Research Inst. At Nationwide Children's Hosp. v. Trellis Bioscience, LLC

• Decision Date: 30 September 2016
• Docket Number: Case No. 2:15-cv-3032
• Court: U.S. District Court — Southern District of Ohio
• Parties: RESEARCH INSTITUTE AT NATIONWIDE CHILDREN'S HOSPITAL, Plaintiff, v. TRELLIS BIOSCIENCE, LLC, Defendant.

RESEARCH INSTITUTE AT NATIONWIDE CHILDREN'S HOSPITAL, Plaintiff, v. TRELLIS BIOSCIENCE, LLC, Defendant.

Case No. 2:15-cv-3032

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

September 30, 2016

CHIEF JUDGE EDMUND A. SARGUS, JR.

Magistrate Judge Elizabeth P. Deavers

OPINION AND ORDER

This matter is before the Court on Defendant's Motion to Dismiss or, Alternatively, to Transfer Venue [ECF Nos. 23, 27].¹ For the reasons that follow, Defendant's Motion is DENIED.

I.

Plaintiff, Research Institute at Nationwide Children's Hospital ("RINCH"), is a non-profit corporation based in Columbus, Ohio. (Compl. ¶ 1 [ECF No. 1].) RINCH is a pediatric research center focused on improving children's health. (Id. ¶ 6.) Among other areas of study, RINCH has, for years, "researched compositions and methods for the destruction or remediation of biofilms in the clinical and industrial settings." (Id. ¶ 8.) As RINCH explains in its Complaint,

Biofilm is a "slime" comprised of primarily DNA held together by DNA binding proteins such as the bacterial protein "integration host factor (IHF)." These biofilms prevent the innate and adaptive immune systems, antibiotics, and other antibacterial agents from gaining access to bacteria located within the biofilm. Bacteria within the biofilm in the mammalian body are a significant source ofchronic/recurrent diseases. The biofilm makes it difficult to treat and clear bacterial infections from the body.

. . . RINCH's research sought compositions and methods for breaking through the biofilm to gain access to, treat, and/or kill the bacteria residing therein. RINCH has invested substantial time and resources developing compositions and methods of gaining access to, breaking down and inhibiting biofilm formation, and for treating and/or killing the bacteria protected within biofilms, and continues to devote resources to improve upon its existing technology and to create new compositions and methods relating to the same.

(Id. ¶¶ 8-9.)

Defendant, Trellis Bioscience, LLC ("Trellis"), is a Delaware limited liability company operating in Menlo Park, California. (Compl. ¶ 2.) Trellis is a biotechnology startup company that "discovers and develops human antibody therapeutics as treatment for infectious disease and cancer, using a unique proprietary method." (Ellsworth Decl. ¶ 4 [ECF No. 27-3].) Trellis has twelve employees in Menlo Park and one employee who lives in Florida. (Id. ¶¶ 3-4.) Trellis avers that it has never employed any Ohio citizens and has never had any Ohio offices. (Id. ¶ 4.)

In the late summer or early fall of 2012, RINCH's Director of Technology Commercialization, Dr. Matthew McFarland, participated in a technology showcase to promote its biofilm remediation technology. (McFarland Decl. ¶ 4 [ECF No. 31-1].) Around that same time period, Dr. McFarland spoke with Wayne Embree, an Ohio businessman affiliated with an Ohio-based firm specializing in forming and funding start-up companies. (Id.) Embree was aware of Trellis's business interests in biotechnology and RINCH's interest in partnering with a third party to develop antibodies. (See id.) Consequently, Embree told Dr. McFarland about Trellis and suggested a possible partnership between Trellis and RINCH. (Id. ¶ 5.)

On November 16, 2012, Embree first contacted Trellis. (Ellsworth Decl., Ex. A, at PageID 235 [ECF No. 27-4].) Embree emailed his friend and Trellis board member, Jack Anthony. (Id.) He asked Anthony if he was still involved in the monoclonal antibody ("mAb")business, and he informed Anthony that he was working with a team that had identified antibodies that play a role in biofilm production. (Id.) Anthony responded by connecting Embree to Dr. Larry Kauvar, a Trellis founder and Senior Vice President. (Id. at PageID 234.) Dr. Kauvar emailed Embree that same afternoon. (Id. at PageID 231-33.) He indicated that he was "definitely interested to learn more," and advised Embree that the parties should "get a 2-way CDA [confidential disclosure agreement] in place and discuss further." (Id. at PageID 232.) Dr. Kauvar attached to his email a one-page information sheet on Trellis. (Id. at 232-33.)

Several days later, on November 21, 2012, Embree emailed Dr. McFarland offering to introduce Dr. McFarland to Dr. Kauvar. (Nov. 21, 2012 Embree Email to McFarland at PageID 339 [ECF No. 31-2].) Embree explained that he had "reached out to one of [his] life sciences contacts who's running business development for a firm called Trellis Biosciences in California." (Id.) In his email to Dr. McFarland, Embree quoted Dr. Kauvar's description of Trellis and the portion of Dr. Kauvar's correspondence requesting that the parties "get a 2-way CDA in place." (Id. at PageID 339-40.)

