Baxter Healthcare Corp. v. HQ Specialty Pharma Corp.

157 F. Supp. 3d 407, 2016 WL 344888, 2016 U.S. Dist. LEXIS 9201
CourtDistrict Court, D. New Jersey
DecidedJanuary 26, 2016
DocketCivil Action No. 13-6228 (JBS/KMW)
StatusPublished
Cited by15 cases

This text of 157 F. Supp. 3d 407 (Baxter Healthcare Corp. v. HQ Specialty Pharma Corp.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baxter Healthcare Corp. v. HQ Specialty Pharma Corp., 157 F. Supp. 3d 407, 2016 WL 344888, 2016 U.S. Dist. LEXIS 9201 (D.N.J. 2016).

Opinion

REDACTED OPINION

SIMANDLE, Chief Judge.

Table of Contents

I. INTRODUCTION.. .411

II. BACKGROUND.. .413

A. Factual and Procedural Background ...413

[411]*4111. Background to Esmolol Hydrochloride and Baxter’s Innovative Esmolol Research ... 413

2. Mr. Owoo’s Separation from Baxter .. .415

3. Mr. Owoo’s Initial Contact with [¶] ...416

4. HQ’s Development Agreement with Mr. Owoo’s Welgrace Research Group ...417

5. HQ’s Applications before the USPTO and FDA ... 418

6. Litigation in this District ... 418

III. STANDARD OF REVIEW .. .419

IV. DISCUSSION.. .420

A. Baxter Cannot Establish a Prima Fa-cie Case of Tortious Interference with Contractual or Business Relationships .. .420

B. Admissible Evidence May Establish a Prima Facie Case of HQ’s Misappropriation of Trade Secrets ... 422

1. New Jersey’s Trade Secrets Act, N.J.S.A. § 56:15-1, et seq., generally .. .423

a. Genuine factual issues preclude a finding that Baxter’s “trade secrets” constitute public information... .424

b. ■ Genuine factual issues exist on whether [¶] had Reason to Know that Mr. Owoo obtained Baxter’s claimed “trade secrets” by Improper Means... .426

C. Admissible Evidence May Establish a Prima Facie Case for HQ’s Unjust Enrichment and/or Unfair Competition Claims ...426

D. Admissible Evidence May Establish a Prima Facie Case for Baxter’s claims for Correction of Inventorship and to Quiet Title to HQ’s Patents .. .427

V.CONCLUSION.. .427

1. INTRODUCTION

In this action Plaintiffs Baxter Healthcare Corporation, Baxter International Inc., and Baxter Healthcare S.A. (collectively, “Baxter”) assert three distinct series of claims arising out of Defendant [¶] Specialty Pharma Corporation’s (hereinafter, “HQ”) New Drug Application (hereinafter, “NDA”) for an esmolol premixed injectable bag product. First, Baxter alleges that the esmolol product claimed in HQ’s NDA infringes the formulation patents 1 covering Baxter’s injectable esmolol product, BREVIBLOC®.2 Second, Baxter asserts an array of state law claims for tortious interference, misappropriation of alleged trade secrets, unjust enrichment, and unfair competition, all of which it premises upon HQ’s employment of George Owoo, a former (now deceased) Baxter scientist and one of the named inventors on Baxter’s Patents.3 Third, and largely based upon the allegations underpinning its state law claims, Baxter seeks to designate Mr. Owoo as the sole inventor [412]*412of the generic esmolol formulation embodied in HQ’s esmolol patents (and its related NDA), and then to declare Baxter the true holder of the rights and interests protected by HQ’s patents.4

This Court previously addressed the parties’ cross-motions for summary judgment on the issue of patent infringement, see Baxter Healthcare Corp. v. HQ Specialty Pharma Corp., 133 F.Supp.3d 692, 2015 WL 5646779 (D.N.J. Sept. 23, 2015), and now confronts HQ’s motion for summary judgment on Baxter’s state law tort and inventorship claims.5 Although dresséd in different terms, the critical threads throughout each of these claims concern Baxter’s positions that HQ (knowingly or otherwise) built its proposed esmolol formulation (and obtained its patents) upon confidential information' secreted from Baxter by Mr.. Owoo (especially, a formulation “discovered” by Baxter during a 2009 study involving Mr. Owoo), and otherwise developed this product by interfering with Baxter’s contractual relationship with Mr. Owoo (specifically, his Employment and Severance Agreements).

