Ferring B.V. et al v. Allergan Inc. et al
Filing
57
OPINION re: 26 MOTION to Dismiss filed by Allergan Sales, LLC, Allergan USA, Inc., Allergan Inc. Based upon the facts and conclusions set forth above, the Defendant's motion to dismiss is granted as to all counts, except for Counts 1 through 3. (Signed by Judge Robert W. Sweet on 3/18/2013) (cd)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-- --- x
FERRING B.V., FERRING
INTERNATIONAL CENTER S.A., AND
FERRING PHARMACEUTICALS INC.,
Plaintiffs,
12 Civ. 2650
against
OPINION
ALLERGAN, INC., ALLERGAN USA, INC.,
ALLERGAN SALES, LLC, SERENITY
PHARMACEUTICALS CORPORATION,
SERENITY PHARMACEUTICALS, LLC,
REPRISE BIOPHARMACEUTICS, LLC,
SEYMOUR H. FEIN, AND RONALD V.
NARDI,
Defendants.
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--
--
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--
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---------
--x
A P PEA RAN C E S:
Attorneys for Plaintiffs
GIBBONS P.C.
One Gateway Center
Newark, NJ 07102
By: Mara E. Zazzali-Hogan, Esq.
William P. Deni, Jr., Esq.
FINNEGAN, HENDERSON, FARABOW, GARRETT
& DUNNER, LLP
901 New York Avenue, N.W.
Washington, D.C.
20001 4413
By:
James B. Monroe, Esq.
Paul W. Browning, Esq.
Adriana L. Burgy, Esq.
Attorneys for Defendants
GIBSON, DUNN & CRUTCHER LLP
200 Park Avenue
New York, NY 10166-0193
By: Joseph Evall,
Scott A. Leslie, Esq.
GIBSON, DUNN & CRUTCHER LLP
3161 Michelson Drive
Irvine, CA 92612
By: Jeffrey T. Thomas, Esq.
Jeffrey H. Reeves, Esq.
ZUCKERMAN SPAEDER LLP
1185 Avenue of the Americas
New York, NY 10036
By: James Sottile, Esq.
Steven M. Cohen, Esq.
Noah Solowiejczyk, Esq.
Sweet, D.J.
Defendants Allergan, Inc.; Allergan USA, Inc.; and
Allergan Sales, LLC (col
Pharmaceuticals Corporat
(collect
ctively, "Allergan"); Serenity
, Serenity Pharmaceuticals, LLC
, "Serenity"), Reprise Biopharmaceutics, LLC
("Reprise"), Dr. Seymour H. Fein ("Fein") and Dr. Ronald V.
Nardi
("Nardi")
(collectively, the "Defendants") have moved
pursuant to Rules 8, 9(b), and 12(b) (6) of Federal Rules
Civil Procedure to di
ss the complaint (the "Compl
If)
of
plaintiffs Ferring B.V., Ferring International Center S.A., and
Ferring Pharmaceuticals Inc.
"
(collect
ly,
"Ferring" or the
iffslf) alleging seventeen causes of action arising out of
the obtaining and use of certain patents by the Defendants.
Based upon the conclusions set forth below, the
Defendants' motion is granted as to Counts 4-17 and denied as to
Counts 1-3.
I. The Facts & Prior Proceedings
1
Desmopressin is a
ic hormone used to treat a
variety of disorders related to excessive urine production.
See Compl. ~~ 27-28}.
Ferring devel
the world's first pharmaceuti
desmopressin products,
as a treatment for
desmopressin in Denmark
diabetes insipidus.
1972
(rd. , 29)
Over
the past several decades, Ferring almost singlehandedly built
the current desmopress
market by leading the
in
developing novel formulations and obtaining regulatory approval
to treat an increas
number of disorders.
rd. "
29 44) .
Given its efficacy, safety profile, and worldwide commercial
s various desmopressin products today
success, Ferring
under the Minirin® tradename and continues to conduct research
and development
("R&D") on desmopressin.
rd. "
29, 30).
smopressin's success in treating central
diabetes
ipidus, a Ferring affiliate
doctor in Denmark, a
Peter Norgaard ("Norgaard"), then a
grant to
that deC!m(')1"\,r
this di
effectively treating
tigate the possibility
nocturnal enuresis.
(rd. , 31).
1984 awarded Dr. Jens
Norgaard's work established
in successfully treated children suffering from
, enabling Ferring to
2
a
regulatory approval
and launch desmopressin for this purpose.
(rd.)
After becoming
an employee with a Ferring affiliate, Norgaard also led the
effort to gain regulatory approval for desmopressin as a
treatment for nocturia, further expanding the reach of
desmopressin therapy and Ferring's Minirin® products.
32
1
33).
(rd. ~~
During the 1990s 1 Norgaard also investigated an
adverse side effect associated with
water retention causes an imbalance in blood
in which excess
sodium levels.
smopressin, hyponatremia [
rd.
~
33).
His research into dosage levels led
him to recognize that higher doses
stronger antidiuretic effect
duration of action.
rd.
~~
l
rather than generating a
l
simply extend desmopressin's
34, 35).
Dr. Thomas Senderovitz ("Senderovitz")
joined Ferring
soon thereafter to build a pharmacokinetics department and began
collaborating with Norgaard.
rd.
~
35).
Senderovitz began
pooling data both from in and outside of Ferring to generate
comprehensive analyses of desmopressin1s properties
internally as the EMF study.
rd. ~~ 35, 37).
l
known
Norgaard and
Senderovitz confirmed that desmopressin was far more potent than
previously understood and that even low doses may yield maximum
antidiuretic ef
of action.
1
while higher doses merely extend duration
rd. ~~ 35, 36).
Given these findings and the
3
dosages may increase
understanding that
sk of
hyponatremia, Norgaard and Senderovitz proposed dosages designed
to achieve maximum plasma levels of approximately 6 7 pg/ml or
lower, yielding a duration of six hours or less.
(Id. )
Their
studies later served as a basis for Ferring clinical studies
targeted at further evaluating the efficacy of low doses of
desmopressin.
rd. ~ 38) .
On August 30, 2001, Ferring dec
to proceed with an
orodispersible formulation project, and Senderovitz and his
pharmacokinetics group developed study protocols in support of
this endeavor.
(rd. at
~
44.)
Consistent with previous
development plans considered in the 1990s, these protocols
specified us
tablet.
the orodispersible
ation as a sublingual
rd.
Fein and Nardi worked
Ferring's former
Tarrytown, New York office beginning in the 1990s.
(rd. ~ 46) .
An "Employment Agreement" executed in connection wi
promotion
legedly manifests Nardi's "agree [ment] to assign his
ownership rights to any invention (or any improvement upon or
addition to an invention)
carri
on by Ferring that
icable to the business then being
made, discovered, or
4
participated in the discovery of" during the course of his
employment.
(Id.
~
48) .
When Nardi joined Ferring, he began working with Fein,
then a consultant for Ferring.
(Id.
~
In 1997, Fein
52.)
became an employee at Ferring with the position of Executive
Director, Clinical Research and Medical Affairs.
(Id.
~
53.)
He was an employee for just one year, however, and then resumed
his consulting role.
(See id.
~~
54-56.)
In 2001, while Fein
was a consultant, his "duties and responsibilities
expanded to include assisting with developing (and potentially
patenting) a desmopressin formulation."
(Id.
~
56.)
Fein
"continued to hold himself out as Medical Director" during that
period.
(Id. ~ 59).
For most of their tenure, neither Nardi or
Fein nor that office had any involvement in desmopressin R&D.
(Id.
~
50).
After Nardi became Executive Vice President,
Research and Development and Chief Scientific Officer on August
1, 2001, his responsibilities expanded to include Ferring's
development of the new orodispersible desmopressin formulation.
