Sentinel Products Corp. v. Mobil Chemical Co.

Full title: SENTINEL PRODUCTS CORP., Plaintiff v. MOBIL CHEMICAL CO., Defendant

Court: United States District Court, D. Massachusetts

Date published: Dec 7, 2000

CIVIL ACTION NO. 98-11782-PBS (D. Mass. Dec. 7, 2000)

Opinion

CIVIL ACTION NO. 98-11782-PBS

December 7, 2000

REPORT AND RECOMMENDATION ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

JUDITH GAIL DEIN, United States Magistrate Judge

I. INTRODUCTION

The plaintiff, Sentinel Products Corporation ("Sentinel"),¹ has brought suit against Mobil Oil Corporation ("Mobil") alleging that the defendant copied the bag-making machine originally developed and eventually patented by the plaintiff. The complaint sounds in six counts: patent infringement (Count I), misappropriation of trade secrets (Count II), breach of contract (Count III), fraud and misrepresentation (Count IV), unjust enrichment (Count V), and violation of Mass. Gen. Laws ch. 93A (Count VI). Mobil has moved for summary judgment on all counts. For the reasons detailed herein, this court recommends that the motion be ALLOWED as to Count I, since Sentinel lacks standing to bring a patent infringement claim; ALLOWED as to Counts III (insofar as that Count relates to an express written and/or oral agreement) and IV because the undisputed facts defeat such claims and they are time-barred; and DENIED as to Counts II, III (insofar as it relates to the implied obligation of good faith and fair dealing), V and VI, as there are disputed facts relating to whether Mobil acted wrongfully in acquiring and using confidential information of Sentinel, and whether the statute of limitations relating to those claims should be tolled.

1 As used herein and unless otherwise noted, "Sentinel" includes its predecessors in interest, including Packaging Industries, Inc.

II. STATEMENT OF FACTS

Sentinel, a company based in Hyannis, Massachusetts, developed a machine for making plastic bags sometime prior to June 1974. (PF ¶ 1).² This machine was known as the Sentinel 5000. ( Id.). John Bala, an employee of Sentinel and one of the inventors of the Sentinel 5000, first applied for a patent covering the Sentinel 5000 in July 1973. ( Id.). One June 21, 1974, Bala filed a continuation-in-part application from that original application. ( Id.).

2 In accordance with Local Rule 56.1, plaintiffs have filed a response to the defendant's statement of undisputed facts. Because this court accepts all reasonable inferences in favor of the plaintiff, the court will cite to the plaintiff's response ("PF"). To the extent that any material facts asserted by the parties differ, those disputes will be noted.

Sentinel began to market the machine to the bag-making industry sometime prior to 1974. (PF ¶ 2). Sentinel produced and disseminated several brochures and press releases describing, in general terms only, the innovative technology contained in the machine, including a vacuum box web tensioning system and a servomotor control system. ( Id.). In 1973 and 1974, the company also took the machine to several trade shows. ( Id.). At the shows, the machines was guarded and roped off to prevent close study, and was shrouded and locked up overnight. ( Id.).

In 1974, Mobil, at its design Products Division in Macedon, New York, was engaged in designing its own plastic bag-making machine. (PF ¶ 5). Sentinel was unaware of these design efforts. (PF ¶ 24). Rather, to the best of Sentinel's knowledge, Mobil was just a customer, and was not a competitor, as Mobil had purchased other machines from Sentinel in the past. ( Id.).

On July 25, 1974, Mobil engineer Alex Provan traveled to Sentinel's Hyannis facility to view the Sentinel 5000. (PF ¶ 6). Mobil expressed interest in possibly purchasing the Sentinel 5000. (PF ¶ 24). Mobil did not reveal to Sentinel its ongoing design program and Sentinel expected that Mobil would use the information it obtained for consideration in its purchase decision. (Id.). Provan was allowed to inspect the workings of the machine, and obtained detailed specifications for the machine. (PF ¶ 6). Provan was not asked to sign a confidentiality agreement. ( Id.). However, the Sentinel 5000 was stamped with a "Patent Pending" designation. (PF ¶ 25).

Sentinel contends that within days of the visit to Hyannis, Mobil changed the entire direction of its bag machine design program by working to incorporate the innovative features of the Sentinel 5000, including a servomotor control system and a vacuum box web tensioning system. (PF ¶¶ 6, 26). Mobil disputes this fact, and contends that Provan did not believe that the Sentinel 5000 was suitable for Mobil's needs for a bag-making machine. (See PF ¶ 6).

Mobil engineers attempted to duplicate the servomotor drive and vacuum web technology, but they were unable to do so. (PF ¶¶ 27, 28). In November 1974, Sentinel sent a sample machine to Mobil for purchase on 60 day approval, along with an instruction manual and wiring diagrams. (PF ¶ 7). The purchase order provided that the Sentinel 5000 was being, "loaned to Mobil-Kordite for production trials with no lease/rental charges. and with no purchase obligation for 60 days from operational readiness at Macedon. At the end of this trial period, Mobil agrees to either purchase the machine or return the same to Packaging Industries, freight prepaid." (Id.). Sentinel shipped the machine, which included the "patent pending" designation, to Mobil. (PF ¶ 29). Previously, Sentinel had sold approximately six of the Sentinel 5000 machines to various buyers. (PF ¶ 3). These sales were not accompanied by confidentiality agreements either, but the machines were also stamped "patent pending." (Id.).

At the close of the 60-day trial period in late January 1975, Mobil returned the machine. (PF ¶ 9). Thereafter, Mobil had no further contact with Sentinel. (PF ¶ 30). Sentinel contends that Mobil continued to use the design and details from the Sentinel 5000. (PF ¶ 31).

After Mobil returned the machine, Sentinel continued its marketing efforts. (PF ¶ 10). On September 8, 1975 and April 6, 1976, Sentinel applied for additional patents on the machine. (Id.). It also started an internal development program to improve the machine by adding a multiple web feed. (Id.). In April 1976, Sentinel sent the Sentinel 5000 to a prospective customer in New Jersey for purchase on approval. (Id.). John Bala, the machine's inventor, eventually received three patents related to the Sentinel 5000: No. 3,948,425, issued April 6, 1976; No. 4,011,975, issued March 15, 1977; and No. 4,070,951, issued January 31, 1978. (PF ¶ 4). Bala later assigned these patents to Packaging Industries, Inc. ( Id.). These patents all expired in the 1990s, prior to the filing of this suit. (Id.).

Meanwhile, in 1977 and early 1978, Mobil arranged for manufacture of the bag machine it had allegedly copied from Sentinel. (PF ¶ 32). Mobil requested proposals from nine manufacturers, all of whom were required to keep confidential all information, specifications, drawings, blueprints and other writings received from Mobil. ( Id.). Sentinel was not included in the bid process. ( Id.). In addition, none of the bidders were OEMs (original equipment manufacturers) for the plastics industry, thereby reducing the possibility that Sentinel might learn of the Mobil machines. ( Id.). Mobil reported in a March 20, 1978 internal memorandum that it was investigating the "patentability issue" concerning the bag machines. (Pl. Ex. 5. PF ¶ 33). The record lacks any information about what, if anything, Mobil learned about the Sentinel patents during this investigation.

Mobil hired Rapidac, Inc., a company from Rochester, New York, to manufacture the mechanical portions of the machine. (PF ¶ 11). Mobil bid out separately the servomotor electronics, which were later installed by Rapidac. (PF ¶ 32). Although not clearly defined by the summary judgment record, it seems that Rapidac made bag machines for Mobil at least until 1989. (PF ¶ 11). The plaintiff asserts that Mobil's operation of these machines infringed on Sentinel's '425 and '951 patents. (PF ¶ 35).

Mobil operated Rapidac-built machines from 1978 until approximately January 1993, when Mobil sold its Design Products Division (along with at least some of the bag machines at issue) to Huntsman Packaging Corporation. (PF ¶ 12). According to Sentinel, 82 machines remain unaccounted for by Mobil. (Id.).

After completing construction of the bag machines for Mobil, Rapidac decided to offer the bag machines to the bag industry at large. (PF ¶ 13). Rapidac disseminated brochures to the industry advertising its Model 2030 bag machine. (Id.). The brochure indicated that the machine contained a "servo drive and vacuum web tension control." (Id.). The record does not clearly define the date when Rapidac began to market and sell the bag machines, although it was clearly free to do so after the January 1993 sale of Mobil's Design Products Division. (See PF ¶ 13). Although Sentinel claims that Rapidac began selling its machine to companies other than Mobil in 1995, according to the deposition testimony of the former general manager of Rapidac, on which Sentinel relies, Rapidac began selling machines to a company called Cypress Packaging "in the early '90s."³ (See Sliker Dep. 8/23/99 at 21-23, Pl. Ex. 4).

3 The summary judgment record also contains an affidavit by the same former general manager, Larry Slicker, dated November 6, 1998. (See Slicker Aff., Def. Ex. 15). In that affidavit Slicker maintains that the last bag machine Rapidac produced for Mobil "was made and delivered more than ten years ago." ( Id. at ¶ 5). Slicker also states that "Rapidac has not built any bag machine for any customer in more than four years" and that "the last time someone could have observed a bag machine on Rapidac's premises is more than four years ago." ( Id. at ¶ 6).

