Full Opinion

IN THE SUPREME COURT OF THE STATE OF DELAWARE CLAUDE GENDREAU and THE § CLAUDE GENDREAU INVESTMENT § No. 447, 2025 TRUST U/A/D MARCH 16, 2013, § § Court Below—Superior Defendants/Counterclaim § Court of the State of Plaintiffs Below, Appellants, § Delaware § v. § C.A. No. N23C-05-034 CCLD § MOVORA LLC (F/K/A OSSIUM § NEWCO LLC), OSSIUM BIDCO, LLC, § and VETERINARY ORTHOPEDIC § IMPLANTS, LLC (F/K/A § VETERINARY ORTHOPEDIC § IMPLANTS, INC.), § § Plaintiffs/Counterclaim § Defendants Below, Appellees. § § Submitted: June 3, 2026 Decided: September 24, 2026 Before SEITZ, Chief Justice; TRAYNOR and GRIFFITHS, Justices. Upon appeal from the Superior Court of the State of Delaware. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED. David E. Ross, Esq., S. Reiko Rogozen, Esq., Benjamin M. Whitney, Esq., ROSS ARONSTAM & MORITZ LLP, Wilmington, Delaware; Adam Unikowsky, Esq. (argued), In Kyu Chung, Esq., JENNER & BLOCK LLP, Washington, D.C.; Andrew W. Vail, Esq., Benjamin J. Bradford, Esq., Yusuf Esat, Esq., JENNER & BLOCK LLP, Chicago, Illinois, for Appellants. Megan Ward Cascio, Esq., Phillip Reytan, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, Delaware; Kevin M. Downey, Esq., R. Kennon Poteat III, Esq., Eden Schiffmann, Esq. (argued), Ilana B. Frier, Esq., WILLIAMS & CONNOLLY LLP, Washington, D.C., for Appellees. GRIFFITHS, Justice: This appeal turns on the meaning and scope of an indemnification provision negotiated in a corporate acquisition. A Swedish private equity firm that invests in companies specializing in veterinary products agreed to acquire a company that sells orthopedic implants for domestic animals. During the negotiations, a third party filed suit against the target company alleging patent infringement by some of its products. The private equity firm valued the target company at about $100 million but could not quantify the litigation exposure. To account for the litigation risk, the company’s owners agreed to an indemnification provision that covered any losses suffered “as a result of, or in connection with” the patent litigation. Following the closing, the patent litigation plaintiff amended its complaint, including a newly-issued patent and alleging infringement by more of the company’s products. The company eventually agreed to settle the patent litigation for $70 million and a license for one of its products. The company financed the settlement payment with a bank loan. The new owners sued the former owners in the Superior Court when they refused to indemnify the company for the settlement and patent litigation-related expenses. All former owners settled, except the company’s founder. After cross- motions for summary judgment, the court granted the company’s summary judgment 2 motion directed to the owner’s implied covenant defense but otherwise denied the motions. The case then proceeded to trial. Following trial, the Superior Court held that the founder must indemnify the buyers for damages arising from the patent litigation but not the cost of the patent license. The court also awarded the buyers prejudgment interest on the loan-interest expense to fund the settlement. But the court awarded the company only half of its requested attorneys’ fees for expenses incurred in defending the patent litigation, reasoning that allocating fees between the company and a jointly represented co-defendant would be burdensome. The court also determined that the indemnification provision did not cover attorneys’ fees incurred to enforce the indemnification provision. These decisions left both sides dissatisfied. The founder appealed, and the owners cross-appealed. On appeal, the founder argues that the Superior Court erred by: (1) holding that the indemnification provision covered damages arising from post-transaction conduct; (2) concluding that public policy did not bar indemnity when the company willfully infringed patents; (3) rejecting the implied covenant defense; and (4) awarding the company prejudgment interest on the loan-interest expense. In its cross-appeal, the new owners contend that the trial court erred by (1) holding that the indemnification provision does not cover attorneys’ fees incurred to 3 enforce that provision, (2) excluding the license cost from the indemnification award, and (3) reducing the award of patent litigation attorneys’ fees. For the reasons explained below, we hold that the Superior Court correctly concluded that the indemnification provision covers post-transaction product sales and does not offend public policy and that the implied covenant did not