United States, et al v. Cytogel Pharma, LLC, No. 2:2016cv13987 - Document 396 (E.D. La. 2018)

Court Description: ORDER AND REASONS: IT IS ORDERED that the 75 Refiled Motion of Plaintiff, in which the United States of America joins, to Dismiss Defendant's First Amended and Restated Counterclaims be and hereby is GRANTED as to Count 9 of Defendant's F irst Amended and Restated Counterclaims against the United States and DENIED as to Counts 1 and 4 and the request for injunctive relief in Defendant's First Amended and Restated Counterclaims. The motion of the Administrators of the Tulane Educa tional Fund and Dr. Zadina to strike Cytogel's Third and Fourth Affirmative Defenses is DENIED as to Count 1 of the Complaint and DENIED WITHOUT PREJUDICE as to Count 2 of the Complaint. IT IS FURTHER ORDERED that the Motion to Dismiss Counts 1 , 8, 9, and 14 of Cytogel's Second Amended and Restated Counterclaims, filed by the United States pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, be and hereby is DENIED IN PART as to Count 1 and DENIED IN PART AS MOOT as to Count 9. Signed by Judge Susie Morgan on 10/29/2018. (jls)

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United States, et al v. Cytogel Pharma, LLC Doc. 396 U N ITED S TATES D ISTRICT COU RT EASTERN D ISTRICT OF LOU ISIAN A TH E U N ITED S TATES an d TH E AD MIN ISTRATORS OF TH E TU LAN E ED U CATION AL FU N D , Plain tiffs CIVIL D OCKET VERSU S N O. 16 -13 9 8 7 CYTOGEL PH ARMA, LLC, D e fe n d an t SECTION : “E” (1) ORD ER AN D REAS ON S Before the Court is the Refiled Motion of Plaintiff the Adm inistrators of the Tulane Educational Fund (“Tulane”) and Counterclaim -Defendant Dr. J am es E. Zadina, in which Plaintiff the United States of Am erica joins, to Dism iss Defen dant’s First Am en ded and Restated Counterclaim s Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. 1 Defendant Cytogel Pharm a, LLC (“Cytogel”) opposes Plaintiffs’2 m otion. 3 The Court already has addressed the m otion as to Counts 2– 3, 4 5– 8, and 10 – 13. 5 The Court has also addressed Count 9 as against Tulane an d Dr. Zadina, but not as against the United States. 6 The Court addresses herein the rem aining portions of the m otion: the m otions to dism iss Counts 1, 4, and 9 (as to the United States), to dism iss Cytogel’s request for injunctive relief, and to strike Cytogel’s Third and Fourth Affirm ative 1 R. Doc. 75. Dr. Zadina is not a Plaintiff in this case. R. Doc. 1. Cytogel joined Dr. Zadina as a Counterclaim -Defendant. R. Doc. 6. However, because Dr. Zadina is align ed with Plaintiffs Tulane and the United States, the Court refers collectively refers to Tulane, Dr. Zadina, and the United States as Plaintiffs. 3 R. Doc. 83. 4 In its Order and Reasons of Septem ber 17, 20 18, the Court denied the m otion as to Counts 2 and 3. R. Doc. 294. 5 In its Order and Reasons of October 25, 20 18, the Court denied the instant m otion as m oot as to Counts 5– 8 and 10 – 13. R. Doc. 395. 6 In its Order and Reasons of October 25, 20 18 , the Court denied the instant m otion as m oot as to Count 9 as against Tulane. Id. The m otion to dism iss Count 9 as against the United States is still pendin g before the Court. 2 1 Dockets.Justia.com Defenses. For the reasons that follow, Plaintiffs’ m otion is GRAN TED IN PART an d D EN IED IN PART. The Court also D EN IES IN PART herein the United States’ Motion to Dism iss Counts 1, 8 , 9, and 14 as to Counts 1 and 9. 7 BACKGROU N D In the 1990 s, Dr. Zadina and his colleagues at Tulane University developed synthetic opioid peptides related to endom orphins, which are opioid peptides found naturally in the hum an body. 8 Based on their research, Tulane obtained two patents, U.S. Patent Nos. 5,885,958 (“the ’958 Patent”) and 6,30 3,578 (“the ’578 Patent”), claim ing these synthetic opioid com pounds. 