(Id.
~~
47,
50).
His performance objectives and bonus criteria
for 2001/2002 depended in part on obtaining patent protection
for this formulation.
(Id.
~
50) .
5
Fein became a senior management member of Ferring's
high-level Research Development Marketing committee ("RMDC
Id. ~ 57) and began travell
tI
)
to Copenhagen to attend various
meetings concerning Ferring's global research and development.
Id.
as the sponsor on several
Fein also later
clinical studies, signing on Ferring's behalf and holding
himself out as Medi
rector, Ferring Research and
Id. ~58).
Development.
Fe
was one of the most highly
Id. ~ 60).
compensated employees at Ferring in 2001 and 2002.
As of December 2001, Nardi was unaware of
of the orodispersible study, internally designat
~ 51.)
When he
status
CS004.
(Id.
red about its status, Senderovitz informed
him that the protocol, specifying sublingual delivery and naming
Senderovitz as study sponsor, had been comple
similarly did not
2002.
icipate in any desmopres
Id.
Fein
meetings until
Id. ~ 57).
filed a patent appl
orodispers
ion on an
e desmopressin formulation in Great Britain on May
7, 2002, without identifying any inventors, and then filed a
Patent Cooperation Treaty ("peTti) application on September 20,
2002,
ifying an initial set of s
6
inventors,
(Id.
~~
62,
63), including Fein and Nardi based on their representations
that they allegedly contributed the "sublingual" aspect of the
orodispersible formulation.
(Id. ~ 65).
With Nardi and Fein
listed as inventors, Nardi could claim that he had fulfilled his
performance objective of obtaining patent protection for the
orodispersible desmopressin formulation.
2002 memorandum,
(rd.
~
65) .
rn a May
Fein asserted that he made these alleged
contributions jointly with Nardi and did so in the course of his
regular duties at Ferring.
(rd.
~
66) .
Ferring terminated Nardi soon after the peT filing.
(See id.
~
67).
In his severance agreement, Nardi reaffirmed
that he would fulfill the post-employment obligations detailed
in his August 1, 2001, employment agreement.
68, 69).
(rd.
~~ 47,
48,
He reaffirmed that he would assign his ownership
rights to any inventions he made, discovered, or participated in
discovering in the course of his employment.
(rd. ~ 68).
He
also reaffirmed that he would return all electronic and hard
copy documents and materials containing information relating to
Ferring's business, including trade secret and confidential
information.
(Id.
~
69).
Nardi further reaffirmed that he
would keep secret, at all times, information concerning
Ferring's organization, business, and finances,
7
including
rd.
t
severance
During his termination and
s, Nardi provided explicit assurances that
was complying wi
his obligations and returning all of his hard
copy files and e
c documents on his home computer.
Ferring
Fe
shortly thereafter on November 7, 2002,
and directed him to return
I Ferring materials, including
computer files, wherever located.
Before leaving
, Inc.
trade secret Ferring
i
information, including the
of Norgaard and Senderovitz.
CNF and Markus have
Main Street, Suite 400, New
same address:
120 North
Id. ~ 80) .
ty, New York, 10956.
the commerci
Fein and Cheng sought investors
~
("Markus"), continued
er the termination of Fein and Nardi
and to have access to conf
desmopressin (rd.
70) .
, working with Maria Cheng
("Maria Cheng") at Markus Re
(Id. ~ 78) .
~
("Cheng"), a consultant for
(rd. ~~ 52, 77)
to consult for Ferring
rd.
, Fein incorporated CNF Pharma,
LLC ("CNF") with Linda
Ferring.
(rd.
ization of
79), but kept their CNF venture and joint
Id. ~ 77).
activities secret from Ferring.
On May 6, 2003,
Fein filed a PCT patent application (App. No. PCT/US03/14463)
claiming priority to Ferring's May 7, 2002 British
See id.
~
74.)
Approximately six months later, he
8
ication.
i
what would ultimately issue as his U.S. Patent No. 7,799,761
(the "'761 Patent"), which disclosed various pharmaceuti
compos
containing low dosages for
claimed
rd.
~
ority to the
smopressin; he again
tish application.
(See id. Ex. Ci
74)
Fein filed his patent applicat
in 2003 and
represented that his patent would be directed to some sort
subject matter relating to sublingual desmopressin.
74).
(rd.
~~
73
In 2004, in response to Ferring's inquiry, Fein's counsel
stated that
applications contained no confidential
information.
ng now claims that Fein and Nardi used Fe
"confidential, trade secret, proprietary, and privileged
information" to design and conduct clinical studies of
desmopressin and to obtain and commercialize patents.
75-76).
Fein subsequently fil
a divisional application for
what would issue as U.S. Patent No. 7,405,203
(the "'203
Patent"), and a continuation application for what would issue as
U.S. Patent No. 7,579,321 (the '''321 Patent").
B). Fein assigned
fendant Reprise
s interest in
2008.
se applications to
(rd. ~~ 84,90).
9
See id. Exs. A,
Fein and Cheng approached Nardi for help in their
venture and in locating potential investors by at least 2004,
rd.
and Nardi began working for CNF Pharma as a consultant.
81).
~
Fein later incorporated Serenity, located at the same
address as CNF and Markus, to focus on desmopressin and
investors, hiring Nardi as a pa
Fein then incorporated
consultant.
Id. ~ 82, 83).
se, located at the same address as
Serenity Corp., CNF, and Markus, to similarly focus on
Id.
desmopressin and investors.
~~
84, 85).
and equity participants in Reprise, and Cheng
are principals
and Maria Cheng are partners.
Id.
~
84).
rights in patent applications relating to
Reprise.
Id.
Fein and Nardi
~
90).
Fein assigned his
smopressin to
In 2009, Serenity was incorporated with
Fein having the title of Chief Medical Officer.
When Fe
.
~
105).
obtained a patent on July 29, 2008, U.S.
ent") , Fein's alleged
Patent No. 7,405,203 (the "'203
s patent included claims directed to
invention had changed.
treatment methods involving maximum plasma concentration of
lower than 10 pg/ml.
Id.
~~
91, 92).
He obtained a second
patent on August 25, 2009, U.S. Patent No. 7,579,321,
patent, also including claims involving maximum plasma
10
'321
(rd. ~~ 94, 95).
concentrations of lower than 10 pg/ml.
patents list Fein as t
e inventor.
On April I, 2010,
global agreement with All
Both
(Id. ~~ 91, 94).
se and Serenity entered
a
for the development and
commercialization of SER 120, a Phase III investigational drug
comprising a desmopressin formulation
administration.
(Id.
~
106).
intranasal
te Fein, Nardi, Cheng and
Maria Cheng all having past employment at Ferring where they
worked on desmopressin, none
s to the SER-120
agreement attempted to clear any
claims or otherwise
contact Ferring during any due dil
fore the agreement.
Reprise purportedly assigned the two is
as well as a pending patent application.
patents to Allergan,
(Id.
claimed compositions purportedly establi
concentrations lower than 10 pg/ml
99).
asma
de
It also lists Fein as sole inventor.
The '761 patent
ssin.
(Id. ~~ 97
Id. ~ 97).
In 2011, Ferring brought entitlement proceedings
Fein and Reprise concerning a European
ent
ion in the District Court of The Hague in the
Netherl
brought
In response, Allergan, Serenity, Reprise, and Fein
ent entitlement claims against Ferring.
11
Id. ~ 107).
