There was quite a bit of partisan commentary and generalization with regard to the rejection of partial summary judgement on the ALNY board the other day. Fortunately TKMR is at least partially open in providing the specific original documentation on their website. The document posted a few days ago makes for interesting reading.
I have copied below, but there are some interesting points that can be extracted.
1. The rejection of the partial summary judgements appears to be predominantly on the basis that the judge does not consider that they will foreshorten the trial conclusion time-point which the court appears to be determined to adhere too. The cost, complexity, and time for appeal of any judgements would appear to be important factors and there is support of TKMR here in that the financial and further time elapsed impact on them would be unfairly greater on TKMR than ALNY. There is I believe insinuation that ALCANA/ALNY are semi-intentionally attempting to delay the process by proposing unrealistic timetables that will have secondary effects on the main trial.
2. The majority of the document appears to address ALCANA's attempt to extricate itself from the litigation by stating that their actions were excluded by their agreement with TKMR and TKMR's covenant not to sue. The judge has not ruled on the court's opinion in this regard but clearly states that this agreement is very specific and limited to certain instances and catalogued in tables (not provided). Clearly Alcana's and by association ALNY's "get out of jail card" is not carte blanche as presented in PRs, but well documented and will require specific arguments from both sides.
3. The following paragraph is self-explanatory in its interest/significance:
" For example, plaintiffs allege that the former Tekmira employees whom the defendants maintain are protected by the covenant not to sue actually stole documents fiom Tekmira before they departed. Plaintiffs also argue that, at the same time the parties were negotiating the Supplemental Agreement, defendants were developing a lipid almost identical to a lipid formulation belonging to the plaintiffs and not only concealed that from the plaintiffs but also made deliberate misrepresentations to the plaintiffs about their activities. Finally, plaintiffs cite emails suggesting that defendants deliberately delayed other work so that Tekmira (which had certain residual rights) would not receive the benefit of such activities. Whether these allegations are true could very well affect not only the interpretation of the contractual provisions at issue but also their enforceability if plaintiffs' position that they
were fraudulently induced can be factually supported.
Full text below (pdf format at tekmira website):
MEMORANDUM OF DECISION
RELATIVE TO PARTIAL SUMMARY JUDGMENT
This is an action alleging misappropriation of trade secrets. As such, the plaintiffs from
the inception of this case have pushed for "fast track" discovery and a firm trial date. Plaintiffs'
desire for a relatively speedy disposition makes sense: if they are correct on the merits, then their
damages continue to accrue on a daily basis; moreover, without prompt resolution, their future as
viable businesses remains clouded. Without prejudging the case, this Court has attempted to
address the plaintiffs' concerns by setting an expedited discovery schedule and setting trial for
October 30,2012, just over one year after the Second Amended Complaint in this case was filed.
Moreover, this Court agreed with plaintiffs' position that any summary judgment motion that did
not fully dispose of the case would be essentially "pre-screened." That is, a motion for partial
summary judgment would be permitted to be filed only if defendapts could convince the Court
that there was some likelihood that the motion would substantially limit the issues at trial
without unduly delaying it.
On June 29,2012, defendants were given that opportunity to persuade this Court that a
partial summary judgment motion was a wise use of resources. Although the parties were barred
from making written submissions, the defendants were allowed 45 minutes to present their
positions. They also submitted to the Court printouts of a "power point" presentation that tracked
their arguments. Plaintiffs were given equal time to respond. As a result, this Court got a full
preview of the contours of defendants' proposed summary judgment motions (there being a total
of six that were suggested). I conclude that the proposed motions are not only unlikely to
eliminate any issues but they would at the same time be extremely costly for the parties to litigate
and distract them fi-om preparing for and focusing the issues for trial.
The defendant Alcana points out that its proposed summary judgment motion would
completely eliminate it fi-om the case, so this Court turns first to the arguments it advanced as to
why such a motion would be a wise use of resources. The centerpiece of its argument is a
provision in an agreement negotiated between the parties in 2009 (the Supplemental Agreement),
after certain Tekmira employees left that company and were recruited to work first as consultants
for the defendant Alnylam and then for Alcana. Alcana argues that a covenant not to sue, set
forth in Section 12 of the Supplemental Agreement, completely bar all of plaintiffs' claims
against it (as well as many of the claims against Alnylam) and that the interpretation of that
provision involves a straightfornard question of law for the Court to decide. This Court need
only read the provision to conclude that that is not the case.