9 On Decem ber 1, 20 0 3, Tulane licen sed the ’958 Patent and the ’578 Patent to Cytogel. 10 After Tulane and Cytogel signed the Licensing Agreem ent, Dr. Zadina began perform ing consulting work for Cytogel pursuant to a Consulting Agreem ent. 11 He advised Cytogel on the developm ent of Cyt-10 10 , a synthetic opioid peptide covered by the ’958 and ’587 Patents. 12 The Consulting Agreem ent included the following provision relating to ownership of intellectual property: [Dr. Zadina] acknowledges that any inventions, processes, m ethods, techniques, form ulae, com pounds, designs, im provem ents, writings, tradenam es, tradem arks, copyrights, patents, trade secrets and other intellectual properties that m ay result or em erge from m aterials or inform ation provided by Cytogel, its em ployees or other consultants, or on the prem ises of Cytogel, or as a result of the consulting process, shall rem ain the sole and exclusive property of and for the benefit of Cytogel. 13 7 R. Doc. 30 1. In that m otion , the United States reasserts and incorporates by referen ce the argum ents m ade in the Motion to Dism iss Cytogel’s First Am ended and Restated Counterclaim s, R. Doc. 75, as against Cytogel’s Second Am ended and Restated Counterclaim s. R. Doc. 30 1-1 at 9. 8 R. Doc. 1 at 4– 5, ¶ 14– 16; R. Doc. 68 at 7, ¶ 16. 9 R. Doc. 1 at 5– 6, ¶ 17– 19; R. Doc. 68 at 7, ¶ 16. 10 R. Doc. 1 at 6, ¶ 20 ; R. Doc. 68 at 7, ¶ 17. 11 R. Doc. 1 at 6– 9, ¶ 24– 36; R. Doc. 68 at 8 , ¶ 19. 12 The parties’ filin gs do not clarify whether Cyt-10 10 is covered by the ’958 Patent, the ’587 Patent, or both patents. 13 R. Doc. 1-6 at 3– 4, ¶ 7– 8 . 2 Dr. Zadina was a joint em ployee of Tulane and the Departm ent of Veterans Affairs (“VA”). 14 He and his colleague Dr. Laszlo Hackler developed new synthetic opioid com pounds for Tulane and the VA. 15 Drs. Zadina and Hackler applied for a patent for these com pounds and assigned their ownership rights in the pending patent to Tulane and the VA. 16 The application resulted in U.S. Patent No. 8,716,436 B2 (“the ’436 Patent”), which issued on May 6, 20 14 and lists Drs. Zadina and Hackler as co-inventors. 17 Cytogel alleges that Dr. Zadina secretly developed the com pounds covered by the ’436 Patent while acting as a consultant to Cytogel. 18 Cytogel asserts the com pounds covered by the ’436 Patent are related to Cyt-10 10 an d result from Dr. Zadina’s consulting work. 19 As a result, Cytogel claim s ownership of the ’436 Patent. 20 On August 19, 20 16, Tulane and the United States filed the instant action. 21 They seek declaratory judgm ents of ownership and inventorship of the ’436 Patent, dam ages, and injunctive relief. 22 On Septem ber 7, 20 16, Cytogel filed an Answer including affirm ative defenses and counterclaim s against the Tulane and the United States. 23 Cytogel joined Dr. Zadina as a defendant to the counterclaim s. 24 Cytogel brings affirm ative defenses on the following grounds: (1) ripeness, (2) lack of standing, (3) m isappropriation of trade secrets, and (4) unclean hands. 25 Cytogel filed its First 14 R. Doc. 1 at 3, ¶ 10 – 11; R. Doc. 68 at 5, ¶ 10 . R. Doc. 1 at 9– 10 , ¶ 38 – 41; R. Doc. 68 at 16– 19, ¶ 45– 56. 16 R. Doc. 1 at 11– 12, ¶ 43– 47; R. Doc. 68 at 18 , ¶ 54. 17 R. Doc. 1 at 11– 12, ¶ 43– 47; R. Doc. 68 at 19, ¶ 57. 18 R. Doc. 68 at 20 , ¶ 61. 19 Id. at 16– 17, ¶ 45– 50 . 20 Id. at 26, ¶ 78. 21 R. Doc. 1. 22 Id. 23 R. Doc. 6. 24 Id. 25 Id. at 14– 15, ¶ 78 – 87. 15 3 Am ended and Restated Counterclaim s on April 11, 20 17. 