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

United States District Court, Third Circuit

November 13, 2013



Stewart Dalzell, J.

I. Introduction

These actions concern the nature of an immunotherapy for cancer treatment that Dr. Carl June, M.D., Director of the Translational Research Program and a professor at the University of Pennsylvania (“the University” or “Penn”), developed. The parties’ claims sound in patent and contract law, and the dispute centers on the question of whether Dr. June’s immunotherapy (the “June Construct”) contains “material” within the meaning of two Materials Transfer Agreements the University executed with St. Jude Children’s Research Hospital (“St. Jude”).

We here consolidate the earlier contract action (C.A. No. 12-4122) and the later patent action (C.A. No. 13-1502) and consider St. Jude’s motion for partial summary judgment in the contract action and Penn’s partial motion to dismiss St. Jude’s counterclaims in the patent action.[1] We also consider St. Jude’s motion for a separate trial. For the reasons discussed herein, we will deny in part the motion to dismiss, deny the summary judgment motion, and deny the motion for a separate trial. We will then set a schedule for discovery and trial.

II. Procedural History

On April 12, 2013, we issued an opinion in which we detailed the procedural and factual history of this dispute. Trustees of Univ. of Pennsylvania v. St. Jude Children's Research Hosp., No. 12-4122, 2013 WL 1499518 (E.D. Pa. Apr. 12, 2013). Because those histories guide our consideration of the instant motions, and because the parties’ recent submissions provide more information about the facts giving rise to the conflict, we will rehearse the procedural history briefly and the factual history in detail.

On July 11, 2012 St. Jude filed a breach of contract action against the University in the Western District of Tennessee seeking injunctive relief and damages on the ground that the University had breached two Materials Transfer Agreements (“MTAs” or “Agreements”) the parties had executed. Apr. 20, 2013 Mem. at 6-7.

Eight days later, the University filed a breach of contract action here. It then submitted an amended complaint in that action in September of 2012.[2] On October 10, 2012 the United States District Court for the Western District of Tennessee transferred the St. Jude case to this District pursuant to 28 U.S.C. § 1404(a), and we consolidated the actions.

On March 19, 2013, the United States Patent and Trademark Office issued U.S. Patent No. 8, 399, 645, (the “‘645 patent”) entitled “Chimeric Receptors with 4-1BB Stimulatory Signaling Domain” to St. Jude. Three days later the University filed a separate action in this Court seeking a declaration that it was not infringing on that patent and that the patent was invalid, see C.A. No. 13-1502, Comp. ¶¶ 9, 34-39. St. Jude moved to dismiss, and on June 10, 2013 the University filed an amended complaint in which it again sought our declaration of its non-infringement and the patent’s invalidity. See C.A. No. 13-1502, Am. Comp. ¶¶ 34-39.[3]

St. Jude filed an Answer and Counterclaims, asserting that Penn is infringing and contributorily infringing on the ‘645 patent by using and commercializing the June Construct, and that this infringement is willful. Through its counterclaims St. Jude seeks a judgment in its favor in C.A. No. 13-1502, a declaration that the patent is valid and enforceable and that Penn is infringing upon it and that such infringement has been willful and deliberate. It also seeks an injunction from further infringement or contributory infringement, and damages. See C.A. No. 13-1502 Counterclaims ¶¶ 22-34. Penn moves to dismiss the willful infringement claim. See C.A. No. 13-1502 Penn MTD.

When the University filed the patent action, we directed the parties to show cause why we should not consolidate it with the contract action, see C.A. No. 13-1502, Docket No. 4.

The University responded that it did not oppose consolidation, see April 26, 2013 epistolary submission. St. Jude responded by submitting a motion for partial summary judgment and positing that by the time the parties had submitted briefing in the patent case the contract case might be resolved by summary judgment. St. Jude Resp. to Order to Show Cause.

As an alternative to summary judgment, St. Jude moved for a separate trial on “[t]he question of whether the June Construct incorporates and was made with Material” under the MTAs. St. Jude MSJ at 23.

We thus consider here our initial suggestion of consolidation, the University’s motion to dismiss St. Jude’s counterclaim for willful infringement, and St. Jude’s motion for partial summary judgment or, in the alternative, a separate trial.

III. Factual History

This action between the University and St. Jude concerns two MTAs between the parties, the “2003 MTA” and the “2007 MTA”. We will describe the undisputed facts as the parties have presented them.[4]

A. The Campana Construct

The MTAs arose out of immunotherapy research Dr. Dario Campana and Dr. Chihaya Imai[5] conducted at St. Jude. In the early 2000s Dr. Campana developed a protein molecule called an “anti-CD19 chimeric antigen receptor” (“CAR”). Through a genetic process we will recount below, Dr. Campana inserted the CAR into T cells, a type of white blood cell that directs immune responses and attacks infected or cancerous cells.[6] One end of the CAR protruded from the T cell, enabling it to latch onto a tumor cell “antigen.” St. Jude MSJ at 4 (citing Declaration of Dr. John Gray, Ex. to St. Jude MSJ, at ¶ 6). When the T cell connected with the antigen, the other end of the CAR directed the T cell to “attack and destroy” the target cell. Id.

