CourtListener 10663253•Movora LLC v. Gendreau
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IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
MOVORA LLC (f/k/a OSSIUM )
NEWCO LLC); OSSIUM BIDCO, LLC; )
and VETERINARY ORTHOPEDIC )
IMPLANTS, LLC (f/k/a VETERINARY )
ORTHOPEDICS IMPLANTS, INC.), )
)
Plaintiffs/Counterclaim Defendants, )
)
v. )
) C.A. No. N23C-05-034 MAA CCLD
CLAUDE GENDREAU; THE CLAUDE )
GENDREAU INVESTMENT TRUST )
U/A/D MARCH 16, 2013; PATRICK )
GENDREAU; BRIAN BEALE; and )
TIMOTHY VAN HORSSEN, )
)
Defendants/Counterclaim Plaintiffs. )
)
Submitted: June 17, 2025
Decided: August 29, 2025
POST-TRIAL OPINION
Megan W. Cascio, Esquire, of MORRIS NICHOLS ARSHT & TUNNELL LLP,
Wilmington, DE, and Kevin M. Downey, Esquire (Argued), R. Kennon Poteat III,
Esquire (Argued), Eden Schiffmann, Esquire (Argued), and Ilana B. Frier,
Esquire, of WILLIAMS & CONNOLLY LLP, Washington, DC, Attorneys for
Plaintiffs/Counterclaim Defendants.
David E. Ross, Esquire and S. Reiko Rogozen, Esquire, of ROSS ARONSTAM
& MORITZ LLP, Wilmington, DE, and Andrew W. Vail, Esquire (Argued),
Benjamin J. Bradford, Esquire, and Yusuf Esat, Esquire, of JENNER & BLOCK
LLP, Chicago, IL, Attorneys for Defendants/Counterclaim Plaintiffs Dr. Claude Gendreau
and The Claude Gendreau Investment Trust U/A/D March 16, 2013.
Adams, J.
I. INTRODUCTION
This dispute arises out of non-party Fidelio Capital II AB’s (“Fidelio”)
acquisition of Veterinary Orthopedic Implants, LLC (f/k/a Veterinary Orthopedic
Implants, Inc.) (“VOI”) (the “Transaction”). The parties effectuated the Transaction
pursuant to an Amended and Restated Membership Interest Purchase and Exchange
Agreement (the “MIPA”). The MIPA’s indemnification provisions are central to the
parties’ dispute.
Before, during, and after the Transaction, VOI was defending a patent
infringement suit brought by non-parties DePuy Synthes Products, Inc. and DePuy
Synthes Sales, Inc. (collectively, “DePuy”). DePuy filed suit in the United States
District Court for the Middle District of Florida under the caption: DePuy Synthes
Products, Inc. et al. v. Veterinary Orthopedic Implants, Inc., 3:18-cv-01342-HES-
PDB (the “Patent Litigation”). Post-Transaction, DePuy added Fidelio to the
expanding Patent Litigation. The Patent Litigation jury found VOI and Fidelio liable
for willful infringement and awarded DePuy $60 million. After that verdict, DePuy,
Fidelio, and VOI agreed to a $70 million settlement (the “Settlement”).
Through this action, Plaintiffs seek indemnification from Defendants for the
Settlement pursuant to the MIPA’s indemnification provision. Plaintiffs argue the
entire Settlement, as well as their associated costs and fees, are indemnifiable. The
remaining Defendant in this case contends Plaintiffs breached the MIPA, obviating
2
any indemnification obligation. Even if certain portions of the Settlement are
covered, the remaining Defendant maintains various non-recoverable components
are not indemnifiable. For the reasons discussed herein, the Court concludes
Defendants have not proven Plaintiffs materially breached the MIPA. The Court
finds the entire Settlement is indemnifiable, except for the forward-looking license
covering certain VOI plates. Judgment is therefore entered in favor of Plaintiffs,
who are entitled to $40,172,084.49 in damages.
II. FACTS
A. The Parties and Relevant Non-Parties
Plaintiffs/Counterclaim Defendants Movora LLC (f/k/a Ossium NewCo,
LLC) (“Movora”), Ossium BidCo, LLC (“Ossium BidCo”), and VOI (collectively
with Movora and Ossium BidCo, “Plaintiffs”), are each a Delaware limited liability
company.1 Under the MIPA, Movora is the “Buyer,” Ossium BidCo the “Parent,”
and VOI the “Company.”2 Non-party Fidelio, is a Swedish corporation.3
Defendants/Counterclaim Plaintiffs Claude Gendreau (“Claude”)4 and The
Claude Gendreau Investment Trust u/a/d March 16, 2013 (the “Trust”)5, are
1
Joint Pretrial Stipulation and Proposed Order (hereafter “Pretrial Stip.”) at 11 (D.I. 263).
2
Id.
3
Id. at 12.
4
Because Claude Gendreau and Patrick Gendreau share a surname, this opinion refers to them by
their first names for clarity. The Court intends no disrespect or familiarity.
5
Because Claude and the Trust have identical legal interests, the Court often refers to them
collectively as Claude.
3
domiciled in Indiana.6 Claude founded VOI in 1992.7 Before the Transaction,
Claude owned VOI along with former Defendants Patrick Gendreau (“Patrick”),
Brian Beale (“Beale”), and Timothy Van Horssen (“Van Horssen”).8 During this
period, Patrick served as VOI’s CEO and ran the day-to-day operations.9 Post-
Transaction, Patrick continued as VOI’s CEO until he resigned in December 2022.10
B. DePuy Files the Patent Litigation and Defendants Shop VOI
DePuy initiated the Patent Litigation in November 2018 – alleging VOI’s
“Swiss” plates infringe DePuy’s U.S. Patent No. 8,523,921 (the “‘921 Patent”).11
VOI hired Fox Rothschild as its Patent Litigation counsel.12 In July 2019, DePuy
amended its complaint to also accuse VOI’s “Elite” and “CBLO” plates of infringing
the ‘921 Patent.13
6
Pretrial Stip. at 12. Because Claude and the Trust have identical interests in this dispute, the
Court often refers to them collectively as Claude.
7
Id.
8
Id. Each Defendant is a “Seller” under the MIPA. Id. at 12-13. Patrick, Beale, and Van Horrsen
(collectively “Settling Defendants”), settled with Plaintiffs before trial and were dismissed via
stipulation. See D.I. 130 (dismissing Beale); D.I. 167 (dismissing Van Horssen); D.I. 197
(dismissing Patrick).
9
DX130; Trial Transcript February 11, 2025 (hereafter “2/11/25 Tr.”) 223:20-224:13, 235:11-
237:19.
10
PX122; Trial Transcript February 10, 2025 (hereafter (“2/10/25 Tr.”) 122:15-17; Trial Transcript
February 13, 2025 (hereafter “2/13/25 Tr.”) 61:7-65:8.
11
JX08.
12
See, e.g., PX14 (communication between Patrick and Fox Rothschild regarding VOI’s Patent
Litigation defense).
13
DX44.
4
At the same time, VOI began developing a new plate – the NXT plate – to
replace Swiss plates.14 VOI launched NXT plates in October 2019 and discontinued
Swiss plates.15 DePuy requested discovery on NXT plates almost immediately.16
Based on this discovery, Fox Rothschild informed Defendants that DePuy
“intent[ed] [] to add [] NXT plates to the [Patent Litigation].”17
Faced with the expanding Patent Litigation,18 Claude directed Patrick to reach
out to parties interested in buying VOI.19 Patrick discussed a possible sale with
private equity company DWHP,20 but negotiations stalled due to the Patent
Litigation.21 Patrick suggested an asset purchase to insulate any Patent Litigation
liability, but DWHP declined.22 It was under these circumstances that Fidelio first
entered the picture.23
14
D.I.218, Ex. 3 (hereafter “Patrick Dep. Tr.”) 47:3-9, 106:1-22; PX179; 2/11/25 Tr. 183:23-184:2.
15
DX566.
16
PX67; see PX68.
17
PX65; see 2/11/25 Tr. 184:3-8; PX084 (email from Fox Rothchild to Patrick stating, “we fully
expect [DePuy] to allege your new plates [NXT] also infringe although they have not done so yet.
They have certainly suggested they will be doing so.”).
18
PX14 (Fox Rothchild informing Patrick early in the Patent Litigation that DePuy would likely
expand the list of accused plates); PX017 (DePuy’s amended complaint expanding the patent
litigation); PX10 (email from Patrick discussing the potential for DePuy to expand the Patent
Litigation); PX19 (email discussing DePuy’s efforts to receive a continuation patent, which could
expand the Patent Litigation).
19
2/11/25 Tr. 83:12-20.
20
Patrick Dep. Tr. 27:24-28:2.
21
Id. 60:16-61:1; 2/11/25 Tr. 95:22-96:6.
22
Patrick Dep. Tr. 132:12-138:2; see JX16.
23
See PX41.
5
C. Fidelio, the Transaction, and the MIPA
In fall 2019, Patrick, Claude, and Fidelio began exploring a possible deal
involving VOI.24 Fidelio recently acquired two of VOI’s competitors and was
looking to expand its footprint in the veterinary orthopedics space.25 As negotiations
progressed, Fidelio hired Morrison Foerster (“MoFo”) and Ernst & Young to conduct
due diligence on VOI.26
From the outset, Fidelio had concerns about the Patent Litigation’s potential
impact on VOI.27 Patrick told Fidelio, VOI “had a strong case [and] didn’t infringe”
DePuy’s patents.28 MoFo’s diligence report estimated the potential Patent Litigation
damages at $12-40 million.29 Fidelio, however, felt “it was impossible to [] [] judge
the risk”30 – given DePuy’s continual expansion of the Patent Litigation’s scope.31
As such, Fidelio was only willing to purchase VOI if Defendants provided “broad
indemnification [] to cover any potential risk[] of th[e] [Patent] [L]itigation.”32
24
Id.
25
DX566; 2/10/25 Tr. 65:12-66:3, 69:15-22, 180:14-181:22.
26
See PX54; 2/10/25 Tr. 73:5-10; 2/11/25 Tr. 33:13-21.
27
2/10/25 Tr. 73:5-74:1; 2/11/25 Tr. 33:13-21.
28
2/10/25 Tr. 230:8-11; see id. 153:4-14.
29
DX58.
30
2/10/25 Tr. 87:11-20.
31
See 2/10/24 Tr. 154:3-8, 227:7-14 (testifying Defendants told Fidelio there was a high risk of
NXT plates being added to the Patent Litigation).
32
2/11/25 Tr. 33:19-21; see 2/10/25 Tr. 68:6-69:2; D.I. 216, Ex. 27 (hereafter “Fitzgerald Dep. Tr.”
97:8-98:16.
6
The parties executed the MIPA to effectuate the Transaction, which closed on
June 16, 2022.33 Under the MIPA, Plaintiffs agreed to pay Defendants $100 million
to acquire VOI.34 Several provisions of the MIPA are relevant to the parties’ dispute.
At the center of Plaintiffs’ claim is Section 8.2(a), which provides:
from and after the Closing . . . [Defendants] shall severally (in
proportion to their Percentage Interests)35 but not jointly indemnify,
defend and hold harmless the Buyer, its Affiliates36 (including the
Parent and the Company) . . . from and against any and all Damages
arising out of ore relating to . . . any Damages suffered by the Company
as a result of, or in connection with, the Patent Litigation[.]37
The MIPA defines “Damages” as:
any losses, liabilities, damages, awards . . . payments (including
amounts paid in settlement), costs and expenses (including costs of
investigation, preparation and defense, and the fees and disbursements
of counsel), whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, together with interest
with respect to any of the foregoing.38
“Patent Litigation” means:
33
Pretrial Stip. at 13-14; see JX32 (hereafter “MIPA”).
34
MIPA §§ 2.3, Schedule 2.3. Fidelio generated the $100 million valuation using a 10x EBIDA
multiplier – which was consistent with its recent acquisitions and priced VOI as if the Patent
Litigation did not exist. 2/10/25 Tr. 69:3-70:3. The $100 million purchase price was broken into
four components. See MIPA Schedule 2.3. Notably, one portion was a $20 million “Contingent
Closing Note” (the “Note”), intended as the first source of Plaintiffs’ indemnity for the Patent
Litigation. See id. §§ 1 (“Contingent Closing Note”), 2.3, 5.5.
35
The MIPA sets forth each Seller’s Percentage Interest. See MIPA, Ex. 7. Relevant here, Claude’s
Percentage Interest is 46.296296% and the Trust’s is 9.259259%. Id. As such, Defendant’s
combined Parentage Interest is 55.55%
36
The MIPA defines “Affiliates” to mean “with respect to any Person, any other Person that
directly, or indirectly . . . controls, is controlled by, or is under common control with, such first
Person.” Id. § 1 (“Affiliates”).
37
Id. § 8.2. Section 8.3 caps Defendants’ aggregate total indemnity at $100 million. Id. § 8.3(a).
38
Id. § 1 (“Damages”).
7
the patent litigation pending in the United States District Court for the
Middle District of Floria under the caption DePuy Synthes Products,
Inc. et al. v. Veterinary Orthopedic Implants, Inc., 3:18-cv-01342-HES-
PDB (M.D. Fla.), together with any appeals therefrom and any related
or derivative action.39
Defendants negotiated for various rights concerning the Patent Litigation.40
Relevant here is the provision stating, “Sellers’ Representative shall [] control the
defense of the Patent Litigation . . . on behalf of the Company[.]” 41 Pursuant to the
MIPA, Defendants appointed Patrick as Sellers’ Representative.42
D. VOI’s Post-Transaction Business as the Patent Litigation Continues
After the Transaction closed, Fidelio united VOI with its other veterinary
orthopedic companies to form Movora.43 Patrick continued to run VOI’s “day-to-
day operations,”44 reporting first to Movora’s board and later to Vimian’s45 CEO.46
During this period, VOI continued selling several of the plates at issue in the Patent
Litigation.47
39
Id. (“Patent Litigation”).
40
See id. § 5.5.
41
Id. § 5.5(b).
42
Pretrial Stip. at 14. The MIPA memorialized Patrick’s role as VOI’s post-Transaction CEO,
stating Plaintiffs could terminate his “employment at any time with or without cause and without
advance notice.” MIPA, Ex. 3 § 1.1.
43
2/10/25 Tr. 66:9-67:8. Fidelio joined Movora with other companies in the animal health sector
under the publicly traded company Vimian. Id. 66:9-67:22.
44
2/13/25 Tr. 57:10-59:11.
45
Fidelio formed Vimian to run Movora along with other animal health companies. 2/10/25 Tr.
66:9-67:22.
46
See D.I. 218, Ex. 8 (hereafter “Ullman Dep. Tr.”) 16:25-21-19.
47
See JX50 (damages expert presentation in Patent Litigation, discussing sales of accused plates
post-Transaction); DX602 (discussing VOI’s TPLO plates).
8
DePuy continued to expand the Patent Litigation.48 On June 8, 2021, DePuy
filed its Second Amended Complaint, adding Fidelio as a defendant and alleging it
willfully infringed DePuy’s patents.49 Later the same month, DePuy filed its Third
Amended Complaint (“TAC”).50 The TAC added a new patent to the Patent
Litigation – DePuy’s newly issued U.S. Patent No. 11,026,728 (the “‘728 Patent”).51
The ‘728 Patent is a continuation of the ‘921 Patent.52 The TAC alleged VOI’s NXT
plates infringed the ‘728 Patent.53
As DePuy expanded its case, the evidence shows Patrick controlled the Patent
Litigation for VOI.54 Patrick: (1) initiated attempts to settle with DePuy;55 (2)
48
See, e.g., DX189 (DePuy’s second amended complaint in the Patent Litigation).
49
Id.
50
PX100.
51
Id.
52
See Trial Transcript February 13, 2025 (hereafter “2/12/25 Tr. 3”) 19:9-20:18; PX100.0010
(DePuy’s Third Amended Complaint alleging, “[t]he ‘728 patent is a continuation of the ‘921
patent and shares a common specification.”), PX100.0073 (‘728 Patent stating it is “a continuation
of . . . Pat. No. 8,523,921.”)
53
PX100.
54
Claude vigorously disputes the extent of Patrick’s control over VOI’s Patent Litigation defense.
