Court Opinion

ID: 4463185
Source: CourtListenerOpinion
Date Created: 2019-12-11 17:03:00.449114+00
Date Added: 2024-06-11T14:25:22.214478
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

OCIMUM BIOSOLUTIONS (INDIA)
LIMITED and DON A. BESKRONE,
Chapter 7 Trustee of Ocimum
Biosolutions Inc.,

V. C.A. No. N15C-08-168 AML CCLD

ASTRAZENECA UK LIMITED,

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Plaintiffs, )
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Defendant. )

OPINION

Submitted: September 23, 2019
Decided: December 4, 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.

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.
1. STATEMENT OF FACTS

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

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”).°

 

' Def. AstraZeneca UK Limited’s Opening Br. in Supp. of its Mot. for Summ. J. Based on the
Statute of Limitations (“AZ Mot. Summ. J.”); Br. in Supp. of Pls.’ Opp’n to Def.’s Mot. for Summ.
J. Based on the Statute of Limitations (“Ocimum Resp.”); Def. AstraZeneca UK Limited’s Reply
Br. in Supp. of its Mot. for Summ. J. Based on the Statute of Limitations (“AZ Reply”). The
motion’s resolution was delayed, at least in part, because trial scheduling issues necessitated the
reassignment of this case in August 2019. Oral argument on the motion was held on September
23, 2019.

* Although there remain ongoing discovery issues and an associated motion for sanctions between
the parties, the discovery issues relate to AstraZeneca’s belated production of documents. Because
AstraZeneca’s statute of limitations argument is premised on Ocimum’s documents and its own
witnesses’ testimony, AstraZeneca’s alleged discovery failures and belated production are not a
basis upon which the Court can conclude that summary judgment is premature.

3 App. to Ocimum Resp., Ex. 1 GeneExpress® Product Access Agreement (“2001 Agreement”).

2
Through the 2001 Agreement, Gene Logic agreed to provide AstraZeneca non-
exclusive access to its “GeneExpress® Product” (“GeneExpress”) for a three-year
“Access Term” followed by a six-month “Wind-Down Period.’* At that time,
GeneExpress consisted of “BioExpress™, ToxExpress™ and the Gene Logic
Software.”>

BioExpress and ToxExpress are databases.° BioExpress contained biological
data, including data “derived from untreated [] diseased and normal human

”7 Similarly, ToxExpress contained biological data “associated with the

tissues]. ]
treatment, using known toxic compounds, of],]” for example, “diseased and normal
human tissues[.]”® 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[.]”? Under the 2001 Agreement,

Gene Logic solely and exclusively owned all Database Information,’ and

 

4 Id. at third “Whereas” clause, §§ 1.2, 1.12, 1.32, 4.1(a).

> Id. § 1.14.

6 Td. §§ 1.7, 1.29.

1 Td. § 1.7.

8 Id. § 1.29.

° Id. §§ 1.7, 1.10, 1.29. More specifically, the 2001 Agreement defines Database Information as:
“{D]ata and information generated by or for Gene Logic or its Affiliates comprising (i) gene
expression profiles, (ii) nucleotide sequence information, (iii) protein sequence information and
(iv) clinical and other information associated with tissue and cell samples; and any related

annotated information... .” Jd. § 1.10.
10 Td. § 3.1.
AstraZeneca was prohibited from providing any Database Information to a third
party without Gene Logic’s consent.!!

Although Gene Logic retained sole ownership of all Database Information,
AstraZeneca solely owned all “AZ Results.”!? The 2001 Agreement defined AZ
Results as “any results or data generated by [AstraZeneca] during the Access Term
using the GeneExpress® Product... .”!3 AstraZeneca was “free to use, disclose, sell

9914

and sublicense any AZ Results,”’* and with one exception, not relevant here,

AstraZeneca had “no obligation to disclose to Gene Logic any AZ Results[.]’!

