Kucharczyk v. Regents of the University of California

ORDER

I. INTRODUCTION

Plaintiffs, both scientists’ who formerly worked for the University of California San Francisco (“UCSF”), are suing the Regents of the University of California (“the University”), Nycomed Salutar (“Salutar” or “Ny-comed”), and Nycomed Imaging AS (“NIAS”), Salutar’s parent company, alleging. a number of theories in ten causes of action. Salutar has counterclaimed against plaintiffs and cross-claimed against the University.

This suit arises out of plaintiffs* invention of a process in the magnetic resonance imaging (“MRI”) field and the University’s subsequent licensing of that invention. The invention was eventually patented as U.S. Patent No. 5,190,744 (“ ’744 Patent”), entitled “Methods for Detecting Blood Perfusion Variations by Magnetic Resonance Imaging.” The invention was a method of using DyDT-PA-BMA, a chemical compound. Salutar owns the patent in DyDTPA-BMA. Dr. Scott Rocklage, a Salutar employee, was named on the ’744 patent as a co-inventor, thereby giving Salutar an undivided right in the patent.

Plaintiffs assigned their rights in the invention to the University pursuant to a Patent Agreement they entered into upon their employment by the University. The Patent Agreement required plaintiffs to assign all inventions to the University and in turn obligated the University to pay them 50% of all royalties collected. Upon being assigned the invention, the University entered into an exclusive License Agreement with Salutar. Sa-lutar agreed to pay the University a total of $25,000, half of which was paid to plaintiffs.

In essence, plaintiffs allege that they were the sole inventors of the process, that it was worth significantly more than $25,000, and that plaintiffs were entitled to greater rewards for their invention. Plaintiffs have alleged ten causes of action. First, plaintiffs allege that their civil rights, including their property rights, were impaired in violation of 42 U.S.C. § 1983. 1 Second, plaintiffs seek a declaration that they were sole inventors of the invention claimed by the ’744 patent. Next, they allege that when the University entered into an exclusive licensing agreement with Salutar and accepted a lump-sum payment of only $25,000, the University breached its contract with plaintiffs which required it to secure a royalty-bearing, non-exclusive license. In their third cause of action, they seek rescission of the Assignment Agreements on the grounds that there was a “fundamental lack of actual, mutual agreement.” Alternately, in their fourth cause of action, they seek monetary damages for the University’s breach of contract. In their fifth cause of action, plaintiffs allege a conspiracy to induce the breach of contract and seek punitive damages. In their sixth cause of action, they claim that the University’s breach of its contracts was tortious and fraudulent and in breach of the implied covenant of good faith and fair dealing. The seventh cause of action claims fraud and deceit in connection with their employment contracts and Assignment Agreements. Eighthly, plaintiffs claim negligent misrepresentation. In their ninth cause of action, plaintiffs allege that they were fraudulently induced to enter into employment agreements, Assignment Agreements, and other unspecified contracts with the Uni *1424 versity. Finally, in their tenth cause of action, plaintiffs allege that defendants Salutar and NIAS have tortiously interfered with their contracts with the University.

■Plaintiffs and the University have filed cross-motions for summary judgment; plaintiffs seek summary adjudication of their breach of contract claim, and the University seeks summary judgment on all of plaintiffs’ causes of action except the claim seeking a declaratory judgment removing Scott Rock-lage as the inventor of the ’744 patent. 2 The Court has requested and received supplemental briefing, and the matter has been extensively briefed and argued.

For the reasons set forth below, the Court will deny plaintiffs’ motion for summary judgment and grant the University’s motion. However, the Court will certify this case for interlocutory review.

II. FACTS

Plaintiff Moseley was hired by the University in 1982 as an Associate Professor of Radiology at UCSF. Upon being hired, Moseley executed a form Patent Agreement that required him to assign all rights in any invention developed during his employment to the University. Plaintiff Kucharezyk joined the UCSF faculty in 1988 and was a tenured member of the UCSF Department of Radiology. Prior to his employment, Ku-charezyk also signed a form Patent Agreement in which he agreed to assign all invention rights to the University.

