Case: 19-2216    Document: 65-2     Page: 1   Filed: 08/25/2020




    United States Court of Appeals
        for the Federal Circuit
                   ______________________

                 PHYTELLIGENCE, INC.,
                    Plaintiff-Appellant

                              v.

          WASHINGTON STATE UNIVERSITY,
                 Defendant-Appellee
               ______________________

                         2019-2216
                   ______________________

     Appeal from the United States District Court for the
  Western District of Washington in No. 2:18-cv-00405-RSM,
  Judge Ricardo S. Martinez.
                   ______________________
          SEALED OPINION ISSUED: August 25, 2020
          PUBLIC OPINION ISSUED: August 27, 2020 ∗
                  ______________________

      JOHN PAUL FLYNN, Wilson, Sonsini, Goodrich & Rosati,
  PC, San Francisco, CA, argued for plaintiff-appellant. Also
  represented by COLLEEN BAL, JOSHUA ALEC BASKIN.

     STUART RUSSELL DUNWOODY, Davis Wright Tremaine
  LLP, Seattle, WA, argued for defendant-appellee.
                    ______________________



     ∗
         This opinion was originally filed under seal and has
  been unsealed in full.
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  2                  PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.



      Before PROST, Chief Judge, REYNA and STOLL, Circuit
                          Judges.
  REYNA, Circuit Judge.
      Phytelligence, Inc., appeals from the United States
  District Court for the Western District of Washington’s
  grant of summary judgment in favor of Washington State
  University. Because we agree with the district court’s
  decision, we affirm.
                          BACKGROUND
                                I
      Appellant Phytelligence, Inc., (“Phytelligence”) was an
  agricultural biotechnology company that used tissue cul-
  ture to grow trees for sale to nurseries and growers.
  Phytelligence has since ceased operations and is in receiv-
  ership.
      In November 2012, Phytelligence and appellee Wash-
  ington State University (“WSU”) began discussing the
  propagation, i.e., growing, of “WA 38” apple trees—a new
  apple cultivar that WSU developed and patented. On No-
  vember 9, 2012, WSU sent Phytelligence a draft propaga-
  tion agreement, which provided that Phytelligence could
  propagate WA 38 trees. The draft agreement forbid
  Phytelligence from selling WA 38 trees “unless [Phytelli-
  gence] ha[d] authorization to do so under a separate con-
  tract with [WSU], or an agent of [WSU], in accordance with
  Section 4 of this Agreement.” J.A. 119.
      Key to this appeal is Section 4 of the draft propagation
  agreement, entitled “option to participate as a provider
  and/or seller in [WSU] licensing programs,” which provided
  that:
      If [Phytelligence] is an authorized provider in good
      standing . . . by signing this Agreement, [Phytelli-
      gence] is hereby granted an option to participate as
      a provider and/or seller of Plant Materials listed in
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  PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.                  3



      Exhibit A, if the Cultivar is officially released by
      WSU and becomes available for licensing by [WSU]
      . . . . [Phytelligence] will need to sign a separate
      contract with [WSU], or an agent of [WSU], to ex-
      ercise this option.
  J.A. 51.
       On November 18, 2012, days before Phytelligence exe-
  cuted the agreement, Phytelligence reached out to WSU “to
  clarify” that to exercise its option under Section 4, WSU
  would need to “grant [it] a separate license for the purpose
  of selling.” J.A. 631. On November 19, 2012, WSU re-
  sponded “[y]es,” but also noted that there was uncertainty
  as to the terms of that future license. Specifically, WSU
  noted that “there exists the possibility that if we license
  WA 38 to an exclusive licensee, that company/person/group
  may want to do his/her own plant propagation without out-
  side assistance or may want to do that under contract with
  its own contractors.” Id. WSU also noted that:
      We have no idea how WA 38 will be licensed at this
      time. It would take any form: under an open re-
      lease through a nursery group, for example, to an
      exclusive license with a company, group of individ-
      uals, coop., etc. That decision has not yet been
      made, so there can be no guarantees made to any-
      one at this point.
  Id. During this exchange, Phytelligence noted that it un-
  derstood the Propagation Agreement to be a “strictly re-
  search undertaking,” in which it would propagate WA 38
  for WSU and be allowed to “experiment with propagation
  techniques.” J.A. 635. WSU indicated a similar under-
  standing of the Propagation Agreement, noting that “[t]he
  intent of the agreement is to give [Phytelligence] the ability
  to propagate WA 38.” Id.
    On November 19, 2012, Phytelligence reached out to
  WSU a second time, acknowledging the uncertainty
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  4                   PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.