Sentinel first learned of the machine manufactured by Rapidac in 1997, when a former Sentinel employee, Anthony Giavannone visited the Rapidac plant. (PF ¶ 14) While there, he picked up one of Rapidac's brochures for the Model 2030. (Id.) He then told John Bambara, Sentinel's President, about the Rapidac Model 2030. ( Id.). Sentinel then determined that this machine was based on its 5000 model and brought suit against Mobil on August 28, 1998.

Additional relevant facts are described below.

III. DISCUSSION A. STANDARD OF REVIEW

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A material fact is one which has the "potential to affect the outcome of the suit under applicable law."Sanchez v. Alvardo, 101 F.3d 223, 227 (1st Cir. 1996). A genuine issue is "one that must be decided at trial because the evidence, viewed in the light most flattering to the nonmovant, would permit a rational fact finder to resolve the issue in favor of either party." Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1St Cir. 1990) (citations omitted).

Therefore, to prevail on a motion for summary judgment, "the moving party must show that there is an absence of evidence to support the nonmoving party's position." Rogers v. Fair, 902 F.2d 140, 143 (151 Cir. 1990). In order to defeat the entry of summary judgment, the nonmoving party must submit "sufficient evidence supporting the claimed factual dispute to require a choice between the parties' differing versions of the truth at trial." LeBlanc v. Great Am. Ins. Co., 6 F.3d 836, 841 (151 Cir. 1993), cert. denied, 511 U.S. 1018 (1994) (internal quotations and citations omitted).

B. COUNT I — PATENT INFRINGEMENT

In Count I of its complaint, Sentinel contends that Mobil infringed on its patents by manufacturing the Mobil bag-making machine. Mobil has moved for summary judgment on the grounds that Sentinel lacks standing to bring this claim. This court agrees, and recommends that summary judgment be granted in favor of Mobil on Count I of the complaint.

1. Ownership of the Patent

In order for Sentinel to have standing to bring this action for patent infringement, it must have been the owner/assignee of the patents at the time suit was filed. 35 U.S.C. § 281, 100(d) (1994). Moreover, any assignment of the patent to Sentinel must be in writing. 35 U.S.C. § 261. Sentinel does not meet these conditions.

The three Sentinel 5000 patents were originally issued to John Bala, who assigned them to Packaging Industries, Inc. (PF ¶ 4). Over the years, Packaging Industries, Inc. assigned the patents to various banks as collateral for loans. (PF ¶ 15). In or around 1980, Packaging Industries, Inc. was merged into Packaging Industries Group, Inc. ( Id.). In April 1991, the patents were reassigned to Packaging Industries Group by Marine Midland Bank. (Id.).

According to Mobil, after April 1991, there is no evidence of Packaging Industries Group assigning the patents to any other entity. (See PF ¶ 15). Sentinel disputes this fact and has filed the affidavit of John Bambara, in which he asserts in a conclusory form that:

[i]n or around 1994, in connection with the reorganization and consolidation of several related corporations, the assets of Packaging Industries, Group, Inc. were conveyed to PI, Inc. Effective November 30, 1994, PI, Inc. transferred all of its assets to Sentinel Products Corporation. A bill of sale was signed at that time which refers to assets on a balance sheet listing. Although the patents of PI, Inc. were not listed specifically on that sheet, in fact all assets of PI, Inc. (including its patents) were transferred to Sentinel Products Corp. at that time. The transfer was confirmed in the ratification document I signed on April 26, 1999. It is my understanding that Sentinel Products Corp. owns the three patents involved in the present lawsuit.

(Pl. Ex. 45 at ¶ 4).

It is questionable whether Sentinel's conclusory assertions that PI, Inc. acquired all the assets of Packaging Industries Group are sufficient to establish such a fact without documentary support. See Medina-Munoz, 896 F.2d at 8 ("conclusory allegations, improbable inferences, and unsupported speculation" will not suffice to create genuine issue of material fact); see also Schubert v. Nissan Motor Corp. in U.S.A., 148 F.3d 25, 30-32 (1st Cir. 1998) (expert affidavits which contain only conclusory assertions and insufficient factual foundation properly excluded). This issue, however, does not have to be decided in light of the wording of the Bill of Sale from PI, Inc. to Sentinel. Assignments of patents must be in writing, and Sentinel has not proffered any evidence that such a writing exists. Bambara's belief as to the meaning of the transfer to Sentinel is not controlling. See Dynamic Mfg., Inc. v. Craze, 1998 U.S. Dist. LEXIS 4530, *24-25, 46 U.S.P.Q.2d 1548, 1554 (E.D. Va. 1998) (absent written assignment of patent, corporation did not have standing to sue under § 281 even though corporation President believed corporation owned the patent).

The referenced Bill of Sale between PI, Inc. and Sentinel, dated November 30, 1994, is included in the record. (Def. Ex. 24). That document provides:

KNOW ALL MEN BY THESE PRESENTS that PI, INC. . . . does hereby by these presents, grant, sell, convey, assign, transfer and deliver unto SENTINEL PRODUCTS CORP. . . . its successors and assigns, to have and to hold forever, the following:

All of the right, title and interest of the Seller as of the date hereof in and to the assets listed on Schedule A annexed hereto and incorporated herein by reference ("Assets") . . . .

Schedule A itself is quite specific and includes:

Deferred financing costs Prepaid Insurance Property and Equipment, including phone system, copiers, darkroom equipment and miscellaneous office equipment and furniture Itemized data processing equipment 1977 Rolls Royce, and Leasehold improvements

In short, neither the patents nor anything even resembling the patents are listed on Schedule A.

A contract is ambiguous only when the language of the agreement "'is reasonably prone to different interpretations.'" Alison H. v. Byard, 163 F.3d 2, 6 (1st Cir. 1998) (quoting Fowler v. Boise Cascade Corp., 948 F.2d 49, 54 (1St Cir. 1991)). That is not the situation here. Rather, where, as here, the wording of a contract is not ambiguous, the contract must be enforced according to its terms. See Liberty Mut. Ins. Co. v. Gibbs, 773 F.2d 15, 17 (1st Cir. 1985).

Moreover, PI, Inc. was not an unsophisticated party and was aware of the formal requirements for the transfer and assignment of patents. For example, in 1986 Bambara, then President of Packaging Industries Group, Inc., expressly assigned in writing "all rights, title and interest in . . . all of [Packaging Industries Group's] patents and patent applications" to Marine Midland Business Loans, Inc. (See Def. Exs. 22 and 23).⁴ The 1994 Bill of Sale from PI, Inc. to Sentinel is devoid of similar language. The Bill of Sale simply does not include a transfer of the patents at issue in this case. See Alison H., 163 F.3d at 6, and cases cited (describing principles of contract interpretation).

4 Packaging Industries Group also recorded the 1991 reassignment of its patents with the Patent and Trademark Office.

Finally, the Bill of Sale cannot be read to have assigned the right to sue for patent infringement separate from the assignment of ownership of the patents. As the court held in Minco, Inc. v. Combustion Eng'g. Inc., 95 F.3d 1109, 1116-17 (Fed. Cir. 1996), the assignment of ownership of a patent does not include the right to sue for infringements which injured a prior patent owner unless such an intent is expressly stated in the assignment. Unlike the 1986 assignment by Packaging Industries Group to Midland Marine, which contained an express provision allowing the assignee to "bring actions for past infringements and to retain all profits and damages from such past infringements," the Bill of Sale to Sentinel contained no such reference. (See Def. Ex. 22). The Bill of Sale does not include the right to sue for prior patent infringements which Sentinel is seeking to enforce.⁵ See Minco, Inc., 95 F.3d at 1117.

5 It is undisputed that Mobil sold its Design Products Division in 1993 and that, according to Sentinel, it acquired the patents in November 1994. Sentinel is obviously seeking to sue for past infringements to prior owners.

The Purported Ratification

On April 26, 1999, after the complaint was served and after Mobil had filed an answer, PI, Inc. and Sentinel entered into a "Ratification of Assignment of Rights." That document (Def Ex. 25) provides:

Whereas, the Assignor [PI, Inc.] granted, transferred, and assigned to Assignee [Sentinel] and Assignee affirmatively assumed any and all of the Assignor's rights, contracts, liabilities, know-how, patent rights, research and development on or about November 30, 1994 including, but not limited to, those rights, contracts and liabilities listed in the agreements referenced herein.

Now therefore, the Assignor hereby ratifies, reaffirms and acknowledges that as of November 30, 1994, all of its rights, contracts, liabilities, know how, patent rights, research, development, technology, proprietary property (confidential or otherwise) was transferred to the Assignee, in addition to and consistent with the written assignments referenced above, copies of which are attached hereto and incorporated herein.

This belated ratification, however, cannot confer ownership as of the date suit was filed.

This issue was decided in Gaia Techs., Inc. v. Reconversion Techs., Inc., 93 F.3d 774 (Fed. Cir.), as amended by 104 F.3d 1296 (1996). InGaia, the plaintiff claimed that it was the assignee of certain patent rights, but the only writing which supported its claim were Board minutes which memorialized approval to sell 100% of the patent owner's corporate stock to Gaia in the future. Gaia, 93 F.3d at 777-778. The court first ruled that "[s]uch an agreement to assign is not an assignment and thus did not vest legal title in Gaia . . . ." Id. at 779. In addition, the court went rejected Gaia's claim that a post ligation agreement, datednunc pro tunc to a date prior to the litigation, effectively conferred ownership on Gaia. As the court held:

As a general matter, parties should possess rights before seeking to have them vindicated in court. Allowing a subsequent assignment to automatically cure a standing defect would unjustifiably expand the number of people who are statutorily authorized to sue. Parties could justify the premature initiation of an action by averring to the court that their standing through assignment is imminent. Permitting non-owners and licensees the right to sue, so long as they eventually obtain the rights they seek to have redressed, would enmesh the judiciary in abstract disputes, risk multiple litigation, and provide incentives for parties to obtain assignments in order to expand their arsenal and the scope of litigation. Inevitably, delay and expense would be the order of the day.