26 The following counts are addressed in this order: Count 1 for a declaratory judgm ent against Tulane, Dr. Zadina, and the United States that Cytogel owns the ’436 Patent, Count 4 alleging breach of the Consulting Agreem ent against Dr. Zadina, and Count 9 alleging receipt of a thing not owed against the United States. 27 On May 2, 20 17, Plaintiffs filed the instant Motion to Dism iss Cytogel’s First Am ended Counterclaim s. 28 On J uly 23, 20 18, Cytogel filed its Second Am ended an d Restated Counterclaim s and First Am en ded and Restated Affirm ative Defenses. 29 Cytogel brings the sam e request for injunctive relief as in its First Am ended and Restated Counterclaim s. 30 Counts 1, 4, and 9 of Cytogel’s Second Am ended and Restated Counterclaim s are substantially identical to Counts 1, 4, and 9 of Cytogel’s First Am ended and Restated Counterclaim s. 31 As a result, the Court construes the instant m otion as a m otion to dism iss Counts 1, 4, and 9 and the request for injunctive relief in Cytogel’s Second Am ended and Restated Counterclaim s pursuant to Rule 12(b)(6). Cytogel’s Third and Fourth Affirm ative Defenses in its First Am ended and Restated Affirm ative Defenses 32 are substantially identical to the Third and Fourth Affirm ative Defenses as pleaded in Cytogel’s Answer. 33 Plaintiffs m ove to dism iss or strike Cytogel’s Affirm ative Defenses pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. 34 Rule 12(b)(6) allows parties to assert defenses to “a claim for relief in any pleading,” while 26 R. Doc. 68. R. Doc. 68 at 4, ¶ 6. The Court has already addressed Count 9 as against Tulane. R. Doc. 395; see supra n.6. 28 R. Doc. 75. 29 R. Doc. 220 . 30 Id. at 52. 31 Id. at 28 – 29, 31– 32. 32 Id. at 2– 3. 33 R. Doc. 6. 34 R. Doc. 75-1 at 28. 27 4 Rule 12(f) allows a party to file a m otion to strike “an insufficient defense.” The Court construes Plaintiffs’ challenge to Cytogel’s Third and Fourth Affirmative Defenses as a m otion to strike under Rule 12(f). RU LE 12 ( b) ( 6 ) STAN D ARD Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, a district court m ay dism iss a com plaint, or any part of it, for failure to state a claim upon which relief m ay be granted if the plaintiff has not set forth factual allegations in support of his claim that would entitle him to relief. 35 “To survive a m otion to dism iss, a com plaint m ust contain sufficient factual m atter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”36 “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the m isconduct alleged.”37 “[A] m otion to dism iss under 12(b)(6) is viewed with disfavor an d is rarely granted.”38 However, the court does not accept as true legal conclusions or m ere conclusory statem ents, 39 and “conclusory allegations or legal conclusions m asquerading as factual conclusions will not suffice to prevent a m otion to dism iss.”40 In sum m ary, “[f]actual allegations m ust be enough to raise a right to relief above the speculative level.”41 “[W]here the well-pleaded facts do not perm it the court to infer m ore than the m ere possibility of m isconduct, the com plaint has alleged—but it has not 35 Bell Atl. Corp. v . Tw om bly , 550 U.S. 544, 555 (20 0 7); Cuvillier v . Tay lor, 50 3 F.3d 397, 40 1 (5th Cir. 20 0 7). 36 Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9) (quotin g Tw om bly , 550 U.S. at 570 ). 37 Id. 38 Leal v. McHugh, 731 F.3d 40 5, 410 (5th Cir. 20 13) (quoting Turner v. Pleasant, 663 F.3d 770 , 775 (5th Cir. 20 11)) (internal quotations om itted). 39 Id. 40 S. Christian Leadership Conference v. Suprem e Court of the State of La., 252 F.3d 781, 78 6 (5th Cir. 20 0 1) (citing Fernandez-M ontes v. Allied Pilots Ass’n, 987 F.2d 278, 284 (5th Cir. 1993)). 41 Tw om bly , 550 U.S. at 555. 