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Trustees of the University of Pennsylvania v. St. Jude Children's Research Hospital

April 12, 2013

TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA
v.
ST. JUDE CHILDREN'S RESEARCH HOSPITAL



The opinion of the court was delivered by: Dalzell, J.

MEMORANDUM

I. Introduction

We consider here a motion by St. Jude Children's Research Hospital ("St. Jude") to dismiss Count I of the complaint filed by the Trustees of the University of Pennsylvania ("Penn" or "the University"), a Count which alleges tortious interference with contractual relations.*fn1 St. Jude argues first that the claim is barred by the Noerr-Pennington doctrine, and that, if it is not, the University has failed to state a claim on which relief can be granted.

a. Factual History

This action between the University and St. Jude concerns two Materials Transfer Agreements ("MTAs" or "Agreements") between the parties, one executed in 2003 and the other in 2007.

The Agreements arose out of research that doctors at each institution had been conducting on immunotherapy cancer treatment. The University avers that Carl H. June, M.D., a Professor of Pathology and Laboratory Medicine at Penn, had developed a "CD19 ScFv DNA lentiviral construct" (the "June Construct") that "causes T cells to express chimeric antigen receptors (CARs) in patients such that their cancer is treated". Am. Comp. ¶ 8.

According to the University's amended complaint, Dario Campana, M.D., Ph.D., a doctor at St. Jude*fn2 , had also developed "an anti-CD19 BB-ζ chimeric receptor construct" (the "Campana Construct"). Id. at ¶ 11. St. Jude claims that this construct is a molecule that "can be expressed on the surface of a normal human immune T-cell, and . . . causes the T-cell to recognize and attack certain leukemic cancer cells". MTD at 3. Dr. June and Dr. Campana met at a conference in 2003, after which Dr. June asked Dr. Campana to provide him with a sample of the Campana Construct. Am. Comp. ¶ 12.

In order to facilitate this exchange, the parties entered into the first MTA at issue here on December 17, 2003. Id. at ¶ 13. That Agreement defined the "Material" St. Jude was transferring as "the anti-CD19-BB-ζ chimeric T-cell receptor construct, including any progeny, portions, unmodified derivatives and any accompanying know-how or data". 2003 MTA at ¶ 1, Am. Comp. Ex. D. The Agreement provided that "the Material will only be used to create a lentiviral chimeric T-cell receptor construct to be used in pre-clinical studies", id. at ¶ 3, and "may not be used in humans" or "for any commercial purpose." Id. at ¶ 4. It further provided that the University would "not commercialize any product that contains Material without the prior written approval of St. Jude." Id. at ¶ 8.

By 2007, Dr. June wished to use the June Construct to conduct human clinical trials, Am. Comp. ¶ 17, and so in February 2008, the parties executed a second MTA, dated October 2, 2007*fn3 , allowing the product to be used in such clinical trials. 2007 MTA at ¶ 3, Am. Comp. Ex. E. That agreement contained the same definition of "Material" as found in the 2003 agreement. Id. at ¶ 1.

In August 2011, Dr. June described the results of his study in an article in The New England Journal of Medicine, New Eng. J. Med. 8:725-733 (2011) and in Science Translational Medicine, 2011; 3(95):95ra73. Id. ¶ 23. St. Jude, in a complaint we will discuss below, avers that the University did not submit the Science Translational Medicine article to it for approval and that Penn and Dr. June failed to acknowledge that the Material the article referred to had come from St. Jude. St. Jude Comp. ¶ 49.

In a November 22, 2011 letter, the University informed St. Jude that it wished to terminate the MTA*fn4 . Am. Comp. Ex. F.

The University contends that it "contractually agreed to exclusively negotiate with Novartis regarding a ground-breaking collaboration that would develop Dr. June's cellular immunotherapy for general cancer patient use." Id. ¶ 27. According to the amended complaint, "The University . . . actively negotiated with Novartis a collaboration under which the University would receive funding that would allow it to continue with clinical trials of the Penn Immunotherapy without undue delay", and "[a]s of July 10, 2012, the University and Novartis had made substantial progress towards reaching an agreement that would allow continued development of the Penn Immunotherapy Technology." Id. ¶¶ 28-29.

According to the University's complaint, "[s]tarting in August 2011, St. Jude and the University had ongoing discussions regarding St. Jude's contention that the University allegedly breached the 2003 and 2007 MTAs." Id. ¶ 30. St. Jude claims that by January of 2012 it "had learned that the University had breached both the 2003 MTA and the 2007 MTA by publishing experimental results without the required acknowledgment of St. Jude and without sharing the proposed publication with St. Jude beforehand", and by "engaging in prohibited commercialization efforts", MTD at 5.