  surrounding WSU’s future licensing of WA 38. Phytelli-
  gence also noted that given the “wispy forward commit-
  ment” concerning the option in Section 4, it was hesitant to
  execute the Propagation Agreement. J.A. 247. Phytelli-
  gence noted that “[i]t may make more sense” for it to con-
  duct its research with a separate lab or to proceed forward
  with a “fee-for-service contract.” Id. WSU responded that
  same day, noting that the “fact of the matter is that what
  happens from a commercialization/licensing point of view
  in regard to WA 38 and future apple releases is completely
  out of [our] hands at the moment.” J.A. 640.
      On November 23, 2012, Phytelligence reached out to
  WSU again. Phytelligence acknowledged that WSU is
  “moving somewhat cautiously here,” but noted that “every-
  one thinks that . . . Phytelligence and others would have a
  shot at securing commercial licenses.” J.A. 249. Phytelli-
  gence also noted that
      since this [Propagation] agreement is a precursor
      to any other, [we] suppose there’s no harm in going
      ahead and executing it. Then at least we will have
      the pieces in place when we are all ready to go be-
      yond R&D mode. With that context, the agreement
      is fine as it is.
  Id. (emphasis added). On November 27, 2012, Phytelli-
  gence executed the “Propagation Agreement” with WSU,
  without making or even suggesting any changes to Section
  4.
                                II
      In March 2013, WSU issued an “Announcement of Op-
  portunity,” i.e., a request for proposals, to companies inter-
  ested in commercializing WA 38. WSU sought “an
  exclusive licensee to manage” commercialization of WA 38,
  “including the contracting of tree propagation to nurseries
  and others.” J.A. 649, 652. WSU sent this announcement
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  PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.                 5



  of opportunity to Phytelligence. Phytelligence did not sub-
  mit a proposal.
       In June 2014, WSU accepted the proposal of Proprie-
  tary Variety Management (“PVM”) and entered into a
  “Management Contract” with PVM. The Management
  Contract granted PVM an exclusive license. The Manage-
  ment Contract also required PVM to subcontract exclu-
  sively with the Northwest Nursery Improvement Institute
  (“NNII”), a fruit tree nursery association, to propagate and
  sell WA 38 trees. Pursuant to the Management Contract,
  PVM provided NNII with an exclusive sublicense. In turn,
  NNII provided nonexclusive sublicenses with NNII mem-
  ber nurseries to propagate and sell WA 38 trees. As a re-
  sult, no industry participant could obtain a license to sell
  WA 38 without becoming a member of NNII.
       On May 18, 2017, Phytelligence formally notified WSU
  that it wanted to exercise its option under the Propagation
  Agreement. J.A. 126. WSU responded that under the op-
  tion clause, Phytelligence had to “sign a separate contract
  with [WSU], or an agent of [WSU], to exercise this option,”
  and that PVM was WSU’s “agent.” J.A. 157 (emphasis in
  original). WSU thus directed Phytelligence to “approach
  PVM for an agreement.” Id. Phytelligence reached out to
  PVM, which required Phytelligence to become a NNII
  member as a condition to obtaining a license to commer-
  cialize WA 38. Phytelligence subsequently notified WSU
  that it rejected PVM’s requirement to become a NNII mem-
  ber. Phytelligence explained that it did “not wish” to join
  NNII, nor did it believe that NNII membership was a con-
  dition contained in Section 4 of the Propagation Agree-
  ment. J.A. 165–166.
      On September 15, 2017, WSU then presented Phytelli-
  gence with three options for propagating and selling WA 38
  “on equal footing with other propagators that have com-
  mercial rights to WA 38.” J.A. 169. One of the options re-
  quired NNII membership while the other two did not.
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  6                  PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.