D.I. 284 (hereafter “Claude Br.”) at 10-14, 27-29; D.I. 289 (hereafter “Claude Opp’n Br.”) at 8-11,
20-22. Specifically, Claude argues Plaintiffs “refus[ed] apportionment of liability between VOI
and Fidelio in the [Patent] [L]itigation and at settlement.” Claude Opp’n Br. at 20-22; see Claude
Br. at 27-29. Claude cites a myriad of documents to support that position. See DX179; DX 204;
DX206; DX314; DX 350; DX380; DX409; DX433; DX440; DX479; DX624; DX651; DX654;
DX701; DX724; DX733; PX118; PX127; PX157; PX200 JX51. This evidence shows liability
was never apportioned between Fidelio and VOI. E.g., JX51. Claude also proved a live
controversy exists regarding whether an apportionment is necessary. See, e.g., DX701 (arguing
the failure to apportion fault between VOI and Fidelio abrogated their indemnification obligation);
PX200 (arguing any failure to apportion did not prevent Plaintiffs’ entitlement to contractual
indemnification). For reasons discussed below, however, the Court finds Claude’s proffered
evidence does not prove Plaintiffs usurped control of the Patent Litigation from Patrick. See infra
V.B.
55
See 2/10/25 97:9-101:9; JX34.
9
switched VOI’s counsel – hiring Finnegan, Henderson, Farabow, Garrett & Dunner
(“Finnegan”) to replace Fox Rothschild;56 and (3) directed Finnegan’s representation
of VOI.57 Patrick also helped develop VOI’s next generation of plates,
“Compresiv”/“Versiv” (“C/V”).58 As part of the redesign, Finnegan conducted a
freedom to operate analysis regarding C/V.59 Finnegan ultimately concluded C/V
did not infringe DePuy’s patents.60 VOI used that analysis to attempt to settle with
DePuy.61 Moreover, Finnegan raised C/V in the Patent Litigation as non-infringing
alternatives to mitigate potential damages.62 In August 2022, VOI stopped selling
Elite and NXT plates, and sought to convert customers to C/V.63
56
See 2/10/25 Tr. 101:10-105:3; PX89; PX94; DX154. Finnegan jointly represented VOI and
Fidelio in the Patent Litigation. PX91; PX92; PX93; PX95. The parties initially disputed how
Finnegan should bill VOI and Fidelio for work related to the joint representation. See DX43.
Ultimately, Patrick directed Finnegan to bill VOI for all work done. PX192.
57
E.g., 2/12/25 12:23-14:15, 40:13-22, 49:3-17.
58
See 2/10/25 Tr. 113:12-116:8; PX93 (informing Claude of efforts to redesign certain VOI plates);
JX42 (discussing VOI’s efforts to redesign plates). The parties dispute the extent to which C/V
were developed by VOI or BioMedtrix, another Fidelio-owned company under the Movora
umbrella. See Claude Br. at 14-15 (“[Plaintiff]s’ affiliate, BioMedtrix, conceived of and developed
a new generation of plates; [C/V].” (citing DX698; DX712)); D.I. 283 (hereafter “Movora Br.”) at
16 (arguing Patrick helped develop C/V). The Court is not convinced the extent of BioMedtrix’s
involvement in developing C/V is relevant. Plaintiffs concede BioMedtrix engineers helped design
C/V. See 2/10/245 Tr. 113:12-116:13. Yet, it is also clear Patrick was involved in the redesign
efforts. See, e.g., id. 116:14-16.
59
Id. 116:19-23; 2/12/25 Tr. 25:16-26:11; PX93 (email from Patrick to Claude mentioning the
Freedom to Operate study).
60
2/12/25 Tr. 26:6-11.
61
PX194; see JX40 (email from May to Patrick, forwarded to Claude, noting DePuy was not
interested in settling despite the C/V redesign).
62
See PX103; PX197; DX386.
63
JX44; 2/10/25 Tr. 115:8-18; Tr. 2/13/25 Tr. 59:12-62:2.
10
E. The Patent Litigation Verdict, VOI’s Post-Verdict Conduct, and the
Settlement
As the Patent Litigation trial approached, Patrick, Finnegan, and Fidelio
discussed the proposed jury verdict form.64 Finnegan recommended “one lump sum
for the amount of damages,” because including separate lines for VOI and Fidelio
“could result in a higher overall number.”65 Patrick approved Finnegan’s
recommendation.66 Finnegan, however, submitted a proposed verdict form breaking
liability down by plate, patent, and claim.67 The Patent Litigation court rejected
Finnegan’s proposal, opting instead for “one question and one answer.”68
The Patent Litigation trial occurred in January 2023.69 The jury found both
VOI and Fidelio liable for willful patent infringement and awarded DePuy’s full
requested damages, approximately $60 million.70 Liability for the Patent Litigation
was joint and several between VOI and Fidelio.71 Because the jury found willful
infringement, the verdict was subject to trebling.72 Following the verdict, Finnegan
recommended Fidelio and VOI appeal.73 At the same time, VOI sent large shipments
64
See 2/12/25 Tr. 71:9-74:19.
65
Id.
66
Id.
67
DX380; DX433; DX440.
68
DX491; see JX51.
69
See DX486.
70
JX51.
71
PX100; 2/13/25 Tr. 44:7-13. The Patent Litigation jury verdict calculation was based on VOI’s
sales of Swiss, Elite, NXT, and CBLO plates. See 2/13/25 Tr. 11:3-12.
72
See id. 10:19-11:2; 2/11/25 Tr. 210:13-19 (Claude testifying everyone was worried about the
possibility of trebling).
73
See DX550; 2/13/25 Tr. 95:6-112:20.
11
of C/V to customers.74 DePuy sought a TRO to stop this alleged “post-verdict ‘fire
sale’ to flood the market with large quantities of the Infringing Implants.” 75 The
Patent Litigation court ultimately enjoined VOI and Fidelio from selling any plate
“not colorably different” from the infringing products.76 Unsatisfied with VOI and
Fidelio’s response to the Court’s injunction, DePuy initiated contempt proceedings.77
With contempt proceedings and a motion to treble damages outstanding,78
DePuy reached out to VOI’s new CEO, Colleen Flesher (“Flesher”), to discuss
settlement.79 With Patrick’s approval, Flesher began settlement negotiations.80
DePuy initially requested a $100 million payment and Plaintiffs’ agreement to stop
selling Swiss, Elite, NXT, CBLO, and C/V plates.81 Plaintiffs were hesitant to enter
74
See 2/13/25 Tr. 64:8-68:1. The parties dispute the nature of these shipments. Compare Claude
Br. at 16-19, with Movora Br. at 26. Plaintiffs contend the C/V shipments were part of VOI’s
ongoing annual order program, which VOI continue because there was no reason to believe the
Patent Litigation prohibited C/V sales given the Finnegan freedom to operate opinion. 2/13/25 Tr.
62:20-68:1. Claude stylizes the C/V shipments as product dumps similar to previous large
shipments of Elite and NXT plates. See JX44.
75
DX493. VOI and Fidelio denied DePuy’s allegations. DX508.
76
DX658; DX698.
77
DX610.
78
Several witnesses testified the risk of trebling was “super high.” E.g., 2/13/25 Tr. 105:9-14.
79
JX55. Flesher worked for DePuy from 2012 until 2019. 2/13/25 Tr. 54:1-5. During that period,
Flesher worked with Maria Cunningham, who led settlement negotiations for DePuy. Id. 54:6-8,
58:10-17, 78:13-17.
80
2/13/25 Tr. 77:18-78:9; see JX56 (discussing Patrick’s authorization of Flesher to negotiate but
requiring Flesher to provide update to Patrick and allow Patrick to approve any settlement).
81
2/13/25 Tr. 93:1-94:22. The Court notes a document on Defendants’ initial exhibit list quoted
DePuy’s initial settlement offer at $90 million. See DX640. Yet, that document was not admitted
into evidence. Accordingly, the Court relies on Flesher’s trial testimony which priced DePuy’s
initial offer at $100 million. DePuy previously voiced an intent to initiate a new lawsuit against
VOI and Fidelio if they continued to sell C/V. See DX583.0018.
12
any deal that prohibited selling C/V.82 After several rounds of negotiations,83 DePuy
sent a final $70 million settlement offer84 which would expire an hour after
issuance.85 Patrick reviewed the Settlement and met with VOI’s post-trial counsel.86
Patrick then approved the Settlement as Sellers’ Representative.87 The Settlement
resolved all outstanding Patent Litigation issues upon VOI’s payment of $70
million,88 which VOI financed via a loan.89 The Settlement also granted VOI and
Fidelio a license to continue selling C/V.90
In April 2023, Plaintiffs demanded Defendants indemnify the Settlement, and
related costs, pursuant to Section 8.2(a) of the MIPA.91 When Defendants refused,
Plaintiffs initiated this litigation.92
III. RELEVANT PROCEDURAL HISTORY
Plaintiffs filed their Complaint on May 4, 2023, asserting a single breach of
contract claim against all Defendants.93 On July 13, 2023, Claude answered the
82
See, e.g., DX662 (stating a settlement prohibiting the sale of C/V was “a last resort option.”).
83
See JX58; PX144; 2/13/25 Tr. 89:21-93:11.
84
PX153.
85
2/13/25 Tr. 96:13-97:4.
86
PX153; PX154; PX155.
87
PX155; JX62.
88
JX62; 2/13/25 Tr. 205:1-11.
89
2/10/25 Tr. 141:1-18.
90
See JX62.
91
PX157.
92
2/11/25 Tr. Tr. 213:3-12.
93
D.I. 1.
13
Complaint,94 asserting six Counterclaims – one alleging Plaintiffs breached the
MIPA95 and five seeking declaratory judgment.96 Plaintiffs answered all
Counterclaims on August 2, 2023.97
In October 2023, Claude filed a Motion for Judgment on the Pleadings,98
which the Settling Defendants promptly joined.99 While that motion was pending,
the parties stipulated to Beale’s dismissal after he settled with Plaintiffs.100 On April
18, 2024, the Court denied the Motion for Judgment on the Pleadings, holding
Plaintiffs’ interpretation of the MIPA was reasonable and finding that Defendants’
other arguments were premature.101 Three weeks later, the parties stipulated to Van
Horssen’s dismissal after he also settled all claims with Plaintiffs.102
On June 13, 2024, while discovery was ongoing, the parties stipulated to
Patrick’s dismissal after he settled with Plaintiffs.103
94
The Settling Defendants filed their Answer the day before, advancing the same six
Counterclaims as Claude, as well as an implied covenant claim. D.I. 28.
95
D.I. 31 ¶¶ 114-36 (alleging Plaintiffs breached Sections 5.5(b), 5.7, 8.2, and 8.3 of the MIPA).
96
Specifically, Claude requested a declaration that: (1) Plaintiffs’ breaches of the MIPA abrogated
any indemnification obligation; (2) there is no obligation to provide indemnification if Damages
exceed the cap in Section 8.3(a); (3) Defendants have no indemnity obligation, because damages
exceed Section 8.3(a)’s cap; (4) Plaintiffs’ failure to apportion Patent Litigation Damages
invalidated their indemnification request; and (5) Defendants have no obligation to indemnify
Plaintiffs for the Settlement. D.I. 31 ¶¶ 137-67.
97
D.I. 39; D.I. 40.
98
D.I. 76.
99
D.I. 80.
100
D.I. 130.
101
D.I. 155.
102
D.I. 166.
103
D.I. 196.
14
The parties filed Cross-Motions for Summary Judgment in July 2024.104 On
December 2, 2024, the Court issued a memorandum opinion granting in part and
denying in part Plaintiffs’ Motion for Summary Judgment, while denying
Defendants’ Motion for Partial Summary Judgment (the “MSJ Op.”).105 The MSJ
Op. resolved in Plaintiffs’ favor: (1) Counterclaims Three, Four, Five Six; (2)
Affirmative Defense Seven; and (3) Defendants’ implied covenant claim.106
Critically, the Court held “Plaintiffs, as the indemnitees, must prove their damages,”
but once Plaintiffs establish a prima facie case Defendants have the burden to “prove
the MIPA does not cover [specific] ‘non-recoverable’ amounts.”107
In advance of trial, Plaintiffs filed the sole Motion in Limine – seeking to
exclude the testimony of Defendants’ damages expert Jeffery Kinrich (“Kinrich”).108
At the January 30, 2025 pretrial conference, the Court deferred ruling on the
admissibility of Kinrich’s opinions until after trial.109
The Court held a five-day bench trial from February 10 through February 14,
2025.110 The parties each filed an opening post-trial brief on March 28, 2025.111 A
104
D.I. 213; D.I. 214.
105
D.I. 249 (hereafter “MSJ Op.”).
106
See id. at 26.
107
Id. at 20 (citing Interim Healthcare, Inc. v. Spherion Corp., 884 A.2d 513, 545, 548 (Del. Super.
2005)).
108
D.I. 256.
109
D.I. 268 at 42:3-21.
110
D.I. 274.
111
Movora Br.; Claude Br.
15
month later, each party filed their post-trial response brief.112 The Court heard post-
trial oral argument on May 13 and May 16, 2025.113
IV. STANDARD OF REVIEW
A. The Burden of Proof
In a civil case, the burden of proof is by a preponderance of the evidence.114
A preponderance of the evidence “means proof that something is more likely than
not.”115 Where “the evidence on any particular point is evenly balanced, the party
having the burden of proof has not” sufficiently proved that point.116 The Court
considers “the testimony of all witnesses regardless of who called them, and all
exhibits received into evidence regardless of who produced them” to determine if
any fact has been proven by a preponderance of the evidence.117
The plaintiff asserting a breach of contract claim has the burden of proof.118
A court may shift the burden of proof to match a contractual allocation or
112
D.I. 287 (hereafter “Movora Opp’n Br.”); Claude Opp’n Br.
113
D.I. 290; D.I. 291; D.I. 297 (hereafter “5/13/25 Tr.”); D.I. 298 (hereafter “5/16/25 Tr.”). The
transcripts, which are integral to the Court’s decision, became available on June 16, 2025. D.I.
297; D.I. 298.
114
Zenith Energy Terminals Joliet Holdings LLC v. CenterPoint Properties Trust, 2024 WL
3570165, at *13 (Del. Super. July 29, 2024).
115
Id.; see Sofregen Medical Inc. v. Allergan Sales, LLC, 2024 WL 4297665, at *16 (Del. Sept. 26,
2024) (“[t]his means that certain evidence, when compared to the evidence opposed to it, has the
more convincing force and makes the Court believe that something is more likely true than not.”).
116
Sofregen Medical, 2024 WL 4297665, at *16.
117
Zenith Energy, 2024 WL 3570165, at *13.
118
Buck v. Viking Holding Management Company LLC, 2024 WL 4352368, at *7 (Del. Super.
Sept. 30, 2024).
16
“accommodate the unique circumstance of the parties.”119 At summary judgment,
the Court held Plaintiffs have the burden to prove their damages.120 If Plaintiffs carry
that burden, “Defendants . . . must prove that the MIPA does not cover [specific]
‘non-recoverable’ amounts.”121 This burden shifting “only makes a difference where
the evidence is balanced.”122 If the evidence on any point is “so overwhelming []
the question of who had the burden of proof [] [] [is] irrelevant[.]”123
B. The Court as Fact Finder
In a bench trial, “the judge sits as both arbiter of law and factfinder.”124 As
factfinder, the judge evaluates “the witnesses’ credibility and determine[s] what
weight to assign their testimony.”125 The court is “free to accept or reject any or all
of the sworn testimony, as long as it consider[s] all of the evidence presented.”126
119
Id. (citing AB Stable VIII LLC v. Maps Hotels & Resorts One LLC, 2020 WL 7024929, at *48
(Del. Ch. Nov. 30, 2020)).
120
MSJ Op. at 20.
121
Id.
122
Buck, 2024 WL 4352368, at *7.
123
Americas Mining Corp. v. Theriault, 51 A.3d 1213, 1242-43 (Del. 2012).
124
Jackson v. State, 21 A.3d 27, 38 (Del. 2011).
125
Torres v. Bishop, 2021 WL 6053870, at *4 (Del. Super. Dec. 21, 2021) (citing Mundy v. Devon,
906 A.2d 750, 755 (Del. 2006)); see Buck, 2024 WL 4352368, at *7 (“[t]he Court can consider
each witness’s means of knowledge; strength of memory; opportunity to observe; how reasonable
or unreasonable the testimony is; whether it is consistent or inconsistent; whether it has been
contradicted; the witnesses’ biases, prejudices, or interest; the witnesses’ manner or demeanor on
the witness stand; and all circumstances that according to the evidence could affect the credibility
of the testimony.” (internal quotes omitted)).
126
Pardo v. State, 160 A.3d 1136, 1150 (Del. 2017).
17
When the evidence is conflicting, the Court “retains discretion to determine which
evidence deserves more weight.”127
V. ANALYSIS
The Court first evaluates whether Plaintiffs proved their breach claim. If so,
the Court considers whether Claude demonstrated Plaintiffs breached the MIPA
thereby voiding Claude’s obligation to indemnify. If not, the Court determines
whether Defendants proved some portion of the Settlement is non-recoverable under
Section 8.2(a).
