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Baseload Energy, Inc. v. Roberts

September 17, 2009

BASELOAD ENERGY, INC., PLAINTIFF,
v.
BRYAN W. ROBERTS, DEFENDANT.



The opinion of the court was delivered by: Paul L. Friedman United States District Judge

OPINION

Plaintiff Baseload Energy, Inc. ("Baseload"), filed this action seeking a declaratory judgment that a patent owned by defendant Bryan W. Roberts is invalid and unenforceable under federal law. This matter is before the Court on Mr. Roberts' motion for summary judgment, third party Sky WindPower Corporation's ("SWPC") motion to intervene as a defendant, and Baseload's motion to stay the motion to intervene and for leave to take discovery.*fn1 After consideration of the parties' claims and arguments, the Court will grant Mr. Roberts' motion for summary judgment and deny the remaining motions as moot.*fn2

I. BACKGROUND

This action represents the second round of litigation between these parties or their affiliates concerning the device they term a "flying electric generator" ("FEG"). Compl. ¶¶ 7-14; Mot. Summ. J. 2. The FEG is a harvester of wind power, a platform designed to hover in the air at high altitudes and to use wind to generate mechanical energy, which in turn is transformed into electricity. Compl. Ex. 1 at 4. Mr. Roberts owns U.S. Patent No. 6,781,254 ("the '254 patent"), which covers a refinement of the FEG that can remain stable and suspended in the air even in the absence of wind. Id. Mr. Roberts founded SWPC, the would-be intervenor in this action, for the purpose of reproducing and marketing the FEG. Compl. ¶ 9.

On May 4, 2007, Baseload's predecessor, Sky Power, and David Resnick, owner first of Sky Power and now of Baseload, filed suit ("the 2007 litigation") in the United States District Court for the Southern District of California against SWPC and Mr. Roberts, among others. See Roberts Decl. Ex. 1 at 1; Compl. ¶¶ 9-11. Mr. Resnick and Sky Power brought claims for, inter alia, anticipatory breach of contract and promissory estoppel. Roberts Decl. Ex. 1 at 1. They alleged that Mr. Roberts and SWPC had reneged on an agreement with the plaintiffs to create a new business for commercializing FEG technology, to transfer the '254 patent to that business, and to appoint Mr. Resnick the CEO of the new firm. See id. at 3-9; Compl. ¶¶ 10-11. The complaint included no allegations of patent invalidity.

To bring an end to that prior round of litigation, SWPC, Sky Power, Baseload, Mr. Roberts, and Mr. Resnick, among others, entered into a settlement agreement dated March 19, 2008 ("the 2008 Settlement Agreement"). See Roberts Decl., Ex. 2. The Agreement provided that the pending claims against Mr. Roberts and SWPC would be discharged, and that Mr. Roberts would grant Baseload an option to acquire a nonexclusive license to use the technology claimed by the '254 and other FEG-related patents at a price of $1.75 million. Compl. ¶¶ 11-12. It also contained the following release provision:

3. Resnick Parties' Release. Resnick, SPLLC [Sky Power], BEI [Baseload], and Grenier,*fn3 on behalf of themselves, any entity in which any of them has an interest and any employee, affiliate, or co-owner of any such entity, and their respective spouses, agents, partners, members, representatives, heirs, attorneys, shareholders, officers, directors, employees, affiliates, parents, subsidiaries, successors and assigns (collectively, "Resnick Parties"), forever release and discharge Shepard,*fn4 the Shepard estate, SWPC and Roberts, any entity in which any of them has an interest and any employee, affiliate or co-owner of such entity, and their respective predecessors, successors and present or former affiliates and their respective spouses, agents, members, representatives, heirs, attorneys, shareholders, officers, directors, employees, affiliates, parents, subsidiaries, successors and assigns (collectively, "SWPC Parties"), of and from any and all losses, liabilities, claims, expenses, demands and causes of action of every kind and nature, known and unknown, suspected and unsuspected, disclosed and undisclosed, fixed and contingent, whether direct or by way of indemnity, contribution or otherwise, that the Resnick Parties ever had, now have, or hereafter may have or be able to assert against the SWPC Parties by reason of any matter, cause or circumstance whatsoever arising or occurring prior to and including the date of this Agreement, as stated in its first sentence, that arise from or relate in any way, directly or indirectly, to SWPC, the Resnick Action, the Grenier Action or any plan or effort to research or develop a flying electric generator ("FEG").

Settlement Agreement ¶ 3. Paragraph 4 of the Agreement contained a similar release of all claims that could be brought by Mr. Roberts and/or SWPC against Mr. Resnick, Baseload, or Sky Power. See id. ¶ 4. Paragraph 5 of the Agreement expanded the scope of the release provisions as follows:

5. Section 1542 Waiver. Each party acknowledges that additional or different facts may be discovered of which he or she is unaware and states that he or it intends nevertheless fully, finally and forever to release all claims within the scope of paragraphs 3 and 4 above notwithstanding the discovery of such additional or different facts. Each party is aware of and hereby waives to the fullest extent permitted by law the benefit of California Civil Code 1542, which reads as follows:

"A general release does not extend to claims which the creditor does not know or expect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor."

and any other statute, rule or law that might limit the generality or binding effect of a release in accordance with its terms. Anything herein to the contrary notwithstanding, the releases given in paragraphs 3 and 4 shall not cover or extend to any losses, liabilities, claims, expenses, demands and/or causes of action arising from or relating to the breach by any party of this Agreement or Exhibits C or D attached thereto.

Settlement Agreement ¶ 5. And Paragraph 6 provided:

6. No Other Claims. The parties hereto represent and warrant that they are aware of no right or claim, and no fact that might give rise to a right or claim, against a released party or his or its related persons and entities referred to in paragraphs 3 or 4 above that this Agreement does not effectively release.

Settlement Agreement ΒΆ 6. Pursuant to a joint stipulation of the parties, the claims brought against SWPC and Mr. Roberts in the Southern District of California were dismissed by ...


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