Zirvi et al v. Flatley et al

Filing 173

MEMORANDUM AND OPINION re: 164 LETTER MOTION for Oral Argument on Defendants' Motions to Dismiss the Second Amended Complaint addressed to Judge John G. Koeltl from Robert P. Haney, Jr. dated May 6, 2019. filed by Mark Chee, I llumina Inc., Jay T Flatley, David R Walt, John R. Stueplnagel, Kevin Gunderson, Jian Bing Fan, Robin M. Silva, 141 MOTION to Dismiss the Second Amended Complaint. filed by Illumina Inc., Jay T Flatley, Stephen P.A. Fodor, David R Wal t, John R. Stueplnagel, Affymetrix, Kevin Gunderson, Robin M. Silva, Jian Bing Fan, Applied Biosystems, 137 MOTION to Dismiss . filed by Stephen P.A. Fodor. Therefore, the plaintiffs' Complaint is dismissed in its entirety. Because the plaintiffs have amended the Complaint twice before, and because further amendments would be futile, the complaint is dismissed with prejudice. The Court has considered all of the arguments raised by the parties. To the extent not addre ssed specifically above, the arguments are either moot or without merit. The Clerk is directed to enter judgment dismissing this case with prejudice. The Clerk is also directed to close all pending motions, and to close this case. SO ORDERED. (Signed by Judge John G. Koeltl on 1/14/2020) (ks) Transmission to Orders and Judgments Clerk for processing.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
────────────────────────────────────
MONIB ZIRVI et al.,
Plaintiffs,

18-cv-7003 (JGK)

- against -

OPINION AND ORDER

JAY T. FLATLEY et al.,
Defendants.
────────────────────────────────────
JOHN G. KOELTL, District Judge:
In the Second Amended Complaint (the “Complaint” or “SAC”),
the plaintiffs allege that the defendants have orchestrated a
wide-ranging conspiracy over the past twenty-five years to steal
the plaintiffs’ trade secrets consisting of proprietary
discoveries related to the encoding and decoding of DNA. The
plaintiffs are scientists Monib Zirvi, Matthew Lubin, Maria
Kempe, and Norman Gerry. The defendants are scientists and
businesspeople Jay Flatley, David Walt, Stephen Fodor, Kevin
Gunderson, Jian-Bing Fan, Mark Chee, and John Stueplnagel, a
patent lawyer Robin Silva, and biotechnology companies
Affymetrix, P.E. Applied Biosystems, and Illumina, Inc. The
plaintiffs allege claims under the Defend Trade Secrets Act
(DTSA), 18 U.S.C. § 1836, et seq.; the Racketeer Influenced and
Corrupt Organizations Act (RICO), 18 U.S.C. § 1961, et seq.; the
New York common law of trade secrets protections; and claims for
other common law torts of fraud, conversion, tortious
1

interference with prospective business advantage, inequitable
conduct, civil conspiracy, and breach of confidence. The
defendants collectively move to dismiss the Complaint under
Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil
Procedure on the grounds that the plaintiffs lack standing, that
the plaintiffs’ claims are barred by various statutes of
limitations, and that in any event the facts alleged do not
amount to violations of federal or state law. In addition to
joining the defendants’ motion, Stephen Fodor also moves
individually to dismiss the claims against him.
For the reasons set out below, the motions to dismiss the
Complaint are granted and the Complaint is dismissed with
prejudice.
I.
The defendants move to dismiss the Complaint pursuant to
Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack
of subject matter jurisdiction because the plaintiffs allegedly
lack standing to pursue their claims. “Dismissal of a case for
lack of subject matter jurisdiction under Rule 12(b)(1) is
proper ‘when the district court lacks the statutory or
constitutional power to adjudicate it.’” Ford v. D.C. 37 Union
Local 1549, 579 F.3d 187, 188 (2d Cir. 2009) (quoting Makarova
v. United States, 201 F.3d 110, 113 (2d Cir. 2000)). In
considering a Rule 12(b)(1) motion, courts must construe all
2

ambiguities and inferences in a plaintiff's favor. However, a
court may refer to evidence outside of the pleadings, and the
burden is on the plaintiff to prove by a preponderance of the
evidence that jurisdiction exists. See Makarova, 201 F.3d at
113. “To survive the motion to dismiss, the pleadings must only
allege facts that affirmatively and plausibly suggest that
Plaintiffs have standing to sue.” Lowell v. Lyft, Inc., 352 F.
Supp. 3d 248, 255 (S.D.N.Y. 2018) (quotations and alterations
omitted). “[A]t the pleading stage, standing allegations need
not be crafted with precise detail, nor must the plaintiff prove
his allegations of injury.” Baur v. Veneman, 352 F.3d 625, 631
(2d Cir. 2003).
The defendants also move to dismiss the Complaint pursuant
to Rule 12(b)(6). In deciding a motion to dismiss pursuant to
Rule 12(b)(6), the allegations in the complaint are accepted as
true, and all reasonable inferences must be drawn in the
plaintiff’s favor. McCarthy v. Dun & Bradstreet Corp., 482 F.3d
184, 191 (2d Cir. 2007). The Court’s function on a motion
to dismiss is “not to weigh the evidence that might be presented
at a trial but merely to determine whether the complaint itself
is legally sufficient.” Goldman v. Belden, 754 F.2d 1059, 1067
(2d Cir. 1985). The Court should not dismiss the complaint if
the plaintiff has stated “enough facts to state a claim to
relief that is plausible on its face.” Bell Atl. Corp. v.
3

Twombly, 550 U.S. 544, 570 (2007). “A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
Although the Court should construe the factual allegations
in the light most favorable to the plaintiff, “the tenet that a
court must accept as true all of the allegations contained in
the complaint is inapplicable to legal conclusions.” Id. at
678. When presented with a motion to dismiss pursuant to Rule
12(b)(6), the Court may consider documents that are referenced
in the complaint, documents that the plaintiff relied on in
bringing suit and that are either in the plaintiff’s possession
or that the plaintiff knew of when bringing suit, or matters of
which judicial notice may be taken. See Chambers v. Time Warner,
Inc., 282 F.3d 147, 153 (2d Cir. 2002).
II.
The following facts alleged in the Complaint are accepted
as true for the purposes of ruling on the motions to dismiss.
The plaintiffs’ claims, under both federal and New York
State law, arise out of two alleged instances of
misappropriation of trade secrets, one occurring in 1994 when
certain trade secrets were allegedly stolen from a confidential
grant proposal, and one occurring in 1999 when alleged trade
4

secrets were allegedly misappropriated during confidential
communications. The plaintiffs allege that these two acts of
misappropriation resulted in the theft of both positive and
negative trade secrets. 1 In order to overcome the various
statutes of limitations, the plaintiffs also allege the
existence of an overarching, twenty-five-year conspiracy of
fraudulent concealment engineered by the defendants that
allegedly prevented the plaintiffs from learning the full extent
of the defendants’ misconduct until 2015. Because they allegedly
only discovered the conspiracy in 2015, the plaintiffs allege
that this action, which the plaintiffs filed on August 3, 2018,
is timely because the statutes of limitations should be
equitably tolled until the discovery of the alleged conspiracy.
SAC ¶¶ 5-6, 9-13, 26-31.
Throughout the early 1990s, the plaintiffs began
collaborating in various capacities with Dr. Francis Barany of
Cornell University Medical College (now Weill Cornell Medical
College) to “creat[e] an entirely novel method for diagnosing
human genetic defects.” SAC ¶¶ 2, 16, 20 (Lubin), 34 (Zirvi), 37

