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Alnylam Pharmaceuticals, Inc. v. Dicerna Pharmaceuticals, Inc. (Lawyers Weekly No. 09-026-17)

COMMONWEALTH OF MASSACHUSETTS
MIDDLESEX, ss. SUPERIOR COURT
CIVIL ACTION
No. 2015-4126
(Specially Assigned to
Leibensperger, J.)
ALNYLAM PHARMACEUTICALS, INC.
vs.
DICERNA PHARMACEUTICALS, INC.
MEMORANDUM AND ORDER ON ALNYLAM’S SPECIAL MOTION TO DISMISS
COUNTERCLAIMS UNDER THE ANTI-SLAPP STATUTE, AND ON ALNYLAM’S
MOTION TO DISMISS COUNTERCLAIMS UNDER RULE 12(b)(6)1
These motions present the issue of whether, in a battle between business competitors, the
defendant may assert a counterclaim against the plaintiff based on plaintiff’s commencement of
the lawsuit. Specifically, may the defendant proceed on counterclaims of tortious interference
with advantageous relations, abuse of process and violation of G.L. c. 93A based on the
allegation that the initiation of the lawsuit by the plaintiff was motivated by an ulterior purpose to
squelch the defendant as a competitor, as opposed to a good faith belief in the claims asserted?
Here, Alnylam attacks counterclaims asserted by Dicerna. Alnylam seeks dismissal of
Dicerna’s counterclaims on the ground that they are all based on Alnylam’s exercise of its right
to petition the government by commencing the lawsuit. Alnylam invokes the protection of the
anti-SLAPP staute, G.L. c. 231, § 59H. Alnylam also contends that Dicerna’s counterclaims fail
to meet the standard for asserting viable causes of action. Thus, Alnylam moves for dismissal
1 This Order will also address Alnylam’s Rule 42(b) Motion to Bifurcate.
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under Rule 12(b)(6). I will address the anti-SLAPP motion first as the resolution of that motion
will necessarily determine whether the counterclaims survive Rule 12(b)(6).
BACKGROUND
This action was commenced by Alnylam in June 2015. Alnylam claims that Dicerna
misappropriated Alnylam’s trade secrets. In general, the trade secrets include those developed at
Merck and purchased by Alnylam for millions of dollars. Alnylam alleges that the theft occurred
in at least two ways. First, Dicerna hired scientists who had been employed at Merck, and those
scientists brought Merck’s trade secret documents with them to Dicerna. Second, Dicerna had bid
for Merck’s trade secrets at the same time as Alnylam. In that connection, Dicerna was provided
with access to Merck’s trade secrets under an agreement not to use or disclose the trade secrets if
the bid were unsuccessful. Dicerna’s bid was unsuccessful, as the sale went to Alnylam. Alnylam
claims that Dicerna is, nevertheless, using the Merck/Alnylam trade secrets. Alnylam seeks
damages and an injunction in its complaint but it chose not to seek a preliminary injunction.
Dicerna did not attack Alnylam’s complaint with a motion to dismiss or a motion for summary
judgment.
Two years later, in June 2017, Dicerna moved to amend its responsive pleading to assert
counterclaims against Alnylam. After hearing, I allowed the motion to amend. The counterclaims
are in three counts: Count I, Tortious Interference With Advantageous Relations; Count II, Abuse
of Process; and Count III, Violation of G.L. c. 93A. Alnylam now moves to dismiss the
counterclaims.
The overall gist of the counterclaims is that Alnylam commenced a frivolous suit because
the trade secrets alleged by Alnylam, and described by it after several iterations during discovery
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from 2015 to 2017, are not secrets at all but, instead, constitute information in the public domain.
Dicerna contends that the suit was commenced in order to crush Alnylam’s much smaller
competitor, Dicerna, with the cost of defending the case. Dicerna also avers that Alnylam
brought the suit with the ulterior motive to interfere with Dicerna’s funding sources and
partnership opportunities. The counterclaims include the following specifics.
There is no question that the two bio-pharmaceutical companies are competitors. They
are both engaged in the process of researching, developing and commercializing therapies
utilizing RNA interference (“RNAi”). RNAi technology is cutting edge science directed to
attacking or suppressing disease-involved genes. According to Dicerna’s counterclaim, the two
companies compete with respect to hiring the best scientists and attracting investment dollars, as
well as with respect to bringing an approved drug to market. Alnylam is the larger competitor,
with over one billion dollars in cash on its balance sheet, while Dicerna has only a small fraction
of that amount.
Dicerna alleges that the trade secrets claimed by Alnylam fail to qualify as such. The
“central component” of the assets purchased from Merck by Alnylam was Merck’s patent
portfolio. Counterclaims (“CCL”) ¶ 27. The patent portfolio puts the technology in the public
domain. In addition, the particular trade secret that precipitated this suit (Slide 11) has been