Dr. Campana reproduced this result by developing a cDNA, a DNA[7] molecule containing a nucleotide[8] sequence encoding the structure of the CAR, and inserting it into the DNA of a T cell. Thus, when the T cell replicated, the new T cells also included the CAR. Id. Through this process Dr. Campana “creat[ed] a population of T cell progeny that can be used to treat CD19 B-cell cancers, such as acute and chronic leukemia and non-Hodgkin’s lymphoma”. St. Jude MSJ at 5. In order to insert the CAR-encoded cDNA into the T cell DNA, Dr. Campana used a “retroviral 'vector'” as a “molecular delivery vehicle”. Id.

Dr. Campana presented his findings at an American Society of Hematology conference in San Diego, California, in December of 2003. St. Jude MSJ at 5; Penn Opp. at 3. After the conference, Dr. June wrote to Dr. Campana saying,

Your data at ASH with the CD19 ScFv was striking. I was wondering if you might want to have an inter-institutional collaboration to test this? . . . I think that retroviruses are going to be problematic as vectors due to the leukemic risk, and the higher efficiency of the lentivirus is another reason making it attractive to switch. Would you consider letting my lab create the lentiviral vector from your construct, and then I can ship you transduced T cells to compare to the retroviral vector?

Dec. 10, 2003 E-mail from June to Campana, Campana Dec., Ex. to St. Jude MSJ, Ex. 4.

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, St. Jude MSJ Ex. A. 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, that the University would jointly publish any “result[s] from the collaborative research study” with St. Jude, Id. at ¶ 6, and that it would “notify St. Jude within sixty (60) days of filing any patent application which claims subject matter that contains or incorporates the Material or which claims a method of manufacture or use of the Material.” Id. at ¶ 8.

Pursuant to the MTA, St. Jude sent the anti-CD19-BB-ζ chimeric receptor construct to the University, St. Jude MSJ at 7, Penn Resp. in Opp. at 7. After receiving the construct, Drs. Milone and June sent e-mails requesting information about the gene sequence to Drs. Campana and Imai. Dr. June requested a sequence of the plasmid, and he asked, “how do you detect surface expression of the scfv; do you have an antibody to [do] it?” Dec. 17, 2003 E-mail from June to Campana, Campana Dec. Ex. 5. Dr. Campana responded by sending the sequence of the anti-CD19-BB-ζ and explained, “We detect surface expression with a goat-anti-mouse F(ab)2 biotin from Jackson Immunoresearch, followed by streptavidin PerCP from Becton Dickinson.” Dec. 17, 2003 E-mail from Campana to June, Campana Dec. Ex. 5. Dr. Milone then wrote, “I realized that the sequence for the CD19-truncated receptor is likely to have a different 3’ end compared with the other 2 constructs. We need to use PCR to transfer it to our lentivirus system. Could you tell me what sequence is at the 3’ end of the CD19-truncated?” Dec. 23, 2003 E-mail from Milone to Imai, Campana Dec. Ex. 5. Dr. Imai responded with “files containing sequence for anti-CD19-truncated and MSCV-IRES-GFP retroviral vector.” Dec. 23, 2003 E-mail from Imai to Milone, Campana Dec. Ex. 5.

Penn does not contest that St. Jude sent the construct and the gene sequence, but it argues that the sequence and the other information did not constitute “know-how” under the MTA because The sequence of a plasmid or DNA sequence, such as the CD19-BB-z CAR sequence included in the Attachment, is readily obtainable by a person skilled in the art of molecular biology using commonly employed sequencing techniques, as were widely available at the time the materials were received from St. Jude.

Penn Resp. in Opp. at 9, citing Milone Dep., Ex. C to Penn Resp.

in Opp., at ¶ 7. Dr. Milone avers that it is “common practice amongst scientific and academic research institutions that, when one institution sends biological material such as a plasmid to another, it also sends a text version of DNA sequences . . . so the recipient scientist does not have to independently sequence” the material, but that had St. Jude not provided the sequence, Dr. Milone “otherwise could have derived [the information] from [his] own sequencing of the biological materials provided by St. Jude.” Milone Dep. at ¶ 7.