The Complaint describes negative trade secrets as “the trade secrets
reflecting, referencing and relating to the thorough scientific process
required to create a trade secret, much of which was unsuccessful and
resulted in experimental dead ends (i.e. negative) but which was crucial in
the ultimate invention and success of the trade secret.” SAC ¶ 12 n.1.
1

5

(Gerry), 102 (Lubin and Gerry), 196 (Kempe). 2 In February 1994,
Barany’s team, which included Lubin, submitted a grant proposal
to the National Cancer Institute containing alleged trade
secrets. Id. at ¶¶ 102-03. The achievement of the Barany
proposal, allegedly, was “a radical new idea of ‘Universal
Addressable Arrays.’” Id. at ¶ 104. The array was a grid
structure made up of numerous squares in which each square
contained a “man-made designed DNA sequence[]” that the Barany
team referred to as a “zip code” and each square was referred to
as an “address[].” Id. at ¶ 109(I). The arrays worked together
with a ligase detection reaction (“LDR”) in which DNA would be
extracted from a biological sample and matched up to the array
to reveal genetic mutations through a process known as
polymerase chain reaction (“PCR”). Id. at ¶¶ 72, 104, 107(3),
109(I), 109(III). The technologies developed by the plaintiffs
throughout the 1990s and early 2000s, and which formed the basis
for numerous patent applications, were all broadly related to
LDR, PCR, zip code array, and DNA sequencing. Id. at ¶¶ 135
(‘917 and ‘470 patent series), 162 (‘594 patent series), 208
(‘917, 470, and ‘594 patent series), 259 (‘293, ‘470, and ‘917
patent series), 310 (‘470 and ‘293 patent series). 3
Neither Barany nor Cornell University nor any of Cornell’s affiliated
entities are plaintiffs in this case.
2

Patent series are referred to throughout the Complaint by the last three
digits of the United States Patent Number. Thus, the ‘470 patents series
corresponds to Patent No. 6,797,470 issued on September 28, 2004 and based on
3

6

The first alleged instance of misappropriation occurred on
or around June 1, 1994 when Stephen Fodor, the Chief Technology
Officer of the biotechnology company Affymetrix, in his capacity
as a peer reviewer for the National Institute of Health (“NIH”),
reviewed the Barany proposal. Id. at ¶ 16. According to the
plaintiffs, upon reviewing the grant proposal, Fodor
“immediately resolved to steal those ideas” contained in the
grant proposal in violation of confidentiality agreements that
he was bound to obey in his capacity as an NIH reviewer. Id. at
¶¶ 20, 114-17. Fodor then allegedly enlisted Affymetrix
employees, the defendants Mark Chee, Jian-Bing Fan, and Kevin
Gunderson, to begin filing patent applications based on the
technologies and ideas described in the grant proposal. Id. at
¶ 123.
According to the plaintiffs, Fodor “deliberately removed
himself as a co-inventor of the October 26th, 1994 patent
application” and instructed Chee, Fan, and Gunderson to file the
patent applications in order to cover his tracks. Id. at ¶ 125.

a series of applications going back to May 29, 1996 and invented by, among
others, Barany and Lubin. Prakash Decl., Ex. 3. The ‘917 patent series
corresponds to Patent No. 7,083,917, issued on August 1, 2006 and based on
applications going back to February 4, 1997, and invented by, among others,
Barany, Kempe, and Zirvi. Prakash Decl., Ex. 6. The ‘293 patent series
corresponds to Patent No. 6,534,293, issued on March 18, 2003 and based on an
application filed on January 6, 1999, and invented by, among others, Barany,
Zirvi, and Gerry. Prakash Decl., Ex. 12. The ‘594 patent series corresponds
to Patent No. 6,506,594, issued on January 14, 2003 based on applications
going back to March 19, 1999, and invented by, among others, Barany and
Gerry. Prakash Decl., Ex. 16.

7

The October 26, 1994 patent application was one in a series of
related patent applications that eventually resulted in the
final application filed on April 3, 1996 and published as United
States Patent No. 6,156,501 on December 5, 2000. Prakash Decl.,
Ex. 23, at 1:[63]; SAC ¶ 124. Notwithstanding the allegations in
the Complaint that Fodor deliberately removed himself from these
patent applications, his name appeared on an International
Patent Application that was published to the world on May 4,
1995 under International Publication Number WO 95/11995. Gorman
Decl., Ex. 3. The International Patent, which listed Fodor as an
inventor, had an international application number of
PCT/US94/12305, a number that corresponded to the October 26,
1994 application that was in the chain of applications that
eventually culminated in the ‘501 patent series. Gorman Decl.,
Ex. 3, at 1:(21); Prakash Decl., Ex. 23, at 1:[63]. The
International Patent was also related by continuation to a
United States patent application numbered 08/284,064 that
corresponded to an application in the chain of applications
culminating in the ‘501 patent series. Gorman Decl., Ex. 3, at
1:(60); Prakash Decl., Ex. 23, at 1:[63].
On May 1, 1995, Barany allegedly explained “on a strictly
confidential basis” to the defendant, Dr. David R. Walt of Tufts
University, Barany’s proprietary discoveries of “Zip Code
chemistry,” primers, and probes that could be used to encode and
8

decode DNA. SAC ¶¶ 132-33. Walt formed the defendant company
Illumina Inc. in 1998, with defendants Chee, Fan, Gunderson, and
John Stueplnagel as founding employees, and Jay Flatley as the
first CEO. Id. at ¶¶ 140-42. Beginning in June 1998,
Stueplnagel, Chee, and Gunderson filed several patent
applications that were allegedly derived from the Barany grant
proposal. Id. at ¶¶ 143-45, 149. More generally, the plaintiffs
allege that the defendants filed patent applications that were
designed to conceal the alleged source of the work by omitting
certain information from the patent applications that could lead
back to Barany and his team. Id. at ¶¶ 143-44, 149-50, 153.
Around this time, the plaintiffs Lubin, Zirvi, Kempe, and
Gerry began to assign their rights in the ‘470, ‘917, ‘293, and
‘594 patent series to Cornell and the University of Minnesota,
which later assigned its interests to Cornell. Id. at ¶¶ 3, 135,
168, 273, 321; Prakash Decl., Exs. 4, 7, 8, 9, 13, 22.
The second alleged instance of misappropriation occurred in
1999 after Zirvi, then a medical student at Cornell working with
Barany, developed 187 files of Microsoft Excel and Word
documents containing, among other things, the design of 4,633
zip codes including an alleged proprietary set of 465 zip codes.
SAC ¶ 155. On August 8, 1999, Barany allegedly provided the 187