described in the public domain in patent applications and in the scientific literature. Dicerna
alleges that Alnylam did not research whether its putative trade secrets were in the public domain
prior to filing this lawsuit. CCL ¶s 42 to 46. In ¶ 45, Dicerna states “Alnylam’s willful blindness
to the public domain and its own patent strategy while making its trade secret allegation is clear,
as not a single Alnylam witness has come forward to testify that Alnylam considered the
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technology described in its public patent filings before striking out at Dicerna with a lawsuit
designed to inflict competitive harm on Dicerna.” In depositions taken of Alnylam witnesses in
this case, Dicerna says there are admissions that Alnylam did not, before filing suit, compare the
Merck documents that were found to be in the possession of former Merck scientists who
became employed at Dicerna to information already in the public domain. Finally, Dicerna
alleges that Alnylam did not investigate before filing suit whether the putative trade secrets held
at Merck were adequately protected as such so as to qualify for legal protection as trade secrets.
CCL ¶s 17 to 24.
Alnylam filed this lawsuit against Dicerna in June 2015, and on the same day issued a
press release announcing the action. With the press release, Alnylam posted an electronic copy of
its complaint, where it remains accessible today. Although Alnylam claimed in the press release
that it filed the case in order to stop Dicerna from misappropriating trade secret information, and
included a request for an injunction in the complaint, Alnylam did not seek a preliminary
injunction. At the outset of this litigation, Alnylam, upon motion by Dicerna, was ordered to
provide a Trade Secret List detailing the secrets it claimed had been misappropriated and
describing whether the putative secrets were or were not in the public domain. In response,
Alnylam submitted an extremely long and broad list, with no indication of what might already be
in the public domain. Pursuant to orders of the court, Alnylam was required to revise the list in
successive iterations of the Trade Secret List. After discovery, the list of alleged trade secrets has
narrowed considerably.
Dicerna alleges that “[b]ecause they are competitors, Alnylam is well-aware that Dicerna
relies on securing partnerships, alliances, and licensing deals with other pharmaceutical
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companies to continue to fund its mission of continuing research and development into
potentially life-saving therapeutics.” CCL ¶ 57. Dicerna pleads that it has been unable to secure
two partnership deals that would have closed but for the pendency of Alnylam’s lawsuit. CCL ¶
68. The lost partnership opportunities have allegedly caused Dicerna pecuniary harm in the form
of lost investment dollars. Dicerna also claims that the lawsuit has affected Dicerna’s ability to
recruit talented scientists. CCL ¶ 72. Finally, Dicerna alleges that Alnylam’s lawsuit has caused
harm to Dicerna in the form of attorney fees and expert costs.
DISCUSSION
The standards for evaluating Alnylam’s anti-SLAPP motion and its Rule 12(b)(6) motion
are different. To survive a Rule 12(b)(6) motion to dismiss, a complaint or counterclaim must set
forth the basis for the complainant’s entitlement to relief with “more than labels and
conclusions.” Iannacchino v. Ford Motor Co., 451 Mass. 623, 636, quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). At the pleading stage, Rule 12(b)(6) requires that the
counterclaim set forth “factual ‘allegations plausibly suggesting (not merely consistent with)’ an
entitlement to relief . . . .” Id., quoting Bell Atl. Corp., 550 U.S. at 557. The court must, however,
accept as true the factual allegations of the counterclaim and draw every reasonable inference in
favor of the counterclaimant. Curtis v. Herb Chambers I-95, Inc., 458 Mass. 674, 676 (2011).
The anti-SLAPP standard allows the court to consider more than the averments in the
counterclaim. “[T]he motion judge, in the exercise of sound discretion, is to assess the totality of
the circumstances pertinent to the nonmoving party’s asserted primary purpose in bringing its
claim. The course and manner of proceedings, the pleadings filed, and affidavits ‘stating the facts
upon which the liability or defense is based,’ . . . may all be considered in evaluating whether the
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claim is a ‘SLAPP’ suit.” Blanchard v. Steward Carney Hospital, Inc., 477 Mass. 141, 160 – 161
(2017)(citations omitted). Under the anti-SLAPP statute, G.L. c. 231, § 59H, the court is to
“advance” consideration of a special motion to dismiss “so that it may be heard and determined
as expeditiously as possible.”
Thus, the court is required to conduct the comprehensive analysis described in Blanchard
upon motion papers rather than a trial. This presents particular problems in a highly technical