A. Plaintiffs Proved Claude Breached the MIPA by Not Indemnifying the
Settlement.
Plaintiffs advance a single breach of contract claim – alleging Claude
breached Section 8.2(a) of the MIPA by not providing indemnification for the
Settlement.128 The elements of a breach of contract claim are: (1) a valid contract;
(2) breach of a contractual obligation; and (3) resultant damages.129 No Party
challenges the MIPA’s validity. The MSJ Op. noted, “Defendants do not
meaningfully dispute that their failure to indemnify some portion of the Settlement
is a breach of the MIPA.”130 At post-trial oral argument, Claude conceded he
breached the MIPA by not indemnifying certain portions of the Settlement covered
127
Unico Commodities, LLC v. Lofty Links, LLC, 2025 WL 638631, at *4 (Del. Super. Feb. 25,
2025).
128
See Compl. ¶¶ 41-51.
129
VLIW Technology, LLC v. Hewlett-Packard Co., 840 A.2d 606, 612 (Del. 2003).
130
MSJ Op. at 16.
18
by Section 8.2(a).131 Accordingly, the only dispute regarding Plaintiffs’ breach claim
is whether Plaintiffs proved Section 8.2(a) covers the entire Settlement.
Plaintiffs argue they proved a prima facie case that the entire Settlement falls
within the MIPA’s “exceptionally broad” indemnification provision.132 Plaintiffs
cite: (1) whom the MIPA indemnifies;133 (2) the forms of damages covered;134 (3)
the subject-matter indemnified;135 and (4) the period covered,136 as confirming the
entire Settlement is indemnifiable. Plaintiffs also cite “the commercial context” of
the Transaction as confirming the entire Settlement is indemnifiable.137
131
5/13/25 Tr. 160:16-162:2; see Claude Opp’n Br. at 12 (“[t]he Parties indemnification agreement
does not include the ‘728 Patent or NXT. At the time of the MIPA the Patent Litigation involved
one patent–the ‘921 Patent–and three accused plates–Swiss, Elite, and CBLO.”), 46 (“[t]he
business [Defendants] provided was one that sold three TPLO/CBLO plates alleged to infringe the
‘921 Patent . . . and [Defendants] agreed to provide a remedy for that business–indemnity for pre-
closing liability for these sales and for post-closing liability for the reasonable and expected
continuation of those sales.”), 48 (“[t]he only ‘dispute’ that [Defendants] could, and did, indemnify
was DePuy’s 921 Patent infringement claims against VOI’s Swiss, Elite, and CBLO plates.”).
132
Movora Br. at 31-35 (citing MIPA § 8.2(a)).
133
Id. at 32 (noting the MIPA indemnifies “Buyer” and “its Affiliates.” (quoting MIPA § 8.2(a)).
134
Id. (noting the MIPA defines “Damages” to include “any losses, liabilities, damages, [and]
awards” as well as “amounts paid in settlement,” “fees and disbursements of counsel,” and
“interest.” (quoting MIPA §1 (“Damages”))).
135
Id. at 33. Plaintiffs assert the provision broadens coverage in three ways. Id. First, the MIPA
defines “Patent Litigation” to include “any related or derivative Actions.” MIPA §1 (“Patent
Litigation”). Second, Section 8.2(a) coves “Damages suffered by [VOI] as a result of, or in
connection with, the Patent Litigation.” MIPA § 8.2(a) (emphasis added). Finally, the clause
“arising out of or relating to” means Section 8.2(a) must be read broadly. Id.; see MSJ Op. at 19-
20 n.117.
136
Movora Br. at 33-35. Plaintiffs insist Section 8.2(a)’s language shows the provision is forward-
looking. Id. at 33-34; see MIPA § 8.2(a) (“from and after the Closing,” “all Damages arising out
of”, “appeals . . . related. . . [or] derivative[.]”). See also MIPA § 1 (“Damages”) (“whether known
or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued.”).
137
Movora Br. at 34-35. Specifically, Plaintiffs assert Fidelio would not have entered the
Transaction “unless [Defendants] agreed to keep all the risk” associated with the “ever-expanding
[P]atent [Litigation].” Id. (citing 2/10/25 Tr. 68:16-69:2, 87:11-20 (“it was impossible to . . . judge
the risk.”); 2/11/25 Tr. 33:13-21). Plaintiffs point to Fidelio’s use of a 10x EBITDA valuation
19
Claude asserts Section 8.2(a) “indemnif[ies] [Plaintiffs] for DePuy’s claims
relating to conduct and occurrences through the sale of VOI, when [Defendants]
controlled the business, and the reasonable and expected continuation of that
conduct.”138 Claude contends Plaintiffs’ reading of Section 8.2(a) impermissibly
broadens the indemnification provision “to be essentially limitless.”139 Claude
acknowledges Section 8.2’s broad language, but insist “these phrases do not
encompass anything and everything added to the Patent Litigation case number.”140
Claude also take issue with Plaintiffs’ interpretation of the “commercial context.”141
Instead, Claude argues each indemnifiable portion of the Settlement “requires a
causal connection to the Patent Litigation pending at the time of the MIPA.”142
when calculating the purchase price as confirmation that Plaintiffs valued the Transaction
“completely exclude[ing] the risk and potential liabilities relating to the” Patent Litigation. 2/10/25
Tr. 69:3-18; see Fitzgerald Dep. Tr. 209:15-210:2; 2/10/25 Tr. 69:15-70:2(noting a 10x EBITDA
valuation was standard for companies not undergoing major litigation).
138
Claude Br. at 32-34 (citing MIPA §§ 1 (“Patent Litigation”); 8.2(a)).
139
Claude Opp’n Br. at 22-25; see Claude Br. at 32-34 (arguing Plaintiff’s interpretation is
“illogical” (citing 2/11/25 Tr. 68:3-69:8 (asserting Section 8.2(a) covers “any claims . . . brought
under [the Patent Litigation] case number . . . regardless of who the parties are . . . [and] what the
claims are[.]”))).
140
Claude Opp’n Br. at 23-24; see Claude Br. at 23 (“the parties did not contemplate a provision
where [Plaintiffs] could ramp up liability with impunity.”).
141
Claude Opp’n Br. at 26-27. Claude first argues Bonnier’s testimony that it was impossible to
judge the Patent Litigation risk is contradicted by Buyer’s extensive due diligence pre-Transaction.
Id. at 26. Second, the $100 million purchase price “was driven by VOI’s commercial success.” Id.
at 26-27. Finally, Claude argues it was Plaintiffs’ responsibility pre-closing to confirm the
indemnification provision covered all forward-looking conduct. Id. at 27.
142
Id. at 23-24 (citing Pac. Ins. Co. v. Liberty Mut. Ins. Co., 956 A.2d 1246, 1257 (Del. 2008)).
20
Plaintiffs dispute Claude’s interpretation of the MIPA’s indemnification
provision’s scope.143 Instead, Plaintiffs assert the MIPA’s definition of Patent
Litigation shows indemnification is limited to a particular case number, not a point
in time.144 Plaintiffs insist any post-Transaction claims asserted by DePuy are at
least “related or derivative claims” to the Patent Litigation.145
The starting point for interpreting the scope of Defendants’ indemnification
obligation is the MIPA’s text.146 Section 8.2(a) provides in relevant part:
the Sellers shall severally (in proportion to their Percentage Interest)
but not jointly indemnify, defend and hold harmless the Buyer, [and] its
Affiliates . . . [from] any Damages suffered by the Company as a result
of, or in connection with, the Patent Litigation[.]147
The MIPA defines “Damages” as:
any losses, liabilities, damages, awards, . . . payments (including
amounts paid in settlement), costs and expenses (including costs of
investigation, preparation and defense, and the fees and disbursements
of counsel), whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, together with interest
with respect to any of the foregoing.148
143
Movora Opp’n Br. at 8-13.
144
Id. at 9 (citing MIPA § 1 (“Patent Litigation”)). The MIPA also provides indemnification for
Damages suffered “as a result of, or in connection with” the Patent Litigation. MIPA § 8.2(a).
145
Id. at 9-11 (internal quotes omitted).
146
See First Solar, Inc. v. National Union Fire Insurance Company of Pittsburg, PA, 274 A.3d
1006, 1013 (Del. 2022) (“the scope of an insurance policy’s coverage is prescribed by the language
of the policy.” (cleaned up)).
147
MIPA § 8.2(a).
148
Id. § 1.1 (“Damages”).
21
“Affiliate[s]” means “with respect to any Person, any other Person that directly, or
indirectly . . . controls, is controlled by, or is under common control with, such first
Person.”149 Critically, the Parties defined “Patent Litigation” as:
the patent litigation pending in the United States District Court for the
Middle District of Florida under the caption DePuy Synthes Products,
Inc. et al. v. Veterinary Orthopedic Implants, Inc., 3:18-cv-01342-HES-
PDB (M.D. Fla.), together with any appeals therefrom and any related
or derivative Actions.150
In the MSJ Op., the Court interpreted these provisions to provide the “broadest
possible” indemnification.151 Claude admits Section 8.2(a)’s language “is broad.”152
Yet, Claude insists he is only required to indemnify “the [P]atent [L]itigation at the
time the MIPA was entered into, not anything and everything that could come
later.”153 The Court, however, finds the MIPA provides no textual support for
Claude’s proffered temporal limitation.
Claude’s indemnification obligation is not limited to the Patent Litigation’s
scope when the Transaction closed. The plain text of Section 8.2(a) ties Plaintiffs’
recoverable indemnity to the Patent Litigation without referencing any point in
time.154 Rather, the phrase “in connection with” in Section 8.2(a) suggests the right
149
Id. § 1.1 (“Affiliates”).
150
Id. § 1.1 (“Patent Litigation”).
151
MSJ Op. at 19-20 (citing Lillis v. AT & T Corp., 904 A.2d 325, 332 (Del. Ch. 2006)).
152
5/13/25 Tr. 160:1-4.
153
Id. 160:4-7.
154
See MIPA § 8.2(a); Scion Breckenridge Managing Member, LLC v. ASB Allegiance Real Estate
Fund, 68 A.3d 665, 683 (Del. 2013) (holding courts “interpret clear and unambiguous contract
terms according to their plain meaning.”).
22
to indemnification is not temporally limited.155 The MIPA’s extensive “Damages”
definition – which includes “unknown,” “unasserted,” “contingent,” and
“unaccrued” losses – further suggests Claude’s interpretation of Section 8.2(a) is
incorrect. Unrebutted trial testimony confirms that suggestion. Guhan Subramanian
(“Subramanian”), Plaintiffs’ mergers and acquisitions expert, testified Section 8.2(a)
does not establish a “my watch, your watch” indemnification scheme.156 Instead,
155
See Lillis, 904 A.2d at 332 (holding the phrase “in connection with,” “clearly envisions that any
dispute plausibly related to [the expressly covered conduct] is withing the purview of” an
indemnification provision.”).
156
Trial Transcript February 14, 2025 (hereafter “2/14/25 Tr.”) 27:4-29:10. Claude attempts to
argue his interpretation of Section 8.2(a) is not a “my watch, your watch approach” because
Defendants “agreed to indemnify post-closing conduct (on [Plaintiff]s’ watch) to the extent that
conduct was a reasonable and expected continuation of pre-closing conduct.” Claude Opp’n Br.
at 46-47. The Court, however, is not convinced that Claude advances a meaningful distinction.
Claude interprets the MIPA such that Section 8.2(a) does not “immunize [Plaintiffs] from their
own business decisions.” Id. at 46; see Claude Br. at 32-34. Splitting recoverable indemnity into
damages relating to conduct that occurred pre- versus post-Transaction is plainly a “my watch,
your watch” arrangement. See J.B. Hanks Co., Inc. v. Shore Oil Co., 2014 WL 268698, at *12 &
n.126 (M.D. La. Jan. 23, 2014) (interpreting a provision which read “[a]ll accounts payable,
royalties, severance taxes and other costs and expenses with respect to the Seller’s interest in the
Assets which relate to the period prior to the Effective Date shall be the obligation of and be paid
by Seller, and those which relate to the period commencing with the Effective Date shall be the
obligation of and be paid by Purchaser” to be a “my watch, your watch” arrangement); Williams
Alaska Petroleum, Inc. v. State, 529 P.3d 1160, 1203 (Alaska 2023) (holding it was reasonable to
interpret a contractual provision as “your watch/my watch” because “liabilities were defined by
their known/unknown status[.]”). See also 2/14/25 Tr. 25:9-27:3 (testifying regarding what a “my
watch, your watch” indemnity scheme means).
Similarly, the Court rejects Claude’s efforts to discredit Subramanian’s testimony. Claude
argues Subramanian’s testimony “repeatedly ‘cross[ed] the line’ and ‘invade[d] the province of the
court,’ including by ‘effectively interpreting the agreement using extrinsic evidence.’” Claude
Opp’n Br. at 47-48 (quoting In re Columbia Pipeline Grp., Inc. Merger Litig., 2022 WL 2902769,
at *4 (Del. Ch. July 14, 2022) (edits in original) (excluding Professor Subramanian’s opinions in
a separate action on that basis)). Certainly, an expert cannot testify regarding the interpretation of
a contract as a matter of law or the parties’ subjective intent when entering into an agreement. See
Hoechst Celanese Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 1994 WL 721624, at *1
(Del. Super. Apr. 20, 1994); Forsythe v. ESC Fund Mgmt. Co. (U.S.), Inc., 2010 WL 1676442, at
*2 (Del. Ch. Apr. 21, 2010). Subramanian did not cross the line of permissible expert testimony.
23
Subramanian confirmed Section 8.2(a) sets forth a broad, forward-looking,
indemnification obligation.157 Taken together, this evidence convinces the Court
Section 8.2(a) does not limit Plaintiffs’ recoverable indemnity to Damages related to
the Patent Litigation as it existed when the Transaction closed.
The only textual evidence Claude cites to argue otherwise is the word
“pending” in the MIPA’s definition of “Patent Litigation.”158 Dictionaries define
“pending” as “[r]emaining undecided; awaiting a decision.”159 The Supreme Court
of Delaware has endorsed a similar definition.160 Thus, the MIPA’s use of the word
“pending” conveyed the Patent Litigation was ongoing and remained undecided
when the Transaction closed. As a “pending” lawsuit, the Patent Litigation’s scope
could change dramatically.161 Therefore, rather than limiting Claude’s
The Court therefore Court credits Subramanian’s testimony regarding how contracting parties
typically structure “my watch, your watch” indemnification provisions, and how Section 8.2(a)
differs from those representative examples. See 2/14/25 Tr. 27:4-30:17. The In re Columbia
Pipeline case Claude cites explicitly endorsed such testimony as proper. See In re Columbia
Pipeline, 2022 WL 2902769, at *4 (“[t]here are many ways in which Subramanian might have
provided helpful expert opinions about [the relevant agreements]. He could have analyzed the
prevalence of [the at-issue provision] in the marketplace. He might have collected data on and
analyzed whether there are different formulations of [the at-issue provision], then evaluated how
tight or loose the different formulations are.”).
157
2/15/25 Tr. 28:5-22.
158
See Claude Opp’n Br. at 22-25; 5/13/25 Tr. 160:12-15.
159
Pending, BLACK’S LAW DICTIONARY (11th ed. 2019); accord Pending, MIRRIAM-WEBSTER,
https://www.merriam-webster.com/dictionary/pending (last visited June 6, 2025). See also
Consolidated, LLC v. GFP Cement Contractors, LLC, 2023 WL 3496188, at *3 (Del. Super. May
15, 2023) (“‘[u]nder well-settled law,’ the Court may use dictionaries to ascertain the meaning of
undefined contract terms.” (quoting Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728,
740 (Del. 2006) (edits in original)).
160
See Rice v. McCaulley, 31 A. 240, 243 (Del. 1885).
161
See BDO USA, LLP v. JSCo Enterprises, Inc., 2023 WL 5206150, at *11 (Del. Super. Aug. 8,
2023) (“parties are allowed to adapt their positions around changed circumstances over the course
24
indemnification obligation, the Court interprets the word “pending” as
acknowledging the Patent Litigation was ongoing and subject to change.162 That
construction comports with the circumstances when the parties negotiated the
Transaction – namely DePuy’s continuing expansion of the Patent Litigation.163
Accordingly, Claude’s reliance on the Patent Litigation definition does not support
temporally limiting Section 8.2(a)’s scope. The Court finds Plaintiffs met their
prima facie burden of showing the entire Settlement falls within the MIPA’s
indemnification provision. As such, the burden shifts to Claude to prove either some
countervailing breach by Plaintiffs or specific non-recoverable portions of the
Settlement.
of a case.”); CIM Urban Lending GP, LLC v. Cantor Commercial Real Estate Sponsor, L.P., 2016
WL 768904, at *4 n.22 (Del. Ch. Feb. 26, 2016) (“the scope of the dispute among the parties will
likely evolve, and the appropriateness of this discovery may become more apparent later.”); Delta
Eta Corp. v. University of Delaware, 2007 WL 4578278, at *6 (Del. Super. Dec. 27, 2007) (“[a]s
litigation proceeds, the parties' positions may change as the factual record becomes more
complete.”); State Farm Fire & Cas. Co. v. Maltman ex rel. Maltman, 1976 WL 168381, at *2
(Del. Super. June 22, 1976) (recognizing “the tendency of factual patterns to shift during the course
of litigation prior to trial[.]”).