B. The June Construct

When Dr. June proposed using a lentiviral vector, rather than a retroviral vector, he and others at Penn, including Dr. Michael Milone, were “the first researchers to work with a lentiviral vector (a modified form of HIV-1) for immunotherapy in cancer patients, having determined that the use of a lentivirus was the most effective way to accomplish genetic modification of human T cells”. Penn Resp. in Opp. at 7. Penn contends that Drs. Milone and June could not use the St. Jude CAR cDNA because it was designed to be introduced through a retroviral vector, and it thus “lacked the required sequences at the beginning and end of the DNA anti-CD19-BB-z chain to allow it to recombine into the University’s pre-existing lentiviral vector.” Penn Resp. in Opp. at 8, citing Milone Dec. Ex. C, at ¶ 11. Instead, Penn avers that Dr. Milone developed a separate “primer-based polymerase chain reaction (“PCR”)” that would generate a DNA sequence similar to the one that Dr. Campana had constructed but modified to contain “appropriate restriction enzyme sites on the ends to facilitate recombination into the University’s lentiviral vector.” Campana Dec. at ¶ 12. Thus, Penn alleges that this new sequence differed from the sequence in the Campana Construct in that it “included five nucleotide differences at the ends of the sequence” to facilitate incorporation into the lentiviral vector. Id. at ¶ 13.

Moreover, Penn contends that the new sequence differed from the sequence in the Campana Construct in that it contained a modified nucleotide in the CAR sequence leading to “an amino acid change from the original amino acid sequence encoded by the Campana construct.” Id.

Dr. Milone also avers that “[t]he modified anti-CD19-BB-z did not contain any physical part of the Campana Construct. It was composed completely of nucleotides from Dr. June’s laboratory during the PCR reaction”, and “after the PCR process . . . the original Campana Construct physically existed as it did before the process.” Id. at ¶ 14. Drs. Milone and June completed the June Construct by incorporating the modified anti-CD19-BB-ζ sequence into a lentiviral plasmid that had been created earlier in Dr. June’s laboratory. Id. at ¶ 15. The University thus describes the June Construct as a “modified derivative” of the Campana Construct. Penn Resp. in Opp. at 7.

St. Jude’s account of the genetic makeup of the June construct appears similar to Penn’s account in fact, if not in emphasis. St. Jude describes the June Construct as a “lentiviral vector clone” consisting of “the anti-CD19 cDNA provided by St. Jude, incorporated into a lentiviral vector delivery vehicle”, St. Jude MSJ at 8. St. Jude asserts that “[t]he cDNA of the June Construct consisted of the identical approximately 1, 500-base-pair sequence provided by St. Jude, with the exception of a single-base-pair difference that appears to be the kind of ‘copying error’ (or mutation) that can occur in a process called PCR amplification.” Id. (emphasis in original). The "exception" to which St. Jude refers appears to be the difference Dr. Milone cited as causing an amino acid change. St. Jude thus concludes that “even with the base pair difference, the June Construct contains the largest possible nucleotide ‘portion’ -- all but one base pair out of approximately 1, 500 -- of the anti-CD19 cDNA ‘Material’ St. Jude provided, and it was made with the accompanying data and know-how St. Jude provided.” Id. at 8-9.

With regard to the five nucleotide differences at the end of the sequence, St. Jude contends that “all Penn did with the anti-CD19 CAR cDNA it received from St. Jude was to copy it exactly using common polymerase chain reaction (“PCR”)

techniques, and to add five nucleotide base pairs at each end so the cDNA could be spliced into a lentiviral vector.” St. Jude Reply at 4[9].

C. The 2007 MTA In 2007 St. Jude sent Penn an e-mail saying that it had “reason to believe Dr. June may have sent the receptor to an investigator outside the University of Pennsylvania” and noted that it needed to determine whether “Dr. June is planning to conduct clinical trials using St. Jude materials”, Jan. 11, 2007 e-mail from Hawkins to Donohue, Hawkins Dec., Ex. to St. Jude MSJ, Ex. 1.

Kurt Schwinghammer, then Director of Licensing at Penn, responded that Dr. June was planning to conduct a clinical trial, and that he had told Dr. Campana that he intended to do so. Feb. 5, 2007 E-mail from Schwinghammer to Hawkins, Hawkins Dec. Ex. 2. Three days later, St. Jude replied that Dr. Campana would not object to clinical trials moving forward, but that from St. Jude’s standpoint “a new clinical trial agreement will need to be executed between the University and St. Jude before clinical trials proceed.” St. Jude MSJ at 9-10, quoting Feb. 8, 2007 e-mail from Hawkins to Schwinghammer, Hawkins Dec. Ex. 3. On February 28, 2007, St. Jude again wrote to Penn that “a new MTA for clinical use must be executed between the University and St. Jude to provide St. Jude with the appropriate protections.” Id.

