luitpold complaint
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I I I
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
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LUITPOLD PHARMACEUTICALS, INC., Case No. ILIDGE-HOLWELL
Plaintiff,
v.
ED. GEISTLICH SOHNE A.G. FOR CHEMISCHE : COMPLAINT rE
INDUSTRIE, and OSTEOMEDICAL LTD.
Defendants. x
Plaintiff Luitpold Pharmaceuticals, Inc. ("Plaintiff" or "Luitp
complaint against Defendants Ed. Geistlich Soh= A.G. Fiir Chemische Industrie ("Geistlich")
and Osteomedical Ltd. ("Osteomedical" and collectively with Geistlich, "Defendants") alleges as
follows:
INTRODUCTION
1. This action arises out of Geistlich's unilateral and bad faith termination of the
parties' agreements to distribute certain patented and trademarked dental regenerative products
over a "long term" in the United States, Canada, Mexico, Central America, the Caribbean and
Japan.
2. These agreements were intended to last past the expiration of the patents and for
so long as the trademarks are valid and Luitpold sells product under those marks, and were
otherwise terminable only upon the mutual consent of the parties or an incurable breach by one
of the parties.
3. Without justification, Geistlich repudiated and breached the agreements by
serving a notice to terminate the agreements as of March 31, 2011 (thereafter tolled to June 30,
2011), based on the bad faith assertion that the agreements were of indefinite duration and
Case 1:11-cv-00681-RJH Document 1 Filed 02/01/11 Page 1 of 36
terminable after a reasonable time. This ill-conceived assertion is contrary to settled New York
law, the express terms of the termination provision in the agreements, and the unequivocal intent
of the parties.
4. Plaintiff asks this Court to: (i) enforce the plain terms of the Bio-Oss Commercial
Agreement, the Bio-Oss License Agreement and the Bio-Gide License Agreement and declare
that Geistlich's notice purporting to terminate those Agreements as of March 31, 2011 (as
thereafter tolled to June 30, 2011), is invalid and of no effect; (ii) declare that Geistlich, having
failed to fulfill product orders placed by Luitpold, is obligated to release the Manufacturing
Details (as that term is defined in the Bio-Oss Commercial Agreement) to Luitpold or to an
alternative supplier who is ready, willing and able to supply all of Luitpold's product
requirements under the Bio-Oss Commercial Agreement; (iii) enter an equitable decree of
specific performance requiring Geistlich to comply with its duties and obligations under the Bio-
Oss Commercial Agreement, Bio-Oss License Agreement, Bio-Gide License Agreement,
Mucograft Commercial Agreement and Mucograft License Agreement; (iv) award Luitpold
compensable damages as a result of Defendants' breaches of the Bio -Oss Commercial
Agreement, Bio-Oss License Agreement, Bio-Gide License Agreement and Mucograft
Commercial Agreement; and (v) grant Luitpold a pre-judgment attachment of the patents and
trademarks for the products.
PARTIES
5. Plaintiff Luitpold Pharmaceuticals, Inc. ("Luitpold") is a New York corporation
with its principal offices at One Luitpold Drive, Shirley, New York 11967.
6. Plaintiff Luitpold is engaged in the development and marketing of innovative,
quality drugs and medical devices for healthcare professionals, clinics, and hospitals around the
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world, but principally in the United States and Canada. Its Osteohealth division ("Osteohealth")
specializes in providing regeneration products to dental professionals. These products aid the
growth of bone and tissue after oral surgery or tooth removal in the gums and mouths of dental
patients.
7. Defendant Ed. Geistlich Sane A.G. Far Chemische Industrie ("Geistlich") is a
Swiss Corporation with its principal offices at Bahnofstrasse 40, P.O. Box 157, 6110 Wollhusen,
Switzerland. Ed. Geistlich Sohne Ag Fur Chemische Industrie is not registered to do business in
New York.
8. Defendant Osteomedical Ltd. ("Osteomedical") is an Irish corporation having its
principal offices at 2 Babmaes Street, London SWIY 6NT United Kingdom. Osteomedical is
not registered to do business in New York.
9. Upon information and belief, Geistlich and Osteomedical are part of a privately
held Swiss chemical and pharmaceutical conglomerate.
10. Geistlich and Osteomedical own patents and trademarks, more specifically
identified below, for certain biomaterials and regeneration products. The patents and trademarks
have been licensed to Luitpold, and Geistlich has unlawfully terminated Luitpold's rights to
utilize the patents and trademarks.
JURISDICTION AND VENUE
11. This Court has jurisdiction over this matter pursuant to 28 U.S.C. 1332(a)(2)
because the amount in controversy exceeds $75,000.00, exclusive of interest and costs, and
Geistlich and Osteomedical are both citizens of a foreign country while Luitpold is a citizen of
the United States.
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12. Venue is proper pursuant to 28 U.S.C. 1391(a)(3). The parties have agreed that
this judicial district is the proper venue for this action to be brought and have consented to
personal jurisdiction in this Court. Each of the agreements contains a provision under Article 19
titled "JURISDICTION AND GOVERNING LAW." In substance, each party agreed to submit
to the jurisdiction of the District Court for the Southern District of New York and that the
agreements shall be deemed made under, governed by and interpreted under the laws of the State
of New York.
THE FACTS
The Bio-Oss Commercial Agreement
13. On March 25, 1994, Geistlich and Luitpold established their long-term
relationship when they entered into a Commercial Agreement (the "Bio-Oss Commercial
Agreement"). A true and correct copy of the Bio-Oss Commercial Agreement is attached hereto
as Exhibit 1. The Bio-Oss Commercial Agreement establishes the basic business relationship in
the core territory, North America, between the parties as it pertains to the core Geistlich product,
Bio-Oss, and its related products, Bio-Oss Collagen and Bio-Tape (the "Bio-Oss Products").
14. Under the Bio-Oss Commercial Agreement, the Bio-Oss Products are to be
marketed and developed as a "bone substitute" for "dental, periodontal, oral maxillo facial, dental
implant and oral surgical purposes"; the parties' contemplated relationship was to be "over a
long period of time"; and Geistlich was "to supply the PRODUCT to [Luitpold] on a long-term
basis." Ex. 1 at ri 1.01, 1.05 (emphasis added).
15. In consideration for the right to market and sell the Bio-Oss Products, Luitpold
agreed to pay Geistlich a substantial up-front fee of $15 million, and Luitpold paid the fee as
promised over the first two years of the agreement. Id at ¶ 6.01.
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16. Significantly, the Bio-Oss Commercial Agreement contains an express
termination provision, so it could only be terminated by mutual consent of the parties, an
incurable breach by one of the parties, or upon a failure by Luitpold to meet certain sales
projections set forth in the Agreement. Id. at TT 5.02, 9.01, 9.02. The termination provision
regarding sales projections was later deleted in an amendment dated February 11, 1998.
