Court Opinion

ID: 2964511
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:26:44.050914+00
Date Added: 2024-06-11T11:42:57.061155
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

        No. 96-2028

                   INSTITUT PASTEUR AND PASTEUR SANOFI DIAGNOSTICS,

                                     Appellants,

                                          v.

                            CAMBRIDGE BIOTECH CORPORATION,

                                      Appellee.

                                                     
                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                   [Hon. Nathaniel M. Gorton, U.S. District Judge]
                                              ___________________

                                                     
                                 ____________________

                                        Before

                                Cyr, Boudin and Lynch,

                                   Circuit Judges.
                                   ______________

                                                     
                                 ____________________

             Jeffrey D.  Sternklar, with  whom Michael  Gottfried and  Burns &
             _____________________             __________________      _______
        Levinson LLP were on brief for appellants. 
        ____________
             Joseph  F. Ryan,  with whom  Jeffrey L.  Jonas, Anthony  L. Gray,
             _______________              _________________  ________________
        Andrew P.  Strehle and  Brown, Rudnick, Freed  & Gesmer, P.C.  were on
        __________________      _____________________________________
        brief for appellee.

                                                     
                                 ____________________

                                   January 17, 1997
                                                     
                                 ____________________

                    CYR, Circuit Judge.    Unsuccessful in their intermedi-
                    CYR, Circuit Judge.
                         _____________

          ate appeal  to the district  court, Institut Pasteur  and Pasteur

          Sanofi Diagnostics [collectively:   "Pasteur"] again appeal  from

          the bankruptcy court order which confirmed the chapter 11 reorga-

          nization plan ("Plan") proposed by debtor-in-possession Cambridge

          Biotech  Corporation  ("CBC"),  the  holder of  two  licenses  to

          utilize  Pasteur  patents.   The  Plan provision  central  to the

          present dispute  calls for the sale of all CBC stock to a subsid-

          iary of bioMerieux Vitek, Inc. ("bioMerieux"), a major competitor

          of appellant Pasteur.  Finding no error, we affirm.

                                          I
                                          I

                                      BACKGROUND
                                      BACKGROUND
                                      __________

                    CBC  manufactures and sells retroviral diagnostic tests

          for detecting the human  immunodeficiency virus (HIV)  associated

          with  AIDS.   Its  HIV  diagnostics  division annually  generates

          approximately  $14  million in  revenues.    Institut Pasteur,  a

          nonprofit French foundation engaged in  AIDS-related research and

          development, owns various patented procedures for  diagnosing HIV

          Virus  Type 2  ("HIV2 procedures").   Pasteur  Sanofi Diagnostics

          holds  the  exclusive  right   to  use  and  sublicense  Institut

          Pasteur's patents.

                    In October  1989, CBC  and Pasteur entered  into mutual

          cross-license  agreements, whereby  each acquired  a nonexclusive

          perpetual  license to  use  some of  the  technology patented  or

          licensed by the other.   Specifically, CBC acquired the  right to

          incorporate Pasteur's  HIV2 procedures into  any diagnostic  kits

                                          2

          sold  by CBC in the United States, Canada, Mexico, Australia, New

          Zealand and elsewhere.1  

                    Each cross-license broadly  prohibits the licensee from

          assigning  or sublicensing  to others.   See  Royalty-Free Cross-
                                                   ___

          License, at   7.1; Royalty-Bearing Cross-License, at   8.1 ("[N]o

          other  person shall acquire or have  any right under or by virtue

          of this Agreement.").   Nevertheless, either  Pasteur or CBC  was

          authorized to "extend to its Affiliated Companies the benefits of

          this Agreement so  that such party shall  remain responsible with

          regard  [to] all [license] obligations."  Id.   1.4.  "Affiliated
                                                    ___