9

files to Bill Efcavitch of P.E. Biosystems. 4 Barany allegedly
instructed Efcavitch to keep the files secret pursuant to a
confidentiality agreement between Cornell and P.E. Biosystems.
Id. at ¶¶ 181-83. According to the plaintiffs, P.E. Biosystems
and Illumina were, unbeknownst to the plaintiffs, working
together at the time. Id. at ¶ 188.
On April 14, 2000, Barany, Zirvi, and Gerry, among others,
filed a provisional patent application, a “Method of Designing
Addressable Array for Detection of Nucleic Acid Sequence
Differences Using Ligase Detection Reaction,” which would
eventually be published as United States Patent Number 7,455,965
(“’965 patent”) on November 25, 2008. Prakash Decl., Ex. 21; SAC
¶ 284. The ‘965 patent application was published to the world on
October 25, 2001. Prakash Decl., Ex. 19-1. According to the
Complaint, the ‘965 patent application “described PCR-LDR, 4,633
zip codes, Universal Arrays, detection of low abundance K-ras
mutations and included substantial data.” SAC ¶ 284.
According to the plaintiffs, the data contained in the 187
files, and particularly in the 465-zip code set, were never
published and were not reproduced by the plaintiffs in the ‘965
patent filings even though those filings contained zip code

4 Efcavitch is not a defendant in this case. P.E. Biosystems, which is a
defendant in this case is now a division of Thermo Fisher Scientific. SAC
¶ 49.

10

sets. Id. at ¶¶ 155-56. The plaintiffs allege that the precise
order of the 465-zip code set was integral to its value and that
the set, when misappropriated and used by the Illumina
defendants, “became a clear and unmistakable marker for the
theft of Dr. Zirvi’s trade secret, much like a finger print or
red ink exploding in a stack of bills stolen during a bank
robbery.” Id. at ¶ 156. Allegedly, the Illumina defendants Chee
and Gunderson used the propriety zip code set in a patent
application on August 25, 2000, entitled “Probes and Decoder
Oligonucleotides.” Id. at ¶ 320. The plaintiffs allege that Chee
and Gunderson “blatantly copied the Barany team Zip Code IP” but
renamed them “Illumacdoes.” Id. at ¶¶ 320-21.
Then, in 2006, junior parties Barany, Kempe and Zirvi,
among others, brought a patent interference claim before the
United States Patent and Trademark Office alleging that Fodor
and his Affymetrix colleagues had unlawfully derived the October
26, 1994 patent application and a related family of patents from
the Barany grant proposal. Id. at ¶¶ 127, 180; Prakash Decl.,
Ex. 25. The Board of Patent Appeals ultimately concluded that
“Barany’s motion fails to establish, prima facie, that the
[Affymetrix inventors] derived the subject matter of the count
from Barany.” Gorman Decl., Ex. 10, at 9.
On May 24, 2010, Cornell initiated a patent infringement
case against Illumina in the United States District Court for
11

the District of Delaware. Cornell Univ. v. Illumina, Inc., No.
10-cv-433, 2017 WL 89165, at *1 (D. Del. Jan. 10, 2017); see SAC
¶ 1. In that case, Cornell alleged that Illumina infringed a
number of patents falling into two categories: (1) array patents
that related to tools that utilize oligonucleotides with
particular sequence properties to detect target molecules, and
(2) LDR-PCR patents that describe the combination of a ligase
detection reaction with polymerase chain reaction to test for
genetic changes. See Cornell, 2017 WL 89165, at *1. That
litigation ended on April 18, 2017 after the parties entered
into a joint stipulation to dismiss the case. Cornell Univ. v.
Illumina, Inc., No. 10-cv-433, Dkt. No. 598 (D. Del. Apr. 24,
2017).
The plaintiffs allege that they learned about the conduct
underlying the Complaint in this case for the first time during
the Cornell v. Illumina, Inc. litigation in 2015, only after
Zirvi was deposed by Illumina lawyers. SAC ¶¶ 502-04. According
to the plaintiffs, the deposition of Zirvi was the initial
thread that, once pulled, revealed a complex, multi-decade
concerted effort to conceal the defendants’ theft, as manifested
in the years of patent filings containing alleged purloined
trade secrets. Id. at ¶¶ 515-35. The plaintiffs allege that they
could not have discovered the defendants’ actions sooner because
the defendants had taken great pains to cover their tracks by
12

filing patents under various names and using different
variations and combinations of technical terms in order to
disguise the scheme of theft and fraud. Id. at ¶¶ 339, 344, 347,
353, 363, 366, 371-483.
On August 8, 2018, the plaintiffs initiated this action,
alleging violations by all or some of the defendants of the
DTSA, civil RICO, New York common law trade secrets protections
and other common law torts. Dkt. No. 13. On December 6, 2018,
the plaintiffs filed an amended complaint, which amplified the
claims in the original complaint by adding more facts, and which
also added a claim for inequitable conduct against Robin Silva,
a lawyer for Illumina. Dkt. No. 102. On February 8, 2019, the
plaintiffs filed a second amended complaint, which contained the
same claims and basic set of facts as the first amended
complaint. Dkt. No. 127. The defendants now move to dismiss the
Complaint.
III.
The gravamen of the Complaint is that the defendants
misappropriated the plaintiffs’ trade secrets in violation of
both federal and New York state law in 1994 and 1999. The
plaintiffs argue that two separate acts of alleged
misappropriation – (1) Fodor’s misappropriation of the Barany
proposal in 1994, and (2) the Illumina defendants’
misappropriation of Barany’s and Zirvi’s proprietary 465 zip
13