The ’744 Patent grew out of plaintiffs’ work at the UCSF Department of Radiology in the late 1980s. Plaintiffs’ research was initially funded by Syntex to assess therapeutic drugs used for stroke treatment. However, Syntex ended its funding, and Salutar began funding plaintiffs’ research. Plaintiffs claim that on February 13, 1989, they conceived of the use of DyDTPA-BMA, a chemical compound invented by Salutar, as a contrasting agent useful in detecting strokes via MRI. On February 23,1990, plaintiffs faxed a disclosure form to the University’s Patent Office discussing the invention and identifying the funding source or sponsor for the project as “Salutar, Inc.” On March 9,1990, Salutar and the University filed a patent application for the process. That application named as inventors Roeklage and both plaintiffs. In April of 1990, the University and Salutar submitted a grant application to California Department of Commerce for a Comp-Tech grant under which Salutar sought to contribute $150,000 toward the research, and Salutar and the University asked the state to match that amount with a $150,000 grant. The University and Salutar executed an agreement entitled Memo of Understanding Under California Competitive Technology Program Grant Application (the “Research Funding Agreement”). The Research Funding Agreement designated Kucharezyk as the Principal Investigator for the University and Moseley as co-investigator. Kucharezyk signed the Research Funding Agreement. In" 1990, CompTech provided $150,000 in research funds to UCSF.

Plaintiffs assigned their rights in the invention to the University in the Assignment Agreement they signed in early 1990. 3 Roeklage assigned his rights to Salutar, which in turn assigned its rights to the University on May 7, 1990. On June 13, 1990, Salutar and the University entered into their exclusive License Agreement (“License Agreement”). In accordance with the License, Salutar paid the University $12,500 upon executing the license and paid an additional $12,500 patent issued in March of 1993. The University paid plaintiffs 50% of each of those payments.

III. SUMMARY JUDGMENT

Both parties have moved for summary judgment. Summary judgment is appropriate where no genuine issue exists as to any material fact and where the moving party is entitled to judgment as a “matter of law. Fed.R.Civ.P. 56(e). The moving party has the burden of establishing that there is no genuine issue of material fact. Id.; Celotex *1425 Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). Generally, after the moving party makes a properly supported motion, the non-moving party has the burden of presenting specific facts showing that contradiction is possible. British Airways Board v. Boeing Co., 585 F.2d 946, 950-52 (9th Cir.1978). It is not enough for the non-moving party to point to the mere allegations or denials contained in the pleadings. Instead, it must set forth, by affidavit or other admissible evidence, specific facts demonstrating the existence of an actual issue for trial. The evidence must be more than a mere “scintilla” of evidence; the non-moving party must show that the trier of fact could reasonably find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986). Summary judgment may be granted “[i]f the evidence is merely' colorable ... or is not significantly probative.” Eisenberg v. Insurance Co. of North America, 815 F.2d 1285, 1288 (9th Cir.1987). In reviewing a motion for summary judgment, the Court must take the non-movant’s evidence as true and all inferences are to be drawn in the light most favorable to the non-movant. Id. at 1289.

IV. CONTRACTS

At issue in this case are several contracts: (1) the Patent Agreement between each of the plaintiffs and the University; (2) the Assignment Agreement between the plaintiffs and the University; (3) the CompTech Research Funding Agreement between the University and Salutar; and (4) the Licensing Agreement between the University and Salutar. Plaintiffs contend that the University was obligated by contract to obtain a reasonable running royalty upon licensing their invention. The Court’s first task in this case is thus an analysis of the nature and content of the various contracts at issue here to determine whether they contain such an obligation as well, as an analysis of the requirements of the Patent Policy, which plaintiffs argue obligates the University to obtain a reasonable royalty.