          Company"  is defined  as "an  organization which  controls or  is

          controlled  by a party or  an organization which  is under common

          control with a party." Id.
                                 ___

                    CBC  filed its chapter 11 petition on July 7, 1994, and

          thereafter continued to operate its retroviral diagnostic testing

          business   as  debtor-in-possession.    Its  reorganization  plan

          proposed that CBC assume both cross-licenses, see 11 U.S.C.   365
                                                        ___

          (executory  contracts),2  continue   to  operate  its  retroviral

          diagnostics  division  utilizing Pasteur's  patented  HIV2 proce-

          dures, and sell  all CBC stock  to a subsidiary of  bioMerieux, a

          giant  French  biotechnology  corporation  and  Pasteur's  direct

                                   
               ____________________

               1These cross-licenses expressly  provide that  Massachusetts
          law governs  their interpretation.    See Royalty-Free  Cross-Li-
                                                ___
          cense, at   9; Royalty-Bearing Cross-License, at   10. 

               2The  parties agree that  the cross-licenses  are "executory
          contracts,"  since substantial  performance remains  due by  both
          parties.   See Summit Inv. & Dev. Corp. v. Leroux (In re Leroux),
                     ___ ________________________    ______  ____________
          69 F.3d 608, 610 n.3 (1st Cir. 1995).

                                          3

          competitor in international biotechnology  sales.  Pasteur previ-

          ously had licensed bioMerieux to use its HIV2 procedures, but the

          earlier  license  related to  a  single  product manufactured  by

          bioMerieux (i.e., bioMerieux's  VIDAS automated immunoassay  test
                      ____

          system),  and applied only to  VIDAS sales in  markets other than
                                                                 _____ ____

          the United  States, Canada,  Mexico, Australia, and  New Zealand,

          markets expressly encompassed within the CBC cross-licenses.  

                    Not surprisingly, in due course Pasteur objected to the

          Plan.  Citing  Bankruptcy Code    365(c), 11 U.S.C.    365(c), it

          contended  that the  proposed sale of  CBC's stock  to bioMerieux

          amounted  to CBC's  assumption of  the patent  cross-licenses and

          their  de facto "assignment" to a third party in contravention of
                 __ _____

          the presumption  of  nonassignability  ordained  by  the  federal

          common law of patents, as  well as the explicit  nonassignability

          provision  contained in  the cross-licenses.   Isabelle  Bressac,

          Pasteur's licensing  director,   attested that Pasteur  would not

          have  granted  its competitor,  bioMerieux,  or  a subsidiary,  a

          patent license under the terms allowed CBC.   
                                                      

                    The  bankruptcy  court  authorized  CBC  to  assume the

          cross-licenses  over  Pasteur's objection.    It  ruled that  the

          proposed sale of  CBC stock to bioMerieux did not constitute a de
                                                                         __

          facto  "assignment"  of  the cross-licenses  to  bioMerieux,  but
          _____

          merely  an assumption  of the  cross-licenses by  the reorganized

          debtor  under new  ownership, and  that Bankruptcy Code    365(c)

          enabled CBC to assume the cross-licenses  as debtor-in-possession

          because  the prepetition  licensing relationship  between Pasteur

                                          4

          and CBC was neither "unique" nor "something in the category of  a

          personal services contract."  In  re Cambridge Biotech Corp., No.
                                        ______________________________

          94-43054, slip op. at 17-18, 24 (Bankr. D. Mass. Sept. 18, 1996);

          Tr.  176-77.3   The district  court upheld  the  bankruptcy court

          ruling on intermediate appeal. 

