Bob Gust recently argued the case of OmegaGenesis Corporation v. Mayo Foundation for Medical Education and Research before the United States Circuit Court for the Eighth Circuit. Arguing before the Court that is one-step removed from the United States Supreme Court is noteworthy enough, but this argument was held at the University of Minnesota Law School. Most appellate arguments take place only in front of court personnel and other lawyers, not in an auditorium designed to hold hundreds.
Curiously, this is not the first time Gust has argued in such an environment. Despite the fact that Courts infrequently take proceedings to law schools, Gust previously argued before the Nebraska Supreme Court at the University of Nebraska Law School. With respect to both experiences, he noted that: “The audience definitely increases the adrenaline level, and invariably results in judges wanting to spar more than normal in an effort to give the crowd a sense of what they might face as lawyers.”
The case involves a dispute regarding the development of technology related to angiogenesis, which it the manufacture of blood vessels. OmegaGenesis entered into a license agreement with the Mayo Foundation based on representations that the scientists at Mayo had independently developed the technology, but it was later learned that one of the scientists at Mayo had been a graduate assistant at a university in Israel when the discovery was originally made. The presence of the prior art resulted in a rejection of the patent application and OmegaGenesis brought suit. The only issue on appeal is whether the license agreement precludes such a claim because there is language indicating that OmegaGenesis did its own investigation and was not relying on the Mayo Foundation.
Minnesota law is clear that exculpatory clauses purporting to excuse misrepresentation or any other intentional tort are not enforceable. The clause in question was less blunt, but it amounted to an agreement that OmegaGenesis could not claim reliance – which is an essential element of a misrepresentation claim – so it had the exact same effect. Contract language that specifically contradicts the alleged misrepresentation can be sufficient to preclude a claim, but that is substantially different from a provision that merely contradicts the reliance element. Hopefully, the Court will agree.