RINCH and Trellis first communicated directly on December 5, 2012 when Embree introduced Dr. Kauvar to Dr. McFarland via email. (Ellsworth Decl., Ex. B, at PageID 238 [ECF No. 27-5].) Dr. Kauvar quickly replied to the introductory email. (Id.) He asked Dr. McFarland if he wanted to have a non-confidential introductory call, and he again suggested that the parties "get a 2-way CDA in place." (Id.) Dr. McFarland eventually responded: he agreed to an introductory call, and he was "happy to review" Trellis's CDA. (Id. at PageID 237.) Several days later, on December 13, Dr. Kauvar emailed Dr. McFarland a one-page information sheet on Trellis and two publications that Dr. Kauvar had written. (Dec. 13, 2012 Kauvar Email to McFarland at PageID 346 [ECF No. 31-2].)

Dr. Kauvar sent Dr. McFarland a nondisclosure agreement ("NDA") on December 8. (Dec. 8, 2012 Kauvar Email to McFarland at PageID 342 [ECF No. 31-2].) Dr. McFarland returned an unsigned copy of the NDA on December 18; he proposed changing the governing law to Ohio. (Dec. 8, 2012 McFarland Email to Kauvar at PageID 349 [ECF No. 31-2].) Dr. Kauvar accepted Dr. McFarland's edits, noting: "Ohio jurisdiction is fine. I have never had a problem and don't expect one now. The major novel IP is from your guys, so that's fine." (Dec. 8, 2012 Kauvar Email to McFarland at PageID 349 [ECF No. 31-2].) The parties executed a mutual NDA later that day. (NDA at 1 [ECF No. 1-1].)

After executing the NDA, RINCH and Trellis had numerous communications on potential avenues for collaboration; RINCH disclosed details about alleged confidential and trade secret information in several of those communications. (McFarland Decl. ¶¶ 13-30 [ECF No. 31-1].) The parties, for example, held teleconferences throughout 2013: on January 18; February 20; March 5; May 15; and October 17. (Id. ¶¶ 13, 15-16, 26, 29.) The parties exchanged emails and telephone calls, many of which were initiated by Trellis. (Id. ¶¶ 13, 17-18, 22-28.) And the parties even met in person. (Id. ¶ 20.) Dr. Kauvar had emailed Dr. McFarland on April 9, 2013 asking to visit RINCH's facility in Columbus, Ohio, for a "working session" with RINCH's inventors. (Id. ¶ 18.) Dr. McFarland agreed, and so on May 10, 2013, Dr. Kauvar came to Columbus and met with RINCH inventors at RINCH's headquarters. (Id. ¶ 20.) During the visit, RINCH disclosed alleged trade secret and confidential information to Dr. Kauvar. (Id.)

In addition to sharing alleged confidential and trade secret information under the NDA, the parties were also discussing other potential agreements. (McFarland Decl. ¶¶ 21, 29-30.) The parties, however, were unable to conclude those agreements, and they cut off their negotiations in mid-October 2013. (Id. ¶ 29.)

In September 2013, and unbeknownst to RINCH, Trellis began filing patent applications relating to biofilm remediation. (Compl. ¶ 27; Mem. in Opp'n at 5 [ECF No. 31].) RINCH eventually learned of these patent applications and, on November 24, 2015, sued Trellis for breach of contract and violation of Ohio's Uniform Trade Secrets Act. (Compl. at 11-15.) Trellis's patent applications allegedly violate the NDA and the Uniform Trade Secrets Act through their use and disclosure of RINCH's confidential and trade secret information. (Id. ¶¶ 36-58.)

Trellis now moves to dismiss for lack of personal jurisdiction. (Mot. to Dismiss at 1 [ECF No. 27].) As an alternative to dismissal, Trellis requests that the Court transfer the case to the Northern District of California. (Id.)

II.

Federal Rule of Civil Procedure 12(b)(2) provides for dismissal when a court lacks personal jurisdiction over a defendant. In considering a motion to dismiss for lack of personal jurisdiction, district courts have discretion to either decide the motion on the pleadings alone, permit discovery in aid of deciding the motion, or conduct an evidentiary hearing to resolve any apparent factual questions. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991) (citing Serras v. First Tenn. Bank Nat'l Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989)). Here, the record is sufficiently developed that the Court can decide Trellis's Motion to Dismiss without a hearing.

Plaintiff bears the burden of establishing personal jurisdiction. Estate of Thomson v. Toyota Motor Corp. Worldwide, 545 F.3d 357, 360 (6th Cir. 2008) (citing Brunner v. Hampson, 441 F.3d 457, 462 (6th Cir. 2006)). Where a Rule 12(b)(2) motion is decided solely on written submissions, the plaintiff's burden is "relatively slight"; the court must view all of the pleadingsand affidavits in a light most favorable to the plaintiff, and to defeat dismissal, the plaintiff need only make a prima facie showing that personal jurisdiction exists. Am. Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir. 1988); Shaker Constr. Grp. LLC, v. Schilling, No. 1:08-cv-278, 2008 WL 4346777, at *1 (S.D. Ohio Sept. 18, 2008). Indeed, as the Sixth Circuit has explained, a court disposing of a 12(b)(2) motion "does not weigh the controverting assertions of the party seeking dismissal." Theunissen, 935 F.2d at 1459. The Sixth Circuit has adopted that approach "to prevent non-resident defendants from regularly avoiding personal jurisdiction simply by filing an...