                                          II
                                          II

                                      DISCUSSION
                                      DISCUSSION
                                      __________

          A.   Appellate Jurisdiction
          A.   Appellate Jurisdiction
               ______________________

                    Citing  our decision  in  Rochman  v. Northeast  Utils.
                                              _______     _________________

          Serv.  Group (In re Public Serv. Co.  of N.H.), 963 F.2d 469 (1st
          ____________  _______________________________

          Cir.) ("Public Service"), cert. denied,  506 U.S. 908 (1992), CBC
                  ______________    _____ ______

          now moves to dismiss  the appeal for lack of  appellate jurisdic-

          tion.   It contends that  Pasteur failed to  pursue all available

          remedies  for preserving  a  temporary stay  of the  confirmation

          order pending appeal after  this court lifted the temporary  stay

          on October 9,  1996.4  See  Trone v. Roberts  Farms, Inc. (In  re
                                 ___  _____    ____________________  ______

          Roberts Farms, Inc.), 652  F.2d 793, 798 (9th Cir.  1981) (noting
          ___________________

          that appellant should  file motion to stay  judgment with Circuit

                                   
               ____________________

               3The bankruptcy court  further found that the  Plan had been
          proposed  in good faith, see 11 U.S.C.   1129(a)(3), and that the
                                   ___
          stock sale to bioMerieux had been negotiated in good faith and at
          arm's  length.  In re Cambridge Biotech Corp., No. 94-43054, slip
                          _____________________________
          op. at 7, 12.

               4A series of stays had  prevented CBC from consummating  the
          Plan  by August 2, 1996,  as scheduled, and  a final consummation
          date was set  for October 31, 1996.  In  early October, CBC asked
          this  court to  vacate the  pending stay,  claiming that  further
          delay threatened irreparable injury.   It represented that almost
          half its  employees had quit  during the preceding  year, jittery
          clients  had begun to cancel contracts, and that its revenues had
          declined by 10%.

                                          5

          Justice if  necessary).  Since CBC  substantially consummated its
                                                            ___________

          Plan on October 21, 1996, it argues that Pasteur can no longer be

          afforded  complete  relief because  neither  this  court nor  the

          bankruptcy  court has  jurisdiction over  the many  third parties

          affected by, and  much of  the res distributed  pursuant to,  the
                                         ___

          consummated  Plan.  Finally, CBC argues, no court can now provide

          Pasteur with meaningful partial relief, such as selective rescis-

          sion of the stock sale or the cross-license assumption/assignment

          provisions, because  retention of these cross-licenses  by CBC is

          indispensable to any successful reorganization  of its retroviral

          diagnostics business,  and,  from bioMerieux's  standpoint, is  a

          "deal-busting" component  of  the  Plan.   See  Plan     IX.B.2.a
                                                     ___

          ("[P]rovisions of  the Confirmation  Order  are nonseverable  and

          mutually dependent.").  We disagree.

                    Contrary  to  CBC's   suggestion,  our  Public  Service
                                                            _______________

          decision does not reduce  to the simplistic theme  that appellate

          courts  invariably are deprived  of jurisdiction by  the lack (or

          premature  dissolution) of  a stay  which results  in substantial

          plan  consummation  prior to  final  disposition  of the  appeal.

          Rather, we rested our decision in Public Service primarily on two
                                            ______________

          circumstantial considerations.  See  In re Andreuccetti, 975 F.2d
                                          ___  __________________

          413, 418 (7th  Cir. 1992)   (noting that  Public Service  contem-
                                                    ______________

          plates that "'[t]he court should reach a determination upon close

          consideration  of the relief sought in light  of the facts of the

          particular case'") (citation omitted).  

                    First, the equities weighed heavily against the  appel-

                                          6

          lants in  Public Service, who repeatedly  and inexplicably failed
                    ______________

          to avail themselves of interlocutory appeals from earlier denials

          of their requests for stay by the courts below.  As a consequence

          of their notable  lack of  diligence, a full  sixteen months  had

          elapsed from the date  of confirmation, during which "implementa-

          tion of the confirmed plan proceeded apace."  In re Public Serv.,
                                                        __________________

          963  F.2d at 472.  In contrast, Pasteur assiduously preserved its

          stay throughout  the three-month  period which  elapsed following

          confirmation, and, on the day  this court dissolved the temporary

          stay, we expedited the Pasteur appeal. 