93 F.3d at 780 (quoting Procter Gamble Co. v. Paragon Trade Brands, Inc., 917 F. Supp. 305, 310 (D. Del. 1995). Accord Enzo APA Sony. Geapag A.G., 134 F.3d 1090, 1093 (Fed. Cir. 1998); Sunrise Med. HHG, Inc. v. Airsep Corp., 95 F. Supp.2d 348, 436-437 (W.D. Pa. 2000). But see Valmet Paper Mach., Inc. v. Beloit Corp., 868 F. Supp. 1085, 1088-1090 (W.D. Wis. 1994) (reaching contrary conclusion where writing confirmed undisputed oral assignment).

In the instant case, as in Gaia, the plaintiff "has failed to come forward with the requisite evidence necessary to establish that an assignment, in writing, of the Intellectual Property took place before the lawsuit was filed." Gaia, 93 F.3d at 780. Such a conclusion is especially appropriate here, where the "Ratification" refers to the November 30, 1994 Bill of Sale as being the operative document which assigned the patent rights. As detailed above, such a reading of the Bill of Sale is not supportable. Under such circumstances, Sentinel lacks standing to maintain its patent infringement claim. See generally Timothy R. DeWitt Tamara S. Klein, A Fatal Mistake: Lack of Standing At The Time of Filing A Patent Infringement Complaint Results In Dismissal With Prejudice, 27 AIPLA Q.J. 189 (Summer 1999).⁶

6 Sentinel notes in a footnote that if it lacks standing, the prior owner can be named as the plaintiff. That issue has not been fully argued and will not be decided here, though it has been rejected by other courts. This court does note, however, that as a factual matter it is far from clear that any of the "Packaging Industries" entities still exist. Moreover, since damages for patent infringement can only cover the six years prior to bringing suit, 35 U.S.C. § 286, and Mobil sold its division in 1993, it is questionable whether a new action by PI, Inc. or Packaging Industries Group would provide for any damages. No party has addressed the issues relating to the propriety or ramifications of any substitution of the plaintiff at this stage of the litigation.

2. Laches

In further support of its motion for summary judgment on Count I, Mobil argues that Sentinel's patent infringement claim should be barred by the doctrine of laches. If this court's recommendation that summary judgment be entered in Mobil's favor because Sentinel lacks standing to bring a patent infringement claim is not accepted, this court recommends that Mobil's motion be denied as to Count I. It is this court's conclusion that the doctrine of laches does not preclude Sentinel from pursuing its patent infringement claim.

Damages recoverable by Sentinel, if it were to prevail on the merits of its claim, are limited by 35 U.S.C. § 286 which provides in relevant part that "no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint." While not a statute of limitations which bars the bringing of an action, § 286 does limit the right to recover damages to the six years before suit was filed; "one starts from the filing of a complaint or counterclaim and counts backward to determine the date before which infringing acts cannot give rise to a right to recover damages." Standard Oil Co. v. Nippon Shokubai Kagaku Kogyo Co., Ltd., 754 F.2d 345, 348 (Fed. Cir. 1985). In the present case, that would be August 28, 1992. For purposes of the motion for summary judgment, it is undisputed that Mobil has engaged in infringing activity in the six year period before suit was filed.⁷

7 Mobil contends that any infringing activity must have ended in January 1993, when it sold its Design Products Division. Sentinel contends that the infringing activity continued since Mobil used the machines in different divisions. (PF ¶ 12).

Nevertheless, Mobil argues that suit should be barred by the doctrine of laches, a recognized defense to a charge of patent infringement. See A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1030 (Fed. Cir. 1992). It is well established that:

to invoke the laches defense, a defendant has the burden to prove two factors:

(1) the plaintiff delayed filing suit for an unreasonable and inexcusable length of time from the time plaintiff knew or reasonably should have known of its claim against the defendant, and

(2) the delay operated to the prejudice or injury of the defendant.

Id. at 1032, and cases cited (emphasis added). There is no fixed length of time which is deemed unreasonable; rather, the analysis is fact specific. Id. However, courts recognize a rebuttable presumption of laches where suit is not brought within six years after a patentee has actual or constructive knowledge of the alleged infringing activity. Id. at 1034-1035 and cases cited. The presumption may be overcome with evidence showing that the patentee's delay was reasonable and/or that the defendant suffered no prejudice. Id. at 1038. The defendant maintains the burden of proof on laches even if the presumption is found to arise. Id. at 1038-39.

In the present case, a fact finder may conclude that Sentinel did not unreasonably delay in bringing suit after it had actual or constructive knowledge of Mobil's potentially infringing activities.⁸ See Wanlass v. Gen. Elec. Co., 148 F.3d 1334, 1337 (Fed. Cir. 1998) ("[w]hen raising the laches defense in the summary judgment context, the defendant also must establish that there was no genuine issue of material fact about the delay or the prejudice").

8 For purposes of this motion, this court will assume that there has been prejudice to Sentinel caused by the timing of the suit in that evidence is harder to come by and memories have faded. See A.C. Aukerman Co., 960 F.2d at 1033 and cases cited. However, this harm is not controlling if Sentinel did not unreasonably delay bringing suit.

It is undisputed that Sentinel did not have actual notice of the alleged infringing activity until 1997. The question then is whether Sentinel had a duty of inquiry before that time.

[L]aches will not be imputed to one who has been justifiably ignorant of facts which create his right or cause of action. But ignorance will not of itself excuse delay. The party must be diligent and make such inquiry and investigation as the circumstances reasonably suggest, and the means of knowledge are generally equivalent to actual knowledge.

Potash Co. of Am. v. Int'l Minerals Chem. Corp., 213 F.2d 153, 155 (10th Cir. 1954), quoted in Wanlass, 148 F.3d at 1338.

Mobil did not engage in the "pervasive, open, and notorious activities" which would normally put a patent owner on notice of potential infringing activities, thereby giving rise to a duty to investigate. Wanlass, 148 F.3d at 1338. For example, Mobil did not engage in "sales, marketing, publication, or public use of a product similar to or embodying technology similar to the patented invention, or published descriptions of the defendant's potentially infringing activities," the type of conduct which has been found to impose a duty of inquiry on the patent holder. Id. and authorities cited (describing situations in which constructive knowledge has been imputed to the patent owner). Rather, there is strong record support for Sentinel's claim that it did not and should not have known about Mobil's use of its design while Mobil was operating its Design Products Division. Drawing reasonable inferences in favor of Sentinel, Mobil went to great lengths to keep its copying of Sentinel's machine secret. The machine was manufactured in parts, all vendors signed confidentiality agreements, and Sentinel was precluded from bidding on the manufacturing contract. Mobil did not sell the machines, and did not make its machine available for viewing. There is nothing from the finished product itself which would put Sentinel on notice that Mobil had incorporated Sentinel's design into its product. Mobil was not traditionally a competitor of Sentinel in the bag-making industry. Under such circumstances, a jury could reasonably conclude that Sentinel did not, and even with the exercise of reasonable diligence, should not have known of Mobil's wrongful conduct. See Puritan Med. Ctr., Inc. v. Cashman, 596 N.E.2d 1004, 1010 (Mass. 1992) (viewing facts in light most favorable to plaintiff, jury could find that 9 year period of deception tolled the statute of limitations).

The record is unclear when Rapidac, as opposed to Mobil, began selling the machine to the public and the extent of its marketing efforts. It is undisputed, however, that Rapidac could have made such sales in 1993, when Mobil sold its Division. Suit was brought within six years of 1993, SO the rebuttable presumption discussed above is not applicable. Mobil has not met its burden of proving that Sentinel had a duty of inquiry which arose so long before suit was filed that its suit should be barred by laches as a matter of law. Under these circumstances, laches will not defeat Sentinel's claim of patent infringement at the summary judgment stage.⁹

9 Since this court rejects Mobil's defense of laches, I need not address Sentinel's contention that the six year period defined by § 286 should be "tolled" in equity due to Mobil's allegedly egregious conduct. It should be noted, however, that courts have rejected Sentinel's claim that equitable defenses can circumvent the provisions of § 286. See A. Stucki Co. v. Buckeye Steel Castings Co., 963 F.2d 360, 363 (Fed. Cir. 1992) and authorities cited.

In sum, this court recommends that Mobil be granted summary judgment on Count I of the complaint because Sentinel lacks standing to pursue patent infringement claims. If that recommendation is not accepted, this court recommends that summary judgment be denied, as laches does not preclude Sentinel from bringing this claim.

C. COUNT II: MISAPPROPRIATION OF TRADE SECRETS

In Count II of the Complaint, Sentinel contends that Mobil misappropriated trade secrets by wrongfully copying the design of the Sentinel 5000. There are sufficient facts for a jury to find Mobil liable on this count, and this court recommends that the motion for summary judgment be denied as to Count II.