codes in 1999 – resulted in the defendants’ wrongful ownership
of trade secrets that broadly fall into three categories – (1)
positive trade secrets contained in the 1994 Barany proposal,
(2) positive trade secrets contained in the 1999 proprietary zip
codes, and (3) negative trade secrets derived from both acts of
misappropriation that include the experimental knowhow and dead
ends that allegedly have independent economic value to a
competitor seeking to replicate the plaintiffs’ experimental
results.
Although the defendants dispute that the factual
allegations in the Complaint state a claim for misappropriation
under either New York or federal law, their primary argument in
favor of dismissal is that any viable claim is barred by the
applicable statute of limitations. Because the defendants are
correct that the Complaint should be dismissed on statute of
limitations grounds, that issue will be discussed first. 5
5 The defendants also move to dismiss the Complaint for lack of standing. The
defendants argue that the plaintiffs either assigned their rights to others,
namely Cornell, or developed their intellectual property on behalf of others,
also Cornell, and therefore lack a sufficient interest in the intellectual
property to bring their claims. Usually, a Rule 12(b)(1) motion is addressed
before a Rule 12(b)(6) motion because the former affects the Court’s subject
matter jurisdiction. See Rhulen Agency, Inc. v. Ala. Ins. Guar. Ass’n, 896
F.2d 674, 678 (2d Cir. 1990). However, what the defendants describe as a
question of standing is, in fact, a question about whether the plaintiffs can
state a claim under the law, a question formerly known as statutory standing.
See Lexmark Int’l., Inc. v. Static Control Components, Inc., 572 U.S. 118,
128 n.4 (2014); Am. Psychiatric Ass’n v. Anthem Health Plans, Inc., 821 F.3d
352, 359 (2d Cir. 2016) (“The Supreme Court has recently clarified, however,
that what has been called ‘statutory standing’ in fact is not a standing
issue, but simply a question of whether the particular plaintiff ‘has a cause
of action under the statute.’”) (quoting Lexmark, 572 U.S. at 127). The
question whether the plaintiffs “owned” or “possessed” the alleged trade

14

A.
“Although the statute of limitations is ordinarily an
affirmative defense that must be raised in the answer, a statute
of limitations defense may be decided on a Rule 12(b)(6) motion
if the defense appears on the face of the complaint.” Ellul v.
Congregation of Christian Bros., 774 F.3d 791, 798 n.12 (2d Cir.
2014). In this case, the plaintiffs affirmatively pleaded the
defendants’ fraudulent concealment in order to overcome the
statutes of limitations. Therefore, it is appropriate for the
Court to decide the statute of limitations defense on this Rule
12(b)(6) motion.
i.
The federal claims in this case are subject to three- or
four-year statutes of limitations. DTSA claims are subject to a
three-year statute of limitations. See 18 U.S.C. § 1836(d). The
limitations period runs from “the date on which the
misappropriation with respect to which the action would relate

secrets is not a question of constitutional standing, but a question whether
the plaintiffs can state a claim under either the DTSA or New York state law.
See 18 U.S.C. § 1839(4) (“An owner of a trade secret that is misappropriated
may bring a civil action under this subsection if the trade secret is related
to a product or service used in, or intended for use in, interstate or
foreign commerce.”); Faiveley Transp. Malmo AB v. Wabtec Corp., 559 F.3d 110,
117 (2d Cir. 1999) (“To succeed on a claim for the misappropriation of trade
secrets under New York law, a party must demonstrate: (1) that it possessed a
trade secret, and (2) that the defendants used that trade secret in breach of
an agreement, confidential relationship or duty, or as a result of discovery
by improper means.”). The Court could not resolve these issues on a motion to
dismiss because there are factual disputes about the circumstances under
which the intellectual property was developed.

15

is discovered or by the exercise of reasonable diligence should
have been discovered,” or, in other words, when the plaintiff
“knew or should have known that the alleged trade secrets were
wrongfully acquired, disclosed, or used.” Uni-Systems, LLC v.
United States Tennis Ass’n, Inc., 350 F. Supp. 3d 143, 178
(E.D.N.Y. 2018). RICO claims are subject to a four-year statute
of limitations and accrual dates under the RICO statute are
similarly determined when the plaintiff knew or should have
known of the alleged injury. See Koch v. Christie’s Int’l PLC,
699 F.3d 141, 148, 150-51 (2d Cir. 2012) (“As a general matter,
the limitations period does not begin to run until a plaintiff
has actual or inquiry notice of the injury.”) (quotation marks,
citation, and alterations omitted).
In this case, the date on which the alleged
misappropriation “by the exercise of reasonable diligence should
have been discovered” has long since passed. There are multiple
events that the plaintiffs themselves described in the Complaint
that triggered the statute of limitations. First, contrary to
the plaintiffs’ suggestion otherwise, Fodor’s name appeared in
the chain of patent applications that the plaintiffs allege
contained trade secrets taken from the Barany grant proposal
that culminated in the ‘501 patent series because it appeared on
the face of the International Patent that explicitly crossreferenced the United States ‘501 Patent and the October 26,
16

1994 patent application. The existence of a patent application
or a public patent puts parties on notice of their existence and
therefore starts the clock on the limitations period. See
Advanced Cardiovascular Sys., Inc. v. Medtronic Vascular, Inc.,
182 F. App’x 994, 999 (Fed. Cir. 2006) (per curiam) (patent
applications put parties on constructive notice); WesternGeco v.
Ion Geophysical Corp., No. 09-cv-1827, 2009 WL 3497123, at *5
(S.D. Tx. Oct. 28, 2009) (“In the same way that the issuance of
a patent by the PTO constitutes notice to the entire world of
its existence, regardless of whether other persons take it upon
themselves to examine the records, so too, by extension, do the
applications published under the [Patent Cooperation Treaty]
constitute notice to the world of their existence . . . .”).
Second, the Complaint itself refers to the 465-zip code set
allegedly misappropriated in 1999 as a “clear and unmistakable
marker for the theft of Dr. Zirvi’s trade secret, much like a
finger print or red ink exploding in a stack of bills stolen
during a bank robbery.” SAC ¶ 156. Based on the allegations in
the Complaint, the events in 1999 concerning the alleged
misappropriation 187 files and the 465-zip code set also
commenced the statute of limitations because any definition of
“reasonable diligence” would encompass the duty to discover
alleged wrongdoing at the time in which a self-described “clear
and unmistakable marker” of theft allegedly appeared in public
17

patent applications. Indeed, the plaintiffs’ own allegations
indicate that the 465 zip codes appeared in an August 25, 2000
patent application, although in a different order. SAC ¶¶ 155,
275. Thus, with respect to the alleged misappropriation in 1999,
the plaintiffs are “chargeable with knowledge which by ordinary
diligence [they] would have acquired.” Barrio Bros., LLC v.
Revolucion, LLC, No 18-cv-2052, 2019 WL 5213039, at *3 (N.D.
Ohio Oct. 16, 2019) (quotation marks and citation omitted).
Finally, the statutes of limitations began to run no later
than the dates of the patent interference proceedings before the
USPTO and the litigation in the federal district court in
Delaware. In 2006, two plaintiffs in this action, Zirvi and
Kempe, were named as junior parties in the interference before
the USPTO. Gorman Decl., Ex. 25. In 2010, Cornell University,
the assignee of many of the patents relevant in this case, sued
Illumina, Inc. regarding many of the same patents, which, at the
very least, put the plaintiffs in this case on inquiry, if not
actual, notice. See Maatuk v. Emerson Elec., No. 16-cv-3023,
2017 WL 9485679, at *8-9 (N.D. Ohio Nov. 14, 2017) (proceedings
before the USPTO triggered a duty to inquire into alleged acts
of misappropriation), report and recommendation adopted, 2018 WL
562934 (N.D. Ohio Jan. 24, 2018), aff’d, 781 F. App’x 1002 (Fed.
Cir. 2019); 421-A Tenants Ass’n, Inc. v. 125 Court Street LLC,
760 F. App’x 44, 48-49 (2d Cir. 2019) (the commencement of
18