17. Article 9 in the Bio-Oss Commercial Agreement, titled "TERMINATION,"
expressly states, in relevant part:
9.01 Subject to all of the provisions set forth in this COMMERCIAL AGREEMENT, this COMMERCIAL AGREEMENT may be terminated by mutual consent of the parties in writing at any time. 9.02 In the event that any of the terms or provisions hereof are [sic] incurably breached, the non-breaching party may immediately terminate this COMMERCIAL AGREEMENT by written notice.
18. From the beginning, the Bio-Oss Commercial Agreement has recited that
Luitpold "is desirous of obtaining and ensuring a supply of the PRODUCT for sale in the
TERRITORY over a long period of time," and that Geistlich "is willing to supply the
PRODUCT to BUYER on a long-term basis." Ex. 1 at pp. 1-2. The Bio-Oss Commercial
Agreement contemplated and required a long-term duration to protect the investments made by
Luitpold and to maximize the financial rewards of the relationship for both parties. Luitpold
paid a total of $35 million in up-front licensing fees to Geistlich and Osteomedical for rights to
products. Luitpold invested tens of millions of dollars on top of these up-front license fees to
create and develop a market for the Geistlich products, particularly in the core territory of North
America.
19. Though the Bio-Oss Commercial Agreement was amended in April 1996, in
February 1998, and again in June 2008, none of these amendments (including the 2008
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amendment) provided a unilateral right to terminate the Bio-Oss Commercial Agreement for
convenience. In 1998, the parties demonstrated that they understood how to and did amend the
Bio-Oss Commercial Agreement to remove one condition for termination — relating to Luitpold's
obligation to meet certain sales projections — out of the three permissible conditions. However
the parties left the remaining termination provisions undisturbed. In fact, each amendment re-
affirmed and ratified the Bio-Oss Commercial Agreement except as amended, meaning the
parties repeatedly re-affirmed that termination for convenience could only occur upon mutual
consent, not unilateral action.
The Bio-Oss License Agreement
20. Also in March 1994, as a companion agreement to the Bio-Oss Commercial
Agreement, Luitpold and Osteomedical entered into a License Agreement (the "Bio-Oss License
Agreement"). A true and correct copy of the Bio-Oss License Agreement is attached hereto as
Exhibit 2. The Bio-Oss License Agreement granted to Luitpold a license to the Bio-Oss
Products in North America. Like the Bio-Oss Commercial. Agreement, the Bio-Oss License
Agreement did not permit unilateral termination for convenience by Osteomedical.
21. The Bio-Oss License Agreement grants Luitpold exclusive and non-transferable
patent and trademark licenses for the Bio-Oss Products and sets a royalty and fee structure for
those licenses, for which Luitpold agreed to pay and did pay Osteomedical an "up front" fee of
$5 million, in addition to a royalty of 10% of net sales.
22. The parties' agreements contemplated that their relationship would continue past
the expiration of the patents and for so long as the trademarks are valid and Luitpold sells
product under those marks. Specifically, the royalty is 10% of net sales during the term of the
patents, and then after the expiration of the last-to-expire patents, it drops to 8% for the
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remaining PROPRIETARY ASSETS (i.e. the licensed trademarks). Licenses of this sort are
customarily intended to last for the life of the intellectual property licensed, unless otherwise
expressly agreed.
23. The Bio-Oss License Agreement may only terminate as a result of mutual consent
by the parties or an incurable breach by one of the parties. Article 11 in the Bio-Oss License
Agreement, titled "TERMINATION," expressly states, in relevant part:
11.01 Subject to all of the provisions set forth in this LICENSE AGREEMENT, this LICENSE AGREEMENT may be terminated by mutual consent of the parties in writing at any time.
11.02 In the event that any of the terms or provisions hereof are [sic] incurably breached, the non-breaching party may immediately terminate this LICENSE AGREEMENT by written notice.
24. Osteomedical assigned its rights and obligations under the Bio-Oss License
Agreement to Geistlich.
The 1994 Letter Agreement
25. Confirming that the 1994 Agreements are tied to the intellectual property, on
March 25, 1994, Luitpold, Geistlich, and Osteomedical entered into a letter agreement (the
"1994 Letter Agreement"). A true and correct copy of the 1994 Letter Agreement is attached
hereto as Exhibit 3. The 1994 Letter Agreement recited that the "rights granted to, and the
obligations assumed by" the parties under the Bio-Oss Commercial Agreement and Bio-Oss
License Agreement were "interdependent." Ex. 3 at p. 1. The 1994 Letter Agreement also
provided that a breach or termination of one of the agreements resulted in a breach or termination
of the other agreement. Id. at ¶ 3. Inasmuch as there was no form of unilateral termination for
convenience, the 1994 Letter Agreement only applied to termination by mutual consent of the
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parties or an incurable breach by one of the parties. By confirming that the Bio-Oss Commercial
Agreement and the Bio-Oss License Agreement are interdependent, the parties reinforced their
expressions of intent that both were to last past the expiration of the patents and for so long as
the trademarks are valid and Luitpold sells product under those marks unless sooner terminated
for cause or on mutual, not unilateral, consent.
The 1996 Amendment
26. In April 1996, the parties amended both the Bio-Oss Commercial Agreement and
the Bio-Oss License Agreement to add Mexico as a territory subject to the Agreements (the
"1996 Amendment"). A true and correct copy of the 1996 Amendment is attached hereto as
Exhibit 4. Since that time, Luitpold has distributed the Bio-Oss Products in Mexico and paid a
royalty based upon its net sales that is the same arrangement that applies to North America (the
United States and Canada). The 1996 Amendment confirmed and ratified the un-amended
provisions in the Bio-Oss Commercial Agreement, which includes the "long-term" language and
the ability to terminate for convenience only upon mutual consent.
The Amendment to the Bio-Oss Commercial Agreement to add Bio-Gide and the Bio-Gide License Agreement
27. On February 11, 1998, the parties amended the Bio-Oss Commercial Agreement
to include a new Geistlich product, Bio-Gide. A true and correct copy of the amendment to the
Bio-Oss Commercial Agreement is attached hereto as Exhibit 5. This amendment again re-
affirmed that, except as amended, the Bio-Oss Commercial Agreement was confirmed and
ratified, which includes the "long-term" language and the ability to terminate for convenience
only upon incurable breach or mutual consent.
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28. Simultaneously, the parties entered into a license agreement (the "Bio-Gide
License Agreement") (together with the Bio-Oss Commercial Agreement and the Bio-Oss
License Agreement, the "Bio-Oss and Bio-Gide Agreements"), which granted Luitpold patent
and trademark licenses for Bio-Gide in the United States, Canada and Mexico. A true and
correct copy of the Bio-Gide License Agreement is attached hereto as Exhibit 6. Like the Bio-
Oss License Agreement for the Bio -Oss Products, the Bio -Gide License Agreement required
Luitpold to pay, and Luitpold did pay, an up-front license fee of $6 million to Osteomedical.
