RNAi Litigation

Transcript kindly provided by Lee Marzilli, Court Reporter

During the discussions in this hearing the settlement of the previous lawsuit is discussed in the context of this case.

APPEARANCES: (By Telephone)

STEVE W. BERMAN, ESQ. and MARK S. CARLSON, ESQ., Hagens Berman Sobol Shapiro, LLP, 1918 8th Avenue, Suite 3300, Seattle, Washington, 98101, for the Plaintiff (Univ. Utah).

DAVID I. GINDLER, ESQ., Irell & Manella, LLP, 1800 Avenue of the Stars, Suite 900, Los Angeles, California,90067, for the Defendants (Max-Planck, Whitehead, MIT, Umass, and Alnylam).

SCOTT McCONCHIE, ESQ., Griesinger, Tighe & Maffei, LLP,176 Federal Street, Boston, Massachusetts, 02110, for the Defendants.

PROCEEDINGS

THE CLERK: Court calls Civil Action 11-10484, University of Utah v. Max-Planck. Could counsel please identify themselves.

MR. BERMAN: Good afternoon, your Honor. This is Steve Berman and Mark Carlson of Hagens Berman for the University of Utah.

MR. GINDLER: Good afternoon, your Honor. This is David Gindler of Irell & Manella for all of the defendants.

MR. McCONCHIE: Good afternoon, your Honor. Scott McConchie from Griesinger, Tighe & Maffei in Boston, also on behalf of the defendants.

THE COURT (Judge Saris): All right, thank you. I wanted to hold this status conference, and let me first apologize. I’m on emergency duty, and an emergency matter came up, so I do apologize for this 20-minute delay. But give me a sense of where we are. We haven’t had a scheduling conference. Has everyone been served? What’s happening?

MR. BERMAN: This is Steve Berman, your Honor. Everyone has been served. Currently before the Court is a motion to dismiss the Second Amended Complaint. Our responsive brief is due on March 21, and there has been no schedule set in the case.

THE COURT: Right, and so what happens often is, when a motion to dismiss is filed, we wait till the argument on that, but that could be forever at this point. So what I wanted to do was figure out what we should be doing. Do you all agree that we shouldn’t be doing discovery in the interim, or do you think it should be ongoing?

MR. BERMAN: We haven’t discussed it, your Honor, but I think that from the plaintiff’s perspective, since so much of the discovery was already done in effect in the case that you are familiar with, you know, we could wait until you rule on the motion. I don’t think there’s going to be a very lengthy discovery period needed in this case.

MR. GINDLER: Your Honor, this is David Gindler for the defendants. So we would agree that it would not be appropriate to take discovery at this time. We have a different reason, which is, one of our motions to dismiss – we have two - addresses whether the Court has jurisdiction over this case, and for that reason, we’re not sure it’s appropriate to move forward with discovery -

THE COURT: Why wouldn’t I have jurisdiction, no diversity or -

MR. GINDLER: Your Honor, this case - over - well, let me just explain.

THE COURT: It’s asking to rename the patent as far as one of the kinds of relief was. Isn’t that a federal cause of action?

MR. GINDLER: Well, it is, but let me explain. The plaintiff in the case is the University of Utah. When the case was first filed, one of the defendants was the University of Massachusetts. The University of Utah is an instrumentality of the State of Utah. The University of Massachusetts is an instrumentality of the Commonwealth of Massachusetts. There is only one court in the United States that has jurisdiction of a lawsuit between two states, and that is the United States Supreme Court. It is the original and exclusive jurisdiction of the Supreme Court that can handle a case from one state against the other.

When the complaint was first filed, we filed a motion to dismiss on that ground, that the Court did not have jurisdiction. In response to that, what the plaintiff did is dismissed the University of Massachusetts from the case, and in its place named a number of University of Massachusetts officials and sued them in their official capacities on the theory that that would eliminate the jurisdictional issue. In the motion that we filed, we explain that it does not. There is an exception to sovereign immunity, which is called the Ex Parte Young Doctrine, that allows you to sue individuals acting in their official capacity but only to enjoin essentially future illegal activity. This is an action based upon something that was allegedly done wrong in the past to correct inventorship of a patent, so no claim can be stated against those individuals acting in their official capacity. Not having the University of Massachusetts in the case is a problem because they are an indispensable party. They are one of the owners of the two patents at issue.

