Massachusetts Eye and Ear v. Qlt Phototherapeutics
| Decision Date | 16 June 2005 |
| Docket Number | No. 03-1682.,No. 03-1725.,No. 03-1683.,03-1682.,03-1683.,03-1725. |
| Citation | 412 F.3d 215 |
| Parties | MASSACHUSETTS EYE AND EAR INFIRMARY, Plaintiff/Counterclaim Defendant, Appellant/Cross-Appellee, v. QLT PHOTOTHERAPEUTICS, INC., Defendant. QLT, Inc., Counterclaim Plaintiff, Appellee/Cross-Appellant, v. Massachusetts Eye and Ear Infirmary, Evangelos S. Gragoudas, M.D., Joan W. Miller, M.D., Counterclaim Defendants, Appellants/Cross-Appellees. |
| Court | U.S. Court of Appeals — First Circuit |
Kenneth B. Herman, with whom James F. Haley, Jr., Christopher J. Harnett, Gerald J. Flattmann, John P. Hanish, Bindu Donovan, Fish & Neave, Christine M. Roach, M. Ellen Carpenter and Roach & Carpenter PC, were on brief, for appellants.
Donald R. Ware, with whom Barbara A. Fiacco, Jessica M. Silbey, Mark A. Reilly and Foley Hoag LLP, were on brief, for appellee/cross-appellant.
Before TORRUELLA, Circuit Judge, GIBSON,* Senior Circuit Judge, and LIPEZ, Circuit Judge.
The noble pursuit of curative technologies birthed Visudyne, a drug that treats the leading cause of vision loss in people over age fifty. That success involved the efforts of multiple institutions, and the common drive for financial returns now brings us a dispute over rights to the income stream of the fastest growing ophthalmic drug in history.
The entire range of claims articulated by plaintiff-appellant was dismissed by the district court on summary judgment. The bulk of the opinion that follows consists of our de novo review of these dismissals. We must also address defendant-appellee's cross-appeal of several discovery-related rulings. Following a review of the factual background, considered in the light most favorable to the appellant, we will begin our analysis.
Age-related macular degeneration (AMD) is an ocular disease that is the predominant cause of vision loss in people over age fifty. The illness takes two forms: "wet" and "dry." The wet form, though only accounting for ten percent of the cases of age-related macular degeneration, leads to the debilitating condition known as choroidal neovascularization ("CNV" or "neovasculature"), responsible for ninety percent of cases of AMD vision loss. Neovasculature refers to conditions characterized by the proliferation of unwanted blood vessels.
In 1989, several researchers at Massachusetts General Hospital's ("MGH") Wellman Laboratories of Photomedicine began investigating the use of photosensitive drugs to treat eye diseases such as AMD involving neovasculature. In March 1991, the MGH researchers met with Dr. Julia Levy of appellee QLT Phototherapeutic ("QLT") to discuss the possibility of utilizing benzoporphin derivatives ("BPD" or "derivatives") developed by QLT for the treatment of AMD. Levy agreed to provide MGH the BPD needed for research trials.
The Massachusetts Eye and Ear Infirmary ("MEEI" or "the Infirmary"), a medical institution located next to, but distinct from, MGH, also sought out QLT's BPD for photodynamic therapy research. Dr. Joan Miller joined the Infirmary in the fall of 1991 and soon proposed conducting studies using BPD on monkeys. In March 1992, Miller applied to MEEI to investigate the use of BPD to treat neovasculature. Pursuant to Dr. Miller's application, MEEI and QLT signed a material transfer agreement ("MTA") in which MEEI would receive BPD at no cost in exchange for providing QLT the results of Miller's pre-clinical studies for use in QLT's regulatory filings and patent disclosures.
In September 1992, following their successful monkey trials, which demonstrated the potential use of photodynamic therapy with BPD, Dr. Miller and her MEEI colleague, Dr. Gragoudas, presented their data confidentially to QLT representatives visiting Boston. Within the next two years, MEEI and QLT entered into two more material transfer agreements of similar tenor.
QLT had interest in commercial applications of the Infirmary's experimental monkey trials and, in May 1993, QLT and Dr. Miller entered into a Confidential Disclosure Agreement ("CDA"). As part of this agreement, QLT promised "not to use the Confidential Information for any purpose other than the evaluation of Products under the terms of this Agreement" and "to maintain Confidential Information in confidence." The parties agreed that "misuse or improper disclosure of Confidential Information would irreparably harm the business of the disclosing party or that party's affiliates." Pursuant to the CDA, Miller continued to provide MEEI's confidential research results to QLT, including results of MEEI research not funded by QLT.
