Warren v. The Children's Hosp. Corp.

• Decision Date: 20 January 2023
• Docket Number: 17-CV-12472-DLC
• Parties: LUIGI WARREN, Plaintiff, v. The CHILDREN'S HOSPITAL CORPORATION, Defendant.
• Court: U.S. District Court — District of Massachusetts

LUIGI WARREN, Plaintiff,
v.
The CHILDREN'S HOSPITAL CORPORATION, Defendant.

No. 17-CV-12472-DLC

United States District Court, D. Massachusetts

January 20, 2023

MEMORANDUM AND ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (DKT NO. 51) AND PLAINTIFF'S MOTION TO AMEND (DKT NO. 72)

DONALD L. CABELL, U.S.M.J.

Plaintiff Dr. Luigi Warren sued defendant Children's Hospital Corporation (Children's) for reportedly failing to honor the terms of a revenue and equity policy regarding an invention of Dr. Warren's that is included in a patent Children's owns. Children's demurred and moved for summary judgment. (Dkt. No. 51). Following a hearing, the court denied Children's motion, and Dr. Warren subsequently moved to amend the complaint, which Children's has opposed. (Dkt. Nos. 70, 72, 87). For the reasons explained below, the court vacates its prior order denying Children's motion for summary judgment, and now allows the motion. The court also denies Dr. Warren's motion to amend.

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I. Factual Background

The facts are taken from the Defendant's Statement of Undisputed Material Facts (Dkt. No. 55), the Defendant's Memorandum of Law in Support (Dkt. No. 52), the Plaintiff's Statement of Material Facts (Dkt. No. 58), the Plaintiff's Memorandum in Opposition to Defendant's Motion for Summary Judgment (Dkt. No. 57), and the exhibits attached to these filings. The facts are undisputed unless otherwise noted. As always on a motion for summary judgment, the court views the facts in the light most favorable to Dr. Warren as the non-moving party and draws all reasonable inferences in his favor. Carlson v. Univ. of New England, 899 F.3d 36, 43 (1st Cir. 2018).

A. Dr. Warren's Work at the IDI

In November 2007, Dr. Warren began working at the Immune Disease Institute (IDI) in an at-will capacity as a postdoctoral researcher. (Dkt. No. 55, ¶ 3). While there, he co-invented, along with Principal Investigator Dr. Derrick Rossi, a breakthrough technique for “reprogramming” cells to induce them to become pluripotent stem cells (the Invention). (Dkt. No. 52, pp. 3-4). The parties quickly recognized the Invention's great medical and commercial potential.

Throughout the early part of 2010, Dr. Warren and Dr. Rossi worked with other IDI personnel to begin the process of securing

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patents for the Invention. (Dkt. No. 57, p. 3). In April 2010, IDI filed for a provisional patent with the United States Patent and Trademark Office. (Id.) Dr. Warren left his position at IDI shortly thereafter, in June of 2010. (Dkt. No. 55, ¶ 5). On December 21, 2010, approximately six months after Dr. Warren left IDI, IDI exclusively licensed the Invention to Moderna Therapeutics, Inc. (Dkt. No. 55, ¶ 39).^[1]

B. IDI's Affiliation with Boston Children's Hospital

During the patent and licensing process, IDI itself was in a state of change. In or around 2008, IDI and Children's began exploring the possibility of a merger, executing an Affiliation Agreement on December 24, 2008. (Id. at ¶ 28). Under that agreement, any IDI intellectual property not licensed before the affiliation was consummated (the “Effective Date”) became subject to Children's policies as of the Effective Date, including Children's revenue and equity policies. (Id. at ¶¶ 29, 31). The parties agree that the Effective Date was February 20, 2009. (Id. at ¶ 31; Dkt. No. 57, p. 2). In September 2012, IDI dissolved and formally merged into Children's. (Dkt. No. 55, ¶ 38).

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C. The Two Invention Revenue and Equity Policies

The were some differences between IDI's and Children's respective revenue policies. The IDI policy in effect when Dr. Warren was hired, known formally as the IDI Research and Technology Development Policy (IDI policy), provided among other things that all technology was “owned by IDI,” (Dkt. No. 55-3, § E(1)(a)), and employee-inventors would “provide technical information, documentation, and all other assistance deemed necessary by IDI, including an assignment of the Inventor's rights in the Technology to IDI.” (Id. at § F). In exchange, IDI would give one-third of its technology-derived licensing revenue to the inventors. (Dkt. No. 55-3, § H(4)).^[2] Further, if IDI accepted equity from a company in exchange for licensing rights, the inventor's share of the equity would be deemed a “royalty” and “distributed to the Inventors at the earliest opportunity.” (Id. at § I(3)). The IDI policy also provided that IDI's trustees “retain the discretion to amend [the policy] from time to time.” (Id. at § A). The policy required each “Covered Person,” including employees like Dr. Warren, to “sign a Participation Agreement in which the Covered

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Person agrees to comply with this Policy.” (Id. at § C). The record is unclear as to whether Dr. Warren ever signed a Participation Agreement. (Dkt. No. 57, p. 16; Dkt. No. 59, p. 5).

