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Ocimum Biosolutions (India) Ltd. v. Astrazeneca UK Ltd.

Superior Court of Delaware

December 4, 2019

OCIMUM BIOSOLUTIONS (INDIA) LIMITED and DON A. BESKRONE, Chapter 7 Trustee of Ocimum Biosolutions Inc., Plaintiffs,
v.
ASTRAZENECA UK LIMITED, Defendant.

          Submitted: September 23, 2019

          Corrected and Public Version: December 10, 2019

         Upon Defendant's Motion for Summary Judgment Based on the Statute of Limitations: GRANTED.

          Kevin S. Mann, Esquire, Michael L. Vild, Esquire, Christopher P. Simon, Esquire, of CROSS & SIMON, LLC, Wilmington, Delaware, and C. Edward Polk. Jr., Esquire, of POLK LAW PLLC, Ashburn, Virginia, Attorneys for Plaintiffs.

          Michael P. Kelly, Esquire, Daniel M. Silver, Esquire, Benjamin A. Smyth, Esquire, Steven P. Wood, Esquire, of MCCARTER & ENGLISH, LLP, Wilmington, Delaware, and Dane H. Butswinkas, Esquire, of WILLIAMS & CONNOLLY, LLP, Washington, D.C., Attorneys for Defendant.

          OPINION

          LEGROW, J.

         In 2001, Defendant AstraZeneca UK Limited ("AstraZeneca") entered into an agreement with a predecessor of Plaintiff Ocimum Biosolutions (India) Limited ("Ocimum"). That agreement gave AstraZeneca a subscription to access Ocimum's biological databases for a three-year period. At the conclusion of the subscription period, AstraZeneca was required to return or destroy all data in its possession, apart from certain contractually defined results that AstraZeneca was entitled to retain and continue using. This case centers upon Ocimum's core allegation that AstraZeneca wrongfully retained data after the agreement ended.

         After four years of contentious litigation regarding AstraZeneca's alleged breach of the parties' contract and misappropriation of trade secrets, many factual and legal issues remain between the parties. Both sides have lodged numerous motions of variable facial merit and spent their resources litigating a case that Ocimum believes could result in a jury verdict worth tens of millions of dollars or more. The considerable resources the parties expended and the potential damages at stake stand in marked contrast to Ocimum's decision to ignore for six years its suspicion that AstraZeneca had breached the contract.

         The question before the Court is one of notice, specifically whether information Ocimum knew that strongly suggested AstraZeneca wrongfully retained data placed Ocimum on inquiry notice of its claims more than three years before Ocimum filed suit, even though the full extent of AstraZeneca's alleged wrongdoing was not apparent until after the lawsuit was filed and discovery commenced. I conclude those facts and Ocimum's suspicions placed it on inquiry notice no later than July 2012, more than three years before Ocimum initiated this action. Accordingly, and for the reasons explained below, AstraZeneca is entitled to summary judgment on all Ocimum's claims.

         I. STATEMENT OF FACTS

         AstraZeneca filed its motion for summary judgment based on the statute of limitations on February 18, 2019.[1] The parties briefed and argued that motion along with two other motions. The following facts, unless otherwise noted, are not disputed.[2]

         A. The 2001 Agreement

         On May 4, 2001, AstraZeneca and Gene Logic Inc. ("Gene Logic") entered into the GeneExpress® Product Access Agreement (the "2001 Agreement").[3] Through the 2001 Agreement, Gene Logic agreed to provide AstraZeneca nonexclusive access to its "GeneExpress® Product" ("GeneExpress") for a three-year "Access Term" followed by a six-month "Wind-Down Period."[4] At that time, GeneExpress consisted of "BioExpressTM, ToxExpressTM and the Gene Logic Software."[5]

         BioExpress and ToxExpress are databases.[6] BioExpress contained biological data, including data "derived from untreated [] diseased and normal human tissues[.]"[7] Similarly, ToxExpress contained biological data "associated with the treatment, using known toxic compounds, of[, ]" for example, "diseased and normal human tissues[.]"[8] All the data in the BioExpress and ToxExpress databases was "Database Information" under the 2001 Agreement, that is "data and information generated by or for Gene Logic or its Affiliates[.]"[9] Under the 2001 Agreement, Gene Logic solely and exclusively owned all Database Information, [10] and AstraZeneca was prohibited from providing any Database Information to a third party without Gene Logic's consent.[11]