                    Second, Public Service involved  extraordinarily intri-
                            ______________

          cate Plan  provisions, as well  as a multi-billion  dollar enter-

          prise,  with  the  result  that any  attempted  Plan  dismantling

          following  the  substantial  and unexcused  lapses  by appellants

          would have produced "'a  nightmarish situation for the bankruptcy

          court on remand.'"   Id.  at 474 (citation  omitted); see,  e.g.,
                               ___                              ___   ____

          Baker & Drake, Inc. v. Public Serv. Comm'n of Nev., 35 F.3d 1348,
          ___________________    ___________________________

          1351-52 (9th  Cir.  1994) (finding  appellate  jurisdiction,  and

          noting that  reorganization plan  at  issue was  "not a  complex,

          billion-dollar affair"  like the plans  in Trone and  Public Ser-
                                                     _____      ___________

          vice).  Although  the CBC Plan is  not without its  own complexi-
          ____

          ties,  CBC is a much less complex enterprise than Public Service,

          and its Plan was substantially consummated much  more recently in

          relation to the date of appeal.5         
                                   
               ____________________

               5The  equitable  and  pragmatic  tests  employed  in  Public
                                                                     ______
          Service are  symbiotic.  See In  re UNR Indus., 20  F.3d 766, 769
          _______                  ___ _________________
          (7th Cir.), cert. denied, 115 S. Ct. 509 (1994) ("There  is a big
                      _____ ______

                                          7

                    We need not resolve  the jurisdictional challenge urged

          upon us by CBC, however, since the merits of Pasteur's contention

              that CBC's assumption of  the cross-licenses and  its sale of

          stock to  the bioMerieux subsidiary contravene  Bankruptcy Code  

          365(c)     are readily dispatched.  See Casco N. Bank. N.A. v. DN
                                              ___ ___________________    __

          Assocs.  (In re  DN  Assocs.), 3  F.3d 512,  515 (1st  Cir. 1993)
          _______   __________________

          (noting that  appellate court may bypass jurisdictional questions

          where appeal  would falter on merits  even assuming jurisdiction)

          (citing Norton v. Mathews, 427 U.S. 524, 532 (1976)).
                  ______    _______

          B.   The Merits6
          B.   The Merits
               __________

                    Pasteur argues  that the  CBC Plan  effects a  de facto
                                                                   __ _____

          assignment of  its two cross-licenses to  bioMerieux, contrary to

          Bankruptcy Code   365(c)(1) which provides as follows: 

                    The trustee  [viz., CBC]7  may not assume  or
                                  ____
                    assign any executory contract . . . , whether
                    or not such contract  . . . prohibits or  re-
                    stricts assignment of rights or delegation of
                    duties, if    

                         (1)(A) applicable law excuses  a party[]
                         other than the debtor[]  [viz., Pasteur]
                                                   ____
                         to  such contract .  . .  from accepting
                                   
               ____________________

          difference between inability to alter the outcome (real mootness)
          and unwillingness to  alter the outcome  ('equitable mootness'),"
          and "[u]sing one  word for two  different concepts breeds  confu-
          sion"; instead, appellate courts  ultimately must ask "whether it
          is  prudent  to upset  the plan  of  reorganization at  this late
          date.") (citations omitted). 

               6We review the district court's  conclusions of law de  novo
                                                                   __  ____
          and the bankruptcy court's findings of fact for clear error only.
          See Petit v. Fessenden, 80 F.3d 29, 32 (1st Cir. 1996).
          ___ _____    _________

               7As  debtor-in-possession,  CBC has  substantially  the same
          rights and powers as a chapter 11 trustee, including the power to
          assume executory contracts under  Bankruptcy Code   365.   See 11
                                                                     ___
          U.S.C.   1107.

                                          8

                         performance  from  or rendering  perfor-
                         mance to an entity other than the debtor
                         or the debtor in possession,  whether or
                         not such contract . . . prohibits or re-
                         stricts assumption or assignment; and 

                         (B)  such party [viz., Pasteur] does not
                                          ___
                         consent to such assumption or assignment
                         . . . .