29. Like the Bio-Oss License Agreement for the Bio-Oss Products, the Bio-Gide
License Agreement contained a royalty structure corresponding to the "long-term" language of
the Bio-Oss Commercial Agreement that now also applied to Bio-Gide products. Specifically,
the royalty is 10% of net sales during the term of the Bio-Gide patents, and then after the
expiration of the last-to-expire patents it drops to 8% for the remaining PROPRIETARY
ASSETS (i.e., the licensed Bio-Gide trademarks). Ex. 6 at §§ 5.01, 5.02.
30. Significantly, the Bio-Gide License Agreement did not give a unilateral right to
terminate for convenience; rather, the Bio-Gide License could only terminate as a result of
mutual consent by the parties or an incurable breach by one of the parties.
31. Article 11 in the Bio-Gide License Agreement, titled "TERMINATION,"
expressly states, in relevant part:
11.01 Subject to all of the provisions set forth in this AGREEMENT, this AGREEMENT may be terminated by mutual consent of the parties in writing at any time.
11.02 In the event that any of the terms or provisions hereof are [sic] incurably breached, the non-breaching party may immediately terminate this AGREEMENT by written notice.
Case 1:11-cv-00681-RJH Document 1 Filed 02/01/11 Page 9 of 36
The 1998 Letter Agreement
32. On February 11, 1998, the parties entered into a letter agreement (the "1998
Letter Agreement"), re-confirming that the Bio-Oss Commercial Agreement and the Bio-Oss
License Agreement (and the Bio-Gide License Agreement) were interdependent. A true and
correct copy of the 1998 Letter Agreement is attached hereto as Exhibit 7. The 1998 Letter
Agreement recited that the "rights granted to, and the obligations assumed by" the parties under
the Bio-Oss Commercial Agreement, the Bio-Oss License Agreement, and the Bio-Gide License
Agreement were "interdependent." Ex. 7 at p. 1.
33. The February 1998 Letter Agreement also provided that a breach or termination
of one of the agreements resulted in a breach or termination of the other agreement. Inasmuch as
there was no form of unilateral termination for convenience, the 1998 Letter Agreement only
applied to termination by mutual consent of the parties or an incurable breach by one of the
parties. By confirming that the Bio-Oss Commercial Agreement and the Bio-Oss License
Agreement are interdependent, the parties reinforced their expressions of intent that both were to
last past the expiration of the patents and for so long as the trademarks are valid and Luitpold
sells product under those marks, unless sooner terminated for cause or on mutual, not unilateral,
consent.
The Mucograft Agreements
34. In December 2002, Geistlich and Luitpold entered into a "Commercial
Agreement" for the distribution of another new Geistlich product called Mucograft (the
"Mucograft Commercial Agreement"). A true and correct copy of the Mucograft Commercial
Agreement is attached hereto as Exhibit 8. Mucograft is a "resorbable double layer collagen
membrane for tissue regeneration of mucosa after surgery" for "dental, periodontal, oral
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maxillofacial, dental implants and oral surgery purposes," and was intended by the parties to be
marketed as part of the same product suite as the Bio-Oss and Bio-Gide Products. Ex. 8 at §§
1.01, 1.09.
35. Simultaneous to the Mucograft Commercial Agreement, Luitpold and
Osteomedical entered into a License Agreement for Mucograft (the "Mucograft License
Agreement"). A true and correct copy of the Mucograft License Agreement is attached hereto as
Exhibit 9. The Mucograft License Agreement grants Luitpold exclusive and non-transferable
patent and trademark licenses for Mucograft and sets a royalty and fee structure for those
licenses. In consideration for this license, Luitpold paid Osteomedical an up-front license fee of
$6 million, and agreed to pay Osteomedical a royalty on net sales. Specifically, the royalty is
10% of net sales during the term of the patents, and then after the expiration of the last-to-expire
Mucograft patent, it drops to 8% for the remaining PROPRIETARY ASSETS (i.e., the licensed
Mucograft trademarks).
36. The Mucograft License Agreement — unlike the prior license agreements — was
granted for a term. "for a period of 17 years unless earlier terminated as provided herein or
extended by mutual written agreement of the parties," or in the event of an incurable breach. Ex.
9 at § 11.1.
37. In 2008, Luitpold and Geistlich entered into an Amendment to the Mucograft
Commercial Agreement (the "Mucograft Commercial Agreement Amendment"). A true and
correct copy of the Mucograft Commercial Agreement Amendment is attached hereto as Exhibit
10. The Mucograft Commercial Agreement Amendment added Japan as a covered territory,
deleted certain other territories, and imposed upon Geistlich the obligation to use its best efforts
to obtain registration of the Mucograft product in the United States, Japan and Canada.
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Termination of the Bio-Oss and Bio-Gide Agreements
38. Despite a nearly 16-year relationship in which it shared in Luitpold's success
distributing the Bio-Oss and Bio-Gide Products, Geistlich arbitrarily decided, in bad faith, to
terminate the Bio-Oss and Bio-Gide Agreements, using a fig-leaf argument that it has th right of
unilateral termination while in fact trying to steal for itself all of the business in the Bio-Oss and
Bio-Gide Products that Luitpold invested substantial time, money, and effort to establish.
39. By letter dated September 13, 2010, Geistlich notified Luitpold that the
"Commercial Agreement, as amended, and the License Agreements, as amended, will be
terminated as of March 31, 2011" (the "Termination Letter"), listing the affected territories as:
the 'United States, Canada, Mexico, Central America, the Caribbean, and Japan. A true and
correct copy of the Termination Letter is attached hereto as Exhibit 11. Geistlich executives
have also informed Luitpold that the board of directors of Geistlich decided to terminate the Bio-
Oss and Bio-Gide Agreements. Geistlich subsequently agreed to toll the termination date to June
30, 2011, but has refused to withdraw the termination notice.
40. With neither a legal basis nor any other justification, the Termination Letter
contended that because the Bio-Oss and Bio-Gide Agreements were of an indefmite duration,
they were terminable by either party after a reasonable duration and upon reasonable notice. Ex.
11. The Termination Letter asserted that six months termination notice was reasonable notice
and that March 31, 2011 was a reasonable termination date, despite:
• The "long-term" language of the Bio-Oss and Bio-Gide Agreements;
• The express termination provisions of the Bio-Oss and Bio-Gide Agreements;
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• The "long-term" license royalty provisions in the Bio-Oss License Agreement and the Bio-Gide License Agreement which expressly continue past the expiration of the patents and for so long as the trademarks are valid and Luitpold sells product under those marks;
• The substantial loss to Luitpold of up-front license fees and other huge investments in the good will of the licensed patents and trademarks;
• The total loss to Luitpold of future profits on the products, estimated at well in excess of $100 million; and
• Geistlich's complete refusal to tender any compensation to Luitpold for these enormous losses.