THE COURT: Well, can I ask you just as a practical matter - this was such a mess the first time around, it was so complex and took so much effort - you think the Supreme Court is going to try it?

MR. GINDLER: Your Honor, I don’t think there’s really an issue as to whether the case can be brought. In other words -

THE COURT: Well, what happens? Just tell me practically speaking what happens. Let’s assume I agree with you. What happens?

MR. GINDLER: What practically happens, your Honor, is that the Supreme Court actually doesn’t sit down and hear cases in their original jurisdiction. They appoint a special master. That’s essentially what happens. So there have been a number of cases state against state, and people don’t go to Washington -

THE COURT: Well, why wouldn’t I stay the case against the UMass officials - let’s assume you’re right — try the rest of it, and then whatever is left essentially send to the Supreme Court?

MR. GINDLER: Because you can’t try the case without the University of Massachusetts in the case.

THE COURT: Well, I’m not dismissing them.

MR. GINDLER: We have not included the University of Massachusetts in the case because that creates the jurisdictional problem. And UMass is an indispensable party because they’re one of the co-owners of the patent. You can’t have a litigation without a co-owner of the patent.

THE COURT: Well, I agree with that, and so but - excuse me, can I just say, I’m not saying to dismiss them.

MR. GINDLER: I’m sorry.

THE COURT: I’m not saying dismiss them. I’m saying litigate as much as you can with respect to the rest of it, and then leave the -

MR. GINDLER: Your Honor, I think that what the case law says is that if the University of Massachusetts is joined as a defendant, that it’s not appropriate to try part of the case in the District Court and then part of the case in the U.S. Supreme Court. The whole thing goes to the original jurisdiction of the U.S. Supreme Court.

THE COURT: Well, that’s interesting. I can guarantee you I’ve never had one of these before.

MR. GINDLER: — previously filed.

THE COURT: Excuse me?

MR. GINDLER: Sorry?

THE COURT: I can guarantee you I’ve never had one of these before. So your view is that — it would just be lovely to watch the nine Justices walking their way through what I did for the last few years, but you think there’s no out here?

MR. GINDLER: Well, your Honor, the one thing I can tell you is that if the case goes to the original jurisdiction of the Supreme Court, what the Supreme Court does is, they appoint a special master to hear the case. The Supreme Court is not actually going to have a trial where the nine Justices are going to listen about RNA interference.

THE COURT: Just it would be a glorious sight. Let me ask you this, Mr. Berman: What do you think here on the merits?

MR. BERMAN: Well, your Honor, we think that you do have jurisdiction. There is a case that we think is on point that we will cite to you when we respond. It’s called Connecticut v. Cahill. It’s a Second Circuit case which endorsed the exact approach that we took here; namely, that we name the individuals who are responsible for making sure that our client, Dr. Bass, was listed as one of the inventors. And in a two-to-one opinion, they ruled that the case like this did not have to go to the Supreme Court, and there are other cases that we will cite that have followed this and have expanded on it saying that basically the Supreme Court doesn’t have original jurisdiction unless the dispute between states involves core sovereign interests. And this is a commercial dispute. It’s not over water rights, it’s not over so-called core sovereign interests; and in those situations the courts have accepted jurisdiction at the District Court level.

THE COURT: So would it make sense - well, let me ask you this: Let’s assume it’s a close question and it’s a difficult matter of law. Would I then certify it straight to the Supreme Court before we went through two years of litigation?

MR. BERMAN: Well, I assume that if you denied their motion, that the defendants would ask you to certify it somewhere. I’m not sure if it’s the Federal Circuit. I think it would be the Federal Circuit in the first instance.

THE COURT: It’s very interesting.

MR. GINDLER: I think that we would ask you to certify, but I can’t tell you right now that I know the answer to the question as to which circuit would get the appeal.