case like this one. The essence of Dicerna’s counterclaim is the allegation that Alnylam did not
have a good faith basis for its claims of theft of trade secrets. Dicerna says the trade secrets do
not qualify for protection because they are in the public domain. That is the heart of this lawsuit –
– were the trade secrets in the public domain or not? At trial, I expect that there will be
sophisticated experts on both sides telling the jury the answer to that question. Yet, I am to
determine now whether Dicerna should be allowed to proceed with its counterclaims. The fair
result, and the result consistent with the following analysis under the anti-SLAPP framework, is
to let the counterclaims proceed.
Anti-SLAPP Analysis
The now three-pronged framework for analyzing an anti-SLAPP statute is as follows.
First, the moving party must make a threshold showing through the pleadings and affidavits that
“the claims against it are “based on” the petitioning activities alone and have no substantial basis
other than or in addition to the petitioning activities.” Duracraft, v. Holmes Prods. Corp., 427
Mass. 156, 167 – 168 (1998). If such a showing is made by the moving party, the burden shifts to
the non-moving party to show “(1) the moving party’s exercise of its right to petition was devoid
of any reasonable factual support or any arguable basis in law and (2) the moving party’s acts
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caused actual injury to the responding party.” G.L. c. 231, § 59H. The recent decision in
Blanchard, supra, adds a third prong to the framework. The non-moving party may defeat an
anti-SLAPP motion by establishing “that its suit was not ‘brought primarily to chill’ the special
movant’s legitimate exercise of its right to petition.” Blanchard, 477 Mass. at 159, quoting
Duracraft, supra at 161. The non-moving party must persuade the court that its “primary
motivating goal in bringing its claim, viewed in its entirety, was ‘not to interfere with and burden
[the moving party’s] . . . petition rights, but to seek damages for the personal harm to [it] from
[the moving party’s] alleged . . . [legally transgressive] acts.” Blanchard, supra at 160, quoting
Sandholm v. Kuecker, 2012 IL 111443 ¶ 57,356 Ill. Dec. 733, 962 N.E. 2d 418 (2012).
The first two prongs of the analysis are easily determined in favor of Alnylam, the
moving party. Dicerna concedes that its counterclaims are based on Alnylam’s petitioning
activity and nothing else. The filing of the complaint, the press release and the subsequent
litigation conduct by Alnylam are all protected petitioning activities. Alnylam carries its burden
to show that the counterclaims have no basis other than or in addition to the petitioning activity.
The burden then shifts to Dicerna to show that Alnylam’s petitioning activity was devoid of any
reasonable factual support. While Dicerna certainly alleges that Alnylam’s complaint was devoid
of factual support, I find that, on the state of the record today, it cannot be determined whether
Alnylam’s claims are reasonably supported. Applying the Rule 12(b)(6) standard to Alnylam’s
complaint, an exercise that was never done because Dicerna did not move to dismiss, Alnylam’s
complaint states a cognizable claim for misappropriation of trade secrets, taking the allegations
of the complaint as true. But the ultimate conclusion regarding the merits of Alnylam’s
complaint must await further evidence at trial. Dicerna cannot carry at this stage of the
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proceedings its burden of showing that Alnylam’s claims lack any reasonable support.
I now address the new third prong of the anti-SLAPP analysis. This is the augmented
analysis dictated by the Supreme Judicial Court in Blanchard, supra. Absent this third prong,
Alnylam’s special motion to dismiss would be allowed. In fact, Dicerna’s counsel suggested at
oral argument that it was because of the Supreme Judicial Court’s decision in Blanchard in 2017
that Dicerna believed it could move to add the counterclaims.
The non-moving party (Dicerna) may defeat a special motion to dismiss if it can
demonstrate that its counterclaim “was not primarily brought to chill the special movant’s
[Alnylam’s] legitimate petitioning activity.” Blanchard, 477 Mass. at 160. As described above, in
applying this new test, the motion judge may consider the entire record and circumstances
pertinent to the nonmoving party’s primary purpose in bringing its counterclaim. It appears that
this is a subjective test as to whether Dicerna’s counterclaims were brought primarily to chill. A
necessary but not sufficient factor in this analysis will be whether Dicerna’s counterclaim at issue
is ‘colorable or . . . worthy of being presented to and considered by the court’ . . . i.e., whether it
‘offers some reasonable possibility’ of a decision in the party’s favor.” Id. at 160-161 (citations
omitted).
I start with the “necessary but not sufficient factor.” I find that all of Dicerna’s