  Phytelligence rejected WSU’s three options. Phytelligence
  never applied for membership in NNII.
       On January 16, 2018, WSU terminated the Propaga-
  tion Agreement. According to WSU, Phytelligence materi-
  ally breached section 1.b of the Propagation Agreement
  when it sold and delivered WA 38 to a third-party without
  a license to do so. WSU also alleged that such actions in-
  fringed its plant patent for WA 38 and its COSMIC CRISP
  trademark. Also on January 16, 2018, WSU revoked its
  September 15, 2017, offer to Phytelligence to commercial-
  ize the propagation of WA 38.
                              III
        On February 26, 2018, Phytelligence sued WSU in
  Washington state court alleging breach of the Propagation
  Agreement. Specifically, Phytelligence argued that WSU
  breached the Propagation Agreement “[b]y entering into its
  arrangements with PVM and refusing to honor the obliga-
  tions in the Propagation Agreement.” J.A. 47. Phytelli-
  gence sought damages and specific performance of “the
  Propagation Agreement resulting in issuance of a license .
  . . to propagate WA 38 plant materials for commercial sale.”
  J.A. 48. On March 16, 2018, WSU asserted patent and
  trademark infringement counterclaims and removed the
  action to federal district court. 1
      WSU then moved for summary judgment, arguing that
  Section 4 was an unenforceable “agreement to agree” pur-
  suant to Washington state law. J.A. 101. Phytelligence
  opposed the motion, arguing that Section 4 was not an
  agreement to agree but rather an enforceable “agreement
  with open terms.” See J.A. 294–95.




      1   WSU’s counterclaims are not at issue in this ap-
  peal.
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  PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.                  7



      The district court granted WSU’s motion. Phytelli-
  gence moved for reconsideration, and in that motion,
  Phytelligence specified its theory of breach. Phytelligence
  argued that WSU breached Section 4 by conditioning a li-
  cense to commercialize WA 38 on Phytelligence becoming a
  NNII member. The district court denied Phytelligence’s
  motion for reconsideration. WSU then waived any dam-
  ages related to its counterclaims, and the parties entered a
  stipulated injunction in order to permit this appeal to pro-
  ceed. Phytelligence timely appealed. We have jurisdiction
  under 28 U.S.C. § 1295(a)(1).
                           DISCUSSION
      Phytelligence challenges the district court’s determina-
  tion concerning Section 4 on two general grounds. First,
  Phytelligence argues that, on its face, Section 4 of the Prop-
  agation Agreement is an enforceable agreement with open
  terms and not an unenforceable agreement to agree. Sec-
  ond, Phytelligence argues that evidence extrinsic to the
  Propagation Agreement indicates that Section 4 is an en-
  forceable agreement with open terms, or, at a minimum,
  creates a material factual dispute precluding summary
  judgment. We address each challenge in turn.
      We review a grant of summary judgment under the law
  of the regional circuit, which in this case is the Ninth Cir-
  cuit. See, e.g., Cheetah Omni LLC v. AT&T Servs., Inc.,
  949 F.3d 691, 693 (Fed. Cir. 2020). The Ninth Circuit re-
  views a district court’s grant of summary judgment de
  novo. See, e.g., L.F. v. Lake Washington School District
  #414, 947 F.3d 621, 625 (9th Cir. 2020). Summary judg-
  ment is appropriate when the moving party demonstrates
  that “there is no genuine dispute as to any material fact
  and the movant is entitled to judgment as a matter of law.”
  Fed. R. Civ. P. 56(a). In other words, summary judgment
  may only be granted when no “reasonable jury could return
  a verdict for the nonmoving party.” Anderson v. Liberty
  Lobby, Inc., 477 U.S. 242, 248 (1986).
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  8                   PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.



