Opinion ID: 765605
Heading Depth: 3
Heading Rank: 1

Heading: Construction of the 1989 Agreement and Its Breach

Text: 69 Appellants advance several arguments that the bankruptcy court erred in granting Cambridge's motion for summary judgment of noninfringement and that it abused its discretion in declaring Cambridge a sublicensee under the '391 and '496 patents. Appellants first argue that there are genuine issues of material fact regarding both the intent of the parties as to the recovery of rights clause ( 2.2) in the 1989 Agreement and the alleged breach of this provision. Appellants assert that fact-finding and consideration of parol evidence are necessary to resolve contractual ambiguity. Appellants further contend that the parties did not intend best efforts to require PSD to pursue the recovery of the HIV-2 license rights after Elf Sanofi, Inc. acquired Genetic, because 2.2 was limited to PSD's ongoing renegotiation of the 1984 BVD agreement with Genetic, i.e., there was no continuing obligation, as indicated by the term results in 2.2. See Joint App. at 1274 (DP represents that it is currently discussing such recovery with GENETIC SYSTEMS and will inform CBS [Cambridge] with the progress and results of such discussions). Secondly, appellants argue that the court abused its discretion in declaring that the '391 and '496 patents were licensed patents under the 1989 Agreement. Appellants assert that the bankruptcy court abused its discretion in applying the maxim equity treats as done that which in good conscience should be done because, more accurately, equity regards that as done which was agreed or directed to be done, thereby carrying out the intent of the parties. Here, appellants continue, PSD and Genetic did not agree, intend, or direct that PSD's best efforts obligation would continue after negotiations with Genetic failed. Moreover, appellants contend that the equities balance in favor of PSD in any case. 70 Cambridge responds that the 1989 Agreement raises no genuine issues of material fact because 2.2 is unambiguous, and under Massachusetts law it must be enforced according to its terms. Cambridge contends that appellants are attempting to use parol evidence to inject ambiguity into the contract as to the parties' intent, despite the presence of an integration clause, 8.2. 9 Cambridge further contends that there is no dispute as to the breach of 2.2, because doing nothing clearly breaches the best efforts clause. Lastly, Cambridge argues that the bankruptcy court properly granted equitable relief. Cambridge asserts that the bankruptcy court did look to the intent and meaning of the agreement and concluded that PSD had violated the best efforts clause. Cambridge additionally asserts that the bankruptcy court properly weighed the equities when it held for Cambridge. 71 Under Massachusetts law, 10 it is . . . elementary that an unambiguous agreement must be enforced according to its terms, see Schwanbeck v. Federal-Mogul Corp., 592 N.E.2d 1289, 1292 (Mass. 1992), and a court considers extrinsic evidence to discern intent only when a contract term is ambiguous, see Massachusetts Mun. Wholesale Elec. Co. v. Town of Danvers, 577 N.E.2d 283, 289 (Mass. 1991). Once the court assures itself that the written contract was intended by the parties to represent their complete agreement, parol evidence may not be considered. See Carlo Bianchi & Co., Inc. v. Builders' Equip. & Supplies Co., 199 N.E.2d 519, 524 (Mass. 1964); see also Tilo Roofing Co. v. Pellerin, 122 N.E.2d 460, 462 (Mass. 1954) (As the written agreement shows on its face that it was intended to set forth the entire agreement of the parties . . . its terms cannot be varied or supplemented by parol evidence.). 72 Upon reviewing the construction of the 1989 Agreement de novo, we agree with Cambridge that 2.2 is unambiguous and therefore that extrinsic evidence of the intent of the parties is not relevant. Paragraph 2.2 could not be clearer--the parties agreed that PSD was to exercise its best efforts to recover the rights to the '391 and '496 patents. Despite appellants' contention that the parties intended 2.2 to be limited to PSD's renegotiation of the 1984 BVD agreement, that provision sets no qualifications, time limits, or restrictions on PSD's efforts to recover the sublicensing rights to the patents, and we do not interpret the term results to impart any temporal limit on PSD's best efforts obligation. That portion of 2.2 simply states that PSD will report to Cambridge on the progress of its recovery of rights negotiations with Genetic. We see no reason to resort to any extrinsic evidence to assist in the interpretation of this unambiguous provision, especially in view of the integration clause, which indicates that the parties' intent is reflected within the four corners of the writing. See Tilo Roofing, 122 N.E.2d at 462. Thus, we agree with the bankruptcy court that the best efforts clause means, at the very least, that PSD had to make a serious and continuing effort to recover the rights to the patents at issue. 73 It is likewise clear that Institut Pasteur (via PSD) breached 2.2, because it is undisputed that PSD made no real effort to recover the rights at issue. See Macksey v. Egan, 633 N.E.2d 408, 414 (Mass. App. Ct. 1994) (stating that best efforts requires that the party put its muscles to work to perform with full energy and fairness the relevant express promises and reasonable implications therefrom). We therefore conclude that the bankruptcy court properly granted summary judgment in favor of Cambridge, as there was no genuine issue of material fact as to the intent of the parties regarding 2.2 or its breach. 74