apply. We find, however, that the trial court’s prejudgment interest award on the loan-interest expense erroneously allowed a double recovery. Turning to the cross-appeal, we hold that the Superior Court correctly concluded that the indemnification provision does not cover the new owner’s attorneys’ fees incurred to enforce its indemnification rights. But the new owners were entitled to the license cost and the full amount of the attorneys’ fees incurred in the patent litigation. Thus, we affirm in part, reverse in part, and remand. BACKGROUND A. Claude and Veterinary Orthopedic Implants, LLC Dr. Claude Gendreau started practicing veterinary medicine in 1967. Later, he founded the Veterinary Specialty Center, an animal surgical practice. During his time there, Claude identified a demand for low-cost fracture-repair implants for animals. To pursue the opportunity, Claude formed Veterinary Orthopedic Implants, LLC (“VOI”) in 1992 and, three years later, hired his nephew, Patrick Gendreau, as 4 VOI’s Chief Executive Officer.1 Brian Beale and Timothy Van Horssen later joined Claude, Patrick, and the Claude Gendreau Investment Trust U/A/D March 16, 2013 (the “Trust”)2 as VOI owners. In time, VOI became a global leader in veterinary surgical products. Its offerings included implant bone plates for tibial plateau leveling osteotomy (“TPLO”) procedures, a common operation for dogs with cranial cruciate ligament injuries—the canine equivalent of an anterior cruciate ligament (ACL) tear. In October 2013, however, DePuy Synthes Products, Inc. (“DePuy”) notified VOI that VOI’s “Swiss Style” TPLO plates infringed DePuy’s U.S. Patent No. 8,523,921 (the “’921 Patent”). VOI continued to sell the Swiss Style TPLO plates. B. Claude Decides to Sell and DePuy Initiates Litigation In early 2015, Claude decided to sell VOI and asked Patrick to find a buyer. Around the same time, VOI began marketing plates for CORA-based tibial leveling osteotomy (“CBLO”) procedures,3 which are also used to treat cranial cruciate ligament injuries. 1 Because Claude and Patrick share the same last name, we will refer to them by their first names to avoid confusion. 2 Claude owned a percentage of VOI through Appellant Claude Gendreau Investment Trust U/A/D March 16, 2013. Because Claude’s interest and the Trust’s interest align in this case, references in this Opinion to “Claude” will also refer to the Trust, unless otherwise indicated. 3 “CORA” stands for the center of rotation of angulation. 5 In 2018, Patrick secured an offer from DW Healthcare Partners (“DWHP”) to acquire VOI for $100 million. That same year, VOI introduced “New Elite TPLO” plates to replace its Swiss Style TPLO plates. While negotiations with DWHP were underway, DePuy sued VOI in the United States District Court for the Middle District of Florida, alleging that VOI’s Swiss Style TPLO plates infringed the ’921 Patent (the “Patent Litigation”).4 Seven days after the suit was filed, Patrick directed VOI employees to transition customers from the Swiss Style plates to the New Elite TPLO plates. VOI continued to sell Swiss Style plates into 2019. In July 2019, DePuy amended its complaint to add infringement claims based on VOI’s Elite and CBLO plates. Around the same time, VOI launched its “NXT” plate, which it designed to avoid infringing the ’921 Patent. The Patent Litigation caused DWHP to abandon its plan to acquire VOI. C. A New Buyer Emerges and Acquires VOI In October 2019, Fidelio Capital II AB (“Fidelio”), a Swedish private equity firm focused on the veterinary supply chain, approached Patrick about acquiring VOI. Fidelio valued VOI at $100 million but was concerned about the Patent Litigation. It viewed it as an unquantifiable risk. Fidelio therefore offered to 4 App. to Claude & the Trust’s Opening Br. at A938–54 [hereinafter A__] (JX08 – Compl. in DePuy Synthes Prods., Inc., et al. v. VOI, 3:18-cv-01242-HES-PDB, Dkt. No. 1, dated Nov. 12, 2018) [hereinafter M.D. Fla. Compl.]. 