substantially similar claims in state court put the plaintiffs
on inquiry notice).
Therefore, whether the accrual date was in 1994, 1999,
2006, or 2010, the federal statutes of limitations have long
since passed. The federal claims are therefore barred by the
relevant statutes of limitations.
ii.
Apart from the state law fraud claim and the claims for
injunctive relief, which are subject to six-year statutes of
limitations, N.Y. C.P.L.R. § 213(1), (8), the plaintiffs’ state
law claims for damages are subject to three-year statutes of
limitations because they are all actions to recover damages for
an injury to property. See N.Y. C.P.L.R. § 214(4); Andrew
Greenberg, Inc. v. Svane, Inc., 830 N.Y.S.2d 358, 362 (App. Div.
2007) (state law misappropriation); Carlingford Ctr. Point
Assocs. v. MR Realty Assocs., L.P., 772 N.Y.S.2d 273, 274 (App.
Div. 2004) (breach of fiduciary duty); Harley v. Druzba, 565
N.Y.S.2d 278, 279-80 (App. Div. 1991) (breach of confidence);
Ingrami v. Rovner, 847 N.Y.S.2d 132, 134 (App. Div. 2007)
(unjust enrichment); Sporn v. MCA Records, Inc., 451 N.Y.S.2d
750, 751 (App. Div. 1982), aff’d 448 N.E.2d 1324 (N.Y. 1983)
(unfair competition); Collymore v. Sec’y of Hous. & Urban Dev.,
803 N.Y.S.2d 123, 124 (App. Div. 2005) (conversion); CDx Labs.,

19

Inc. v. Zila, Inc., 79 N.Y.S.3d 285, 287 (App. Div. 2018)
(tortious interference with business relations). 6
New York law governing the accrual of statutes of
limitations is less permissive for plaintiffs than the law under
the DTSA or RICO. Statutes of limitations accrue for
misappropriation claims when the defendant first discloses the
trade secret or when the defendant first makes use of the
plaintiff’s ideas. See GeoVector Corp. v. Samsung Elecs. Co.
Ltd., 234 F. Supp. 3d 1009, 1014 (N.D. Cal. 2017) (applying New
York law). Many of the plaintiffs’ other state law claims
similarly accrue upon the alleged breach or tortious act. See,
e.g., Ciccone v. Hersh, 530 F. Supp. 2d 574, 579 (S.D.N.Y. 2008)
(breach of fiduciary duty), aff’d, 320 F. App’x 48 (2d Cir.
2009); Sporn, 58 N.Y.2d at 488 (conversion); Thome v. Alexander
& Louisa Calder Found., 890 N.Y.S.2d 16, 30 (App. Div. 2009)
(tortious interference with prospective business advantage). 7

“[C]onspiracy is not an independent tort, and is time-barred when the
substantive tort underlying it is time-barred.” Schlotthauer v. Sanders, 545
N.Y.S.2d 197, 199 (App. Div. 1989). Therefore, to the extent that the civil
conspiracy claims rest on any or all of the underlying state law torts
subject to three-year statutes of limitations, the claims for civil
conspiracy are also subject to three-year statutes of limitations.
6

7 Because a conspiracy tort “is time-barred when the substantive tort
underlying it is time-barred,” Schlotthauer, 545 N.Y.S.2d at 199, the
conspiracy claims accrue at the same time that the underlying tort accrues.
See also Rutkin v. Reinfeld, 229 F.2d 248, 252 (2d Cir. 1956) (“The person
harmed by the conspiracy may bring suit as soon as the damage to him is
inflicted . . . and the statute therefore begins to run at the moment such
injury occurs.”).

20

In this case, the plaintiffs’ state law claims arise out of
the same factual allegations as their DTSA and RICO claims.
Thus, for substantially the same reasons that the statutes of
limitations have run on the DTSA and RICO claims, the statutes
of limitations have run on the state law claims, whether
governed by the three-year or six-year limitations period. The
alleged misconduct in this case occurred in 1994 and 1999, at
which point the claims accrued, and therefore the state law
claims are barred by the statutes of limitations. See
Synergetics USA, Inc. v. Alcon Labs., No. 08-cv-3669, 2009 WL
2016872, at *2 (S.D.N.Y. July 9, 2009) (“Misappropriation first
accrues either when defendant discloses the trade secret or when
he first makes use of plaintiff’s ideas.”) (internal quotation
marks and citation omitted).
iii.
The plaintiffs nevertheless argue that the statutes of
limitations should be equitably tolled under the doctrine of
fraudulent concealment. “Under federal common law, a statute of
limitations may be tolled due to the defendant’s fraudulent
concealment if the plaintiff establishes that: (1) the defendant
wrongfully concealed material facts relating to defendant’s
wrongdoing; (2) the concealment prevented plaintiff’s discovery
of the nature of the claim within the limitations period; and
(3) the plaintiff exercised due diligence in pursuing the
21

discovery of the claim during the period plaintiff seeks to have
tolled.” Koch, 699 F.3d at 157 (internal quotation marks and
citation omitted). “Allegations of fraudulent concealment are
subject to the particular pleading requirements set forth in
Federal Rule of Civil Procedure 9(b).” In re Issuer Plaintiff
Initial Pub. Offering Antitrust Litig., No. 00-cv-7804, 2004 WL
487222, at *3 (S.D.N.Y. Mar. 12, 2004). In cases in which the
plaintiffs allege fraudulent concealment, due diligence requires
the plaintiffs, among other things, to review relevant patent
applications when they are filed because they may contain
alleged trade secrets. See Ferring B.V v. Allergan, Inc., 4 F.
Supp. 3d 612, 632 (S.D.N.Y. 2014) (“Either Ferring never
conducted the review [of patent applications] it claims it did,
which is fatal to its equitable tolling theory, or it conducted
a review but, through lack of reasonable diligence, failed to
recognize that the patent application contained confidential
Ferring information, which likewise is fatal.”).
The plaintiffs have not alleged with particularity that the
defendants fraudulently concealed their various misappropriation
claims as required by Rule 9(b), and in particular that the
defendants wrongfully concealed material facts related to the
defendants’ alleged wrongdoing. See Anwar v. Fairfield Greenwich
Ltd., 286 F.R.D. 258, 260 (S.D.N.Y. 2012) (“Rule 9(b) also
requires a plaintiff to plead with particularity facts giving
22