          11 U.S.C.   365(c)(1). 

                    Pasteur  argues that  in  order  to  encourage  optimum

          product  innovation the  federal common  law of  patents presumes

          that patent licensees, such  as CBC, may not sublicense  to third

          parties absent  the patent holder's consent.   See, e.g., Commis-
                                                         ___  ____  _______

          sioner v. Sunnen, 333 U.S. 591, 609  (1948).  This federal common
          ______    ______

          law  rule of  presumptive nonassignability  thus qualifies  as an

          "applicable  law,"  within  the  meaning  of  Bankruptcy  Code   

          365(c)(1)(A),  which precludes  Pasteur from  being  compelled to

          accept  performance  from  any entity  other  than  CBC     e.g.,
                                                                      ____

          bioMerieux's subsidiary    and therefore prevents CBC from either
                                                                     ______

          assuming  or assigning  these cross-licenses.   See  Everex Sys.,
                    __                                    ___  ____________

          Inc.  v. Cadtrak  Corp. (In re  CFLC, Inc.), 89  F.3d 673, 679-80
          ____     ______________  _________________

          (9th Cir. 1996) (federal  patent law of nonassignability preempts

          state law  relating to  patent license assignability).   Further,

          says Pasteur,  even assuming that  section 365(c)  might allow  a

          debtor simply  to assume the cross-licenses  without a subsequent
                                                       _______ _ __________

          assignment  to a third  party, CBC formally  structured this Plan
          __________                         ________

          transaction as an assumption by the debtor-in-possession, whereas

          in  substance  it  was an  assignment  of  the cross-licenses  to
          __  _________

          bioMerieux, a  complete stranger to  the original cross-licensing

                                          9

          agreements. 

                    These  contentions are  foreclosed by  our decision  in

          Summit Inv.  & Dev. Corp. v.  Leroux (In re Leroux),  69 F.3d 608
          _________________________     ______  ____________

          (1st  Cir.  1995),8  which  analyzed  and  interpreted  companion

          Bankruptcy  Code subsections  365(c) and  (e) and  their relevant

          legislative history.9  As in the present case, in  Leroux we were
                                                             ______

          urged  to  interpret subsections  365(c) and  (e) as  mandating a

          "hypothetical  test."   Under such  an  approach, the  chapter 11

          debtor  would lose its option to assume the contract, even though
                                           ______

          it  never intended to assign  the contract to  another entity, if

          either  the  particular  executory  contract  or  the  applicable

          nonbankruptcy law  purported to terminate  the contract automati-

          cally  upon the filing of the chapter  11 petition or to preclude

          its assignment to an  entity not a party to the contract.  Id. at
                                                                     ___

          612.   

                    We rejected  the proposed hypothetical test  in Leroux,
                                                                    ______

          holding  instead that  subsections 365(c)  and (e)  contemplate a

          case-by-case inquiry  into  whether the  nondebtor  party  (viz.,
                                                                      ____
                                   
               ____________________

               8See  Williams v. Ashland Eng'g  Co., 45 F.3d  588, 592 (1st
                ___  ________    __________________
          Cir.) ("In  a multi-panel circuit, newly  constituted panels are,
          for  the most  part, bound  by prior  panel decisions  closely on
          point."), cert. denied, 116 S. Ct. 51 (1995).
                    _____ ______

               9Bankruptcy Code   365(e)(2)(A) provides that a statutory or
          contractual termination  provision, which is  contingent upon the
          filing of a bankruptcy petition, may be enforceable in bankruptcy
          if the "applicable law excuses a party, other than the debtor, to
          such contract or lease from accepting performance from or render-
          ing performance to the trustee or to an assignee of such contract
                          __ ___ _______ __ __ __ ________
          or  lease, whether  or not  such contract  or lease  prohibits or
          restricts assignment of rights or delegation of duties;  and (ii)
          such  party does not consent to such assumption or assignment . .
          . ."  11 U.S.C.   365(e)(2)(A) (emphasis added).