162
This reading is consistent with the fact that Claude, Patrick, and their Patent Litigation Counsel
knew pre-closing that DePuy was aggressively expanding the Patent Litigation and was likely to
accuse additional VOI plates. See supra n.17; Chicago Bridge & Iron Company N.V. v.
Westinghouse Electric Company LLC, 166 A.3d 912, 926-27 (Del. 2017) (holding a “[p]urchase
[a]greement” should be “read in full and situated in the commercial context between the parties.”
(emphasis added)).
163
See, e.g., PX65 (noting, pre-Transaction, DePuy was likely to add NXT plates to the Patent
Litigation). Interpreting Section 8.2(a) to provide comprehensive, forward-looking indemnity is
consistent Fidelio’s 10x EBIDA valuation of VOI. Tr. 1, 69:3-70:3 (testifying the $100 million
purchase price was consistent with Fidelio’s valuation of other companies and priced VOI as if the
Patent Litigation did not exist).
25
B. Claude did Not Prove Plaintiffs Materially Breached the MIPA, thereby
Obviating Defendants’ Indemnification Obligation.
Claude asserts Plaintiffs’ material breach of the MIPA abrogates any
obligation to indemnify the Settlement.164 It is axiomatic that “[a] party is excused
from performance under a contract if the other party is in material breach thereof.”165
Claude contends Plaintiffs breached Section 5.5(b) of the MIPA by usurping control
of the Patent Litigation from Sellers’ Representative, Patrick.166 Section 5.5(b)
states, “Sellers’ Representative shall [] control the defense of the Patent Litigation
and any settlement negotiations relating thereto on behalf of [VOI.]”167
Claude argues Plaintiffs’ refusal to permit apportionment of Damages in the
Patent Litigation between VOI and Fidelio materially breached Section 5.5(b).168
Claude insists the evidence shows Plaintiffs repeatedly refused169 Patrick’s
numerous apportionment requests.170 While Patrick approved the Settlement,
164
2/10/25 Tr. 40:5-41:2 (“[w]e will show that Plaintiffs breached section 5.5 in two ways.”).
165
BioLife Solutions, Inc. v. Endocare, Inc., 838 A.2d 268, 278 (Del. Ch. Oct. 1, 2003) (citations
omitted).
166
Claude Br. at 27-31 (citing MIPA § 5.5(b)). Patrick’s control of the Patent Litigation as Sellers’
Representative is central to Defendants’ breach claim. See id; Claude Opp’n Br. at 20-22. Movora
points out, however, “Claude failed to product Patrick at trial” despite representing at summary
judgment that Patrick would testify regarding his lack of control. Movora Br. at 58. Per Plaintiffs,
such testimony was needed to overcome Patrick’s deposition statements that Finnegan never failed
to follow his directions related to the Patent Litigation. See Patrick Dep. Tr. 307:4-18.
167
MIPA § 5.5(b).
168
Claude Br. at 27-31 (citing MIPA § 5.5(b); eCommerce Indus., Inc. v. MWA Intelligence, Inc.,
2013 WL 5621678, at *13 (Del. Ch. Sept. 30, 2013); Int’l Underwriters, Inc. v. Stevenson Enters.,
Inc., 1983 WL 935827, at *2 (Del. Super. Oct. 4, 1983)).
169
See 2/10/25 Tr. 123:10-20; 2/11/25 Tr. 37:4-22; DX479; DX654; DX651; DX701.0003; PX127;
DX624; PX200.
170
See DX179; DX204; DX206; DX314; DX350; DX409.
26
Claude maintains he did so while noting Plaintiffs’ failure to apportion voided any
indemnification obligation.171
Plaintiffs insist Claude failed to prove a material breach.172 Plaintiffs argue
multiple witnesses testified “Patrick controlled all defense decisions for VOI,”
including a Finnegan lawyer who represented VOI and Fidelio in the Patent
Litigation.173 Rather, Plaintiffs assert the evidence shows Patrick agreed to not
apportion damages in the Patent Litigation, because Finnegan advised him doing so
“could result in a higher overall number[.]”174 Plaintiffs further maintain Claude did
not prove any alleged breach was material.175 Plaintiffs insist requesting
apportionment “would not have made a difference,” because the Patent Litigation
judge made clear he wanted a simple verdict form.176
171
Claude Br. at 29 (citing JX57; JX59; DX695; PX151; PX155).
172
Movora Br. at 58-60 (citing I/Mx Info. Mgmt. Sols., Inc. v. MultiPlan, Inc., 2013 WL 3322293,
at *6 (Del. Ch. June 28, 2013) (holding a breach is material if it is “so fundamental” that it “defeats
the essential purpose of the contract”)).
173
Id. at 58-59; see 2/10/25 Tr. 112:9-113:11; 2/13/25 Tr. 57:13-21; id. 225:20-226:2; 2/12/25 Tr.
12:23-14:15, 40:13-22, 49:3-17.
174
Movora Br. at 59 (quoting 2/12/25 Tr. 74:11-19) (citing 2/12/25 Tr. 71:9-15 (Patrick agreed “to
just have one lump sum for the amount of the damages.”); PX245). Because Patrick had the right
to control VOI’s defense regardless of its impact on damages,” Claude maintains any risk of
apportionment increasing the Patent Litigation jury award does not excuse Plaintiffs’ breach.
Claude Opp’n Br. at 22 (arguing higher damages were not possible, because “the jury awarded the
full damages amount sought by DePuy.” (citing DX610)).
175
Movora Opp’n Br. at 43-45 (“[w]here the evidence shows that the breach was ‘of no
consequence’ to the outcome, the breach is immaterial.” (quoting Matthew v. Laudamiel, 2014 WL
5499989, at *2 (Del. Ch. Oct. 30, 2014))).
176
Movora Br. at 59-60. Specifically, Plaintiffs argue the evidence shows the judge rejected
Finnegan’s proposed complex verdict sheet, stating “[i]t’s going to be one question and one answer.
We’re not going to break it down.” DX491.0141; see DX380; DX433; DX440. Claude rejects
Plaintiffs’ reliance on Finnegan’s proposed verdict forms – which supposedly did not comply with
27
Claude did not prove Plaintiffs breached Section 5.5(b) by usurping control
of the Patent Litigation from Patrick.177 The overwhelming evidence shows Patrick
controlled VOI’s Patent Litigation Defense.178 Tim May, a member of the joint
Patent Litigation defense team,179 testified Finnegan always took direction from
Patrick, who approved all defense decisions regarding VOI.180 Patrick’s control
included approving the single item, non-apportioned jury verdict form.181 At his
deposition, Patrick could not identify a single direction Finnegan refused to follow
regarding VOI’s representation in the Patent Litigation.182 This statement is even
more striking given Patrick’s notable absence from trial prevented him from
clarifying or explaining his deposition testimony.183 Taken together, this largely
Defendants’ apportionment request. Id. at 20-21 (citing 2/13/25 Tr. 47:23-48:23 (acknowledging
an apportionment could be done)).
177
Because the Court concludes Claude did not prove Plaintiffs breached the MIPA, it need not
evaluate whether the alleged breach would have been material.
178
See 2/10/25 Tr. 112:22-113:11; 2/13/25 Tr. 57:13-21 (“I was given really clear direction from
both Patrick and from Fredrick Ullman, my direct manager, that Patrick would be leading the
process of the [Patent] [L]itigation.”); 2/13/25 Tr. 223:18-226:2. See also 2/10/25 Tr. 112:2-21
(explaining why Fidelio had certain calls with Finnegan without Patrick); 2/10/25 Tr. 113:12-
115:11 (discussing Patrick’s control over specific aspects of VOI’s Patent Litigation defense –
namely C/V as non-infringing alternatives).
179
See 2/12/25 Tr. 53:7-56:16 (May testifying he was “not the first-chair litigator,” but a member
of the defense team).
180
2/12/25 Tr. 12:23-14:15; 40:17-22, 49:3-17.
181
2/12/25 Tr. 71:9-15, 74:11-19.
182
Patrick Dep. Tr. 370:4-24 (“Q. And what did you ask them to do that they didn’t do? A. [Patrick]
I forget.”).
183
Patrick’s non-appearance at trial directly contradicted Defendants’ representation at summary
judgment that they would “put [documents] in front of [Patrick] at trial . . . [to] make clear that
[Finnegan] did not respect the direction that [Patrick] was providing to them at times during” the
Patent Litigation. D.I. 244 (Summary Judgment hearing transcript) 58:17-59:9.
28
unrebutted testimony shows Patrick controlled VOI’s Patent Litigation defense and
specifically approved the non-apportioned jury verdict form.
Faced with this substantial evidence, Claude relies on a series of
communications in which Patrick allegedly requested an apportionment of fault
between VOI and Fidelio,184 but Plaintiffs refused.185 Some of Claude’s proffered
evidence, however, only tangentially references apportionment.186 The vast majority
of other documents Claude cites are indemnification claim notices/demands and
subsequent counterparty responses.187 Questions regarding the reliability of
184
See Claude Br. at 28 (citing DX179; DX204; DX206; DX314; DX350; DX409; DX479; DX624
DX651; DX654; DX701; DX721; DX724; DX733; PX127; PX157; PX200).
185
See id. (citing PX118; 2/10/25 Tr. 123:10-20; 2/11/25 Tr. 37:4-14, 20-22).
186
See DX179 (Patrick emailing Finnegan and Bonnier, “[i]n my view any material amendments
to th[e] [Patent] [L]itigation should not be burdened by the previous ownership,” but not requesting
apportionment. Instead, asking “[h]ow do you propose we deal with this? Theo what are your
thoughts on this?”); DX204 (Patrick emailing Bonnier “I feel Fidelio being added to the case and
the new patent being issued should force us to rethink our approach,” but suggesting “Finnegan
make J&J a 7M offer to settle” not apportionment); DX206 (Wells emailing Klein, “I also
understand from Patrick that the litigation may now include claims related to actions taken by
Ossium/VOI following the closing and that I was not sure if they related to the status of facts at
the closing on June 16, 2020, that are subject to the indemnification obligation,” but not mentioning
or requesting any apportionment of fault); 2/10/25 Tr. 123:10-20 (testifying Plaintiffs’ “completely
disputed” Defendants’ “claim notices” sent “after Patrick resigned” as VOI’s CEO, but not stating
Plaintiffs refused to allow Patrick to direct Finnegan to request apportionment of damages).
187
See DX350 (12/5/22 claim notice); DX409 (1/3/23 response to claim notice dispute); DX479
(1/18/23 response to indemnification request); DX624 (2/10/23 response to updated claim notice);
DX651 (3/20/23 response to fourth indemnification claim notice); DX654 (3/16/23 response to
indemnification demand); DX701 (4/21/23 response to fifth indemnification claim notice); DX721
(4/5/23 reply to indemnification demand response); DX724 (4/10/23 further rejection of claim
notices); DX733 (5/11/23 further rejection claim notices); PX118 (12/5/22 indemnification claim
notice); PX127 (1/19/23 further indemnification demand and response); PX157 (4/14/23 updated
indemnification claim notice); PX200 (3/7/23 reply to indemnification response).
29
documents prepared in anticipation of a dispute aside,188 these documents do not
support Claude’s breach claim. While the indemnification demands and responses
extensively outline the parties’ positions on the issue, they do not show Plaintiffs
prevented apportionment or usurped control of the Patent Litigation.189
Claude heavily relies on Tom Wells’ (“Wells”) November 21, 2022, email to
Klein, cc’ing Patrick and Bonnier.190 In that email, Wells stated “[t]he liability
attributable to the Patent Litigation needs to be apportioned to seller indemnifiable
amounts and buyer non-indemnifiable amounts.”191 Yet, nothing in that email, or
any document Defendants cite, objectively shows Patrick told Finnegan to seek
apportionment and Plaintiffs prevented honoring that request. Indeed, none of the
communications were directed towards Finnegan or included them as a recipient.
As such, Claude has not overcome the overwhelming trial testimony showing
Patrick’s complete control of VOI’s Patent Litigation defense. Accordingly,
Defendants did not prove Plaintiffs breached the MIPA by a preponderance of the
evidence. The Court enters judgment in Plaintiffs’ favor on Claude’s breach
188
See LaPoint v. AmerisourceBergen Corp., 2007 WL 2565709, at *1 (Del. Ch. Sept. 4, 2007) (“I
place the greatest weight on documents . . . prepared by a party (or agent of a party) before any
anticipation of litigation.” (emphasis added)).
189
See DX179; DX204; DX206; DX350; DX409; DX 479; DX624 DX651; DX654; DX701;
DX721; DX724; DX733; PX127; PX157; PX200; PX118.
190
See DX314. Tom Wells was one of Defendants’ transactional attorneys involved in the
Transaction.
191
Id. at 0002.
30
counterclaim and concludes Claude’s indemnification obligation is not abrogated by
any countervailing material breach.
C. The Only Non-Recoverable Component of the Settlement is the C/V
License.
Claude does not dispute they must indemnify certain portions of the
Settlement.192 Claude admits he owes indemnity for Damages attributable to
“DePuy’s claims that the Swiss, Elite, and CBLO plates infringed the ‘921
Patent.”193 Nevertheless, Claude maintains the Settlement includes four non-
recoverable components.194 Specifically, Claude challenges Plaintiffs’ entitlement
to Damages: (1) associated with C/V; (2) attributable to Fidelio; (3) due to alleged
post-Transaction willful misconduct; and (4) tied to the ‘728 Patent.195
192
See 5/13/25 Tr. at 160:16-162:2 (“conced[ing]” an obligation to indemnify “the plates [accused]
at the time [the parties’ executed the MIPA] [] that infringed the 921 patent[.]”); Claude Opp’n Br.
at 23.
193
Claude Opp’n Br. at 23; see id. at 12 (“[a]t the time of the MIPA, the Patent Litigation involved
one patent–the ‘921 Patent–and three accused plates–Swiss, Elite, and CBLO.”). The parties
dispute the quantum of damages attributable to Swiss, Elite, and CBLO. Compare 5/16/25 Tr. at
7:13-9:1 (Plaintiffs arguing Swiss, Elite, and CBLO accounted for “54.3 million of the 59.5 million
jury verdict” in the Patent Litigation, which corresponds to “91 percent of the whole exposure[.]”),
with id. at 59:8-60:10 (Defendants arguing the “the 54 million number isn’t accurate. It needs to
be reduced” to account for “profits, Fidelio’s role, and the willful misconduct[.]”).
194
See Claude Br. at 31-44.
195
See id.
31
1. Plaintiffs Can Recover Damages Associated with the C/V Release, but Not
the C/V License.
Claude argues Plaintiffs cannot recover portions of the Settlement attributable
to C/V.196 Claude insists Plaintiffs are not entitled to indemnification for the release
of liability triggered by Plaintiffs’ “decision to flood the market with C/V on the
heels of the jury verdict” for two reasons.197 First, Claude insists the release is not
connected to the Patent Litigation.198 Second, Claude contends the release is not
“Damages,” because “VOI and Fidelio never incurred any obligation to pay DePuy
for the C/V sales.”199 Claude maintains the “purely forward-looking” C/V license is
not indemnifiable, because a “license” is not included in the “Damages” definition
and “a license [] [] is not damages ‘suffered by [VOI].’”200
Plaintiffs insist C/V plates relate to the Patent Litigation, such that Section
8.2(a) covers the license and release.201 Plaintiffs argue C/V are VOI products,
which Patrick helped develop “to try to avoid DePuy’s patents.”202 Patrick injected
196
Claude Br. at 34-37. Claude asserts C/V were designed by BioMedtrix after the Transaction.
Id. at 34-35 (citing JX62.003; 2/12/25 Tr., 57:2-10).
197
Id. at 34-36.
198
Id. at 35-36 (“C/V neither existed at the time of the MIPA . . . nor were ever accused products
in the Patent Litigation.” (citing 3/12/25 Tr. 82:2-8; JX50.0041.). Claude notes Plaintiffs described
C/V as “a new generation of plates out of scope in this dispute.” DX386.
