KLARQUIST NEWS
Klarquist Win for Oregon State University
At a hearing on October 23, the Benton County Circuit Court granted Klarquist’s motion to dismiss with prejudice a Complaint filed against its client Oregon State University, on the grounds that the Plaintiff, Vinoculate Inc., a California corporation, had its corporate powers suspended for failure to pay taxes about 8 months before it filed its Complaint, and the statute of limitations on its claim expired by the time its corporate powers were reinstated about two months after it filed its Complaint. The Court agreed with Klarquist’s argument that California law governed the effect of the reinstatement. It was undisputed that under California law reinstatement is without prejudice to any defense that may accrue during the suspension, including a statute of limitations defense. Plaintiff unsuccessfully argued that the California law does not apply to an Oregon statute of limitations raised in an Oregon court by an Oregon defendant in defense of a contract claim brought under Oregon law. The motion was argued by Jeff Love for OSU and Joe Mabe for Plaintiff.
The Plaintiff had previously filed the same claim against OSU in California state court, which granted Klarquist’s motion to dismiss based on lack of personal jurisdiction over OSU.
The merits, which neither court addressed, concerned OSU’s patented process for creating a vector for delivering into grapevines protection from certain diseases. The vector was a relatively benign grapevine virus that was genetically modified to protect the grapevines against more serious diseases. It was developed by OSU after over a decade of research and experimentation funded by the Plaintiff and its owners, who were major California vineyards. The Complaint essentially alleged that the symptoms caused by OSU’s vector in certain plants delivered to a potential business partner of the Plaintiff, a large California nursery, caused the potential business partner to walk away from the deal. Plaintiff alleged that OSU should have provided vectors that did not cause such symptoms, or should have warned Vinoculate earlier about the severity of the symptoms. OSU had several defenses to those claims that it was prepared to present in a summary judgment motion, including that at the outset of the research, OSU told Plaintiff that the research vectors made by OSU for research purposes may cause undesired symptoms, in which case Plaintiff should use OSU’s patented technology to make vectors from California viruses whose symptoms are tolerated by California vineyards. Another defense was that written agreements between OSU and Plaintiff state that OSU offers no warranty of merchantability or fitness for a particular purpose for the vectors. However, due to the dismissal on procedural grounds, OSU never filed a motion on the merits. An upside to the early dismissals is that OSU was never subjected to discovery, which its in house counsel and researchers appreciated.