Brigham Young Univ. v. Pfizer, Inc.

• Decision Date: 20 March 2012
• Docket Number: Case No. 2:06–CV–890 TS.
• Citation: 861 F.Supp.2d 1320
• Parties: BRIGHAM YOUNG UNIVERSITY, and Dr. Daniel L. Simmons, Plaintiffs, v. PFIZER, INC., et al., Defendants.
• Court: U.S. District Court — District of Utah

861 F.Supp.2d 1320

BRIGHAM YOUNG UNIVERSITY, and Dr. Daniel L. Simmons, Plaintiffs,

v.PFIZER, INC., et al., Defendants.

Case No. 2:06–CV–890 TS.

United States District Court,

D. Utah,

Central Division.

March 20, 2012.

David B. Thomas, Stephen M. Craig, Brigham Young University, Provo, UT, Leo R. Beus, Mark C. Dangerfield, Abigail M. Terhune, Adam C. Anderson, Britton M. Worthen, Hank E. Pearson, L. Richard Williams, Lee M. Andelin, Scot C. Stirling, Timothy J. Paris, Beus Gilbert PLLC, Scottsdale, AZ, Mark M. Bettilyon, Arthur B. Berger, James S. Jardine, Rick B. Hoggard, Samuel C. Straight, Ray Quinney & Nebeker, Salt Lake City, UT, G. Robert Blakey, University of Notre Dame Law School, Notre Dame, IN, Keith C. Ricker, Cassett Ricker Law PLLC, Phoenix, AZ, Victoria L. Romney, San Diego, CA, for Plaintiffs.

Brent O. Hatch, Phillip J. Russell, Kevin W. Bates, Hatch James & Dodge, Salt Lake City, UT, John Caleb Dougherty, DLA Piper U.S. LLP, Baltimore, MD, Kathy J. Owen, Dla Piper LLP US, Dallas, TX, Richard T. Mulloy, Dla Piper U.S. LLP, San Diego, CA, Richard F. O'Malley, Jr., Sidley Austin LLP, Chicago, IL, Amanda L. Major, Amy K. Wigmore, James L. Quarles, III, Wilmer Cutler Pickering Hale and Dorr, Washington, DC, Andrea Weiss Jeffries, Donald W. Ward, Wilmer Cutler Pickering Hale Dorr LLC, Los Angeles, CA, Emily R. Whelan, William F. Lee, Wilmer Cutler Pickering Hale and Dorr, Boston, MA, for Defendants.

MEMORANDUM DECISION AND ORDER ON DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT NO. 6

TED STEWART, District Judge.

This matter is before the Court on Pfizer's Motion for Partial Summary Judgment on Plaintiffs' Claim that Defendants Have Misappropriated “Project” and “Compilation” Trade Secrets (Count VIII of the First Amended Complaint). ¹

I. BACKGROUND

The facts of this case are fully set out in the Court's Order dated March 13, 2012,² and need not be recited here.

II. STANDARD OF REVIEW

Summary judgment is proper if the moving party can demonstrate that there is no genuine issue of material fact and it is entitled to judgment as a matter of law.³ The party seeking summary judgment bears the initial burden of demonstrating an absence of a genuine issue of material fact.⁴ “Once the moving party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party to go beyond the pleadings and set forth specific facts showing that there is a genuine issue for trial.” ⁵ “An issue is genuine‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’ ” ⁶

III. DISCUSSION

BYU has alleged that Pfizer misappropriated BYU's “project” and “compilation” trade secrets from BYU. Pfizer contends that BYU's trade secret claims fail for four reasons: (1) BYU has failed to identify what these trade secrets are with the requisite particularity; (2) BYU has not alleged that each element of the trade secret was misappropriated as is required; (3) BYU did not make reasonable efforts to maintain secrecy; and (4) Pfizer obtained a license to the disputed material through paragraph 3.2 of the Research Agreement, which gives Pfizer a license to any project output that is not patented. In its response, BYU does not differentiate between a project and a compilation trade secret and the Court will address them in the same manner.

A. FAILURE TO IDENTIFY TRADE SECRET WITH PARTICULARITY

Both Utah and Missouri have adopted the Uniform Trade Secrets Act (“UTSA”). The UTSA expressly provides that it “shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of the chapter among the states enacting it.” ⁷

Under the UTSA, a trade secret is

information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

(b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.⁸

The UTSA thus recognizes that a trade secret can be a “compilation” of several elements. A compilation can be made up of known elements, if the combination itself is outside the general knowledge and not readily ascertainable by proper means.⁹ In making this showing of uniqueness, a plaintiff must be specific.¹⁰ Simply pointing to a large amount of information and claiming it is secret will not do.¹¹ Rather, the plaintiff must explain how the combination of elements is sufficiently different, or special, to merit protection.