5 ‘show[n]’—that the pleader is entitled to relief.”42 “Dism issal is appropriate when the com plaint ‘on its face show[s] a bar to relief.’”43 RU LE 12 ( f) STAN D ARD Rule 12(f) of the Federal Rules of Civil Procedure provides that a court m ay strike from a pleading “an insufficient defense or any redundant, im m aterial, im pertin ent, or scan dalous m atter.” An affirm ative defense is “subject to the sam e pleading requirem ent as is the com plaint,” and a defendant “m ust plead an affirm ative defense with enough specificity or factual particularity to give the plaintiff ‘fair notice’ of the defense that is being advanced.”44 A m otion to strike under Rule 12(f) “is a drastic rem edy to be resorted to only when required for the purposes of justice [and] should be granted only when the pleading to be stricken has no possible relation to the controversy.”45 The Court should not resolve disputed factual issues on a m otion to strike. 46 “[E]ven when technically appropriate an d well-founded,” m otions to strike are not to be granted “in the absence of a showing of prejudice to the m oving party.”47 The decision to grant or deny a m otion to strike lies within the sound discretion of the trial court. 48 42 Id. (quotin g Fed. R. Civ. P. 8(a)(2)). Cutrer v. McMillan, 30 8 F. App’x 819, 8 20 (5th Cir. 20 0 9) (per curiam ) (unpublished) (quoting Clark v. Am oco Prod. Co., 794 F.2d 967, 970 (5th Cir. 1986)). 44 Woodfield v. Bowm an, 193 F.3d 354, 362 (5th Cir. 1999) (internal quotation m arks and citation om itted). 45 Augustus v. Bd. of Pub. In struction of Escam bia Cnty ., Fla., 30 6 F.2d 862, 868 (5th Cir. 1962) (quotin g Brow n v. W illiam son Tobacco Corp. v. United States, 20 1 F.2d 819,822 (6th Cir.1953)); see also Kaiser Alum inum & Chem . Sales, Inc. v. Avondale Shipy ards, Inc., 677 F.2d 10 45, 10 57 (5th Cir. 1982). 46 Augustus, 30 6 F.2d at 868. 47 Abene v. Jay bar, LLC, 8 0 2 F. Supp. 716, 723 (E.D. La. 20 11) (quotin g 5C CHARLES ALAN W RIGHT & ARTHUR R. M ILLER, F EDERAL P RACTICE AND P ROCEDURE § 1381 (3d ed. 20 0 4)). 48 Tarver v. Foret, No. 95-1192, 1996 WL 3536, at *1 (E.D. La. J an . 3, 1996) (Carr, J .). 43 6 LAW AN D AN ALYSIS I. Co u n ts 1 an d 4 o f Cyto ge l’s Se co n d Co u n te rclaim s s tate p la u s ible cla im s . Am e n d e d an d Re s tate d Cytogel brings Count 1 for a declaratory judgm ent of ownership of the ’436 Patent against Tulane, Dr. Zadina, and the United States. 49 Cytogel brings Count 4 against Dr. Zadin a for breach of the Consulting Agreem ent. Plaintiffs argue the Con sulting Agreem ent does not contain an assignm ent provision. 50 They argue that, as a result, Cytogel has not pleaded facts sufficient to support claim s that Cytogel owns the ’436 Patent in Count 1 or that Dr. Zadina breached the Consulting Agreem ent in Count 4. 51 On this m otion, the Court m ay consider the Consulting Agreem ent because it is attached to the Com plaint. 52 The Consulting Agreem ent states Dr. Zadina “acknowledges that any inventions, processes, m ethods, techniques, form ulae, com pounds, designs, im provem ents, writings, tradenam es, tradem arks, copyrights, patents, trade secrets and other intellectual properties that m ay result or em erge from m aterials or inform ation provided by Cytogel, its em ployees or other consultants, or on the prem ises of Cytogel, or as a result of the consulting process, shall rem ain the sole and exclusive property of and for the benefit of Cytogel.”53 Cytogel alleges in its pleadings Dr. Zadin a used inform ation he learned from Cytogel to develop the’436 Patent com pounds. 