199
Claude Br. at 36.
200
Id. at 36-37 (emphasis added) (“[Plaintiffs] could have stopped selling C/V upon settlement,
thus eliminating any possible damages after that date, obviating the need for a license.”).
201
Movora Opp’n Br. at 25-29.
202
Id. at 25 (citing 2/13/25 Tr. 60:21-61:11; PX103; 2/10/25 Tr. 113:12-115:7; 2/13/25 Tr. 182:20-
183:1; Ullman Dep. Tr. 45:3-13).
32
the C/V plates into the Patent Litigation as “non-infringing alternatives.”203
Therefore, “there was no realistic way to settle the Patent Litigation without ensuring
peace as to [C/V].”204 Plaintiffs also assert the term “injunctions” in the MIPA
contemplates a forward-looking license.205
Claude counters Plaintiffs’ arguments regarding C/V for four main reasons.206
First, the MIPA does not expressly cover the license or require Claude to pay for the
right to continue selling an accused product.207 Second, Defendants had no control
over Plaintiffs’ post-closing decision to develop C/V, which were never accused in
the Patent Litigation.208 Third, although C/V were never subject to an injunction,
the MIPA nevertheless does not indemnify a license to overcome an injunction.209
Fourth, Patrick’s involvement in developing C/V is immaterial, because he worked
as VOI’s CEO at the time.210
Claude’sarguments concerning C/V are properly evaluated in two parts. First,
Claude argues Plaintiffs cannot recover any portion of the Settlement attributable to
releasing Plaintiffs from liability associated with post-Transaction sales of C/V. The
203
Id. at 27-29 (citing PX194; PX103; PX197; DX386; DX610).
204
Id. at 29.
205
Movora Br. at 39 (citing MIPA § 8.2(a); 2/11/25 Tr. 18:21-20:13 (Klein)).
206
Claude Opp’n Br. at 27-33.
207
Id. at 27-28; see MSJ Op. at 19 (“the basis for [any] apportionment must be included in the text
of the indemnification provision.”).
208
Id. at 29-30. Claude asserts proffering C/V as non-infringing alternatives “did not make a
license necessary to resolve the [Patent] [L]itigation.” Id. at 30-31.
209
Id. at 31-33.
210
Id. at 32.
33
Court has already rejected Claude’s proffered temporal limitation on Section
8.2(a).211 Hence, the mere fact VOI developed and sold C/V after the Transaction
closed does not mean they fall outside Claude’s indemnification obligation. Rather,
the Court must determine whether the C/V release qualifies as “Damages suffered .
. . as a result of, or in connection with, the Patent Litigation.”212
The evidence shows the C/V release constitutes Damages suffered in
connection with the Patent Litigation. Although DePuy did not accuse C/V of
infringement, VOI injected C/V into the Patent Litigation both to facilitate
settlement213 and as non-infringing alternatives to mitigate damages.214 Patrick
approved these actions as Sellers’ Representative.215 Flesher credibly testified
Patrick directed the post-Patent Litigation verdict C/V shipments under VOI’s
annual ordering program.216 These actions led DePuy to seek a TRO in the Patent
Litigation to prohibit C/V sales.217 This evidence shows VOI, at Patrick’s direction,
211
See Supra V.A.
212
MIPA § 8.2(a).
213
PX194; see JX40 (email from May to Patrick, forwarded to Claude, noting DePuy was not
interested in settling despite the C/V redesign).
214
See PX103; PX197; DX386.
215
PX103; PX194; PX197; DX386.
216
2/13/25 Tr. 66:2-12, 67:9-68:7. The Court Flesher to be one of the most credible witnesses at
trial. See In re 2004 Harley Davidson VIN No. 1VF9FV31A84R116374, 2011 WL 601440, at *3
(Del. Super. Feb. 2, 2011) (“[d]uring a bench trial the judge is the sole person responsible for . . .
determine[ing] the credibility of every witness.”).
217
See DX493 (moving for a TRO); DX508 (opposing DePuy’s TRO request, but noting the
challenged shipments concerned C/V). Both DePuy and Defendants stylize these post-verdict
sales as VOI flooding the market with infringing products. See DX493; Claude Br. At 34-36. Yet,
as discussed, credible trial testimony evidenced these sales were part of VOI’s annual ordering
program. 2/13/25 Tr. 66:2-12, 67:9-68:7.
34
made C/V a part of the Patent Litigation. Thus, settling the Patent Litigation without
addressing VOI’s prior C/V sales was not realistic. Accordingly, the portion of the
Settlement attributable to the C/V release constitutes Damages related to the Patent
Litigation and is indemnifiable.
A different result is warranted concerning the forward-looking C/V license.218
The C/V license is not “Damages suffered by [VOI].”219 The MIPA’s definition of
Damages does not include a “license” or any analogous term.220 “[A]mounts paid in
settlement” do not include a forward-looking license.221 The word “injunctions” in
the definition of “Action” does not support Plaintiffs’ position. “[I]njunctions”
expands the types of proceedings giving rise to indemnifiable Damages, not the class
of injuries subject to indemnification.222 Nor does the reference to injunctions in a
218
The Settlement is expressly titled “Settlement and License Agreement.” JX62. Flesher, the
person who negotiated with DePuy, admitted the Settlement includes “a license to VOI and Fidelio
to continue to sell [C/V].” 2/13/25 Tr. 205:1-4.
219
MIPA § 8.2(a).
220
MIPA § 1 (“Damages”).
221
“[A]mounts paid in settlement” are properly understood as payments to “release[] a party from
a potential liability otherwise imposed by law.” Ketler v. PFPA, LLC, 132 A.3d 748 (Del. 2016).
Multiple courts, including this one, have noted the different between a license and a release – a
license is forward-looking while a release is generally retrospective. See Universal Oil Products
Co. v. Vickers Petroleum Co. of Delaware, 19 A.2d 727, 729 (Del. Super. 1941); Lostutter v.
Kentucky, 2023 WL 4636868, at *4 (6th Cir. July 20, 2023) (differentiating “pardons” which “are
retrospective in the sense that they look backward and excuse–indeed, nullify the consequences
of–past misconduct,” and a “license” which “is usually perspective in that it looks forward and
grants permission to engage in some future conduct.”); Cellport Systems, Inc. v. Harman
International Industries Inc., 2024 WL 1337338, at *7 (E.D. Tex. Mar. 28, 2024) (noting the
“general rule” that releases do not “embrace a forward-looking discharge of liability.”).
222
The MIPA requires Claude to indemnify “Damages suffered . . . in connection with, the Patent
Litigation[.]” MIPA § 8.2(a). Thus, Damages are what is indemnified. The phrase “the Patent
Litigation” describes from where the indemnifiable damages must arise.
35
defined term show Defendants “specifically assumed the liability[y]” for a forward-
looking license, as is required to award indemnification.223 Accordingly, Claude
proved by a preponderance of the evidence the C/V license is not indemnifiable. The
portion of the Settlement attributable to the C/V license must be carved out of
Plaintiffs’ recoverable damages.
2. Claude Must Indemnify Damages Attributable to Fidelio.
Claude argues the portion of the Settlement attributable to Fidelio’s conduct
is not indemnifiable.224 Claude contends Damages attributable to Fidelio fall outside
Section 8.2(a), because they were not “suffered by [VOI].”225
To the extent the Settlement includes Damages attributable to Fidelio,
Plaintiffs maintain those amounts are subject to indemnification.226 Plaintiffs argue
Claude’s contrary position “nullifies the phrase ‘any and all Damages arising out of
or relating to’” in Section 8.2(a).227 Plaintiffs point to the term “Affiliates” as
confirming any damages caused by Fidelio are subject to indemnification.228
223
See Alcoa World Alumina LLC v. Glencore Ltd., 2016 WL 521193, *7-8 (Del. Super. Feb. 8,
2016).
224
Claude Br. at 37-39. Claude notes DePuy “argued and presented evidence regarding Fidelio’s
control over VOI and its infringing misconduct, making it Fidelio’s conduct.” Id. at 37 (citing Tr.
3, 88:19-22; DX486.0017; DX189; DX201). The Patent Litigation jury also found Fidelio liable
for willful infringement. See JX51; JX62.
225
Movora Opp’n Br. at 17, 20-22 (quoting MIPA § 8.2(a)).
226
Movora Opp’n Br. at 3-8.
227
Id. at 3-4 (quoting MIPA § 8.2(a)).
228
Movora Br. at 38. Plaintiffs cite Klein’s testimony as “confirming that the language . . .
contemplates Affiliates’ own Patent Litigation Damages.” Id. at 5 (citing 2/11/25 Tr. 10:12-11:19,
71:17-72:17).
36
Plaintiffs note Fidelio was jointly-and-severally liable for the Patent Litigation
verdict and Settlement – therefore, “[t]hose Damages not only relate to VOI’s
damages; they are the exact same damages.”229
Claude advances two main arguments in opposition.230 First, the term
“Affiliates” does not control, because the “language explains who [Defendants] must
indemnify, not the conduct or damage for which [Defendants] must indemnify
them[.]”231 Second, Plaintiffs’ decision to have VOI pay the entire Settlement does
not mean all Damages were suffered by VOI.232
The Court agrees with Claude’s reading of the word “Affiliates” in Section
8.2(a). Section 8.2 provides Claude “shall . . . indemnify, defend and hold harmless
the Buyer, [and] its Affiliates . . . [from] any Damages suffered by [VOI].”233 The
plain meaning of these unambiguous terms shows the word “Affiliates” expands who
Claude must indemnify, not what losses are subject to indemnification.234 Only
Damages “suffered by [VOI]” are indemnifiable.235 Hence, Section 8.2(a)’s
229
Movora Opp’n Br. at 6 (citing 2/13/25 Tr. 44:7-17; 6 Del. C. § 2701; Settlement).
230
Claude Opp’n Br. at 33-37.
231
Claude Br. at 38 (citing 2/10/25 Tr. 156:17-157:2; 2/11/25 Tr. 63:19-22). Claude contrasts
Section 8.2(a)’s terms with the LOI’s “broader indemnification language.” Id. at 38-39; see PX54.
232
Claude Opp’n Br. at 34-35 (“a large portion of the liability remains damages suffered by Fidelio,
regardless of how [Plaintiffs] decided to pay the Settlement.”).
233
MIPA § 8.2(a).
234
See Scion Breckenridge, 68 A.3d at 683.
235
MIPA § 8.2(a).
37
“Affiliates” language does not compel finding for Plaintiffs’ on this issue. That
conclusion, however, does not end the inquiry.
The Court concludes any portion of the Settlement attributable to Fidelio is
“Damages suffered by [VOI].”236 The Patent Litigation jury verdict established
“joint[] and several[] liabil[ity]” between VOI and Fidelio.237 Similarly, Fidelio and
VOI were jointly and severally liable for the Settlement.238 A party “subject to joint
and several liability is responsible for the entire obligation if the other liable person
does not pay.”239 Accordingly, VOI was independently liable for the entire
Settlement. Hence, the whole Settlement was “suffered by [VOI].”240 For this
reason, there is no portion of the Settlement solely attributable to Fidelio for the
Court to carve-out.
3. Public Policy does Not Compel Excluding Parts of the Settlement Due to
Alleged Willful Misconduct.
Claude contends “Damages attributable to [Plaintiff]s’ willful misconduct”
are not indemnifiable as a matter of public policy.241 Claude points out the Patent
236
Id.
237
2/13/25 Tr. 44:7-13; see JX51.
238
JX62 § 3.01 (“VOI/Fidelio shall pay or cause to be paid to DePuy Seventy Million Dollars[.]”).
See also 6 Del. C. § 2701 (“[a]n obligation or written contract of several persons shall be joint and
several, unless otherwise expressed.”); JX62 § 11.02 (“[the Settlement] shall be governed by and
construed in accordance with the . . . laws of the State of Delaware[.]”).
239
Marsh v. State, 210 A.3d 705 (Table) (Del. 2019) (emphasis added) (citations omitted).
240
MIPA § 8.2(a).
241
Claude Br. at 39-43 (citing Valley Forge Ins. Co. v. Jefferson, 628 F. Supp. 502, 508 n.3 (D.
Del. 1986) (“[u]nder Delaware law, a contract to relieve a party from liability for its intentional or
willful acts is unenforceable as against public policy.”); James v. Getty Oil Co., 472 A.2d 33, 38
(Del. Super. 1983); New Enter. Assocs. 14, L.P. v. Rich, 295 A.3d 520, 592 (Del. Ch. 2023).
38
Litigation jury found Fidelio willfully infringed, which increased liability and
exacerbated the Settlement.242 Claude questions Plaintiffs’ reliance on Patrick’s
post-Transaction conduct – when he was Plaintiffs’ chosen terminable at-will
CEO.243
As a matter of law, Plaintiffs argue there is no “public policy basis to exclude
supposed willful misconduct.”244 As a matter of fact, Plaintiffs assert Claude has not
proven “Fidelio’s or VOI’s post-closing conduct exacerbated damages.”245 Plaintiffs
contend DePuy only targeted Fidelio because it acquired VOI, and there is “no
evidence [] Fidelio was involved in any misconduct by VOI[.]”246
242
JX51. Claude argues Fidelio “used its control over VOI to willfully infringe DePuy’s patents
and ramp up liability in the Patent Litigation,” with the goal of “capturing as much market share
as possible[.]” Claude Br. at 40-41 (citing DX491.0155; DX78; DX590.0006-07; DX575.0064-
65; DX582.0016; DX508.0181; DX611.0006).
243
Id. at 41-43 (“Patrick’s authority to lead VOI and any post-closing actions that created liability
stemmed from his appointment as, and were taking in his capacity as, CEO, not Sellers’
Representative.” (citing 2/14/25 Tr. 64:23-67:4)). Patrick had no role in VOI after he resigned in
December 2022. See 2/13/25 Tr. 156:3-12, 234:7-10.
244
Movora Opp’n Br. at 13-17; see Salamone v. Gorman, 106 A.3d 354, 370 (Del. 2014) (“a strong
showing that dishonoring the contract is required to vindicate a public policy interest even stronger
than freedom of contract.”). Plaintiffs insist “James [v. Getty Oil Co.] is an outlier . . . the public
policy against indemnification for willful act ‘has not gained traction in the Delaware court since
James was decided.’” Movora Opp’n Br. at 14-15 (quoting CNX Res. Corp. v. CONSOL Energy
Inc., 2024 WL 4929171, at *6 (Del. Super. Nov. 8, 2024)). Plaintiffs argue the other cases Claude
cites are differentiable, because they dealt with waivers of liability for fraud or bad faith not
indemnification. Id. at 16 (“a policy against waiver of a claim is altogether different from one
against indemnification. A claim waiver leaves a wronged plaintiff without any remedy;
indemnification merely determines who pays the remedy.”).
245
Id. at 30-40.
246
Id. at 30-32 (“DePuy’s evidence focused heavily on Sellers’ conduct, and particularly
Patrick’s.”). Plaintiffs assert Claude relies on “inadmissible” and unreliable documents to argue
otherwise. Id. at 32-34 (arguing DX44, DX189, DX201, DX468, DX486, DX491, DX493, DX498,
DX502, DX503, DX575, DX582, DX583, DX590, DX610, DX611, DX712, DX788, DX797,
JX08, JX50, JX51, and JX62 are inadmissible hearsay). Per Plaintiffs, the only admissible
39
Portions of the Settlement attributable to Fidelio’s alleged post-Transaction
willful misconduct are not excludable pursuant to public policy.247 “‘Delaware is a
contractarian state that holds parties’ freedom of contract in high regard.’” 248 As
such, Delaware courts “enforce the plain meaning of clear and unambiguous
[contractual] language.”249 Therefore:
when parties have ordered their affairs voluntarily through a binding
contract, Delaware law is strongly inclined to respect their agreement,
and will only interfere upon a strong showing that dishonoring the
contract is required to vindicate a public policy interest even stronger
than freedom of contract.250
The Supreme Court of Delaware cautions against “void[ing] [an] otherwise [] []
valid [indemnity] contract as contrary to public policy in the absence of clear indicia
that such a policy actual exists.”251
evidence Claude musters are documents and testimony related to: (1) VOI’s Annual Ordering
Program; and (2) the Settlement’s statement that Fidelio “willfully infringed” DePuy’s patents. See
DX582; DX590; JX62. Plaintiffs insist neither shows any supposed willful conduct exacerbated
damages. See Movora Opp’n Br. at 36-38 (citing 4/13/25 Tr. 62:20-68:1, 170:9-20, 212:3-214:9
(testifying that the Annual Ordering Program shipments were a normal occurrence and on advice
of counsel, VOI did not believe the shipments were prohibited).