                                          10

          Pasteur) actually  was being "forced to  accept performance under
                   ________

          its executory contract  from someone other than  the debtor party

          with whom it originally  contracted."  Id.  Where  the particular
                                                 ___

          transaction  envisions that the debtor-in-possession would assume

          and  continue to perform  under an executory  contract, the bank-

          ruptcy court  cannot simply presume  as a matter of  law that the

          debtor-in-possession is a legal  entity materially distinct  from
                                                  __________

          the  prepetition  debtor with  whom  the  nondebtor party  (viz.,
                                                                      ____

          Pasteur) contracted.  Id.  at 613-14 (citing H.R. Rep.  No. 1195,
                                ___

          96th  Cong.,  2d  Sess.      27(b)  (1980);  NLRB  v.  Bildisco &
                                                       ____      __________

          Bildisco, 465 U.S. 513,  528 (1984)).  Rather, "sensitive  to the
          ________

          rights of  the nondebtor  party (viz., Pasteur),"  the bankruptcy
                                           ____

          court  must focus on the  performance actually to  be rendered by

          the  debtor-in-possession  with  a  view  to  ensuring  that  the

          nondebtor party (viz., Pasteur) will receive "the full benefit of
                           ___

          [its] bargain."   Id.  at 612-13  (citing S.  Rep. No.  989, 95th
                            ___

          Cong., 2d Sess.  59 (1978), reprinted in 1980  U.S.C.C.A.N. 5787,
                                      _________ __

          5845). 

                    Given the pragmatic  "actual performance" test  adopted

          in Leroux, the ultimate  findings of fact and conclusions  of law
             ______

          made by  the bankruptcy court10  below did not  constitute error.

          CBC simply does  not occupy the  same position  as the debtor  in

          CFLC,  Inc.,  89 F.3d  673 (9th  Cir.  1996), upon  which Pasteur
          ___________
                                   
               ____________________

               10We  are not  persuaded  by Pasteur's  contention that  the
          failure to cite Leroux  in the confirmation order  indicates that
                          ______
          the bankruptcy court failed  to follow it.  Pasteur  itself cited
          Leroux  at the July 1996 confirmation hearing, and the bankruptcy
          ______
          court's ultimate findings faithfully track its model. 

                                          11

          relies most heavily.  The Plan in CFLC, Inc. unmistakably provid-
                                            __________

          ed for an outright  assignment of the debtor's patent  license to
                              __________

          an entirely  different corporation  with which the  patent holder

          Cadtrak Corporation had  never contracted.   Id. at  679-80.   By
                                                       ___

          contrast, CBC all along has conducted, and  proposes to continue,

          its retroviral diagnostic enterprise as the same corporate entity

          which  functioned prepetition,  while  utilizing  Pasteur's  HIV2

          procedures in that same prepetition endeavor.  

                    Pasteur nonetheless insists that the reorganized CBC is

          different than  the prepetition  entity,  not due  merely to  its

          chapter 11 filing  but because  it is  now owned  by a  different
                                                     _____  __

          legal entity  than before    namely,  bioMerieux's subsidiary qua
                                                                        ___

          CBC shareholder.  Pasteur's contention finds no support, however,

          either in Massachusetts law, see  supra note 1, or in the  cross-
                                       ___  _____

          license provisions it negotiated. 

                    Stock sales are not  mergers whereby outright title and

          ownership of  the  licensee-corporation's assets  (including  its

          patent licenses) pass to the acquiring corporation.  Rather, as a

          corporation, CBC "is a legal entity distinct from its  sharehold-

          ers." Seagram  Distillers  Co.  v.  Alcoholic  Beverages  Control
                ________________________      _____________________________

          Comm'n, 519 N.E.2d  276, 281  (Mass. 1988) (citing  6 William  M.
          ______

          Fletcher, Cyclopedia of Corporations   2456 (1979 & Supp. 1986)).

