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Vaxiion Therapeutics, Inc. v. Foley & Lardner LLP

May 6, 2009


The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court


[Doc. No. 182]

Defendant Foley & Lardner, LLP ("Foley") moves the Court in limine*fn1 to exclude the introduction of evidence arising from a June 2008 meeting in Sydney, Australia between the parties and EnGeneIC PTY Ltd. ("EnGeneIC"). Plaintiff Vaxiion Therapeutics, Inc. ("Vaxiion") has filed an opposition and Foley has filed a reply. EnGeneIC has submitted a letter brief in which it requests, inter alia, attorney's fees and costs.*fn2 Vaxiion has filed an objection to the letter brief. The Court heard oral argument on Foley's motion on Monday, April 27, 2009. For the reasons stated herein, the Court grants the motion, and denies EnGeneIC's request for fees and costs.


The factual and procedural history of this case is familiar to the parties and need not be repeated at length herein. Vaxiion brings suit against Foley over a missed Patent Cooperation Treaty ("PCT") filing deadline related to Vaxiion's international patent applications seeking protection for minicell technology. Foley also allegedly breached its fiduciary duty to Vaxiion when it represented EnGeneIC, an Australian company, and prosecuted EnGeneIC's patent applications, some of which included minicell technology. Vaxiion claims that as a result of the missed PCT deadline and the alleged conflict, EnGeneIC captured some of the international patent rights in minicells to which Vaxiion was originally entitled.

On March 16, 2007, Magistrate Judge Brooks held an Early Neutral Evaluation Conference with Plaintiff and Defendant. At the conference Plaintiff's counsel suggested the parties might be able to reach a resolution to the dispute if Vaxiion entered into an arrangement with EnGeneIC to allow Vaxiion to license or use EnGeneIC's minicell technology outside of the United States. [Declaration of Robert E. Gooding, Jr. ISO Defendant's Motion in Limine ("Gooding Decl."), Doc. No. 182-14, ¶ 1.] The parties agreed to attempt to schedule a joint meeting with EnGeneIC, and to keep the Court informed of their progress. (Id. ¶, 2.)

The parties agreed to several conditions for the meeting in Australia, including a stipulated protective order ("Protective Order,") which Magistrate Judge Brooks signed on May 16, 2008. (Doc. No. 74.) The Protective Order states that "any information exchanged... in connection with any discussion contemplated by this Agreement shall not be offered or received in evidence in any legal action or proceeding as an admission of liability, wrongdoing or for any other purpose by either Vaxiion or Foley." (Protective Order at 4.) The parties and EnGeneIC also entered into a Confidentiality and Non-Disclosure Agreement, whose terms applied to EnGeneIC and were nearly identical to those of the Protective Order. (Ex. B. to Gooding Decl.)

On June 24, 2008 the parties traveled to Sydney, Australia to meet with EnGeneIC. At oral argument, Vaxiion's counsel explained that Vaxiion spent considerable time at the Sydney meeting explaining its science to EnGeneIC. The parties also discussed, in general terms, Vaxiion's and EnGeneIC's interests and willingness to enter into a business arrangement or license agreement. (Gooding Decl., ¶ 9.) At the end of the meeting, the parties decided EnGeneIC would present a term sheet ("term sheet") to Vaxiion and Foley outlining the parameters under which EnGeneIC would license its technology to Vaxiion. (Id., ¶ 10.) EnGeneIC's U.S. counsel sent the proposal to Vaxiion and Foley on July 18, 2008. The letter contained a statement below the subject line stating: "Subject to the CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT of May 13, 2008 and to the ORDER entered on May 16, 2008, granting the JOINT MOTION TO PROTECT CONFIDENTIALITY OF DISCUSSIONS." (Ex. C to Gooding Decl.) On the same date, EnGeneIC's counsel also sent a letter to Magistrate Judge Brooks stating that the Sydney meeting had taken place and that EnGeneIC had offered Vaxiion a license. (Ex. D to Gooding Decl.) The letter did not enclose the term sheet, and noted both Vaxiion and Foley had agreed to keep the term sheet confidential.

Vaxiion nevertheless concedes it "provided [the term sheet] to its damages experts [Louis Berneman and Michael Lasinski] to assist them in evaluating the losses Vaxiion sustained through the loss of [its] foreign intellectual property." (Opp. at 2.) Messrs. Berneman and Lasinski issued expert reports on May 6, 2008 and supplemental expert reports on June 13, 2008. Additionally, each expert issued a second supplemental report, respectively on October 30, 2008 and October 31, 2008.*fn3 In his second supplemental report, Mr. Berneman states that, as his sole assignment, Vaxiion asked him: to provide [his] expert opinion regarding the lost value to Vaxiion of a proposed, irrevocable, royalty-free, exclusive, worldwide license to make, use, and sell products under Vaxiion's patent rights in all fields other than vaccines for infectious diseases, as expressed in Section 3(b) of the Outline of Agreement [between EnGeneIC and Vaxiion]. ("Berneman 2d Supp. Report," Ex. G to Garner Decl. at 3.) In Mr. Lasinski's second supplemental report, he states:

Since the issuance of my Initial Reports, I have been provided with the following additional information which I have utilized in the analysis contained in this report: [¶] 1. The July 18, 2008 Outline of Agreement between EnGeneIC and Vaxiion (the "EnGeneIC Proposal"). ("Lasinski 2d Supp. Report," Ex. H to Garner Decl.) Lasinski accordingly calculates the "present value of the expected costs Vaxiion will have to pay under the EnGeneIC Proposal" related to the development and sale of three specified vaccines. (Lasinski 2d Supp. Report at 8.)

On February 23, 2009 Vaxiion requested that EnGeneIC execute an affidavit stating the Protective Order "did not extend to the financial terms of the [term sheet]." (EnGeneIC Letter Brief at 5.) EnGeneIC refused to provide the affidavit because "it disagreed with Vaxiion's belated attempt to limit the scope of the Order." (Id.) EnGeneIC attached an email thread between its counsel and Vaxiion's counsel documenting this exchange. (Exs. A and B to EnGeneIC's Letter Brief.)


Defendant moves the Court in limine to exclude the introduction of: (1) any evidence related to the parties' Sydney, Australia meeting with EnGeneIC, including the term sheet; and (2) any expert opinion based on the meeting or the term sheet, including Lasinski and Berneman's second supplemental reports. Defendant's motion is based on two arguments: (1) Vaxiion's use of the term sheet violates the Protective Order; and (2) ...

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