247
Because the Court concludes Claude’s public policy argument is legally deficient, it need not
analyze whether Claude proved VOI and Fidelio committed post-Transaction will misconduct that
exacerbated the Settlement.
248
Village Practice Management Company, LLC v. West, 2025 WL 1679818, at *15 (Del. June 16,
2025) (quoting Thompson Street Capital Partners IV, L.P. v. Sonova United States Hearing
Instruments, LLC, 2025 WL 1213667, at *8 (Del. 2025 April 28, 2025)).
249
Manti Holdings, LLC v. Authentix Acquisition Co., Inc., 261 A.3d 1199, 1208 (Del. 2021).
250
Salamone, 106 A.3d at 370.
251
Whalen v. On-Deck, Inc., 514 A.2d 1072, 1074 (Del. 1986). Courts have gone so far as to hold
“in Delaware, losses are uninsurable as-against public policy only if the legislature so provides.
As the Supreme Court [of Delaware] has cautioned, public policy is the General Assembly’s
domain, and judges should avoid the temptation to legislate from the bench.” Sycamore Partners
Management, L.P. v. Endurance American Insurance Company, 2021 WL 761639, at *11 (Del.
Super. Feb. 26, 2021) (citing Jones v. State Farm Mut. Auto. Ins. Co., 610 A.2d 1352, 1354 (Del.
40
Claude primarily relies on James v. Getty Oil to support his public policy
argument.252 The James court held a contractual provision “purport[ing] to provide
indemnification for injuries or death [] [] caused by or arise out of a ‘willful act’ of
[indemnitee]” was “void and unenforceable.”253 Citing only a contract treatise, the
court stated “[a] contract to relieve a party from its intentional or willful acts is. . .
unenforceable as being against clear public policy.”254
1992); Whalen, 514 A.2d at 1074). Under this standard, Defendants’ public policy argument –
which does not invoke any statute or legislative material – fails at the outset.
252
See Claude Br. at 39-43 (citing James, 472 A.2d at 38); Claude Opp’n Br. at 37-41 (same). As
Plaintiffs point out, the other authorities Claude cites are differentiable and do not control the
Court’s analysis. The United States District Court for the District of Delaware’s non-binding
statements in Valley Forge Ins. Co. v. Jefferson were clarified by the Supreme Court of Delaware
in Whalen. See Whalen, 514 A.2d at 1073-74 (“the District Court’s prediction in Valley Forge of
how this Court would rule are not controlling.”). Both New Enter. Assocs. and Surf’s Up Legacy
Partners, LLC v. Virgin Fest, LLC dealt with whether a provision waiving claims for intentional
misconduct are void under Delaware public policy. See New Enter. Assocs., 295 A.3d at 591-93
(“[t]o the extent the Covenant seeks to prevent the Funds from asserting a claim for an intentional
breach of fiduciary duty, then the Covenant is invalid . . . because of policy limitations on
contracting.”); Surf’s Up Legacy Partners, LLC v. Virgin Fest, LLC, 2021 WL 117036, at *11 (Del.
Super. Jan. 13, 2021). Multiple courts have recognized contractual waiver and indemnification
provisions are distinct and implicate different concerns. See Hummel v. Minnesota Department of
Agriculture, 430 F.Supp.3d 581, 589 (D. Minn. 2020) (holding a contractual provision “appears to
be an indemnification provision, not a waiver provision.” (emphasis in original)); Leonard v.
Golden Touch Transportation of New York Incorporated, 144 F.Supp.3d 640 (D. N.J. 2015)
(“an indemnification clause does not provide a basis for dismissal of a claim. . . . An
indemnification clause does not shield a party from being called into court, and it does not relieve
a party of any duty of care it owes to plaintiffs.”); R & R Capital, LLC v. Buck & Doe Run Valley
Farms, LLC, 2008 WL 3846318, at *3 (Del. Ch. Aug. 19, 2008) (granting a motion to dismiss
based on a contractual waiver); Wisconsin Public Service Corp. v. Arby Const., Inc., 342 Wis.2d
544, 565 (2012) (“indemnification is not an affirmative defense.”); Velocity Exp., Inc. v. Office
Depot, Inc., 2009 WL 406807 (Del. Super. Feb. 4, 2009) (“[w]aiver is an affirmative defense[.]”).
The USAA Casualty Insurance Company v. Carr case denied coverage based on the at-issue policy
language, not public policy. 225 A.3d 357, 360-62 (Del. 2020).
253
James, 472 A.2d at 38.
254
Id. (citing 15 WILLISTON ON CONTRACTS § 1750A (3d ed. 1957)). See also Steam TV Networks,
Inc. v. SeeCubic, Inc., 279 A.3d 323, 350 n.156 (Del. 2022) (endorsing the idea that treatises are
only persuasive authority, because “[i]t is a fundamental principle of state sovereignty that the
41
The Superior Court of Delaware recently recognized James’ articulation of
public policy “has not gained traction in the Delaware courts since [the case] was
decided.”255 Post-James, Delaware courts have rejected similar public policy
arguments, and permitted indemnification of: (1) “punitive damages for wanton
conduct;”256 “losses occasioned by fraud;”257 (3) “restitution or disgorgement;”258
and (4) a monetary settlement of a claim alleging indemnitee committed intentional
ERISA violations.259 The public policy articulated in James would seem to, but did
not, prohibit such indemnification. Accordingly, the Court lacks clear indica the
public policy stated in James exists or outweighs Delaware’s reverential freedom of
contract principle.260 Therefore, the Court concludes public policy provides no basis
to limit Claude’s indemnification obligation regarding the Settlement.
common law decisions of some jurisdictions are merely persuasive authority in the aw of another
jurisdiction until that State’s courts adopt it.”).
255
CNX, 2024 WL 4929171, at *6 (“[a]side from a brief statement in James, which has not gained
wide acceptance, there is no Delaware law supporting the broad rule” that a contract providing
indemnification for a party’s own willful misconduct is always void). The Court is not convinced
by Defendants’ attempt to differentiate CNX on the basis that it involved “backward-looking
indemnification.” 5/13/25 Tr. 248:3-249:9. While true the agreement at-issue in CNX allocated
indemnification obligations for events that had already occurred, the court discussed Delaware
public policy generally. See CNX, 2024 WL 4929171, at *1-2, 6 (discussing James generally).
256
Whalen, 514 A.2d at 1073-74 (“[t]he Superior Court found that the public policy of Delaware
prohibits the issuance of insurance covering punitive damages. In this Court’s view, however,
there is no evidence of public policy in this State against such insurance.”).
257
RSUI Indemnity Company v. Murdock, 248 A.3d 887, 901-05 (Del. 2021) (rejecting an argument
that fraud should not be indemnifiable because, “as a matter of public policy, insurance should not
be available for intentional wrongdoing[.]” (internal quotations omitted)).
258
Sycamore Partners, 2021 WL 761639, at *11-12.
259
CNX, 2024 WL 4929171, at *3, 6.
260
See Cantor Fitzgerald, L.P. v. Ainslie, 312 A.3d 674, 676-77 (Del. 2024).
42
4. Damages Tied to the ‘728 Patent and NXT Plate are Indemnifiable.
Claude contends any part of the Settlement attributable to the ‘728 Patent or
NXT plates fall outside Section 8.2(a).261 Specifically, Claude focuses on the fact
that the ‘728 Patent did not exist when the Transaction closed.262 As such, “at the
time of the MIPA, neither party reasonably expected indemnity over any claims on
the ‘728 Patent, let alone on NXT, which was not part of the litigation at closing.”263
Plaintiffs contend the portions of the Settlement attributable to the ’728 Patent
and NXT plates are indemnifiable because those amounts arose out of and relate to
the Patent Litigation.264 Plaintiffs assert the trial evidence shows Defendants knew
before the Transaction that DePuy was likely to accuse NXT plates.265 Plaintiffs also
note DePuy added NXT plates to the Patent Litigation “by virtue of a continuation
patent,” the ’728 Patent.266
Claude primarily argues Damages attributable to the NXT plates and ‘728
Patent fall outside Section 8.2(a) because the MIPA only indemnifies the reasonable
261
Claude Br. at 43-44.
262
See DX566; DX201.1260; 2/12/25 Tr. 64:21-65:6.
263
Claude Br. at 43. See also DX201 (DePuy bringing claims based on the ‘728 Patent for the first
time in the Patent Litigation).
264
Movora Opp’n Br. at 22-23.
265
Id. (citing PX67; PX68; PX65; PX71; PX84; 2/10/25 Tr. 154:3-7, 227:10-14).
266
Id. at 23-25 (“DePuy learned about the NXT plates during discovery, used discovery to ascertain
how [Defendants] were attempting to design around the ’921 Patent, and filed a continuation patent
application expanding the claims to block VOI’s attempted circumvention.” (citing DX192)).
43
continuation of Defendants’ pre-Transaction conduct. The Court already rejected
this temporal limitation on Section 8.2(a).267
Even if the Court considered Claude’s temporal argument, it provides no basis
to reduce Plaintiffs’ recoverable indemnity. Both the NXT plates and ‘728 Patent
related to the pre-Transaction Patent Litigation. The ‘728 Patent is a continuation of
the ‘921 Patent that formed the basis of DePuy’s claims from the outset of the Patent
Litigation.268 Continuation patents “share the same specification[s].”269
Accordingly, “the written descriptions of [continuation] patents are, with some
modifications, substantially the same [as the original patent].”270 Therefore, while
true “the ‘728 Patent did not exist . . . at the time of the MIPA,”271 it is a reasonable
continuation of the pre-Transaction Patent Litigation.272
Similarly, the evidence shows NXT plates relate to VOI’s pre-Transaction
conduct. VOI developed the NXT plates in 2019.273 DePuy sought discovery
267
See supra V.A.
268
See 2/12/25 Tr. 19:9-20:18; PX100.0010 (DePuy’s Third Amended Complaint alleging, “[t]he
‘728 patent is a continuation of the ‘921 patent and shares a common specification), .0073 (‘728
Patent stating it is “a continuation of . . . Pat. No. 8,523,921.”); JX08 (DePuy’s initial complaint
asserting claims under the ‘921 Patent).
269
Smartflash LLC v. Apple Inc., 680 Fed. Appx. 977, 978 n.1 (Fed. Cir. 2017).
270
ACTV, Inc. Walt Disney Co., 346 F.3d 1082, 1084 (Fed. Cir. 2003).
271
Claude Br. at 41-44.
272
See Claude Opp’n Br. at 32 (arguing Section 8.2(a) only provides indemnification “for DePuy’s
claims relating to conduct and occurrences through the sale of VOI, when [Defendants] controlled
the business, and the reasonable and expected continuation of that conduct.” (emphasis added)).
273
PX179; 2/11/25 Tr. 183:23-184:2; Patrick Dep. Tr. 106:1-22.
44
concerning NXT soon thereafter.274 Fox Rothschild informed Patrick of DePuy’s
“intent [] to add the NXT plates to the [Patent Litigation].”275 Based on this
information, Defendants told Plaintiffs there “was at least a high risk of [NXT plates]
being added” to the Patent Litigation.276 This unrebutted evidence shows DePuy’s
allegations concerning NXT plates were anticipated pre-Transaction and relate to
conduct when Defendants owned VOI. Accordingly, Claude owes indemnification
on the NXT plates and the ‘728 Patent.
D. Plaintiffs Can Recover Patent Litigation Costs and Loan Interest, but
Not Attorneys’ Fees for this Action.
In addition to the Settlement, Plaintiffs argue the MIPA requires Claude to
pay: (1) fees and expenses incurred in the Patent Litigation; (2) interest on the loan
used to pay the Settlement; and (3) costs and fees for this action.277 Claude maintains
none of these alleged damages are recoverable under the MIPA. 278 The Court
evaluates each claimed amount in turn.
1. Plaintiffs Can Recover Fees and Expenses Related to the Patent Litigation.
274
PX67 (DePuy Motion to Compel concerning NXT); PX68 (email informing Claude and Patrick
of DePuy’s request for discovery on NXT plates with the motion to compel attached). Later emails
show Defendants produced discovery concerning NXT before the transaction. See PX71 (“[o]ther
tasks needed to be performed . . . Production of NXT plates[.]”).
275
PX65; see 2/11/25 Tr. 184:3-8; PX84 (email from Fox Rothchild to Patrick stating, “we fully
expect [DePuy] to allege your new plates [NXT] also infringe although they have not done so yet.
They have certainly suggested they will be doing so.”).
276
2/10/25 Tr. 154:3-8, 227:7-14.
277
See Movora Br. at 30-31, 34-35, 37.
278
See Claude Opp’n Br. at 50 n.15; Claude Br. at 49-54.
45
Plaintiffs argue they are entitled to $8,608,888.99 in Patent Litigation fees and
expenses.279 Plaintiffs note Section 8.2(a) indemnifies “any Damages suffered by
[VOI] as a result of, or in connection with, the Patent Litigation,” and “Damages”
include “fees and disbursement of counsel[.]”280
Claude concedes Plaintiffs can recover costs and fees for the Patent Litigation,
but argues the amount requested includes non-recoverable items.281 Claude
challenges three categories of allegedly non-recoverable Patent Litigation costs.282
First, Claude asserts Plaintiffs request “fees for work performed for VOI and
Fidelio,” which are not damages suffered by VOI.283 Second, Claude contends
Plaintiffs seek “amounts for Fidelio-specific work,” which were also not suffered by
279
Movora Br. at 30, 34-35, 37 (citing PX174); see 2/13/25 Tr. 262:1-4.
280
MIPA §§ 1.1 (“Damages”), 8.2(a).
281
Claude Br. at 51-53. To the extent Claude identifies one or two minor non-recoverable entries,
Plaintiffs insists that does not abrogate his general obligation to indemnify Patent Litigation
expenses. Movora Opp’n Br. at 6 n.3 (citing Great Am. Opportunities, Inc. v. Cherrydale
Fundraising, LLC, 2010 WL 338219, at *23 (Del. Ch. Jan. 29, 2010) (“absolute precision is not
required” to prove the “quantum of damages.”)).
282
Claude Br. at 51-53.
283
Claude Br. at 51-52 (citing 2/13/25 Tr. 259:18-260:8, 265:2-267:20; PX170). Plaintiffs point
out Finnegan jointly invoiced work done for VOI and Fidelio at Patrick’s request. Movora Opp’n
Br. at 7-8.
46
VOI.284 Finally, Claude insists Plaintiffs cannot recover cost associated with the
non-recoverable Settlement components.285
The Court first addresses the recoverability of defense costs attributable to
both VOI and Fidelio. Claude asserts, without any supporting authority, that “half
of the[] joint VOI/Fidelio fees w[ere] incurred by Fidelio” and are thus not
indemnifiable.286 Plaintiffs argue, also without any support, that such fees “are joint-
and-several liabilities.”287 Delaware courts have not squarely addressed whether
jointly incurred defense costs attributable to multiple co-defendants are a joint-and-
several liability.
284
Claude provides two examples: (1) a 9/22/2021 entry dealing with Fidelio’s strategy in
answering DePuy’s third amended complaint; and (2) a 12/1/2021 entry regarding editing and
sending Fidelio’s reply to DePuy’s opposition to Fidelio’s motion to dismiss. Claude Br. at 52
(citing PTX170.0318 (9/22/2021 entry); PX170.0358 (12/1/2021 entry)). Plaintiffs briefly assert
both VOI’s and Fidelio’s Patent Litigation attorneys’ fees are indemnifiable “because they are
joint-and-several liabilities.” Movora Opp’n Br. at 6 n.3. See also id. at 8 (“Fidelio’s attorneys’
fees and expenses ‘relat[e] to’ ‘Damages suffered by [VOI] as a result of, or in connection with,
the Patent Litigation’ because they are expenses incurred to defend Fidelio against its joint-and-
several liability with VOI in the Patent Litigation.” (quoting MIPA § 8.2(a) (edits in original))).
Yet, “as an accommodation,” Plaintiffs already excluded Fidelio-only fees from its request. Id. at
6-7 (citing 2/13/25 Tr. 259:1-11). Vimian’s general counsel testified as part of these efforts, he
“took [] out” entries that “w[ere] predominantly for Fidelio,” adopting “a conversative approach
and tr[ying]to be fair.” 2/13/25 Tr. 260:4-10. Plaintiffs insist Claude did not rebut that testimony
or submit an alternative calculation. Movora Opp’n Br. at 6 n.3.
285
Claude Br. at 52-53.
286
Id. at 52.