On January II, 2012, Allergan, Serenity,
se, and
Fein filed certain exhibits in the Netherlands proceedings
alleged by Ferring to contain its confidential and trade secret
information,
(rd. "
108, 109), including presentations given by
Nardi to Ferring's Board of Directors that contain desmopressin
EC50 data (indicating the plasma concentration at which half of
maximum cl
cal effect is present) developed by Norgaard
and Senderovitz in t
cl
cal effect
EMF study, directly illustrating the
ss of low desmopress
plasma levels,
internal minutes from high level Ferring R&D committees with
restricted distribution lists, internal Ferring emails, an entry
from Nardi's Outlook calendar while at Ferring, int
Ferring
R&D memoranda with confidentiality legends and a witness
statement from Nardi stating
he was assisting Al
Serenity, Reprise, and Fein in these proceedings.
The Dist
(rd. , 108)
ct Court of The Hague granted Ferring's request to
See id. , 116).
keep those documents confident
On January 22, 2012, Ferring demanded that Fein,
Reprise, Serenity, and Allergan withdraw
return all
ng information.
ir exhibits, and
rd. , 114).
12
The Complaint was filed on April 5, 2012.
On June 29,
2012, Defendants' filed the instant motion to dismiss, and the
motion was heard and marked fully submitted on September 19,
2012.
II.
Discussion
On a motion to dismiss pursuant to Rule 12 (b) (6), all
factual allegations in the complaint are accepted as true, and
all inferences are drawn in favor of the pleader.
Polar Molecular Corp., 12 F.3d 1170, 1174
Mills v.
(2d Cir. 1993). "'The
issue is not whether a plaintiff will ultimately prevail but
whether the claimant is entitled to offer evidence to support
the claims .
,
II
Villager Pond, Inc. v. Town of Darien, 56
F.3d 375,378 (2d Cir. 1995)
(quoting Scheuer v. Rhodes, 416
U.S. 232, 236, 94 S. Ct. 1683, 40 L. Ed. 2d 90
(1974)).
To survive a motion to dismiss pursuant to Rule
12 (b) (6),
"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, 129 S. Ct.
1937, 1949, 173 L. Ed. 2d 868
(2009)
(quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929
13
(2007)).
Plaintiffs must allege sufficient facts to "nudge [
their claims across the I
______~, 550 U.S. at 570.
factual allegations
from conceivable to plausible."
Though the Court must accept the
a compl
as true, it is "'not bound to
accept as true a legal conclusion couched as a factual
all
ion.'"
Iqbal, 129 S. Ct. at 1950 (quoting Twombly, 550
U.S. at 555).
In addition, the expiration of the statute of
limitations is an affirmative defense under which the defendant
bears the burden of proof.
Fed. R. Civ. P. 8(c).
With regard
to motions to dismiss based on a statute of limitations defense,
"[a]lthough the triggering
inappropriate
inquiry notice is an issue 'often
resolution on a motion to
smiss,' where 'the
s needed for determination of when a reasonable investor of
ordinary intelligence would have been aware of the existence of
fraud can be
eaned from the complaint and papers
integral to the complaint, resolution of the issue on a motion
to dismiss is appropriate.'"
Masters v. GlaxoSmithKI
Fed. Appx. 46, 48 (2d Cir. 2008)
Secs.
(citation omitted); see also
Inc., 12 F.3d 346, 352 n.3
~~~--~~~~~~--~------
(noting the "vast number
, 271
cases in this ci
[notice] issues at the pleading stage.")
14
(2d Cir. 1993)
t resolving
A) Counts 1-3 (Inventorship Claims) Are Not Barred By Laches
Unacceptable neglect or delay in promptly asserting a
claim for relief, if such neglect or delay causes prejudice to
the adverse party, invokes the doctrine of laches, barring
enforcement.
See A.C. Aukerman Co. v. R.L. Chaides Constr. Co.,
960 F.2d 1020, 1028 29
. Cir. 1992).
"To prevail on a
defense of laches, a defendant must establish that
(1) the
plaintiff's delay in filing a suit was 'unreasonable and
inexcusable,' and (2) the defendant suffered 'material
judice
attributable to the delay.'ff Hor v. Chu, 699 F.3d 1331, 1334
(Fed. C
. 2012)
A
(quoting A.C. Aukerman, 960 F.2d at 1028).
lay of more than six years "
er the omitted
inventor knew or should have known of the issuance of the patent
will produce a rebuttable presumption of laches."
Cardiovascular
Inc. v. Scimed
Advanced
. Inc., 988 F.2d
--------~--------~--~--~--------~~--------~-------
1157, 1163 (Fed. Cir. 1993) i see also Moore v. Broadcom
No. C06-05647 MJJ, 2008 WL 425932, at *3
2008)
(N.D. Cal. Feb. 12,
(stating that the factors giving rise to laches "are
presumed upon proof that the [allegedly omitted inventor]
delayed filing suit for more than six years after actual or
15
.,
constructive knowledge of the claim.
"With the presumption,
lf
)
•
the facts of unreasonable delay and prejudice must be inferred,
absent rebuttal evidence."
Mahmood v. Research in Motion Ltd.,
No. 11 Civ. 5345 (KBF) , 2012 WL 242836, at *7 (citing to A.C.
Aukerman,
960 F.2d at 1937).
The application of laches "is committed to t
discretion of the district court.1f
ics
sound
Serdarevic v. Advanced Med.
Inc., 532 F.3d 1352, 1358 (Fed. Cir. 2008).
Courts have
found that "when the defense of laches is clear on the face
the complaint, and where it is clear that the plaintiff can
prove no set of facts to avoid the insuperable bar, a court may
consider the defense on a motion to dismiss."
Lennon v. Seaman,
63 F. Supp. 2d 428, 439 (S.D.N.Y. 1999).
According to the Complaint, Ferring notified Fein in
early 2003 that it was removing Fein and Nardi as inventors from
its patent filings because their contributions were
"unpatentable"
(see Compl.
~~
71-72).
On April 17, 2003, Fein's
counsel responded that Fein would pursue "his own patent
application" on "subject matter relating to sublingual
desmopressin with alleged low dosage possibilities. 1f
16
See id.
~
73i
Reeves Decl. Ex. 4 (4/17/2003 Email from W. Speranza to P.
Barclay) ) .
According to the Defendants, Ferring had "actual
notice" of this correspondence and "relied upon these documents
in framing the complaint."
(Def. Memo. at 7 n. 5)
(citing Cortec
Industries, Inc. v. Sum Holding L.P., 949 F.2d 42, 48
1991)
i
Chambers v. Time Warner,
Cir. 2002)
(2d Cir.
Inc., 282 F.3d 147, 152-53
(2d
(contracts relied upon by plaintiff in drafting
complaint may be considered on Rule 12(b) (6) motion)).
They
contend that Ferring has not challenged the use of the
correspondence and therefore may consider it on its motion to
dismiss.
Specifically, In a letter dated December 9, 2004,
Ferring's counsel raised "concerns that Fein's patent
application might include confidential Ferring data."
Compl.
~
75i
Barclay to
w.
(See
Reeves Decl. Ex. 5 (4/29/2003 Letter from P.
Speranza)).
Ferring's general counsel
acknowledged that she had "noted the publication of PCT/ US
2003/014463 entitled "Pharmaceutical composition including low
dosages of desmopressin."
Id.
Ferring's counsel also stated
that "Ferring will take all necessary steps to protect its
17
rights and
erest," and expressly threatened to "commence
formal I
action" against Fein and his attorney if they did
not respond "with a satisfactory explanation within 14 days."
rd.
After Fein's attorney responded, Fe
did not hear from
Ferring until it filed its lawsuit almost eight years later.
According to the Defendants, nine years have therefore passed
between the time Ferring received actual notice of Fein's patent
applications and the commencement of this action.