1. Trade Secret Status

To establish its claim of misappropriation of trade secrets, Sentinel will have to prove that (1) the design of its machine is a trade secret, (2) Sentinel took reasonable steps to preserve the secrecy of the design, and (3) that Mobil "used improper means, in breach of a confidential relationship, to acquire and use the trade secret." Data Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1165 (1St Cir. 1994) (internal citations omitted). Information for which a patent application is pending can be afforded trade secret protection. See Peter D. Rosenberg, Patent Law Fundamentals, 3-74 (2000); See also 35 U.S.C. § 122 (mandating the confidential status of patent applications). Similarly, the design of a machine is the type of information which may qualify as a trade secret. As the court held inJ.T. Healy Son, Inc. v. James A. Murphy Son, Inc., 260 N.E.2d 723, 730 (Mass. 1970):

A trade secret may consist of any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. . . . It may be a process of manufacturing . . . or a pattern for a machine or other device.

(citing Restatement Torts, § 757, comment b).

Mobil's principal argument is that Sentinel made an election to seek patent protection, which is inconsistent with trade secret status. Thus, according to Mobil, Sentinel consciously elected not to take reasonable steps to protect the secrecy of its information regarding the Sentinel 5000. There are facts which support this position, including, without limitation, the fact that Sentinel allowed potential customers such as Mobil access to design information and the machine itself, and never asked its customers or potential customers to sign non-disclosure agreements. However, there are facts which support a contrary result. For example, and again without limitation, the fact that Sentinel made it clear that it had applied for a patent before it gave Mobil a machine to try, the fact that Mobil was to return the machine if it elected not to purchase the Sentinel 5000, the fact that all machines were stamped "patent pending," the fact that the machines were kept under wraps at trade shows, and the fact that Mobil had been a customer, but never a competitor, of Sentinel, may lead a jury to find that Sentinel's precautions were sufficient to protect the trade secret status of the design of the machine. See Foster Miller, Inc. v. Babcock Wilcox Canada, 210 F.3d 1, 11 (1st Cir. 2000) (jury reviewing facts could reasonably conclude parties believed information intended to be kept confidential despite some unrestricted disclosures); Curtiss-Wright Corp. v. Edel-Brown Tool Die Co., Inc., 407 N.E.2d 319, 322 (Mass. 1980) (trade secret status properly left to jury in view of conflicting evidence).

It should be recognized that the policy behind the protection of trade secrets is not only to encourage commercial innovation and development, but also to maintain the "standards of commercial ethics." Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 481, 94 S.Ct. 1879, 1886, 40 L.Ed.2d 315 (1974). As a result:

Once information is demonstrated to be "of an appropriate nature to qualify" the information as a trade secret, any inquiry into the misuse of the trade secret must focus on the conduct of the defendant. . . . If the defendant has acquired the information as a result of a confidential relationship which he enjoyed with the plaintiff, and, if the defendant has used the information without the permission of the plaintiff, then the defendant's use of the information is wrongful, and the defendant is liable to the plaintiff in damages "for the wrongful use of the information."

Jet Spray Cooler, Inc. v. Crampton, 385 N.E.2d 1349, 1355 (Mass. 1979) (citations omitted, emphasis added). "In general, the essence of the wrong is the obtaining of unjust enrichment and unfair competitive advantage through inequitable conduct, usually a breach of confidence."Atlantic Wool Combing Co. v. Norfolk Mills, Inc., 357 F.2d 866, 869 (1st Cir. 1966).

In the instant case, a jury could reasonably conclude that Mobil obtained the Sentinel 5000, including information about the design of the machine, in confidence. The machine was clearly marked "patent pending." A jury could reasonably reject Mobil's argument that by emphasizing the patent, Sentinel was admitting that the design of the machine was not confidential. Another interpretation could be that Sentinel was putting Mobil and other potential buyers on notice that (1) it believed that the design of the machine was unique and gave it a competitive advantage in the marketplace; and (2) that Sentinel did not expect anyone to copy the machine without payment to Sentinel. In fact, I find this latter interpretation more persuasive and consistent with the law. Thus, while one cannot infringe a patent before a patent has issued, information can be afforded trade secret status during that time. Prescott v. Morton Int'l, Inc., 769 F. Supp. 404, 406 (D. Mass. 1990). Once a patent issues, the protected design cannot be copied without compensation to the patent holder. See Robertson, supra at 2-32 (2000). And, if one is put on notice of a patent, one has "an affirmative duty to exercise due care to determine whether or not it was infringing" the patent. Milgo Elec. Corp. v. United Bus. Communications, Inc., 623 F.2d 645, 666 (10th Cir.), cert. denied, 449 U.S. 1066 (1980), and cases cited. In short, by notifying a potential buyer that a patent is pending, it would be reasonable to conclude that the buyer is being given notice that it is being entrusted with valuable, proprietary information which cannot be used without compensation to its owner.

A jury may also conclude that a confidential relationship should be implied from the circumstances surrounding Mobil's acquisition of the machine. As the court held in Burten v. Milton Bradley Co., 763 F.2d 461, 463 (1St Cir. 1985), "[w]here the facts demonstrate that a disclosure was made in order to promote a specific relationship, e.g., disclosure to a prospective purchaser to enable him to appraise the value of the secret, the parties will be bound to receive the information in confidence" (and authorities cited). The jury could reasonably conclude that a confidential relationship should "be implied where disclosures have been made in business relationships between . . . purchasers and suppliers . . . or prospective licensees and licensors . . . ." Id. and authorities cited. Given the fact that Mobil knew that Sentinel believed that its product was eligible for patent protection, and that Mobil was to return the machine if it did not purchase it, a jury may find that Mobil could "reasonably have been expected to know that [Sentinel was] disclosing a trade secret" and that Mobil could "reasonable have anticipated that [Sentinel] would claim the exclusive right to market" its machines. See Moore v. Marty Gilman, Inc., 965 F. Supp. 203, 216 (D. Mass. 1996). Under such circumstances, a finding of an implied confidential relationship could be sustained.

For the same reasons, a jury could reasonably find that the sale of machines to others, again with the "patent pending" designation, does not constitute the dissemination of confidential information which defeats its trade secret status, as Mobil argues. See Burten, 763 F.2d at 463 (an implied confidential relationship can be defeated if a disclosing party voluntarily conveys a trade secret to others without limitations upon its use). Potential buyers, including Mobil, could be reasonably expected to have known that Sentinel intended to retain the exclusive right to manufacture and sell the machine. See and compare Moore, 965 F. Supp. at 215 and n. 12 and cases cited. "No general rule may be established to determine whether the security precautions taken by the possessor of a trade secret are reasonable"¹⁰ and a fact finder must balance the owner's conduct in maintaining its security measures against the conduct of the one acquiring the information. USM Corp. v. Marson Fastener Corp., 393 N.E.2d 895, 900 (Mass. 1979). Under such circumstances, and because reasonable minds may differ, this court recommends that summary judgment be denied on the misappropriation of trade secrets claim.Prescott, 769 F. Supp. at 410 (where design plans contained proprietary statement but no express limit of use, genuine issue of material fact exists as to whether recipient impliedly agreed not to use information in plans without authorization); see also W.C. Phillips v. Frey, 20 F.3d 623, 632 (5th Cir. 1994) (even in absence of confidentiality agreement, evidence presented jury question as to whether disclosure of secret manufacturing process during course of negotiations for sale of business took place in context of confidential relationship imposing duty on prospective buyers to keep the information secret).

10 It is generally recognized that "[r]elevant factors to be considered include (1) the existence or absence of an express agreement restricting disclosure, (2) the nature and extent of security precautions taken by the possessor to prevent acquisition of the information by unauthorized third parties, (3) the circumstances under which the information was disclosed . . . to (any) employee to the extent that they give rise to a reasonable inference that further disclosure, without the consent of the possessor, is prohibited, and (4) the degree to which the information has been placed in the public domain or rendered 'readily ascertainable' by the third parties through patent applications or unrestricted product marketing." USM Corp. v. Marson Fastener Corp., 393 N.E.2d 895, 900 (Mass. 1979).

Mobil also argues that Sentinel's claim of misappropriation of trade secrets must fail because the "trade secrets" were disclosed in brochures and press releases issued by Sentinel. Sentinel denies this contention. Sentinel contends that the generalized information contained in public documents was insufficient to copy its machine, and points to the (disputed) fact that Mobil needed possession of the machine to reproduce it. The existence of disputed material facts on this point requires that summary judgment be denied.

Finally, Mobil contends that because the machine is capable of being reverse engineered, Sentinel cannot sustain a claim of misappropriation of trade secrets. However, while the possibility of reverse engineering may limit the time an injunction may be imposed, it does not relieve one who obtained information in confidence from liability for using such information without permission. As the court held in Curtiss-Wright Corp., 407 N.E.2d at 326, "[i]n conformity with our emphasis on commercial morality, we have stated that 'defendants should not be permitted a competitive advantage from their avoidance of the normal costs of invention and duplication'" (internal citation omitted). Accord Analogic Corp. v. Data Translation, Inc., 358 N.E.2d 804, 807-808 (Mass. 1976) (fact that reverse engineering is possible does not relieve defendant of liability for wrongfully using confidential information; "defendants who have wilfully attempted to profit through violation of a confidential relationship need not be placed in as good a position as other honest competitors"). For these reasons, Mobil's motion for summary judgment as to Count II should be denied.