          Absent compelling  grounds for  disregarding its  corporate form,

          therefore, CBC's  separate legal  identity, and its  ownership of

          the  patent cross-licenses, survive without interruption notwith-

          standing repeated and even drastic changes in its ownership.  See
                                                                        ___

                                          12

          id.  (holding that  corporation's sale of  all its  capital stock
          ___

          does  not  alter  its identity,  nor  effect  a  transfer of  the

          corporation's  executory  contracts or  licenses);  see  also PPG
                                                              ___  ____ ___

          Indus.  v. Guardian Indus. Corp., 597 F.2d 1090, 1096 (6th Cir.),
          ______     _____________________

          cert. denied, 444 U.S. 930 (1979) (same; distinguishing mere sale
          _____ ______

          of  stock from a transfer of  patent license as part of corporate

          merger wherein  merging licensee  ends its corporate  existence).

          Pasteur cites no apposite authority to the contrary.

                    Furthermore, Pasteur's position finds no support in the

          negotiated  terms of its cross-licenses.  As the patent holder   

          and given  CBC's corporate  form and the  governing Massachusetts

          law, supra    Pasteur was free to negotiate restrictions on CBC's
               _____

          continuing rights  under the  cross-licenses based on  changes in

          its  stock ownership  or  corporate control.    See id.  at  1095
                                                          ___ ___

          (parties may override law of merger by negotiating express patent

          license  provision); see  also Seagram,  519 N.E.2d  at 280-81.11
                               ___  ____ _______

          Nevertheless,  these cross-licenses  contain no  provision either

          limiting  or terminating  CBC's  rights in  the  event its  stock

          ownership  were to  change hands.   The  generic nonassignability

          provisions found in these cross-licenses, see, e.g., Royalty-Free
                                                    ___  ____

          Cross-License,  at    7.1 ("This  Agreement .  . . has  been made

          solely  for  the benefit  of the  parties  hereto" and  "no other

          person shall acquire or have any right under or by virtue of this
                                   
               ____________________

               11Notwithstanding Pasteur's reliance on the important policy
          goals animating the federal  common law of patents,  the product-
          innovation  theme promoted under patent law  may well be accommo-
          dated by allowing patent  holders to control sublicensing through
                                                                    _______
          negotiated contract restrictions. 
          __________ ________ ____________

                                          13

          Agreement."), plainly  do not address the  circumstance presented

          here.   Rather, these nonassignability provisions  simply beg the

          essential question, which is whether  bioMerieux's subsidiary, by

          virtue  of its acquisition of  CBC stock, terminated CBC's rights
                                                               ___

          under the cross-licenses.  Interpreted as Pasteur proposes, CBC's

          own  rights under  the  cross-licenses would  terminate with  any
                                                                        ___

          change in the identity of any CBC stockholder.  

                    Other   cross-license   provisions  directly   undercut

          Pasteur's interpretation as well.  See Willitts v. Roman Catholic
                                             ___ ________    ______________

          Archbishop of Boston,  581 N.E.2d 475,  478 (Mass. 1991)  (noting
          ____________________

          that a contract  must be interpreted as  a whole).  These  cross-

          licenses  explicitly authorize  CBC to  share its  license rights

          with  any  "affiliated company,"  which  on  its face  presumably

          encompasses a parent corporation such as bioMerieux's subsidiary.

          Cross-Licenses, at    1.4  (defining "Affiliated Company"  as "an

          organization  which controls  . .  . a  party or  an organization

          which is under common  control with a party"); see  supra Section
                                                         ___  _____

          I.  Yet  more importantly,  CBC insisted upon  a provision  which

          would afford it the unilateral right to terminate any  sublicense

          Pasteur  might extend  to a  company called  Genetic Systems  "if

          control of Genetic Systems shall .  . . be acquired, directly  or

          indirectly, by  any  person  or group  of  connected  persons  or

          company not having  such control  at the date  hereof, by  recon-

          struction,  amalgamation,  acquisition  of  shares or  assets  or
                                     ___________  __  ______             __

          otherwise."    Royalty-Free  Cross-license,  at    2.3  (emphasis
          _________

          added);  see PPG  Indus., 597  F.2d at  1096 (noting  that patent
                   ___ ___________