On the other hand, according to Ferring,
language of the statute demonstrates
plain
the patent must be
issued first and the laches clock does not run prior to
issuance.
Under 35 U.S.C.
inventorship of is
§
256, dis
courts may correct
patents in the following situations.
Whenever through error a person is named in an issued
patent as the inventor, or through error an inventor
is not named
an issued patent and such error arose
without any deceptive intention on his part,
[t]he court be
which such matter is called
question may order correction
the patent on notice
and hearing of
1 parties concerned and
Director
shall issue a certificate accordingly.
35 U.S.C.
§
256.
issued, can a
§
Ferring contends that only once a patent is
256 claim accrue, and that "[d]istrict courts do
not have the power to correct inventorship
18
pending patent
applications.
II
(Pl. Opp. at 10-11).
the laches period
Thus, Ferring avers that
should be measured from
date that the
patents-in-suit were issued, September 21, 2010
the '761
patent, August 25, 2009 for the '321 patent, and July 29, 2008
for the '203 patent.
rcuit recently issued a decision
The
addressing this issue in Hor v. Chu.
inventorship c
With respect to
, the Court reaffirmed its prior holding in
Advanced Cardiovascular that laches for a
begin prior to issuance.
that "the 1
§
Federal Circuit
Specifically,
s period for a
the issuance of the
or knew or should
, regardless of whet
the omitted inventor knew or should
known of the omitted
was pending before
inventorship while the patent applicat
PTO."
Hor, 699 F.3d at 1336 37.
Court reli
In reaching its holding,
of
on the statutory
latches cannot begin, until
§
256 to confirm
patent actually issues.
1336 (stating that "[n]othing
the plain language of
the accompanying regulations
cates that the
cha11
inventorship be
from later contest
ld
256 correction of inventorship
§
claim begins to run when the omitted
have known
256 claims does not
19
§
256 or
to
PTO can potent
inventorship under
Id. at
bar an
§
256.").
All
has also asserted one delay period for
1
three patents in-suit, but "each patent is a separate chose in
action."
____________________~____~_____ , 29 F.3d 1570, 1576
(Fed. Cir. 1994)
(Stark I).
The
Circuit stated that
"the general rule is that the 1
s period does not accrue
until each patent issues, even if the patents are interrelated."
Id. at 1576.
Here, the '761 patent was issued on September 21,
2010, the '321 patent was issued on August 25, 2009, and the
'203
ent was issued on July 29, 2008.
Thus, the period
April 5, 2012 filing date ranges
between patent issuance and
from one year and six months to three years and e
whi
delay required to invoke a
are less than the s
presumption of laches.
months,
Accordingly, the laches period began to
run once the patents-in-
t were issued and
's § 256
claims are not barred by 1
B) Counts 4 And 5 (Ownership
Dismissed
Cla~s)
Are Time Barred And
Where the complaint "clearly shows
time," it should be dismissed with prejudice.
20
claim is out of
See Troni v.
Holzer, No. 09 Civ. 10239 (WHP), 2010 WL 3154852, at *2-5
(S.D.N.Y. July 29, 2010)
smissing
on statute
limitations grounds); - - - -so Gonzales v. Nat'l Westminster
see
Bank PLC, 847 F. Supp. 2d 567, 570 (S.D.N.Y. 2012)
facts
can be gl
("Where the
from the complaint, papers integral
to the complaint, and
icly disclosed documents,
ion
of the limitations issue on a motion to dismiss is
a ppropriat e .
If )
(
quo t i ng .=I.=n.=.=r.=e.=.=S.=a.=.=l_o_m_o-=n.=.=A-=n-=a.=.=-=--:::..=t.=.=W.=l=-·n_s-=-=t.=a.=r.=.=L.=i.=t=-=-~. ,
373 F. Supp. 2d 241, 245 (S.D.N.Y. 2005))
marks and brackets omitted)
112 (2d Cir. 2000)
i
(internal quotation
Cuoco v. Morit
, 222 F.3d 99,
smissal without leave to amend is
warranted where amending the complaint would prove futile in
curing its deficiencies) .
Counts 4 and 5 assert
ownership of the
Ferring is entitled to
ents-in-suit.
Specifically,
Count 4,
Ferring has contended that it is a rightful owner of Fein's
s because Nardi co-invent
was required by
the claimed subject matter and
s Employment Agreement to assign ownership
rights to any invention he developed while employed at Ferring.
See Compl.
~~
167 172).
21
To begin with, Ferring has contended that "third party
transferees of misappropriated patents are proper defendants in
inventorship and ownership actions."
See Pl. Opp. at 21)
(citing Yeda Research & Dev. Co. Ltd. v. rmcl
F. Supp. 2d 570, 577-78 (S.D.N.Y. 2006)
i
, 443
St. John's Univ. v.
Bolton, 757 F. Supp.2d 144, 154 (E.D.N.Y. 2010».
However, in
Yeda, one defendant was the successor in interest to the
organization that employed the named inventors, and the other
was an exclus
prosecution.
licensee that agreed to take over the patent's
See Yeda, 443 F. Supp. 2d at 577-78. In Bolton,
two defendants filed for the patents, and were the sole
shareholders in the third defendant, which was assigned the
patents.
See Bolton, 757 F. Supp. 2d at 154.
supports the
aims against
Neither case
lergan, which has no such relation
to the patents-in-suit.
Although Count 4 is asserted against all Defendants,
there are no allegations that
lergan was involved in the
inventions or that Allergan is a party to, or beneficiary of,
Nardi's Employment Agreement.
Allergan is not alleged to have
any involvement with Fein's and Nardi's work until 2010.
Compl. , 106).
(See
In Count 5, Ferring has also alleged that
obligation to assign Fein's patents was impli
22
I
rather than
contractual.
(See Compl. ~~ 181-83).
As with Count 4, Ferring
has not alleged that Allergan was involved in the invention of
the claimed subject matter or that it was involved with Fein's
consulting relationship with Ferring.
Accordingly, Counts 4 and
5 are dismissed as against Allergan with prejudice.
Ferring has contended that "by virtue of Fein's and
Nardi's positions at Reprise and Serenity, Reprise and Serenity
are liable for the actions of their members or officers when
acting in these capacities."
However, Counts 4 and 5 assert
that Nardi and Fein are obliged to assign patents to Ferring by
virtue of associations with Ferring that ended in 2002, several
years before Reprise or Serenity were even formed.
Thus, Counts
4 and 5 are also dismissed with respect to Reprise or Serenity
because Ferring nowhere alleges that Reprise or Serenity had any
relationship or obligation to Ferring.
In addition, Ferring has recast Claims 4 and 5 as
actions for replevin, so that the statute of limitations does
not begin to run until "demand and refusal."
21)
(See Pl. Opp. at
(citing Leadertex, Inc. v. Morganton Dyeing & Finishing
Corp., No. 93 Civ. 3755
Aug. 17, 1994)
(KTD) , 1994 WL 445618, at *5
(action for replevin of fabrics)).
23
(S.D.N.Y.
Count 4
sounds in breach of contract, not replevin, and must be brought
within six years of the
leged breach-here, Nardi's alleged
failure to asslgn rights in patent applications first pursued in
2003,
See Compl, ~~ 168-70)
i
see
so Bd, Of Trustees of
------
--=L-=e-=l:.. :a,, ,n-=d=--=--=S-=t-=a--=n--=f-=o--=r-=-=d-=..=J-=u-=n-=l=-·o-=-=:.r-=..=U-=n--=l: . V..=-=,---=v-=,---=R-=o--=",-c--=h-=e---=M-=o--=l=..-=e-=c-=u-=l:.. :a.::.:. .:r-=-=:'::::.d-=-=,--,----=:::.I; ;.:.n-=c:. .:. . , 5 8 3
·
F.3d 832, 847-48 (discussing that a cause of action for patent
ownership accrues upon knowledge of patent application) .
