Legal Opinions - U.S. District Court, Maryland: October 20, 2008

Daily Record, The (Baltimore), Oct 20, 2008

In the end, the title agents retained a tremendous amount of discretion on a day-to-day basis in the provision of settlement and closing services, and were not acting primarily for the benefit of the title insurer in those activities. The agents were simply incapable of altering their legal relationships to the Title Companies under the terms of the title insurance policies and closing protection letters. Rather, the arguments advanced by the Homeowners illustrated precisely the relationship seen in National Mortgage and other cases in which the settlement agent wears two hats, only one of which -- his or her role in the provision of title insurance -- involves a general agency relationship with the title insurance company sufficient to establish vicarious liability to any plaintiff. Here, the Homeowners advanced no allegations that would permit a reasonable jury to conclude otherwise.

Finally, the Court also disagreed that the Maryland statutory requirement that title insurers perform annual reviews of their title agents alters the agency relationship for purposes of civil liability. Contrary to the Homeowners' assertions, the language in [section]10-121(j) does not "in clear, unambiguous terms...expand the agency relationship." Although [section]10-121(j) certainly imposes an oversight duty on title insurers, that provision neither creates a cause of action for its breach or otherwise makes the title insurer the guarantor of closing activities, nor encompasses the type of detailed oversight and responsibility inherent in a common law agency relationship.

PRACTICE TIPS: The Homeowners further alleged that the title companies were liable because they ratified the acts of their agents. Even if an agent acts outside the scope of the actual or apparent agency relationship, however, a principal is bound by the unauthorized acts of the agent if the transaction is not promptly rejected or is ratified in whole or in part. See Smith v. Merritt Sav. & Loan, Inc., 295 A.2d 474, 480 (Md. 1972).

The court granted the motions as to any claim based on a theory of ratification because the Homeowners failed to establish that the title insurers had knowledge of all material facts. See Webb v. Duvall, 11 A. 2d 446 (Md. 1940).

Intellectual Property

Patent infringement

BOTTOM LINE: District court denied cross-motions for summary judgment in declaratory judgment action where there were issues of material fact as to whether every element of patents-in-suit were infringed by pharmaceutical company.

CASE: Wyeth v. Lupin Ltd., USDMD No. WDQ-07-0632 (decided Sept. 29, 2008) (Judge Quarles).

FACTS: Wyeth sued Lupin Ltd. and Lupin Pharmaceuticals for patent infringement of United States Patent No.'s 6,274,171 B1 (claims 20- 25), 6,403,120 (claims 1 and 2), and 6,419,958 B2 (claims 1-6) under 35 U.S.C. [section]271(e) (Patents-in-Suit).

During the development of Effexor(R) XR, Deborah Sherman, a Wyeth employee, contacted Paul Shesky, an employee of Dow Chemical. Dow produces HPMC, which Sherman was working with in laboratory testing. Shesky gave Sherman advice as to which Dow products to use, given the experiment conditions described by Sherman. One of Shesky's suggested HPMC grades tested successfully, and Wyeth incorporated it into Effexor(R) XR. Sherman was cited as an inventor of all three patents-in-suit, but Shesky was not.