## Facts

- A patent owner granted Cook Inc. and Boston Scientific Corp. (BSC) coexclusive worldwide licenses to use and sublicense (to affiliates) a drug (paclitaxel) solely for use on arterial stents.
- The license agreement barred either licensee from assigning its license or granting sublicenses beyond affiliates without consent of the other parties.
- Cook later contracted with a major stent manufacturer (ACS) under which Cook would buy ACS stents, coat them with paclitaxel under Cook’s license, and sell the coated stents back to ACS.
- ACS would assemble the finished stent system, seek FDA approval, and market and sell the product under ACS’s branding.
- BSC claimed the Cook–ACS deal effectively shifted the economic benefit and practical control of Cook’s coexclusive license to ACS, inserting a new competitor contrary to the anti-assignment clause.
- Cook sought a declaratory judgment that its ACS contract did not breach the license agreement; BSC counterclaimed for breach.
- The district court granted summary judgment for BSC, found a de facto assignment, and entered a permanent injunction restricting Cook’s dealings under the license.

## Issues

1. Whether Cook’s contract with ACS constituted a de facto assignment of Cook’s coexclusive license, breaching the agreement’s anti-assignment clause.
2. Whether the district court’s permanent injunction was proper and sufficiently tailored to the contractual harm.

## Decision

- The Seventh Circuit affirmed the determination that Cook’s arrangement with ACS functioned as a de facto assignment and therefore breached the anti-assignment provision.
- The court treated the anti-assignment clause as protecting the coexclusive competitive arrangement by preventing either licensee from unilaterally transferring the license’s economic control to a third party.
- The court recognized the availability of injunctive relief to protect BSC’s contractual rights but indicated that relief must be limited to preventing the harmful conduct rather than broadly barring unrelated development steps.

## Legal Principles

- Courts may treat a transaction as an “assignment” based on economic substance and practical control, even if formal title is retained and the arrangement is not labeled an assignment.
- In a coexclusive licensing structure, an anti-assignment clause protects each licensee’s contractual expectation that the competitive field will not be altered by the other licensee’s unilateral transfer of effective rights to an outside firm.
- Permanent injunctive relief for breach should be tailored to the contractual injury, distinguishing between conduct that creates unauthorized competition or sales and conduct that does not itself consummate the prohibited transfer.

## Conclusion

The court held that Cook breached a coexclusive paclitaxel-on-stents license by structuring a deal that effectively handed ACS the commercial benefit and control of Cook’s licensed rights, violating an anti-assignment clause; equitable relief was warranted but required careful tailoring to the actual harm.


Cook Inc. v. Bos. Sci. Corp., 333 F.3d 737 (7th Cir. 2003)