54 Am ong its num erous factual allegations on the subject, Cytogel describes specific inform ation Dr. Zadina allegedly learned from 49 R. Doc. 220 at 28 . R. Doc. 75-1 at 20 . Plaintiffs argue the use of the word “rem ain” indicates the Consulting Agreem ent does not transfer intellectual property rights, and, as a result, Cytogel cannot plausibly claim it owns the ’436 Patent. Id. 51 Id. 52 R. Doc. 1-6. 53 R. Doc. 220 at 3– 4, ¶ 7– 8 . 54 Id. at 20 , ¶ 50 . 50 7 Cytogel and used in developing the ’436 Patent com pounds, including the structure of the ’436 Patent com pounds. 55 “The court’s task is to determ ine whether the plaintiff has stated a legally cognizable claim that is plausible, not to evaluate the plaintiff's likelihood of success.”56 Based on Cytogel’s allegations in its Second Am ended and Restated Counterclaim s and the language of the Consulting Agreem ent, Cytogel has stated a plausible claim that the ’436 Patent resulted or em erged from inform ation provided by Cytogel to Dr. Zadina. Dism issal of Counts 1 and 4 is not appropriate under Rule 12(b)(6) of the Federal Rules of Civil Procedure. II. Th e Lo u is ian a U n ifo rm Trad e Se cre ts Act d o e s n o t p re e m p t Co u n t 4 . Cytogel brings Count 8 of its Second Am ended and Restated Counterclaim s against Tulane, Dr. Zadina, and the United States for m isappropriation of trade secrets under the Louisiana Uniform Trade Secrets Act (“LUTSA”). 57 Plaintiffs argue this claim preem pts Count 4 of Cytogel’s Second Am en ded and Restated Counterclaim s, alleging breach of contract claim against Dr. Zadina, because LUTSA “displaces conflicting tort, restitutionary, and other laws . . . pertaining to civil liability for m isappropriation of a trade secret.”58 LUTSA’s displacem ent of conflicting laws does not affect “contractual or other civil liability or relief that is not based upon m isappropriation of a trade secret.”59 Cytogel’s breach of contract claim against Dr. Zadina is based on his alleged violation of the 55 Id. at 23– 25, ¶ 67– 69. Lone Star Fund V (U.S.), L.P. v. Barclay s Bank PLC, 594 F.3d 383, 387 (5th Cir. 20 10 ) (citin g Ashcroft v. Iqbal, 556 U.S. 662 (20 0 9)). 57 La. Rev. Stat. § 51:1431 et seq. 58 R. Doc. 75-1 at 17 (quoting La. Rev. Stat. § 51:1437(A)). 59 La. Rev. Stat. § 51:1437(B)(1). 56 8 confidentiality provision and his failure to assign the ’436 Patent to Cytogel. 60 This contractual claim is not based on LUTSA. 61 As a result, the Court finds Count 8 of Cytogel’s Second Am ended and Restated Counterclaim s does not preem pt Count 4. III. Co u n t 9 o f Cyto ge l’s Se co n d Am e n d e d a n d Re s tate d Co u n te rclaim s d o e s n o t s tate a claim o n w h ich re lie f m ay be gran te d . Cytogel brings Count 9 of its Second Am ended and Restated Counterclaim s against the United States under Louisiana Civil Code articles 2299 and 230 3. 62 Article 2299“is lim ited to the situation in which on e person gives som ething of value to another because of a perceived obligation to that other, when in fact no obligation exists.”63 As the Court explain ed in its Order of October 25, 20 18, Article 230 3 is based on Article 2299 and does not create a cause of action in a third party. 64 In this case, Cytogel does not allege it assigned the ’436 Patent to the United States. Rather, Cytogel alleges Tulane and the VA wrongfully accepted ownership rights in the ’436 Patent from Drs. Hackler and Zadina. 65 As a result, Count 9 of Cytogel’s Second Am ended and Restated Counterclaim s does not state a claim against the United States on which relief m ay be granted. 