Immunomedics, Inc. v. The Board of Directors of Roger Williams Medical Center et al

REPLY BRIEF to Opposition to Motion

D.N.J.December 12, 2016

Eric I. Abraham Christina L. Saveriano HILL WALLACK LLP 21 Roszel Road Princeton, New Jersey 08540 Telephone: 609-924-0808 Facsimile: 609-452-1888 eabraham@hillwallack.com csaveriano@hillwallack.com Michael P. Chu (admitted pro hac vice) Wan-Shon Lo (admitted pro hac vice) MCDERMOTT WILL & EMERY LLP 227 W. Monroe Street Chicago, IL 60606 312-984-5485 mchu@mwe.com Attorneys for Defendants Roger Williams Medical Center and Steven C. Katz, M.D. UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY IMMUNOMEDICS, INC., Plaintiff, v. ROGER WILLIAMS MEDICAL CENTER, RICHARD P. JUNGHANS, M.D., Ph.D., STEVEN C. KATZ, M.D., TUFTS MEDICAL CENTER, BDL PRODUCTS, INC., CARGENIX HOLDINGS, LLC, TNK- THERAPEUTICS, INC., SORRENTO THERAPEUTICS, INC., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Civil Action No. 15-cv-04526 JLL- JAD Judge Jose L. Linares JURY TRIAL DEMANDED REPLY BRIEF IN SUPPORT OF DEFENDANTS ROGER WILLIAMS MEDICAL CENTER AND STEVEN C. KATZ’S RULE 12(B)(6) MOTION TO DISMISS Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 1 of 19 PageID: 1138 -i- TABLE OF CONTENTS Page I. INTRODUCTION............................................................................................................. 1 II. ARGUMENT ..................................................................................................................... 1 A. Plaintiff Fails to Demonstrate the Safe Harbor Defense Does Not Apply to Defendants’ Work and Lacks Evidence Adequate to Support Its Infringement Claims .................................................................... 1 1. The Safe Harbor Provision Is a Non-Infringement Defense That Can Be Relied Upon to Dismiss a Complaint Under Rule 12(b)(6) ............................................................................................... 1 2. The Safe Harbor Applies to Defendants’ Research .................................... 2 3. Plaintiff’s Reliance on Breach of Contract Allegations to Support Its Patent Infringement Claims Is Misguided ................................ 6 B. Because Plaintiff Has Not Alleged the Existence of a Valid Contract with RWMC, Counts II-III Against RWMC Must Be Dismissed ............................................................................................................... 9 C. Plaintiff’s Conversion Claim Lacks Adequate Support to Survive Defendants’ Motion to Dismiss ............................................................ 11 D. Plaintiff’s Allegations of Tortious Interference Are Insufficient to Overcome Defendants’ Motion to Dismiss ................................................... 12 E. Plaintiff Improperly Blurred the Lines Between the Actions of the Various Defendants to Justify a Claim for Unjust Enrichment Against RWMC and Dr. Katz ...................................................... 13 F. Plaintiff Has Not Provided Any Evidence to Rebut Defendants’ Argument That Amendment Would Be Futile ................................................. 14 III. CONCLUSION ............................................................................................................... 15 Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 2 of 19 PageID: 1139 -ii- TABLE OF AUTHORITIES Page Cases Ashcroft v. Iqbal, 556 U.S. 662 (2009) ................................................................................................................ 7, 8 Baxter Healthcare Corp. v. HQ Specialty Pharma Corp., 157 F.Supp.3d 407 (D.N.J. 2016) ............................................................................................. 12 Callano v. Oakwood Park Homes Corp., 291 A2d 332 (N.J. 1966)........................................................................................................... 14 Classen Immunotherapies, Inc. v. Shionogi, Inc., 993 F. Supp. 2d 569 (D. Md. 2014) ............................................................................................ 2 CPS MedManagement LLC v. Bergen Regional Medical Center, L.P., 940 F.Supp.2d 141 ................................................................................................................ 9, 10 De Franceschi v. BAC Home Loans Servicing, L.P., 477 F. App’x 200 (5th Cir. 2012) ............................................................................................... 8 In re Adams Golf, 381 F.3d 267 (3d Cir. 2014)........................................................................................................ 