Mirion Technologies (Canberra), Inc. v. Sunpower, Inc.

2017 WL 5090436 (2017)

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Nature of the Case

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Facts

P manufactures radiation detection instruments and offers radiation monitoring systems. It manufactures high-purity germanium detectors and cryostats, which is a device that can be used on radiation detectors in order to maintain extremely low temperatures. The germanium crystal inside a high-purity germanium detector needs to be kept at a temperature of about negative 296 degrees Fahrenheit. The most efficient way to keep that low temperature is with a hybrid cooler in a closed system with a container of liquid nitrogen, which, as it evaporates, is condensed by a cryocooler. P produces and sells a hybrid cooler called the Canberra Cryo-Cycle II. D manufactures CryoTel GT cryocoolers. A cryocooler is a small electrical device that performs a cooling function in certain kinds of radiation detectors, including high-purity germanium detectors. D is owned by AMETEK, Inc. ORTEC, Inc., which is owned by AMETEK, competes with D. Each has nearly a 50% share of the market for high-purity germanium detectors that use hybrid coolers. P and D entered into a Supply Agreement for cryocoolers. The per-unit cost of the cryocoolers would be $9,835. For orders of 1 to 10 cryocoolers, D agreed to make delivery in 6 weeks. For quantities greater than 10 cryocoolers, the parties would determine a mutually agreeable delivery schedule. The cryocoolers came with a two-year warranty. Prior to the signing of the Supply Agreement P and D agreed to a delivery forecast. The schedule accommodated P's transition away from Lihan and provided D with time to increase production in order to meet P's supply-demand. P submitted a purchase order for 250 CryoTel GT units for $2.65 million. The purchase order was based upon P's forecast that it would need 250 units over the next 18 months. D emailed a letter to P in which D elected not to enter into the proposed Supply Agreement. P submitted a purchase order for 250 CryoTel GT units for $2.65 million. The purchase order was based upon P's forecast that it would need 250 units over the next 18 months. D emailed a letter to P in which D elected not to enter into the proposed Supply Agreement. D rejected the Agreement and the purchase order. P objected to the purported rejection. Legal counsel for D withdrew the purported notice of rejection. D them exercised its contractual right to terminate the Supply Agreement with six months' notice. Under the Agreement, D was obligated to fill purchase orders placed prior to the effective date of termination, January 7, 2018. P delivered a revised purchase order for 250 cryocoolers. D refused to fill the order. P sued D. P continues to obtain cryocoolers from Lihan. According to P, Lihan's cryocoolers still suffer from a reliability problem, and P and Lihan continue to work together to address that problem. Mirion also has had discussions with Thales. But their lead time is 18 months because of R&D issues. The cost and the per-unit price point continue to be an obstacle with Thales.