6 purchase VOI for about $100 million but conditioned the transaction on VOI’s owners indemnifying it for any losses tied to that litigation. The parties signed a letter of intent reflecting the basic terms of the sale. Fidelio formed two Delaware limited liability companies for the acquisition: Ossium BidCo, LLC (“Ossium”) and Ossium NewCo, LLC, later renamed Movora, LLC (“Movora,” together with Ossium, the “Buyers”). In June 2020, the Buyers and VOI owners—Claude, Patrick, Brian, and Van Horssen (collectively, the “Sellers”)—executed an Amended and Restated Membership Interest Purchase and Exchange Agreement (the “MIPA”). Under the MIPA, the Sellers agreed to indemnify the Buyers for the Patent Litigation. Section 8.2(a) of the MIPA set forth the “Indemnification Provision.” It required the Sellers to, severally and in proportion to their ownership percentages, “indemnify, defend and hold harmless” the Buyers from “any Damages suffered by the Company as a result of, or in connection with, the Patent Litigation[.]”5 The MIPA defined “Patent Litigation” as the DePuy action pending in the United States District Court for the Middle District of Florida, “together with any appeals 5 A1013 (JX32 – Am. & Restated Membership Interest Purchase & Exchange Agreement dated June 11, 2020, at 54) [hereinafter MIPA]. 7 therefrom and any related or derivative [a]ctions.”6 The MIPA further defined “Damages” as any losses, liabilities, damages, awards, . . . payments (including amounts paid in settlement), costs and expenses (including costs of investigation, preparation and defense, and the fees and disbursements of counsel), whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, together with interest with respect to any of the foregoing . . . .7 The Sellers’ indemnity obligation was capped at $100 million, subject to specific exceptions, including “the expenses of the Indemnified Party in enforcing its rights under this Article 8[.]”8 Section 8.4 of the MIPA set forth procedures for seeking indemnification and included a subsection addressing “Inter-Party Claims.”9 Section 8.4 otherwise addressed indemnification claims generally and, in a few places, specified procedures to deal with Third Party Claims.10 Section 8.5 of the MIPA described the rights of the Indemnified and Indemnifying Parties in connection with any Third 6 A968 (MIPA at 9). 7 A963 (MIPA at 4). 8 A1014 (MIPA at 55). 9 A1015–16 (MIPA at 56–57). The term “Inter-Party Claims” is used as a header in MIPA § 8.4(a). A1015 (MIPA at 56). 10 See, e.g., A1015 (MIPA at 56) (stating that a party must deliver written notice “no later than twenty (20) Business Days after the Indemnified Party acquires knowledge of such claim (or potential claim, in the case of a Third Party Claim)”); id. (stating that the indemnitor can dispute “all or any portion of the claim (including any Third Party Claim)”). The MIPA defined “Third Party Claim” as “any actual or potential Action or claim made by another Person against the Indemnified Party that, if successful, would be indemnifiable hereunder[.]” Id. 8 Party Claims. For example, the Indemnifying Party could elect to assume the defense of any Third Party Claim with counsel of its choice, and if this election was made, the Indemnified Party could participate in the defense of the claim.11 The parties agreed that $20 million of the $100 million acquisition price would be paid under a contingent closing note (the “Note”).12 Under the Note, the Buyers withheld $20 million from the Sellers until the Patent Litigation concluded, less settlement or damages the Buyers paid in that litigation. Section 5(g) of the Note stated that, “[i]f the Seller commences a proceeding to enforce and collect upon this Note and prevails in such proceeding, the Buyer shall pay all reasonable costs incurred by the Seller in connection therewith, including attorneys’ fees and disbursements.”13 The transaction closed in June 2020. After the acquisition, Patrick continued to serve as VOI’s CEO. 11 A1016 (MIPA at 57). 12 The Note was an Ancillary Agreement under the MIPA. A961 (MIPA at 2 (defining “Ancillary Agreements”)). The MIPA and the Ancillary Agreements “constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings among the Parties with respect to the subject matter hereof and thereof.” A1020 (MIPA at 61). 13 A1042. Section 5(g) only shifts fees incurred in connection with a proceeding to enforce the Note and, consequently, does not apply to the collection of attorneys’ fees incurred in a proceeding to enforce the MIPA. 9 D. Post-Closing Patent Litigation Six months after the acquisition, DePuy amended its complaint a second time to add Fidelio as a defendant. The amended complaint alleged that Fidelio was jointly and severally liable for VOI’s patent infringement. In June 2021, the United States Patent and Trademark Office issued U.S. Patent No. 11,026,728 (the “’728 Patent”), a continuation of DePuy’s ’921 Patent. DePuy then amended its complaint for a third time to allege that VOI and Fidelio infringed DePuy’s ’728 Patent by selling NXT plates after the patent issued. VOI continued selling Elite and NXT plates through October 2022. Later that year, VOI began selling