Critically, the parties do not genuinely dispute that Mr. Owoo’s esmolol proposal to HQ. (now substantially embodied in HQ’s proposed formulation) closely resembles a formulation documented in a prior Baxter esmolol. study. ..Rather, in support of summary judgment, [¶] takes the position that the factual record nowhere suggests that it played any role in any unlawful conduct relative to the unsolicited esmolol proposal Mr, Owoo brought to [¶] on his own accord. (See HQ’s Br. at 1, 4-8, 16-26.) In that way, [¶] generally claims that it cannot be called to answer for Mr. Owoo’s independent malfeasance, particularly because it allegedly engaged Mr. Owoo with the belief (1) that his proposal had no connection to any confidential Baxter information and (2) that he otherwise acted as a free agent unrestrained by any contractual obligations. (See, e.g., id. at’ 24; see also HQ’s Reply at 7-11.) [¶] further submits that its formulation came from publicly-available sources (namely, the label for Baxter’s own concentrated esmolol formulation from the 1980s), and not any information over which Baxter can legitimately claim trade secrecy protection. (HQ’s Reply at 1-3; see also HQ’s Br. at 1-4, 10-12, 24-25.)

Baxter advances the position, by contrast, that, in working with Mr. Owoo, [¶] simply turned a blind eye to the obvious Baxter-centric underpinning for Mr. Owoo’s proposal, in order to fast track an esmolol product through its development pipeline. Mr. Owoo was an expert on esmo-lol product formulations at Baxter, who left Baxter and almost, immediately proposed the new esmolol product to HQ, which had no prior esmolol experience. [413]*413Indeed, because Mr. Owoo approached [¶] with a “folly formed concept” for a “new” esmolol “bag product,” Baxter alleges that he necessarily relied upon his “extensive knowledge of Baxter’s confidential information,” in order to place [¶] on; an expedited and unfair track to Food and Drug Administration (hereinafter, the “FDA”) approval (and to competing with BREVI-BLOC®). (Baxter’s Opp’n at 1-3, 13-17, 23-30 (internal quotations omitted).).As .a result, Baxter submits that the factual record plainly supports an inference that [¶] had at least reason to know that Mr. Owoo based his “new” product proposal upon information gleaned during his tenure at Baxter (and while- working on Baxter’s own esmolol formulations). (See Baxter’s Opp’n at 18-22.)

The factual record on the pending motion leaves little question that Mr. Owoo acted at best suspiciously and at worst unlawfully, in helping to develop rival es-molol formulations for both Baxter and HQ. Nevertheless, the claims at issue here call upon the Court to determine whether [¶] acted unlawfully relative to its esmolol product development, by either encouraging Mr. Owoo’s conduct or by engaging Mr. Owoo despite his conduct of which [¶] knew or should have known. For purposes of this motion, the Court must consider whether the movant, HQ, is correct that the factual record is undisputed and that it can give rise to no reasonable' inference of liability (or, triable issue of fact) on any or all of Baxter’s state law claims.

For the reasons that follow, HQ’s motion for summary judgment will be granted with respect to Baxter’s tortious interference claims,' but denied with respect to Baxter’s remaining claims for misappropriation of trade secrets, unfair competition, unjust enrichment, and correction of inven-torship.6

II. BACKGROUND7

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157 F. Supp. 3d 407, 2016 WL 344888, 2016 U.S. Dist. LEXIS 9201, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baxter-healthcare-corp-v-hq-specialty-pharma-corp-njd-2016.