rise to a strong inference that each defendant acted with the
requisite state of mind, or scienter.”). For example, one of the
plaintiffs’ primary allegations in support of their argument for
fraudulent concealment is that a lawyer, Robin Silva,
orchestrated Illumina’s patent filings over many years in such a
way that the subject matter of their patents could not be traced
back to the plaintiffs’ trade secrets. However, the plaintiffs
do not allege these acts of fraudulent concealment with
particularity, but rather state in conclusory terms that the
defendants’ authorship of their patents was carried out in
deliberately fraudulent ways. See Anwar, 286 F.R.D. at 260. 8
Even more fatal to the plaintiffs’ argument, however, is
that for the same reasons that the plaintiffs had inquiry,
actual, or constructive notice of alleged wrongdoing as early as
1994 and no later than 2010 for statute of limitations purposes,
equitable tolling is also not appropriate in this case because
the plaintiffs did not act, and could not have acted, with due
diligence in this case given that they allegedly discovered the
alleged impropriety in 2015. See 421-A Tenants Ass’n, 760 F.
App’x at 50 (“The tenants’ failure to prosecute their lawsuit
once on inquiry notice forecloses their argument that they acted

These pleading deficiencies could be cured, in theory, with an amended
complaint. However, the fraudulent concealment allegations fail for other
reasons that could not be cured by amendment and therefore dismissal with
prejudice is appropriate.
8

23

with ‘reasonable diligence,’ a prerequisite for equitable
tolling.”). Indeed, the Complaint along with documents
incorporated by reference directly undermine the plaintiffs’
argument that they acted with the “[r]easonable diligence [that]
is a prerequisite to the applicability of equitable tolling.”
Koch, 699 F.3d at 157. This is so for several reasons.
First, Fodor’s name appeared on at least one patent
application in connection with the ‘501 patent series no later
than 1995, which undermines the plaintiffs’ allegations that
Fodor fraudulently omitted his name from patent applications in
order to cover his tracks. Second, the existence of the “clear
and unmistakable marker for the theft of Dr. Zirvi’s trade
secret” that the Illumina defendants allegedly included in some
of their patent applications likewise imposed upon the
plaintiffs a duty of reasonable diligence, the failure of which
undermines their argument for equitable tolling. See Zhongwei
Zhou v. Wu, No. 14-cv-1775, 2017 WL 1233994, at *6 (S.D.N.Y.
Mar. 31, 2017) (“In short, Plaintiffs waited years before
bringing this case. The record reflects that they failed to
exercise reasonable diligence in pursuing the facts and
investigating their suspicions while their claims were still
timely[.]”). Finally, the matters in this case are substantially
similar to the ones that Barany and Cornell litigated before the
USPTO and in the District of Delaware, matters about which
24

plaintiffs were either actually aware because they were named in
the litigation or constructively aware because the proceedings
were public. Due diligence required the plaintiffs to
investigate any alleged misappropriation when these events
occurred. See Landow v. Wachovia Secs., 966 F. Supp. 2d 106, 129
(S.D.N.Y. 2013) (“One who suspects a defendant of widespread
fraud may be under a duty to see if others have sued the
defendant and whether such suits revealed evidence of the fraud
of which the plaintiff complains.”) (quoting Cohen v. S.A.C.
Trading Corp., 711 F.3d 353, 363 (2d Cir. 2013)).
Each one of these events demonstrates a lack of due
diligence on the part of the plaintiffs and therefore each
event, by itself, is fatal to the plaintiffs’ argument that
equitable tolling should apply in this case. Taken as a whole,
the plaintiffs’ allegations of fraudulent concealment fail
because the plaintiffs have not alleged with particularity the
fraudulent concealment that the defendants allegedly engineered
and because the facts alleged show that the plaintiffs were on
notice, which required them to pursue their claims with due
diligence. The timeline of events undermines any argument that
the plaintiffs acted with reasonable diligence in investigating
the alleged wrongdoing, as a matter of law, and no amended
complaint could cure such deficiencies.

25

Therefore, the plaintiffs are not entitled to equitable
tolling of the statutes of limitations.
B.
The federal claims in this case should also be dismissed
because the plaintiffs failed to allege actionable postenactment conduct. The DTSA became effective on May 11, 2016, at
which point it created, among other things, a private right of
action to sue for misappropriation of trade secrets and it also
amended RICO to include the misappropriation of trade secrets as
an enumerated predicate act. See Defend Trade Secrets Act of
2016, Pub. L. No. 114-153, May 11, 2016, 130 Stat. 376, 376-382.
The DTSA does not apply retroactively, but applies only to
misappropriation for which “any act occurs on or after the date
of the enactment of this Act.” Id. at 381-82; RCC Ventures, LLC
v. Am. DG Energy, Inc., No. 17-cv-3007, 2018 WL 1415219, at *3
(S.D.N.Y. Mar. 19, 2018) (“Because the only allegations of
misappropriation of a trade secret that are pled with
particularly predate the enactment of the DTSA, RCC has not
stated a claim upon which relief may be granted.”). 9
9 Some courts have held that the DTSA applies to pre-enactment conduct if the
misappropriation continues after the enactment date. See Brand Energy &
Infrastructure Servs., Inc. v. Irex Contracting Grp., No. 16-2499, 2017 WL
1105648, at *4 (E.D. Pa. Mar. 24, 2017) (collecting cases); Veronica Foods
Co. v. Ecklin, No. 16-cv-7223, 2017 WL 2806706, at *13 (N.D. Cal. June 29,
2017) (“Courts have generally held that the DTSA applies to misappropriations
that began prior to the DTSA’s enactment if the misappropriation continues to
occur after the enactment date, so long as the defendant took some relevant
act after that date.”) (quotation marks and citation omitted). In this case,
there are no plausible allegations that any relevant pre-enactment conduct