Section 12 states that Tekmira waives any restrictions imposed by virtue of its
employment agreements with its former employees (who ultimately became part of Alcana) so
long as their activities were "carried out pursuant to the Research Program [or] the Consulting
Agreement" they had at that time with Alnylam. Tekmira further covenanted not to sue either
Alnylam or Alcana "for any cause of action relating to such activities ..." "Research Program" is
a defined term under the Supplemental Agreement: it encompasses a "Work Plan" set forth in a
chart five pages long which describes in highly technical terms what Alnylam and Alcana
proposed to accomplish over the next two years in connection with liposomal research. At the
same time that Tekmira gave its promise not to sue concerning certain activities, Alnylam and
Alcana pledged not to attempt to obtain any of plaintiffs' "confidential information from any of
such Tekmira employees except to the extent the same is necessary for Alcana's conduct of its
activities under the Research Program." The question of whether the claims asserted by the
plaintiffs fall under Section 12 or instead amount to misappropriation of confidential
information protected under Section 13 is therefore fact intensive: its resolution would appear to
turn on whether the technology at issue was a result of activities conducted under the
defendants' "Research Program" or developed based on Tekmira's separate and earlier research
The fact intensive nature of the dispute among the parties is reflected in the extent of
discovery that has already been conducted to date. Literally millions of documents have been
exchanged and well over forty fact depositions taken. Each side has hired at least three experts
to analyze and explain the science implicated in the trade secrets Tekmira alleges were
misappropriated, the research activities of the defendants after certain Tekmira employees left the
plaintiffs' employ, and the connection (or lack thereof) between the two. Given that extensive
discovery, it seems likely that any summary judgment motion would require the filing of
literally boxes of documents together with slews of competing affidavits of a highly technical
nature. Thus, although the defendants have proposed an ambitious schedule which would
allow a hearing on any motion at least six weeks before trial, it would be next to impossible for
this Court to give such a motion the consideration it deserves and issue any reasoned decision
about it before the proposed October 30 trial date.'
The same schedule would apply to summary judgment filings of Alnylam, which
proposes to file motions on at least five additional contract-based issues in the case. Those
motions focus on other agreements between the parties and would ask the Court to decide
(among other things) the application of certain terms in those agreements to claims involving
"Lead formulation derivatives," the sharing of "batch records" including the
"VSP02record/IND," and the development of the "MC3" lipid. The contract provisions
themselves are keyed to facts of a highly technical nature. Clearly, resolution of these issues
requires more than reading the agreements and applying them to a narrow set of undisputed facts
that are capable of being understood without any special scientific expertise.
Of course, plaintiffs do dispute many facts, and at the June 29 hearing, this Court got a
preview of some of those disputes. For example, plaintiffs allege that the former Tekmira
employees whom the defendants maintain are protected by the covenant not to sue actually stole
documents fiom Tekmira before they departed. Plaintiffs also argue that, at the same time the
'The defendants' schedule - which proposes that all briefs be filed with the Court by the
end of August - also appears to be unrealistic. Although fact discovery has closed, additional
information may still be forthcoming in light of this Court's recent rulings on discovery motions,
and expert discovery is ongoing. Finally, to comply with the proposed schedule puts the
plaintiffs in the difficult position of devoting a large amount of resources to responding to the
motions at the same time that counsel must gear up for trial so as not to be forced to request a
parties were negotiating the Supplemental Agreement, defendants were developing a lipid
almost identical to a lipid formulation belonging to the plaintiffs and not only concealed that
from the plaintiffs but also made deliberate misrepresentations to the plaintiffs about their
activities. Finally, plaintiffs cite emails suggesting that defendants deliberately delayed other
work so that Tekmira (which had certain residual rights) would not receive the benefit of such
activities. Whether these allegations are true could very well affect not only the interpretation of
the contractual provisions at issue but also their enforceability if plaintiffs' position that they
were fraudulently induced can be factually supported.
The defendants suggested at the hearing that, at the very least, summary judgment
motions would educate the Court to the issues in the case and, at the same time, require the
parties to focus and narrow their claims and counterclaims; thus even if the motions were denied,
the trial would be conducted more fairly and efficiently. The plaintiffs reply that there are other
ways to educate the Court (for example, by motions in limine tailored to address discrete legal
issues that could be heard and decided in advance of trial). Moreover, to require them to go
through the enormous effort that would be needed to oppose any partial summary judgment
motions at the same time that they are attempting to finish discovery and gear up for the trial
would actually make it more difficult for them to structure and streamline their trial presentation.
See also footnote 1, supra. Particularly in light of this Court's conclusion that any motion would
not likely be successful, this Court is inclined to agree with the plaintiffs.
CONCLUSION AND ORDER
For these reasons, this Court will not permit the filing of any partial summary judgment
ce of the Superior Court
Dated: July 1 l,20 12