United States District Court, D. Delaware
IFM THERAPEUTICS, INC., FIRST WAVE BIO, INC., GARY D. GLICK, and LUIGI FRANCHI Plaintiff,
LYCERA CORPORATION, Defendant.
A. Jenkins, Neal C. Belgam, and Eve H. Ormerod, SMITH,
KATZENSTEIN & JENKINS LLP, Wilmington, DE, Robert P.
Haney, Jr. and Douglas S. Curran, COVINGTON & BURLING
LLP, New York, NY Attorneys for Plaintiff.
Garrett B. Moritz and Benjamin J. Schladweiler, ROSS ARONSTAM
& MORITZ LLP, Wilmington, DE, Michael K. Ng and Daniel A.
Zaheer, KOBRE & KIM LLP, San Francisco, CA Angela Colt,
KOBRE & KIM LLP, New York, NY Attorneys for Defendant.
U.S. DISTRICT JUDGE.
before the Court are Plaintiffs IFM Therapeutics, Inc.
("IFM"), First Wave Bio, Inc. ("First
Wave"), Gary D. Glick ("Glick"), and Luigi
Franchi's ("Franchi") (collectively,
"Plaintiffs") Motion for Partial Summary Judgment
(D.I. 200) and Defendant Lycera Corporation's
("Defendant" or "Lycera") Motion for
Summary Judgment (D.I. 194).
reasons discussed below, the Court will grant in part
Plaintiffs' partial motion (D.I. 200) and deny
Lycera's motion (D.I. 194).
2006, Glick, a biopharmaceutical scientist, founded Lycera, a
biopharmaceutical research company that develops treatments
for diseases like cancer and autoimmune disorders.
(See D.I. 2 ¶¶ 17-18; D.I. 20 ¶
Franchi, also a biopharmaceutical scientist, joined Lycera as
a research scientist in 2012. (See D.I. 25 ¶ 5)
Both Glick and Franchi are professors at the University of
Michigan ("UM") and were throughout their tenure at
Lycera. (D.I. 2 ¶ 17; D.I. 25 ¶2)
spring of 2015, after nine years with the company, Glick
decided to resign from Lycera. (See D.I. 2 ¶
19) Leading up to his departure, Glick entered into a
Confidential Information and Invention Assignment Agreement
with Lycera, which was to be retroactively effective as of
April 7, 2009. (See D.I. 196 Ex. D) ("Glick
CIIAA") Pursuant to that agreement, Glick undertook
numerous obligations to Lycera, including "to hold
[Lycera's confidential information] in the strictest
confidence" and to promptly disclose and assign his
interest in "all inventions ... developments, concepts,
[or] know-how" resulting from his work at the company to
Lycera. (Id. ¶¶ 4(a), 5(b)) Franchi had
previously executed a similar agreement with Lycera.
(See D.I. 20 Ex. 7) ("Franchi PIIA")
and Lycera also executed a separation agreement and release
with an effective date of June 12, 2015. (See D.I.
20 Ex. 5) ("2015 Glick Agreement") In that
agreement, Lycera granted Glick and his assigns a broad
release of all claims against them "occurr[ing] up until
and including [June 12, 2015]." (Id. ¶ 7)
Glick and Lycera also entered into a consulting agreement,
which set forth four categories of research Glick agreed not
to pursue upon leaving Lycera. (See D.I. 32 Ex. 8
¶ 3) None of the four categories included niclosamide,
an off-patent drug that Glick informed Lycera he intended to
study after leaving the company. (See id.; see
also D.I. 11 Ex. A)
27, 2015, shortly after Glick left Lycera, Franchi followed.
(See D.I. 196 ¶¶ 17-18) By the end of the
summer, Glick and Franchi's research had progressed such
that on September 1, 2015, Glick and Franchi filed a
provisional patent application related to a new use for
niclosamide to treat gastrointestinal autoimmune diseases.
(See D.I. 2 ¶ 53) Glick and Franchi assigned
their rights to this intellectual property to IFM and First
Wave, companies Glick and Franchi had founded shortly after
leaving Lycera. (See Id. ¶ 54)
Lycera and UM, where Glick and Franchi remained faculty
members, had completed after substantial negotiations and
executed a renewed licensing agreement for certain
Glick-invented, UM-owned patents. (See Id. Ex. 1)
("2016 Agreement") As part of the 2016 Agreement,
Lycera granted an extremely broad release to Glick, Franchi,
and their assigns:
[Lycera] hereby fully, finally and forever release[s] ... (in
reliance upon the certifications set forth as Exhibit A made
by Luigi Franchi [and] Gary D. Glick ...) [Franchi and
Glick], and their . .. assigns . . . from, and agree[s] not
to sue concerning, any and all claims, demands ... causes of
action, damages . .. losses, interest, . . . and liabilities
of any kind or nature whatsoever arising from or relating to
any matters of any kind . . . presently known or unknown,
suspected or unsuspected, reasonably discoverable or not,
present, fixed or contingent that... [Lycera] ever had, now
has or could have had against [Franchi and Glick and their
assigns] from the beginning of the world to [September 7,
2016], regardless of when such claim, demand . . . cause of
action, ... damage . .. loss, [or] interest... accrues or
(Id. ¶ 2(b)) In return, Lycera was granted the
same broad release from UM, Glick, and Franchi. (See
Id. at ¶ 2(a), 9-10 of 61)
as shown above, Lycera granted the release "in
reliance" upon certain "certifications" from
Glick and Franchi. (Id. ¶ 2(b)) These
certifications included a representation and warranty from
both Glick and Franchi that neither had breached his
confidentiality and invention assignment agreements with
Lycera (See Id. at 9-10 of 61) In turn,
Lycera warranted that it had no knowledge of any such breach:
To its actual and constructive knowledge, [Lycera] represents
and warrants that as of [September 7, 2016], none of Luigi
Franchi, Gary D. Glick, or [Glick and Franchi's business
partner] Anthony W. Opipari, Jr. has breached any of the
agreements referred to in Exhibit A.