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.’ Initially,
BioExpress contained 3709 “samples,” and ToxExpress contained 1620.'’ The
databases would be updated no less than bi-monthly from physical disks shipped to
the AstraZeneca facilities.'®

AstraZeneca accessed the BioExpress and ToxExpress databases through the

Gene Logic Software, which consisted of “software tools for the visualization,

 

Nid. § 4.1,

2 Id. 83.2.

3 Id. § 1.4.

14 Td. § 4.1(a).

8 Id. § 3.2.

16 Td. 81.11.

'7 Td. at Schedule C.
18 Iq. §§ 2.2-2.3.
analysis, indexing and mining of Database Information[.]”!? Gene Logic retained
the rights to “Gene Logic Technology,” which included “the Gene Logic

0 The agreement

Software ...[and] the data management architecture...
prohibited AstraZeneca from copying or creating derivative works from the Gene
Logic Software.?!

Once the three-year Access Term expired, the six-month “Wind-Down
Period” began.”” 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.”? AstraZeneca could, however, “retain and continue to use, disclose, sell
or sublicense any AZ Results in any manner, at [AstraZeneca’s] discretion.”*4
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

 

'9 Td. § 1.15.

20 Td. § 1.16.

*l Td. § 4.1(a).

22 Td. §§ 1.32, 4.1(a).
3 Id. § 6.1(c).

24 Id.
GeneExpress “as in existence on the expiration of the Access Term[.]”*° 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.”°

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, 2004.7’ 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.’”’?® 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.”?
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

 

25 Td. § 8.1; App. to Ocimum Resp., Ex. 5 Feb. 7, 2004 Mallamaci Email.
© App. to Ocimum Resp., Ex. 5 Feb. 7, 2004 Mallamaci Email.

27 App. to AZ Mot. Summ. J., Ex. 2 Apr. 23, 2004 Mallamaci Email.

ew (7

29 Td.
‘AZ Results’ storage environment[,]” i.e., how AstraZeneca would build “global AZ
Results databases[.]”°° On this point, Mallamaci cautioned that AstraZeneca needed
to be certain that it was “not impinging on [Gene Logic] property regarding software
and schemas.”?!

Initially, AstraZeneca built a database it called Gene Expression of
AstraZeneca Results, or “GeAZr,” to hold expression and sample data captured from
GeneExpress.*? 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.*? 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.”*4

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.°> On January 5, 2005, John

 

30 Td.

31 Td.

32 App. to AZ Mot. Summ. J., Ex. 5 Jan. 31, 2005 GeAZr II Project Charter. GeAZr is pronounced
“Geezer.”

33: Td.

34 App. to Ocimum Resp., Exs. 29-30, 33; 35 (series of internal AstraZeneca emails and draft letters
discussing the meaning of AZ Results and whether to “provoke a response” from Gene Logic on
that issue). AstraZeneca ultimately sent a letter to Gene Logic that removed any reference to AZ
Results. See id. Ex. 35.

35 Appendix to AZ Mot. Summ. J., Ex. 4 Jan. 5, 2005 Letter.

7
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.*°
Stageman also certified that AstraZeneca had retained and would continue to use AZ
Results.2”
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.*®
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.

 

36 Td.

37 Id.

38 Whether the 2001 Agreement was assigned to Ocimum is a disputed issue that goes to Ocimum’s
standing to pursue the claims in this action. This Court denied AstraZeneca’s motion to dismiss
on the basis of standing, concluding that issue could not be resolved on the pleadings. AstraZeneca
again raised standing more recently as a basis to deny Ocimum’s motion for partial summary
judgment. Because this standing issue is not relevant to the claims’ timeliness, and because I am
required in any event to view all facts and inferences in Ocimum’s favor when resolving
AstraZeneca’s motion, I assume Ocimum has standing to pursue all the claims in the third amended
complaint.