Moreover, under Count 4, Ferring's c
im for patent
ownership based on Nardi's Employment Agreement is time-barred.
In New York, actions sounding in breach of contract must be
commenced within six years
213(2)
(McKinney 2012)
Bank, No. 08
Feb. 4, 2010),
i
the alleged breach.
Malone v.
N.Y.C.P.L.R.
Und Vereins
-----------~~------~~--~--------
. 7277 (PGG) , 2010 WL 391826, at *5 (S.D.N.Y.
f'd sub nom. Malone v.
Und
-----------~~--------~~-----
Vereinsbank, AG, 425 F. App'x 43 (2d
r. 2011).
Ferring has
alleged that it owns Fein's patents because Nardi breached his
contractual obligation to assign his ownership rights to any
invention he discovered or participated in the discovery of
during his employment.
(See Compl.
employment, however, ended in 2002
~~
169-71).
see id.
~
Nardi's
67), and the
leged breach could have occurred no later than 2003, when Fe
24
first pursued his patent applications without naming Ferring as
the assignee.
Ferring knew of Fein's patent applications
2003;
but even ignorance of the applications cannot save the claim,
because "[t]he plaintiff need not be aware of the breach or
wrong to start the [limitations] period running."
Worldwide
2010)
See Marvel
, 756 F. Supp. 2d 461, 470
Inc. v. Ki
(S.D.N.Y.
(dismissing breach of contract counterclaims as time
barred even though plaintiff may not have been aware of breach
when it occurred)
149 (2d
dismis
(quoting Guilbert v.Gardner, 480 F.3d 140,
. 2007)).
Count 4 is therefore t
barred, and is
with prejudice.
Under Count 5, Ferring seeks equitable relief
breach of "fiduciary dut
to Ferring"
Claims based on breach of fiduc
see Compl.
~~
182 83).
duties must be brought
within six years of when "the claim becomes enforceable, i.e.,
when all elements
complaint."
the tort can be truthfully alleged in a
See IDT Corp. v. Morgan Stanley Dean Witter & Co.,
12 N.Y.3d 132, 140, 879 N.Y.S.2d 355 (N.Y. 2009)
omitted); see also N.Y.C.P.L.R. 213 (1)
(citations
(McKinney 2012).
Ferring
was on notice of Fein's efforts to obtain his patents no later
25
than 2003.
Any damages from
in's efforts to obtain patents
could have been alleged at that time, notwithstanding Ferring's
claim that it "has additionally been damaged in an amount .
no less than $43 million"
(the amount of Allergan's up-front
payment for the patent assignments in 2010).
194, 206).
See Compl.
Because Ferring could have brought
~~
claim nine
years before it did and more than six years have
when the
claim became enforceable, Count 5 is dismissed as untimely under
the six-year statute of limitat
C) Counts 6 And 7 (Breach Of Common Law Duty) Are Dismissed
In Counts 6 and 7, Ferring has alleged that Fein and
Nardi owed "common law duties," such as "duties of
confidentiality, loyalty, good faith and fair dealing with
employer, and/or fiduciary duties."
(Compl.
~~
186, 199).
Fein
Nardi allegedly breached those duties by "using" Ferring
"confidential information" in designing and conducting clinical
studies and obtaining
commercializ
patents on Fein's
ions, and by providing Ferring documents to other
defendants for submission as evidence in The Hague Action.
id.
~~
187-89, 200-01).
Specifically, Fe
"documents c o n t a i n i n g ' s confident
26
See
and Nardi provided
, trade secret,
proprietary, and privileged information to" the other defendants
. submissions to the
"for use in .
in proceedings adverse to Ferring."
200).
strict Court of The Hague
(See Compl. ~~ 187-88,
Ferring also alleges breach
contract
aims with
respect to the same set of facts and that also is ground for
di smi s sal.
See, e. g .,
Harr.~i_s_v_._P_r_o_v_i_d_e_n._t_L_i
___
&_A_C_c_i_d_e_n_t_I_n_s_.
Co., 310 F.3d 73, 80-81 (2d Cir. 2002)
("New York law.
does
not recognize a separate cause of action for breach of the
implied covenant of good faith and fair dealing when a breach of
contract cIa
,based upon the same facts,
is also pled.") .
The alleged damages stem from the alleged breaches of
common law duties because Fein "obtained at least three patents"
and the non-Allergan defendants "have received at least $43
million in payments from Allergan to date."
Id. ~~ 192, 204}.
Yet neither of these alleged harms, even if they were cognizable
damages, could be "damages directly caused by [Allergan's]
misconduct," as required to state a claim against Allergan.
Palmetto Partners
A.D.3d 804, 807,
L.P. v. AJW
lified Partners
921 N.Y.S.2d 260
(2d Dep't 2011)
See
LLC, 83
(finding that
a lower court should have dismissed a claim for breach of
fiduciary duty because plaintiffs "suffered no damages from any
breach of fiduciary duty.")
(citations omitted) .
27
The al
damages here are unrelated to the document
submissions in
Hague.
The last
Fein's three
s were
issued in 2010, the same year that Reprise and Serenity assigned
the patent
s to Allergan.
See Compl.
~~
97, 106).
The
document submissions, however, did not occur until January 11,
2012.
See id.
more than a
~
108).
The al
ion of damages
before the all
fered were
breaches and thus
unavailing.
The claims for breach of common law duties are also
time-barred.
~~
Since Ferring
196, 208), its breach
equitable relief
fiduciary duty claims are governed
statute of limitations that beg
by a six-
see Compl.
accruing "when
all elements of the tort can be truthfully alleged in a
complaint."
213(1)
See IDT Corp., 12 N.Y.3d at 139; N.Y.C.P.L.R.
(McKinney 2012).
To the extent that either Fein or Nardi
, Ferring's claims would have
owed common law duties to
begun to accrue with the
leged breach,
patent applicat
in 2003.
In addition, Ferring has not
Sereni
leged that Allergan
l
or Reprise had a relationship with Ferring that would
28
give
se to any common law duties.
Accordingly, for the
reasons stated above, Counts 6 and 7 are dismissed as to all
parties.
D) Counts 8 And 9 (Aiding And Abetting) Are Dismissed
To state a
aim for aiding and abetting breach
fiduciary duty under New York law, Ferring must allege "(I) a
breach by a fiduciary of obligations to another,
(2) that the
defendant knowingly induced or participated in the breach,
(3) that plaintiff suffered damage as a result of the breach."
See Palmetto Partners, 83 A.D.3d at 808.
Ferring has alleged that Allergan aided and abetted
breaches of common law duties owed by Fein and Nardi by
"requesting and/or accepting from [them] Ferring documents for
use in activities adverse to Ferring's interest including in
submissions to the District Court of The Hague."
212,
(Compl. "
221).
Ferring has not alleged that Allergan "knowingly
induced or participated in" any breach.
83 A.D.3d at 808.
See Palmetto Partners,
Ferring has alleged only that Allergan,
29
through some sort of "due diligence," "either knew or should
have known" of F e ' s and Nardi's employment histories and all
duties allegedly arising therefrom, and that the documents
submitted in The Hague Action were "
idential, trade secret,
proprietary, and privileged," and revealed Fein's and Nardi's
status as former agents of Ferring.
The harms
(See Compl.
~~
212, 221).
leged from the aiding and abetting claims
include Fein's "obta
at least three patents" and defendants
sharing "at least $43 million in payments from Allergan to
date."
(Compl.
~~
213, 222).
