Quite often Employees and Employers engage in oral discussions relating to their employment terms. Often oral statements are made relating to qualifications, experience, relocation expenses, length of employment, compensation and a variety of similar matters. Employers have been routinely allowed to use any false statements about an Employee’s qualifications and/or experience to justfy a subsequent discharge.
Now, Illinois Courts are recognizing that an Employee has a basis to assert fraudulent inducement based on oral misrepresentations. Illinois courts are finding a scheme to defraud based on oral statements (saying no demotion) and actions that indicate the opposite intent by an Employer (having the demotion papers being processed at the same time). See. Kamboj v. Eli Lilly and Co., 2007 WL 178434 (N.D. Ill. 2007) (promise of a certain job title and a certain range of salary/benefits prevented a summary judgment on the employee’s claim) and Quake Construction Inc. v. American Airlines Inc., 141 Ill. 2d 281, 565 N.E.2d 990 (1990).
Thus, Employers should be more cautious about what they may say to Employees during the hiring process. A misstatement may tie up the Employer in litigation that could have been avoided. On the other hand, Employees now, have a means of recourse for oral misstatements by Employers.
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In a recent case, the Federal Circuit held that Innova’s use of a patented system and device to measure the spray characterization of inhaler devices was not protected under the FDA Exemption. The Federal Circuit affirmed the district court’s decision based on the fact that Proveris’ ‘400 patent was not itself subject to FDA approval.
In other words, although the sprayer device was used on products that are subject to FDA approval, since the sprayer device (Optical Sprayer Analyzer) is not subject to FDA approval it cannot be covered by the FDA exemption. The Court reasoned that the OSA was not subject to the distortion effect of the FDA approval process, thus it cannot be covered under the FDA exemption.
Innova was not seeking to create a product that competes with the OSA and the OSA does not require FDA approval, thus Innova’s use of the OSA cannot be protected under the FDA exemption. The Federal Circuit relied heavily on the perfect product fit between 156 (f) and 271 (e) (1) discussed in Lilly v. Medtronic by the Supreme Court.
The reasoning seems sound and gives new hope to owners of bio tech research tool patents, to the extent that their claimed inventions are not subject to FDA approval. However, it may raise questions about tying products requiring FDA approval with products that are not subject to FDA approval.
Here is the case proveris-v-innovasystems. Enjoy!!