plates marketed as Compresiv and Versiv (the “C/V plates”). VOI developed the C/V plates to fall outside the scope of DePuy’s patents and to replace the Elite and NXT plates.14 Patrick resigned from VOI in November 2022. E. The Patent Trial and Post-Trial Injunctions The Patent Litigation proceeded to trial. A jury found VOI and Fidelio jointly and severally liable for willful patent infringement and awarded DePuy more than $59.4 million in damages. Six days after the verdict, DePuy moved to permanently enjoin VOI and Fidelio from infringing the ’921 and ’728 Patents. It relied on the 14 VOI’s outside counsel conducted a freedom to operate analysis to determine whether the C/V plates would infringe on DePuy patents. B297–98. Outside counsel opined “that there would be no infringement.” B298. 10 jury’s finding that VOI willfully infringed the ’921 and ’728 Patents through sales of Swiss Style, Elite, NXT, and CBLO plates (the “Infringing Plates”). DePuy also sought to include the C/V plates in the injunction by asking the court to enjoin the sale of a specific screw used in those plates. A few days later, DePuy moved for a temporary restraining order and, in the alternative, requested that the district court enter the permanent injunction on an emergency basis. DePuy sought to enjoin VOI and Fidelio’s “fire sale to flood the market” with C/V plates.15 DePuy supplemented the record with additional facts in support of its stance that VOI “attempt[ed] to evade the impact of the requested permanent injunction” by sending “unsolicited, large quantities of these products . . . to current customers.”16 DePuy also moved for enhanced damages based on the jury’s willfulness finding, increasing the potential exposure to nearly $180 million.17 The district court rejected DePuy’s proposed permanent injunction, concluding that it was overbroad because it would include C/V plates. The court 15 A2014. 16 A1708–14 (DX503 – Notice of Suppl. Facts in Support of Pls.’ Mot. for a Temporary Restraining Order dated Jan. 23, 2023, at 1–5); A1634 (Decl. of Maria Cunningham in Support of Pls’ Emergency Mot. for Temporary Restraining Order dated Jan. 18, 2023, ¶¶ 2–3). 17 See 35 U.S.C. § 284 (“[T]he court may increase the damages up to three times the amount found or assessed.”); Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93, 110 (2016) (“Section 284 gives district courts the discretion to award enhanced damages against those guilty of patent infringement” for “egregious cases of misconduct beyond typical infringement.”). 11 instead entered a permanent injunction against the Sellers’ manufacturer limited to the Infringing Plates. DePuy then sought a permanent injunction against VOI and Fidelio as designers and sellers of the Infringing Plates. In its motion, DePuy again asked the court to include the C/V plates in the injunction. Ultimately, the district court permanently enjoined VOI and Fidelio from marketing or selling the Infringing Plates. The injunction did not address the C/V plates. About a week later, DePuy moved for an order that would require VOI to show cause why VOI’s sales of the C/V plates did not violate the court’s permanent injunction. DePuy claimed that the C/V plates were “not colorably different” from the Infringing Plates.18 The district court scheduled a two-day rule to show cause hearing for early April 2023. F. The Patent Litigation Settlement Before the second day of the rule to show cause hearing, the parties settled. Patrick, who acted as the Seller’s Representative and controlled VOI’s patent litigation defense, approved the settlement. The settling parties executed a settlement and license agreement under which VOI and Fidelio agreed to pay DePuy $70 million in exchange for a release of all claims and a license covering the C/V 18 A2033–34 (DX610 – Pls.’ Mot. for Order to Show Cause & to Find Defs. in Contempt of the Ct.’s Permanent Inj., M.D. Fla. Dkt. No. 594 dated Mar. 2, 2023, at 1–2). 