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IN THE UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF FLORIDA

GAINESVILLE DIVISION

UNIVERSITY OF FLORIDA RESEARCH FOUNDATION INC,

Plaintiff,

v. CASE NO. 1:11-cv-00008-MP-GRJ

DIAMYD MEDICAL AB,

Defendant.

_____________________________/

O R D E R

This matter is before the Court on Doc. 9, the defendant’s motion to dismiss, to which the

parties have filed a flurry of responses, replies, sur-replies and objections to sur-replies. Docs.

14, 19, 21 and 22. The motion to file sur-reply at Doc. 21 is granted, and the Court has

considered the arguments in Docs. 21 and 22. 

The University of Florida Research Foundation ("UFRF") is the owner of both United

States and foreign patent rights relating to glutamic acid decarboxylase (“GAD”) for therapeutic

and diagnostic uses in treating Type 1 diabetes and other conditions. In November 1997, UFRF

and Diamyd entered into a licensing agreement, by which Diamyd obtained an exclusive license

to sell products and practice processes covered by certain of UFRF’s patent rights to GAD. One

provision of the licensing agreement allowed Diamyd to sublicense its rights but also required

Diamyd to pay 10% of the funds received via the sublicense to UFRF, less certain amounts. The

provision (section 2.2.2) states:

if Licensee receives any fees, minimum royalties, or other payments in

consideration of any rights granted under a Sublicense, and such payments are not

based directly upon the amount or value of Licensed Products sold by the

Sublicensee, the Licensee shall pay UFRF Ten (10%) of such payments, less

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amounts to be used for future development of Licensed Products, in the manner

specified in Section 3.5.

In June or July of 2010, Diamyd and Ortho-McNeil-Janssen Pharmaceuticals, Inc.

(“OMJP”) entered into a License and Collaboration Agreement (the “OMJP Agreement”). Under

the OMJP Agreement, OMJP obtained a sublicense from Diamyd to rights, including the right to

practice the Licensed Patents, that Diamyd itself had licensed from UFRF in the Agreement. In

return, Diamyd received an upfront, non-refundable payment of $45 Million. Based on the

language of Section 2.2.2, quoted above, UFRF contacted Diamyd and demanded payment of 10

percent of $45 Million, or $4.5 Million. Diamyd refused and UFRF filed the instant suit.

In the Complaint, UFRF never alleged any fact relating to Section 2.2.2's final clause;

that is, UFRF never alleged whether or not there were "amounts to be used for future

development of Licensed Products, in the manner specified in Section 3.5." Nor did UFRF

include a copy of the licensing agreement so that the Court could determine what "the manner

specified in Section 3.5" was. Diamyd has moved to dismiss, asserting that UFRF needs to

allege something with regard to that clause in Section 2.2.2. UFRF responded with factual

assertions which UFRF argues tend to show that Diamyd is not going to incur any "amounts to

be used for future development of Licensed Products."

After consideration, the Court concludes that rather than have the case litigated based on

allegations made only in responses to motions, the Plaintiff should allege in the complaint, and

be required to prove, that the clause at the end of Section 2.2.2 does not excuse the duty to pay

the 10% royalty. Thus, plaintiff will be required to amend the complaint to include such an

allegation. Additionally, while the Federal Rules of Civil Procedure do not require the

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attachment of an agreement that forms the basis of a complaint as the Florida Rules1 do, the

resolution of the current law suit would be greatly facilitated by the attachment of the agreement

to the amended complaint. 

Accordingly, it is hereby

ORDERED AND ADJUDGED:

The motion to dismiss, Doc. 9, is denied, but the Plaintiff is directed to file an amended

complaint by Tuesday, August 23, 2011. The Plaintiff should attach a correct copy of the

pertinent agreement between UFRF and Diamyd to the amended complaint.

The motion to file a sur-reply (Doc. 21) is granted, and the Court construes the motion at

Doc. 21 to contain the sur-reply.

DONE AND ORDERED this 9th day of August, 2011

 s/Maurice M. Paul 

 Maurice M. Paul, Senior District Judge

1

Fla. R. Civ. P. 1.130(a).

Case No: 1:11-cv-00008-MP-GRJ

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