definition of “Media”, as prohibiting only certain activities by SolmeteX involving the use of product or resin that includes a Purolite base bead.
Purolite does not dispute that the alleged acts by Layne did not involve a product using a Purolite base bead, or provide evidence to the contrary. Accordingly, Purolite has not provided evidence that Layne breached Section 11.1 by those acts, and summary judgment is warranted on this claim for that reason as well.
E. Breach of Implied Covenant of Good Faith and Fair Dealing
Purolite also asserts a counterclaim for breach of the Agreement’s implied covenant of good faith and fair dealing, based on the same anti-competitive acts by Layne that Purolite alleged with respect to the counterclaim under Section 11.1.
1. DAMAGES
Layne again argues that Purolite has failed to provide evidence of damage, for the same reasons set forth above with respect to the claim under Section 11.1. In response, Purolite only incorporates its prior arguments concerning the claim under Section 11.1. As explained above, Purolite did not provide evidence of the fact of its damage from the alleged anti-competitive acts. Accordingly, summary judgment is also appropriate on Purolite’s claim for breach of the implied covenant.
2. MERITS OF THE CLAIM
The Court concludes that summary judgment on this claim is warranted for another reason as well. Delaware courts have expounded on this cause of action as follows:
All contracts are subject to an implied covenant of good faith and fair dealing. This doctrine, however, does not provide a Delaware court with the authority to rewrite or supply omitted provisions to a written contract. Rather, a court should be cautious when implying a contractual obligation and do so only where obligations which can be understood from the text of the written agreement have nevertheless been omitted from the agreement in the literal sense. In this instance, a court’s inquiry should focus on what the parties likely would have done if they had considered the issue involved. The express terms of a contract and not an implied covenant of good faith and fair dealing, however, will govern the parties’ relations when the terms expressly address the dispute.
Fitzgerald, v. Cantor, 1998 WL 842316, at *1 (Del.Ch. Nov. 10, 1998) (unpub.op.) (footnotes and internal quotations omitted).
Under Delaware law, the implied covenant of good faith and fair dealing is employed as a means of honoring the parties’ reasonable expectations in forming a contract. Courts must interpret the reasonable expectations of the parties within the context of existing contract terms, however. Accordingly, the implied covenant cannot be asserted to circumvent the express terms of the parties’ bargain or to create new duties unattached to the underlying contract, and courts should not imply alleged obligation where the contract addresses the subject of the alleged wrong but fails to include the obligation alleged. Thus, the Delaware Supreme Court has consistently held that obligations under the covenant of good faith and fair dealing should be implied only in rare instances.
Homan v. Turoczy, 2005 WL 2000756, at *18 (Del.Ch. Aug. 12, 2005) (unpub.op.) (footnotes omitted).
With respect to this claim, Purolite asks the Court to recognize an implied term prohibiting Layne from engaging in the alleged anti-competitive acts, even if those acts do not involve products using the Purolite base bead and thus do not involve the “Media”. The Agreement, however, contains specific terms concerning prohibited anticompetitive acts by SolmeteX. Thus, SolmeteX’s (and Layne’s) restrictions are expressly stated, and under Delaware law, this Court may not inject other obligations relating to non-competition by SolmeteX into the contract under the guise of the implied covenant of good faith and fair dealing. Accordingly, Purolite’s claim under this doctrine fails, and Layne is awarded summary judgment for this reason as well.
F. Unfair Competition
In the Pretrial Order, Purolite asserts a claim for “common law unfair competition.” Layne seeks summary judgment on that claim on the basis that such a claim is not recognized under Kansas law. Purolite agrees that Kansas law applies and that Kansas does not recognize this claim. Purolite therefore states that it withdraws this claim. Based on Purolite’s admission that the claim as asserted in the Pretrial Order cannot stand, however, the Court deems it appropriate to enter summary judgment in Layne’s favor on this claim.