60 R. Doc. 220 at 31. See also W right's W ell Con trol Servs., LLC v. Oceaneering Int'l, Inc., No. 15-1720 , 20 15 WL 7281618 , at *11 (E.D. La. Nov. 16, 20 15) (perm ittin g parallel LUTSA and breach of contract claim s); cf. Com puter Mgm t. Assistance Co. v. Robert F. DeCastro, Inc., 220 F.3d 396, 40 5 (5th Cir. 20 0 0 ) (holding LUTSA and the Louisiana Unfair Trade Practices Act “m erely provide parallel rem edies for sim ilar conduct”); accord Im aginative Research Assocs., Inc. v. Ram irez, 718 F. Supp. 2d 236, 248 (D. Conn. 20 10 ) (interpretin g a Connecticut statute with a provision identical to the LUTSA provision at issue to allow contract claim s and LUTSA claim s to be brought together). 62 R. Doc. 220 at 39. In its Order of October 25, 20 18, the Court granted sum m ary judgm ent on Count 9 as against Tulane. R. Doc. 395. 63 Soileau v. ABC Ins. Co., 20 0 2-130 1 (La. App. 3 Cir. 3/ 5/ 0 3), 844 So. 2d 10 8 , 110 , w rit denied, 20 0 3-1558 (La. 10 / 3/ 0 3), 855 So. 2d 313 (internal bracket om itted). 64 R. Doc. 395 at 21. 65 R. Doc. 220 at 39. 61 9 IV. Cyto ge l p la u s ibly s tate s claim s fo r in ju n ctive re lie f. In its Second Am en ded and Restated Counterclaim s, Cytogel requests that the Court enjoin Tulane, Dr. Zadina, and the VA from licensing or com m ercializing the ’436 Patent or related patent applications or from infringing the ’958 and ’578 Patents. 66 Plaintiffs argue Cytogel is not entitled to injunctive relief. 67 “A declaratory judgm ent action cannot be term ed as either inherently at law or in equity. When classification has been required, courts have exam ined the basic nature of the issues involved to determ ine how they would have arisen had Congress not enacted the Declaratory J udgm ent Act.”68 Cytogel’s claim for ownership of the ’436 Patent arises under 35 U.S.C. § 261, which governs patent ownership, and its claim s for infringem ent of the ’958 and ’578 Patents under 35 U.S.C. § 271, which governs patent infringem ent. Under 35 U.S.C. § 283, this Court m ay grant injunctions relating to these claim s “in accordance with the principles of equity to prevent the violation of any right secured by patent.” As a result, this Court has the equitable authority to grant Cytogel’s requested injunctive relief. The Court denies Plaintiffs’ m otion to dism iss Cytogel’s request for injunctive relief. V. Strikin g Cyto ge l’s Th ird an d Fo u rth Affirm ative D e fe n s e s u n d e r Ru le 12 ( f) o f th e Fe d e ral Ru le s o f Civil Pro ce d u re is n o t ap p ro p riate . Cytogel’s Third Affirm ative Defense alleges m isappropriation of trade secrets as a defense to Plaintiffs’ assertion of ownership of the ’436 Patent. 69 The Court has denied Tulane and Dr. Zadina’s m otion to dism iss Cytogel’s LUTSA claim . 70 Plaintiff argues 66 R. Doc. 220 at 52, ¶ I, J . R. Doc. 75-1 at 28. 68 W allace v. N orm an Indus., Inc., 467 F.2d 824, 827 (5th Cir. 1972) (citations om itted). 69 R. Doc. 220 at 2. 70 R. Doc. 395. 67 10 Cytogel has not iden tified the allegedly m isappropriated trade secrets, 71 but the counterclaim Cytogel brings under LUTSA lists five trade secrets Plaintiffs allegedly m isappropriated. 72 Cytogel has sufficiently stated a claim for m isappropriation of trade secrets under LUTSA. 73 Affirm ative defen ses are subject to the sam e pleading requirem ent as claim s in a com plaint. 74 As a result, Cytogel has also sufficiently pleaded its affirm ative defense for m isappropriation of trade secrets on the sam e facts as its LUTSA claim . Cytogel’s Fourth Affirm ative Defense alleges unclean hands. 