Siegler v. Sorrento Therapeutics, Inc.
| Decision Date | 12 February 2019 |
| Docket Number | CASE No. 3:18-cv-01681-GPC-NLS |
| Parties | SARA ELIZABETH SIEGLER and Sara Elizabeth Siegler, Plaintiffs, v. SORRENTO THERAPEUTICS, INC., TNK THERAPEUTICS, INC., BDL PRODUCTS, INC., CARGENIX HOLDINGS LLC, TUFTS MEDICAL CENTER, PROSPECT CHARTERCARE ROGER WILLIAMS MEDICAL CENTER LLC, HENRY JI, RICHARD PAUL JUNGHANS, STEVEN C. KATZ, and THE BOARD OF DIRECTORS OF SORRENTO THERAPEUTICS, INC., Defendants. |
| Court | U.S. District Court — Southern District of California |
Pending before the Court are three motions. The first is a motion to dismiss Plaintiff's First Amended Complaint ("FAC"), filed by defendants BDL Products, Inc., Cargenix Holdings LLC, Henry Ji, Sorrento Therapeutics, Inc., TNK Therapeutics, Inc. (hereinafter, the "Sorrento Defendants"), on September 26, 2018. (ECF No. 18.) This motion has been fully briefed (ECF Nos. 68, 70) and joined by a number of defendants. (ECF Nos. 19, 20, 22, 24, 28, 57.) The second is a motion to dismiss for lack of jurisdiction, filed by defendant Tufts Medical Center, dated September 26, 2018. (ECF No. 19.) This motion has similarly received the benefit of full briefing. (See ECF Nos. 69, 71.) The third and final motion is pro se Plaintiff Sara Elizabeth Siegler's1 ("Plaintiff's") motion for leave to file a second amended complaint, which was submitted in conjunction with Plaintiff's Omnibus Motion on October 11, 2018. (ECF No. 46, at 15.) This motion has been opposed by the Sorrento Defendants. (ECF No. 58.)
Pursuant to Civil Local Rule 7.1(d)(1), the Court finds the matter suitable for adjudication without oral argument. For the reasons set forth below, the Court GRANTS both motions to dismiss and GRANTS in part and DENIES in part Plaintiff's motion for leave to file a second amended complaint.
Plaintiff Sara Siegler is a resident of Ohio. Plaintiff established an Ohio-based sole-proprietorship in her own name in April of 2011. Plaintiff's sole-proprietorship is alleged to be "an early stage micro-entity without any marketed pharmaceutical products to date." (ECF No. 3, at 46.) Plaintiff asserts that she is a "potential participant in the CAR T cell pharmaceutical market both domestically and abroad." (Id.)
Plaintiff began corresponding with defendant Richard Junghans ("Dr. Junghans") in 2013. Thereafter, Plaintiff began to work on a planned collaboration with Dr. Junghans to develop new chimeric antigen receptor ("CAR") T cell-based therapeutics for virology and oncology indications invented by Dr. Junghans. According to Plaintiff, Dr. Junghans previously filed patent application No. 10/006,711 in 2002 for a "second generation CAR T cell construct with a humanized single chain variable fragment . . . binding domain targeting the carcinoembryonic antigen ("CEA") on tumor cells," but had abandoned that application as of February 17, 2006. (ECF No. 3, at 4, 95.)
At some point before August 2015, Plaintiff created two "work products" as part of the aforementioned collaboration with Dr. Junghans. (Id. at 4.) Those workproducts encompass two text-based scientific articles which were registered for copyrights with the United States Copyright Office, with registrations effective September 8, 2015. (ECF No. 3, at 85, 91.) They include a work entitled "In Vivo Testing of 3rd Generation Anti-CEA Designer CAR T Cells with Bcl-xL in Pancreatic Cancer," registered as TXu 1-998-310 (the "'310 Copyright") and a work entitled "Phase 1b/2 Study of [2nd Generation] Anti-CEA Designer CAR T Cells in Breast Cancer," registered as TXu 1-998-311 (the "'311 Copyright"). (Id.) To develop her research, Plaintiff made plans to utilize the current Good Manufacturing Practice ("cGMP") facility at defendant Prospect Chartercare Roger Williams Medical Center LLC ("RWMC"), a for-profit medical institution registered in Rhode Island.
In May of 2014, after Plaintiff's initial contact with Dr. Junghans, Dr. Junghans became employed on a part-time basis with Tufts Medical Center, a not-for-profit medical institution with its principal place of business in Massachusetts. (Id., at 11). Dr. Junghans was initially employed as an Investigator in the Department of Medicine, Division of Hematology and Oncology, and later served as a member of the Special and Scientific Staff. (ECF No. 19-2 (Decl. of Susan Blanchard, dated Sept. 26, 2018).)