26

In this case, the alleged misappropriation occurred in 1994
when Fodor allegedly stole the contents of the Barany grant
proposal and then in 1999 when the Illumina defendants allegedly
misappropriated the 187 files. These events occurred well before
May 11, 2016, and therefore the plaintiffs cannot sue for these
alleged acts misappropriations under the DTSA.
For the same reason, the RICO claims should also be
dismissed. RICO makes it unlawful for a person to receive income
“from a pattern of racketeering activity.” 18 U.S.C. § 1962. A
“pattern of racketeering activity requires at least two acts of
racketeering activity[.]” 18 U.S.C. § 1961(5). To the extent
that the plaintiffs allege misappropriation of trade secrets in
violation of federal law to be the RICO predicates, that claim
fails because the plaintiffs have not alleged any violation of
the DTSA that post-dated the statutory enactment. See Democratic
Nat’l Comm. v. Russ. Fed’n, 392 F. Supp. 3d 410, 442 (S.D.N.Y.
2019) (“Therefore, alleged violations of sections 1832 and 1832
[for misappropriation of trade secrets] can serve as predicate
acts only for offenses occurring after May 11, 2016.”). 10

continued after May 11, 2016. See Cave Consulting Grp., Inc. v. Truven Health
Analytics, No. 15-cv-2177, 2017 WL 1436044, at *5 (N.D. Cal. Apr. 24, 2017)
(“The Court finds that without facts about when post-enactment use occurred
and whether the information disclosed was new or somehow different from the
prior misappropriation, plaintiff has failed to state a claim under the
DTSA.”).
To the extent that the plaintiffs allege that the predicate RICO acts were
instances of mail or wire fraud under 18 U.S.C. §§ 1341, 1343, that claim
fails because the allegations in the Complaint on that point consist solely

10

27

C.
Further, most of the misappropriation claims, either under
federal or New York state law, should be dismissed for failure
to state a claim upon which relief can be granted. 11
In order to state a claim for misappropriation of trade
secrets, a plaintiff must allege the existence of a trade
secret, which under New York law is “any formula, pattern,
device or compilation of information which is used in one’s
business, and which gives one an opportunity to obtain an
advantage over competitors who do not know or use it.” E.J.
Brooks Co. v. Cambridge Sec. Seals, 105 N.E.3d 301, 310 (N.Y.
2018) (internal quotation marks, citation, and alterations
omitted). Additionally, a plaintiff must allege that the
defendant obtained the trade secret through improper means. See
Free Country Ltd. v. Drennen, 235 F. Supp. 3d 559, 567 (S.D.N.Y.
2016) (using proprietary information “in breach of an agreement
or confidential relationship” may constitute misappropriation);
see also Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 476
of alleged fraudulent misstatements made before the USPTO, which cannot form
the basis of mail or wire fraud. See Semiconductor Energy Lab. Co. v. Samsung
Electronics Co., 204 F.3d 1368, 1380 (Fed. Cir. 2000) (“[I]nequitable conduct
before the PTO cannot qualify as an act of mail fraud or wire fraud for
purposes of the [RICO] predicate act requirement.”).
Courts in the Southern District of New York often use New York state law
cases when discussing misappropriation claims under the DTSA because the
Second Circuit Court of Appeals has not yet addressed the DTSA in a reported
opinion and the requirements are similar under state and federal law. See
Medidata Sols., Inc. v. Veeva Sys., Inc., No. 17-cv-589, 2018 WL 6173349, at
*3 n.1 (S.D.N.Y. Nov. 26, 2018).
11

28

(1974) (“A trade secret law, however, does not offer protection
against discovery by fair and honest means, such as by
independent invention, accidental disclosure, or by so-called
reverse engineering[.]”).
“Although the Second Circuit has not articulated a
specificity requirement, district courts in this circuit
routinely require that plaintiffs plead their trade secrets with
sufficient specificity to inform the defendants of what they are
alleged to have misappropriated.” ExpertConnect, L.L.C. v.
Fowler, No 18-cv-4828, 2019 WL 3004161, at *4 (S.D.N.Y. July 10,
2019). The existence of a trade secret is generally a question
of fact, but in some situations whether information is a trade
secret may be evident from the pleadings alone. See Big Vision
Private Ltd. v. E.I. DuPont De Nemours & Co., 1 F. Supp. 3d 224,
267 (S.D.N.Y. 2014), aff’d, 610 F. App’x 69 (2d Cir. 2015).
Courts dismiss trade secrets claims when the alleged trade
secrets are not, in fact, secret, or when the plaintiffs have
not alleged sufficiently how the secrets derive independent
economic value from not being generally known. See Vendavo, Inc.
v. Price f(x) AG, No. 17-cv-6930, 2018 WL 1456697, at *4 (N.D.
Cal. Mar. 23, 2018) (“[P]laintiff must describe the subject
matter of the trade secret with sufficient particularity to
separate it from matters of general knowledge in the trade or of
special persons who are skilled in the trade, and to permit the
29

defendant to ascertain at least the boundaries within which the
secret lies.”); Democratic Nat’l Comm., 392 F. Supp. 3d at 448
(“The DNC has not identified anything about the process of
developing donor lists or fundraising strategies or shown how
their particular value derives from their secrecy.”).
In this case, the plaintiffs’ allegations concerning
misappropriation of negative trade secrets fail for two reasons.
First, these allegations “resemble . . . broad categories of
information” and are “vague,” which, by itself, constitutes a
reason to dismiss the claims. See AlterG, Inc. v. Boost
Treadmills LLC, 388 F. Supp. 3d 1133, 1145 (N.D. Cal. 2019). The
plaintiffs have therefore failed to identify their alleged
secrets with “sufficient particularity” in order to apprise the
defendants and the Court what information contained in the
alleged negative trade secrets is truly secret and what
information is not. See Big Vision Private, 1 F. Supp. 3d at
266-67.
Second, the plaintiffs have failed to allege how these
negative trade secrets derive independent economic value from
not being generally known given the existence of volumes of
information publicly available in the patent applications and
patents described in the Complaint. See E.J. Brooks, 105 N.E.3d
at 316 (“A trade secret, by definition, must have economic value
and provide a competitive advantage due to the exclusive use of
30

a product or technique.”). It is difficult to see how negative
trade secrets consisting of unsuccessful efforts to develop
trade secrets and experimental dead ends, see SAC ¶ 12 n.1, can
have independent economic value when the end result of the
process, the positive trade secrets, have in fact been
uncovered.
The plaintiffs have also failed to allege that the 187
files containing the 465-zip code set are a trade secret.
Although the plaintiffs described these alleged trade secrets
with sufficient particularity, the plaintiffs have failed to
allege how this zip code set derives independent economic value
from not being publicly known given the quantity of similar zip
code sets publicly available, particularly in the roughly
contemporaneously published ‘965 patent series. See Sarkissian
Mason, Inc. v. Enter. Holdings, Inc., 955 F. Supp. 2d 247, 25758 (S.D.N.Y. 2013) (“The components of the system are widely
known, and the concept as a whole is of limited value because it
is readily ascertainable. Thus, AutoMatic Buying System as an
unexecuted concept is not a trade secret as a matter of law.”),
aff’d, 572 F. App’x 19 (2d Cir. 2014)
Therefore, the plaintiffs have failed to state a claim for
misappropriation with respect to the negative trade secrets and

31

the 465-zip code set contained in the 187 files. 12 Moreover,
because these claims are barred by the statutes of limitations
as explained above, repleading would be futile, and the claims
are appropriately dismissed with prejudice. See Wallace v. NYC
Dept. of Corr., 112 F. App’x 794, 795 (2d Cir. 2004) (amendment
is futile where the statute of limitations has long since run);
Ferring, 4 F. Supp. 3d at 618-19.
D.
Finally, the plaintiffs have failed to state a claim for
the non-misappropriation common law claims for fraud, breach of
fiduciary duty, conversion, tortious interference with
prospective economic advantage, inequitable conduct, civil
conspiracy, and breach of confidence.

