In its 2011 decision refusing to dismiss Meso’s claim, the Court, finding no Delaware case law on point, declined to rule that a reverse triangular merger does not, as a matter of law, constitute an assignment “by operation of law.” Addressing the issue now on summary judgment, the Court dismissed the claim, noting that, “enerally, mergers do not result in an assignment by operation of law of assets that began as property of the surviving entity and continued to be such after the merger.” The Court held that the phrase “by operation of law or otherwise” made clear the parties did not intend the anti-assignment clause to apply to reverse triangular mergers. Meso contended that, pursuant to the anti-assignment clause, BioVeris could not assign any of the rights arising from the 2003 Transaction without Meso’s prior written consent and that, lacking consent, defendants breached the clause because the BioVeris Merger constituted an assignment of BioVeris’s intellectual property rights “by operation of law or otherwise.” Meso thereafter brought this action, alleging that, as a result of the BioVeris Merger, Roche and its affiliates breached the Global Consent’s anti-assignment clause. As noted by the Court, the effect of the BioVeris Merger was that “all properties, rights, privileges, powers and franchises” of BioVeris and Lili vested in BioVeris, and “all claims, obligations, debts, liabilities and duties” of BioVeris and Lili became the claims, obligations, debts, liabilities and duties of BioVeris. BioVeris emerged as the surviving entity and Roche as its sole stockholder. In 2007, Roche, seeking to acquire full rights to the ECL-related intellectual property, acquired BioVeris through a reverse triangular merger (the “BioVeris Merger”) in which Roche subsidiary Lili Acquisition Corp. The clause provided that none of “the rights, interests or obligations under shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties ….” The Global Consent contained the anti-assignment clause at the center of this litigation. To facilitate the 2003 Transaction, Roche, IGEN, BioVeris, and Meso entered into a Global Consent and Agreement (the “Global Consent”) through which Meso consented and granted waivers with respect to consummation of the Transaction and to the Transaction-related agreements. Roche also acquired IGEN in the 2003 Transaction but, before it did, IGEN transferred all of its intellectual property assets-including its ECL patents and related licensor rights and obligations-to a newly-created, publicly held entity, defendant BioVeris Corporation. Roche immediately sought to reacquire rights to the ECL technology and, as part of a broad transaction comprised of numerous agreements (the “2003 Transaction”), obtained from IGEN a second, non-exclusive license (the “Roche License”). In 2003, following a federal court verdict that Roche had violated the narrow restrictions of the 1992 License, IGEN terminated the license. According to MSD, those rights included a “springing right” to acquire any exclusive rights then held by a third party, such as those granted Roche under the 1992 License, should those third-party rights terminate. As part of the venture, IGEN granted MSD exclusive rights to certain broadly-defined ECL intellectual property. In 1995, IGEN entered into a joint venture with plaintiff Meso Scale Technologies LLC (“MST”) to form Meso Scale Diagnostics, LLC (“MSD” and, with MST, “Meso”) to develop and promote the ECL-related technology. an exclusive but narrow license to use certain electrochemiluminescent, or ECL, technology (the “1992 License”). The opinion resolves uncertainty that followed a 2011 decision from the same case in which the Court, on a motion to dismiss, declined to rule on whether a change of control accomplished through a reverse triangular merger constitutes an assignment “by operation of law or otherwise.” In this memorandum opinion addressing defendants’ motion for summary judgment, the Court of Chancery dismissed plaintiffs’ claim that a reverse triangular merger constituted an assignment of rights in breach of a contractual anti-assignment provision. Restructuring, Bankruptcy & Creditors' Rights. ![]() ![]() Intellectual Property Counseling, Patent & Trademark Procurement.Employee Benefits & Executive Compensation.Cybersecurity, Data Privacy and Information Governance.Alternative Entities and Structured Finance.
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