March and May of 2017, after Glick and Franchi's
niclosamide patent application was published, Lycera sent
Glick and Franchi a series of letters requesting information
about the patent application and demanding that Glick and
Franchi assign their patent rights in the niclosamide
invention to Lycera. (See D.I. 2 Exs. 2-3,
Lycera threatened to sue if its demands were not met.
(See Id. Ex. 2 at 4, Ex. 3 at 5)
25, 2017, Plaintiffs sued Lycera for (among other things)
breach of contract, a declaratory judgment, and
indemnification, contending Lycera's demand letters and
threatened litigation amount to an actionable repudiation of
the 2016 Agreement. (See generally D.I. 2)
Plaintiffs sought a temporary restraining order, which the
Court denied, and a preliminary injunction, which Plaintiffs
later withdrew. (See D.I. 4, 37, 5, 40)
16, 2017, Lycera filed its answer and asserted counterclaims
against Plaintiffs (D.I. 51), which Plaintiffs answered on
July 10, 2017 (D.I. 93). Thereafter, the parties filed the
pending cross-motions for summary judgment. (D.I. 194, 200)
The Court heard oral argument on January 17, 2018.
(See D.I. 254 ("Tr."))
to Rule 56(a) of the Federal Rules of Civil Procedure,
"[t]he court shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law." The moving party bears the burden of demonstrating
the absence of a genuine issue of material fact. See
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,
475 U.S. 574, 585-86 (1986). An assertion that a fact cannot
be - or, alternatively, is - genuinely disputed must be
supported either by citing to "particular parts of
materials in the record, including depositions, documents,
electronically stored information, affidavits or
declarations, stipulations (including those made for purposes
of the motion only), admissions, interrogatory answers, or
other materials," or by "showing that the materials
cited do not establish the absence or presence of a genuine
dispute, or that an adverse party cannot produce admissible
evidence to support the fact." Fed.R.Civ.P.
56(c)(1)(A)-(B). If the moving party has carried its burden,
the nonmovant must then "come forward with specific
facts showing that there is a genuine issue for trial."
Matsushita, 475 U.S. at 587 (internal quotation
marks omitted). The Court will "draw all reasonable
inferences in favor of the nonmoving party, and it may not
make credibility determinations or weigh the evidence."
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S.
133, 150 (2000).
defeat a motion for summary judgment, the nonmoving party
must "do more than simply show that there is some
metaphysical doubt as to the material facts."
Matsushita, 475 U.S. at 586; see also Podobnik
v. U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir. 2005)
(stating that party opposing summary judgment "must
present more than just bare assertions, conclusory
allegations or suspicions to show the existence of a genuine
issue") (internal quotation marks omitted). The
"mere existence of some alleged factual dispute between
the parties will not defeat an otherwise properly supported
motion for summary judgment;" a factual dispute is
genuine only where "the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party." Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 247-48 (1986). "If the evidence is merely
colorable, or is not significantly probative, summary
judgment may be granted." Id. at 249-50
(internal citations omitted); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986) (stating entry of
summary judgment is mandated "against a party who fails
to make a showing sufficient to establish the existence of an
element essential to that party's case, and on which that
party will bear the burden of proof at trial"). Thus,
the "mere existence of a scintilla of evidence" in
support of the nonmoving party's position is insufficient
to defeat a motion for summary judgment; there must be
"evidence on which the jury could reasonably find"
for the nonmoving party. Anderson, 477 U.S. at 252.
The 2016 Agreement
contend the entire dispute among the parties can be disposed
of based on the 2016 Agreement. (See generally D.I.
201) It is undisputed that Michigan law governs the 2016
Agreement. (See D.I. 201 at 12 n.9; D.I. 195 at 18
(applying Michigan law); see also Rubin v.
Gallagher, 292 N.W. 584, 586 (1940) ("The validity
and construction of a contract are controlled and to be
determined by the laws of the situs, or place where the
contract was entered into."))
Michigan law, the Court's principal duty in interpreting
a contract is to give effect to the parties' intentions.
See Quality Prods. Concepts Co. v. Nagel Precision,
Inc.,666 N.W.2d 251, 259 (Mich. 2003). "The scope
of a release is governed by the intent of the parties as it
is expressed in the release. If the text in the release is
unambiguous, the parties' intentions must be ascertained
from the plain, ordinary meaning of the language of the
release." Cole v. LadbrokeRacing Mich.,
Inc.,614 N.W.2d 169, 176 (Mich. Ct. App. 2000). If a
contract is ambiguous, a court may a court rely on extrinsic
evidence to determine a provision's meaning. See Shay
v. Aldrich,7 ...