The plaintiffs may have survived a motion to dismiss the allegations of
Fodor’s misappropriation of trade secrets based on the alleged theft of the
contents in the Barany proposal had those claims been brought in a timely
complaint. Unlike the 187 files allegedly misappropriated in 1999, which were
then published in substance by the plaintiffs themselves in the ‘965 patent
series, the information contained in the Barany proposal allegedly formed the
basis for the Affymetrix defendants’ patent applications beginning in 1994.
Moreover, the plaintiffs alleged with particularity the contents of the
Barany proposal and which aspects of the technologies described therein
constituted the alleged trade secrets. These allegations, along with
allegations concerning the time and resources spent by both the plaintiffs
and the defendants engaged in this work would tend to demonstrate the
independent economic value of the description of the technology in the Barany
proposal. See ExpertConnect, 2019 WL 3004161 at *5 (collecting cases
concerning independent economic value). Finally, the plaintiffs alleged that
Fodor misappropriated any information contained in the Barany grant proposal
because he used it in violation of his NIH confidentiality agreement. See
Free Country Ltd., 235 F. Supp. 3d at 567. Nevertheless, as explained above,
these claims from over twenty-five years ago are plainly barred by the
statute of limitations.
12

32

The plaintiffs’ allegations of fraud fail because the
plaintiffs have not pleaded any false statements or omissions
made by the defendants upon which the plaintiffs reasonably
relied. See Wall v. CSX Transp., Inc., 471 F.3d 410, 415-16 (2d
Cir. 2006) (“Proof of fraud under New York Law requires a
showing that (1) the defendant made a material false
representation, (2) the defendant intended to defraud the
plaintiff thereby, (3) the plaintiff reasonably relied upon the
representation, and (4) the plaintiff suffered damage as a
result of such reliance.”) (quotation marks and citation
omitted).
The plaintiffs’ claim for conversion lacks merit because
the conversion of intangible property is not actionable under
New York State law. See Matzan v. Eastman Kodak Co., 521
N.Y.S.2d 917, 918 (App. Div. 1987) (“There is no protected
interest in an idea, but only in the tangible expression or
implementation of that idea. It thus cannot be the subject of
conversion.”). Moreover, the mere fact that the alleged act of
conversion involved learning intangible ideas from tangible
documents does not make the claim actionable. See Rao v. Verde,
635 N.Y.S.2d 660, 661 (App. Div. 1995) (“While the plaintiff
claims that the conversion cause of action remains viable
because the defendants continued to use information that they

33

learned from such documents, this amounts to a claim for
conversion of intangible property[.]”).
The plaintiffs’ allegations that the defendants tortiously
interfered with the plaintiffs’ prospective economic advantage
are deficient because the plaintiffs have not pleaded specific,
non-generalized interference with particular and ongoing
business relationships in order to plead this tort. See Camp
Summit of Summitville, Inc. v. Visinski, No. 06-cv-4994, 2007 WL
1152894, at *14 (S.D.N.Y. Apr. 16, 2007) (“Generalized
allegations of impairment to claimant’s ability to attract new
business will not suffice.”) (internal quotation marks,
citation, and alterations omitted); Bus. Networks of N.Y., Inc.
v. Complete Network Sols. Inc., 696 N.Y.S.2d 433, 435 (App. Div.
1999) (“[T]he cause of action for tortious interference with
prospective business relations should have been dismissed for
failure to allege any specific prospective relationship with
which defendants interfered[.]”).
The plaintiffs cannot state a cause of action based on
alleged inequitable conduct before the USPTO because inequitable
conduct cannot comprise a civil claim for damages, but is
instead an equitable defense in a patent infringement case. See
Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1285
(Fed. Cir. 2011) (“Inequitable conduct is an equitable defense
to patent infringement that, if proved, bars enforcement of a
34

patent.”); Solomon v. Khoury, No. CV 16-10176, 2017 WL 598758,
at *3 (D. Mass. Feb. 13, 2017) (“[I]nequitable conduct is not an
affirmative allegation that can be brought forth in a
complaint.”).
The plaintiffs cannot state a claim based on civil
conspiracy because there is no independent tort of civil
conspiracy under New York law. See McCarthy v. Weaver, 472
N.Y.S.2d 64, 65 (App. Div. 1984) (“Similarly, the seventh cause
of action, which purports to state a claim for civil conspiracy,
should be dismissed because there is no substantive tort of
civil conspiracy in New York.”). Where, as in this case, the
plaintiffs’ substantive claims are dismissed, there is no basis
for a claim of conspiracy. See Kirch v. Liberty Media Corp., 449
F.3d 388, 401 (2d Cir. 2006) (failure to state a cause of action
for torts underlying the alleged conspiracy requires that the
claim for civil conspiracy be dismissed).
The plaintiffs fail to plead breach of confidence claims
related to the two acts of misappropriation, in 1994 and in
1999, because an express contract allegedly covered the
relationships at issue, and therefore there is no basis for an
independent tort claim. See G5 Techs., Inc. v. Int’l Bus. Machs.
Corp., No. 04-cv-1201, 2005 WL 2271741, at *14 (S.D.N.Y. Sept.
19, 2005) (disclosure in alleged violation of an express
confidentiality agreement precludes a claim based on breach of
35

an implied confidentiality agreement). In this case, the
plaintiffs allege that Fodor breached the express terms of his
confidentiality agreement with Barany and the NIH in 1994. The
plaintiffs also allege the Efcavitch and Applied Biosystems
breached the terms of the confidentiality agreement between
Cornell and Applied Biosystems in 1999.
The plaintiffs’ non-misappropriation state law claims
should therefore be dismissed for the additional reason that the
plaintiffs cannot allege facts giving rise to these claims.
CONCLUSION
Therefore, the plaintiffs’ Complaint is dismissed in its
entirety. Because the plaintiffs have amended the Complaint
twice before, and because further amendments would be futile,
the complaint is dismissed with prejudice. The Court has
considered all of the arguments raised by the parties. To the
extent not addressed specifically above, the arguments are
either moot or without merit. The Clerk is directed to enter
judgment dismissing this case with prejudice. The Clerk is also
directed to close all pending motions, and to close this case.
SO ORDERED.
Dated:
New York, New York
January 14, 2020

____/s/ John G. Koeltl
_
John G. Koeltl
United States District Judge

36