287
Movora Opp’n Br. at 6 n.3. This argument mirror’s Plaintiffs’ position concerning whether
portions of the Settlement attributable to Fidelio are indemnifiable pursuant to the MIPA. See
supra V.C.2. Yet, while the Settlement plainly established joint-and-several liability, see supra
n.239, “co-indemnitees who retain[] joint counsel [are] responsible for their pro rata share of . . .
litigation costs.” Levy v. Hli Operating Co., Inc., 2007 WL 2801383, at *11 n.62 (Del. Ch. May
16, 2007). As such, Plaintiffs’ argument that VOI and Fidelio’s Patent Litigation attorneys’ fees
“are the very same fees,” is unavailing. Movora Opp’n Br. at 6 n.3.
47
Under different factual circumstances, the Delaware Court of Chancery “held
purported co-indemnitees who retained joint counsel [are] responsible for their pro
rata share of advanced fees and litigation costs.”288 In Valeant Pharm. Int’l v. Jerney,
the Delaware Court of Chancery held two co-defendants were each responsible “for
half of all fees and litigation costs,” even though one party “was the focus of
attention throughout th[e] litigation.”289 The court rejected a request for “a
supplemental proceeding to allocate fees and expenses” as unduly burdensome,
because “there is no doubt their defense was, by and large, jointly conducted.”290
The court held evenly dividing attorneys’ fees was consistent with “the general
principle [] that joint obligations give rise to equal contribution.”291
The Court finds Valeant Pharm.’s reasoning persuasive and adopts it here.
The trial evidence shows VOI and Fidelio jointly defended the Patent Litigation.292
Parsing Finnegan’s invoices to assign each entry to VOI or Fidelio is unduly
burdensome, and ignores “lawyers’ time that might appear to be devoted solely to
one or the other . . . is just as readily seen as constituting an element of their joint
288
Levy, 924 A.2d at 227 n.62 (citing Valeant Pharm. Int’l v. Jerney, 921 A.2d 732, 754-55 (Del.
Ch. 2007)).
289
Valeant Pharm., 921 A.2d at 755.
290
Id.
291
Id. (citing Estate of Keil, 145 A.2d 563, 565 (Del. 1958)).
292
See PX91; PX92; PX93; PX95.
48
defense.”293 Therefore, the Court holds Plaintiffs are entitled to half of the Patent
Litigation costs and fees incurred in VOI and Fidelio’s joint defense.
The Court is not convinced by Claude’s other arguments. Claude asserts
Plaintiffs’ request Patent Litigation attorneys’ fees solely attributable to Fidelio. Yet,
Claude only identify two minor entries which could reasonably be considered part
of VOI and Fidelio’s joint defense.294 More fundamentally, Claude did not rebut
Ehn’s testimony that Plaintiffs’ request excludes defense costs solely tied to
Fidelio.295 Delaware courts do not “require certainty in the award of damages” when
a claimant establishes a right to recovery.296 Accordingly, the inclusion of one or
two items which may be attributable to Fidelio alone does not invalidate Plaintiffs’
contractual entitlement to Patent Litigation costs and fees.
Claude also argues the Court must exclude attorneys’ fees incurred in
connection with the non-recoverable portions of the Settlement. As discussed
above, the only non-recoverable component of the Settlement is the forward-looking
293
Valeant Pharm., 921 A.2d at 755.
294
Specifically, the 9/22/2021 entry dealing with Fidelio’s strategy in answering DePuy’s third
amended complaint could be attributable, in part, to VOI, because the purpose of a joint defense
is to “form[] a common defense strategy.” In re XL specialty Ins. Co., 373 S.W.3d 46, 51 (Tex.
2012); see Federal Election Com’n v. Christian Coalition, 178 F.R.D. 61, 72-73 (E.D. Va. 1998).
Depending on the specific, and unknown, underlying facts, the 12/1/2021 entry regarding editing
and sending Fidelio’s reply to DePuy’s opposition to Fidelio’s motion to dismiss could similarly
be considered part of formulating an overreaching and consistent defense strategy.
295
2/13/25 Tr. 259:1-260:10. “Ehn” refers to Carl-John Ehn, Vimian’s general counsel as of
August 2022. See id. 219:6-21.
296
Del. Express Shuttle, Inc. v. Older, 2002 WL 31458243, at *17 (Del. Ch. Oct. 23, 2002); see
Great Am., 2010 WL 338219, at *23.
49
C/V license.297 Claude does not identify what portions of Plaintiffs’ requested Patent
Litigation fees are attributable to the C/V license. As such, Claude’s third argument
does not alter Plaintiffs’ recoverable Patent Litigation costs and fees.
2. Plaintiffs Can Recover Interest on the Loan Used to Pay the Settlement.
Plaintiffs seek $9,084,348 in interest incurred through December 31, 2024 on
the loan used to pay the Settlement.298 Plaintiffs assert such interest is recoverable
under Section 8.2(a) as both a “loss” and “interest” “suffered by [VOI] as a result of,
[and] in connection with, the Patent Litigation.”299 Plaintiffs point out VOI, not
Fidelio, took the loan and paid the interest.300
Claude argues Plaintiffs did not disclose their requested interest damages in
discovery, barring any such recovery.301 Even if Plaintiffs can recover some loan
interest, Claude maintains “Plaintiffs failed to provide a calculation [accounting] for
the non-recoverable components of the $70 million [S]ettlement.”302
297
See supra V.C.
298
Movora Br. at 31 (citing PX175; 2/13/25 Tr. 250:12-252:10, 254:10-257:14).
299
MIPA § 8.2(a); see Movora Br. at 34.
300
Morova Br. at 37 (citing PX175; 2/13/25 Tr. 256:1-257:8). Claude asserts it is immaterial that
VOI paid the loan, because Plaintiffs decided how to pay the Settlement. Claude Opp’n Br. at 34.
301
Claude Br. at 49-51 (citing 2/10/25 Tr. 217:16-220:6; DX788.0020-22). Claude argues
Plaintiffs’ non-disclosure prejudiced Defendants who were unable to conduct discovery on: “(1)
whether Plaintiffs could have secured a lower interest rate . . . and (2) whether Plaintiffs could
have paid down at least some of the principal loan amount[.]” Id. at 50. Plaintiffs note, “Claude
does not dispute [] the MIPA provides indemnification for loan interest[.]” Movora Opp’n Br. at
49. Plaintiffs argue Claude’s position is really an untimely discovery dispute which the Court
should ignore. Id. at 50.
302
Claude Br. at 51.
50
The parties’ briefing clarifies Claude does not dispute the MIPA entitles
Plaintiffs to interest on the loan used to pay the Settlement. Nor could they. Section
8.2(a) requires Claude to indemnify “all Damages suffered by [VOI] as a result of .
. . the Patent Litigation.”303 The MIPA defines “Damages” to include “amounts paid
in settlement . . . together with interest with respect to [] [] [] the foregoing.”304
Hence, the MIPA provides indemnification for interest accrued on amounts paid to
settle the Patent Litigation.
Rather than attack this clear language, Claude argues Plaintiffs’ failure to
disclose their request for loan interest precludes any recovery. Claude’s argument
fails. Plaintiffs disclosed their request for loan interest in response to Defendants’
first set of interrogatories.305 At summary judgment, Plaintiffs listed their
“indemnification damages” including “VOI’s ongoing financing costs for th[e]
[S]ettlement[.]”306 Claude’s expert Kinrich recognized Plaintiffs’ request –
acknowledging VOI took an interest-bearing loan to pay the Settlement.307 Thus,
the Court holds Plaintiffs adequately disclosed their request for interest on the loan
303
MIPA § 8.2(a).
304
MIPA § 1.1 (“Damages”).
305
DX788.0020-21 (“complete damages, including interest, continue to accrue . . . [damages]
continue to increase on a daily basis as a result of interest incurred.”).
306
D.I. 214 at 20 (requesting “the ultimate total Settlement Interest[.]”). See also D.I. 219 ¶ 6 (Ehn
declaring in support of Plaintiffs’ Motion for Summary Judgment, “[t]o be able to make that
payment [the Settlement], VOI borrowed $70 million, and has been paying interest on the loan.”);
D.I. 218, Ex. 84 (agreement memorializing VOI’s loan to pay the Settlement, attached as an exhibit
to Plaintiffs’ Motion for Summary Judgment).
307
D.I. 256, Ex. 1 at 14 n.44; Ex. 4 at 14 n.44.
51
used to pay the Settlement. Hence, Claude’s first argument provides no basis for
abrogating the MIPA’s grant of Settlement interest to Plaintiffs.
Separate from the disclosure issue, Claude argues any awarded interest must
account for, and carve out, the non-recoverable portions of the Settlement. The only
non-recoverable component of the Settlement is the C/V license.308 Accordingly,
Plaintiffs’ recoverable loan interest must be reduced to account for the portion of the
Settlement tied to the C/V license.309
3. The MIPA does Not Grant Plaintiffs Their Costs and Fees in This Action.
Plaintiffs assert the MIPA grants them “enforcement expenses.”310 Claude
argues Plaintiffs cannot recover attorneys’ fees for this litigation, because the MIPA
lacks specific “fee-shifting language in the [] indemnification provision.”311 Rather,
Claude maintains Plaintiffs improperly base their attorneys’ fees request on “a
provision regarding a ‘cap’ on the indemnification obligation.”312 Plaintiffs
acknowledge Delaware law requires a “clear and unequivocal articulation of intent
308
See supra V.C.
309
See infra V.E.2.
310
Movora Br. at 30-31, 35 (citing MIPA § 8.3(a) (“the Cap shall not apply to . . . the expenses of
the Indemnified Party in enforcing its rights under this Article 8[.]”)).
311
Claude Br. at 53-54 (citing Ashland LLC v. Samuel J. Heyman 1981 Continuing Tr. for Heyman,
2020 WL 6582958, at *6 (Del. Super. Nov. 10, 2020)).
312
See MIPA § 8.3(a); Claude Br. at 53-54 (citing TradSched Sys. v. Versyss Transit Sols., LLC,
2012 WL 1415466, at *2 (Del. Super. May. 29, 2012)).
52
to cover attorneys’ fees.”313 Yet, Plaintiffs insist the “Damages” definition – which
includes “fees and disbursement of counsel”314 – is sufficient.315
Under well-settled Delaware law, “litigants are [] responsible for paying their
own litigation costs . . . ‘in the absence of statutory authority or contractual
undertaking to the contrary.’”316 Absent “specific language” evidencing a “clear and
unequivocal” intent to shift fees, a party is not entitled to attorneys’ fees for its
enforcement of an indemnity right.317
The MIPA lacks a clear statement evidencing the parties intended to shift
responsibility for attorneys’ fees. Plaintiffs argue the “fees and disbursements of
counsel” language in the MIPA’s Damages definition permits recovery of attorneys’
fees.318 Yet, a contractual definition alone does not create a substantive right or
obligation.319 No provision of the MIPA establishes an affirmative right to attorneys’
313
Movora Opp’n Br. at 47-48 (internal quotes omitted).
314
MIPA § 1.1 (“Damages”).
315
Movora Opp’n Br. at 48-49. Accordingly, Plaintiffs clarify they are not relying on Section
8.3(a) as the source of Claude’s obligation to indemnify enforcement expenses, but as confirmation
that the MIPA contemplates fee shifting. Id. (noting “Claude provides not theory for what else this
language could mean).
316
DeMatteis v. RiseDelaware Inc., 315 A.3d 499, 516 (Del. 2024) (quoting Tandycrafts, Inc. v.
Initio Partners, 562 A.2d 1162, 1164 (Del. 1989)). The Court notes the narrow exception for
instances of “bad faith” litigation, does not apply here as neither party advances a bad faith
argument. See Montgomery Cellular Holding Co., Inc. v. Dobler, 880 A.2d 206, 227 (Del. 2005).
317
Ashland, 2020 WL 6582958, at *6 (internal quotes omitted).
318
MIPA § 1.1 (“Damages”).
319
See AB Stable, 2020 WL 7024929, at *54 n.200 (“[i]n a contract, a defined term simply serves
as a convenient substitute for the definition[.]” (internal quotations omitted)); Akorn, Inc. v.
Fresenius Kabi AG, 2018 WL 4719347, at *48 n.525 (Del. Ch. Oct. 1, 2018) (same) (internal
quotations omitted). The MIPA’s text confirms this conclusion. The Damages definition does not
53
fees in enforcement actions.320 As discussed above, Section 8.2(a) contemplates
indemnification of attorneys’ fees incurred “as a result of, or in connection with, the
Patent Litigation.”321 Conversely, the Contingent Closing Notes executed with the
MIPA as part of the Transaction explicitly authorizes recovery of enforcement action
attorneys’ fees.322 This evidences the parties knew how to memorialize such a right,
but chose not to do so in the MIPA.323 For these reasons, the Court holds Plaintiffs
cannot recover their attorneys’ fees for this action.
impose any obligation on any party, it simply articulates what the parties’ agreed would constitute
“Damages.” See MIPA § 1.1 (“Damages”).
320
The Court disagrees with Plaintiffs’ position that Section 8.3(a)’s reference to “expenses of the
Indemnified Party in enforcing its rights under [] Article 8,” shows attorneys’ fees incurred in this
action are recoverable. MIPA § 8.3(a). First, merely mentioning enforcement expenses is not a
clear and unequivocal statement evidencing an intent to permit recovery of attorneys’ fees.
Second, Section 8.3 references attorneys’ fees in the context of discussing what costs do count
towards the recoverable indemnity “Cap.” See MIPA § 8.3(a). Plaintiffs argue this evidences an
implicit right to attorneys’ fees. Movora Opp’n Br. at 48-49. Delaware courts hesitate to “imply[]
contractual obligations in a contract, when such an obligation is not clearly supported by the terms
of the contract.” Riverside Fund V, L.P. v. Shyamsundar, 2015 WL 5004906, at *3 (Del. Super.
Aug. 17, 2015) (citing Nationwide Emerging Managers, LLC v. Northpointe Holdings, LLC, 112
A.3d 878, 881, 897-99 (Del. 2015)). This hesitancy is well-founded when considering whether a
contract overrides the general rule that each party is responsible for their own litigation costs. As
such, the Court does not read Section 8.3(a) as confirming Plaintiffs can recovery their attorneys’
fees.
321
See supra V.D.1. While it could be argued this suit – to recover indemnification from the Patent
Litigation – occurred “as a result of” the Patent Litigation, the Court finds the causal connection
too attenuated. The more natural reading of the MIPA is that Plaintiffs are entitled to their
attorneys’ fees in the Patent Litigation, but not this case.
322
Contingent Closing Note § 5(g) (“[i]f the Seller commences a proceeding to enforce and collect
upon this Note and prevails in such proceeding, the Buyer shall pay all reasonable costs incurred
by the Seller in connection therewith, including attorneys’ fees and disbursements.”).
323
See Torrent Pharma, Inc. v. Priority Healthcare Distribution, Inc., 2022 WL 3272421, at *9
(Del. Super. Aug. 11, 2022) (“[w]here one contract section omits a terms present in another, the
omission is presumed intentional.” (citing McDonald’s Corp. v. Easterbrook, 2021 WL 351967, at
*5 (Del. Ch. Feb. 2, 2021)); Ashall Homes Ltd. v. ROK Entertainment Group Inc., 992 A.2d 1239,
1250 & n.56 (Del. Ch. 2010) (“related contemporaneous documents should be read together,”
“writings executed at the same time and relating to the same transaction are construed together as
54
E. Claude is Not Entitled to Any Damages Offset, but Plaintiffs Cannot
Recover the $9.8 Million Portion of the Settlement Associated with the
C/V License.
Based on the above findings, the Court must resolve two outstanding issues
regarding Plaintiffs’ recoverable damages. First, the Court must address Claude’s
argument that Plaintiffs’ damages should be reduced by amounts Plaintiffs received
in settlement and VOI’s post-Transaction profits.324 Second, the Court must resolve
the value of Plaintiffs’ recoverable damages given the forward-looking C/V license
is not indemnifiable.
1. Claude is Not Entitled to Offset Amounts Plaintiffs Received from the
Settling Defendants or VOI’s Post-Transaction Profts.
Claude argues “the Court should deduct from any damages calculations”: (1)
$31.5 million Plaintiffs received from the Settling Defendants; and (2) VOI’s $16.1
million in post-Transaction profits.325 Claude maintains not carving-out these
amounts would give Plaintiffs a “windfall.”326 Accounting for these deductions,
Claude asserts he is entitled to his $10.1 million share of the Contingent Closing
Note.327
a single contract[.]” (internal quotations omitted)); Chicago Bridge, 166 A.3d at 927 n.61
(endorsing the rule that all writings that are part of the same transaction should be read together).
324
Claude Br. at 47-49.
325
Id. (citing Genecor Int’l, Inc. v. Novo Nordisk A/S, 766 A.2d 8, 11 (Del. 2000); Hill v. LW Buyer,
LLC, 2019 WL 3492165, at *10 (Del. Ch. July 31, 2019)).