counterclaims are “colorable” and are worth being presented to and considered by the court and
jury. I start with the claim for intentional interference with advantageous relations.
In order to succeed on a claim for intentional interference with advantageous relations,
the claimant (Dicerna) must show that “(1) a business relationship or contemplated contract for
economic benefit with a third party; (2) [the defendant’s] knowledge of such a relationship; (3)
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[the defendant’s] interference with it through improper motive or means; and (4) [the claimant’s] loss of advantage directly resulting from [the defendant’s] conduct.” Adcom Products, Inc. v
Konica Business Machines USA, Inc., 41 Mass. App. Ct. 101, 104 (1996). Dicerna satisfies the
first element by pleading that there were two business relationships for investment in Dicerna
that would have closed but for the filing of Alnylam’s complaint. As to the second element,
while there is no allegation that Alnylam knew, specifically, of the two potential partnerships for
investment referenced by Dicerna, Dicerna does plead that Alnylam knew, generally, that
Dicerna was in the business of attracting and developing investment partners. It also is a
reasonable inference that Alnylam knew that the act of commencing a major lawsuit against a
competitor that goes to the heart of the competitor’s rights to intellectual property will likely
interfere with the competitor’s ability to raise investment funds through partnerships or
otherwise. I agree with the conclusion reached in Gillette Company v. Provost, 2017 WL
2292748 (Mass. Sup. Ct., Salinger, J.) that “[a] party claiming tortious interference with
prospective (rather than existing) business relationships is not required to prove that the
defendant was aware of a potential relationship with a specific third party. It is enough that the
defendant knowingly interfered with a prospective relationship between the plaintiff and an
identifiable class or category of third persons.” Id. at *8.
Whether the facts alleged in the counterclaim are sufficient to plead the third element of
the intentional interference tort is the principal subject of Alnylam’s motion to dismiss. Dicerna
must plead sufficient facts to make it plausible that Alnylam acted with improper means or
motive when it commenced this action. That means that Alnylam commenced the suit not
primarily to protect its trade secrets but instead with the ulterior motive to thwart its competitor,
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Dicerna. As put by Alnylam in its argument, Dicerna must show that Alnylam’s suit was filed
without probable cause to believe it would succeed. G. S. Enterprises, Inc. v. Falmouth Marine,
Inc., 410 Mass. 262, 273 (1991).
Dicerna’s counterclaim alleges facts that, if proved, raise a jury question regarding
Alnylam’s motivation for commencing this action. Dicerna alleges that Alnylam’s alleged trade
secrets did not qualify as such because the information was in the public domain. Further, the
counterclaim alleges that Alnylam either knew that the trade secrets were not protected or
recklessly failed to examine whether the trade secrets were in the public domain before
commencing this lawsuit. Alnylam allegedly did so to injure Dicerna and to gain a competitive
advantage over Dicerna. If these facts are proved, a jury could conclude that Alnylam acted with
ulterior motive and did not actually believe it could succeed on its claim of misappropriation of
trade secrets. “The propriety of an actor’s motives in a particular setting necessarily depends on
the attending circumstances, and must be evaluated on a case-by-case basis.” Id. at 273 – 274
(reversing summary judgment dismissing intentional interference claim). See, Brooks
Automation, Inc. v. Blueshift Technologies, Inc., 2006 WL 307948 at *8 (Mass. Superior Ct.,
Gants, J.)(holding, after trial, that interference claim justified where party “filed suit when it
sensed the possibility of a trade secret theft without having reasonably investigated whether what
it sensed indeed constituted the theft of a trade secret”). In sum, the questions of whether
Alnylam had probable cause to file this case, and whether it acted with an ulterior motive are for
the jury.
Having concluded that Dicerna’s counterclaim for intentional interference with
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advantageous relations is colorable, and adequately pleaded,2 it is an easy deduction to conclude
that Dicerna’s abuse of process and c. 93A claims also are colorable and adequately pleaded.
Alnylam makes no separate arguments for why these claims are not colorable and do not state a
claim. Alnylam expressly concedes that the c. 93A claim is derivative of the intentional
interference claim and that they stand or fall together. With respect to the abuse of process claim,
Alnylam repeats its arguments to the effect that the counterclaim does not adequately plead
ulterior motive.
