Sigma-Aldrich this week took steps to avoid a court order requiring it to hand over sales data related to its shRNA research products to Cold Spring Harbor Laboratory as part of the institute's lawsuit against its former intellectual property counsel, stating that doing so would compromise “confidential information” of the company and its customers, while causing “undue costs and hardship.”
In response, CSHL argued that it has offered Sigma-Aldrich the opportunity to anonymize the data, and pointed out that Life Technologies “willingly and quickly” provided pertinent sales information when asked and did not require any additional protective measures.
The legal tussle stems from a suit CSHL filed in early 2010 against law firm Ropes & Gray, which had been handling the institute's IP, including two US patent applications for shRNA inventions made by CSHL's Greg Hannon (GSN 2/25/2010).
According to the suit, Ropes & Gray lawyer Matthew Vincent improperly prosecuted those applications by failing to provide "an original, complete description of … Hannon's work.” Instead, the CSHL suit alleges, he “relied upon copying extensive portions of text — essentially verbatim — from a prior patent application" published by RNAi pioneers Andrew Fire, of the Carnegie Institution of Washington, and Craig Mello, of the University of Massachusetts Medical School.
In doing so, Hannon's inventions were made to seem like "something that Fire invented or was suggested by the Fire application," rather than a novel invention that "represented a considerable advance over the prior art," CSHL charged.
As a result, the Hannon applications, which were first filed in 2001, were rejected by the US Patent and Trademark Office, causing CSHL to miss out on years of significant licensing revenues. The patent applications were eventually successfully prosecuted and issued in 2012.
In making its case against Ropes & Gray, CSHL is collecting data on the sales of shRNA products by companies it believes would have had to take a license to the Hannon patents, including Sigma-Aldrich. Earlier this year, CSHL filed a subpoena that would require the company to provide such sales figures as part of its effort to “discover information relevant to prove damages” (GSN 12/13/2012).
Sigma-Aldrich maintained that doing so would represent an undue burden, but the court hearing the case ultimately sided with CSHL.
This week, the company followed up with a court filing seeking to quash the subpoena, stating that forcing it to provide “sensitive proprietary information, including an exorbitant range of irrelevant and trade secret documents, and testify regarding all such documents and information, will compromise [Sigma-Aldrich's] and its customers’ confidential information, cause undue costs and hardship, and is not supported by the facts, law, or procedural posture of the underlying case.”
According to Sigma-Aldrich, CSHL is requesting “a tremendous number of documents spanning eight broad categories over seven years,” including all of the company's revenues, sales units, and purchase orders for its vector- or viral-based RNAi products, its Mission shRNA human and mouse gene family sets, its Mission microRNA mimics, and its Mission miRNA target ID library, among other product lines.
It is also asking for customer lists; licensing agreements; and catalog, product literature, and product descriptions from 2005 to the present for all relevant products.
CSHL's subpoena “indiscriminately requests — and risks — information and testimony that encompasses highly confidential and trade secret third-party customer, sales, research, development, and commercial information,” the company told the court. At the same time, providing the materials and information request — some of which is either in long-term storage or not available in an electronic format — will be “extremely time consuming, expensive, and will require the devotion of a significant amount of resources.”
In the end, CSHL's subpoena “is nothing more than an extensive fishing expedition,” Sigma-Aldrich said. In order for the requested information to be relevant, CSHL would first need to establish that it would have obtained the Hannon patents if not for Ropes & Gray's actions, that the patents would cover Sigma-Aldrich products, and that the company would have taken a license to the IP.
In a response to Sigma-Aldrich this week, CSHL told the court that the company would be permitted to produce documents that would only be available to lawyers with no role in CSHL's licensing program and that it would assign customer identification numbers to the company's customers, which would be referenced during discovery and at trial.
The institute added that Sigma-Aldrich's sales and customer information is “directly relevant” to damages and that there is nothing speculative about its request since “CSHL’s damages and licensing model reflects CSHL’s actual licensing program.
“CSHL does not seek discovery from Sigma-Aldrich in order to establish a damages theory,” it said. “CSHL’s licensing and damages model is fully elucidated and based on CSHL’s actual licensing program. Rather, CSHL seeks discovery in order to build numbers into its model.”
As for its information request being overly burdensome, CSHL said that it is “seeking summary data commonly sorted as part of a corporation’s internal reporting requirements. Sigma-Aldrich nowhere demonstrates, or even argues, that it does not maintain its customer information in its internal reporting database or that it cannot sort these data based on the shRNA products it sells.”
To reinforce its point, CSHL noted that Life Technologies “voluntarily and quickly produced such information … in a roughly 250 page report. It is very unlikely that [Sigma-Aldrich] cannot generate a similar report.”
CSHL noted that it has also obtained relevant sales and customer data from Thermo Fisher Scientific and its Open Biosystems unit, but only because the company has licensed the Hannon IP, making such information available.