G. Restraint of Trade
Finally, Purolite seeks an injunction prohibiting Layne’s enforcement of one provision of Section 11.2 of the Agreement. The provision in question reads as follows:
11. Non-Competition
11.2. Restrictions on Purolite .... During the Term and hereafter, Purolite agrees not to directly or indirectly use any Intellectual Property resulting from its activities under this Agreement to directly or indirectly manufacture, sell, supply or use any products or media substantially similar to, or competitive with, the Media (excluding any existing product already manufactured by Purolite as of the date of this Agreement) or other products of SolmeteX....
Purolite claims that this provision should be deemed void as an unreasonable restraint of trade in violation of one of Kansas’s antitrust statutes, K.S.A. § 50-112. The statute reads as follows:
All arrangements, contracts, agreements, trusts, or combinations between persons made with a view or which tend to prevent full and free competition in the importation, transportation or sale of articles imported into this state, or in the product, manufacture or sale of articles of domestic growth or product of domestic raw material, or for the loan or use of money, or to fix attorney or doctor fees, and all arrangements, contracts, agreements, trusts or combinations between persons, designed or which tend to advance, reduce or control the price or the cost to the producer or to the consumer of any such products or articles, or to control the cost or rate of insurance, or which tend to advance or control the rate of interest for the loan or use of moneys to the borrower, or any other services, are hereby declared to be against public policy, unlawful and void.
Id. (emphasis added). Purolite argues that this provision in Section 11.2 of the Agreement unreasonably restricts its ability to compete with Layne because the restriction lacks any temporal or geographical limitation; the restriction goes beyond what is necessary to protect Layne’s interest in its intellectual property, in light of protection under the patent laws and other terms in the Agreement; Purolite is restricted from using intellectual property jointly owned with Layne; a limited number of competitors operate in this market; and the product, which removes arsenic from water, benefits public health.
Layne seeks summary judgment on this claim, arguing as a matter of law that Purolite has not shown that this contractual provision is an unreasonable restraint of trade in violation of the Kansas antitrust statute. The Court concludes that the relevant caselaw indicates that the Kansas Supreme Court would not deem this provision void as a violation of K.S.A. § 50-112. Accordingly, the Court agrees with Layne that summary judgment is appropriate here.
In 1999, the Kansas Supreme Court noted that, although Section 50-112 is broad on its face, “there has been no meaningful interpretation” of the statute since its enactment more than one hundred years ago, as only a few cases involving the statute had come before the supreme court, and none since 1959. See Bergstrom v. Noah, 266 Kan. 829, 843-44, 974 P.2d 520 (1999). That 1959 case, however, is at least somewhat instructive. In Okerberg v. Crable, 185 Kan. 211, 341 P.2d 966 (1959), the court placed the burden of proof on the party challenging the contract and applied a presumption of validity, in accordance with its earlier cases, as follows:
There is no presumption that a contract is illegal. He who denies his liability under a contract which he admits having made, must make the fact of its illegality apparent. The burden of showing it wrong is on him who seeks to deny his obligation thereon. The presumption is in favor of innocence, and the taint of wrong is a matter of defense.
Id. at 217, 341 P.2d 966 (quoting Morrison v. Bandt, 145 Kan. 942, 945, 67 P.2d 584 (1937), which quoted an earlier case). The court also confirmed that the governing test under the statute is one of reasonableness:
The old rule as to limitations of time and space with respect to contracts involving restraint of trade has given way to the modern doctrine of reasonableness and the real test is never whether there is any restraint but always whether the restraint is reasonable under the facts and circumstances of the particular case.
Id. (quoting Heckard v. Park, 164 Kan. 216, syl. ¶ 7, 188 P.2d 926 (1948)). The question of reasonableness depends “upon the fundamental elements of common fairness in view of the facts and circumstances of the parties.” Id. (quoting Heckard, 164 Kan. at 224, 188 P.2d 926).
Applying these standards in Okerberg, the supreme court held that a restriction among milk haulers concerning routes was reasonable. See id. at 217-18, 341 P.2d 966. In so concluding, the court reviewed and distinguished several cases that involved either price-fixing or a monopolized market. See id. at 215-17, 341 P.2d 966.