Neither of these harms have been
adequately alleged to have anything to do with the document
submissions to the District Court of
Hague.
Allergan's single alleged act of aiding and abetting
relates to document submissions in The Hague.
212, 221).
The alleged damages of the $43 million Allergan paid
to Serenity and Reprise
(Compl.
~~
See Compl. ~~
assignment of the patents in suit
215, 224), however, preceded The Hague submissions.
In addition, the tort of
ng and abetting breaches
of common law duty does not encompass a "should have known"
standard and actual knowledge is required.
30
See Kaufman v.
Cohen, 307 A.D.2d 113, 125, 760 N.Y.S.2d 157 (1st Dep't 2003)
(c
im for aiding and abetting breach
fiduciary duty was
properly dismissed where there were "no facts In the complaint
from which it could be inferred that the
. defendants had
actual knowledge" of any purported breach) .
Ferring's recitals concerning Allergan's "knowing
participation" in breaches are inadequate.
Ferring has alleged that Allergan (i)
SpecificallYI
"request [ed] and/or
accept[ed]" Ferring documents for use in The Hague action, and
(ii)
"knew or should have known [Fein's or Nardi's] employment
history and consequently that [they owe] Ferring substantial
common law duties."
(Compl. ~~ 212, 221).
not identify the "substant
participation.
This allegation does
assistance" required for knowing
See Kaufman, 760 N.Y.S.2d at 170.
conceded that the allegations
Ferring has
Kaufman were "conclusory"
(Pl.
Opp. at 22), but cannot distinguish its own allegations from the
inadequate language at issue
(defendants "were aware
Kaufman, 760 N.Y.S.2d at 169
Cohen's and plaintiff's prior
involvement with and beneficial ownership interest
., and
therefore knew of the fiduciary duty owed to plaintiffs by Cohen
or acted in reckless disregard of the same.").
31
Ferring's allegations do not meet the applicable
pleading standard.
Ferring has offered no reason for Allergan
to have known of any specific duties, contractual or implied,
owed by either Fein or Nardi to Ferring.
There is no allegation
that Allergan saw or even knew of Nardi's Employment or
Severance Agreements, or that Allergan had any actual knowledge
whatsoever of the nature of Nardi's or Fein's relationships with
Ferring - relationships that concluded approximately eight years
prior to the assignment of the patents to Allergan.
Without an
allegation of actual knowledge on the part of Allergan of the
alleged common law duties, Counts 8 and 9 are dismissed as
against Allergan.
The aiding and abetting claims are also untimely.
The
applicable limitations period for an aiding and abetting claim
is the same as for the underlying violation, which in this case
is an alleged breach of fiduciary duties.
Stevenson, No. 08-cv-8960
(S.D.N.Y. Feb. 6, 2009)
See Glonti v.
(CM), 2009 WL 311293, at **6, 13
(dismissing as time-barred, pursuant to
Rule 12(b) (6), claims including breach of fiduciary duties and
aiding and abetting breach of fiduciary duties).
Because
Ferring's claims for breach of fiduciary duties carry six-year
limitations periods and are themselves time-barred, Ferring's
32
infirm on timeliness
aiding and abetting claims are simil
grounds and there
dismis
E) Counts 10 And 11 (Breach Of Contract) Are Dismissed
Breach of contract under New York law requires:
the
stence of an agreement;
contact by plaintiff;
(4) damages.
1996).
(1)
(2) adequate performance of
(3) breach of contract by defendant; and
Harsco
----------~~------~--
1
91 F.3d 337 1 348
(2d Cir.
Ferring/s claims for breach of contract involve
allegations arising from Nardi/s Employment Agreement
Severance Agreement.
~~ 228
(See Compl.
alleged that Nardi breached
1
245).
his
Ferring
s Employment and Severance
Agreements by (a) using Ferring confidential information to
design and conduct clinical studies and obtain and commerc
patents covering desmopressin formulat
1
ize
and (b) providing
Ferring confidential information to the other defendants as part
of
35
discovery process in The Hague Action.
1
(See id.
~~
234
250-51.)
There are no allegations of a contractual relationship
with any of the other Defendants.
demonstrating that Fein
l
Allergan
Ferring has not pled facts
l
33
Reprise or Serenity had a
contractual relationship with Ferring or that any breaches of
contract were committed.
Accordingly, Ferring's claims for
breach of contract are dismissed as against these parties for
improper pleading.
See Swan Media
Inc. v. Staub, No. 11
civ-2250 (RWS) , 2012 WL 160073, at *3-4
(S.D.N.Y. Jan. 18, 2012)
(dismissing breach of contract claim for failure to properly
plead the existence of an enforceable contract) .
breach of contract claims are also time-barred.
To the extent Nardi breached any contract by using Ferring
information to develop desmopressin products or assist in
obtaining patents, those breaches accrued no later than 2003,
when Fe
first pursued his patent applications independently.
The six-year statute
run.
limitations for breach of contract has
See Marvel, 756 F. Supp. 2d at 470
not be aware
("The plaintiff need
the breach or wrong to start the [limitations]
period running.")
(citation omitted).
Ferring's breach of
contract claims against Nardi are thus time-barred and
dismissed.
F) Count 12 (Interference With Contractual Relations) Is
Dismissed
34
A tortious interference with contractual relations
claim under New York law requires a plaintiff to prove:
(1) the
existence of a valid contract between itself and a third party;
(2) the defendant's knowledge of the contract;
(3)
the
fendant's intentional procurement of the third-party's breach
of the contracti and (4) damages.
v. Lefkowitz, 16 F. Supp. 2d 355, 359 (S.D.N.Y. 1998)
omitted).
Ltd.
See Mina Inv. HoI
(citations
Further, to sustain a claim for tortious interference
with a prospective contract with a third party, a plaintiff must
demonstrate that (1) but for the actions
contract would have been formed and (2)
contract from being executed, the
the defendant, the
in preventing the
fendant intended to "damage
the plaintiff U or engaged in "dishonest, unfair or otherwise
improper" conduct.
Bankers Trust Co. v. Bernstein, 169 A.D.2d
400, 401, 563 N.Y.S.2d 821 (N.Y.App. Div. 1st Dep't 1991).
Ferring's
legation with respect to Allergan's
alleged involvement in purported breaches is that "U.S. and
European counsel for Fein, Allergan, Serenity, and Reprise
approached Nardi for assistance" in The Hague Action, and then
submitted evidence allegedly containing Ferring confident
information to the
strict Court of The Hague.
267) .
35
See Compl. ~
Fatally, Ferring fails to plead a requisite element of
a claim for intentional interference with contractual relations,
namely, that Allergan intended to induce any contractual
breaches.
See Jones v.
Sch. Dist. Of New Rochelle, 695 F.
Supp. 2d 136, 148 (S.D.N.Y. 2010)
(stating that intentional
inducement is a necessary element of the claim).
There is no
allegation that Allergan intended to cause contractual breaches.
Count 12 also should be dismissed as against all other
fendants because Ferring fails to plead any pecuniary damages
resulting from alleged inducements of breach, as required by New
York law.
See Int'l Minerals & Resources
F.3d 586, 595-97 (2d
r. 1996).
, 96
Ferring alleges only that
defendants' evidentiary submissions in The Hague were "adverse
to Ferring!s interest," but does not plead any actual damages
See Compl. ~ 267.)
resulting therefrom.
Indeed, the only
reference to damages is the $43 million paid by Allergan for the
assignment of the patents in-suit, which assignment occurred in
2010
(see id.
~
106)
I
almost two years before the breach
Allergan allegedly induced.
36
helping Fein develop
Ferring also has alleged
desmopressin formulations and obtain
breach (see id. ~~ 266{ 270).
limitations
In New York{ the statute
intentional interference with contractual
relations is
2012).
s were inducements of
years.
