United States District Court, E.D. Louisiana
UNITED STATES OF AMERICA, ET AL.
CYTOGEL PHARMA, LLC
ORDER AND REASONS
MAGISTRATE JUDGE JANIS VAN MEERVELD
the Court is the Motion for Leave to File First Amended and
Restated Affirmative Defenses and Second Amended and Restated
Counterclaims (Rec. Doc. 195). For the following reasons, the
Motion is GRANTED.
lawsuit concerns the ownership of patent rights in certain
opioid substitutes. During the relevant period, Dr. Zadina
and Dr. Lazlo Hackler (“Dr. Hackler”) were employed
jointly by 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 University developed a group of cyclic
peptide-based opioid compounds (“1st
Generation Compounds”), for which two patents were
ultimately issued (“1st Generation
Patents”). The 1st Generation Patents were
assigned to only Tulane because the VA assigned all of its
ownership rights to Tulane. In 2003, 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.
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.
provisional application resulted in the issuance of U.S.
Patent No. 8, 716, 436 (the “436 Patent”). There
are also three patent applications relating to the
2nd Generation Compounds currently pending with
the U.S. Patent and Trademark Office (“PTO”) U.S.
Patent Application No. 14/268, 057 (the ‘057
Application), U.S. Patent Application No. 14/845, 813 (the
‘813 Application), and U.S. Patent Application No.
14/974, 249 (the ‘249 Application and with the
‘057 Application and the ‘813 Application, the
“Related Applications”). According to Plaintiffs,
all have been assigned to, and are co-owned by, the VA and
August 19, 2016, Tulane and the United States filed this
lawsuit against Cytogel seeking a declaratory judgment that
they are the sole owners of the ‘436 Patent and the
Related Applications and that Dr. Zadina and Dr. Hackler are
the true inventors of the ‘436 Patent and the Related
Applications. 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. Cytogel's amended counterclaim filed on April 11,
2017, stated that “As described in the foregoing
paragraphs, the '436 Patent and the '057, '813,
and '249 Applications resulted or emerged from materials
and information provided to Dr. Zadina by Cytogel, and/or as
a result of the consulting process between Dr. Zadina and
Cytogel. Therefore, under the Consulting Agreement, Dr.
Zadina's interest in the '436 Patent and the
'057, '813, and '249 Applications are the
property of Cytogel.â (Rec. Doc. 68, Para. 78).
now seeks to amend its affirmative defenses and counterclaim.
It proposes to add a claim challenging Dr. Hackler's
inventorship of the ‘436 Patent, to assert that Cytogel
also owns Dr. Hackler's purported interest in the
‘436 Patent, to clarify that its claims apply to the
Related Applications in addition to the ‘436 Patent,
and to amend its defenses to be consistent with the
counterclaims. Cytogel states it did not make these claims
Applications in its original or first amended counterclaim
because it lacked sufficient evidence to claim that Dr.
Hackler had not invented the ‘436 Patent or Related
Applications and it similarly lacked knowledge of facts
sufficient to support a claim challenging any interest Dr.
Hackler may have with respect to this intellectual property
because his work, like that of Dr. Zadina, emerged from
Cytogel's confidential information . Cytogel claims it
has since obtained sufficient evidence to make this claim.
The Plaintiffs oppose Cytogel's proposed amendment.
Standard to Amend Pleadings
Federal Rule of Civil Procedure 15(a)(2), when the time
period for amending a pleading as a matter of course has
passed, a party may amend its pleadings by consent of the
parties or by leave of court. “The court should freely
give leave when justice so requires.” Fed. R. Civ.
Proc. 15(a)(2). Thus, the United States Court of Appeals for
the Fifth Circuit instructs that the “district court
must possess a ‘substantial reason' to deny a
request for leave to amend.” Smith v. EMC
Corp., 393 F.3d 590, 595 (5th Cir. 2004). Nonetheless,
“that generous standard is tempered by the necessary
power of a district court to manage a case.”
Yumilicious Franchise, L.L.C. v. Barrie, 819 F.3d
170, 177 (5th Cir. 2016) (quoting Schiller v. Physicians
Res. Grp. Inc., 342 F.3d 563, 566 (5th Cir. 2003)). The
court may consider numerous factors when deciding whether to
grant a motion for leave to amend, including “undue
delay, bad faith or dilatory motive on the part of the
movant, repeated failures to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, and futility of the
amendment.” Schiller v. Physicians Res. Grp.
Inc., 342 F.3d 563, 566 (5th Cir. 2003).
determine whether a complaint is futile, courts “apply
‘the same standard of legal sufficiency as applies
under Rule 12(b)(6).'” Stripling v. Jordan
Prod. Co., LLC, 234 F.3d 863, 872-73 (5th Cir. 2000)
(quoting Shane v. Fauver, 213 F.3d 113, 115 (3d Cir.
2000)). “To survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007). In many cases where futility is not
clear, courts find the better course is to grant leave to
amend and allow the opposing party to respond to the amended
claim with a motion to dismiss or motion for summary
judgment. E.g., Tripp v. Pickens, No.
17-CV-0542, 2018 WL 3059614, ...