The Court first discusses the Patent Agreement and the Assignment Agreement. Though neither expressly requires the University to obtain- a royalty, both of these documents refer to the University’s Patent Policy. Plaintiffs contend that the Patent Policy applies to them as a matter of contract because it is incorporated by reference into the Patent and Assignment Agreements. They also contend that the Patent Policy requires a mandatory royalty. The Court agrees that the Patent Policy applies here, but for the reasons set forth in detail below, the Court finds that the Policy does not contain such an obligation. The Court also finds that neither the Research Funding Agreement nor the License Agreement contains a contract term requiring the University to obtain a royalty on the plaintiffs’ invention.

A. Patent Agreement

Upon joining the University faculty, each plaintiff executed a form Patent Agreement with the University requiring them to assign to the University all rights in any invention developed in the course of their employment. Plaintiff Moseley signed a 1980 version of the Patent Agreement on October 21, 1982. Plaintiff Kueharczyk signed a 1985 version Patent Agreement on December 30, 1987. The Patent Agreements are very similar, and the parties agree that the 1985 version of the Patent Agreement is applicable here. 4 For that reason, only the 1985 version will be described here.

The Patent Agreement is contained on a form contract bearing the title “University of California State Oath of Allegiance and Patent Agreement.” The first page contains the State Oath of Allegiance and what will be referred to as the Patent Policy Statement. The Patent Policy Statement, which will be discussed in greater detail in Section IV.C.2, infra, bears the heading “University of California Patent Policy.” The first page of agreement bears a notation on the bottom indicating “POLICY IS CONTINUED ... *1426 Please sign Patent Agreement on reverse side.” The Patent Policy Statement continues on the reverse side. The end of the Patent Policy Statement states that it was revised effective November 18, 1985. The reverse side also contains the Patent Agreement. The Patent Agreement states “Please read Patent Policy on reverse side and above.”

The Patent Agreement states: “[b]y execution of this agreement, I understand that I am not waiving any rights to a percentage of royalty payments received by University, as set forth in University Patent Policy.” It further states that it is made “in part consideration of my employment, and of wages and/or salary tp be paid to me during any period of employment, by University, and/or my utilization of University research facilities and/or my receipt of gift, grant or contract research funds through the University.” The Patent Agreement further requires each plaintiff to do all things necessary to assign the rights to the University. No express term in the Patent Policy requires the University to obtain a royalty.

B. Assignment Agreement

The Assignment Agreement too makes reference to the Patent Policy. Following their invention, Kucharczyk and Moseley entered into an Assignment Agreement with the University whereby plaintiffs assigned all their rights in their process to the University. The Assignment Agreement recited that the assignment was made:

in consideration of One Dollar ($1.00) and in consideration of the benefits stipulated in the “University of California Policy Regarding Patents”, as revised and effective as of November 18, 1985, which document is made by reference part hereof, and in fulfillment of my Patent Agreement with the University of California.

The assignment Agreement itself does not contain any term requiring the University to obtain a royalty on an invention.

C. Patent Policy

1. Contract Term

The Court now turns to a discussion of the Patent Policy, which plaintiffs argue applies to them and requires the University to obtain a royalty on their invention. The Patent Policy itself is not an agreement between the parties. Instead, as a policy of the University, it has the force and effect of statute. Regents of University of California v. City of Santa Monica, 77 Cal.App.3d 130, 135, 143 Cal.Rptr. 276 (1978). 5 However, plaintiffs contend that the Patent Agreement and the Assignment Agreement incorporate by reference the Patent Policy and that the Patent Policy thereby became a term of these agreements.