See N.Y.C.P.L.R. 214(4)
A claim accrues "at the t
(McKinney
the injury is sustained.
u
Rosemeier v. Scb:enker Int'l{ Inc.{ 895 F. Supp. 65{ 66 (S.D.N.Y.
1995).
Because the injury allegedly suffered by
as a
result of assistance in developing and obtaining desmopressin
patents occurred in 2003{ when
alleged contractual
interference caused Fein to file his patent applications{
Ferring{s
aims are untimely and therefore dismis
G) Count 13 (Misappropriation of Trade Secrets) Is Dismissed
To state a misappropriation claim,
that "(1) it possessed a
using
trade secret
or duty, or as a result
Geritrex
secret{ and (2)
Ferring
fendants are
breach of an agreement, confidence {
scovery by improper means.
v. Dermarite Indus.
(S.D.N.Y. 1996).
must allege
U
LLC, 910 F. Supp. 955, 961
not alleged that Allergan is using
that information in breach of any agreement, confidence, or
duty.
37
ng's misappropriation claim is based on
Compl. ~~
evidentiary submissions to a foreign tribunal.
277 78).
Because Ferring has conceded that Allergan did not
submit the documents
breach of its own "agreement,
confidential relationship, or duty"
"analysis .
(Pl. Opp. at 23), the
turns on whether [Ferring] sufficiently pleaded
that [Allergan] used [
ng's] trade secrets as a 'result of
discovery by improper means.'"
See Watts v. Jackson Hewitt Tax
Servs., Inc., 675 F. Supp. 2d 274, 280 (E.D.N.Y. 2009).
In Watts, as here, a party obtained allegedly
confidential materials from t
claimant's former employees and
then submitted them during discovery in an action involving the
aimant.
Id. at 277-78.
The Court found that "[d]iscovery by
improper means" does not include purported "abuses of the civil
discovery process.
II
Id.
Ferring fails to distinguish Watts
from the instant case.
In addition, even if there were such a relationship
between Allergan and Ferring, Allergan's use
that
information, accepting and submitting documents in The Hague
Action, does not constitute misappropriation.
38
(See Compl. ~~
277-78.)
The mere submission of documents as part of the
discovery process does not constitute misappropriation.
See
Watts, 675 F. Supp. 2d at 280 ("'Discovery by improper means"
refers not to abuses of the c
to industrial espionage.")
1 discovery process, but rather
(citation omitted).
Even if Allergan
somehow improperly induced Fein or Nardi to provide it with
Ferring trade secrets, "mere conclusory statements that they did
so pursuant to .
. underhanded prodding fails to raise this
allegation 'above the speculative level.'
II
See id.
(citing
Twombly, 550 U.S. at 555).
Count 13 should also be
smissed because the
limitations period for a misappropriation claim has
ready run.
In New York, misappropriation claims must be brought within
three years of "when the defendant
scloses the trade secret or
when he first makes use of plaintiff's ideas."
I
v. Alcon Laboratories
WL 2016872, at *2
Inc., No. 08 Civ. 3669 (DLC) , 2009
(S.D.N.Y. July 9, 2009)
see also N.Y.C.P.L.R. 214(4)
tcs USA
(quotation omitted)
(McKinney 2012).
Ferring has
alleged that Fein and Nardi first misappropriated Ferring's
"labor, skill, and expenditures, as well as its confidenti
trade secret, proprietary, and privileged information" by
collaborating with Serenity and Reprise to obtain and
39
i
commercialize patents covering desmopressin formulations and
designing and conducting clinical studies.
295.)
The three-
ar limitations period began in 2003, when
Fein first applied for patents covering
formulations.
(See Compl. ~~ 280,
smopressin
Accordingly, for the reasons stated above, Count
14 is dismissed.
H) Count 15 (Conversion) Is Dismissed
The tort of conversion requires that the defendant,
"intentionally and without authority, assumes or exercises
control over personal property belonging to someone else."
Marketxt Holdings Corp. v. Engel & Reiman, P.C., 693 F. Supp. 2d
387, 395 (S.D.N.Y. 2010).
Ferring has not alleged any facts
demonstrating that Allergan intentionally exercised control over
Ferring property.
Count 15 is also time-barred.
Conversion claims are
subject to a three-year statute of limitations, which begins
running when the
N.Y.C.P.L.R. 214(3)
leged conversion takes place.
See
(McKinney 2012) i see also
-----------,-----------
Records, 58 N.Y.2d 482, 488-89 (1983)
(barring conversion claim
because statute of limitations had run).
40
Ferring has contended
that the conversion claims did not accrue until "Ferring's
demands and Defendants' refusals in early 2012."
However,
the case Ferring has cited, accrual based on demand and refusal
applies where "the party in possession has not acquired
possession wrongfully, and has not otherwise exercised wrongful
dominion over the property."
Bolton, 757 F. Supp.2d at 179.
The later accrual period therefore applies only if defendants'
alleged acquis
were lawful.
ion of the Ferring documents and patents in-suit
However, Ferring has pled that the acquisition was
unlawful (see, e.g., Compl.
~~
190, 202, 237).
To the extent
that Fein and Nardi are alleged to have exercised control over
any information belonging to Ferring, the conversion took place
in 2002, by retaining documents after completing the
employment and/or consultancies.
see id.
~
If, as Ferring has alleged
310), any defendant used unlawfully obtained Ferring
material to develop desmopressin formulations or obtain patents,
the defendant must have had that material prior to 2003, when
Fein first filed
s patent applications.
Count 15 is therefore
time-barred.
I) Count 16 (Fraudulent Concealment) Is Dismissed
41
"Fraudulent concealment is a species of common law
fraud.
Arabe Et Internationale D'Investissement v.
II
r.1995).
Maryland Nat'l Bank, 57 F.3d 146, 150 (2d
"Under
New York law, fraudulent concealment requires proof of:
failure to discharge a duty to disclose;
defraud, or scienter;
Cir. 2005).
(2) intention to
(3) reliance; and (4) damages."
=-:R-=e-=c-=o-=r:.....:d:::.=s=--v~.--=.I.=s-=l:..::a=n=-:d=-...;D=-e.=...=.f.-.:;...J=a_m--"M=-u=s --i=-c--"----'--'--"-,
•=
(1)
TVT
412 F. 3 d 82, 90- 91 (2 d
The duty to disclose requires a fiduciary
relationship between plaintiff and defendant.
See
v.
Green, 42 A.D.3d 521, 522, 842 N.Y.S.2d 445 (2d Dep't 2007).
Misrepresentations or omissions must be pleaded with
specificity or the claims will be dismissed.
See
e . . , Ben Hur
Inc. v. Better Bus. Bureau, No. 08 Civ. 6572,
2008 WL 4702458, at *4 (S.D.N.Y. Oct. 3, 2008)
("The plaintiff's
complaint fails [the Rule 9(b)] standard because the allegations
in the complaint do not specify the time,
ace,
[or] speaker
. of the misrepresentations that were allegedly made .
. ") i
Armored
LLC v. Homeland Securi
, No. 07
CV-9694 (LAP) , 2009 WL 1110783, at *1 (S.D.N.Y. 2009)
(dismissing
a fraudulent inducement claim where plaintiff "does not identi
the location where the misrepresentations were made
not provide exact dates for the statements .
42
. does
. and fails to
sufficiently identify 'who' the speaker is concerning each
statement") .
In addition,
"[i]t is well settled that a complaint
leging fraud under New York law must comply with the
heightened pleading standard under Rule 9(b) which requires that
-
L
~
Woods_ _v. _ _ _
___
__
~
particularity.'"
