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Administrators of Tulane Educational Fund v. Cytogel Pharma, LLC

United States District Court, E.D. Louisiana

April 30, 2018


         SECTION: “E” (1)



          Janis Van Meerveld United States Magistrate Judge

         Before the Court is the Motion to Compel filed by Cytogel Pharma, LLC (“Cytogel”) (Rec. Doc. 152). For the following reasons, the Motion to Compel is GRANTED in part and DENIED in part.


         This lawsuit concerns the ownership of patent rights in certain opioid substitutes. During the relevant period, Dr. James E. Zadina (“Dr. Zadina”) and Dr. Lazlo Hackler[1] (“Dr. Hackler”) were employed jointly by Tulane University (plaintiff in this lawsuit as the corporate entity The Administrators of the Tulane Educational Fund (“Tulane”)) and the Department of Veterans Affairs (“VA”) and were engaged in developing new compounds that would reduce the side effects associated with opioids. In the 1990s, Dr. Zadina, Dr. Hackler, and Dr. Abba J. Kastin of Tulane developed a group of cyclic peptide-based opioid compounds (“1st Generation Compounds”), for which two patents were ultimately issued (“1st Generation Patents”). Pursuant to a 2003 agreement, Tulane has the sole right to license patents and patent applications it owns jointly with the VA. In that same year, Cytogel and Tulane entered into a license agreement for the 1st Generation Patents. After this agreement was executed, Dr. Zadina advised Cytogel regarding the properties and characteristics of the 1st Generation Compounds, at first pursuant to an oral agreement, and starting in 2007, pursuant to a written consultancy agreement. This work was performed outside of Dr. Zadina's normal duties for the VA and Tulane. Tulane insists that Dr. Zadina's consultancy never involved work with any opioids other than the 1st Generation Compounds.

         Tulane alleges that Dr. Zadina and Dr. Hackler continued researching peptide-based opioids for the VA and Tulane and eventually invented certain “2nd Generation Compounds, ” which offered reduced side effects and improved solubility relative to the 1st Generation Compounds. Tulane filed a provisional patent application for the 2nd Generation Compounds. After Tulane informed Cytogel of the application, Cytogel asserted that it owned the new application. Cytogel alleges that the 2nd Generation Compounds were developed by Dr. Zadina using confidential Cytogel information. The dispute continued, and eventually Dr. Zadina terminated his consulting agreement in 2013. Tulane's provisional application resulted in the issuance of U.S. Patent No. 8, 716, 436 (the “‘436 Patent”).

         On August 19, 2016, Tulane and the United States filed this lawsuit against Cytogel seeking a declaratory judgment that Plaintiffs are the sole owners of the ‘436 Patent and related patent applications and that Dr. Zadina and Dr. Hackler are the true inventors of the ‘436 Patent. Cytogel filed a counterclaim against Tulane, the United States, and Dr. Zadina, alleging that they misappropriated its trade secrets and confidential information. Cytogel seeks a declaratory judgment that it is the owner of the ‘436 Patent and also asserts claims for breach of contract, infringement of the 1st Generation Patents that had been licensed to Cytogel, misappropriation of trade secrets, and other state law claims.

         Discovery Issue

         The issue before the Court at this time[2] concerns a licensing agreement between Tulane and a non-party, Mirata Pharmaceuticals (“Mirata”), for the ‘436 Patent (the “License Agreement”). Before producing the License Agreement, Tulane seeks assurances from Cytogel that the non-party will not be joined to this lawsuit. Further, Tulane will only produce this licensing agreement to Cytogel if it is subject to the “Attorneys' Eyes Only” provisions of the joint Protective Order issued earlier in this case. That Protective Order was issued on November 9, 2017, and was submitted jointly by the parties who negotiated the terms between themselves, and with the assistance of the undersigned Magistrate Judge.

         Law and Analysis

         1. Scope of Discovery

         The Federal Rules of Civil Procedure provide that “parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed. R. Civ. Proc. 26(b)(1). Of note, with the 2015 amendment to Rule 26, it is now clear that “[i]nformation within this scope of discovery need not be admissible in evidence to be discoverable.” Id. In assessing proportionality of discovery, the following should be considered: “the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Id. The advisory committee comments to the 2015 amendment to Rule 26 make clear that the parties and the court have a collective responsibility to ensure that discovery is proportional. The party claiming it would suffer an undue burden or expense is typically in the best position to explain why, while the party claiming the information sought is important to resolve the issues in the case should be able “to explain the ways in which the underlying information bears on the issues as that party understands them.” Id. advisory committee comments to 2015 amendment. “The court's responsibility, using all the information provided by the parties, is to consider these and all the other factors in reaching a case-specific determination of the appropriate scope of discovery.” Id.

         Rule 26(c) provides that the Court “may, for good cause, ” protect a party from “undue burden or expense” by issuing an order “forbidding inquiry into certain matters, or limiting the scope of disclosure or ...

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