12 plates (the “C/V License”).19 The parties also stipulated to a consent judgment stating that VOI and Fidelio willfully infringed the ’921 and ’728 Patents. As part of the settlement, DePuy agreed “not to enforce any aspect of the Permanent Injunctions as to VOI/Fidelio’s manufacture, sale, offer for sale, use or importation of [the C/V plates]” (the “C/V Release”).20 VOI financed the $70 million settlement with a bank loan. G. The Owners Refuse to Indemnify and the Buyers Sue in Delaware With the Patent Litigation resolved, the Buyers—Ossium and Movora— asserted their rights under the Indemnification Provision against the Sellers—former VOI owners Claude, Patrick, Brian and Van Horssen—for the $70 million, plus attorneys’ fees and costs. The Sellers refused to pay, causing the Buyers to file suit in the Delaware Superior Court. Patrick, Beale, and Van Horssen settled with the Buyers, leaving Claude to defend the action. The Buyers’ complaint asserted a single count for contractual indemnification under the MIPA and sought damages, including pre- and post-judgment interest and attorneys’ fees and costs. Claude answered, asserting six counterclaims and eight affirmative defenses. In his sixth affirmative defense, Claude claimed that the Buyers breached the implied covenant of good faith and fair dealing (the “implied covenant”), which, in his view, 19 A1116–18 (JX62 – Settlement & License Agreement dated Apr. 3, 2023, at 1–3) [hereinafter Settlement Agreement]. 20 A1126–27 (JX62 – Ex. A to Settlement Agreement). 13 excused his performance under the MIPA. He alleged that the Buyers breached the implied covenant by willfully infringing DePuy’s patents and, after the verdict, shipping unsolicited quantities of the Infringing Plates and C/V plates to customers. Claude alleged that the Buyers’ misconduct increased the indemnifiable settlement amount. He also argued that indemnifying willful patent infringement violated public policy because it encouraged intentional infringement. The parties filed cross-motions for summary judgment. In December 2024, the Superior Court addressed the parties’ cross-motions for summary judgment. The court rejected Claude’s defense that the Buyers breached the implied covenant.21 It explained that the implied covenant is a “gap- filling mechanism” that addresses issues “neither party anticipated,” and Claude “[did] not identify any contractual gap[.]”22 The court also concluded that the implied covenant cannot “impose a general obligation to avoid misconduct.”23 The court left two issues for trial: whether the Buyers breached the MIPA, and therefore, excused Claude’s performance under it; and whether the Buyers could prove damages. 21 Movora LLC v. Claude, 2024 WL 5389423, at *10–11 (Del. Super. Dec. 2, 2024), as revised (Jan. 23, 2025) [hereinafter Summ. J. Op.]. 22 Id. at *10 (quoting Nemec v. Shrader, 991 A.2d 1120, 1125 (Del. 2010)). 23 Id. (citation modified). 14 H. The Superior Court Post-Trial Decisions The court held a five-day bench trial and heard two days of post-trial argument. Claude conceded at post-trial argument that he breached the MIPA by failing to indemnify the Buyers for DePuy’s ’921 Patent infringement claims against VOI’s Swiss Style, Elite, and CBLO plates. He still contended, however, that the Indemnification Provision did not cover the full settlement amount because it included amounts attributable to the Buyers’ post-closing plate sales, including damages tied to the sale of C/V plates. In Claude’s view, the MIPA limited indemnification to damages attributable to pre-closing conduct. The Superior Court rejected Claude’s interpretation of the MIPA. It held that “[t]he plain text of [the Indemnification Provision] ties [the Buyers’] recoverable indemnity to the Patent Litigation without referencing any point in time.”24 The court also relied on the MIPA’s expansive definition of “Damages,” and on expert testimony establishing that the provision “sets forth a broad, forward-looking, indemnification obligation.”25 The court also rejected Claude’s public policy argument—that damages stemming from willful infringement are not indemnifiable—because Claude failed to identify any Delaware policy supporting his argument. 24 Movora LLC v. Claude, 345 A.3d 997, 1014 (Del. Super. 2025), as revised (Oct. 1, 2025) [hereinafter Post-Trial Op.]. 25 Id. at 1014–15. 15 On damages, the Superior Court held that amounts tied to the post-transaction C/V Release were indemnifiable. The court found that VOI had injected the issue into the Patent Litigation as a non-infringing alternative to mitigate damages and to facilitate settlement. The court reasoned that VOI’s conduct prompted DePuy, after the jury verdict, to seek an injunction against the C/V plates. The court therefore concluded that the C/V Release caused damages “in connection with[] the Patent Litigation”26 as the parties could not settle without addressing VOI’s sales of the C/V plates. The Superior Court reached a different conclusion as to the C/V License. It held that the “MIPA’s definition of Damages does not include a ‘license’ or any analogous term.”27 Based on DePuy’s valuation of the C/V License, the court set its value at $9.8 million, reducing the damages award from $70 million to $60.2 million. The Buyers also sought to recover about $8.6 million in attorneys’ fees and costs incurred in the Patent Litigation. Claude conceded that the Indemnification Provision required the Sellers to indemnify the Buyers for attorneys’ fees and costs, but he argued that the requested amount overstated the recoverable fees because it included work performed for Fidelio, which was jointly represented with VOI in the 26 Id. at 1021. 