“For the terms of another document to be incorporated into the document executed by the parties the reference must be clear and unequivocal, the reference must be called to the attention of the other party and he must consent thereto, and the terms of the incorporated document must be known or easily available to the contracting parties.” Williams Const. Co. v. Standard-Pacific Corp., 254 Cal.App.2d 442, 61 Cal.Rptr. 912 (1967). While the Patent Agreement does not expressly state that it is incorporating the Patent Policy by reference, it clearly and unequivocally refers to it, stating that execution of the agreement does not waive the signer’s “rights to a percentage of royalty payments received by University, as set forth in University Patent Policy, hereinafter called ‘Policy”’ and making several other references to the Policy. The reference is called to the attention of both parties. Finally, the Patent Policy is easily available to the contracting parties given that it is printed on the reverse side of the Patent Agreement. The Court finds that the Patent Policy is thus incorporated by reference into the Patent Agreement. See, Singer v. The Regents of the University of California, No. 950381 (San Francisco Super.Ct. Mar. 1, 1996), slip op. at 8 (holding Patent Policy incorporated *1427 by reference into Patent Agreement). The Patent Policy is likewise expressly incorporated by reference in the Assignment Agreement, which states that the assignment is made “in consideration of the benefits stipulated in the ‘University of California Policy Regarding Patents’, as revised and effective as of November 18, 1985, which document is made by reference part hereof.” The Patent Policy thus is both an official policy of the University, with the force and effect of statute, Regents v. Santa Monica, 77 Cal.App.3d at 135, 143 Cal.Rptr. 276, and a contract term.

Having concluded that the Patent Policy was incorporated by reference into both the Patent Agreement and the Assignment Agreement, the Court now turns to an analysis of the Patent Policy, a subject of no small dispute. In brief, plaintiffs contend that the Patent Policy contains a requirement that all licenses bear reasonable royalties; the University contends that it does not. Both parties point to different documents in support of their positions. For the reasons set forth below, the Court finds that the Patent Policy does not require all licenses to be royalty-bearing.

2. Patent Policy Statement

The University contends that the Patent Policy consists solely of the Patent Policy Statement, i.e., the words reproduced on the 1985 Patent Agreement in the section titled: “University of California Patent Policy.” The Patent Policy Statement consists of three parts: (I) Preamble, (II) Statement of Policy, and (III) Patent Responsibilities and Administration. The Preamble states the purpose of the Patent Policy:

It is the intent of the President of the University of California, in administering intellectual property rights for the public benefit, to encourage and assist members of the faculty, staff, and others associated with the University in the use of the patent system in a manner that is equitable to all parties involved.

The Preamble further states that the Patent Policy was adopted:

To encourage the practical application of University research for the broad public benefit, to appraise and determine relative rights and equities of all parties concerned, to facilitate patent applications, licensing, equitable distribution of royalties, if any, to assist in obtaining funds for research, to provide for the use of invention-related income for the further support of research and education, and to provide a uniform procedure in patent matters when the University has a right or equity ...

(Emphasis added.)

Sections A and B of the Statement of Policy provide that employees must promptly disclose and assign all inventions to the University. In Section C, the University “agrees, for and in consideration of said assignment of patent rights, to pay annually to the named inventor(s) ... 50% of the net royalties and fees received , by the University.” The Patent Responsibilities and Administration portion of the Patent Policy Statement delegates duties to various the University personnel.

The Patent Policy Statement does not require the University to obtain a royalty on any invention, though it does impose on the University the obligation to share any royalty it does obtain with the inventor. The University thus argues that it has no duty, contractual or otherwise, to obtain a royalty on plaintiffs’ invention. Plaintiffs contend that the Patent Policy Statement is not the complete Patent Policy, and that the complete Patent Policy does impose a royalty, requirement on the University.