2. Statute of Limitations

Mobil contends that it is entitled to summary judgment for the additional reason that Sentinel's claim is time-barred by the three year statute of limitations found in Mass. Gen. L. ch. 260, § 2A. It is Sentinel's contention that the wrong occurred in 1970's, when, according to Sentinel, "Mobil surreptitiously copied the Sentinel machine specifications and provided the stolen designs to a machine shop, Rapidac, for the purpose of having Rapidac manufacture the machines secretly for Mobil." (Sentinel's Mem. at 19). Sentinel did not learn of the wrong until March 1997, when a former employee of Sentinel visited Rapidac. Suit was filed in August 1998.

Sentinel asks the court to apply the "discovery rule" or the theory of "fraudulent concealment" to toll the statute of limitations to within three years of the filing of suit. This court agrees that the statute of limitations may be tolled on the basis of fraudulent concealment, but finds that the discovery rule does not save Sentinel's otherwise time-barred tort claim.

Fraudulent Concealment

Under Mass. Gen. Laws ch. 260, § 12, the statute of limitations will be tolled "if the wrongdoer either 'concealed the existence of a cause of action through some affirmative act done with intent to deceive' or breached a fiduciary duty of full disclosure." Puritan Med. Ctr., Inc., 596 N.E.2d at 1010 (quoting Frank Cooke, Inc. v. Hurwitz, 406 N.E.2d 678 (Mass.App.Ct. 1980)). Thus, the statute will be tolled in "cases where the defendant takes affirmative steps to conceal the existence of the operative facts underlying the cause of action" or in cases where the defendant had a fiduciary duty to disclose the operative facts underlying the cause of action and failed to do so. Compagnie de Reassurance d'Ile de France v. New England Reins. Corp., 944 F. Supp. 986, 995 (D. Mass. 1996), and cases cited. "The question of whether in a particular factual setting, a fiduciary relationship exists is a question of fact." Indus. Gen. Corp. v. Sequoia Pac. Sys. Corp., 44 F.3d 40, 44 (1st Cir. 1995). The burden is on the plaintiff opposing the motion for summary judgment to present sufficient facts to take the case outside the statute of limitations. John Beaudette, Inc. v. Sentry Ins. A Mut. Co., 94 F. Supp.2d 77, 106 (D. Mass. 1999), and authorities cited.

In the instant case, a jury may reasonably find that a fiduciary relationship existed between Sentinel and Mobil. If such a relationship existed, Mobil's failure to reveal that it was copying Sentinel's machine would be sufficient to toll the statute of limitations until disclosure was made by Mobil. Geo. Knight Co. v. Watson Wyatt Co., 170 F.3d 210, 215 (1St Cir. 1999), and cases cited ("Massachusetts courts have recognized that mere failure to reveal information can be fraudulent concealment by a person, such as a fiduciary who has a duty to disclose"). In the context of a fiduciary relationship, there is no need for the plaintiff to prove that it "exercised due diligence in investigating the existence of the cause of action." Rather, "[o]nce fraudulent concealment is established, the limitations period is tolled until plaintiffs actually become aware of the operative facts. Mere suspicion of fraud is insufficient to end the tolling period." Compagnie de Reassurance d'Ile de France, 944 F. Supp. at 995, n. 9 and cases cited. Since it is undisputed that Sentinel did not have actual knowledge of Mobil's wrongful misappropriation of its machine's design until 1997, if a fiduciary relationship existed between the parties, this suit, brought in 1998, is timely.

For many of the reasons a jury could find that a confidential relationship existed, it could conclude that a fiduciary relationship existed. As the court recently ruled in Stark v. Advanced Magnetics, Inc., 736 N.E.2d 434 (Mass.App.Ct. 2000), a case involving an inventor's claims for, inter alia, misappropriation of trade secrets:

At issue then is whether the parties' relationship was a fiduciary one or amounted to no more than an arm's length business relationship. . . . The issue is dependent on the resolution of disputed issues of material fact, such as whether the parties' relationship was one of trust and confidence; whether the plaintiff relied upon the defendants' specialized knowledge or judgment; whether the defendants were aware of the plaintiffs reliance upon them; and whether the defendant abused the plaintiffs trust and confidence to the plaintiff's disadvantage. . . . In light thereof, the tort claim could not be disposed of by summary judgment on the statute of limitations ground.

Id. at 442, citations omitted. This holding is equally applicable to the instant case. Sentinel asserts that Mobil wrongly induced it to reveal its trade secrets, that it relied on Mobil's representations that it was just trying out the machine for purchase possibilities, that Mobil had been a long-standing customer which never intimated that it was in competition with Sentinel, that Mobil requested that Sentinel send it the machine knowing that Sentinel was relying on Mobil's good faith, and that Mobil accepted the machine with its patent pending designation knowing that Sentinel was relying on Mobil not copying the machine. As the Circuit Court held in Stark v. Advanced Magnetics, Inc., 29 F.3d 1570, 1578 (Fed. Cir. 1994). reinstating dismissed tort claims which eventually lead to the Massachusetts Appeals Court decision quoted above, "we do not read the Massachusetts cases as weighing on the side of a tortfeasor who practiced deliberate deception of a professional colleague." Similarly, in the present case, it should be left to as jury to ascertain whether a fiduciary relationship existed which required Mobil to reveal its true intentions. "Massachusetts jurisprudence, which involves equitable as well as legal considerations, merits a finer tuning than is reflected in [a] summary disposition." Id. See also Geo. Knight Co., 170 F.3d at 2 15-16 (a duty to disclose "may exist when one party reposes, to the other's knowledge, trust and confidence under circumstances in which the other's failure to make disclosure would be inequitable") (citations omitted).

Absent a fiduciary duty, this court would conclude that Sentinel's tort claims are time barred despite the fraudulent concealment statute and the discovery rule, as the plaintiff has failed to meet its burden of identifying facts of record that would justify a fact finder in concluding that the suit is timely. John Beaudette, Inc., 94 F. Supp.2d. at 106 and cases cited. There are facts which would support a conclusion that Mobil took affirmative steps to conceal the existence of the operative facts from Sentinel, including, without limitation, limiting bidding for the right to manufacture the machine, and having all suppliers sign confidentiality agreements. However, such acts of concealment ended by no later than 1993, when Mobil sold its Design Division and Rapidac machines were available on the open market. See Stark, 736 N.E.2d at 442 (in the case of actual fraud, the statute is not tolled if plaintiff has means to acquire facts on which his cause of action is based). Thus, absent a fiduciary relationship, the present suit, brought in 1998, is time barred under the fraudulent concealment analysis.

The Discovery Rule

The discovery rule also does not save Sentinel's tort claims. That rule is explained in the case of Geo. Knight Co., Inc., 170 F.3d at 213, as follows:

Pursuant to the discovery rule, an action accrues when the injured party knew, or, in the exercise of reasonable diligence, should have known the factual basis for the cause of action. . . . In order for the statute of limitations to be tolled pursuant to the discovery rule, "the factual basis for the cause of action must have been 'inherently unknowable' at the time of the injury." . . . The factual basis for a cause of action is "inherently unknowable" if it is "incapable of detection by the wronged party through the exercise of reasonable diligence."

(internal citations omitted). The burden is on Sentinel to prove that it did not, or in the exercise of reasonable diligence, could not have known about the wrong. Id. The discovery rule has been found to apply to claims of misappropriation of trade secrets. See Prescott, 769 F. Supp. at 408, and authorities cited.

Sentinel has failed to put forth evidence that despite the exercise of reasonable diligence it could not have known of the factual basis for its cause of action within three years of its filing of suit i.e., August 1995. Even the most liberal reading of the deposition testimony of Rapidac is that it sold the machine on the open market in the early 1990's. (See Slicker Dep. 8/23/99 at 21-23, Pl. Ex. 4). Similarly, Rapidac's affidavit asserts that Rapidac sold machines to customers other than Mobil from 1988-1994. (See Slicker Aff. ¶ 6, Def. Ex. 15). Mobil sold its Design Products Division in 1993, by which time Rapidac was clearly free to sell the machines to other customers. Even applying the discovery rule, the claim for misappropriation of trade secrets would be time barred absent a fiduciary duty.

In sum, I recommend that summary judgment be denied as to Count II of the complaint due to the existence of disputed facts relating principally to the existence of a confidential and fiduciary relationship between the parties. If, however, that recommendation is not followed, the discovery rule and theory of fraudulent concealment (apart from the fiduciary situation) would not save Sentinel's misappropriation claim from being time-barred.

D. COUNT III: BREACH OF CONTRACT

Mobil has moved for summary judgment on Count III of the complaint — breach of contract — on the grounds that Mobil fulfilled all of its contractual obligations and that, in any event, any such claim is time-barred. Sentinel contends that Mobil breached three contracts: the written contract which Sentinel reads as obligating Mobil to purchase the Sentinel 5000 if production trials were successful; an implied obligation of good faith and fair dealing which obligated Mobil to limit its use of the machine to production trials and to keep Sentinel's information confidential; and an oral agreement to purchase its bag-making machines from Sentinel. Sentinel further contends that there are disputed facts as to each of these claims which defeat the motion for summary judgment. For the reasons detailed herein, this court recommends that summary judgment be entered in Mobil's favor on this Count insofar as it relates to the written and oral agreements. This court further recommends that the motion be denied as to Sentinel's claim of breach of the implied covenant of good faith and fair dealing.