41. Despite repeated efforts by Luitpold requesting Geistlich to withdraw its
termination notice, including negotiations during a "tolling agreement" that temporarily delayed
the terminations, Geistlich remained obstinate and determined to impose unjustified and
premature termination of the Bio-Oss and Bio-Gide Agreements. Geistlich's insistence on
termination brings its motives into focus; it seeks to usurp the time, money, and effort invested
by Luitpold in cultivating a successful enterprise for over 16 years, and to rob Luitpold of its
future sales of the product and its exclusive license of the patents and trademarks, which are
worth at least tens of millions of dollars. Geistlich has declared to Luitpold that Geistlich seeks
to terminate the Bio-Oss and Bio-Gide Agreements so that it can distribute the products itself
Indeed, Geistlich has already sought greater access to clinical and market information, and
developed relationships with key opinion leaders in the core territory, North America, and made
direct efforts to develop brand recognition for Geistlich as well.
42. In addition, on October 26, 2009, prior to receiving the termination notices from
Geistlich, Luitpold ordered product from Geistlich, for delivery by December 10, 2010, as it was
entitled to do under the Bio-Oss and Bio-Gide Agreements. Geistlich failed to deliver the
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product, in breach of those Agreements. Then, at a January 18, 2011 meeting among Geistlich
and Luitpold executives, Geistlich executives admitted that Geistlich was intentionally
withholding delivery of product to Luitpold — product that Luitpold has previously ordered under
the Bio-Oss and Bio-Gide Agreements, and which Geistlich is obligated to deliver under those
same agreements — unless and until Luitpold would agree to termination or modification of the
Bio-Oss and Bio-Gide Agreements. This intentional breach by Geistlich demonstrates that
Geistlich's intent is to drive Luitpold out of the market and steal its business, without regard for
its obligations under the long-term Bio-Oss and Bio-Gide Agreements.
43. The patents and trademarks that are the subject of the Bio-Oss Commercial
Agreement, Bio-Oss License Agreement, Bio-Gide License Agreement, Mucograft Commercial
Agreement and Mucograft License Agreement have not yet expired. The last of those patents
does not expire until April 2022, as follows: (a) U.S. Patent No. 5,417,975, for Bio-Oss, expires
May 23, 2012; (b) U.S. Patent No. 5,573,771, for Bio-Oss Collagen, expires November 12, 2013;
(c) U.S. Patent No. 5,837,278, for Bio-Gide, expires November 17, 2015; and (d) U.S. Patent No.
6,713,085, for Mucograft, expires April 24, 2022.
44. The trademark rights are independent of the patents and will not expire so long as
they are maintained and used in commerce.
Harm Caused by the Repudiation
45. In order to initiate the long-term relationship with Geistlich and Osteomedical,
and to obtain licenses for the Bio-Oss and Bio-Gide Products, Luitpold paid Geistlich and
Osteomedical $26 million over the first four years of the relationship.
46. From September 1994 to September 2010, Luitpold also spent over $60 million
dollars in an effort to build up Osteohealth's association with the licensed products, including but
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not limited to developing a larger sales and management team for the products, adding new
partners to the product distribution network, expanding the product presence at major trade
shows, updating the product marketing materials with new clinical information, conducting
training sessions for the sales team on this new clinical information, securing and maintaining
sponsorships, and cultivating key opinion leader relationships. In addition, Luitpold has made
royalty payments to Geistlich of more than $28 million, license payments of $35 million, and has
incurred over $2 million in research and development expenses relating to the products.
47. Geistlich's unilateral termination of the parties' relationship is a bad-faith attempt
to steal away valuable rights and interests. The termination would harm a substantial portion of
Luitpold's business, result in the sudden loss of more than 75% of Osteohealth's business by
revenue, scores of employees would have to be let go, and Osteohealth's relationships with
vendors and trade associations would be decimated. The termination of the Bio-Oss and Bio-
Gide Agreements would thereby destroy Luitpold's business in Mucograft, and effectively
terminate Luitpold's rights under the Mucograft Commercial Agreement and the Mucograft
License Agreement.
48. The availability of the Bio-Oss and Bio-Gide products to Osteohealth attracts
customers who make purchases of the other, non-Geistlich, goods offered by Osteohealth.
Additionally, because Osteohealth is currently expanding its product offerings beyond Geistlich
products, the termination sends a false and damaging statement to the market that Osteohealth is
an unreliable distributor, and significantly impairs Osteohealth's ability to maintain its existing
or obtain additional customers for its non-Geistlich products. Given the sensitivities inherent in
any market for specialty surgical devices and products, this would be a severe and incalculable
blow to Osteohealth and its goodwill in the relevant industry.
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49. In addition, Bio-Oss, Bio-Gide and the related products at issue in this litigation
are unique in the sense that Geistlich is the sole source of those products in the market. The
products' uniqueness is confirmed by the fact that they are patented and/or trademarked, as well
as by the provisions of the parties' agreements that protect the confidentiality of the
"Manufacturing Details" for the products.
.50. In short, the availability of the Bio-Oss and Bio-Gide products are essential to the
life of Osteohealth's business.
51. Accordingly, the termination would cause immediate, substantial, and
immeasurable harm to Osteohealth.
52. In addition, the termination would result in the loss of a predictable and reliable
stream of profits to Luitpold from its sales of the Geistlich products and would turn those sales
and profits over to Geistlich or its licensee. But for the termination of the license, Luitpold
would continue to have 100% of the market in the "TERRITORY".
Geistlich's Own, Improper Use of the Bio-Oss and Bio-Gide Marks
53. Geistlich has also been advertising, both on its United States-accessible website
and in trade journals distributed in the United States, products it calls "Geistlich Bio-Oss" and
"Geistlich Bio-Gide." A true and correct copy of a sampling of the advertisements contained in
the journals are annexed hereto as Ex. 12.
54. Such use breaches the Bio-Oss License Agreement and the Bio-Gide License
Agreement, which each grant to Luitpold the exclusive right to use the "Bio-Oss" and "Bio-
Gide" marks.
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55. As a result of Geistlich's breaches the Bio-Oss License Agreement and the Bio-
Gide License Agreement, Luitpold has suffered damages, in an amount to be determined at trial.
Geistlich's Failure to Bring New Products to Luitpold's Attention
56. The Bio-Oss Commercial Agreement, Bio-Oss License Agreement and the Bio-
Gide License Agreement each require that "In the event that GEISTLICH develops or otherwise
obtains rights in NEW PRODUCT which may have a viable commercial use for the FIELD OF
USE, GEISTLICH agrees to undertake discussions with BUYER to evaluate whether
GEISTLICH wishes to enter into negotiations with BUYER for BUYER to acquire from
GEISTLICH the rights to sell, distribute, market and use the NEW PRODUCT in the
TERRITORY, for the FIELD OF USE." Exs. 1, 2 and 6 at § 8.01.
57. The defmition of "New Product" is broad, and includes: "products in the FIELD
OF USE other than PRODUCT or IMPROVEMENTS." Exs. 1, 2 and 6 at § 1.03, 1.07 and 1.07,
respectively.