At the time Okerberg was decided, the supreme court had last addressed Section 50-112 in Barton v. Hackney, 167 Kan. 754, 208 P.2d 590 (1949), which involved a contract for the sale of a restaurant that also prohibited the seller from competing in that city for a period of time. See id. In holding that that restraint was reasonable and did not violate Section 50-112, the court noted that the statute “was not passed with the intention of prohibiting such a contract as this made in connection with the sale of a business.” See id. at 760-61, 208 P.2d 590. The court also relied on its previous opinion in Mills v. Ressler, 87 Kan. 549, 125 P. 58 (1912), in which the court had stated that the decisive test under this statute for contracts that do not restrain competition generally is the resulting injury to the public. See Barton, 167 Kan. at 760, 208 P.2d 590 (quoting Mills, 87 Kan. at 554, 125 P. 58). The Barton court further noted that in Mills, for purposes of that inquiry, it had distinguished contracts “that stifled competition between public service and like corporations.” See id. at 760, 208 P.2d 590 (citing Mills, 87 Kan. at 554, 125 P. 58). In Mills, the court upheld as valid under Section 50-112 a contract by which a physician sold his practice and agreed not to practice or to disclose or sell certain formulas. See Mills, 87 Kan. at 555, 125 P. 58. In so finding in Mills, the supreme court applied a standard of reasonableness, as follows:
[T]he validity of a contract in partial restraint of trade or business is not to be determined by the arbitrary measures of extent in time, extent in space, and the like, but by its reasonableness under all the circumstances, having regard both for the liberty of a person to make beneficial use of his own, and for the public consequences of such use.
Id. at 554, 125 P. 58. The court proceeded to make the distinction later affirmed in Barton:
Therefore the subject of the contract belongs to a different class from those which involve competition between public service corporations like gas and electric light companies, or which involve natural competition in ordinary branches of trade.
Id.
The Kansas Supreme Court also upheld a contract against this statute in Heckard v. Park, 164 Kan. 216, 188 P.2d 926 (1948), in which the contract allegedly restrained competition by prohibiting the defendant from taking singing lessons from any instructor other than the plaintiff. See id. The court applied the same standards from Mills that it later applied in Barton and Okerberg:
The real question is never whether there is any restraint of trade, but always whether the restraint is reasonable in view of all the facts and circumstances and whether it is inimical to the public welfare. If it is reasonable and does not contravene public welfare the contract will be upheld....
The old rule as to limitations of time and space has given way to that of reasonableness. The question of reasonableness of a contract of this character frequently depends upon fundamental elements of common fairness in view of the facts and circumstances of the parties.
Id. at 223-24, 188 P.2d 926 (citations omitted). In finding the contract before it to be reasonable, the court distinguished one case involving the furnishing of electricity for the public and another involving price-fixing. See id. at 224, 188 P.2d 926.
The Court also notes the supreme court’s opinion in Gard v. Holmes’ Estate, 132 Kan. 443, 295 P. 716 (1931), in which the supreme court invalidated under the Kansas antitrust statutes a secret agreement to hire away an undertaker in a particular city to control price and cost in that market. See id. The court noted in Gard, however, that if the plaintiffs had simply bought out the undertaker’s business with an agreement for him not to compete there, the court would have had “little hesitation in upholding the contract.” See id. at 446, 295 P. 716. Years later, in Okerberg, the supreme court relied on this distinction and reaffirmed that “relaxing” of the strict rule of earlier cases. See Okerberg, 185 Kan. at 216, 341 P.2d 966 (citing Gard, 132 Kan. at 446, 295 P. 716).