1. The Written Agreement

Both Sentinel and Mobil agree that the only written agreement between the parties was the November 1974 purchase order. The agreement provides:

The above Model 5000 Bag Machine will be loaned to Mobil-Kordite for production trials with no lease/rental charges, and with no purchase obligation for 60 days from date of operational readiness at Macedon. At the end of this trial period, Mobil agrees to either purchase the machine (payment in full within ten days thereafter) or return same to Packaging Industries, freight prepaid. Mobil also agrees to pay subsequent refurbishing costs, if any.

(Def. Ex. 10, PF ¶ 7). Sentinel claims that Mobil breached this agreement by (1) not purchasing the machine even though (Sentinel contends and Mobil denies) the machine met Mobil's needs, and (2) using the machine for copying and not just "production trials." For its part, Mobil contends that it had no purchase obligations under the contract and that it returned the contract in a timely manner. Thus, Mobil claims it fulfilled its contractual obligations.

To recover damages for a breach of contract claim, Sentinel must prove: (1) the existence of a valid binding agreement; (2) that Mobil breached the terms of this agreement; and (3) that Sentinel suffered damages resulting from the breach. See Michelson v. Digital Fin. Servs., 167 F.3d 715, 720 (1st Cir. 1999); Coll v. PB Diagnostics Sys., Inc., 50 F.3d 1115, 1122 (1st Cir. 1995). "Under Massachusetts law, interpretation of a contract is ordinarily a question of law for the court." Fairfield 274-278 Clarendon Trust v. Dweks, 970 F.2d 990, 993 (1st Cir. 1992) (citing cases). Where the wording of the contract is unambiguous, the contract must be enforced according to its terms. See Alison, 163 F.3d at 6; Curtus v. Surrette, 726 N.E.2d 967, 970 (Mass.App. Ct. 2000). "Only when a contract is ambiguous is there an issue of fact for the jury." Coll, 50 F.3d at 1122. Absent fraud or mistake, an agreement is presumed to express the intent of the parties. See id.

The written agreement is not ambiguous and the undisputed facts demonstrate that Mobil did not breach the terms of the contract. Mobil was to either buy the machine or return it within sixty days: the choice was its alone. The language of the agreement does not support Sentinel's claim that Mobil was obligated to buy the machine if it met Mobil's requirements.

Similarly, the terms of the contract do not support Sentinel's claim that Mobil could not study the workings of the machine to enable it to copy its workings.¹¹ In addition to the machine, Sentinel provided Mobil with detailed schematics. (See Bambara Aff. ¶ 7, Def. Ex. 21). The fact that the machine was loaned for "production purposes" did not preclude Mobil from learning how it worked so as to be in a position of copying the machine. There is no evidence that Mobil breached any express terms of the written agreement. Consequently, summary judgment should enter in Mobil's favor on Count II insofar as it relates to a claim of breach of the written contract.

11 As discussed infra, however, Mobil was under an implied obligation of good faith and fair dealing not to do so.

2. The Alleged Oral Agreement

Sentinel also claims that Mobil breached an oral agreement, made either before or at the time of the written agreement, to purchase all its machines from Sentinel. However, such a requirement is absent from the purchase order. Parol evidence cannot be used to create an ambiguity where none otherwise exists. See ITT Corp. v. LTX Corp., 926 F.2d 1258, 1261 (1st Cir. 1991) and cases cited. "Evidence of prior or contemporaneous oral agreements cannot be admitted to vary or modify the terms of an unambiguous written contract." Coll, 50 F.3d at 1122. "Instead parties are bound by the plain terms of their contract, and their subjective contemplations are immaterial where the agreement is unambiguous." Id. (internal citations omitted). Sentinel's claim of an enforceable oral purchase agreement fails as a matter of law.

In addition, the record does not support the existence of such an oral agreement. Bambara, the President of Sentinel, gave deposition testimony that "[Mobil] told us they were going to buy 100 to 150 machines if they like it and if it worked." (Bambara Dep. 11/22/99 at 22, 28-29, Pl. Ex. 2). This testimony is inconsistent with an affidavit Bambara submitted wherein he asserted that "[d]uring the negotiations with Mobil, which took place in Hyannis, Mobil represented that it anticipated purchasing 50-100 machines within the next 2-5 years." (Bambara Aff. ¶ 5, Def. Ex. 21). Moreover, at no time did Mobil identify either who from Mobil made these statements or to whom at Sentinel the statements were directed. The absence of sufficient admissible, probative evidence to substantiate the occurrence of these oral statements, combined with the unambiguous nature of the purchase order, precludes an inference that Mobil agreed to purchase its manufacturing needs from Sentinel. See Michelson, 167 F.3d at 721 summary judgment appropriate where plaintiff failed to offer significant probative evidence to support breach of contract claim); Fed.R.Civ.P. 56(e) (affidavits used to support or oppose a summary judgment motion must "be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to matters stated therein"); McKenzie v. Brigham Women's Hosp., 541 N.E.2d 325, 338-329 (Mass. 1989) (deposition testimony which would be inadmissable at trial is unacceptable for purposes of summary judgment motion).

Even if this court were to accept that a separate oral agreement existed, the statute of frauds would bar its enforcement. Under Massachusetts law,

a contract for the sale of goods for the price of five hundred dollars or more is not enforceable . . . unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker.

Mass. Gen. Laws ch. 106, § 2-201; see also Mass. Gen. Laws ch. 259, § 1.

Sentinel's assertion that Mobil agreed to purchase its manufacturing needs is essentially an allegation that a requirements contract was created. See Mass. Gen. Laws ch. 106, § 2-306. However, even a requirements contract necessitates a writing if it is for a sale of goods. See Omega Eng'g, Inc. v. Eastman Kodak Co., 908 F. Supp. 1084, 1091 (D. Conn. 1995) (for a requirements contract to satisfy the obligation under § 2-201, to state the quantity of goods to be sold, it must at least specify that it is "a party's requirements"); see also Gestetner Corp. v. Case Equip. Co., 815 F.2d 806, 810-812 (1st Cir. 1987); Zayre Corp. v. S.M. R. Co., Inc., 882 F.2d 1145, 1155 (7th Cir. 1989). Because the alleged agreement relating to the purchase of Mobil's manufacturing needs was not in writing, enforcement of the contract is barred by the statute of frauds. See Omega Eng'g, 908 F. Supp. at 1090.

The plaintiff advances several exceptions to the statute of frauds, most of which have little merit and do not require extensive analysis.¹² One theory, that of promissory estoppel, does warrant some discussion. Specifically, Sentinel claims that it relied on Mobil's promise to purchase the machines and suffered harm as a consequence. Thus, Sentinel claims that Mobil is estopped from denying the existence of the oral agreement. However, the record does not support this claim.

12 Sentinel contends that the court should enforce the oral agreement pursuant to Mass. Gen. Laws ch. 106, § 2-201(3)(b), because Mobil "constructively admitted" to the existence of the agreement due to the lack of information known by the 30(b)(6) deposition witness designated by Mobil. There is no evidence that Mobil had a more knowledgeable deponent to produce and there was no admission on the part of Mobil. Moreover, the court declines to accept Sentinel's suggestion that Mobil "constructively accepted" goods from Sentinel for purposes of Mass. Gen. Laws. ch. 106, § 2-201(3)(c) since Mobil received and accepted bag-making machines from Rapidac. Sentinel also contends that the written confirmation exception to the statute of frauds, Mass. Gen. Laws ch. 106, § 2-201(2), is applicable. Sentinel asserts that the purchase order was a confirmatory writing which included "an implied term" covering Mobil's requirements and that Mobil failed to object within the time frame afforded by the statute. However, the writing specifically states, "[a]t the end of the trial period, Mobil agrees to either purchase the machine or return the same." Nothing in this contract supports the inference that the defendant agreed to purchase from Sentinel all of its production needs.

"Under Massachusetts law the doctrine of promissory estoppel may preclude the use of the Statute of Frauds in defense." Mass. Cash Register, Inc. v. Comtrex Sys. Corp., 901 F. Supp. 404, 419-420 (D. Mass. 1995). In order for promissory estoppel to apply, there must be: "(1) a representation or conduct amounting to a representation intending to induce a course of conduct on the part of the person to whom the representation is made; (2) an act or omission resulting from the representation, whether actual or by conduct, by the person to whom the representation is made; (3) detriment to such person as a consequence of the act or omission." Id. at 420. It is essential that "there be an unambiguous promise and that the party to whom the promise was made reasonably relied on the representation." Id.

As already determined, there is insufficient admissible evidence to establish the existence of an oral promise regarding Mobil's intention to purchase its bag-making machine needs from Sentinel. Moreover, Sentinel has not met its burden of submitting evidence that would raise a genuine issue as to whether Sentinel reasonably relied to its detriment on the alleged representations by Mobil. See Hoppe v. Baxter Healthcare Corp., 878 F. Supp. 303, 313-314 (D. Mass. 1995) (customer was not estopped from asserting statute of frauds defense to company's breach of contract claim where company failed to establish that it reasonably relied to its detriment on customer's alleged oral representations). No evidence has been offered that Sentinel prepared machines in anticipation of supplying Mobil's manufacturing needs. Sentinel continued to further develop, manufacture, market, and sell the machines after Mobil returned its model. It is also undisputed that, internally, Sentinel continued to believe its machine was suitable for bag-making and estimated that the company would sell several machines. Therefore, the statute of frauds would bar the enforcement of any oral requirements contract. This court recommends that Mobil be granted summary judgment on Sentinel's claim of breach of an oral agreement.