2 Integra Lifesciences I, Ltd. v. Merck KGaA, 496 F.3d 1334 (Fed. Cir. 2007)............................................................................................... 3, 4 Isis Pharms., Inc. v. Santaris Pharma A/S Corp., 2014 WL 794811 (S.D. Cal. Feb. 27, 2014) ............................................................................... 6 Leveto v. Lapina, 258 F.3d 156 (3d Cir. 2001)........................................................................................................ 2 Lifecell Corp. v. Lifenet Health, No. 15-6701, 2016 WL 544489 (D.N.J. Feb. 9, 2016) ............................................................... 7 Merck KGaA v. Integra Lifesciences I, Ltd., 125 S.Ct. 2372 (2005) ......................................................................................................... 3, 4, 5 N.J. Physicians United Reciprocal Exch. v. Boynton & Boynton, Inc., 141 F.Supp.3d 298 (D.N.J. 2015) ....................................................................................... 12, 13 Proveris Scientific Corp. v. Innovasystems, Inc., 536 F.3d 1256 (Fed. Cir. 2008)................................................................................................... 5 Statutes 35 U.S.C. §271(e)(1) .............................................................................................................. passim Other Authorities Fed. R. Civ. P. 8(a)(2) ..................................................................................................................... 8 Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 3 of 19 PageID: 1140 I. INTRODUCTION Plaintiff has failed to demonstrate that Defendants Roger Williams Medical Center and Steven C. Katz, M.D.’s motion to dismiss Counts II-IX of Plaintiff’s Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (“MTD”) should not be granted. Plaintiff Immunomedics Inc.’s Response to Defendants’ Rule 12(b)(6) Motions to Dismiss (“Response”) reads facts into the Complaint that do not exist and blurs the lines between the individual Defendants and three separate Material Transfer Agreements (MTAs) at issue. As this reply emphasizes, it is improper to blur the distinctions amongst these MTAs and the roles of the Defendants in this case. These distinctions are key to the claims at issue in this case and Plaintiff has not pointed to any issues of material fact that preclude a motion to dismiss on Counts II-III against Roger Williams Medical Center (“RWMC”), Count IV as to RWMC and Dr. Katz, Counts V and VI as to Dr. Katz, and Counts VII-IX as to RWMC and Dr. Katz. II. ARGUMENT A. Plaintiff Fails to Demonstrate the Safe Harbor Defense Does Not Apply to Defendants’ Work and Lacks Evidence Adequate to Support Its Infringement Claims Plaintiff argues that the safe harbor, codified at 35 U.S.C. §271(e)(1), is procedurally unavailable and substantively inapplicable to Defendants. These arguments are unavailing. Plaintiff has failed to articulate any reason why this Court should not dismiss the patent infringement counts (Counts VII-IX). 1. The Safe Harbor Provision Is a Non-Infringement Defense That Can Be Relied Upon to Dismiss a Complaint Under Rule 12(b)(6) Plaintiff asserts that the safe harbor is procedurally unavailable to Defendants, arguing that Defendants failed to plead it as an affirmative defense. Response at 18-19. This argument is inapposite. The safe harbor is a non-infringement defense, and non-infringement has been raised Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 4 of 19 PageID: 1141 - 2 - by Defendants in their prior answer to Plaintiff’s Second Amended Complaint. See Dkt. 20, RWMC and Katz’s Answer, p. 21. With respect to the Plaintiff’s Third Amended Complaint (D.I. 77) (“TAC”), Defendants have not yet answered this Complaint, instead moving to dismiss. As a result, Defendants have not had the need or opportunity to raise a non-infringement or safe harbor defense. Regardless, the safe harbor is still properly examined at the motion to dismiss stage if it is clearly implicated in complaint. Classen Immunotherapies, Inc. v. Shionogi, Inc., 993 F. Supp. 2d 569, 575 (D. Md. 2014) (recognizing that “while it is a general rule that an affirmative defense may not serve as a basis for dismissal under Rule 12(b)(6) . . . the Court may consider affirmative defenses on a motion to dismiss when they are clear from the face of the complaint.”) (internal citations omitted). 