Biolitec, Inc. v. AngioDynamics, Inc.

Biolitec, Inc. (plaintiff) and AngioDynamics, Inc. (defendant) sued each other in different courts almost simultaneously. Under a supply-and-distribution agreement, Biolitec sold AngioDynamics fiber and laser products that AngioDynamics resold to third parties. If a third party claimed the products infringed patents, the agreement required Biolitec to defend AngioDynamics at its expense or reimburse AngioDynamics for doing so. The agreement also required the companies to indemnify each other for losses, including if Biolitec incurred losses arising from AngioDynamics modifying the products without authorization. A company called Diomed sued AngioDynamics for patent infringement based in part on selling modified Biolitec products. Although Biolitec contributed $1.6 million to AngioDynamics’ defense, the jury awarded Diomed over $9 million. Meanwhile, another company, VNUS, also sued AngioDynamics for patent infringement. On January 2, 2008, AngioDynamics sued Biolitec in New York federal court seeking indemnity for both patent-infringement lawsuits but did not serve Biolitec with a copy of the summons and complaint until January 15. On January 11, Biolitec sued AngioDynamics in Massachusetts federal court to recover the $1.6 million. Biolitec served AngioDynamics on January 14, the day before AngioDynamics served Biolitec. AngioDynamics moved to dismiss or transfer the lawsuit to the New York federal court, arguing an action involving the same transaction and parties was already pending. Meanwhile, Biolitec answered the New York suit, counterclaimed for the $1.6 million, and requested a declaration as to the parties’ payment obligations in both patent-infringement lawsuits. The court referred AngioDynamics’ motion to a magistrate judge before adopting the magistrate’s recommendation as its opinion.