         Although Gene Logic retained sole ownership of all Database Information, AstraZeneca solely owned all "AZ Results."[12] The 2001 Agreement defined AZ Results as "any results or data generated by [AstraZeneca] during the Access Term using the GeneExpress® Product. .. ."[13] AstraZeneca was "free to use, disclose, sell and sublicense any AZ Results, "[14] and with one exception, not relevant here, AstraZeneca had "no obligation to disclose to Gene Logic any AZ Results[.]"[15]

         The parties' agreement gave AstraZeneca access to GeneExpress through a server installed by Gene Logic at AstraZeneca's facilities in Delaware, with the option to install additional servers at other AstraZeneca facilities.[16] Initially, BioExpress contained 3709 "samples," and ToxExpress contained 1620.[17] The databases would be updated no less than bi-monthly from physical disks shipped to the AstraZeneca facilities.[18]

         AstraZeneca accessed the BioExpress and ToxExpress databases through the Gene Logic Software, which consisted of "software tools for the visualization, analysis, indexing and mining of Database Information[.]"[19] Gene Logic retained the rights to "Gene Logic Technology," which included "the Gene Logic Software . .. [and] the data management architecture ... ."[20] The agreement prohibited AstraZeneca from copying or creating derivative works from the Gene Logic Software.[21]

         Once the three-year Access Term expired, the six-month "Wind-Down Period" began.[22] At the end of the Wind-Down Period, the agreement required AstraZeneca immediately to discontinue using GeneExpress and deliver to Gene Logic any and all copies of any Database Information and the Gene Logic Software.[23] AstraZeneca could, however, "retain and continue to use, disclose, sell or sublicense any AZ Results in any manner, at [AstraZeneca's] discretion."[24]

         B. AstraZeneca's Exit Strategy

         Toward the end of the Access Term, AstraZeneca and Gene Logic entered into talks internally and between the parties about whether AstraZeneca would terminate the parties' relationship altogether or continue it in some fashion. Among the continuation options AstraZeneca considered were continuing the Access Term for a fourth year or purchasing a "frozen copy" of GeneExpress, that is, a copy of GeneExpress "as in existence on the expiration of the Access Term[.]"[25] In an internal AstraZeneca email, Michael Mallamaci, an AstraZeneca employee, explained these options to other AstraZeneca employees, stating that, if AstraZeneca walked away without a frozen copy of GeneExpress, AstraZeneca still would have the six-month Wind-Down Period to "deploy an exit strategy."[26]

         Once AstraZeneca determined that it neither would purchase a frozen copy of GeneExpress nor continue the 2001 Agreement into a fourth year, Mallamaci scheduled an exit strategy implementation meeting for April 23, 2004.[27] At that meeting, AstraZeneca employees discussed how to "refine and implement [the AstraZeneca] exit strategy and at least design and complete all the databases queries and capture the output as 'AZ Results.'"[28] As Mallamaci envisioned it, the exit strategy would include: (1) "Creation of sample sets for each specific disease & normal tissue;" and (2) "Perform[ing] a 'Gene Signature' analysis for each set created."[29]

         In addition to deciding what information to search in the database, Mallamaci discussed with AstraZeneca employees how "relational" AstraZeneca wanted or needed the AZ Results to be because the answer would "dictate how we build the 'AZ Results' storage environment[, ]" i.e., how AstraZeneca would build "global AZ Results databases[.]"[30] On this point, Mallamaci cautioned that AstraZeneca needed to be certain that it was "not impinging on [Gene Logic] property regarding software and schemas."[31]

         Initially, AstraZeneca built a database it called Gene Expression of AstraZeneca Results, or "GeAZr," to hold expression and sample data captured from GeneExpress.[32] Later, AstraZeneca started developing "GeAZr II," a project intended to "exploit" and "integrate" the expression data and sample data populating the GeAZr database more fully with expression data generated internally by AstraZeneca.[33] AstraZeneca expressly did not disclose the exit strategy to Gene Logic and went to some lengths to avoid engaging Gene Logic in a discussion about how AstraZeneca was interpreting the meaning of "AZ Results."[34]