3. Exhibit 21

In support of their argument that the Patent Policy is not limited to the Patent Statement, plaintiffs rely on Exhibit 21 of the Sponsored Programs Office (“SPO”) Handbook. Exhibit 21 is the subject of vigorous dispute, and so is described in some detail. Exhibit 21 in the SPO Handbook is 12 typeset pages long, and each page bears the heading “Exhibit 21 — Patent Policy.” 6 The ex- *1428 Mbit consists of a number of documents. The first page is a memo dated September 1, 1987 from the Umversity Provost for Research to various administrators at the University which discusses the University Patent Agreement. The memo states that “guidelines pertaining to the University of California Patent Agreement are set forth in the attachment.” The next three pages consist of “Guidelines Concerning the Patent Agreement.” These Guidelines are likewise dated September 1987. The next page is labeled Appendix B, and is' a form Exemption to Signing Patent Agreement. The sixth page is a memo from the Vice Chancellor of Research to a number of University administrators. 7 The memo refers to “the attached Umversity of Califorma Patent Policy, dated November 18,1985” and indicates that “there are no substantive changes in the new patent policy statement.” The following four pages consist of the Patent Policy Statement. 8 The first of the four pages is labeled “University of Califorma Patent Policy” and is dated November 18, 1985. 9 Following those four pages is a document labeled “Attachment, November 18,1985” and titled “University of Califorma Patent' Policy: Admmistrative Statements Concerning Umversity Patent Matters.” That document is a one-page list of various statements wMch “are to be considered in effect until such time as each is specifically rescinded or superseded.” The last page of ExMbit 21, wMch is the source of a great deal of dispute in tMs case, is a document titled: “Umversity of Califorma Summary of Sponsor Patent Rights Applicable to Funding Agreements with Industrial (For Profit) Sponsors of Research” (“Summary”). The bottom of the Summary bears the date March 1984. Plaintiffs contend that the Patent Policy consists of the final six pages of Exhibit 21, and that the obligations they seek to enforce are contained in the Summary.

4. Summary

The Summary contains the language that plaintiffs contend impose a contractual duty to obtain royalties. The Summary, whose purpose is to provide “guidance on Umversity of Califorma patent rights policies to its potential industrial Sponsors of research,” states that licenses to industry sponsors will:

a) be royalty-bearing, rates negotiable and based on general industry practices for the type of invention involved;

c) normally require a license issue fee and appropriate minimum annual royalties.

Plaintiffs contend that the Summary is a part of the Patent Policy and has therefore been incorporated by reference into the Patent and Assignment Agreements, making the requirement of a royalty a term of their contracts with the Umversity. They further argue that the Umversity breached this term by entering into a Licensing Agreement with Salutar whereby Salutar was obligated to make oMy two lump-sum payments but was not required to pay a runmng royalty. The Umversity argues that the Summary is not part of the Patent Policy, but is instead merely a summary of the “Guidelines For Patent Clauses In Agreements With For-Profit Sponsors” wMch is in turn contained in the Umversity Contract and Grant Manual. The Umversity contends that the Summary is not a part of any contract between it and the plaintiffs, and that it is therefore not liable for any failure to comply with its terms. The question of whether the Summary is part of the Patent Policy is thus crucial to the determination of tMs case.

*1429 a. Legal Standard

In’ order to analyze this ease, the Court must determine the terms of the Patent Policy. The Patent Agreements signed by both plaintiffs contained the Patent Policy Statement. Both Patent Agreements directed the signatory to read the Patent Policy reprinted on the form agreement. Nothing in the Patent Policy Statement printed on that form indicates in any way that it is not the complete Patent Policy. The terms of the agreement would therefore appear to be limited to those printed on the form signed by each plaintiff. However, plaintiffs offer Exhibit 21 as extrinsic evidence supporting the finding that the Patent Policy and thus the contract contains a royalty requirement.