THE COURT: I don’t know anything about it. It’s the first I’ve heard it. Is that the sole basis for the motion to dismiss, or is it more complex than that?

MR. GINDLER: No. There actually are two motions that have been filed. One addresses the jurisdiction of the Court, and one addresses the sufficiency of the pleadings, and that’s a separate motion which has been filed.

THE COURT: Right, I mean, Mr. Berman wrote a novel, so what is it — you know, it’s like this long, long document. So what do you think isn’t sufficient, on certain counts and not others or all together?

MR. GINDLER: No. Your Honor, the entire complaint is a problem. As your Honor pointed out, the complaint is basically seeking the correction of inventorship on two issued United States patents, the Tuschl II patents. The University of Utah says that either Dr. Bass should be named as a co-inventor, or actually, alternatively, the sole inventor. There are, I think, at least two problems with this. The first is that there is just no basis in the complaint to say that she should be the sole inventor because she doesn’t even claim to have, if you read the complaint, invented all of the elements of the invention. It’s just literally not there. The second issue, your Honor, is that if she wants to be named as a co-inventor, she has to demonstrate that there was a collaboration between the inventors. That’s a requirement of federal patent law. And it would have to be a real collaboration. The only collaboration that is mentioned in the complaint is that she attended, I believe, one or two conferences of scientists at which one or more of the inventors also happened to be present, and they had dinner one night, and that really is the extent of the alleged collaboration. No one is working together -

THE COURT: Doesn’t she say it’s her idea?

MR. GINDLER: No one is working together in laboratories, exchanging ideas, working towards a common goal.

THE COURT: Doesn’t she say it’s her idea?

MR. GINDLER: It is –

THE COURT: Excuse me. Listen to me. Doesn’t she allege one of the key portions of this is her idea?

MR. GINDLER: What she alleges is that she identified a particular enzyme that she said played an important role in RNA interference, and she published a paper about it. That paper was actually submitted as prior art to the PTO in the course of prosecuting the Tuschl II applications. The Tuschl II applications were issued over that work as prior art.

THE COURT: No, but suppose - I thought their argument was that she claims - I’m just saying it would be difficult to do this on a motion to dismiss. She claims it was her idea, a key portion of this, and that the inventors took it. So, I mean, I’m just saying that’s a hard thing for me to do on a motion to dismiss, but who knows?

MR. GINDLER: Your Honor, I would definitely understand in the abstract how that would be an issue. I think once you have the opportunity to read the papers, that the issue becomes quite a lot simpler than you might otherwise think. It does not require one to delve down into the nitty-gritty, for example, of all of the scientific details to reach that conclusion.

THE COURT: Maybe, but the other one, the jurisdictional one does sound like something I need to resolve as a threshold matter. So your brief is coming in. When is the - your brief, is it in yet, defendants?

MR. BERMAN: That’s due on March 21, your Honor.

THE COURT: And then when is the opposition, 30 days later?

MR. GINDLER: About that, your Honor.

THE COURT: Have you worked out a schedule?

MR. GINDLER: Yes, and it’s been submitted, and you have approved it.

THE COURT: Okay. And then do we have a date for a hearing on it?

MR. BERMAN: We do not.

MR. GINDLER: Not yet, your Honor.

THE COURT: So when would that make sense, given the briefing schedule?

MR. BERMAN: Maybe sometime in May or June.

THE COURT: Okay, end of May?

MR. GINDLER: This is David Gindler. That makes sense to me.

THE CLERK: The end of May?
THE COURT: Yes.
THE CLERK: Okay, Wednesday, May 30?
THE COURT: Wednesday, May 30, is that okay?
THE CLERK: Two o’clock.
THE COURT: Two o’clock?

MR. GINDLER: Let me just check.

MR. BERMAN: That’s good for the plaintiff, your Honor.

THE COURT: All right. I need people in person on this for the argument.

MR. GINDLER: Yes, May 30 is fine.

THE COURT: All right, does it make any sense to try and do settlement discussions yet?