Finally, even though the case does not specifically refer to Section 50-112 in discussing the Kansas antitrust statutes generally, the Kansas Supreme Court’s opinion in Sage v. Oil Country Specialties Mfg. Co., 134 Kan. 215, 5 P.2d 1091 (1931), supports the Court’s decision here. Like the present case, Sage involved an agreement for the license of patented technology that had allegedly been breached by the sale of a competing product by the licensee. See id. The court held that the contract was not void under Kansas’s anti-monopoly acts, K.S.A. § 50-101 et seq. See id. at 220, 5 P.2d 1091. The court noted that “[t]he main purpose of the antitrust acts is to prevent a person or an association from gaining control of the market, shutting off competition, and fixing prices at will to the prejudice of the public,” and that “[t]he protection of the public is the vital thing in the statute.” See id. The court stressed that the defendant could still sell other products, as long as they didn’t compete with plaintiffs product; that there was no monopoly to harm the public; and that competition generally was not restrained, as others could still sell competing products. See id. at 219-20, 5 P.2d 1091.
Based on these cases from the Kansas Supreme Court, the Court concludes as a matter of law that Purolite has not met its burden to show that the provision in Section 11.2 of the Agreement is unreasonable in violation of K.S.A. § 50-112. Under Kansas law, the Agreement is presumed to be valid. As a part of the Agreement, Layne granted a license and disclosed its intellectual property to Purolite, and it was reasonable for the parties to agree to restrict Purolite’s use of that intellectual property and any other intellectual property that resulted from activities under the Agreement to compete with Layne’s own products. Purolite was not prohibited from competing with Layne altogether — it only had to forego competition using the intellectual property gained as a result of a contract that included benefits for Purolite and that Purolite willingly entered into. Nor did the Agreement stifle competition in the market generally, as Purolite has not shown that a monopoly existed here. Nor did the Agreement involve a public service corporation or the like. The fact that the restriction did not include temporal or geographic limitations is not especially pertinent, as the Kansas Supreme Court has made clear. This case does not involve a monopoly or price-fixing, as in the cases consistently distinguished by the supreme court. Moreover, if the right to compete could not be contracted away in this manner, companies would be discouraged from licensing their technology to other companies. Finally, Purolite has not cited any Kansas authority suggesting that Section 11.2 should be invalidated as a violation of K.S.A. § 50-112.
The Court is convinced that the Kansas Supreme Court would reject this challenge under Section 50-112 and uphold Section 11.2 of the Agreement. Accordingly, the Court also rejects this challenge, and it awards summary judgment in favor of Layne on Purolite’s counterclaim for restraint of trade.
IV. Layne’s Claims for Breach of Contract
Layne asserts various claims against Purolite for breach of the Agreement, which are the subject of summary judgment motions by the parties. Layne seeks summary judgment on its claim for breach of Purolite’s obligation to pay royalties for sales of the product, and on its claim for a permanent injunction prohibiting the further breach of Section 11.2 of the Agreement (Doc. #406). Purolite seeks summary judgment on any claims by Layne under Sections 10.1 and 11.2 of the Agreement (Doc. # 410).
A. Purolite’s Defense of a Prior Material Breach
Purolite seeks to avoid summary judgment based on the defense that its own performance under the Agreement was excused by a prior material breach of the Agreement by SolmeteX or Layne. See, e.g., Eastern Elec. and Heating, Inc. v. Pike Creek Prof. Ctr., Inc., 1986 WL 9031, at *3 (Del. Aug. 5, 1986) (unpub.op.) (noting the general rule that “the party first guilty of a material breach of contract cannot complain if the other party subsequently refuses to perform”); DeMarie v. Neff, 2005 WL 89403, at *4 (Del.Ch. Jan. 12, 2005) (unpub.op.) (material breach may excuse other party’s performance). The Court addresses in turn each prior breach alleged by Purolite.
I. PROVISION OF SPECIFICATIONS
Purolite contends that SolmeteX breached Section 1.2 of the Agreement by failing to provide sufficient specifications for the product, and in support, Purolite refers to the arguments that it made in opposition to summary judgment on its affirmative counterclaims. The Court has already concluded, however, that Purolite has not presented evidence to establish a breach of this provision. See supra Part III.B.2. Accordingly, Purolite may not rely on this alleged prior material breach in opposition to summary judgment on Layne’s contract claims.
2.COMPETITIVE ACTS
Purolite, again relying on its arguments in support of its affir