                                I
      Phytelligence argues that, on its face, Section 4 is not
  an unenforceable agreement to agree but rather an enforce-
  able agreement with open terms. For the reasons set forth
  below, we disagree.
       The parties agree that the Propagation Agreement is
  governed by Washington state law. Washington courts fol-
  low the “objective manifestation theory” of contract inter-
  pretation, which requires a court to look to the reasonable
  meaning of the contract language to determine the parties’
  intent. Hearst Commc’ns, Inc. v. Seattle Times Co., 115
  P.3d 262, 267 (Wash. 2005). “We generally give words in a
  contract their ordinary, usual, and popular meaning unless
  the entirety of the agreement clearly demonstrates a con-
  trary intent.” Id. The interpretation of a contract is a mat-
  ter of law when it does not rely on extrinsic evidence.
  Wash. State Major League Baseball Stadium Pub. Facili-
  ties Dist. v. Huber, Hunt & Nichols-Kiewit Constr. Co., 296
  P.3d 821, 825 (Wash. 2019); Wash. Pub. Util Dists.’ Utils.
  Sys. v. Pub. Util. Dist. No. 1 of Clallam Cnty., 771 P.2d 701,
  706 (Wash. 1989).
       “An agreement to agree is an agreement to do some-
  thing which requires a further meeting of the minds of the
  parties and without which it would not be complete. Agree-
  ments to agree are unenforceable in Washington.” P.E.
  Sys., LLC v. CPI Corp., 289 P.3d 638, 644 (Wash. 2012) (in-
  ternal quotation marks omitted). Underlying this rule is
  the fundamental principle that Washington courts are un-
  able to fix the liability of parties based on agreements that
  are “too indefinite and uncertain.” Sandeman v. Sayres,
  314 P.2d 428, 430 (Wash. 1957) (internal quotation marks
  omitted); see also Keystone Land & Dev. Co. v. Xerox Corp.,
  94 P.3d 945, 949 (Wash. 2004); Setterlund v. Firestone, 700
  P.2d 745, 746 (Wash. 1985) (“[A]greements must be defi-
  nite enough on material terms to allow enforcement with-
  out the court supplying those terms.”). A court will not
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  PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.                   9



  enforce an indefinite agreement in order “to avoid trapping
  parties in surprise contractual obligations.” Keystone, 94
  P.3d at 949 (internal quotation marks omitted).
       For example, in Sandeman, the Washington Supreme
  Court determined that a provision for a bonus within an
  employment contract was an unenforceable agreement to
  agree. 314 P.2d at 428–29. The provision provided that
  “[a] suitable incentive . . . will be paid [to] you and will be
  decided upon, after the first three (3) months of our mar-
  keting operations . . . . This period of time is specified to
  enable us to properly evaluate the market and acceptabil-
  ity of our products.” Id. at 428. The court found this pro-
  vision to be an agreement to agree because it required “a
  further meeting of the minds of the parties before a com-
  plete and enforceable agreement to pay a commission.” Id.
  at 430. Specifically, the court recognized that although the
  employer “offered to pay the respondent a commission
  and/or bonus,” the bonus was to be “decided upon by the
  company and the respondent three months later, in order
  to enable the company to properly evaluate the market and
  acceptability of its products.” Id.
       By contrast, “[u]nder an agreement with open terms,
  the parties intend to be bound by the key points agreed
  upon with the remaining terms supplied by a court or an-
  other authoritative source, such as the Uniform Commer-
  cial Code.” P.E. Sys., 289 P.3d at 644 (quotation marks
  omitted). Any missing or open term can therefore be “eas-
  ily” discerned by the court. Id.
       For example, in P.E. Systems, a case relied on by both
  parties in this appeal, the parties entered into an agree-
  ment in which P.E. Systems offered to analyze and reduce
  the credit card processing costs of CPI Corporation (“CPI”),
  and CPI provided that it would pay P.E. Systems a portion
  of the savings realized. Id. at 640. The agreement provided
  that the amount of savings would be determined by a cli-
  ent’s “Historic Cost,” which would be agreed to by the
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  10                 PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.



  parties and included in the addendum to the contract. Id.
  The Historic Cost was left blank. Id. at 641. The appeals
  court found that in light of the missing Historic Cost, this
  was an agreement to agree. Id. The Washington Supreme
  Court disagreed, explaining that this was an enforceable
  agreement with an open term because the contract in-
  cluded an agreed to formula for calculating the Historic
  Cost. Id. at 644. Thus, the Historic Cost was “an open term
  that can easily be calculated.” Id.
      Here, Section 4 of the Propagation Agreement provides
  that Phytelligence is “hereby granted an option,” but that
  Phytelligence “will need to sign a separate contract with
  [WSU], or an agent of [WSU], to exercise this option.”
  J.A. 51. Thus, the plain terms of the agreement provide
  that Phytelligence’s option turns on a future contract be-
  tween the parties, and thus “a further meeting of the minds
  of the parties” is required before Phytelligence can com-
  mercialize WA 38. P.E. Sys., 289 P.3d at 644. This renders
  Section 4 an unenforceable agreement to agree.
      Additionally, contrary to Phytelligence’s position, Sec-
  tion 4 is not like the agreement with open terms in P.E.
  Systems. As noted earlier, in P.E. Systems, the court sup-
  plied the missing term from an objective formula that was
  agreed to by the parties and contained within the contract.
  See id. In contrast, here, the Propagation Agreement pro-
  vides the court with no objective method for determining
  the terms of the “separate contract” between Phytelligence
  and WSU (or its agent). Phytelligence even admits in its
  briefing that the terms of the separate contract had not yet
  been determined at the time it entered into the Propaga-
  tion Agreement. Phytelligence notes that “to exercise the
  option, [it] had to sign a separate contract with WSU or its
  agent; the terms of that contract had not yet been deter-
  mined.” Appellant’s Br. at 24 (emphasis added). Thus,
  given that Phytelligence’s licensing rights turned on a fu-
  ture “separate contract,” the terms of which were not yet
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  PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.               11