Under California law, it is “a judicial function to interpret a written instrument unless the interpretation turns upon the credibility of extrinsic evidence.” Delucchi v. County of Santa Cruz, 179 Cal.App.3d 814, 820, 225 Cal.Rptr. 43 (1986) (citation and quotation omitted). “The court must provisionally consider all credible evidence concerning the intention of the parties so that the court can place itself in the same situation in which the parties found themselves at the time they entered the agreement.” Id. at 821, 225 Cal.Rptr. 43, citing Pacific Gas & Elec. Co. v. G.W. Thomas Drayage Co., 69 Cal.2d 33, 39-40, 69 Cal. Rptr. 561, 442 P.2d 641 (1968). In the final analysis, the evidence is admissible only if the court determines “that the contract is reasonably susceptible to the offered interpretation.” Delucchi, 179 Cal.App.3d at 821, 225 Cal.Rptr. 43. If the evidence “tend[s] to prove a meaning of which the language [of the contract] is not reasonably susceptible, Thomas Drayage, 69 Cal.2d at 40 n. 7, 69 Cal.Rptr. 561, 442 P.2d 641, the court may then exclude the evidence.” Id. “It is solely a judicial function to interpret a written contract unless the interpretation turns upon the credibility of extrinsic evidence, even when confiibting inferences may be drawn from uneontroverted evidencé.” Garcia v. Truck Ins. Exchange, 36 Cal.3d 426, 435, 204 Cal.Rptr. 435, 682 P.2d 1100 (1984). If the credibility of the extrinsic evidence is not in question, then the question of whether contract is reasonably susceptible to the interpretation offered by the plaintiffs is a question of law for the court. Id.; see also, Delucchi, 179 Cal.App.3d at 821, 225 Cal. Rptr. 43. See also, Okun v. Morton, 203 Cal.App.3d 805, 816, 250 Cal.Rptr. 220 (1988) (“Although defendant and plaintiff dispute the inferences to be drawn from this evidence, the evidentiary facts themselves are not in substantial conflict. We therefore review the pertinent provisions of the contract in the context of the extrinsic evidence and make an independent determination of the meaning of the agreement.”)

Here, the credibility of Exhibit 21 and the other extrinsic evidence supported by plaintiffs is not in dispute. Instead, the parties argue in favor of “conflicting inferences” which “may be drawn from uncontroverted evidence.” Garcia, 36 Cal.3d at 435, 204 Cal.Rptr. 435, 682 P.2d 1100. This is thus a question for the Court. Id.

■ The Court finds that the evidence offered by plaintiff tends to prove a meaning of which the contract is not reasonably susceptible. An examination of the face of the Summary shows that it is not part of the Patent Policy. First, the title of the document shows that it is the summary of sponsor patent rights, not part of the Patent Policy. In addition, it states that “[t]his summary provides guidance on the University of California patent rights policies to its potential industrial Sponsors of research.” (Emphasis added.) Thus, the language of the Summary states that it is aimed at “potential industrial Sponsors,” not employees. Moreover, unlike any other version of the Patent Policy Statement, the document provides an address and telephone number that the sponsors may use to contact the Patent, Trademark and Copyright Office. The face of the document thus indicates that it is not part of the Patent Policy.

In addition, the whole of Exhibit 21 does not support a finding that it is the Patent Policy. First, the SPO Handbook expressly states at page iv that it “is not intended to replace existing policies and procedures, but to point out those policies which may be applicable and those procedures which may need to be satisfied.” Second,. Exhibit 21 *1430 contains documents which are clearly not part of the Patent Policy, but are instead explanatory material, including the introductory memo, the Guidelines Concerning the Patent Agreement, a copy of an exemption form, and a memo from the Viee-Chaneellor-Research regarding revisions to the Patent Policy. Plaintiffs do not contend that the entirety of Exhibit 21 constitutes the Patent Policy, but argue that it consists of the final six pages, which include the Patent Policy Statement, the administrative statements attachment, and the Summary. Plaintiff Ku-charczyk contends that when he asked for the Patent Policy, he was sent these six pages, but does not otherwise explain why only the second half of Exhibit 21 should constitute the Patent Policy.