58. Upon information and belief, Geistlich has developed or otherwise obtained rights
in products that fall within the defmition of NEW PRODUCT contained in the Bio-Oss License
Agreement, Bio-Gide License Agreement and the Bio-Oss Commercial Agreement, but Geistlich
has not undertaken any discussions with Luitpold in connection with evaluating whether
GEISTLICH wishes to enter into negotiations with Luitpold for Luitpold to acquire from
GEISTLICH the rights to sell, distribute, market and use the NEW PRODUCT in the
TERRITORY, for the FIELD OF USE, as required by the Bio-Oss and Bio-Gide Agreements.
For example, upon information and belief, a Geistlich affiliate filed on August 16, 2010 — prior
to Geistlich's termination notice to Luitpold — a United States trademark application Ser. No.
85108105 for the mark GEISTLICH BIO-OSS PEN for "bone implant material of natural origin"
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and "bone implant material"; and on July 9, 2010, the same Geistlich affiliate filed a U.S.
trademark application for the mark GEISTLICH BIO-GRAFT, Ser. No. 85081419 for "bone
implant materials." Further on information and belief, Geistlich or a Geistlich affiliate has filed
trademark registrations for the marks GEISTLICH BIO-OSS PEN and GEISTLICH BIO-
GRAFT in Canada also for "bone implant materials."
59. Upon information and belief, Bio-Oss Pen is a syringe pre-filled with Bio-Oss.
This product fits squarely within the definition of "New Product" contained in the Bio-Oss
License Agreement, Bio-Gide License Agreement and the Bio-Oss Commercial Agreement. For
years, Luitpold has been inquiring of Geistlich about the availability and development of this
product, yet Geistlich, to Luitpold's knowledge, has never made the product commercially
available. At their global marketing meetings in 2009 and 2010, Geistlich announced Bio-Oss
Pen on their development timeline, but has never provided Luitpold with any formal information
or updates concerning this New Product, as required under the parties' agreements.
60. In addition, Luitpold learned at trade meetings and through industry publications
that Geistlich had a slowly resorbing Bio-Gide membrane in development — initially referred to
by Geistlich as Bio-Gide Retard, and later by its VN number — which also falls squarely within
the definition of "New Product" contained in the Bio-Oss License Agreement, Bio-Gide License
Agreement and the Bio-Oss Commercial Agreement. A true and correct copy of an excerpt from
one of the industry publications referencing Bio-Gide Retard is annexed hereto as Exhibit 13. In
breach of its contractual obligation, Geistlich never undertook any discussions with Luitpold in
connection with evaluating whether Geistlich wishes to enter into negotiations with Luitpold for
Luitpold to acquire from Geistlich the rights to sell, distribute, market and use this New Product
in the Territory, for the Field of Use. Upon information and belief, Geistlich ultimately decided
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not to launch this New Product, without ever asking Luitpold whether it had an interest in
launching the product in Luitpold's territories.
61. Geistlich's secretive development of product that falls within the definition of
"New Product," taken together with its own improper use of the BIO-OSS and BIO-GIDE marks
and its subsequent premature termination of the Bio-Oss and Bio-Gide Agreements demonstrates
that Geistlich's longstanding intent has been to deprive Luitpold of the rights to which it was
entitled under the Bio-Oss and Bio-Gide Agreements and firmly establishes Geistlich's true
intent to terminate the entire relationship between them.
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COUNT I (Declaratory Relief)
62. Luitpold repeats and re-alleges the allegations contained in Paragraphs 1 through
61 as if fully pleaded herein.
63. Luitpold seeks a declaration pursuant to 28 U.S.C. § 2201 of the respective rights
and duties of the parties in this matter.
64. A valid case or controversy exists sufficient for this court to declare the rights and
remedies of the parties in that Geistlich has failed and refused to perform its supply obligations
under the Bio-Oss Commercial Agreement during the term of the agreement, and has improperly
asserted that it has the right to unilaterally terminate the Bio-Oss Commercial Agreement, the
Bio-Oss License Agreement, and the Bio-Gide License Agreement as of June 30, 2011, and that
its letter dated September 13, 2010 provided reasonable notice of such termination.
65. By its termination notice and its actions, Geistlich has declared its intention not to
honor any of the terms of the Bio-Oss Commercial Agreement, including §§ 12.02 and 12.03.
66. Section 12.02 of the Bio-Oss Commercial Agreement provides as follows: "In an
effort to reduce the possibility of non-performance on the part of Geistlich, Geistlich agrees that
Geistlich shall maintain Manufacturing Details for the production of the Product in escrow with a
mutually agreeable third party escrow agent, according to the escrow agreement attached hereto
as Appendix F. The "Manufacturing Details" shall be sufficient to enable the design,
engineering and development of facilities to meet Buyer's requirements under this Commercial
Agreement."
67. Section 12.03 of the Bio-Oss Commercial Agreement provides, in part, that "in
the event that Geistlich, for a period of one hundred twenty (120) days after receipt of any order
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from Buyer, shall fail, refuse or be unable for any reason, including reasons of Force Majeure, to
reasonably and without material interruption of Buyer's sales, perform its supply obligations
Geistlich shall at its option either (i) remedy its failure to perform its supply obligations within
thirty (30) days to the reasonable satisfaction of the Buyer, or (ii) secure an alternative supplier
who is ready, willing and able to supply all of Buyer's requirements hereunder, or (iii) Geistlich
and Buyer will mutually agree to appoint either an independent third party or Buyer to synthesize
or manufacture the Product. In the event that alternative (iii) is selected, Geistlich agrees to the
release of the Manufacturing Details held by the escrow agent in accordance with the terms of
the escrow agreement attached as Appendix F and to grant to Buyer or an independent third
party, a limited license to synthesize and manufacture the Product for Buyer, under obligations to
maintain the confidentiality of, and to only use, Manufacturing Details to perform the obligations
of Geistlich under and within the terms of this Commercial Agreement. If Buyer is the licensee
under such limited license, the license shall be royalty free."
68. On October 26, 2009, Luitpold placed an order for Bio-Oss and Bio-Gide product
from Geistlich, for delivery by December 10, 2010. Geistlich has failed and refused to fill the
purchase order according to its terms. At a January 18, 2011 meeting among Geistlich and
Luitpold executives, Geistlich executives admitted that Geistlich was intentionally withholding
delivery of product to Luitpold — product that Luipold has previously ordered under the Bio-Oss
and Bio-Gide Agreements, and which Geistlich is obligated to deliver under those game
agreements — unless and until Luitpold would agree to termination or modification of the Bio-
Oss and Bio-Gide Agreements. Again, on January 31, 2011, Geistlich refused to fulfill the
purchase order.
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69. Geistlich has neither remedied its failure to perform its supply obligations within
thirty (30) days to the reasonable satisfaction of the Buyer, nor secured an alternative supplier
who is ready, willing and able to supply all of Buyer's requirements hereunder.
70. Luitpold has the requisite standing to request this declaration in that Geistlich has
informed Luitpold of its intent to terminate the Bio-Oss Commercial Agreement, the Bio-Oss
License Agreement and the Bio-Gide License Agreement as of June 30, 2011, and has failed and
refused to perform its supply obligations under the Bio-Oss Commercial Agreement.