~
'the circumstances constituting fraud .
. must be stated with
Co., No. 10 Civ.
_ __
0559 (ADS) (WDW) , 2010 WL 4314313 at *5 (E.D.N.Y. Nov. 2, 2010)
(quoting Fed. R. Civ. P. 9(b»
i
see also Ganino v. Citizens
Utils. Co., 228 F.3d 154, 168 (2d Cir. 2000).
Ferring has contended that it is not required to plead
fraudulent intent with particularity, relying on Rule 9(b)'s
provision that "[m]alice, intent, knowledge and other conditions
a person's mind may
alleged generally.
II
But"
relaxation of Rule 9(b) 's specificity requirement for scienter
'must not be mistaken for license to base claims of fraud on
speculation and conclusory all
ions'll.
Shields v.
rust
Bancorp, Inc., 25 F.3d 1124, 1128 (2d cir. 1994), quoting
O'Brien v. National
ts Partners, 936 F.2d 674,
--------------------------~--~----~~-------------
676 (2d
r. 1991).
Instead,
"to serve the purposes of Rule
43
9 (b),
[the Second Circuit] require [s] plaintiffs to allege facts
that give
se to a strong inference of fraudulent intent."
Id.
"[W]hen pleading scienter, plaintiffs must allege
facts that give rise to a strong inference of fraudulent
intent."
Woods, 2010 WL 4314313, at *6.
Furthermore,
"basing
allegations of knowledge and fraudulent intent 'upon information
and belief' without anything more will not satisfy the pleading
requirements under Rule 9(b)."
Mortgage Corp. v. Equifax,
2009)
Id. at *7 (citing Premium
Inc., 583 F.3d 103, 108 (2d Cir.
("Allegations that are conclusory or unsupported by
factual assertions are insufficient."))
F.2d 49, 54 n. 1 (2d Cir. 1986)
ordinarily
i
Luce v. Edelstein, 802
("Allegations
fraud cannot
based 'upon information and belief,' except as to
'matters peculiarly within the opposing party's knowledge. '") .
Ferring has failed to plead with the requisite
specificity the misrepresentations or omissions that form the
basis of Ferring's fraudulent concealment claim.
"The
particularity requirement of Rule 9(b) demands that a plaintiff
'(1) detail the statements (or omissions) that the plaintiff
contends are fraudulent,
(2)
identify the speaker,
(3) state
where and when the statements (or omissions) were made, and (4)
44
explain why the statements (or omissions) are fraudulent.
'11
Woods, 2010 WL 4314313 at *5 (quoting
F.3d 337, 347 (2d Cir. 1996))
Ferring has alleged Fein's and
Nardi/s intent "on information and belief ll
(See Compl. ~ 325)
("On information and belief, the actions of Fe
and Nardi have
been at all times knowing, willful, and malicious.")) and
without more, thereby fails to allege fraudulent intent with
particularity.
There are also no facts alleged that Allergan
intentionally or even knowingly defrauded Ferring.
See Saltz v.
rst Frontier, LP, 782 F. Supp.2d 61, 75 (S.D.N.Y. 2010)
(dismissing fraudulent concealment claim for failure to plead
scienter) .
Here, Ferring has alleged that Fein and Nardi made
misrepresentations to Ferring or
had a duty to disclose
led to disclose facts they
see Compl. ~~ 318 323), but has not
identified when, where, or how these
or omissions occurred.
See Compl.
leged misrepresentations
~
318)
leging that "Fein
has repeatedly assured Ferring that he would use no Ferring
confidential, trade secret, proprietary or privileged
information" without specifying when such assurances were given
or to whom) .
45
'ii:
__ c u _
In addition, Ferring has not alleged that it relied on
any specific misrepresentation or omission by either Nardi or
Fein or that such
leged reliance is reasonable or justifiable.
See, e.g., Kramer v. Schloss, 2004 U.S. Dist. LEXIS 30964, at
*24
(N.D.N.Y Nov. 30, 2004).
("In order to prove the reliance
element of a fraudulent concealment claim, a plaintiff is
required to demonstrate that the alleged misrepresentation or
omission induced him to act or to refrain from acting to his
detriment
The reliance must also be reasonable or
justifiable. H); Waksman v. Cohen, 00 Civ. 9005 (WK), 2002 U.S.
Dist. LEXIS 21209, at *18 (S.D.N.Y. Nov. 4, 2002)
("As a result,
in order to maintain a claim for fraudulent concealment, the
aintiff must establish that
disclosure or lack thereof.'H
'actual
(quoting Banque Arabe Et
Internationale D'Investissement v.
146, 156 (2d Cir. 1995)).
relied on the
and Nat!l Bank, 57 F.3d
Ferring's allegations as to Fein and
Nardi is that their acts "prevented Ferring from discovering
their claims set forth in this complaint. H (Compl.
~
321).
As to the other defendants, Ferring has not alleged a
fiduciary relationship between Serenity and Reprise or any duty
of Serenity and Reprise to Ferring.
46
Count 16 does not
lege
that Serenity and Reprise acted with intent to defraud.
Taken
as to those parties.
together, Count 16 is therefore dismi
J) Count 17 (Unjust Enrichment) Is Dismissed
To state a claim for unjust enrichment in New York, a
plaintiff must allege that:
(1)
the
fendant was enrichedi
(2)
the enrichment was at plaintiff!s expensej and (3) the
circumstances were such that equity and good conscience require
defendant to make restitution.
Intellectual
tal Partner v.
---------~------~------------------
Institutional Credit Partners LLC, No. 08 Civ. 10580, 2009 WL
1974392, at *8 (S.D.N.Y. Jul. 8, 2009).
need not be
Although a plaintiff
privity with the defendant to state a claim for
unjust enrichment," there can be no claim where
between
plaintiff and
connection
fendant is attenuated.
v.
Crompton Corp., 8 N.Y.3d 204, 215-16, 831 N.Y.S.2d 760
(dismissing unjust enrichment c
direct relationship)
i
see also
im because parties lacked
~O'~Y~ia
Malone & Co.
Ralph Rieder, 86 A.D.3d 406, 408, 926 N.Y.S.2d 494
2011)
(2007)
Inc. v.
(1 st Dep't
(unj ust enrichment claim requires "a connection or
ionship between the parties that could have caused reliance
or inducement on the plaintiff's part").
47
leged that the Defendants have been
Ferring has
unjustly enriched by using Ferring confidential information in
"patenting, developing, and/or commercializing certain
desmopressin formulations."
has not alleged a
(Compl. ~ 330).
ationship between Allergan and Ferring to
support a claim for unjust enrichment.
fail
However, Ferring
Ferring has furthermore
to plead the requisite relationship or connection between
Ferring and Serenity or Reprise.
Ferring's unjust enrichment claim is also time-barred.
The limitations period for unjust enrichment claims is six
years, and it starts running when the defendant commits the
wrongful act that enriches him.
See Cohen v. Cohen, 773 F.
Supp.2d 373, 397 (S.D.N.Y. 2011)
(dismissing unjust enrichment
claim as t
-barred).
To the extent any defendants committed a
wrongful act that led to "patenting, developing, and/or
commercializing certain desmopressin formulations," that act
would necessarily have occurred no later than 2003 when Fein
first applied for patents covering those formulations.
Accordingly, the claim for unjust enrichment comes well after
the s
year limitations period has run and is therefore
dismissed against
1 Defendants.
48
III. Conclusion
Based upon the facts and conclusions set forth above,
the Defendant's motion to dismiss is granted as to all counts,
except for Counts 1 through 3.
It is so ordered.
New York., NY
March!
t~, 2013
/
/
ROBERT W. SWEET
U.S.D.J.
49
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