Thirdly, the December 6, 1985 letter from the Vice Chancellor of Research, which immediately precedes the Patent Policy Statement in Exhibit 21, suggests that the Summary is not part of the Patent Policy. That letter states that the Patent Policy dated November 18, 1995, supersedes the April 1, 1980 University Patent Policy, and indicates that the Patent Policy is attached. The letter further states that “[t]here are no substantive changes in the new policy statement.” The Summary, which would constitute a substantive change from the 1980 Patent Policy if it were part of the Patent Policy, is dated March 1984. This indicates that the Summary is not a part of the. Patent Policy.

Finally, not only do several sections of the Guidelines suggest that the Patent Policy Statement is the entirety of the Patent Policy and that the Summary is a summary of a separate guideline, but also several attachments to the Guidelines suggest that the summary is not part of the Patent Policy. For instance, Section 11-220 of the Guidelines states:

In November, 1985, the President issued the University of California Patent Policy, pursuant to his authority under Standing Order 100.4(gg). The policy includes: Section I, Preamble, an outline of the principles upon which the policy is based; Section II, Statement of Policy, which sets forth the requirement that employees and certain others agree to assign inventions and patents to the University or other parties as appropriate, to promptly report and fully disclose potentially patentable inventions, and sets forth royalty-sharing provisions with the inventor and use of royalty income; and Section III, Patent Responsibilities and Administration, detailing -responsibilities of the Intellectual Property Advisory Council charged by the Senior Vice President — Academic Affairs, and the assignment of responsibility for implementation of the policy to the Senior Vice President — Administration. Refer to Section 11-999 for full text of the University of California Patent Policy.

This precisely describes the Patent Policy Statement, and does not make any reference to the Summary. It therefore strongly suggests that the Patent Policy Statement is the Patent Policy. On the other hand, Section 11-341 of the Guidelines is titled Summary of Sponsor Patent Rights Applicable to Funding Agreements With Industrial (For Profit) Sponsors of Research. Like the Summary attached to Exhibit 21, it includes the categories established for commercial sponsors and contains the conditions that licenses be royalty-bearing. It also refers to 11-999 “for a full-text copy suitable for handout of the Summary of Sponsor Patent Rights Applicable to Funding Agreements With Industrial (For Profit) Sponsors of Research.” This suggests that the Summary is distinct from the Patent Policy.

Section 11-999 lists a number of University References. A Patent Heading fists several documents, including:

—University of California Patent Policy

—Patent Agreement

—Summary of Sponsor Patent Rights Applicable to Funding Agreements with Industrial (For Sponsors of Research)

—Standing Order 100.4(gg) Duties of the President

—Business and Finance Bulletin, University of California Patent Program

—Staff Personnel Manual, Appendix B, University Patent Agreement.

The documents which follow include (among other documents not relevant here) the *1431 three-part Patent Policy Statement; the Patent Agreement, which also includes the three-part Patent Policy Statement on its reverse; and the Summary. The Summary is separated from the Patent Policy Statement by the Patent Agreement. Both the language and the format of the Guidelines and its attachments thus demonstrate that the Patent Policy does not include the Summary.

Finally, the Summary does not help explain the Patent Policy, which states that its predominate purpose is to disseminate inventions to the public and further scholarly research. The purpose of the Summary, on the other hand, is to provide “guidance on University of California patent rights policies to its potential industrial Sponsors of research.” The Summary does not, as plaintiffs argue, assist , in interpreting the Patent Policy. Plaintiffs argue that the royalty requirement in the Summary must be used to interpret the Patent Policy in order to avoid destroying consideration flowing to the faculty inventors. See, e.g., Singer, slip op. at 5 n. 6. However, the Patent Agreement itself recites the. inventor’s consideration: “my employment, and ... wages and/or salary to be paid to me during any period of employment, by University, and/or my utilization of University research facilities and/or my receipt of gift, grant or contract research funds through the University.” The Court finds that the contract does not provide for additional consideration in the form of a royalty.