         Although Gene Logic was not aware of AstraZeneca's exit strategy or the GeAZr database, Gene Logic insisted that AstraZeneca certify its compliance with the 2001 Agreement's termination provisions.[35] On January 5, 2005, John Stageman, AstraZeneca's Vice President of Science and Information, emailed Gene Logic a letter certifying that AstraZeneca ceased its use of GeneExpress, erased all copies of Database Information, and erased all copies of Gene Logic Software.[36] Stageman also certified that AstraZeneca had retained and would continue to use AZ Results.[37]

         C. Ocimum buys Gene Logic's genomics division

         On October 14, 2007, Ocimum and its wholly-owned subsidiary, Ocimum USA, acquired Gene Logic's genomics division and allegedly assumed control over GeneExpress and its licensing, including all past or existing licensing agreements.[38]All the relevant events for statute of limitations purposes, or at least for purposes of determining when Ocimum had inquiry notice of its claims, arose after this acquisition. Accordingly, unless otherwise needed for clarity, the remainder of this decision will refer to Ocimum rather than Gene Logic.

         D. Ocimum's suspicions as of 2009

         On March 26, 2009, David Starr, an Ocimum Sales Director, [39] emailed Tom Thompson, Ocimum's Vice President of BioIT Sales, and Jarlath ffrench-Mullen, an Ocimum Scientific Director, notifying them of a conversation between Starr and Amanda Williams, an AstraZeneca scientist.[40] Williams was inquiring about whether significant content had been added to the "CNS Data Suite" since AstraZeneca last had subscribed to it.[41] Starr opined that Williams' statements suggested that she was able to determine "what the content is within the CNS Data Suite[.]"[42] Starr concluded Williams' statements "may underline a suspicion that Darci [Horne] had about [AstraZeneca] not returning materials to Gene Logic after the termination of their subscription."[43]

         Thompson replied that same day, stating Starr's email "confirms suspicions from before" and "procession [sic] of the data would mean a breach of termination requirements under the old database subscription."[44] In response, Starr suggested that "[a] simple paid subscription to CNS would be a better outcome!"[45] Thompson replied to Starr again the next day stating: "They have been breaching our agreement and using Gene Logic data for 3.5 years with [sic] a contract."[46]

         After receiving Starr's email, Thompson contacted Subash Lingareddy, Ocimum's President and CFO, and Anuradha Acharya, Ocimum's CEO, stating:

We need to discuss AZ. There was another slip of the tongue by an [AstraZeneca] researcher that strongly suggests they kept our data after the end of their agreement in 2005. This is a serious breach of termination requirements under the agreement.[47]

         In his deposition, Lingareddy acknowledged that the Starr email triggered Thompson's suspicion that AstraZeneca may have "a copy of the database."[48]

         It appears neither Acharya nor Lingareddy responded to this email. Instead, approximately a month later, Acharya contacted Thompson and Ron Hencin, another Ocimum Vice President of Sales. Acharya did not address Thompson's concerns about AstraZeneca's possible breach, but instead inquired if either had followed up on her suggestion that Ocimum initiate contact with Alan Lamont, AstraZeneca's head of "platform technologies." Archaya stated "[t]his will be an important account and I don't want to lose any opportunity in making contact."[49] Thompson told Acharya he had not contacted Lamont, and Thompson reiterated his concern that there "is a bigger content issue at [AstraZeneca] we need to discuss[.]"[50] Archarya replied: "Shall we hold off on writing to him in that case. I know you brought up the issue of them illegally using the data[.]"[51]

         Within days of Acharya's exchange with Thompson, Marten Hammar from AstraZeneca contacted John Hartwell, Ocimum's Business Development Director, regarding the status of Ocimum's "Human atlas suite tissue collection."[52] Hartwell corresponded with Hammar through the end of April, providing detailed technical answers regarding Ocimum's database products and inquiring whether AstraZeneca would be interested in regaining access to BioExpress.[53] Hammar expressed some interest and inquired about pricing. In that email dated April 30, 2019, Hammar attached "an example view of [AstraZeneca's] frozen copy of some of the old Gene Logic data" for Hartwell to compare to Ocimum's current offerings.[54] Hammar directed Hartwell to note the "tissue types and number of samples," referring to the data as a tissue panel whose donor information "is probably still stored somewhere at [AstraZeneca]."[55]