On April 16, 2007, Donald T. Deyo, Director of Corporate Contracts in Penn’s Office of Research Services, wrote, “[w]e acknowledge the necessity of a new MTA since the anti-CD19-BB-zeta receptor materials are now to be used in a clinical trial.” Apr. 16, 2007 E-mail from Deyo to Hawkins, Hawkins Dec. Ex. 5.

On or about February 8, 2008, the parties executed a second MTA, dated it October 2, 2007[10], allowing Dr. June to proceed with clinical trials. 2007 MTA, St. Jude MSJ Ex. B; Penn Resp. in Opp. at 4. That agreement contained the same definition of “Material” as found in the 2003 agreement.[11] 2007 MTA at ¶ 1.

D. Penn’s Alleged Breaches

In April of 2009, Dr. Campana and Dr. June, with others, co-authored an article in Molecular Therapy, Campana Dec. ¶ 6, in which they noted that “[t]he cDNA for the CARs that contain a truncated form of the TCR-ζ intracellular domain . . . were generated at St[.] Jude’s Children[;]s Research Hospital. These complete CAR sequences were amplified directly from the provided plasmids by PCR.”[12] Campana Dec. Ex. 1 at 8.

In August 2011 Dr. June described the results of his clinical trials in articles in The New England Journal of Medicine, New Eng. J. Med. 8:725-733 (2011) and Science Translational Medicine, 2011; 3(95):95ra73. See St. Jude MSJ at 12, Exs. C and D. St. Jude contends, and Penn does not dispute, that “neither article . . . acknowledge[d] St. Jude as the source of the anti-CD19 CAR cDNA”, St. Jude MSJ at 12. St. Jude wrote to Penn asking if the receptor used in the trials the articles described was the same receptor St. Jude had provided.

Hawkins Dep., Ex. to St. Jude MSJ, Ex. 6. Responding to this (and other inquiries) from St. Jude, Penn’s director of legal affairs, Kathryn A. Donohue, wrote to St. Jude and said, “We incorporated the cDNA from Dr. Campana/St. Jude into the vector.” St. Jude MSJ at 13 (quoting Sept. 22, 2011 E-mail from Donohue to Marsh, Watts Dec., Ex. to St. Jude MSJ, Ex. 2). Donohue included a diagram, above which she wrote, “In the schema below (from the NEJM paper), the large circle represents the entire vector, and the portion of the vector that represents the St. Jude sequence is circled in blue.” Id. (emphasis in original). Donohue continued that the paper in which Dr. Campana was included as a co-author was “incorporated as ref #5 of the NEJM paper, and is an acknowledgment of Dr. Campana and St. Jude.” Id. The parties dispute the significance of these communications, as we will discuss below.

St. Jude points out that when other researchers asked Dr. June for the construct, he told them they needed to obtain permission from Dr. Campana and St. Jude, see, e.g., Esther Allay Dec., Ex. to St. Jude MSJ, Ex. 6 (Nov. 19, 2011 e-mail from Dr. June to Dr. Stephen Gottschalk saying, “I would be happy to send you the BBz CAR. You would also need to get permission from dario campana [sic] at St. Jude. He sent us a retroviral plasmid in 2003, and we modified the CAR and adapted for lentivirus.”); Ex. 3 (Sept. 27, 2011 e-mail from Dr. June to a researcher at the National Cancer Center in Korea saying “[i]t turns out that you also need an MTA from Dr. Dario Campana at St. Jude/Singagpore [sic], or at least his permission, for me to send you the plasmid. We originally made the CD19:BB:Z lentiviral vector from a retroviral vector that Dario made.”).

Dr. June’s declaration suggests a different understanding. He avers that “[a]t no point have I ever understood the [MTAs] . . . to restrict the transfer of the June Construct, developed in my laboratory at the University, since the June Construct does not physically contain any of the Material provided by St. Jude under the 2003 MTA.” June Dec., Ex. A to Penn Resp. in Opp., at ¶ 14. Dr. June says that before August 29, 2011 he “sent samples of the June Construct to researchers at other universities . . . without directing them to St. Jude for permission.” Id. at ¶ 15.

On August 29, 2011, an Associate General Counsel for St. Jude, McGehee Marsh, sent a letter to Donohue referring to Dr. June’s recent publications and saying, “[w]e simply need to know if the receptor used in the clinical trial is the one obtained from St. Jude. If it was, we would like to understand why Dr. June did not acknowledge St. Jude’s contribution . . . .” Aug. 29, 2011 Letter from Marsh to Donohue, June Dec. Ex. 1.

After Penn received this letter, Dr. June avers that “solely in order to avoid a legal dispute and out of an abundance of caution, ” he “directed any researchers who wanted [him] to send them the June Construct to St. Jude so that St. Jude would ...

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