  determined by the parties, Section 4 is an unenforceable
  agreement to agree.
                                II
                                A
      Phytelligence further argues that extrinsic evidence es-
  tablishes that Section 4 is an enforceable contract with
  open terms. Specifically, Phytelligence argues that the
  parties “reached a clear and unequivocal agreement on the
  method” for determining Section’s 4 open licensing terms.
  Appellant’s Br. at 33. For the reasons set forth below, we
  disagree.
       According to Phytelligence, the purportedly agreed
  upon method required WSU to offer Phytelligence the same
  “standardized licensing terms” it planned to offer other in-
  dustry participants. Phytelligence cites to a form license
  included in the record on appeal as the “WSU-approved
  standard licensing terms,” which “WSU promised Phytelli-
  gence.” Appellant’s Br. at 35 (citing form agreement at J.A.
  504–23) (“Form License”). 2 Thus, Phytelligence argues,
  “[n]othing was left for future negotiation; no further meet-
  ing of the minds was required” for Phytelligence to exercise
  its option to a license under Section 4. Appellant’s Br. at
  33.
      To assist in determining the meaning of contract lan-
  guage, Washington courts, in addition to the objective man-
  ifestation theory, apply the “context rule.” See Berg v.
  Hudesman, 801 P.2d 222, 229–30 (Wash. 1990). This rule
  allows examination of the context surrounding a contract’s
  execution, including the consideration of extrinsic evidence
  to help understand the parties’ intent. Hearst, 115 P.3d



      2  The Form License is the nonexclusive sublicense
  that NNII offered to industry participants to commercialize
  WA 38 trees.
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  12                 PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.



  at 266–67. However, extrinsic evidence is to be used “to
  determine the meaning of specific words and terms used
  and not to show an intention independent of the instru-
  ment or to vary, contradict or modify the written word.” Id.
  at 267 (internal quotation marks omitted; emphasis in orig-
  inal). Notably, a court “must distinguish the parties’ intent
  at the time of formation from the interpretations the par-
  ties are advocating at the time of the litigation.” Int’l Ma-
  rine Underwriters v. ABCD Marine, LLC, 313 P.3d 395, 400
  (Wash. 2013); see also Viking Bank v. Firgrove Commons 3,
  LLC, 334 P.3d 116, 120 (Wash. Ct. App. 2014) (noting that
  “[t]he primary objective in contract interpretation is to as-
  certain the mutual intent of the parties at the time they
  executed the contract”).
      When the meaning of a contract turns on the inferences
  drawn from extrinsic evidence, contract interpretation is a
  question of fact. Berg, 801 P.2d at 229. “A question of fact
  may be determined as a matter of law where reasonable
  minds could reach but one conclusion.” Keystone, 94 P.3d
  at 949 n.10.
      As an initial matter, we reject Phytelligence’s theory of
  the case, which is self-contradictory. According to Phytelli-
  gence, the parties agreed that Phytelligence would receive
  the terms contained in the Form License. See J.A. 504–23;
  Appellant’s Br. at 16, 35, 38, 48–50. The Form License,
  however, requires the “Licensee” to “be a NNII member
  nursery in good standing” in order to license WA 38.
  J.A. 506. It is also undisputed that no propagator was of-
  fered a license to WA 38 unless it was a member of NNII.
  Membership in NNII is the very requirement that Phytelli-
  gence alleges was not required by Section 4 and triggered
  WSU’s breach. Thus, Phytelligence’s claim of breach of
  contract fails under either premise. On the one hand, if the
  parties agreed that the “separate contract” in Section 4
  would contain the standard terms of the Form License,
  then WSU did not breach Section 4 by requiring Phytelli-
  gence to become a NNII member. On the other hand, if the
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  PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.                 13