27 Id. 16 Patent Litigation. Relying on Valeant Pharmaceuticals International v. Jerney, 28 a Court of Chancery decision, the Superior Court cut the requested attorneys’ fees in half, holding the Sellers responsible for about $4.3 million because allocating fees attributable to VOI and Fidelio would be unduly burdensome. The Buyers also sought attorneys’ fees for enforcing the Indemnification Provision under the MIPA’s “Damages” definition and § 8.3(a), which limited the indemnity obligation to the acquisition price of $100 million. The court denied the request, concluding that the MIPA lacked a “clear statement” that entitled the Buyers to shift their fees to Claude.29 The court entered judgment for the Buyers in the amount of $40,172,084.49.30 In a separate order, the court awarded prejudgment interest on the principal amount owed, calculated from the date Claude wrongfully refused the Buyers’ indemnification request.31 The prejudgment interest totaled $3,583,221.89, which included prejudgment interest on the loan-interest expense.32 In all, the court 28 921 A.2d 732 (Del. Ch. 2007). 29 Post-Trial Op. at 1031–32. 30 Id. at 1037 n.366 (“The total liability figure equals the $70 million Settlement, reduced by $9.8 million, plus the $9,084,348 in loan interest—reduced by $1,271,808.72 to account for interest accruing from the excluded portion of the Settlement attributable to the C/V license ($9,084,348 * ($9,800,000 / $70,000,000))—plus $4,304,444.50, representing half the requested Patent Litigation attorneys’ fees.”). 31 Movora LLC v. Claude, 2025 WL 2795773, at *2 (Del. Super. Oct. 1, 2025) [hereinafter Order]. 32 Id. at *2 & n.22, *3 (calculation based on 10% of the principal damages of $35,832,218.92). The trial court reasoned that, “[w]hile Plaintiffs received interest on the loan principal, that award 17 awarded the Buyers $43,755,306.38. Claude appealed, and the Buyers cross- appealed. Claude makes four arguments on appeal: (1) the MIPA did not require him to indemnify the Buyers for post-transaction damages arising from their post- transaction business decisions; (2) even if post-transaction damages are covered under the MIPA, the Buyer’s willful infringement rendered the provision unenforceable as against public policy; (3) the Superior Court erred by dismissing his implied covenant claim prior to trial; and (4) the Superior Court awarded plaintiffs a duplicate recovery by awarding prejudgment interest on interest recovered for the settlement loan. On cross-appeal, the Buyers contend that the Superior Court erred by (1) declining to shift fees for the enforcement action; (2) excluding the C/V License cost from the indemnity amount; and (3) reducing the attorneys’ fees and costs award in the Patent Litigation. STANDARD OF REVIEW “Our review of a grant of summary judgment is de novo. Additionally, this Court reviews both the trial court’s interpretation of the contract language and its is unrelated to prejudgment interest, which is ‘conceptually separate and distinct’ from other types of damages, including interest expenses incurred due to borrowing.” Id. at *2 (citation omitted). 18 legal conclusions de novo.”33 The trial court’s factual findings after trial will not be disturbed unless clearly erroneous.34 We review a decision to award attorneys’ fees to determine whether the trial court abused its discretion; however, “we review the trial court’s interpretation of a contractual fee-shifting provision de novo.”35 ANALYSIS A. Claude’s Breach of Contract Appeal 1. The Indemnification Provision covers damages for post-transaction plate sales As noted earlier, Claude admitted that he breached the MIPA by not indemnifying the Buyers for pre-closing patent infringement damages for devices being sold at closing and the post-closing reasonable and expected continuation of those sales. Thus, the only open issue for the breach of contract claim was whether Claude’s indemnity obligation covered devices that Claude attributes to the Buyer’s “business decisions”—meaning the sale of NXT and C/V plates post-closing.36 According to Claude, there must be a “meaningful linkage” between the Seller’s pre- 33 Seaford Golf & Country Club v. E.I. duPont de Nemours & Co., 925 A.2d 1255, 1261 (Del. 2007) (footnote omitted). 