In contrast, the Children's Hospital Policy on Inventions and Intellectual Property (Children's policy) contained materially different and slightly more complicated terms regarding revenue payments and equity sharing with employee-inventors. The Children's policy sets out different payment terms for inventors still employed by Children's and those who had left Children's. (Dkt. No. 55-9, p. 3). In the latter case, the inventor's share of license proceeds is 35 percent “up to” $500,000, then 25 percent “above” $500,000. (Id.). Like the IDI policy, the Children's policy equally divided this share among all co-inventors. (Id.). The parties do not dispute that Dr. Warren would receive a lesser share under the Children's policy than he would under the IDI policy. The Children's policy resembles the IDI policy regarding ultimate ownership of inventions and duties of employee-inventors:

Every invention based on the Hospital's intellectual property . . . shall be the property of the Hospital . . . . When the Hospital determines to seek the patenting . . . of any invention . . . the inventor shall cooperate fully in such effort, including execution of all necessary or desirable agreements, applications, assignments, and other forms and instruments.

(Id. at p. 2).

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D. The Invention Assignments

In August 2010, after having left IDI, Dr. Warren voluntarily executed an assignment of his “entire right, title, and interest” in the Invention to IDI. (Dkt. No. 57-4). In February 2011, Ryan Dietz (“Dietz”), a manager at IDI's technology transfer office, sent Dr. Warren an email asking him to assign his rights a second time. (Dkt. No. 55-4, pp. 10-11). The subsequent assignment is variously described in the record as a “follow-up assignment[],” (Dkt. No. 55-1, 68:11-12), an “additional assignment of the same invention,” (Dkt. No. 55, ¶ 46), and an “assignment pertain[ing] to a second provisional application.” (Dkt. No. 55-4, p. 10).

Reluctant to execute any further assignments, Dr. Warren requested a copy of the document purporting to require his execution of the assignment. (Dkt. No. 55, ¶ 47). In response, Dietz sent Dr. Warren the following excerpt from the IDI policy:

Ownership of Inventions. Each Invention shall be the sole and exclusive property of IDI. I agree to execute an assignment to IDI or its nominee of my entire right, title, and interest in and to all Inventions (to which IDI has ownership rights pursuant to the “Research and Technology Development Policy”) without additional compensation. I further agree, upon request of IDI and at its expense, to execute such documents as may be necessary or desirable in applying for and obtaining patents on the Inventions in the United States and any foreign country. I further agree, whether or not I am employed by IDI, to cooperate to the extent and in the manner reasonably requested by IDI in the prosecution or defense of any claim involving a patent covering any

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Invention or any litigation or other claim or proceeding involving any Invention ....

(Dkt. No. 55-4, p. 7). Dr. Warren also asked for the relevant policy regarding revenue sharing and licensing royalties. (Id.). Dietz again replied with the IDI policy's revenue-sharing schedule. (Id. at p. 6).

After receiving this information, Dr. Warren declined to execute the subsequent assignment. (Dkt. No. 55, ¶ 52). Subsequently, Dianne McCarthy, Children's General Counsel, sent Dr. Warren an email with the full IDI policy attached, reiterating that Dr. Warren was obligated to execute the assignment. (Id.). Dr. Warren also received an email from Children's outside counsel threatening a lawsuit if Dr. Warren persisted in his refusal. (Dkt. No. 55-7). The email indicated that Dr. Warren's “refusal to execute the assignment [was] in direct contravention of [his] obligations under IDI's Research and Technology Development Policy.” (Id. at p. 2). Attached to the email was a draft complaint against Dr. Warren, replete with references to the IDI policy and asserting a breach of contract claim against Dr. Warren for violating said policy. (Id. at pp. 3, 5-6, 9). Shortly after receiving this email, Dr. Warren executed two additional assignments.^[3] (Dkt. No. 57-4, pp. 4-7).

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Six years later, in August 2017, when rumors of an initial public offering for Moderna were circulating, Dr. Warren called Dietz (now officially working for Children's) to inquire about the Moderna licensing agreement. (Dkt. No. 57, p. 6). Dietz informed Dr. Warren that the references to the IDI policy back in 2011 were in error and that Dr. Warren's invention was subject to Children's policies on revenue and equity. (Id. at 7). Dietz offered Dr. Warren the opportunity to sign onto a superior “ad hoc” revenue policy that his co-inventor Dr. Rossi had negotiated with Children's, which Dr. Warren declined.^[4] (Dkt. No. 55, ¶¶ 57-61; Dkt. No. 57, p. 7). Dr. Warren instead filed this suit, seeking inter alia a declaratory judgment that Children's is bound by the IDI policy, and injunctive relief ordering...