                                          14

          holder's express reservation of  change-of-stock-ownership condi-

          tion  in  two patent  licenses  suggested  its intention  not  to

          reserve  condition  in  nine  other patent  licenses);  see  also
                                                                  ___  ____

          Plumbers & Steamfitters Local 150 v. Vertex Constr. Co., 932 F.2d
          _________________________________    __________________

          1443, 1449 (11th Cir. 1991)  ("[T]he doctrine of expressio  unius
                                                           _________  _____

          est  exclusio alterius  instructs that  when certain  matters are
          ___  ________ ________

          mentioned in a contract, other similar matters not mentioned were

          intended  to be  excluded.").   Taken together,  these provisions

          persuade  us  that Pasteur  foresaw,  or  reasonably should  have

          foreseen, that CBC might undergo changes of stock ownership which

          would  not alter  its corporate  legal identity,  but nonetheless

          chose  not to  condition  the continued  viability of  its cross-

          licenses accordingly.12 
                                   
               ____________________

               12Lastly, Pasteur  misplaces  reliance upon  In  re  Alltech
                                                            _______________
          Plastics, Inc., 5 U.S.P.Q.2d 1806 (Bankr. W.D. Tenn. 1987), where
          ______________
          it  was held that section  365(c) precluded an  entity, which had
          acquired the corporate  debtor's stock pursuant  to a chapter  11
          reorganization plan, from exercising  the debtor's rights under a
          prepetition  patent license.    Following the  conversion of  its
          original  chapter 11 reorganization case  to a chapter 7 liquida-
          tion, Alltech  discontinued  all operations  and  discharged  its
          employees.  Before the debtor once again converted to chapter 11,
          its trustee  liquidated virtually all its assets,  except for its
          patent license.  Noting  that plan confirmation is a  fact-inten-
          sive,  equity-based inquiry,  id. at  1813, the  bankruptcy court
                                        ___
          characterized the sale of  Alltech's stock to Fluoropak Container
          Corporation as a de facto assignment  of the patent license to  a
                           __ _____
          noncontracting party.  It so held because unlike CBC, Alltech had
                                                    ______ ___
          ceased to exist except as a "shell."   Id. at 1807 & 1810 (noting
                                                 ___
          that "shell" emerging after Alltech's chapter 7 conversion "is in
          reality  a different entity  than the prepetition  Debtor").  The
          bankruptcy   court  specifically  observed  that  the  "attempted
          innovative rebirth of  a corporate  shell is not  analogous to  a
          sale of stock by an active corporation," id. at 1810-11, and that
                                                   ___
          "the present case is distinguished from  one where the reorganiz-
          ing debtor, operating continuously and in good standing  with its
          licensor,  seeks to  approve the  sale of its  stock [to  a third
          party],"  id. at 1812.   The bankruptcy court  further noted that
                    ___

                                          15

                                         III
                                         III

                                      CONCLUSION
                                      CONCLUSION
                                      __________

                    As  CBC  remains in  all  material  respects the  legal

          entity with which Pasteur freely contracted, Pasteur has not made

          the required individualized  showing that  it is or  will be  de-

          prived of "the full benefit of [its] bargain," Leroux, 69 F.3d at
                                                         ______

          612-13, under the ruling challenged on  appeal.  Accordingly, the
                                                                        ___

          district  court judgment  is affirmed  and  costs are  awarded to
          _________________________________________________________________

          appellee.
          ________

                    So ordered.
                    So ordered.
                    __________

                                   
               ____________________

          the lack of demonstrated  expertise on the part of  Fluoropak, in
          utilizing  the  patented  process to  manufacture  toxic-material
          containers, likewise  posed a  serious public safety  risk.   Id.
                                                                        ___
          These distinguishing circumstances make Alltech inapposite.
                                                  _______

                                          16