1 Plaintiff raises the safe harbor defense directly in its TAC, see TAC ¶ 181, and the allegations in the TAC also implicate the safe harbor defense, see, e.g., TAC ¶¶ 75, 101, 115. Because the safe harbor defense is clearly implicated on the face of the TAC, consideration and dismissal under Rule 12(b)(6) is proper. See Leveto v. Lapina, 258 F.3d 156, 161 (3d Cir. 2001) (“a complaint may be subject to dismissal under Rule 12(b)(6) when an affirmative defense appears on its face.”). 2. The Safe Harbor Applies to Defendants’ Research Plaintiff incorrectly argues that to qualify for the safe harbor, Defendants must make clear that their goal is to obtain FDA approval. Response at 21. But Section 271(e)(1)’s exemption from infringement does not “categorically exclude[] either (1) experimentation on drugs that are not ultimately the subject of an FDA submission or (2) use of patented compounds 1 The Classen case is distinguishable from the In re Adams Golf, 381 F.3d 267 (3d Cir. 2014) case cited by Plaintiff because Classen is pointing out an exception to the general rule laid out in Adams relating to whether an affirmative defense may serve as a basis for dismissal under Rule 12(b)(6). The affirmative defense in Adams related to causation for a drop in stock price, while Classen examines the safe harbor defense at issue in the present case. Adams, 381 F.3d at 277. Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 5 of 19 PageID: 1142 - 3 - in experiments that are not ultimately submitted to the FDA.” Merck KGaA v. Integra Lifesciences I, Ltd., 125 S.Ct. 2372, 2382 (2005). Simply because Defendants have not yet obtained all of the data that would be required for an IND or NDA and are still in the process of conducting the necessary experiments to eventually reach that point does not mean the safe harbor defense does not apply. Plaintiff argues the safe harbor should be limited only to research that produces information relevant to an IND or NDA (Response at 21), but the Supreme Court’s language plainly does not intend that result. In fact, the Court held that “Congress did not limit § 271(e)(1)’s safe harbor to the development of information for inclusion in a submission to the FDA; nor did it create an exemption applicable only to the research relevant to filing an ANDA for approval of a generic drug.” Id. at 2383 (emphasis added). The Supreme Court in Merck specifically rejected the Federal Circuit’s original rationale for denying the safe harbor defense, which was based, in part, on a finding that Merck’s experiments focused on identifying the best drug candidate to subject to future clinical testing under FDA processes, rather than a particular IND or NDA that had already been submitted. Id. at 2382. The Supreme Court acknowledged that oftentimes scientific testing is a process of trial and error and activities relating to identifying a promising candidate should not be excluded from the protections of Section 271(e)(1). Id. at 2382-2383; see also Integra Lifesciences I, Ltd. v. Merck KGaA, 496 F.3d 1334, 1341 (Fed. Cir. 2007) (finding on remand that “under the Supreme Court’s statutory interpretation, the FDA Exemption applies to experiments conducted to determine the optimum candidate drug, including experiments with rejected candidates”). Thus, the Court held that “the use of patented compounds in preclinical studies is protected under § 271(e)(1) as long as there is a reasonable basis for believing that the experiments will produce the types of information that Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 6 of 19 PageID: 1143 - 4 - are relevant to an IND or NDA.” Id. at 2383 (internal quotations omitted). This prerequisite is met here. Plaintiff improperly relies on almost the identical argument that was rejected by the Federal Circuit on remand in the Merck case: that Defendants’ research activities are not protected because they do not relate to safety and efficacy of novel drugs they wish to market. See Response at 20. As is clear from the Federal Circuit’s decision on remand, the Supreme Court held the safe harbor to be much broader than just the information included in an IND or NDA. The safe harbor encompasses experiments that develop “information about the rationale for the drug, its structure, its toxicology, its mode of action, its effectiveness under different conditions, its side effects, its formulation, its administration, and like information.” 