71. This controversy is ripe for determination at this time because the Bio-Oss
Commercial Agreement, the Bio-Oss License Agreement and the Bio-Gide License Agreement
are still in effect, Geistlich has refused and failed to perform under the Bio-Oss Commercial
Agreement, and Geistlich's improper termination of those Agreements and its failure to honor its
obligations under the Bio-Oss Commercial Agreement will cause substantial, immediate and
immeasurable harm to Luitpold.
72. By reason of the foregoing, Luitpold is entitled to a declaration that: (a)
Geistlich's notice purporting to terminate the Bio-Oss Commercial Agreement, the Bio-Oss
License Agreement and the Bio-Gide License Agreement as of March 31, 2011 (as later tolled to
June 30, 2011), is invalid and of no effect; (b) Geislich may not lawfully refuse to supply the
product covered by the Bio-Oss Commercial Agreement, Bio-Oss License Agreement and Bio-
Gide License Agreement; and (c) in the event that Geistlich fails, refuses, or is unable for any
reason, including reasons of force majeure, to reasonably and without material interruption of
Luitpold's sales, perform its supply obligations to Luitpold, Geistlich is contractually required to
release the Manufacturing Details to Luitpold, or to an alternative supplier who is ready, willing
and able to supply all of Luitpold's requirements under the Bio-Oss Commercial Agreement.
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COUNT II (Breach of the Bio-Oss Commercial Agreement and the Bio-Oss License Agreement —
Repudiation)
73. Luitpold repeats and re-alleges the allegations contained in Paragraphs 1 through
72 as if fully pleaded herein.
74. The Bio-Oss Commercial Agreement and the Bio-Oss License Agreement
constitute valid and binding contracts between Luitpold and Geistlich.
75. Luitpold has in all material respects and at all relevant times satisfied its
obligations under the Bio-Oss Commercial Agreement and the Bio-Oss License Agreement.
76. Geistlich, however, has repudiated and anticipatorily breached the Bio-Oss
Commercial Agreement and the Bio-Oss License Agreement by, among other things, terminating
them as of June 30, 2011, in the absence of the mutual consent of the parties or an incurable
breach by one of the parties, causing Luitpold to suffer immeasurable damages. Geistlich's
premature termination of the Bio-Oss Commercial Agreement and the Bio-Oss License
Agreement in their entireties evinced Geistlich's intent not to further perform under the contract
and constituted an absolute, unequivocal repudiation of the contract.
77. At the time of Geistlich's repudiation of the Bio-Oss Commercial Agreement and
the Bio-Oss License Agreement, Luitpold was ready, willing, and able to perform its obligations
under the Bio-Oss Commercial Agreement and the Bio-Oss License Agreement.
78. Luitpold remains willing and able to perform its remaining obligations under the
Bio-Oss Commercial Agreement and the Bio-Oss License Agreement, and is without an
adequate remedy at law as a result of Geistlich's breaches of those Agreements.
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79. Geistlich is able to perform its obligations under the Bio-Oss Commercial
Agreement and the Bio-Oss License Agreement.
80. Luitpold's only adequate remedy is an equitable decree of specific performance
and Luitpold therefore seeks specific performance of Geistlich's duties and obligations under the
Bio-Oss Commercial Agreement and the Bio-Oss License Agreement.
81. Alternatively, as a direct and proximate result of the conduct of Geistlich,
Luitpold has suffered, and is entitled to recover from Geistlich, damages caused by Geistlich's
repudiation of the exclusive license of trademark and patent rights, in an amount to be
determined at trial.
COUNT III (Breach of the Bio-Oss Commercial Agreement — Failure to Obtain Japanese Regulatory
Approval)
82. Luitpold repeats and re-alleges the allegations contained in Paragraphs 1 through
81 as if fully pleaded herein.
83. The Bio-Oss Commercial Agreement constitutes a valid and binding contract
between Luitpold and Geistlich.
84. Luitpold has in all material respects and at all relevant times satisfied its
obligations under the Bio-Oss Commercial Agreement.
85. Geistlich breached its agreement to "use its best efforts to obtain registration and
approval of any PRODUCT and IMPROVEMENTS subject to this COMMERCIAL
AGREEMENT from the Pharmaceutical and Medical Device Agency of Japan ("PDMA")" as
required under the Bio-Oss Commercial Agreement, as amended by the parties in 2008. A true
and correct copy of the 2008 amendment to the Bio-Oss Commercial Agreement is annexed
hereto as Exhibit 14.
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86. Upon information and belief, since June 2008, Geistlich has not obtained
registration of any of its products from the PDMA. Unbeknownst to Luitpold, Geistlich
preliminarily filed "Geistlich Bio-Oss" for approval in 2009, but never filed Bio-Oss for
approval in 2009. When questioned in July 2010 by Luitpold about the status of Geistlich's
filing of Bio-Oss, Geistlich represented that it was making an official submission in the "next
days." Instead, two months later, Geistlich sent to Luitpold the Termination Letter. Upon
information and belief, Geistlich's plan was to allow and encourage Luitpold to expend time and
money under the belief that Luitpold would reap the benefits it contracted for, while Geistlich
delayed complying with its obligations under the Bio-Oss Commercial Agreement long enough
to put itself in a position to misappropriate for itself the rights to market Bio-Oss in Japan. None
of the other products - Bio-Oss Collagen, Bio-Gide, or Mucograft - have, on information and
belief, been submitted for approval to PDMA since June 2008. Upon information and belief,
Geistlich has created further obstacles to obtaining product registration with PDMA by also
selling Bio-Oss Products directly to the Japanese market through its own Japanese distribution
partner.
87. As a result of Geistlich's failure to obtain registration of the products in Japan,
Luitpold has suffered damages.
88. By reason of the foregoing, Luitpold is entitled to recover damages from Geistlich
in an amount to be determined at trial.
COUNT IV (Breach of the Bio-Oss License Agreement —
Use of the Licensed Trademarks in Violation of the Exclusive License Granted to Luitpold)
89. Luitpold repeats and re-alleges the allegations contained in Paragraphs 1 through
88 as if fully pleaded herein.
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90. The Bio-Oss License Agreement constitutes a valid and binding contract between
Luitpold and Osteomedical.
91. Luitpold has in all material respects and at all relevant times satisfied its
obligations under the Bio-Oss License Agreement.
92. Geistlich has been advertising, both on its United States-accessible website and in
trade journals distributed in the United States, a product it calls "Geistlich Bio-Oss.". Such use
breaches the Bio-Oss License Agreement, which grants to Luitpold the exclusive right to use the
BIO-OSS mark, and has caused Luitpold to suffer damages and immeasurable harm to its
goodwill.
93. In addition, Geistlich or its affiliate filed a new trademark application for
GEISTLICH BIO-OSS in the United States and other countries even prior to the time it sent its
Termination Letter to Luitpold in September 2010.
94. By reason of the foregoing, Luitpold is entitled to recover damages from Geistlich
in an amount to be determined at trial.