         Hammar's April 30, 2009 reply email regarding AstraZeneca's "frozen copy" is the last email in the chain included in the record before the Court. It appears, however, that Thompson became aware of Hammar's email at some point. On May 21, 2009, two months after receiving Starr's email that "confirm[ed] suspicions from before," and three weeks after Hammar gave Ocimum an example of AstraZeneca's "frozen copy" of Gene Logic data, Tom Thompson reached out to John Herrmann, Ocimum's counsel, to request an opinion on the meaning of "AZ Results."[56] Thompson limited Herrmann's review to 15-30 minutes of billable work.[57] In that email Thompson stated he was aware of two instances of AstraZeneca researchers referring to AstraZeneca's "Gene Logic data."[58] Thompson explained:

[W]e have also seen a bar graph of content listing the total Gene Logic content AZ has by disease area. For example, a bar graph labeled as 350 CV failing heart sample total. There are hints AZ does have clinical information from these samples. All seems to hinge on the definition of "AZ Results."[59]

         The conclusions Herrmann reached are in dispute. Ocimum maintains that Herrmann "agreed with Mr. Thompson's conclusion that the 2009 discussions with [AstraZeneca] did not provide evidence of any wrongdoing."[60] In support of this contention, Ocimum cites an email from Herrmann to Thompson in which Herrmann asserts "I reviewed [AstraZeneca] last week and agree with your conclusion."[61] The record, however, does not include exactly what conclusion Thompson relayed to Herrmann.[62] For purposes of the pending motion, I assume Thompson told Herrmann that Thompson did not believe AstraZeneca violated the contract, and Herrmann agreed with that conclusion.

         On June 15, 2009, Acharya reached out to Alan Lamont, the AstraZeneca head of platform technologies that Acharya referenced in her April email exchange with Thompson.[63] As in that previous exchange with Thompson, Acharya was not reaching out about AstraZeneca's potential breach of contract. Rather, Acharya sought to speak to Lamont about AstraZeneca potentially "engag[ing] further with our much expanded portfolio of products and services."[64] Acharya testified at her deposition that she did not raise with Lamont the issue of AstraZeneca "illegally using the data," as she phrased the issue in her email exchange with Thompson.[65]

         Lamont forwarded Acharya's request to Terry Reed, who expressed interest and suggested the parties arrange a teleconference in July 2009.[66] Acharya agreed, and soon thereafter, Hartwell, Ocimum's Business Development Director who received the example of AstraZeneca's "frozen copy" of some "old Gene Logic data" from Marten Hammar, contacted Reed about the July meeting, relaying that he had been in talks with Hammar about creating "a custom Affymetrix Exon database."[67] Neither Acharya nor Hartwell inquired about AstraZeneca's potential breach of contract in this email chain. Rather, Ocimum seemed focus on preserving and further developing the parties' business relationship. No contracts or agreements ultimately resulted from those discussions.

         E. Ocimum's suspicions as of July 2012

         In June 2012, Jing Guo, a graduate student who had worked with AstraZeneca, published her Master's Thesis as an article titled "Tissue-Specific Gene Expression Analysis" (the "2012 Guo Article").[68] Guo performed "a meta-analysis on normal human tissues using a computational approach" to investigate gene expression patterns, and the project was carried out "within Research and Development Information at AstraZeneca[.]"[69] Among those Guo expressly thanked was Marten Hammar, who previously forwarded AstraZeneca's "frozen copy" of Gene Logic data.[70]

         In the article, Guo identified four "large-scale microarray datasets" that she used to analyze gene expression patterns.[71] One of these microarray datasets was the GeAZr database, which Guo described as an AstraZeneca "in-house data source which was purchased from GeneLogic by AstraZeneca."[72] Guo described the GeAZr database as containing "44928 human genes expressed across 100 normal tissues[.]"[73]

         The 2012 Guo Article was published in June 2012, and in July 2012, Acharya emailed Marten Hammar and Marcus Bjareland, an AstraZeneca employee Guo listed as her supervisor. In that email, Acharya referenced Guo's thesis and stated "someone from [AstraZeneca] is still using BioExpress."[74] Acharya offered to discuss a license for AstraZeneca.[75] At her deposition, Acharya confirmed that her conclusion, after receiving notice of the 2012 Guo Article, was that AstraZeneca, was still using BioExress.[76] Archarya likewise testified that the 2012 Guo Article, and specifically Guo's reference to GeAZr data purchased from Gene Logic, led her to believe that AstraZeneca had "the database."[77] At his deposition, Lingareddy testified that the 2012 Guo Article raised Ocimum's suspicion that it may have a claim against AstraZeneca.[78]