34 In re Columbia Pipeline Merger Litig., 342 A.3d 324, 353 (Del. 2025). 35 See Bako Pathology LP v. Bakotic, 288 A.3d 252, 266–67 (Del. 2022) (citation modified). 36 Opening Br. at 17–29. As to the NXT plates, Claude contends that he owed no indemnity because DePuy did not assert an infringement claim for those plates until after closing. As for the C/V plates, Claude argues that they did not exist at the time of the transaction and therefore fall outside his indemnity obligation. 19 and post-closing product sales to justify indemnification. 37 That linkage was broken, Claude argues, when the Buyers decided, based on their own business decision, to sell the NXT and C/V plates post-closing. Claude’s pre- and post-closing product divide is inconsistent with the breadth of the MIPA indemnification provision. “Patent Litigation” is defined broadly as the Florida federal court litigation, not any of its specific claims or defenses. As litigants (and contracting parties) know, it is not uncommon for plaintiffs to amend complaints to raise new claims arising out of post-complaint events. And as patent litigants know, it is not uncommon for multiple patents to issue at different times that cover the same subject matter and then be incorporated in pending litigation. The post-closing sales were meaningfully linked to the pre-closing infringement claims.38 As the Superior Court found, the Sellers developed and sold the NXT plate prior to the transaction. It was identified as an expected target for DePuy’s infringement claims. For the C/V plate, the court found that it was used strategically in the patent litigation—“VOI injected C/V into the Patent Litigation both to facilitate settlement and as non-infringing alternatives to mitigate damages.”39 The court also held that the Sellers’ Representative, Patrick, approved 37 Id. at 19. 38 B151(Trial Tr. Excerpts dated Feb. 10, 2025, at 154:3–8) (Theodor Bonnier); B324–26 (Trial Tr. Excerpts dated Feb. 13, 2025, at 66:2–68:7) (Colleen Flesher). 39 Post-Trial Op. at 1021 (footnote omitted). 20 these actions and “directed the post-Patent Litigation verdict C/V shipments under VOI’s annual ordering program.”40 It was all part of the push and pull of the patent litigation—the patent owner raises the stakes by adding new patents and infringement allegations against new products, and the target stands on a non- infringement defense or designs around the patents with non-infringing products to minimize liability. The cases Claude relies on are inapt. In those cases, the indemnity language differs in material ways from the provision here.41 And enforcing the indemnity would not be commercially unreasonable or “produce an extreme moral-hazard concern” by incentivizing buyers to sell infringing products with impunity.42 As the 40 Id. 41 Opening Br. 20–22 (citing Alcoa World Alumina LLC v. Glencore Ltd., 2016 WL 521193, at *7–8 (Del. Super. Feb. 8, 2016) (stating that a general indemnification provision did not permit fee shifting), aff’d sub nom., Glencore Ltd. v. St. Croix Alumina, LLC, 150 A.3d 1209, 2016 WL 6575167, at *1 (Del. 2016) (TABLE); State v. Interstate Amiesite Corp., 297 A.2d 41, 43–44 (Del. 1972) (holding that a provision that stated a contractor would indemnify costs “on account of the operations of the said contractor” did not cover liabilities arising out of the other party’s negligence); Rizzo v. John E. Healy & Sons, Inc., 1990 WL 18378, at *1–2 (Del. Super. Feb. 16, 1990) (stating that an indemnification provision that carved out costs arising out of “the sole negligence of Sky Climber, Inc.” permitted indemnification for certain things “not arising from the sole negligence of Sky Climber, Inc.”), aff’d sub nom. Joseph Rizzo & Sons Constr. Co. v. Sky Climber, Inc., 633 A.2d 370 (Del. 1993) (TABLE); RSUI Idem. Co. v. Sempris, LLC, 2014 WL 4407717, at *7 (Del. Super. Sept. 3, 2014) (determining that an insurance agreement covered claims made during a “Policy Period”); In re Fuqua Indus. Inc. S’holder Litig., 1997 WL 257460, at *5–7 (Del. Ch. May 13, 1997) (stating that a release covering claims arising out of “the acquisition of Georgia Federal” did not cover a claim asserting that defendants wrongfully refused to sell Georgia Federal)). Unlike the agreements in those cases, the MIPA indemnifies fees and expenses incurred “as a result of, or in connection with, the Patent Litigation[.]” A1013 (MIPA at 54). This language does not carveout post-closing sales; rather, this language broadly covers the fees and expenses incurred arising out of the defense of the Patent Litigation. 