326
Id.
327
Id. at 49.
55
Regarding the Selling Defendants’ payments, Plaintiffs assert Claude relies on
the “one-recovery rule” which only applies to joint-and-several, not several-only,
liability.328 Plaintiffs maintain carving out post-closing profits would grant Claude
a windfall, because Plaintiffs paid $100 million for VOI “as if the Patent Litigation
did not exist.”329 The Court agrees with Plaintiffs on both points.
The MIPA does not require reducing Plaintiffs’ damages by amounts received
from the Settling Defendants. While breach of contract damages generally “should
not act as a windfall” for the claimant,330 Delaware courts routinely enforce
“[c]ontractual provisions that define the type of damages for which a party might be
liable” if “they are consistent with principles of contract law.”331 Where
sophisticated parties “have expressed their expectations through a specific
contractual remedy, Delaware law favors enforcing that remedy.”332
328
Movora Opp’n Br. at 41-42 (citing Krieser v. Hobbs, 166 F.3d 736, 742-44 (5th Cir. 1999). See
also MIPA § 8.2(a) (providing Defendants owe indemnity “severally . . . but not jointly.”).
329
Id. at 42.
330
Paul v. Deloitte & Louche, LLP, 974 A.2d 140, 146 (Del. 2009) (internal quotes omitted).
331
Crispo v. Musk, 304 A.3d 567, 582-83 (Del. Ch. 2023); see Tropical Nursing, Inc. v. Arbors at
New Castle Subacute and Rehabilitation Center, 2005 WL 8135148, at *4-5 (Del. Super. Apr. 4,
2005); Concord Plaza Associates, Inc. v. Honeywell, Inc., 1987 WL 8884, *1 (Del. Super. Mar. 20,
1987).
332
L-5 Healthcare Partners, LLC v. Alphatec Holdings, Inc., 2024 WL 3888696, at *7 (Del. Ch.
Aug. 21, 2024) (quoting In re Cellular Tel. P’ship Litig., 2021 WL 4438046, at *72 (Del. Ch. Sept.
28, 2021)).
56
Here, Section 8.2(a) expressly provides Defendants “shall severally (in
proportion to their Percentage Interests)333 but not jointly indemnify[.]”334 Delaware
courts have not interpreted the meaning of a several, but not joint, liability scheme.
Section 52.1 of Corbin on Contracts provides, “[i]f two or more parties promise the
same performance, their obligation is ‘joint.’ If they promise separate performances,
their obligations may be called ‘several.’”335 This distinction comports with the
Supreme Court of Delaware’s interpretation of “joint and several liability” – namely,
each defendant “is responsible for the entire obligation[.]”336 Conversely, under a
several, but not joint, arrangement “each [party] . . . [is] individually liable for the
performance they promised, even if another [party] promised the exact same
performance.”337 Because a severally liable party cannot be forced to perform a co-
defendant’s obligation, it follows they also cannot benefit from a co-defendant’s
settlement.338 Accordingly, Claude is not entitled to offset amounts Plaintiffs
333
The MIPA sets forth each Seller’s Percentage Interest. See MIPA, Ex. 7. Relevant here, Dr.
Gendreau’s Percentage Interest is 46.296296% and the Trust’s is 9.259259%. Id. As such,
Claude’s combined Parentage Interest is 55.55%
334
MIPA § 8.2(a).
335
CORBIN ON CONTRACTS § 52.1 (2023 ed.). See also 12 WILLISTON ON CONTRACTS § 36:1
(stating “several” liability means “each party is bound separately for the performance which [that
party] promises and is not bound jointly with anyone else.”).
336
Marsh, 210 A.3d 705 (Table) (emphasis added).
337
International Marine, LLC v. Delta Towing LLC, 2013 WL 5890551, at *5 (E.D. La. Nov. 1,
2013) (interpreting the meaning of a contract provision requiring indemnification “severally and
not jointly.”).
338
See Kriesser v. Hobbs, 166 F.3d 736, 743 (5th Cir. 1999) (“[s]et-offs for settlement and the
‘one-satisfaction’ rule exist to prevent the plaintiff from recovering twice from the same
assessment of liability. But, where liability is not joint-and-several, and each defendant instead
bears liability for damages only proportionate to his own fault, there is no assessment of liability
57
previously received in settlement from his indemnification obligation.339 Similarly,
VOI’s post-Transaction profits are not a windfall, because Fidelio purchased the
right to reap those profits.340
2. Plaintiffs Cannot Recover $9.8 Million of the Settlement, which is
Attributable to the C/V License.
As discussed above, Section 8.2(a) does not entitle Plaintiffs to
indemnification for the portion of the Settlement attributable to the C/V license.341
The Court must determine how much of the $70 million Settlement to exclude from
Plaintiffs’ recoverable damages. As Claude noted throughout this case, Plaintiffs
offered no evidence concerning how to split the Settlement into constituent parts –
instead consistently arguing the entire Settlement is indemnifiable.342 Claude relies
on Kinrich’s testimony to argue the C/V license is worth approximately $14.6
for damages common to the settling and non-settling defendants. Accordingly, the settlement has
an entirely separate basis from the apportioned damages, and the one-recovery rule does not
apply.”).
339
Claude also cannot be held liable for a share of the Settlement greater than his proportion of the
Percentage Interest. See MIPA § 8.2(a).
340
See Fitzgerald Dep. Tr. 209:15-210:2; 2/10/25 Tr. 69:3-70:2.
341
See supra V.C.1.
342
See Claude Br. at 44 (“Plaintiffs, at trial, only supported a request for the full $70 million
settlement and license payment. They failed to provide a damages calculation that accounted for
the non-covered amounts[.]”); see generally Movora Br. (critiquing Claude’s appraisal of the
allegedly non-recoverable components but not advancing an alternate valuation); Movora Opp’n
Br. (same). See also MSJ Op. at 18-20 (discussing the parties’ apportionment positions).
58
million scaled or $24.3 million unscaled.343 Plaintiffs, however, insist Kinrich’s
opinions are unreliable and should be excluded or ignored.344
Plaintiffs argue Kinrich’s testimony and opinions are “inadmissible, or at the
very least unpersuasive.”345 Plaintiffs note Kinrich conceded certain issues raised at
trial “would require changing his model and obtaining new data [] caus[ing] every
one of his apportionment calculations to change.”346 Plaintiffs challenge Kinrich’s
testimony on three grounds.347 First, Plaintiffs assert Kinrich’s apportionment model
allocates the Settlement into five components,348 but does not account for “at least
five additional components” of value.349 Second, Plaintiffs maintain “every one of
[Kinrich’s] apportionment figures is wrong,” because he relied on an incomplete
343
Claude Br. at 45, 49 n.8 (citing 2/14/25 Tr. 104:14-109:3; DX802); See Claude Opp’n Br. at 53-
55 (citing 2/14/25 Tr. 108:6-17).
344
The Court took under advisement Plaintiffs’ Motion in Limine to exclude Kinrich’s opinions.
1/30/2025 Tr. 42:6-12.
345
Movora Opp’n Br. at 17, 20-22, 39.
346
Id. at 50 (citing 2/14/25 Tr. 141:2-142:19, 161:12-162:4).
347
Id. at 51-57.
348
Id. at 51 (citing 2/14/25 Tr. 89:7-21, 140:10-14).
349
Id. at 51-52. Specifically, Plaintiffs contend Kinrich failed to account for “(1) DePuy releasing
its fee-shifting claim; (2) DePuy releasing its prejudgment interest claim; (3) DePuy releasing its
post-judgment interest claim; (4) VOI’s avoidance of additional litigation fees/expenses; and (5)
VOI’s avoidance of the costs of an enormous appeal bond.” Id. at 51-52; see 2/14/25 Tr. 194:23-
195:21. Plaintiffs assert Kinrich testified adding additional components would require chancing
his model and re-running his calculations. See 2/14/25 Tr. 123:11-20, 140:15-141:17.
59
dataset to calculate the “reversal rate.”350 Third, Plaintiffs argue Kinrich’s $24
million nominal valuation of the C/V license “is irrelevant” and “unreliable.”351
Claude argues the Court should deny Plaintiffs’ request to exclude Kinrich’s
opinions and testimony – advancing three arguments.352 First, Claude asserts “there
is no testimony that the additional components identified by Plaintiffs would actually
impact Kinrich’s analysis.”353 Second, Claude argues Kinrich’s failure to include all
relevant cases in his reversal rate data set “would [] only ‘trivial[ly]’ impact[] his
calculations.”354 Finally, Claude contends Kinrich’s calculation of the C/V license’s
unscaled value “is conservative” and reliable.355
350
Movora Br. at 52-55 (citing Tumlinson v. Advanced Micro Devices, Inc., 81 A.3d 1264, 1270
(Del. 2013) (holding where “the foundational data underlying opinion testimony are unreliable . .
. any opinion drawn from that data is likewise unreliable.”) (internal quotes omitted)). Plaintiffs
argue Kinrich’s 21-case dataset, prepared by Claude’s counsel, did not account for at least five
additional cases where an appeals court “affirmed a jury trial willful infringement verdict.” Id. at
52-54; see 2/14/25 Tr. 158:20-167:3 (discussing PX230, PX231, PX234, PX235, and PX237).
Plaintiffs insist Kinrich admitted these cases should have been included and “would lower the
reversal rate,” therefore changing “all the damage calculations in [his] report[.]” 2/14/25 Tr.
158:20-168:1.
351
Movora Br. at 55-57 (citing Tr. 5, 185:11-18). See also 2/14/25 Tr. 107:11-108:10 (Kinrich)
(discussing how Kinrich calculated the license’s nominal value). To support that position,
Plaintiffs rely on the testimony of its rebuttal expert Dr. Choi. See Movora Br. at 55-57 (citing
2/14/25 Tr. 201:18-204:20).
352
Claude Opp’n Br. at 51-55.
353
Id. at 51. Rather, Kinrich testified those components would either increase the non-recoverable
amount or have no effect. See 2/14/25 Tr. 143:1-9, 145:146:9.
354
Claude Opp’n Br. at 52-53 (quoting 2/14/25 Tr. 167:20-169:11). Claude also notes “Kinrich
relied upon other reported studies of reveral rates, which corroborated the 15% reversal rate
determined by the dataset.” Id. at 52 (citing 2/14/25 Tr. 95:17-97:18). Claude also rejects Plaintiffs’
suggestion that Kinrich’s opinions are excludable because he did not personally compile the dataset
used to calculate the reversal rate. Id. at 51-52.
355
Id. at 53-55. Claude rejects Plaintiffs’ position regarding BioCurve, because if “Plaintiffs could
have seamlessly switched to BioCurve, they would have identified BioCurve as a non-infringing
alternative in the Patent Litigation.” Id. at 54.
60
The Court finds Kinrich’s opinions unreliable and therefore excludes his
testimony. Expert opinions are excludable “[i]f the foundational data underlying
[the] opinion testimony are unreliable” or “the expert draws conclusions . . . based
on flawed methodology.”356 Here, every one of Kinrich’s calculations is affected by
the reversal rate – i.e. the chance the Patent Litigation jury verdict would be reversed
on appeal.357 Kinrich calculated a reversal rate based on a dataset of 21 cases.358 At
trial, however, Kinrich was repeatedly confronted with cases absent from his dataset
he admitted should have been included.359 While Kinrich testified adding additional
cases is “easy” and changes his calculations “by an almost trivial amount,”360 he also
conceded he did not know how many exigent cases were improperly absent from his
dataset.361 As such, Kinrich effectively admitted he does not know the proper
reversal rate, a figure affecting each of his valuation opinions. Accordingly, the
Court finds Kinrich’s opinions are based on unreliable data. Therefore, the Court
does not credit Kinrich’s opinions in determining the value of the C/V license.
356
Council of the Village of Fountainview Condominium v. Corrozi-Fountain View LLC, 2022 WL
18865191, at *2 (Del. Super. Nov. 21, 2022) (citing Tumlinson, 81 A.3d at 1269).
357
2/14/25 Tr. 167:20-168:1.
358
Id. 153:23-154:6.
359
See id. 58:20-166:23; PX230; PX231; PX234; PX235; PX237. Kinrich also issued a corrected
expert report pre-trial to account for miscoding two cases included in his original dataset. See
2/14/25 Tr. 157:14-158:13.
360
Id. 168:1-14. The Court is not convinced any change would be trivial. Using Kinrich’s own
reversal rate calculation methodology, including only the five excluded cases raised at trial would
change the reversal rate by at least 46% (from 15% to 22%) depending on how those flagged cases
are coded. See D.I. 256 at 38.
361
2/14/25 Tr. 167:1-7.
61
The Court concludes $9.8 million of the Settlement is attributable to the C/V
license. During Settlement negotiations DePuy proposed two alternatives: (1) “a
[$]60.2 million lump sum payment . . . plus a 20 percent royalty on Versiv,
Compresiv, and CBLO”; or (2) a “[$]70 million lump sum payment[.]”362 This
credibly suggests DePuy – a party unaffected by the current indemnification dispute
– contemporaneously valued the C/V license at $9.8 million.363 Delaware courts
often rely on prelitigation appraisals by disinterested third-parties when valuing an
asset.364 Accordingly, the Court similarly credits DePuy’s valuation of the C/V
license and reduces the portion of the Settlement Plaintiffs can recover by $9.8
362
5/16/25 Tr. 22:18-24:8; see PX142.
363
Plaintiffs acknowledge the $9.8 million is “overinclusive because CBLO is included. 5/16/25
Tr. 24:9-10. Plaintiffs’ counsel affirmatively represented at post-trial argument that DePuy
assigned a value of “9.8 million for the license” when discussing the portion of the Settlement
attributable to the C/V License. See id. 22:5-25:11. Accordingly, the Court accepts Plaintiffs’
implicit suggestion that the “full 10 million differential [is attributable] to Compresiv/Versiv.” Id.
25:9-11.
364
See Basho Technologies Holdco B, LLC v. Georgetown Basho Investors, LLC, 2018 WL
3326693, (Del. Ch. July 6, 2018) (crediting “valuations [that] provided a real-time, non-litigation
driven, before-and-after assessment of the [at-issue asset’s] value.” (emphasis added)); Henke v.
Trilithic Inc., 2005 WL 2899677, at * (Del. Ch. Oct. 28, 2005) (“contemporary pre-merger
management projections are particularly useful in the appraisal context because management
projections, by definition, are not tainted by post-merger hindsight and are usually created by an
impartial body.” (internal quotes omitted) (emphasis added)); Pinson v. Campbell-Taggart, Inc.,
1989 WL 17438, at *7 & n.7 (Del. Ch. Feb. 28, 1989), as revised, (Nov. 28, 1989) (holding courts
are skeptical to credit “corporate fiduciaries[’]” valuation of assets “not obtain[ed] [by] an
independent appraisal by a disinterested financial advisor[.]”); Ryan v. Tad’s Enterprises, Inc., 709
A.2d 675, 681(Del. Ch. 1996) (“[t]he Court consider[s] th[e] contemporaneous valuation more
reliable than the defendants’ trial expert’s valuation, which was conducted six years later and for
purposes of litigation.” (emphasis added)).
62
million. Additionally, Plaintiffs’ recoverable Settlement loan interest is reduced by
$1,271,808.72 to account for the portion attributable to the C/V license.365
VI. CONCLUSION
The Court finds as follows:
1. Plaintiffs proved Claude breached the MIPA by failing to provide
indemnification for the Settlement.
2. Claude did not prove any countervailing breach of the MIPA by Plaintiffs
that abrogates his indemnification obligation.
3. The entire Settlement, except for the C/V License, falls within the MIPA’s
indemnification provision.
4. Plaintiff is entitled to its Patent Litigation attorneys’ fees and interest on
the loan used to pay the Settlement, but not attorneys’ fees for this action.
For the foregoing reasons, the Court enters judgment for Plaintiffs and awards
$40,172,084.49366 in damages. If there are any open issues not addressed or mooted
by this post-trial opinion, the Parties shall notify the Court by letter within five days.
Otherwise, the Parties shall prepare a form of order entering judgment in accordance
with this Opinion. IT IS SO ORDERED.
365
See supra V.D.2.
366
This number corresponds to Claude’s 55.55% share of the $72,316,983.78 total liability. The
total liability figure equals the $70 million Settlement, reduced by $9.8 million, plus the
$9,084,348 in loan interest – reduced by $1,271,808.72 to account for interest accruing from the
excluded portion of the Settlement attributable to the C/V license ($9,084,348 * ($9,800,000 /
$70,000,000)) – plus $4,304,444.50, representing half the requested Patent Litigation attorneys’
fees.
63
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