         On August 31, 2012, Andrew Gorecki, senior counsel for AstraZeneca, emailed Acharya stating that the 2001 Agreement permitted AstraZeneca to retain AZ Results and that the GeAZr data source Guo used was a data source AstraZeneca developed that incorporated AZ Results.[79] Gorecki asserted that Guo's reference to AstraZeneca purchasing GeAZr from Gene Logic was "incorrect and [AstraZeneca] will remove the reference to this from the paper."[80]

         Lingareddy remained unconvinced. Acharya forwarded Gorecki's response to Lingareddy, who stated "[u]nless they have a perpetual license they cannot publish this. He is blowing smoke. We need to explore this further."[81] Lingareddy confirmed at his deposition that Ocimum remained suspicious even after it received Gorecki's email.[82] Ocimum did not, however, undertake any additional investigation at that time.

         II. ANALYSIS

         Under Superior Court Civil Rule 56, a party is entitled to summary judgment if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law.[83] A material issue of fact exists if "a rational finder of fact could find some material fact that would favor the nonmoving party in a determinative way[.]"[84] The record must be viewed in the light most favorable to the non-moving party.[85]

         The initial burden is on the moving party to demonstrate that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.[86] If the moving party meets that initial burden, the burden shifts to the non-moving party to show that a genuine issue of material fact is in dispute.[87] "It is not enough for the opposing party merely to assert the existence of such a disputed issue of fact[, ]" and "[i]f the facts permit reasonable persons to draw from them but one inference, the question is ripe for summary judgment."[88]

         Where, as here, the question of tolling the statute of limitations turns on the issue of inquiry notice, summary judgment is appropriate if there is a "red flag" that "clearly and unmistakably" would lead a prudent person to investigate and thereby discover the basis for the cause(s) of action alleged.[89]

         Ocimum's Third Amended Complaint contains four causes of action: (1) breach of contract; (2) unjust enrichment; (3) misappropriation of trade secrets; and (4) injunction (to enjoin misappropriation of trade secrets).[90] Although factually complex, all those claims turn on Ocimum's contention that AstraZeneca retained Database Information in violation of the 2001 Agreement and Delaware's trade secret law.

         In Delaware, the statute of limitations for breach of contract or unjust enrichment is 3 years.[91] Normally, the statute of limitations begins to run "at the time of the wrongful act."[92] The limitations period, however, may be tolled: (1) in cases of "concealment or fraud;" or (2) if the injury inherently is unknowable and the claimant blamelessly is ignorant of the wrongful act and injury alleged.[93]

         Under 6 Del C. § 2006, the statute of limitations for a trade secret misappropriation claim also is 3 years. Unlike breach of contract and unjust enrichment claims, however, the statute of limitations for trade secret claims begins to run "after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered."[94]

         Ocimum filed its original complaint on August 21, 2015. Therefore, if the statutes of limitation began to run as a matter of law before August 21, 2012, AstraZeneca's summary judgment motion should be granted. Ocimum maintains that the doctrines of fraudulent concealment and inherently unknowable injuries tolled the statutes of limitation for the breach of contract and unjust enrichment claims, and further argues the trade secret claims could not have been discovered until after August 21, 2012.

         A. A jury reasonably could conclude the statutes of limitation were tolled for a period of time.

         For the doctrine of fraudulent concealment to toll the limitations period, the defendant must have engaged in an affirmative act of concealment, which Delaware case law defines as "an 'actual artifice' that prevents a plaintiff from gaining knowledge of the facts or some misrepresentation that is intended to put a plaintiff off the trail of inquiry."[95] Similarly, the doctrine of inherently unknowable injuries will toll the statute of limitations "while the discovery of the existence of a cause of action is a practical impossibility."[96] In order for the limitations period to be tolled under this doctrine, there must have been no observable or objective factors to put a party on notice of an injury, and a plaintiff must show it blamelessly was ignorant of the act or omission and the injury.[97]

         Whether a statute of limitations was tolled generally is a question of fact. Viewing the evidence in the light most favorable to Ocimum, whether the limitations period was tolled by AstraZeneca's fraudulent concealment is a genuine factual issue. Ocimum claims AstraZeneca affirmatively misled it with John Stageman's certification that AstraZeneca ceased its use of GeneExpress, erased all copies of Database Information, and erased all copies of Gene Logic Software.[98] Whether AstraZeneca intended to put Ocimum "off the trail of inquiry" with Stageman's certification so as to toll the statute of limitations under 10 Del. C. § 8106 cannot be determined as a matter of law on the record before the Court.

