Trs. of the Univ. of Pa. v. St. Jude Children's Research Hosp. Trs. of the Univ. of Pa.

• Decision Date: 13 November 2013
• Docket Number: 13–1502.,Civil Action Nos. 12–4122
• Citation: 982 F.Supp.2d 518
• Parties: TRUSTEES OF the UNIVERSITY OF PENNSYLVANIA v. ST. JUDE CHILDREN'S RESEARCH HOSPITAL. Trustees of the University of Pennsylvania v. St. Jude Children's Research Hospital.
• Court: U.S. District Court — Eastern District of Pennsylvania

982 F.Supp.2d 518

TRUSTEES OF the UNIVERSITY OF PENNSYLVANIA

v.ST. JUDE CHILDREN'S RESEARCH HOSPITAL.

Trustees of the University of Pennsylvania

v.St. Jude Children's Research Hospital.

Civil Action Nos. 12–4122, 13–1502.

United States District Court, E.D. Pennsylvania.

Nov. 13, 2013.

David C. Wade, Richard M. Carter, Martin Tate Morrow & Marston, Memphis, TN, Eric Kraeutler, Thomas J. Sullivan, Deborah W. Frey, John V. Gorman, Morgan Lewis & Bockius, Philadelphia, PA, for Trustees of the University of Pennsylvania.

Alan E. Friedman, Foley & Lardner LLP, Los Angeles, CA, Daniel Segal, Hangley Aronchick Segal & Pudlin, Philadelphia, PA, Amy M. Pepke, Eric E. Hudson, Butler Snow Omara Stevens & Canada, PLLC, Memphis, TN, Paul Victor Cassisa, Jr., Butler Snow O'Mara Stevens & Cannada PLLC, Oxford, MS, for St. Jude Children's Research Hospital.

MEMORANDUM

DALZELL, District Judge.

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., 940 F.Supp.2d 233 (E.D.Pa.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 containinga 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–? 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–? 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–? 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...