As a result, St. Jude's General Counsel, Clinton Hermes, and outside counsel, Glenn Krinsky, spoke to University General Counsel Wendy White by telephone on January 20, 2012. Id. While they were speaking, Krinsky sent White an e-mail, explaining:

Mr. Hermes and I telephoned you several minutes ago to inform you that St. Jude intended to file suit today against the Trustees of the University of Pennsylvania ("Penn") in connection with disputes arising under that certain Collaboration and Materials Transfer Agreement . . . As an alternative to filing suit, Mr. Hermes offered Penn the opportunity to enter into a "Stand Still Agreement" with St. Jude to enable the parties to discuss the disputes arising under the MTAs with the hopes of resolving those disputes and obviating the need for a lawsuit . . . In exchange . . . you have agreed on behalf of Penn that Penn will not file a lawsuit or initiate any other type of judicial or administrative proceeding . . . until no earlier than Friday February 3rd, 2012. On behalf of Penn, you explicitly acknowledge that there are no restrictions on St. Jude's ability to initiate legal proceedings related to the MTAs including, but not limited to, a federal court lawsuit against Penn in the Western District of Tennessee at any time after 3:00pm EST on Tuesday January 31, 2012 in the event that Penn has not executed a Stand Still Agreement . . .

Id. at 5-6. According to St. Jude, White responded that she "Understood and confirmed" the terms of the e-mail, and when the deadline for settlement passed, the parties had not reached an agreement. Id. at 6.

b. Procedural History

On July 11, 2012, St. Jude filed a breach of contract action against the University in the Western District of Tennessee. See St. Jude Comp., MTD Ex. A-1. St. Jude sought eight forms of preliminary and permanent injunctive relief: (1) specific performance of the 2003 and 2007 MTAs and to instruct the University to make submissions to journals crediting Dr. Campana and St. Jude's with the use of chimeric antigen receptors ("CAR"), St. Jude Comp. at ¶ 85 (1)-(4), and (2) an order that (a) the University enter into a Joint Materials Transfer Agreement covering the distribution of materials that contain the CAR, (b) the University not enter into an agreement to commercialize any product containing the CAR without St. Jude's approval, and (c) directs the University to provide St. Jude with a list of everyone to whom it had distributed the CAR or CAR coding sequence and a copy of all patent applications for inventions containing the CAR or the CAR coding sequence. Id. at ¶ 85 (5)-(8). Finally, St. Jude sought actual, compensatory, and punitive damages, as well as the imposition of a constructive trust or lien on "the Materials, and any construct, progeny, portions, replications or derivatives of the Materials". Id. at ¶ 85 (9)-(10).

On August 2, 2012, the University moved to dismiss the Tennessee action for lack of personal jurisdiction, or, in the alternative, to transfer the action to this District. See Penn MTD, St. Jude MTD Ex. C-1.

Meanwhile, in July of 2012, the University filed a complaint in this Court, which it amended in September of that year. In its amended complaint, the University alleges tortious interference with prospective contractual relations and seeks a declaratory judgment stating that it has not materially breached the 2003 and 2007 agreements and that the 2003 agreement has been terminated.

St. Jude moved to dismiss the entire action without prejudice on the ground that the Tennessee action was pending and asserted that the University's claims were compulsory counterclaims in that action. St. Jude alternatively moved this Court to dismiss Count I of the University's complaint which alleged tortious interference with prospective contractual relations for failure to state a claim on which relief can be granted, arguing first that Noerr-Pennington barred the claim, and also that the University had failed to allege sufficient facts to support its claim, see Def. MTD at 1, 16, 24.

On October 10, 2012, the United States District Court for the Western District of Tennessee transferred its case to this Court pursuant to 28 U.S.C. § 1404(a). We soon after consolidated the actions.

As St. Jude acknowledges, "[t]he transfer moots the first part of St. Jude's Motion to Dismiss or Stay, which seeks dismissal or stay of this action pursuant to the first filed and compulsory counterclaim rules". St. Jude Reply at 1. We thus consider the second part of St. Jude's motion, by which it aims to dismiss Count I of the amended complaint.

II. Analysis

The gravamen of the University's complaint is that "St. Jude first asserted an interest in the June Construct in 2011, but delayed litigation until the middle of 2012, when the University and Novartis were actively involved in negotiation of a major collaboration agreement." Am. Comp. ¶ 37. The University further argues that St. Jude knew it was not entitled to the relief it sought, including the injunctive relief, id. at ¶ 43, and instead, "St. Jude filed the Tennessee Complaint with the intent that the public disclosure of its baseless ...


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