496 F.3d at 1341. In reviewing the accused experiments on remand, the Federal Circuit found all of them exempt, including experiments related to obtaining information about efficacy, mechanism of action, pharmacology, pharmacokinetics, safety, or some combination thereof for compounds that were not eventually submitted to the FDA for approval. Id. at 1342-1344. This illustrates the breadth of the safe harbor-examination of basic characteristics of compounds that were ultimately not submitted for FDA approval is covered. This breadth is dictated by the Supreme Court, not by Defendants. Plaintiff’s arguments in its Response that Defendants’ research is not relevant to an IND or NDA, and is not tied to the testing of a particular drug, are contradicted by the TAC, and should be rejected. Notably, in the TAC, Plaintiff points to several instances of Dr. Junghans and Dr. Katz engaging in clinical stage work, precisely the kind of work the safe harbor is designed to protect. See, e.g., TAC ¶¶ 75 (citing a manuscript that discusses a phase I clinical trial), 101 (alleging Dr. Junghans was using Research Materials in clinical trials), 115 (alleging Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 7 of 19 PageID: 1144 - 5 - Sorrento’s intent to use clinical and pre-clinical CAR constructs acquired from Dr. Junghans to develop cancer therapies). It would be improper to credit Plaintiff’s arguments to the contrary in deciding Defendants’ MTD. Plaintiff argues that Proveris Scientific Corp. v. Innovasystems, Inc., 536 F.3d 1256 (Fed. Cir. 2008) controls here; however, Proveris is distinguishable from the current case and not applicable. Response at 22-23. The Proveris case addresses the applicability of Section 271(e)(1) to an optical spray analyzer device, a product that is not of the type that will ever be subject to FDA premarket approval and faces no regulatory barriers to market entry upon patent expiration. Id. at 1265. Thus, the spirit of Section 271(e)(1) was inapplicable. Plaintiff attempts to draw an analogy to Proveris, arguing that its antibodies “are used to test for activity and are not subject to FDCA approval.” Response at 23. The Court should disregard this argument because it is explicitly contradicted by the TAC, which alleges that Plaintiff “continues to conduct clinical trials in cancer patients using antibodies containing or derived from the Research Material” (TAC ¶ 125) and that Plaintiff is “focused primarily on the development of monoclonal antibody-based products for the targeted treatment of cancer, autoimmune diseases, and other serious diseases.” TAC ¶ 20. Further, unlike in Proveris, the activities Defendants are pursuing in this case, i.e., research with CEA CAR-T cells to develop potentially life-saving treatments for cancer and other serious diseases” (TAC ¶ 2), is clearly intended, and could very well lead, to the development of information for inclusion in a submission to the FDA. See Merck, 125 S.Ct. at 2382. These activities are of the type Section 271(e)(1) is designed to protect. Proveris does not suggest otherwise. Plaintiff’s argument that there is an issue of material fact whether Defendants’ accused activities fall within the scope of Section 271(e)(1) is also unavailing. See Response at 23-24. In Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 8 of 19 PageID: 1145 - 6 - the case cited by Plaintiff to support its argument that there is an issue of material fact as to whether the materials at issue here are “patented inventions” under the § 271(e) safe harbor, the court found it dispositive that defendant did present any evidence that it knew of the “particular biological process” and “particular physiological effect” that using plaintiff’s patented inventions would have in relation to the work research defendant was conducting. Isis Pharms., Inc. v. Santaris Pharma A/S Corp., 2014 WL 794811, at *13 (S.D. Cal. Feb. 27, 2014). Conversely, in this case, Plaintiff has alleged that its antibodies are drug products intended to treat cancer and other diseases. See TAC ¶¶ 20, 125. Further the only reasonable conclusion from Plaintiff’s allegations concerning the ‘360 publication, filed on December 10, 2001, is that Dr. Junghans was aware of the biological process of the anti-CEA CAR-T cells. See TAC ¶¶ 69-71. Indeed, Plaintiff admits that Dr. Junghans’ experiments with Plaintiff’s antibodies were “designed with the intention to develop potentially life-saving treatments for cancer and other serious diseases.” TAC ¶ 2. Plaintiff attempts to rely on the ’360 publication to demonstrate infringement, but avoid the clearly