42 Opening Br. 23–25. 21 Buyers’ expert testified at trial, transactional planners have a way of dealing with this hazard, called “my watch, your watch” language, where the “seller is on the hook for preclosing liabilities, buyers[] [are] on the hook for post[-]closing liabilities[.]”43 That approach normally appears in “standard language,” which was not present in the MIPA.44 Instead, the MIPA allocated all of the post-closing liability risk to the Sellers. Claude “cannot now obtain from the courts a right that [he] failed to achieve at the bargaining table.”45 The indemnity covered the sale of pre- and post-transaction devices. 2. The Indemnification Provision does not violate public policy Claude argues in the alternative that, even if the Indemnification Provision covers post-transaction sales of all products alleged to infringe, it is unenforceable on public policy grounds because it would encourage what happened here—willful patent infringement. Claude characterizes James v. Getty Oil Co., a Superior Court decision, as the “leading Delaware case” supporting his argument.46 In James, the 43 B368 (Trial Tr. Excerpts dated Feb. 14, 2025, at 25:15–20) (Guhan Subramanian, Ph.D.). 44 B368–71 (Trial Tr. Excerpts dated Feb. 14, 2025, at 25:15–28:4) (Guhan Subramanian, Ph.D.) (defining the “classic temporal allocation” language as the “buyer assumes all liabilities . . . occurring after the closing, and then the seller retains all liabilities . . . based upon underlying facts and circumstances occurring prior to the closing”). 45 Alta Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381, 391 (Del. 2012). 46 Opening Br. 31 (citing James v. Getty Oil Co. (E. Operations), 472 A.2d 33, 38 (Del. Super. 1983)). 22 court stated that a “contract to relieve a party from its intentional or willful acts is invariably held to be unenforceable as being against clear public policy.”47 The trial court appropriately rejected Claude’s reliance on James, observing that its public policy statement “has not gained traction in the Delaware courts since [the case] was decided.”48 Our post-James decisions have not, in any specific context, barred risk-shifting for willful conduct. In RSUI Indemnity Company v. Murdock, for example, we declined to hold that insurance is unavailable as a matter of public policy for losses tied to willful acts.49 We found support for this conclusion in the Delaware General Assembly’s authorization for corporations to obtain broad D&O policies under 8 Del. C. § 145(g).50 We held that two public policies reinforced our conclusion that public policy does not bar coverage for losses arising from fraudulent conduct: Delaware’s policy of compensating innocent victims and its policy for enforcing freedom of contract.51 Moreover, we emphasized that 47 James, 472 A.2d at 38 (citing 15 Williston on Contracts § 1750A (3d ed.)). 48 Post-Trial Op. at 1025 (quoting CNX Res. Corp. v. CONSOL Energy Inc., 2024 WL 4929171, at *6 (Del. Super. Nov. 8, 2024)). 49 RSUI Indemnity Co. v. Murdock, 248 A.3d 887, 904–05 (Del. 2021); see also Whalen v. On- Deck, Inc., 514 A.2d 1072, 1073–74 (Del. 1986) (“The Superior Court found that the public policy of Delaware prohibits the issuance of insurance covering punitive damages [“for wanton conduct”]. In this Court’s view, however, there is no evidence of public policy in this State against such insurance.”). 50 RSUI, 248 A.3d at 903–04. 51 Id. at 904–05. 23 “deferring to the parties’ contractual choices and to the legislature’s prerogative in matters of public policy” was a “wise” approach.52 In the absence of a clear statement of public policy from the General Assembly related to willful conduct, we defer to Delaware’s public policy favoring freedom to contract.53 Accordingly, enforcing the Indemnification Provision in this situation does not violate public policy. 3. The implied covenant did not apply The Superior Court granted the Buyers’ summary judgment motion dismissing Claude’s implied covenant claim. It reasoned that Claude had not identified a contractual gap that the implied covenant needed to fill, or that the Buyer had improperly exercised its discretion to deprive Claude of the benefits of the MIPA. In Johnson & Johnson v. Fortis Advisors LLC, we recently summarized the application and limitations of the implied covenant: The implied covenant of good faith and fair dealing inheres in every cont