MR. GINDLER: Your Honor, this is David Gindler. There have been numerous conversations between the parties over a very long period of time, and the simple matter is that we’re just not able to see it eye to eye with the University of Utah. It’s not a case that we think has merit. We’ve had a lot of conversations with them about the merits, so it has not been for want of talking.

THE COURT: Well, the first round, shall I say, was very expensive and was what I would call “scorched earth litigation.” On the other hand, Mr. Berman is well acquainted with contentious litigation, so - but it is going to be expensive, and it’s a huge amount of briefing typically. It was very, very difficult the first round. And I think it just settled on the eve of trial, right? It’s just going to be very expensive.

MR. GINDLER: The last time around it settled very close to trial, that’s correct, your Honor.

THE COURT: And I’d done all the motions in limine. I mean, I think we were right up against it. And I hate to spend that kind of money again on lawyers if there’s any possibility of settling. So perhaps what we can do is, once I’ve ruled on the motions to dismiss, I would suggest that you all also come up with the name of a mutually acceptable mediator and see where it goes. Who settled it for you last time, do you remember? Somebody who would be familiar with the technology?

MR. GINDLER: Are you asking who the mediator was last time?

THE COURT: Yes.

MR. GINDLER: The mediator that was used last time by the parties was David Geronemus of JAMS. He actually was not involved in the final resolution. The parties managed to do that themselves.

THE COURT: I see. Well, this is good. This makes sense to me. So all discovery is stayed. We’re going to try and decide whether there is, A, jurisdiction, and, B, a legal cause of action. Once I make that decision, I will expect that you will go to mediation. Or if I throw it out on either ground, I’d expect, obviously, some sort of an appeal. So that the reality is that I don’t want to spend the kind of resources that were exhausted last time on this. I mean, for the most part, is this being paid for by the pharmaceutical companies? The reason I ask is because -

MR. GINDLER: You’re asking –

THE COURT: Yes, I don’t know. Utah, you’re hired by Utah, right?

MR. BERMAN: Yes, your Honor.

THE COURT: And is there a pharmaceutical company with licensing rights?

MR. BERMAN: Not on our side.

THE COURT: Not on your side. Well, there was at University of Massachusetts, by the way. So is –

MR. GINDLER: Right, and in this case –

THE COURT: We have Alnylam, right?

MR. GINDLER: Your Honor, yes, Alnylam is a defendant in this case along with the University of Massachusetts, Whitehead, MIT, and the Max-Planck Institutes.

THE COURT: Right. So is that the only pharmaceutical company? Did it buy up the rights? I can’t remember. There were a bunch of them.

MR. GINDLER: It is the only pharmaceutical company that I think has an interest in the litigation.

THE COURT: All right. Good, so we’re on track. I don’t think there are any questions. At this point I won’t require mediation, but I may well do that at the hearing while I’m ruling on it, either to go to mediation or wait till immediately after my ruling, but before we sort of get into full gear on the discovery, because it sounds like you basically know most of it other than you haven’t had a deposition of this woman, right?

MR. BERMAN: That’s correct.

THE COURT: I mean, does it make sense to do that in the interim? Well, we can address that –

MR. GINDLER: Your Honor, we actually don’t think so, again, for the jurisdictional reason.

THE COURT: Right, but even if it’s the Justices and a master, don’t they have to have some deposition? I’m not likely to stay all that once I’ve gotten the motions to dismiss. I think at some point you need to preserve evidence no matter what happens here, and it sounds like she at the very least is the one person who was not deposed last time around. I think everybody else in the world must have been. Is there any other really obvious person that should have a deposition taken?

MR. BERMAN: Not that I am aware of, your Honor.

THE COURT: All right, so maybe you come up with your wish list when we have the hearing in May as to whose testimony, regardless of whether the Supreme Court resolves it or me, okay, as to what needs to happen right away while this motion to dismiss is under advisement, just to preserve things. Okay?

MR. GINDLER: We agree, your Honor.
THE COURT: Okay. All right, thank you, and I’ll see you in May.
MR. BERMAN: Okay.
MR. GINDLER: Thank you very much.
THE COURT: Bye-bye.
(Adjourned, 3:40 p.m.)

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