1. SPECIFICITY

Pfizer contends that BYU's trade secret claim fails because it is not specific enough. Two types of particularity, according to Pfizer, are missing from BYU's compilation trade secret claims—particularity about what the trade secret is and particularity about how the compilation trade secret is unique. In reality, these requirements seem to be two sides of the same coin—in order to show uniqueness with particularity, one must be particular about what is involved in the compilation.

At the March 9, 2012 hearing, BYU was asked to identify when its alleged compilation was complete and unique and what elements made up the secret at that time. BYU presented a handout that purported to identify several compilations, including their contents and the date they were completed. ¹² Each successive compilation incorporates the contents of the prior. To avoid prejudice to Pfizer, the Court will not now allow BYU to allege distinct compilation trade secrets that it did not clearly identify to Pfizer in the past. Rather, the Court will analyze the description of the trade secret(s) timely provided by BYU, if any, and focus on the latest compilation alleged by BYU that was adequately disclosed. The Court will then proceed to consider the parties' arguments on that compilation.

BYU provided a detailed break down of 42 trade secrets in a document entitled “Substance and Identity of BYU's Trade Secrets” drafted by Keith Ricker, which was marked as an exhibit in Mr. Ricker's deposition.¹³ This deposition was taken on June 2, 2011.¹⁴ Mr. Ricker states that the 42 elements were communicated prior to termination of the Research Agreement, that the elements are trade secrets, and that elements can be combined, even if disclosed individually, to form a compilation. The final trade secret that Mr. Ricker identified was

A research project and plan for the selection, testing, and modifying of nonsteroidal anti-inflammatory drugs for COX–2 selectivity by establishing the existence of functionally separate COX isozymes, ruling out steroids as treatment compounds, developing polyclonal and ultimately monoclonal antibodies, sequencing and cloning human COX–1 and COX–2 DNA, and using cell based and recombinant enzyme assays to test for selective COX–2 inhibition. ¹⁵

The last compilation BYU alleges before the Research Agreement was terminated is dated March 20, 1992, when Simmons sent Pfizer a progress report. That compilation included the following elements, which are the contents of BYU's first claimed compilation:

(1) a vision/project to find a COX–2 selective NSAID; (2) knowledge that a second COX gene existed, plus the COX–1 and COX–2 clones; (3) expression data for COX–1 and COX–2, which tied the inducible COX to COX–2; (4) antibodies to chicken COX–2; and (5) restriction maps for Dr. Simmons's mouse COX–1 and COX–2 clones and instructions for their use.¹⁶

From there, BYU essentially alleges that each progressive increase in Simmons's knowledge that was communicated to Pfizer created a new compilation trade secret. Because Mr. Ricker listed all developments in the Project up until termination and noted that those elements could be combined into a compilation trade secret, and specifically noted that Dr. Simmons's vision and accompanying tools were part of the trade secrets, the Court is satisfied that BYU has communicated to Pfizer that it would claim a compilation trade secret, complete as of March 20, 1992, that is based on Simmons's vision to find a COX–2 selective NSAID and accompanied by the tools that Simmons had developed up to that point. Therefore, the Court will reject Pfizer's argument on this point. The Court will next consider whether that trade secret has been shown to be unique and therefore worthy of trade secret protection.¹⁷

2. UNIQUENESS

The Court understands the compilation trade secret to essentially be a plan or vision to find a COX–2 selective NSAID as well as the information and materials in existence by March 20, 1992, that provide tools to accomplish that goal. The Court finds that this vision could be a compilation trade secret, and that the parties dispute the facts that are essential for making the determination. Accordingly, the Court will deny summary judgment.

In so holding, the Court follows the Utah Supreme Court's reasoning in USA Power, LLC v. PacifiCorp.¹⁸ In that case, USA Power was in the business of laying groundwork for the development of power plants, including the acquisition of land, permits, water rights and other necessaries. USA Power would then sell its work to an entity that would develop and operate the plant. USA Power had been working on a power plant plan in Utah. During negotiations with a potential buyer, the company provided three binders full of information about the plan. The binders contained copies of permits, zoning information, and other public documents. Defendants argued that, because they could have sought out all the documents from various sources and cobbled them together, the binders could not be a compilation trade secret. The court disagreed, noting that a compilation can be a trade secret even if its individual contents were not secret.¹⁹ The court then held that a vision could be a trade secret, without launching into a detailed analysis of what specific...