In July 1993, at Dr. Miller's request, QLT agreed to fund further experiments by the Infirmary involving the treatment of neovasculature in monkeys with the derivatives. The results of these studies, as well as other studies not funded by QLT, were shared with QLT in November 1994, in a report entitled the Preclinical BPD-MA Pharmacology Study for Macular Degeneration ("Bolus Study").
In late 1993, QLT contacted the company CIBA Vision1 to commercialize the use of photodynamic therapies with BPD to treat age-related macular degeneration. QLT provided CIBA Vision with MEEI's confidential research results without first informing MEEI. In February 1994, CIBA Vision sought full access to Dr. Miller's research results to pursue a "high potential opportunity." QLT agreed to share with CIBA Vision the "plans and results of our ocular programme," which included Dr. Miller's research.
Dr. Miller learned of QLT's negotiations with CIBA Vision in the Spring of 1994. In March, she expressed concern about the confidentiality of MEEI's research results to Julia Levy and Edwin Levy of QLT, who assured her that QLT had not disclosed and would not disclose in the future any of MEEI's trade secret information. Dr. Miller then flew to Switzerland "to get CIBA Vision excited in the technology," but during that meeting, and subsequent meetings with CIBA Vision representatives in July and October of 1994 she presented only summaries of her research.
On May 31, 1994, CIBA Vision and QLT executed a Letter of Intent to enter into a strategic partnership for commercializing the use of photodynamic therapy to treat neovasculature arising from age-related macular degeneration. The Letter recognized that QLT had "significant non-clinical evidence" — some of which came from Miller's research — showing the success of the therapy for this application. The Letter indicated that "[e]ach party will manage the patent portfolio in collaboration with the other party." QLT announced the partnership to the public and MEEI announced that:
Researchers at [MEEI] in Boston are participating in a joint worldwide project with [QLT] and CIBA ... to develop photodynamic therapy, a potential treatment for certain eye diseases. Infirmary researchers, since 1992, have performed pre-clinical studies, in collaboration with Wellman Laboratories, using Benzoprophin derivative (BPD), a proprietary light-activated drug developed by [QLT].
Clinical trials testing the treatment on humans began in 1995, and the Infirmary was one of several sites performing the trials under a written agreement with QLT. MEEI was paid more than one million dollars for participation in the trials and for the resulting clinical data.
On February 6, 1995, QLT and CIBA Vision signed a definitive agreement to pursue worldwide joint development and commercialization of photo-dynamic therapy for the treatment of choroidal neovasculature. The partnership aimed to obtain FDA approval for its treatment, trade-named Visudyne, in April 2000. Sales outside the United States began in 1999, and Visudyne received FDA approval in April 2000. As of February 2002, over two hundred twenty million dollars' worth of Visudyne had been sold worldwide.
Prior to QLT's partnering with CIBA Vision, in March 1994, Dr. Miller approached QLT about pursuing a patent application for the treatment. QLT agreed and suggested that Kate Murashige, its long-standing patent attorney, prepare the application. Relying on information provided by Miller, Murashige prepared a patent application with serial number 08/209,473 ("the '473 application") and filed it on March 14, 1994. The claimed invention applied to methods for treating choroidal neovasculature with photodynamic therapy using BPD; the named inventors included only MEEI's Drs. Miller and Gragoudas and another MEEI employee, Lucy Young.
Even though it was not claiming co-inventorship of the '473 application, QLT confirmed that it would pay for the preparation of the application. Murashige told MEEI that "QLT does not see itself as a participant in the invention other than as a supplier of the material BPD," and "the assignment would be entirely to MEEI."
Within months of the '473 filing, however, QLT changed its approach to the patent strategy. On behalf of QLT, Murashige proposed to MEEI that the '473 application could be improved upon by modifying the scope of the patent claims. Murashige argued that it would strengthen the application to include methods of treating CNV with photo-dynamic therapy using liposomal formulations of BPD. Since QLT's Dr. Levy and the MGH inventors had contributed to the invention of this form of treatment, the addition of these claims to the application would make them co-inventors. QLT appreciated the legal significance of the amplification of inventorship in the '591 application. Jennifer Kaufman-Shaw, QLT's in-house counsel, wrote to CIBA Vision that:
at the time the invention was made, there was no contractual agreement in place whereby QLT would be entitled to ownership of the invention. Therefore QLT...
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