The Ninth Circuit Court of Appeals recently ruled on a contract dispute between Pacira Pharmaceuticals, Inc., and the Research Development Foundation (RDF). The court's decision, filed on November 6, 2026, affects how royalties are interpreted in contracts involving future technologies. This ruling is significant for both companies, as it clarifies the obligations under their agreements and the calculation of royalties.

In this case, Pacira Pharmaceuticals, the plaintiff, sought a declaratory judgment against RDF, the defendant, regarding royalty payments related to two technologies: the 45L Exparel technology and the 200L Exparel technology. Pacira had paid these royalties under protest and later initiated the lawsuit to determine whether it owed these payments. The dispute arose from the interpretation of a contract amendment made in 2004 that defined proprietary rights and obligations between the parties.

The case began in the District Court for the District of Nevada, where Pacira initially won a summary judgment regarding the 45L Exparel technology. Following this, a bench trial was held for the 200L Exparel technology, resulting in a final judgment that required RDF to return the disputed funds to Pacira, including pre-judgment interest.

The Ninth Circuit's ruling addressed the interpretation of the contract between Pacira and RDF. The judges reviewed the district court's summary judgment de novo, meaning they evaluated the case from the beginning without being bound by the lower court's conclusions. The court found that the terms of the 2004 Amendment clearly defined proprietary property to include the 200L Exparel technology, which did not exist when the amendment was made. The court stated, "The terms of this contract plainly resolve the parties’ disagreement," emphasizing that the language used in the agreement was unambiguous.

The judges noted that the 2004 Amendment expanded the scope of the original 1994 Agreement, allowing for future patent rights to be included. They rejected Pacira's argument that the amendment only covered technology that existed in 2004, stating that the phrase "existing and future patent or proprietary rights" clearly encompassed rights that would arise later. The court ruled that the district court had misinterpreted the amendment and reversed part of its judgment.

Furthermore, the Ninth Circuit addressed the issue of pre-judgment interest. The court determined that the district court had applied the incorrect statute to calculate the interest owed by RDF to Pacira. The judges instructed the lower court to recalculate the pre-judgment interest based on Nevada's contract-specific prejudgment interest statute, which applies to money owed under contract disputes.

This ruling has significant implications for both Pacira and RDF. It clarifies the obligations of companies under contract amendments, particularly regarding future technologies and royalty payments. The decision reinforces the importance of clear language in contracts and how courts interpret these agreements. The ruling may also impact other companies in similar situations, as it sets a precedent for how future patent rights are treated in contractual obligations.

Looking ahead, it is possible that Pacira or RDF may seek further legal action or clarification following this ruling. The court's decision can be appealed, but details regarding any potential appeal were not available in the court filing. As the case continues, it will be important to monitor any related developments that may arise from this ruling.