         The factual record requires the same conclusion with respect to the inherent unknowability of Ocimum's claims. It is reasonable to infer from the record that Ocimum did not have any access to the GeAZr database and did not have any contractual right at termination to demand details regarding what information AstraZeneca retained as "AZ Results." AstraZeneca concedes it did not advise Ocimum of AstraZeneca's "exit strategy." A reasonable jury could conclude that before 2009, when Thompson and others began receiving information that raised their suspicions about a possible breach, (i) it would have been practically impossible for Ocimum to discover its claim, and (ii) Ocimum was not to blame for AstraZeneca's alleged breach or any associated injury.

         Having concluded that the record precludes judgment as a matter of law regarding whether Ocimum's breach of contract claim was tolled, the question shifts to whether AstraZeneca can point to undisputed facts that compel the conclusion that Ocimum was on inquiry notice of its claim more than three years before it filed this action.

         B. Ocimum was on inquiry notice of a breach of contract claim in 2009.

         Even when the limitations period is tolled, whether by fraudulent concealment, inherently unknowable injury, or otherwise, the statute of limitations begins to run when (i) a plaintiff has actual notice of the basis for the cause of action, or (ii) a plaintiff has notice of facts from which the basis for the cause of action "could have been discovered by the exercise of reasonable diligence."[99] This second category is referred to as "inquiry notice."

         The undisputed facts in the record compel the conclusion as a matter of law that Ocimum was, at a minimum, on inquiry notice before August 21, 2012 of facts that should have prompted it to investigate a breach of contract claim. A person is on inquiry notice when they objectively are aware of facts "sufficient to put a person of ordinary intelligence and prudence on inquiry which, if pursued, would lead to the discovery" of facts constituting the basis of the cause of action.[100] Inquiry notice does not require that a plaintiff be aware "of all of the aspects of the alleged wrongful conduct."[101] Rather, "the statute of limitations begins to run when plaintiffs should have discovered the general fraudulent scheme."[102]

         Delaware courts exploring inquiry notice consistently have held that a party is on inquiry notice when it has "facts sufficient to make [it] suspicious[] or that ought to make [it] suspicious[.]"[103] Those facts effectively must rise to the level of a "red flag" that would prompt a prudent person of ordinary intelligence to further investigate a possible claim.[104]

         Ocimum cannot realistically resist the conclusion that several of its high-level employees and executives were suspicious by April 2009 that AstraZeneca had retained more than it was entitled to retain under the 2001 Agreement. Thompson, Vice President of BioIT Sales, concluded in March 2009 that information provided by an AstraZeneca scientist "confirm[ed Ocimum's] suspicions" that AstraZeneca breached the 2001 Agreement's termination requirements and had remained in breach ever since. Thompson promptly raised his concerns with Lingareddy and Acharya, Ocimum's President and CEO, respectively.[105] Thompson advised Lingareddy and Acharya that the information Williams provided "strongly suggests" that AstraZeneca retained Gene Logic's data at the end of the contract term, which Thompson described as a "serious" breach.[106] According to Lingareddy, Thompson believed AstraZeneca had a copy of the database. Thompson's suspicions only were heightened a month later when Ocimum received communications from another AstraZeneca employee referring to AstraZeneca's "frozen copy" of Gene Logic data and providing an example of that frozen copy.

         These facts were more than enough to make a prudent person suspicious that AstraZeneca had breached the 2001 Agreement's termination requirements. Thompson's email communications to Ocimum's top executives demonstrate that he was, indeed, suspicious. Ocimum argues, however, that these suspicions were not enough to place it on inquiry notice of its claim because (1) suspicions alone are not enough to place a party on inquiry notice under the Delaware Supreme Court's decision in In re Asbestos Litigation, (2) Ocimum conducted a diligent inquiry and its suspicions were allayed, and (3) the facts Ocimum knew did not give it notice of the true nature of AstraZeneca's breach of the 2001 Agreement, which only came to light during discovery in this case.