“‘If the evidence offered would not persuade a reasonable man that- the instrument meant anything other than the ordinary meaning of its words, it is useless.’ ” Blumenfeld v. R.H. Macy & Co., 92 Cal.App.3d 38, 45, 154 Cal.Rptr. 652 (1979) (citation omitted). Here, the Court finds that a reasonable person viewing the Summary would not conclude that it was part of the Patent Policy. Because the evidence proffered by plaintiffs does not show that the Patent and Assignment Agreements are reasonably susceptible to the conclusion that the Summary is part of the Patent Policy. That evidence is therefore not admissible. The Patent and Assignment Agreements do not contain the Summary among their terms.

The Court finds that the Patent Policy Statement constitutes the entirety of the University Patent Policy. The Patent Policy does not include the Summary, upon which plaintiffs rely for the royalty requirement they seek to enforce. The Court holds that because the Patent Policy does not include the Summary or the royalty requirement imposed by the Summary, and because the Patent Policy explicitly limits its distribution to “royalties, if any,” and because neither the Patent Agreement nor the Assignment Agreement explicitly require royalties by their terms, neither .the Patent Agreement nor the Assignment Agreement requires the University to obtain a royalty on plaintiffs’ invented process. However, the Court next turns to whether any other agreement between the parties makes binding either the Summary or a royalty requirement.

D. Research Funding Agreement

On April 12,1990, the University and Salutar entered into a Memo of Understanding under California Competitive Technology Program Grant Application regarding plaintiffs’ research. The agreement states that it is “by and between SALUTAR, INC., ...' and The Regents of the University of California.” Neither of the plaintiffs is a party to the agreement, although Kueharczyk is named as the Principal Investigator and Moseley was named, along with several others, as a co-investigator. Kueharczyk signed the agreement in his capacity as “Director, Neuroradiology Research, Research Program Principal Investigator.” Because the plaintiffs are not parties to this agreement, the Court finds that the Research Funding Agreement does not confer any contract rights on them.

In addition, the agreement does not explicitly reference the Patent Policy or the Summary, nor does it require that any license be royalty-bearing. Nonetheless, plaintiffs argue that the Summary applies. Plaintiffs point to a two-page document entitled: “University of California ‘Summary of Sponsor Patent Rights Applicable to Funding Agreements With Industrial (For Profit) Sponsors of Research For California Competitive Technology Program.” (“CompTech Sum *1432 mary.”) Plaintiffs argue that the CompTech Summary expressly requires that licenses must be issued in accordance with the Summary in cases of combined sponsor-Comp-Teeh funding. The second page of the two-page document is the Summary. As discussed supra, the Summary requires royalty-bearing licenses and “appropriate, minimum annual royalties.”

Because the plaintiffs are not parties to the Research Funding Agreement, neither Summary is contractually binding on the University. However, the Court will discuss infra whether the CompTech Summary itself imposes any non-eontractual obligation on the University.

E. License Agreement

The Court next turns to the License Agreement between the University and Salu-tar to determine if it obligates the University to obtain royalty payments for the plaintiffs. On June 13,1990, the University and Salutar entered into an exclusive License Agreement. The Agreement states that it is “by and between the REGENTS OF THE UNIVERSITY OF CALIFORNIA ... and SALU-TAR, INC.” Neither plaintiff is named as a party to the License Agreement. The License Agreement provides for a License Issue Fee in the amount of $25,000, half of which was to be paid upon execution of the Agreement, the other half of which was due if and only if the patent issued. The Agreement provided “[t]he license will be considered ‘paid up’ upon receipt of the total amounts due.” The License Agreement does not provide for royalties, nor does it refer to the Summary. Thus, because neither plaintiff is a party to the Agreement and because there is no provision for royalties, the Court finds that the License Agreement does not confer any contractual right to royalties on the plaintiffs.

F. Implied Contract

Plaintiffs also argue that they have an implied contract with the University which requires the University to obtain a royalty from any license to an industrial research sponsor. They contend that this implied contract arose when they were given the Summary. However, terms that conflict with an express written contract cannot be implied in a written contract. T