Finally, the last step of the augmented framework for evaluating an anti-SLAPP motion
under Blanchard is to determine whether under the “totality of the circumstances” Dicerna’s
counterclaim was, or was not, brought primarily to chill Alnylam’s legitimate exercise of the
right to petition. Blanchard, 477 Mass. at 160. Dicerna bears the burden to meet this showing. Id.
Dicerna must make this showing as to each claim viewed as a whole. Id.
This last step requires the court to discern the subjective state of mind of Dicerna. It is a
reasonable inference from the facts alleged in the counterclaim that Dicerna is, in fact, motivated
to recover for the harm caused by Alnylam’s commencement of this action. If it turns out that
Alnylam’s lawsuit for theft of trade secrets was justified, the fact that it caused Dicerna harm is
of no moment. But if it turns out that Alnylam’s lawsuit was not justified, and was commenced
without probable cause and with an ulterior motive, as Dicerna alleges, Dicerna seeks
recompense for the harm done. I find that that is a legitimate motive and is not intended to chill
2 The counterclaim expressly pleads that Dicerna has been harmed by loss of investment
opportunities, loss of ability to attract scientists and the incurrence of legal fees. Thus, the fourth
element of the tort of intentional interference is adequately pleaded to withstand a motion to
dismiss.
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Alnylam’s right to petition. Id. at 157 (“The Legislature did not intend the expedited remedy it
provided, the special motion to dismiss, to be used instead as a cudgel to forestall and chill the
legitimate claims – – also petitioning activity – – of those who may truly be aggrieved by the
sometimes collateral damage wrought by another’s valid petitioning activity”).
Alnylam relies on two arguments for why the court should conclude that Dicerna’s
counterclaims are intended to chill Alnylam. First, it points to Dicerna’s efforts, through motions
in this case, to secure compliance with the court’s orders to Alnylam to revise the Trade Secret
List and to compel discovery. I find that those motions were routine litigation tactics purposely
intended and directed to defending Alnylam’s claims.3 Second, Alnylam notes that Dicerna, at
the same time it sought leave to file counterclaims in this case, prepared and promptly filed an
antitrust action in federal court which is, allegedly, a cut and paste of Dicerna’s counterclaims in
this case. Alnylam argues that this filing is evidence that the counterclaims here were brought to
chill Alnylam for its legitimate petitioning activity. I draw an opposite inference. The filing of the
federal lawsuit asserting antitrust claims against Alnylam for anti-competitive conduct, a claim
that could only be made in federal court, suggests Dicerna’s true motive is to seek actual
damages for what it believes is Alnylam’s wrongful conduct in pursuing “sham” litigation.
Complaint, Docket No. 17cv11466, U.S. Dist. Ct., Dist. Of Mass., ¶s 25 et seq. Alnylam’s
arguments do not suggest a “chill” motive for Dicerna beyond a legitimate interest in obtaining
recovery for allegedly wrongful conduct.
3 This finding is made notwithstanding the language I used in allowing Dicerna’s motion
to compel discovery wherein I stated that the breadth of Dicerna’s initial request had a “punitive
element.”
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Rule 12(b)(6) Analysis
As referenced the standard for examining a motion to dismiss is narrower than the
standard for evaluating an anti-SLAPP motion. That said, however, the anti-SLAPP analysis
requires the court to determine whether the counterclaims are colorable. I interpret “colorable” as
being the same as finding that the claims are “plausible.” Accordingly, because I find the
counterclaims to be colorable, they necessarily are plausible and survive Alnylam’s Rule 12(b)(6)
motion to dismiss.
Alnylam’s Motion to Bifurcate and Stay
At the time of hearing and allowing Dicerna’s motion for leave to amend to add
counterclaims, I indicated that bifurcation was not in the interest of judicial economy. The jury
that determines whether Dicerna misappropriated Alnylam’s trade secrets is best equipped to
decide whether Alnylam had a good faith basis to commence the action. Alnylam now points to
Dicerna’s filing of the federal antitrust case as a reason to bifurcate the counterclaims and to stay
resolution of this case until after the completion of the federal case. This also makes no sense
because the three causes of action in Dicerna’s counterclaim are not even pleaded in the federal
case. The motion to bifurcate will be denied.
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CONCLUSION
For the reasons stated above, each of (i) Alnylam’s Special Motion to Dismiss, (ii)
Alnylam’s Rule 12(b)(6) Motion to Dismiss, and (iii) Alnylam’s Rule 42(b) Motion to Bifurcate
is DENIED.
By the Court,
________________________
Edward P. Leibensperger
Justice of the Superior Court
October 23, 2017
14 read more