COUNT V (Breach of the Bio-Gide License Agreement — Repudiation)
95. Luitpold repeats and re-alleges the allegations contained in Paragraphs 1 through
94 as if fully pleaded herein.
96. The Bio-Gide License Agreement constitutes a valid and binding contract
between Luitpold and Osteomedical.
97. Luitpold has in all material respects and at all relevant times satisfied its
obligations under the Bio-Gide License Agreement.
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98. Geistlich, however, has breached the Bio-Gide License Agreement by, among
other things, terminating it as of June 30, 2011, in the absence of the mutual consent by the
parties or an incurable breach by one of the parties, causing Luitpold to suffer damages.
Geistlich's premature termination of the Bio-Gide License Agreement in its entirety evinced
Geistlich's intent not to further perform under the contract and constituted an absolute,
unequivocal repudiation of the contract.
99. At the time of Geistlich's repudiation of the Bio-Gide License Agreement,
Luitpold was ready, willing, and able to perform its obligations under the Bio-Gide License
Agreement.
100. Luitpold remains willing and able to perform its remaining obligations under the
Bio-Gide License Agreement, and is without an adequate remedy at law as a result of Geistlich's
breaches of the Bio-Gide License Agreement.
101. Geistlich is able to perform its obligations under the Bio-Gide License
Agreement.
102. Luitpold's only adequate remedy is an equitable decree of specific performance
and Luitpold therefore seeks specific performance of Geistlich's duties and obligations under the
Bio -Gide License Agreement.
103. Alternatively, as a direct and proximate result of the conduct of Geistlich,
Luitpold has suffered, and is entitled to recover from Geistlich, damages caused by Geistlich's
repudiation of the exclusive license of trademark and patent rights, in an amount to be
determined at trial.
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COUNT VI (Breach of the Bio-Gide License Agreement —
Use of the Licensed Trademarks in Violation of the Exclusive License Granted to Luitpold)
104. Luitpold repeats and re-alleges the allegations contained in Paragraphs 1 through
103 as if fully pleaded herein.
105. The Bio-Gide License Agreement constitutes a valid and binding contract
between Luitpold and Geistlich.
106. Luitpold has in all material respects and at all relevant times satisfied its
obligations under the Bio-Gide License Agreement.
107. Geistlich has breached the Bio-Gide License Agreement by advertising, both on
its United States-accessible website and in trade journals distributed in the United States, a
product it calls "Geistlich Bio-Gide." Such use breaches the Bio-Gide License Agreement,
which grants to Luitpold the exclusive right to use the BIO-GIDE mark, and has caused Luitpold
to suffer damages and immeasurable harm to its goodwill.
108. In addition, Geistlich or its affiliate filed a new trademark application for
GEISTLICH BIO-GIDE in the United States and other countries even prior to the time it sent its
Termination Letter to Luitpold in September 2010.
109. By reason of the foregoing, Luitpold is entitled to recover damages from Geistlich
in an amount to be determined at trial.
COUNT VII (Pre-Judgment Attachment of the Patents and Trademarks)
110. Luitpold repeats and re-alleges the allegations contained in Paragraphs 1 through
109 as if fully pleaded herein.
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111. Pursuant to CPLR § 6201(1), Luitpold is entitled to a pre judgment attachment of
the patents and trademarks because: (a) Geistlich is not registered to do business in New York;
(b) Luitpold has stated valid causes of action against Geistlich for breaches of the Bio-Oss
Commercial Agreement, Bio-Oss License Agreement, Bio-Gide License Agreement, -Mucograft
Commercial Agreement, Mucograft License Agreement; and (c) it is probable that the Luitpold
will succeed on the merits of its claims.
112. Luitpold has an interest in the patents and trademarks under the Bio-Oss License
Agreement, the Bio-Gide License Agreement, the Bio-Oss Commercial Agreement, the
Mucograft Commercial Agreement, and the Mucograft License Agreement, which interest has
been wrongfully terminated and repudiated by Geistlich. These interests in the patents and
trademarks constitute debt or property against which a money judgment may be enforced as
provided in CPLR § 5201. Luitpold also claims damages against Geistlich.
113. Luitpold has satisfied all of the requirements under the Article 62 of the CPLR,
including 6212(a), for obtaining a pre-judgment attachment of the patents and trademarks.
114. By reason of the foregoing, Luitpold is entitled to a pre-judgment attachment of
the patents and trademarks pursuant to Federal Rule of Civil Procedure 64 pending full
determination of this controversy.
COUNT VIII (Breach of the Mucograft Commercial Agreement —
Failure to Obtain Regulatory Approval and Delays in Commercializing Mucograft)
115. Luitpold repeats and re-alleges the allegations contained in Paragraphs 1 through
114 as if fully pleaded herein.
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116. The Mucograft Commercial Agreement constitutes a valid and binding contract
between Luitpold and Geistlich.
117. The Mucograft Commercial Agreement, as amended in 2008, provides Luitpold
with distribution and sales rights for Mucograft in the United States, Canada, Japan, Mexico,
Central America, and the Caribbean.
118. The Mucograft Commercial Agreement also provides that the parties
contemplated a relationship "over a long period of time," that Geistlich is "willing to supply the
PRODUCT to [Luitpold] on a long-term basis." Ex. 8 at p. 1 (emphasis supplied).
119. The Mucograft Commercial Agreement may only be terminated upon a failure by
Luitpold to meet certain sales projections set forth in the Agreement. Ex. 8 at Art. V.
120. Only now, as Geistlich attempts to steal away the Luitpold business in dental
health products, has Geistlich begun to attempt to "roll out" the Mucograft product. In so doing,
Geistlich has made numerous attempts to secure unusual and lengthy meetings with Luitpold
employees, ostensibly in order to discuss Mucograft marketing but obviously (at least to
Luitpold) aimed at making it possible to hire Luitpold's people to continue the business of
Luitpold's Osteohealth division (that markets dental health products) after Geistlich steals that
business away.
121. Upon information and belief, Geistlich failed to submit Mucograft for approval in
Canada or Japan as it agreed to do under the 2008 Mucograft Commercial Agreement
Amendment.
122. In the Mucograft Commercial Agreement, "Geistlich represents that it has made
application to obtain Canadian Authority registration and approval for the product as a medical
device and shall use its best efforts to obtain and maintain such Canadian authority registration
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and approval for the product." Ex. 8 at 10.01 (emphasis supplied). However, as recently as
December 2010, Geistlich had not yet submitted Mucograft for approval in Canada, and Luitpold
had not received updates from Geistlich concerning the status of the submissions. Only after
Luitpold questioned Geistlich about this status in December 2010 did Geistlich report to Luitpold
that the submission to Canadian authorities had not yet been made, and that, once the submission
was made, approval was unlikely to occur before October of 2011. Luitpold has not been able to
exercise its contractual rights to Mucograft in any market other than the United States because of
Geistlich's delays.