         With respect to Ocimum's first argument, the inquiry notice standard articulated in In re Asbestos Litigation[107] relates to latent disease cases and does not apply to the claims at issue in this case. In the Asbestos Litigation case, the Delaware Supreme Court concluded that the plaintiffs subjectively held belief that he had an asbestos-related ailment, without any objective evidence to support his belief, was not sufficient to support the conclusion as a matter of law that the plaintiff had inquiry notice of his claim. The Court reasoned, under the "unusual circumstances of the case," that a plaintiffs subjective belief that he had as asbestos injury did not constitute a "discovery" of his injury when "every diagnostic test performed on [the plaintiff] failed to find any link between his physical condition and asbestos exposure."[108] The Court emphasized the difficulty in fixing the limitations period in latent disease cases and explained that the inquiry is case-specific and depends on a number of factors, including:

(1) the plaintiffs level of knowledge and education; (2) the extent of his recourse to medical evaluation; (3) the consistency of the medical diagnosis; and (4) plaintiffs follow-up efforts during the period of latency following initial recourse to medical evaluation.[109]

         That case, and the four-part standard it adopts regarding notice, does not readily extend beyond the latent disease context. Put differently, the inquiry notice standard adopted in Asbestos Litigation does not alter the inquiry notice standard expressly followed in numerous Delaware cases after Asbestos Litigation was decided. Those cases confirm that inquiry notice arises upon the discovery of facts sufficient to put a person of ordinary intelligence on inquiry that, if pursued, would lead to the discovery of sufficient facts to plead a cause of action.[110] Facts that make a person suspicious of a cause of action manifestly are ones that should prompt a person to investigate further.

         Ocimum next argues that its consultation with Mr. Herrmann constituted a diligent inquiry that dispelled it suspicions, which precludes any finding of inquiry notice. Given Ocimum's strong suspicions that a large pharmaceutical firm had retained all or part of Ocimum's database and was using it, no reasonable jury could conclude Ocimum conducted a diligent inquiry by asking counsel to look into the issue for no more than 30 minutes.[111] To be "diligent," an inquiry must be "reasonable"; once a plaintiffs suspicions are triggered, he is expected to act with alacrity to explore those suspicions as well as other possible instances of non-compliance.[112] Ocimum urges the Court to view the advice it received from counsel as a disputed factual issue precluding summary judgment, but the only facts in the record about Ocimum's investigation show that Thompson arbitrarily limited the amount of time counsel could spend on the assignment. There is no record of what material counsel considered to conduct that review, whom he consulted at Ocimum, or how he reached and explained his conclusions. In short, Ocimum cannot rely on this bare factual record as a basis to argue that a jury could conclude that Ocimum acted with reasonable diligence in investigating its suspicions.[113] Ocimum did not put forward any such facts and therefore cannot meet its burden in opposing the motion on this basis.

         In the face of new, countervailing information, Ocimum similarly was not entitled to continue relying on AstraZeneca's certification that it complied with the terms of the 2001 Agreement.[114] As the Court of Chancery explained in Dean Witter, even a plaintiff who reasonably relies on the competence and good faith of a fiduciary "still must be reasonably attentive to his interests" and cannot put on "blinders."[115] Ocimum and AstraZeneca were not in a fiduciary relationship, and Ocimum therefore should be expected to be more, rather than less, attentive to its interests.

         Finally, as to Ocimum's contention that the facts it knew in 2009 did not reveal the true nature and extent of AstraZeneca's alleged breach of the 2001 Agreement, that argument misses the point. Delaware courts consistently have concluded that inquiry notice may arise before a plaintiff has full or complete knowledge of the extent of its claims.[116] Here, Ocimum was aware from more than one source that AstraZeneca possessed and continued to use data that Ocimum suspected was inconsistent with the 2001 Agreement's termination provisions. The fact that Ocimum did not become aware of the extent of AstraZeneca's alleged breaches until after discovery commenced in this case does not mean Ocimum was not on inquiry notice in April 2009 of its breach of contract claim.

         C. Ocimum also was on inquiry notice of a breach of ...


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