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Astellas Institute for Regenerative Medicine v. Imstem Biotechnology, Inc.

United States District Court, D. Massachusetts

September 28, 2018

ASTELLAS INSTITUTE FOR REGENERATIVE MEDICINE, et al., Plaintiffs,
v.
IMSTEM BIOTECHNOLOGY, INC., et al., Defendants.

          MEMORANDUM AND ORDER ON MOTION TO DISMISS

          ALLISON D. BURROUGHS U.S. DISTRICT JUDGE

         Plaintiffs Astellas Institute for Regenerative Medicine and Stem Cell & Regenerative Medicine International, Inc. (collectively, “Plaintiffs”) filed this action against Defendants ImStem Biotechnology, Inc., Xiaofang Wang, and Ren-He Xu (collectively, “Defendants”) alleging claims for correction of inventorship under 35 U.S.C. § 256, unfair trade practices under Massachusetts General Laws Chapter 93A, conversion, unjust enrichment, misappropriation of trade secrets, and negligent misrepresentation. [Dkt. No. 1]. Defendants ImStem Biotechnology, Inc. and Xiaofang Wang (collectively, “Counterclaim Defendants”) brought counterclaims against Plaintiffs for correction of inventorship under 35 U.S.C. § 256 and unjust enrichment. [Dkt. No. 20 (“Counterclaim Complaint”)]. Plaintiffs moved to dismiss the counterclaims pursuant to Federal Rule of Civil Procedure 12(b)(6). [Dkt. No. 21]. For the reasons set forth below, Plaintiffs' motion to dismiss is DENIED.

         I. BACKGROUND

         The following facts are drawn from the Counterclaim Complaint, the well-pleaded allegations of which are taken as true for purposes of evaluating Plaintiffs' motion to dismiss. See Ruivo v. Wells Fargo Bank, 766 F.3d 87, 90 (1st Cir. 2014).

         Plaintiff Astellas Institute for Regenerative Medicine is a Delaware corporation with a principal place of business in Marlborough, Massachusetts. [Dkt. No. 20, Countercl. ¶ 6]. Plaintiff Stem Cell & Regenerative Medicine International, Inc. (“SCRMI”) is a Delaware corporation with a principal place of business in Marlborough, Massachusetts. [Id. ¶ 7].

         Counterclaim Defendant ImStem Biotechnology Inc. (“ImStem”) is a biotechnology company with a principal place of business in Farmington, Connecticut. [Id. ¶ 4]. Counterclaim Defendant Dr. Xiofang Wang is the Chief Technology Officer, Vice President, and a founder of ImStem. [Id. ¶ 5]. Dr. Wang is a research scientist with experience in the field of autoimmune disease and, in particular, he has studied the genetic mechanism for autoimmune disease in the experimental autoimmune encephalopathy (“EAE”) mouse model for multiple sclerosis. [Id. ¶ 15].

         Defendant Dr. Ren-He Xu was Dr. Wang's research mentor. [Id. ¶ 16]. In July 2010, Dr. Xu met with Dr. Shi-Jiang Lu, a colleague who worked at SCRMI, to discuss Dr. Wang's work. [Id. ¶ 16-17]. Dr. Lu suggested that Dr. Wang get in touch with his SCRMI colleagues, Drs. Erin Kimbrel and Robert Lanza, to discuss a collaboration involving mesenchymal stem cells (“MSCs”) derived from hemangioblast cells. [Id. ¶ 17]. MSCs are a type of stem cell that are useful in treating a variety of disorders. [Dkt. 20, Answer ¶ 1]. Hemangioblast-derived MSCs are created by first generating hemangioblasts from embryonic stem cells and then differentiating the hemangioblasts into MSCs. [Dkt. 20, Countercl. ¶ 25].