stated purpose of the research described therein when arguing in its Response that Defendants were doing nothing more than “basic research.” Response at 21. Plaintiff cannot avoid the allegations it made in the TAC by attorney argument. There is no issue of material fact in this case that precludes the application of the safe harbor defense and dismissal of Counts VII- IX. 3. Plaintiff’s Reliance on Breach of Contract Allegations to Support Its Patent Infringement Claims Is Misguided Plaintiff blurs the distinction between its breach of contract claims and infringement claims in an attempt to demonstrate the latter are sufficiently pleaded. Response at 24-28. While Defendants’ publication of various papers may be related to Plaintiff’s breach of contract claims, Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 9 of 19 PageID: 1146 - 7 - Plaintiff has not pleaded facts sufficient to demonstrate that such actions are an act of infringement. See TAC ¶¶ 173-186; see Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (finding that while all well-pleaded allegations in a complaint are taken as true, they must be supported by factual allegations). Plaintiff argues its pleadings are sufficient because it “has alleged that Defendants’ breach of the MTAs…by publishing papers without notice to or permission from Immunomedics-infringes the Asserted Patents” and that “breaching the MTAs infringes the Asserted Patents.” Response at 25, 26. As an initial matter, it is indisputable that breach of contract is not automatically an act of patent infringement without allegations tied to the claims of the patents. See, e.g., Lifecell Corp. v. Lifenet Health, No. 15-6701, 2016 WL 544489, *6 (D.N.J. Feb. 9, 2016) (recognizing that a patent infringement case involves different considerations generally from a breach of contract case). Plaintiff asserts that Dr. Junghans breached the 1993 MTA by not offering Plaintiff the right of first refusal, and by publishing papers without Plaintiff’s permission. But Plaintiff has failed to allege in the TAC, or explain in its Response, how Defendants’ publications constitute infringement of any claim of any patent. Plaintiff’s bare bones and insufficient factual allegations of infringement mention only the ’540 patent and the ’924 patent. See TAC ¶¶ 71, 119. The 1993 MTA is the only MTA that relates to humanized MN14, which is the antibody claimed in those patents. See MTD 2-6. As Plaintiff admits, only Dr. Junghans is a party to the 1993 MTA. TAC ¶ 32. RWMC is at most a party to the 2008 and 2010 MTAs (TAC ¶¶ 44, 53), while Dr. Katz is not a party to any of the MTAs. According to the TAC, Dr. Katz did not become aware of any of the MTAs until August 2015, after the filing of the first complaint in this matter. (TAC ¶ 65) Indeed, Plaintiff does not assert any breach of contract claims against Dr. Katz. Based on a plain reading of Plaintiff’s Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 10 of 19 PageID: 1147 - 8 - allegations, Dr. Katz could not have breached any contract with Plaintiff because he was not a party to any such contract. Therefore, because Plaintiff relies on breach of contract allegations to support patent infringement, its allegations against Dr. Katz are insufficiently pleaded. Plaintiff allegedly received the right of first refusal to license “Research Product” developed by Dr. Junghans in the 1993 MTA. TAC ¶ 39; 1993 MTA ¶ 12. Indeed, the genesis of Plaintiff’s claims here is Dr. Junghans’ failure to provide that right of first refusal. Logically, if Plaintiff’s patents covered the “Research Product,” it would not need a license from Dr. Junghans for that product. It is reasonable to conclude from the TAC and the 1993 MTA that Dr. Junghans’ work with his Research Product is not covered by Plaintiff’s patents, and is therefore not infringing. Finally, Plaintiff’s reliance on the doctrine of willful blindness to meet the knowledge requirement for its claim of indirect infringement is misplaced. Plaintiff has not set forth these allegations in its TAC. See Ashcroft, 556 U.S. at 679 (finding that “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but has not shown-that the pleader is entitled to relief”) (internal quotations omitted) (citing Fed. R. Civ. P. 8(a)(2)); see also De Franceschi v. BAC Home Loans Servicing, L.P., 477 F. App’x 200, 204 (5th Cir. 2012) (“[D]istrict courts do not abuse their discretion when they disregard claims or theories of liability not present in the complaint and raised first in a motion opposing summary judgment”). If it is Plaintiff’s contention that Dr. Katz and RWMC became aware of the Asserted Patents through Dr. Junghans’ application for other patents (Response at 27-28), Plaintiff should have pleaded that fact in the Complaint. Id. Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 11 of 19 PageID: 1148 - 9 - B. Because Plaintiff Has Not Alleged the Existence of a Valid Contract with RWMC, Counts II-III Against RWMC Must Be Dismissed In its Response, Plaintiff attempts to blur the lines between the activities of the individual Defendants and under the various MTAs. For example, Plaintiff argues that each of the three different MTAs, spanning nearly three decades, concern all of the “Research Material” collectively, and that RWMC and Dr. Junghans “shared responsibility” for the collective Research Material. Response at 8. As explained in Defendants’ MTD (MTD at 1-3), the term “Research Material” is defined as follows in the various agreements: 1993 MTA: the DNA encoding the hMN-14 antibody 2008 MTA: murine MN-14 antibody 2010 MTA: WI2 antibody By bringing breach of contract claims for improper use and sharing of Research Materials, and failure to provide first refusal of a license to Research Products, Plaintiff asks this Court to conclude the 2010 MTA covers DNA that was provided 17 years earlier to a different institution pursuant to a different contract. This is unreasonable, and Counts II and III should be dismissed on this basis alone. To demonstrate it has adequately pled its breach of contract claim for improper use and sharing of the Research Material against RWMC (Count II), Plaintiff must first demonstrate that it has adequately pled the existence of a valid contract with RWMC concerning the particular Research Material in question. See CPS MedManagement LLC v. Bergen Regional Medical Center, L.P., 940 F.Supp.2d 141, 151 (“To establish a breach of contract claim, a plaintiff has the burden to show that the parties entered into a valid contract, that the defendant failed to perform his obligations under the contract and that the plaintiff sustained damages as a result.”). Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 12 of 19 PageID: 1149 - 10 - Notably, in the TAC, Plaintiff alleges only that there exists a valid contract between it and RWMC with respect to the 2008 and 2010 MTAs, tacitly admitting that RWMC is not a party to the 1993 MTA. Response at 9 (citing TAC ¶¶ 44, 53). Next, assuming Plaintiff has alleged the existence of a valid contract between it and RWMC, Plaintiff must demonstrate allegations relating to a breach of the contract(s) to which the RWMC is a party. Id. Plaintiff’s allegations in the TAC and arguments in its Response regarding breach of the MTAs focus on actions of Dr. Junghans, alleging that Dr. Junghans, not RWMC, improperly transferred materials to Dr. Katz. Response at 8 (citing TAC ¶ 72). Plaintiff has not alleged any facts supporting a conclusion that Dr. Junghans’ actions should be imputed to RWMC. For example, it has not alleged that Dr. Junghans is an officer or agent of RWMC. Therefore, allegations concerning Dr. Junghans’ improper sharing of materials cannot be used to support claims against RWMC. Accordingly, Count II for improper sharing of Research Material should be dismissed. Count III of the TAC asserts breach of contract against RWMC for failing to provide Plaintiff “with the right of first refusal to an exclusive license of any Research Product.” TAC ¶ 26. Contrary to Plaintiff’s mischaracterization of Defendants brief, RWMC challenges the existence of a valid contract between it and Plaintiff “concerning a so called ‘Research Product,’” not the mere existence of any such contract. Compare MTD at 16 (emphasis added) with Response at 8. Plaintiff’s mischaracterization provides an opportunity to avoid the issue that it is unable to allege a definition of the term “Research Product” in the 2008 and 2010 MTAs. This term is not defined anywhere in those two MTAs and Plaintiff cites nothing in the TAC supporting a conclusion otherwise. Therefore RWMC could not have granted a right of first refusal to Plaintiff for any so-called “Research Product” under those agreements. Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 13 of 19 PageID: 1150 - 11 - Because Plaintiff cannot allege that the 2008 and 2010 MTAs define and convey rights in “Research Product,” it follows that Plaintiff has not alleged the existence of a valid contract between it and RWMC concerning any such product. Accordingly, Count III, for RWMC’s alleged failure to provide the right of first refusal to Research Product, should be dismissed. C. Plaintiff’s Conversion Claim Lacks Adequate Support to Survive Defendants’ Motion to Dismiss Consistent with its pattern in this case, Plaintiff attempts to blur the distinction between “Research Product” and “Research Material” in its conversion claim, basing its conversion claim on RWMC’s alleged refusal to return all remaining stocks of both “Research Materials” and “Research Products.” See TAC ¶¶ 145, 148-152. Thus, Plaintiff appears to claim right to immediate possession of both “Research Products” and “Research Materials.” Id. However, Plaintiff admits in its Response that its conversion claim should be limited to Research Materials and should not include Research Products, indicating this count is improperly pleaded. Response at 9. Notwithstanding this admission, Plaintiff continues to avoid providing the definition for either “Research Product” or “Research Material” upon which it relies to clarify its claims in this case. Further, the inclusion of Dr. Katz in this claim is inconsistent with Plaintiff’s allegations throughout the TAC. Plaintiff admits that Dr. Katz was not involved with Dr. Junghans or RWMC until 2014, well after all three MTAs were entered into (Response at 2) and that Dr. Katz did not have any knowledge of the MTAs until May 13, 2015 at the earliest (Response at 3 (citing TAC ¶¶ 65, 93)). In spite of this, Plaintiff still tries to loop Dr. Katz in with Dr. Junghans for its liability allegations in this case. This contradictory position undermines Plaintiff’s claims against Dr. Katz for liability in this action. Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 14 of 19 PageID: 1151 - 12 - D. Plaintiff’s Allegations of Tortious Interference Are Insufficient to Overcome Defendants’ Motion to Dismiss Plaintiff failed to show that Dr. Katz had the requisite knowledge or malice to tortiously interfere with a prospective economic advantage. Further, Plaintiff has not sufficiently alleged a concrete injury caused by Dr. Katz’s actions. Thus, Count V should be dismissed. Plaintiff’s allegations relating to Dr. Katz’s awareness of the MTAs are limited to alleging that Dr. Katz was aware of the 2010 MTA as of August 5, 2015. TAC ¶ 65. The timing of Dr. Katz’s awareness of any alleged contractual obligations is an important allegation because the actions Plaintiff allege constitute tortious interference by Dr. Katz occurred prior to his awareness of this alleged contractual duty. TAC ¶ 65. This alleged awareness was after Dr. Katz’s formation of Cargenix. TAC ¶ 107. Therefore, Dr. Katz did not have sufficient knowledge to act intentionally and cannot meet the malice requirement of Plaintiff’s tortious interference claim. Baxter Healthcare Corp. v. HQ Specialty Pharma Corp., 157 F.Supp.3d 407, 420 (D.N.J. 2016) (“Under New Jersey law of tortious interference, the notion of ‘malice’ requires that the defendant acted intentionally with respect to a known contractual duty of another; it does not suffice that a defendant ‘should have known’ of the contractual relationship, because one cannot act with intent to interfere with a contract unless that contract is actually known.”) (emphasis added). Because Dr. Katz did not become aware of the 2010 MTA until August 5, 2015, according to the TAC, he could not have “acted intentionally with respect to a known contractual duty of another” in 2014 when he formed Cargenix. TAC ¶ 107. Moreover, Plaintiff has failed to demonstrate it alleged damages sufficiently to survive Defendants’ motion to dismiss, relying solely on profits Defendants made as opposed to prospective damages from prospective customers. See N.J. Physicians United Reciprocal Exch. v. Boynton & Boynton, Inc., 141 F.Supp.3d 298 (D.N.J. 2015) (holding that a plaintiff must “at Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 15 of 19 PageID: 1152 - 13 - least allege specific prospective contracts that were interfered with” by defendant in a claim for tortious interference with prospective economic benefit). The court in Boynton found that Boynton’s vague allegation that unknown, prospective customers may have been lost was insufficient to survive dismissal. Id. Similarly, Plaintiff has not set forth any allegations of prospective customers that it may have lost as a result of Defendants alleged interference. Plaintiff only points to agreements entered into by Dr. Junghans