123. Geistlich also delayed in making Mucograft commercially available in the United
States. For example, Geistlich failed to provide Mucograft to Luitpold, failed to notify Luitpold
when Mucograft was available to order, refused to provide clinical support to Luitpold
concerning Mucograft even though it knew that such support was necessary in order to make
Mucograft commercially available in the United States, and, without any basis in the parties'
contracts, refused to provide Mucograft to Luitpold or make Mucograft commercially available
to Luitpold unless and until Luitpold gave Geistlich authority to dictate the prices that Luitpold
could and could not charge in its market for Mucograft. As a result of these and other refusals
and delays, Luitpold's ability to market and sell Mucograft in the United States was significantly
delayed, causing Luitpold to suffer harm.
124. In addition, Geistlich failed to keep Luitpold informed of its progress in obtaining
registration in Japan on a periodic basis, when significant developments occurred but at least
once by the end of each calendar quarter, in violation of the 2008 Mucograft Commercial
Agreement Amendment. Ex. 10 at 10.06.
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125. Geistlich further breached the Mucograft Commercial Agreement by failing to
"utilize the PROPRIETARY ASSETS to aid BUYER in developing a market in the
TERRITORY and in distributing and selling PRODUCT." Ex. 10 at 2.01.
126. The obligations between the parties under the Mucograft Commercial Agreement
and the Mucograft License Agreement are continuing in nature. Geistlich's breaches of the
Mucograft Commercial Agreement continue to the present.
127. As recently as July 2010, Geistlich, having failed to provide Mucograft to
Luitpold as required under the Mucograft Commercial Agreement, continued its pattern of delay.
Luitpold submitted a purchase order for Mucograft to Geistlich on April 6, 2010, which was
accepted by Geistlich. However, Geistlich failed to provide the product to Luitpold, and instead
delayed by, inter alia, asking Luitpold in July 2010 to consider a higher pricing model, and,
despite having entered into the Mucograft Commercial Agreement years after the Bio-Gide
License Agreement was already in place, purporting to be concerned that Mucograft would
cannibalize Bio-Gide sales in the market. While Luitpold suffered — and continues to suffer —
the consequences of Geistlich's delay, Geistlich has for years retained the benefit of Luitpold's
$6 million payment and the interest it bore, and has, upon information and belief, improperly
used the time to lay the groundwork for misappropriating for itself Luitpold's rights in
Mucograft.
128. Luitpold has in all material respects and at all relevant times satisfied its
obligations under the Mucograft Commercial Agreement.
129. Geistlich, through its actions alleged in Paragraphs 1-128 herein, has therefore
breached the Mucograft Commercial Agreement.
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130. In the Mucograft Commercial Agreement, Geistlich agrees that "GEISTLICH will
indemnify and hold BUYER harmless against any and all liability, damage, loss, cost or expense
arising out of GEISTLICH's conduct..." Ex. 8 at 13.02.
131. By reason of the foregoing, Luitpold is entitled to recover damages from Geistlich
in an amount to be determined at trial.
COUNT IX (Breach of the Mucograft Commercial Agreement and the Mucograft License Agreement —
Repudiation)
132. Luitpold repeats and realleges the allegations contained in Paragraphs 1 through
131 as if fully pleaded herein.
133. Geistlich has, through its words and actions, made clear its intent not to further
perform under the Mucograft Commercial Agreement and the Mucograft License Agreement,
thereby absolutely and unequivocally repudiating those contracts.
134. By terminating the Bio-Oss and Bio-Gide Agreements, Geistlich would destroy
Luitpold's ability to market Mucograft. Mucograft was intended to be included as part of the
same product suite as the other products, so, as Geistlich knows, the termination of the Bio-Oss
and Bio-Gide Agreements makes it impossible to achieve the intent of the Mucograft agreement
and deprives Luitpold of its valuable rights to Mucograft. In any event, the termination of the
Bio-Oss and Bio-Gide agreements will effectively gut Osteohealth, resulting in the loss of 75% of
its revenues and scores of employees, thereby making it impossible for Osteohealth to continue in
business and terminating the Mucograft Commercial and License Agreements. Thus, the
termination of the Bio-Oss and Bio-Gide Agreements for the other products constitutes a
repudiation of the Mucograft Commercial Agreement and the Mucograft License Agreement.
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135. In addition, Geistlich has: (a) failed to supply the Mucograft product to Luitpold,
even though Luitpold submitted and Geistlich accepted purchase orders for Mucograft; (b) failed
to seek Japanese or Canadian regulatory approval for Mucograft until after it terminated the
parties' agreements; and (c) employed a pattern of delaying its performance under the Mucograft
Commercial Agreement and the Mucograft License Agreement. Geistlich has also made
overtures to purchase Osteohealth, and/or secure the services of Osteohealth's employees. It is
commercially unreasonable for Geistlich not to know that these actions would render Luitpold's
performance under the Mucograft Commercial and License Agreements impossible, thereby
effectively terminating those agreements so that Geistlich itself can take advantage of the benefits
thereunder.
136. Luitpold has in all material respects and at all relevant times satisfied its
obligations under the Mucograft Commercial Agreement and the Mucograft License Agreement.
137. Geistlich, through its actions alleged in Paragraphs 1-136 herein, has therefore
breached the Mucograft Commercial Agreement and the Mucograft License Agreement.
138. At the time of Geistlich's repudiation of the Mucograft Commercial Agreement
and the Mucograft License Agreement, Luitpold was ready, willing, and able to perform its
obligations under the Mucograft Commercial Agreement and the Mucograft License Agreement.
139. Luitpold remains willing and able to perform its remaining obligations under the
Mucograft Commercial Agreement and the Mucograft License Agreement, and is without an
adequate remedy at law as a result of Geistlich's breaches of those Agreements.
140. Geistlich is able to perform its obligations under the Mucograft Commercial
Agreement and the Mucograft License Agreement.
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141. Luitpold's only adequate remedy is an equitable decree of specific performance
and Luitpold therefore seeks specific performance of Geistlich's duties and obligations under the
Mucograft Commercial Agreement and the Mucograft License Agreement.
142. Alternatively, as a direct and proximate result of the conduct of Geistlich,
Luitpold has suffered, and is entitled to recover from Geistlich, damages caused by Geistlich's
repudiation of the exclusive license of trademark and patent rights, in an amount to be
determined at trial.
JURY DEMAND
Plaintiff demands a trial by jury on all causes of action so triable.
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Dated: New York, New York February 1, 2011
ARENT FOX LLP 1675 Broadway New York, NY 10019 Telephone: (212) 484-3900 Facsimile: (212) 484-3990 Attorneys for Plaintiff Luitpold Pharmac Inc.
By: H T. arter (HC-1844) Jennifer L. Bougher (JB-6245)
KANE KESSLER, P.C. Jeffrey H. Daichman, Esq. Dana M. Susman, Esq. 1350 Avenue of the Americas New York, New York 10019 Telephone: (212) 541-6222 Facsimile: (212) 245-3009 Of Counsel for Plaintiff Luio3old Pharmaceuticals, Inc.
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Case 1:11-cv-00681-RJH Document 1 Filed 02/01/11 Page 36 of 36
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