  parties did not agree to such standard terms, Section 4 is
  unenforceable as an agreement to agree.
       Even if we set aside this fundamental flaw in Phytelli-
  gence’s argument, we would disagree that a reasonable fact
  finder could conclude that Phytelligence and WSU agreed
  that the “separate contract” in Section 4 would contain the
  terms of the “Form License.” As noted earlier, WSU and
  Phytelligence communicated via email before the execution
  of the Propagation Agreement. WSU notified Phytelli-
  gence that it had “no idea how WA 38 would be licensed at
  this time,” and that “there can be no guarantees made to
  anyone at this point.” J.A. 631 (emphasis added). WSU
  also warned Phytelligence that WA 38 could be licensed to
  an exclusive licensee who may not want “outside assis-
  tance.” J.A. 247. In response, Phytelligence recognized
  that Section 4 contained a “wispy forward commitment.”
  Id. Phytelligence also recognized that there was “no harm”
  in signing the Propagation Agreement, despite this wispy
  forward commitment, because the Propagation Agreement
  “is a precursor to any other.” J.A. 249. Thus, according to
  Phytelligence, “[w]ith that context, the [Propagation] agree-
  ment is fine as it is.” Id. (emphasis added).
      On these undisputed material facts, no reasonable fact
  finder could conclude that at the time of execution, Phytelli-
  gence and WSU had agreed that the “separate contract”
  under Section 4 would contain the terms of the Form Li-
  cense. Rather, the email communications between the par-
  ties indisputably indicate that at the time the parties
  executed the Propagation Agreement, WSU did not commit
  to any definite terms of a future license with Phytelligence.
  Thus, Section 4 is an unenforceable agreement to agree,
  even considering the extrinsic evidence in a light most fa-
  vorable to Phytelligence. See Keystone, 94 P.3d at 948.
                                B
      Phytelligence argues that, regardless of the above ref-
  erenced email communications, other sources of extrinsic
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  14                  PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.



  evidence create a material factual dispute concerning
  Phytelligence’s option under Section 4. We disagree.
      Phytelligence first argues that the declaration of Chris
  Leyerle, Phytelligence’s CEO, creates a material factual
  dispute. Mr. Leyerle’s declaration provides that:
       My understanding from [WSU personnel] was that
       there would be an internal process at WSU to de-
       cide whether and how to commercialize WA 38. If
       WSU decided to commercialize WA 38, the process
       would result in a set of standard terms and condi-
       tions pursuant to which industry participants
       could sell and distribute WA 38. [WSU] assured
       me that by entering into the Propagation Agree-
       ment, Phytelligence would have the option to ac-
       quire a license on the standard terms if and when
       such a license became available.
  J.A. 612 (emphasis added).
      Mr. Leyerle’s declaration, however, is insufficient to
  create a material factual dispute. Mr. Leyerle’s declaration
  speaks to his subjective “understanding” of his communi-
  cations with WSU, not to the parties’ mutual agreement
  that Section 4 provided Phytelligence with a “separate con-
  tract” based on the terms in the Form License. “It is well
  settled that a conclusory statement on the ultimate issue
  does not create a genuine issue of fact.” Applied Cos. v.
  United States, 144 F.3d 1470, 1475 (Fed. Cir. 1998) (inter-
  nal quotation marks omitted; emphasis in original) (hold-
  ing that an “affidavit alone” was insufficient to create a
  genuine issue of material fact in light of the documentary
  evidence showing otherwise); Nelson v. Pima Cmty. Col-
  lege, 83 F.3d 1075, 1081–82 (9th Cir. 1996) (“[M]ere allega-
  tion and speculation do not create a factual dispute for
  purposes of summary judgment.”).
      Mr. Leyerle’s deposition testimony, submitted to the
  district court below, confirms that the parties did not agree
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  PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.               15