3. Implied Covenant of Good Faith

Finally, Sentinel contends that by copying the Sentinel 5000 during the trial period, Mobil breached the covenant of good faith and fair dealing implied in every contract. See Anthony's Pier Four, Inc. v. HBC Assoc., 583 N.E.2d 806, 820 (Mass. 1991). That covenant requires that "neither party shall do anything that will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract." Id. See also Laser Labs, Inc. v. ETL Testing Labs., Inc., 29 F. Supp.2d 21, 24 (D. Mass. 1998). For the reasons detailed below, Mobil's contention that this claim is time-barred should fail. This court recommends that Mobil's motion for summary judgment based on the implied covenant of good faith or fair dealing should be denied.¹³

13 Although this claim is not included as a separate count of the complaint, it may be considered as part of the breach of contract claim.See Nasco, Inc. v. Public Storage, Inc., 29 F.3d 28, 34-35 (1st Cir. 1994) (court may infer unpleaded legal theory from the essential allegations which have already been pleaded).

There is no question that the written contract between the parties contemplated the purchase and sale of Sentinel 5000 machines. If Sentinel's version of events is proven true, Mobil deprived Sentinel of the "fruits of the contract" by, in essence, stealing the machine. Where "the defendant was in essence motivated by a desire to capitalize on the plaintiff's business opportunities" by pretextually terminating the parties' agreement in order to reap the benefits of the agreement without payment to the plaintiff, a jury could conclude that the defendant breached the covenant of good faith and fair dealing implied in every contract. See Piantes v. Pepperidge Farm, Inc., 875 F. Supp. 929, 939-40 (D. Mass. 1995) (analyzing the implied covenant in connection with franchise terminations).

4. Statute of Limitations

In Massachusetts, the statute of limitations for a breach of contract claim is six years. See Mass. Gen. Laws ch. 260, § 2. An action from breach of contract generally accrues at time of breach. See Saenger Org., Inc. v. Nationwide Ins. Licensing Assoc., Inc., 119 F.3d 55, 64 (1st Cir. 1997). To the extent that Sentinel's claims are premised on Mobil's alleged failure to purchase its machines pursuant to either a written or oral contract, those claims are time-barred.¹⁴ The breach, if any, occurred in the 1975 time frame, and Mobil did not do anything to conceal the fact that it was not purchasing its machines from Mobil. Moreover, unlike the circumstances surrounding Mobil's having obtained Sentinel's trade secrets, no potential fiduciary relationship existed in connection with Mobil's obligations, if any, to buy machines from Sentinel. See Indus. Gen. Corp., 44 F.3d at 44-45 (no fiduciary relationship exists in buyer-seller relationship). There is no basis for tolling the statute of limitations on these claims.

14 As detailed above, the court recommends that these claims be dismissed for other reasons as well.

The claim for breach of the implied covenant of good faith and fair dealing stands on a different footing. In this case, the essence of the complaint is that Mobil wrongfully appropriated Sentinel's technology. For the same reasons as discussed above with respect to Count II, misappropriation of trade secrets, the statute of limitations may be tolled on the basis of fraudulent concealment of the cause of action if a fiduciary relationship exists between the parties. There are material facts in dispute relating to this issue, and it should be decided by a jury.

Since the statute of limitations for a breach of contract claim is six years (as opposed to the three year tort statute), the discovery rule and fraudulent concealment statute also may result in the conclusion that this breach of (implied) contract claim is timely, even in the absence of a fiduciary relationship. As detailed above, the record establishes that Rapidac began selling the machines to the public at least by 1993 when Mobil sold its Design Products Division. By then, a jury may conclude that Sentinel "should have known" of its cause of action, and any fraudulent concealment of Sentinel's cause of action would have ended. This suit, however, was filed in 1998, within six years of 1993, and may be found by a jury to be timely.

In sum, the court recommends that Mobil's motion for summary judgment as to Count III be allowed insofar as it relates to the claims of breach of the written and alleged oral contract, and be denied insofar as it relates to the claim of breach of the implied covenant of good faith and fair dealing.

E. COUNT IV: FRAUD AND MISREPRESENTATION

Count IV of the complaint purports to state a claim for fraud and misrepresentation. Therein, Sentinel alleges that "Mobil misrepresented to Sentinel that the Model 5000 machine did not work and that it was inappropriate for its needs" in connection with the return of the machine that had been loaned for production trials. (Complaint at ¶ 28). That is the only fraudulent statement alleged in the complaint. In opposing the motion for summary judgment, however, Sentinel describes its claim as being that:

Mobil engaged in a pattern and scheme of ongoing deception intended to induce Sentinel to divulge its trade secrets to Mobil under the pretext of 'production trials' and in reliance on Mobil's statements that it would purchase not just the trial machines, but also such additional machines as were needed for its bag making business. Mobil's misrepresentations are confirmed by the Purchase Order.

(Sentinel's Mem. at 23-24).

This court recommends that summary judgment be entered in Mobil's favor on Count IV of the complaint. With respect to the claim actually pleaded in the complaint, Sentinel obviously did not rely on the alleged representation in divulging its trade secrets, since the alleged representation that the machine did not work was made after the secrets had been divulged. With respect to the assertions in its memorandum, there is insufficient record support to sustain a claim based on an alleged representation that Mobil would purchase machines from Sentinel.

1. Fraud and Misrepresentation

To recover for fraud or misrepresentation under Massachusetts law, Sentinel must prove that Mobil made a false statement of material fact; that the misrepresentation was intended to induce the plaintiff to act upon it; that the defendant knew of its falsity; and that the plaintiff relied upon that statement to its detriment. See Rodowicz v. Massachusetts Mut. Life Ins. Co., 192 F.3d 162, 175 as amended, rehearing en banc denied 195 F.3d 65 (1St Cir. 1999); Commonwealth Aluminum Corp. v. Baldwin Corp., 980 F. Supp. 598, 607 (D. Mass. 1997); Zimmerman v. Kent, 575 N.E.2d 70, 74 (Mass.App.Ct. 1991). "Ordinarily false statements that concern matters of opinion, conditions to exist in the future, or matters promissory in nature are not actionable." Piantes, 875 F. Supp. at 933 (citing Yerid v. Mason, 170 N.E.2d 718 (Mass. 1960)). "An exception is that statements of present intention as to future conduct may be the basis for a fraud action if . . . the statements misrepresent the actual intention of the speaker and were relied upon by the recipient to his damage." Id.

The alleged misrepresentation made by Mobil when it returned the machine that it did not work and did not meet Mobil's needs fails to support a claim of fraud for a multitude of reasons. First, there is no admissible evidence to support a contention that the representation was even made. According to Bambara's deposition testimony, "[T]hey told our salespeople . . . who repeated to me, that they didn't like the machine. It didn't do what they wanted it to do and it didn't work properly, and that's why they sent it back." (See Bambara Dep. 11/22/99 at 12-13, Pl. Ex. 2); (see also Bambara Aff. ¶ 7, Def. Ex. 21) ("Mobil returned the machine to Packaging Industries saying that the machine did not work and that it did not suit its needs"). Bambara acknowledged in his deposition that he did not know who from Mobil made the statements and could not recall the name of the salesman at Sentinel to whom Mobil spoke. (See Bambara Dep. at 13-14). These statements are inadmissable hearsay and do not create an genuine material issue of fact to support a claim for fraud. See Fed.R.Civ.P. 56(e).

Furthermore, even assuming this statement was made and was false, there is no evidence that Sentinel relied on the alleged statement to its detriment. As detailed above, Sentinel clearly did not rely on a statement made when the machine was returned in deciding to loan Mobil the machine. Moreover, as described above, the record establishes that Sentinel continued to further develop, manufacture, market, and sell the Sentinel 5000 after the alleged statements by Mobil were made. Sentinel also continued to pursue its patents on the machine, obtained those patents and estimated that the company would sell additional machines. As a result, there is no evidence to support the necessary element that Sentinel relied on statements by Mobil to its detriment. See Mass. Cash Register, 901 F. Supp. at 425 (summary judgment allowed when suppler could not maintain fraud action based on false statement made by manufacturer where suppler failed to demonstrate any reliance on the falsehood). For these reasons, this court recommends that summary judgment be granted in Mobil's favor on Count IV of the complaint.

Sentinel's attempt to rely on statements made prior to the purchase order concerning Mobil's intent to buy additional machines must also fail. For the reasons detailed in the "oral contract" section, supra, there is insufficient support that the statements were made at all. In addition, if such statements were made, they were subsumed by the written agreement. There is also no support for Sentinel's claim to have relied on the promise to buy. Finally, this argument must fail because the alleged misrepresentation was not pleaded in the complaint. See Fed.R.Civ.P. 9(b) (claims for fraud must be stated with particularity). For these reasons, Mobil's motion for summary judgment as to Count IV should be allowed.