         In his initial email exchange with Drs. Kimbrel and Lanza, Dr. Wang suggested that hemangioblast-derived MSCs could be used to treat autoimmune diseases, and proposed that their collaboration focus on using the EAE mouse model to test the effectiveness of MSCs to treat autoimmune diseases like multiple sclerosis. [Id. ¶¶2, 18, 33]. At that time, Drs. Kimbrel and Lanza were not familiar with the EAE mouse model or the potential to use hemangioblast-derived MSCs to treat autoimmune diseases. [Id. ¶¶ 19-20, 32]. In August 2010, the parties agreed to collaborate and, over the course of their collaboration, Dr. Wang conducted experiments involving hemangioblast-derived MSCs on the EAE mouse model. [Id. ¶¶ 23-24]. Dr. Wang's experiments yielded promising results, and Drs. Kimbrel, Lanza, Wang, and Xu worked together to publish this data in a scientific journal. Xiofang Wang et al., Human ESC-Derived MSCs Outperform Bone Marrow MSCs in the Treatment of an EAE Model of Multiple Sclerosis, 3 Stem Cell Reports 115 (2014) (the “Joint Publication”) [Dkt. 1-2].

         On November 30, 2011, Drs. Kimbrel and Lanza filed Provisional Patent Application No. 61/565, 358 with the U.S. Patent and Trademark Office (“PTO”). This patent application incorporated data from the experiments that Dr. Wang had conducted during the parties' collaboration. [Dkt. 20, Countercl. ¶ 26]. On February 24, 2015, the PTO issued U.S. Patent No. 8, 961, 956 (the “‘956 patent”), entitled “Mesenchymal Stromal Cells and Uses Related Thereto, ” and naming, inter alia, Drs. Kimbrel and Lanza as joint inventors. [Dkt. No. 20-1]. The ‘956 patent does not name Dr. Wang as a joint inventor.

         On August 29, 2017, the PTO issued U.S. Patent No. 9, 745, 551 (the “‘551 patent”), entitled “Mesenchymal-Like Stem Cells Derived from Human Embryonic Stem Cells, Methods and Uses Thereof, ” and naming Drs. Wang and Xu as joint inventors. [Dkt. No. 1-1]. The ‘551 patent does not name Drs. Kimbrel and Lanza as joint inventors. On November 13, 2017, Plaintiffs filed suit against Defendants, seeking a correction of inventorship on the ‘551 patent and other state law remedies. [Dkt. No. 1]. On January 10, 2018, the Counterclaim Defendants filed their Answer and the Counterclaim Complaint, asserting claims for correction of inventorship of the ‘956 patent and unjust enrichment. [Dkt. No. 20]. On January 31, 2018, Plaintiffs moved to dismiss the Counterclaim Complaint. [Dkt. No. 21].

         II. STANDARD OF REVIEW

         On a motion to dismiss for failure to state a claim, the Court accepts as true all well-pleaded facts in the complaint and draws all reasonable inferences in the light most favorable to the plaintiff. United States ex rel. Hutcheson v. Blackstone Med., Inc., 647 F.3d 377, 383 (1st Cir. 2011). While detailed factual allegations are not required, the complaint must set forth “more than labels and conclusions, ” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007), and it must contain “factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory.” Gagliardi v. Sullivan, 513 F.3d 301, 305 (1st Cir. 2008) (internal quotations and citations omitted). The facts alleged, taken together, must “state a claim to relief that is plausible on its face.” A.G. ex rel. Maddox v. Elsevier, Inc., 732 F.3d 77, 80 (1st Cir. 2013) (quoting Twombly, 550 U.S. at 570). “A claim is facially plausible if supported by ‘factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'” Eldredge v. Town of Falmouth, MA, 662 F.3d 100, 104 (1st Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

         When assessing the sufficiency of a complaint, the Court first “separate[s] the complaint's factual allegations (which must be accepted as true) from its conclusory legal allegations (which need not be credited).” Maddox, 732 F.3d at 80 (quoting Morales-Cruz v. Univ. of P.R., 676 F.3d 220, 224 (1st Cir. 2012)). Next, the Court “determine[s] whether the remaining factual content allows a ‘reasonable inference that the defendant is liable for the misconduct alleged.'” Id. (quoting Morales-Cruz, 676 F.3d at 224). “[T]he court may not disregard properly pled factual allegations, ‘even if it strikes a savvy judge that actual proof of those facts is improbable.'” Ocasio-Hernandez v. Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2011) (quoting Twombly, 550 U.S. at 556). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, ” however, a claim may be dismissed. Iqbal, 556 U.S. at 679.

         III. ...


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