and Dr. Katz with no suggestion that Plaintiff had any prospective contracts with these or other parties. TAC ¶¶ 161-165. Reliance on Defendants’ profits without an allegation that Plaintiff saw the parties with whom Defendant contracted as prospective customers falls short. Id. Count V should be dismissed. E. Plaintiff Improperly Blurred the Lines Between the Actions of the Various Defendants to Justify a Claim for Unjust Enrichment Against RWMC and Dr. Katz In its Response, Plaintiff argues that its unjust enrichment allegations against RWMC and Dr. Katz are sufficient because these Defendants had many dealings with Plaintiff, and sold the rights to Dr. Junghans’ Research Product. Response at 14-17. Plaintiff refuses to acknowledge the allegations made in the TAC that 1) “Research Product” is only defined in the 1993 MTA; 2) the “Research Product” is proprietary to Dr. Junghans pursuant to the 1993 MTA; and 3) RWMC and Dr. Katz had no dealings with Plaintiff concerning the 1993 MTA or Research Product defined therein. Instead, Plaintiff again attempts to blur the lines among the MTAs and the actions of the various Defendants in this action to support its unjust enrichment claim. See TAC ¶¶ 168-172. This is inappropriate given the different levels of involvement each party had with Immunomedics and Plaintiff admits in its Response Brief that not all Defendants are equal. Response at 15. Plaintiff’s unjust enrichment claim is based on Defendants’ alleged licensing and misappropriation of Dr. Junghans’ Research Product. TAC ¶¶ 105-106, 111-112 114-115, 117- Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 16 of 19 PageID: 1153 - 14 - 118, 169. As discussed in the MTD, the only MTA that defines “Research Product” is the 1993 MTA. MTD at 2. Paragraph 2 of the 1993 MTA states that the Research Product “is proprietary to Recipient” - meaning it was proprietary to Dr. Junghans and New England Deaconess Hospital. MTD at 2-3. The 1993 MTA predates RWMC and Dr. Katz’s association with Dr. Junghans by over a decade. TAC ¶¶ 32, 41. As a result, it is unreasonable to conclude that Plaintiff expected remuneration from RWMC or Dr. Katz when it gave Research Material to Dr. Junghans pursuant to the 1993 MTA. Similarly, Plaintiff has not alleged any mistake on its part relating to the 1993 MTA. See, e.g., Callano v. Oakwood Park Homes Corp., 219 A.2d 332, 334 (N.J. 1966). Further, Plaintiff has not cited any allegation in the TAC that permits a reasonable conclusion that RWMC and Dr. Katz had any dealings with Plaintiff concerning the 1993 MTA. Thus, it is unreasonable to conclude that RWMC and Dr. Katz had a direct relationship with Plaintiff concerning the Research Product. Moreover, contrary to Plaintiff’s argument, it is insufficient to simply plead that RWMC and Dr. Katz received a benefit from licensing the Research Product-Plaintiff must plead that retention of that benefit would be unjust. Id. It has failed to do so, and Count VI should be dismissed. F. Plaintiff Has Not Provided Any Evidence to Rebut Defendants’ Argument That Amendment Would Be Futile Contrary to Plaintiff’s argument in its Response, RWMC and Dr. Katz have fully and adequately responded to Plaintiff’s various discovery requests. Plaintiff has provided no evidence or argument in its briefing that suggests an opportunity to amend would be anything but futile. Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 17 of 19 PageID: 1154 - 15 - III. CONCLUSION For the foregoing reasons, Defendants request this Court to dismiss with prejudice: 1) Counts II-III against RWMC; 2) Count IV as to RWMC and Dr. Katz; 3) Counts V and VI as to Dr. Katz; and 4) Counts VII-IX of the Third Amended Complaint. Dated: December 12, 2016 s/ Christina Saveriano Eric I. Abraham Christina Saveriano HILL WALLACK, LLP 21 Roszel Road Princeton, NJ 08540 (609) 924-0808 Attorneys for Defendants Roger Williams Medical Center and Steven C. Katz, M.D. Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 18 of 19 PageID: 1155 CERTIFICATE OF SERVICE This is to certify that a true and correct copy of the foregoing REPLY BRIEF IN SUPPORT OF MOTION TO DISMISS is to be electronically filed. Notice of this filing will be sent to all parties by operation of the Court’s electronic filing system. Parties may access this filing through the Court’s system. December 12, 2016 /s/ Christina L. Saveriano _______________ Date Christina L. Saveriano Case 2:15-cv-04526-JLL-SCM Document 106 Filed 12/12/16 Page 19 of 19 PageID: 1156