2. Statute of Limitations

Sentinel's claim for fraud is also time barred by the three year statute of limitations found in Mass. Gen. Laws ch. 260, § 2A. The fraud took place by no later than 1975, when Mobil returned the machines and did not buy any additional machines from Sentinel. Mobil did nothing to conceal the fact that it was not engaging in any additional business with Sentinel. Unlike the relationship which led Sentinel to disclose its trade secrets to Mobil, there is no basis for a jury to find a fiduciary relationship in connection with Mobil's alleged statements relating to plans to buy additional machines. Since the statute of limitations is not tolled, summary judgment should enter in favor of Mobil for the additional reason that Count IV is time-barred.

F. COUNT V: UNJUST ENRICHMENT

In Count V, Sentinel alleges that by its copying and use of the Sentinel 5000, Mobil has been unjustly enriched since it has not paid any compensation to Sentinel. Mobil has moved for summary judgment on this count on the grounds that recovery for unjust enrichment is not available where parties have entered into an express contract. This court recommends that the motion be denied as to the unjust enrichment claim.

It is undisputed that an express contract exists and, as detailed above, was fully performed. Because the parties had an enforceable contract and there was no breach, there can be no recovery under a theory of unjust enrichment in relation to the use and then subsequent return of the Sentinel 5000. See Zarum v. Brass Mill Materials Corp., 134 N.E.2d 141, 143 (Mass. 1956) (the law will not imply a contract where there is an existing express contract covering the same subject matter); J.A. Sullivan Corp. v. Commonwealth, 494 N.E.2d 374, 377 (Mass. 1986) (courts permit quantum meruit recovery on the theory of unjust enrichment when an unenforceable contract is found); Commonwealth Aluminum Corp., 980 F. Supp. at 607.

Nevertheless, Sentinel has stated a claim for unjust enrichment which closely parallels its claims for misappropriation of trade secrets, and breach of the implied covenant of good faith and fair dealing, and the existence of disputed facts precludes the entry of summary judgment at this time.¹⁵ Courts have recognized a claim where one party is unjustly enriched "at the expense of the other where 'information confidentially given or acquired was used to the advantage of the recipient at the expense of the one who disclosed the information.'"Mass. Cash Register, Inc., 901 F. Supp. at 423 (citing Jon Alden Transp. Co. v. Arnold Bloom, 415 N.E.2d 250 (Mass.App.Ct. 1981), citing Barry v. Covich, 124 N.E.2d 21 (Mass. 1955)).

15 It may be that the existence of an action at law will render the unjust enrichment claim duplicitous at the trial stage. However, the plaintiff should have the option under which theory to proceed.

The facts alleged by Sentinel closely resemble those in Moore v. Marty Gilman, Inc., 965 F. Supp. 203 (D. Mass. 1997). There, it was alleged that the defendant pretended to be interested in a joint marketing project to induce plaintiff to disclose confidential information, which the defendant proceeded to use for its own benefit. The court denied the defendant's motion for summary judgment on a claim of unjust enrichment because if the defendants did, in fact, obtain the information under "false pretenses," "then, in fairness and good conscience, they should pay the plaintiffs for it." Id. at 219-220. For the same reasons, this court recommends that Mobil's motion for summary judgment be denied as well. See also Prescott, 769 F. Supp. at 410 ("Viewing the record in the light most favorable to the non-movant, a genuine issue of material fact exists as to whether the parties' conduct would lead a reasonable person in the industry to infer that [defendant] promised not to use the information in the design plans without authorization.").

Statute of Limitations

The statute of limitations governing a claim in equity for unjust enrichment is either the six year contract or three year tort statute of limitations, depending on the essential nature of the claim. Desmond v. Moffie, 375 F.2d 742, 743 (1St Cir. 1967). For the reasons detailed in the prior sections of this Report addressing the tort and contract statutes of limitation, material facts are in dispute which preclude the entry of summary judgment on the grounds of timeliness where Sentinel's claim relates to the improper use of its confidential information.

G. COUNT VI: CONSUMER PROTECTION

In Count VI of its complaint, Sentinel contends that Mobil's obtaining the Sentinel 5000 for production trials, copying the specifications, and then returning the machine and misrepresenting that the machine was inadequate and did not work, constitutes unfair and deceptive acts and practices in violation of Mass. Gen. Laws ch. 93A. Mobil has moved for summary judgment on the grounds that: (1) the plaintiff's consumer protection claims are purely derivative of the fraud and trade secret claims and must fail for the same reasons as the other claims; (2) the misconduct alleged occurred primarily and substantially outside of Massachusetts; and (3) the Mass. Gen. Laws. ch. 93A claim is barred by the statute of limitations. This court recommends that summary judgment should be denied as to Count VI.

Chapter 93A remedies are available to "[a]ny person who engages in the conduct of any trade or commerce and who suffers any loss of money or property, real or personal, as a result of the use or employment by another person who engages in any trade of commerce of an unfair method of competition or an unfair or deceptive act or practice declared unlawful by section two or by any rule or regulation issued under paragraph (c) of section two." Mass. Gen. Laws ch. 93A, § 11. "Section 11 has been applied by Massachusetts courts to misappropriation of trade secrets." Prescott, 769 F. Supp. at 407, and cases cited. "The standards for finding misappropriation of trade secret provide the criteria for finding an unfair or deceptive act." Id. Similarly, facts which support a claim of unjust enrichment or breach of the implied covenant of good faith and fair dealing may also support a 93A claim. See Moore, 965 F. Supp. at 220, and cases cited. As detailed supra, this court has found that there are disputed facts, as a result of which Sentinel's claims relating to Mobil's wrongful use of confidential information should withstand the motion for summary judgment. Generally, the question of "whether a particular set of acts, in their factual setting, is unfair or deceptive is a question of fact." See Commonwealth Aluminum Corp., 980 F. Supp. at 614 (internal citations and quotations omitted). This claim should be decided by a jury.

Mobil also argues that the plaintiffs cannot maintain a claim under 93A because the alleged misconduct did not occur primarily and substantially in Massachusetts. To maintain an action under Mass. Gen. Laws ch. 93A, § 11, the unfair and deceptive act or practice must have "occurred primarily and substantially within the Commonwealth." Mass. Gen. Laws ch. 93A, § 11. Mobil bears the burden of proof to show that the misconduct occurred primarily and substantially outside of Massachusetts. See Davis v. Dawson, 15 F. Supp.2d 64, 144-145 (D. Mass. 1998). There are three basic factors which must be weighed in determining whether the conduct occurred primarily and substantially in Massachusetts. First the court considers where the defendant committed the deception. Second, the court considers where the plaintiff was deceived and acted upon the deception. Third, the court considers the situs of plaintiff's losses due to the deception. Garshman Co., Ltd. v. General Elec. Co., 176 F.3d 1, 6-7 (1st to the deceptive act in Massachusetts. These factors weigh most heavily in favor of the plaintiff and create a genuine issue of material fact as to whether the acts occurred primarily and substantially outside Massachusetts. See Davis, 15 F. Supp.2d at 145.

Finally, Mobil argues that the 93A claim is barred by the statute of limitations. The limitations period for an action under Mass. Gen. Laws ch. 93A is four years. See Mass. Gen. Laws ch. 260, § 5A. For the reasons discussed above establishing that the statute of limitations with respect to the trade secret claim may be tolled, the claim under 93A may also be tolled. See Rousseau v. Diemer, 24 F. Supp.2d 137, 142 (D. Mass. 1998) (accrual date for cause of action under 93A is determined by same principles dispositive of the accrual dates of general tort actions). Thus, the motion for summary judgment as to Count VI should be denied.

CONCLUSION

For the reasons detailed herein, this court makes the following recommendations with respect to Mobil's Motion for Summary Judgment:¹⁶

16 The parties are hereby advised that under the provisions of Rule 3(b) of the Rules for United States Magistrates in the United States District Court for the District of Massachusetts, any party who objects to these proposed findings and recommendations must file a written objection thereto with the Clerk of this Court within 10 days of the party's receipt of this Report and Recommendation. The written objections must specifically identify the portion of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The parties are further advised that the United States Court of Appeals for this Circuit has repeatedly indicated that failure to comply with this rule shall preclude further appellate review. See Keating v. Sec'y of Health Human Servs., 848 F.2d 271, 275 (1St Cir. 1988); United States v. Valencia-Copete, 792 F.2d 4 (1st Cir. 1986); Park Motor Mart, Inc. v. Ford Motor Co., 616 F.2d 603, 604-605 (1st Cir. 1980); United States v. Vega, 678 F.2d 376, 378-379 (1St Cir. 1982); Scott v. Schweiker, 702 F.2d 13, 14 (1St Cir. 1983); see also Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466 (1985). Accord Phinney v. Wentworth Douglas Hosp., 199 F.3d 1, 3-4 (1St Cir. 1999); Henley Drilling Co. v. McGee, 36 F.3d 143, 150-151 (1st Cir. 1994); Santiago v. Canon U.S.A., Inc., 138 F.3d 1, 4-5 (1St Cir. 1998).

1. ALLOWED as to Count I (patent infringement);

2. DENIED as to Count II (misappropriation of trade secrets);

3. ALLOWED as to those parts of Count III (breach of contract) relating to express written and oral contracts; DENIED as to that part of Count III relating to the implied covenant of good faith and fair dealing;

4. ALLOWED as to Count IV (fraud and misrepresentation);

5. DENIED as to Count V (unjust enrichment); and

6. DENIED as to Count VI (Mass. Gen. Laws ch. 93A).