75 “Under the doctrine of unclean hands, he who com m its inequity is not entitled to equitable relief.”76 The doctrine applies in cases in which “the wrongful acts ‘in som e m easure affect the equitable relations between the parties in respect of som ething brought before the court for adjudication.’”77 The doctrine “closes the doors of a court of equity to one tainted with inequitableness or bad faith relative to the m atter in which he seeks relief, however im proper m ay have been the behavior of the defendant . . . [and] require[s] that [the defendant] shall have acted fairly and without fraud or deceit as to the controversy in issue.”78 In its First Am en ded and Restated Affirm ative Defenses, Cytogel alleges Tulane and the VA accepted ownership of the ’436 Patent despite being aware of Dr. Zadina’s 71 R. Doc. 75-1 at 29. R. Doc. 220 at 35– 36, ¶ 112. 73 The Court found genuine issues of m aterial fact precluded sum m ary judgm ent on Cytogel’s LUTSA claim . Id. 74 Woodfield v. Bowm an , 193 F.3d 354, 362 (5th Cir. 1999) (internal quotation m arks and citation om itted). 75 R. Doc. 220 at 3. 76 Reg'l Properties, Inc. v. Fin. & Real Estate Consultin g Co., 752 F.2d 178 , 183 (5th Cir. 1985) (citations om itted). 77 Mitchell Bros. Film Grp. v. Cinem a Adult Theater, 60 4 F.2d 852, 863 (5th Cir. 1979) (quoting Key stone Driller Co. v. Gen eral Excavator Co., 290 U.S. 240 , 245 (1933)). 78 Precision Instrum ent Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 80 6, 814– 15 (1945). 72 11 contractual obligations to Cytogel under the Consulting Agreem ent. 79 Cytogel alleges Plaintiffs m isled Cytogel repeatedly in negotiations about licensin g the ’436 Patent. 80 Based on these allegations of unconscionable conduct, the Court finds Cytogel has pleaded the affirm ative defense of unclean hands with enough specificity and factual particularity to put Plaintiffs on fair notice of the defense. The defense does not prejudice Plaintiffs. The drastic rem edy of striking the affirm ative defense is not required for the purposes of justice. As a result, the Court denies Plaintiffs’ m otion to strike Cytogel’s Third and Fourth Affirm ative Defenses as to Count 1 of the Com plaint. The Court denies the m otion without prejudice as to Count 2 of the Com plaint. Plaintiffs m ay refile the m otion as to Count 2 of the Com plaint in connection with the second trial in this case. 81 CON CLU SION For the foregoing reasons, IT IS ORD ERED that the Refiled Motion of Plaintiff the Adm inistrators of the Tulane Educational Fund and Counterclaim -Defendant Dr. J am es E. Zadina, in which Plaintiff the United States of Am erica joins, to Dism iss Defendant’s First Am ended and Restated Counterclaim s Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure be and hereby is GRAN TED as to Count 9 of Defendant’s First Am ended and Restated Counterclaim s against the United States and D EN IED as Counts 1 and 4 and the request for injunctive relief in Defendant’s First Am ended and Restated Counterclaim s. The m otion of the Adm inistrators of the Tulane Educational Fund an d Dr. Zadina to strike Cytogel’s Third an d Fourth Affirm ative 79 R. Doc. 220 at 3, ¶ 9. Id. at 26– 27, ¶ 73. 81 On Septem ber 20 , 20 18 , the Court, on its own m otion, ordered that there be a separate trial for Count 2 of the Com plaint and Coun t 14 of Cytogel’s Second Am ended and Restated Counterclaim s, which in volve inventorship of the ’436 Patent. R. Doc. 298 . 80 12 Defenses is D EN IED as to Count 1 of the Com plaint and D EN IED W ITH OU T PREJU D ICE as to Count 2 of the Com plaint. 82 IT IS FU RTH ER ORD ERED that the Motion to Dism iss Counts 1, 8, 9, and 14 of Cytogel’s Second Am ended and Restated Counterclaim s, filed by the United States pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, be and hereby is D EN IED IN PART as to Count 1 and D EN IED IN PART AS MOOT as to Count 9. 83 N e w Orle a n s , Lo u is ian a, th is 2 9 th d ay o f Octo be r, 2 0 18 . ______________________ _________ SU SIE MORGAN U N ITED S TATES D ISTRICT J U D GE 82 83 R. Doc. 75. R. Doc. 30 1. 13

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