Posted by Stephen Sandberg - November 2, 2017 at 8:44 pm

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Commonwealth of Massachusetts ex rel. Kelly, et al. v. Novartis Pharmaceuticals Corporation, et al. (Lawyers Weekly No. 12-098-17)

COMMONWEALTH OF MASSACHUSETTS

SUFFOLK, ss SUPERIOR COURT

CIVIL ACTION

  1. 2016-03107-BLS1

COMMONWEALTH OF MASSACHUSETTS,

EX REL., ALLISON KELLY AND FRANK GARCIA

vs.

NOVARTIS PHARMACEUTICALS CORPORATION & Others1

1 Novartis Corporation and Genentech, Inc.

2 The District Court’s order actually dismissed the state claims with prejudice, notwithstanding its declination of jurisdiction over them. The First Circuit reversed that part of the District Court’s decision.  It observed that while the District Court could have dismissed the state claims based on the same reasoning applied to the federal claims had it retainedjurisdiction, once it declined jurisdiction, it was required to dismiss the state claims

MEMORANDUM OF DECISION AND ORDER ON

DEFENDANT’S MOTION TO DISMISS

RELATORS’ FIRST AMENDED COMPLAINT

Allison Kelly and Frank Garcia (Relators) brought qui tam actions against Genentech, Inc. (Genentech) and Novartis Pharmaceuticals Corporation (Novartis) in federal district court in Massachuesetts under the Federal False Claims Act (FCA), 31 U.S.C. § 3729 et seq., the Massachusetts False Claims Act (MFCA), G. L. c. 12, § 5B(a)(1)-(10), and several other analogous state statutes.  The federal claims asserted in their complaints were dismissed by the District Court for failure to plead the alleged fraud with the specificity required by Fed. R. Civ. P. 9(b).  See U.S. ex rel. Garcia v. Novartis  Pharm. Corp.,91 F. Supp. 3d 87 (D. Mass. 2015).  The dismissal was affirmed by the First Circuit Court of Appeals.  See U.S. ex. rel. Kelly v. Novartis Pharm. Corp.,827 F. 3d 5 (1stCir. 2016) (Kelly).  While the Relators’ FCA claims were dismissed with prejudice, their state claims were dismissed without prejudice because the District Court declined to exercise supplemental jurisdiction over them.2 The Relators then filed read more

Posted by Stephen Sandberg - August 4, 2017 at 9:01 am

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Chitwood v. Vertex Pharmaceuticals, Inc. (Lawyers Weekly No. 10-046-17)

Posted by Stephen Sandberg - March 20, 2017 at 7:46 pm

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