Thereafter, on or about July 16, 2015, Dr. Junghans registered in Massachusetts a company—defendant BDL Products, Inc. ("BDL")—which Plaintiff alleges was created for the sole purpose of facilitating Dr. Junghans's theft of Plaintiff's intellectual property. (ECF No. 3, at 5.) According to Plaintiff, Dr. Junghan passed off her work as his own, and violated her right to first refusal on other CAR T cell constructs for which Plaintiff had not yet registered copyrights, including the "anti-c-KIT CAR, the anti-GD3 CAR, the anti-PSMA CAR, and the anti-IL13Rα2 CAR." (Id.) After its establishment, BDL was acquired byDefendant Sorrento Therapeutics, Inc. ("SRNE"), via its wholly-owned subsidiary, TNK Therapeutics, Inc. ("TNK"), both which have California as their principal place of business. (Id.) Henry Ji, the Chairman, President, and CEO of SRNE, and SRNE's Board of Directors, have both been named as defendants in this suit.
On August 7, 2015, Dr. Junghans and BDL executed a Stock Purchase Agreement ("SPA") with TNK. The SPA was allegedly contingent upon the closing of a Membership Interest Purchase Agreement ("MPA") between TNK and CARgenix Holdings LLC ("Cargenix"), a Rhode Island corporation that has as one of its equity owners defendant Steven C. Katz ("Dr. Katz"). (Id. at 6, 11.) The MPA includes a section titled "Execution of Exclusive License Agreements," which provides for the exclusive licensing of the "IL13 CAR, the c-KIT CAR, and the HIV CAR." (Id. at 20.) According to Plaintiff, also in either the MPA or the SPA was a "restrictive covenant" provision that prohibited Dr. Junghans and his affiliated research institution, i.e., Tufts Medical Center, from working with her as part of the originally-planned collaboration. (Id.) It is further alleged that SRNE and TNK enticed Dr. Junghans to misappropriate and infringe Plaintiff's intellectual property in exchange for a $6,000,000 stock payment as part of the SPA. (Id. at 16.)
Plaintiff became privy to the SPA and MPA in August of 2015. Around August 24, 2015, she received email correspondence from Susan Blanchard, Vice President for Research Administration at Tufts Medical Center. The email exchange apparently signaled to Plaintiff that her planned collaboration with Dr. Junghans was in potential peril. (Id. at 17.) A few days later, on August 27, 2015, Dr. Junghans sent Plaintiff an email advising that "i/tufts can not help a competitor"and "i/tufts can continue to do my own 'research' including collaborations." (Id.) Plaintiff believes that the contents of those emails derive from the restrictive covenants found in either the MPA or the SPA. Communications between Dr. Junghans and Plaintiff about further collaborations were unsuccessful, and Plaintiff ultimately terminated her relationship with Dr. Junghans after discovering that it was Dr. Junghans' company, i.e., BDL, which had precipitated the restrictive covenant in the first place. (Id. at 18.)
Plaintiff asserts that the SPA, MIPA, and SRA catalyzed a number of wrongful actions by the defendants in this case. According to Plaintiff, those actions sounded in copyright infringement, anticompetitive and monopolizing behavior, and unfair business practices.
Broadly speaking, Plaintiff asserts that defendants improperly seized upon her intellectual property by performing experimental trials similar to the ones she described in her copyrights, and by attempting to secure patents for constructs she researched therein. She maintains that defendants improperly incorporated her intellectual property into corporate presentations, conspired to exclude her from the anti-CEA CAR T cell market, and engaged in a number of business dealings with other entities to commercialize her copyrights both domestically and abroad. Plaintiff further alleges that she has been excluded from conducting investigational activities at RWMC.
In April 2016, SRNE and TNK entered into an Immunotherapy Research Collaboration Agreement ("IRCA") with RWMC, whose cGMP facility Plaintiff had hoped to utilize. Although it is not entirely clear based on Plaintiff's pleadings whether the IRCA contained an exclusivity clause, Plaintiff indicates that as a resultof the IRCA, she was effectively precluded from using the cGMP facility. As a consequence, Plaintiff avers that she is bereft of a "cGMP facility to manufacture clinical grade investigational products for use in the pre-approval phases of the product development lifecycle." (Id. at 21.) Later, in January of 2018, the initial IRCA was extended. That extension unambiguously contained an "exclusive agreement to operate the 'Cellular Immunotherapy and Gene Therapy Facility' at Roger Williams Medical Care Center . . . under Sorrento management." (Id. at 22.)
On July 14, 2016, a clinical trial referred to as "HITM-SURE" was registered to clinicaltrials.gov with a National Library of Medicine identifier NCT02850536. The HITM-SURE trial lists RWMC as its sponsor, and is a study of a U.S. Food and Drug Administration ("FDA") regulated product—i.e., CAR T cells. SRNE has apparently...
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