  to any standard terms or method for determining the terms
  of the “separate contract” under Section 4. Mr. Leyerle tes-
  tified at his deposition that when he executed the Propaga-
  tion Agreement, he did so “with a lack of complete
  understanding of how the university intended to proceed or
  how they might actually proceed.” J.A. 231–32. He also
  testified that he was “hamstrung by not understanding or
  having insight into how the university was proceeding.”
  J.A. 231. Based on this evidence, no reasonable fact finder
  could conclude that parties understood that the “separate
  contract” in Section 4 would include the terms of the Form
  License.
       Phytelligence also argues that WSU’s “standard prac-
  tice” creates a genuine factual dispute. According to
  Phytelligence, WSU had previously undertaken a commer-
  cialization process with the WA 2 apple cultivar, which re-
  sulted in a set of standardized licensing terms. Thus,
  Phytelligence argues, WSU had a “customary practice” in
  place to establish standard license terms for industry par-
  ticipants and that the “licensing program WSU imple-
  mented with respect to WA 38 was consistent with its
  customary practice [of] licensing other plant cultivars.”
  Appellant’s Br. at 54–55. We reject this argument. Even
  assuming that WSU commercialized WA 38 based on this
  customary practice, Phytelligence fails to point to any evi-
  dence that the parties mutually agreed that Phytelligence
  would be entitled to any particular terms developed
  through this standardized process. Thus, no reasonable
  fact finder could conclude that, based on WSU’s alleged
  “standard practice,” the parties understood that the “sepa-
  rate contract” under Section 4 would contain terms con-
  sistent with the Form License. See Plumbing Shop, Inc. v.
  Pitts, 408 P.2d 382, 386 (Wash. 1965) (noting that by sup-
  plying all essential terms of an incomplete contract
  through “[b]usiness practice and custom,” a court “would
  violate the elementary principle that [it] will not make a
  contract for the parties”).
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  16                 PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.



       Lastly, Phytelligence argues that the parties’ conduct
  following the execution of the Propagation Agreement cre-
  ates a genuine factual dispute. We reject this argument.
  Post-execution, the evidence shows that the parties en-
  gaged in negotiations regarding Phytelligence’s future li-
  cense. Specifically, Phytelligence first discussed a future
  license with PVM, which required Phytelligence to become
  a member of NNII. Phytelligence rejected this offer.
  Phytelligence then communicated with WSU, noting it “be-
  lieve[d] that § 4 . . . requires WSU . . . to negotiate with
  Phytelligence, in good faith, and work out the terms and
  conditions of our option to propagate and sell WA-38.” J.A.
  165. (emphasis added). WSU subsequently offered to
  Phytelligence three different licensing options, two of
  which did not require Phytelligence to join NNII. However,
  Phytelligence rejected these options as well. Based on this
  evidence, no reasonable fact finder could conclude that, at
  the time of execution of the Propagation Agreement, the
  parties understood that there was “[n]othing . . . left for
  future negotiation” regarding the terms of Phytelligence’s
  “separate contract” under Section 4.
      To conclude, we recognize Phytelligence’s desire to ob-
  tain a license to commercialize WA 38. But an enforceable
  right to that license does not reside within Section 4 of the
  Propagation Agreement. Courts are not in the business of
  making contracts. Plumbing Shop, 408 P.2d at 385. Here,
  Section 4 did not provide Phytelligence with a “separate
  contract” that contained sufficiently definite terms to be
  enforceable. Additionally, based on the extrinsic evidence,
  no reasonable fact finder could conclude that Section 4’s
  “separate contract” would contain the terms in the Form
  License.
      To hold otherwise would unfairly trap WSU with a sur-
  prise contractual obligation to grant Phytelligence a Form
  License that excludes the requirement of joining NNII—a
  requirement applicable to all other propagators. See Key-
  stone, 94 P.2d at 949. Based on the face of Section 4, as
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  PHYTELLIGENCE, INC.   v. WASH. STATE UNIV.                  17



  well as the extrinsic evidence, it is clear that Section 4 con-
  tained no such obligation. 3
                           CONCLUSION
      We have considered Phytelligence’s remaining argu-
  ments but find them unpersuasive. We affirm the district
  court’s grant of summary judgment in favor of WSU.
                          AFFIRMED




      3   Phytelligence also argues that the district court vi-
  olated Federal Rule of Civil Procedure 56(f) to the extent
  that it stated that Phytelligence failed to show WSU’s
  breach. Because we agree that the contract is unenforcea-
  ble, we do not reach this question.
