Tulane University, pharmaceutical company debate patent of synthetic opioid

By Charmaine Little | Nov 19, 2018

The U.S. District Court for the Eastern District of Louisiana on Oct. 25 denied in part and granted in part a Tulane University organization and one of its medical researcher’s motions for partial summary judgment for counterclaims against them in a case involving a patent for a synthetic opioid compound.

The Administrators of the Tulane Educational Fund and the United States (on behalf of the Department of Veteran Affairs) initially filed the lawsuit against Cytogel Pharma LLC in hopes of getting the court to declare Tulane and the United States owned the patent for the opioid product. 

At the time the product was developed, one of Tulane’s researchers, Dr. James E. Zadina, was a consultant for Cytogel. Before then, Tulane had already granted Cytogel the license to previous patented opioid compounds via a licensing agreement. Still, Cytogel said it was convinced Zadina “took vital and confidential information from Cytogel” to create the new molecule, according to the opinion. Considering this, it responded to the declaratory and ownership lawsuit by filing 13 counterclaims against Tulane, the United States and Zadina. Zadina and Tulane responded by filing a motion for partial summary judgment, stating Cytogel didn’t establish the necessary elements for each of its claim. They added a number of the claims are also either blocked or untimely.

Based on the court’s opinion via U.S. District Judge Susie Morgan, Tulane and Zadina aren’t entitled to judgment issues for Counts 5 through 7: (Count V) Breach of Duty of Good Faith and Fair Dealing Owed Under the Consulting Agreement against Dr. Zadina, (Count VI) Breach of Licensing Agreement against Tulane, and (Count VII) Breach of Duty of Good Faith and Fair Dealing Owned Under the Licensing Agreement against Tulane).

When it comes to Count VI, the court said that while Tulane and Zadina say they can’t be called responsible for breaching the licensing agreement as the federal government has a license to the patents in question, the court said this isn’t the case. Even though it acknowledged Tulane and Zadina’s patents have government license, since they were created with federal funding, in reality, the government license doesn’t protect Tulane and Zadina from any liability. Plus, the expressions in the licensing agreement like “medical use” and “research” aren’t very clear when it comes to the scope of the license Tulane previously granted Cytogel.  

For Counts VI and VII, the court stated it “found genuine issues of material fact that preclude summary judgment on Count VI, which is the underlying breach of contract claim for Count VII.” 

There were similar genuine issues for Count VIII, in which Cytogel claims misappropriation of five trade secrets against Tulane, Zadina and the United States under the Louisiana Uniform Trade Secrets Act (LUTSA). The counterclaim defendants failed to prove they should get the partial summary judgment under the notion Cytogel didn’t own trade secrets. While they say Cytogel failed to identify the actual trade secrets, the court sided with Cytogel and even said just because its CEO doesn’t point out the difference between a trade secret and confidential information doesn’t weaken Cytogel’s claim that it actually owned trade secrets. There were simply too many genuine issues for the court to grant a partial summary judgment for this count.

Still, the court did side with Tulane on Count IX, Receipt of a Thing Not Owed, against Tulane and the United States. Cytogel claimed Tulane and Veterans Affairs improperly obtained ownership rights from Dr. Zadina and one of his colleagues, not Cytogel. So, Cytogel really isn’t involved and doesn’t have grounds to take legal action. Tulane’s motion for partial summary judgement was granted for this count.

As for Count X, the court said Tulane and Zadina still have yet to prove there aren’t any challenges that they took part in unfair trade practices. While Cytogel says Tulane, the V.A., and Zadina tricked it into believing the patents would be Cytogel’s, Tulane and Zadina maintain they told Cytogel they would collaborate on the patents. The court decided it was best for a factfinder to decide if Tulane and Zadina actually committed fraud, deception, or any other related behavior, so the court denied the motion for summary judgement on Count X.

Unfortunately for Cytogel, it didn’t properly establish Tulane encouraged other people not to do business with it, so Cytogel’s claims for Count XI (tortious interference with business relations) fell short, and the court granted Tulane its motion. It made a similar decision for Count XII, when it said Cytogel “failed to establish either Tulane or Dr. Zadina engaged in tortious reference with contractual relations.” It pointed out Cytogel wasn’t able to prove Zadina was a corporate officer for Tulane, or that he even owed Cytogel any duties.

Tulane was also victorious for Cytogel’s 13th count, unjust enrichment, against it. It simply stated unjust enrichment doesn’t apply here as there are other solutions.

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