8
D. Ocimum’s suspicions as of 2009

On March 26, 2009, David Starr, an Ocimum Sales Director,*? emailed Tom
Thompson, Ocimum’s Vice President of BiolT Sales, and Jarlath ffrench-Mullen, an
Ocimum Scientific Director, notifying them of a conversation between Starr and
Amanda Williams, an AstraZeneca scientist.4° Williams was inquiring about
whether significant content had been added to the “CNS Data Suite” since

AstraZeneca last had subscribed to it.*!

Starr opined that Williams’ statements
suggested that she was able to determine “what the content is within the CNS Data
Suite[.]’*? 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.”

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.”** In response, Starr suggested

 

>? Unless otherwise noted, all references to Ocimum employees’ titles are drawn from the January
7, 2009 Ocimum Organizational Chart. See App. to Mot. Summ. J., Ex. 7 Ocimum Organization
Chart (as of Jan. 7, 2009).

49 App. to AZ Mot. Summ. J., Ex. 9 A.K. Marsh. 27, 2009 Email Chain.

41 Td.

® Td.

43 Id. According to Thompson, Darci Horne was a Business Development Director at Gene Logic.
Neither the provenance nor the basis of Horne’s suspicion is in the record. Thompson was asked
about Horne’s suspicions at his deposition, but he had no recollection of the matter. App. to AZ
Mot. Summ. J., Ex. 29 July 27, 2018 Dep. Tr. George (Tom) Thompson at 223-24.

44 App. to AZ Mot. Summ. J., Ex. 9 A.K. Marsh. 27, 2009 Email Chain.

9
that “[a] simple paid subscription to CNS would be a better outcome!”*° 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.”*

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.”

In his deposition, Lingareddy acknowledged that the Starr email triggered
Thompson’s suspicion that AstraZeneca may have “a copy of the database.”**

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.’“? Thompson told

 

45 Td.

46 Td.

47 App. to AZ Mot. Summ. J., Ex. 8 A.K. Marsh. 26, 2009 Thompson Email (emphasis added).

48 App. to AZ Mot. Summ. J., Ex. 33 Sept. 26, 2018 Dep. Tr. Subash Lingareddy (“Lingareddy
Dep. Tr.”) at 62:24—63:22.

49 App. to AZ Mot. Summ. J., Ex. 10 Apr. 27, 2009 Acharya Email.

10
Acharya he had not contacted Lamont, and Thompson reiterated his concern that
there “is a bigger content issue at [AstraZeneca] we need to discuss[.]”°° 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{.]”>'

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.”** 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.*? 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.°* 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].”°°

 

°° Td.

>! Tq. (emphasis added).

°2 App. to AZ Mot. Summ. J., Ex. 11 Apr. 30, 2009 Hammar Email.
°3 Td.

54 App. To Ocimum Resp., Ex. 44 Apr. 30, 2009 Hammar Email.

55 Id.

11
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.”°°
Thompson limited Herrmann’s review to 15-30 minutes of billable work.*’ In that
email Thompson stated he was aware of two instances of AstraZeneca researchers
referring to AstraZeneca’s “Gene Logic data.”°® 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.”°?

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.” In support of this
p & p

contention, Ocimum cites an email from Herrmann to Thompson in which Herrmann

 

6 App. to AZ Mot. Summ. J., Ex. 12 May 21, 2009 Thompson Email.

6° Ocimum Resp. at 30.

12
asserts “I reviewed [AstraZeneca] last week and agree with your conclusion.”°' The
record, however, does not include exactly what conclusion Thompson relayed to
Herrmann.” 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.© 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.” 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.”

Lamont forwarded Acharya’s request to Terry Reed, who expressed interest

and suggested the parties arrange a teleconference in July 2009. Acharya agreed,

 

6! Id.; App. to Ocimum Resp., Ex. 51 May 27, 2009 Herrmann Email.

& A declaration Ocimum submitted in conjunction with its opposition to the summary judgment
motion avers that Thompson independently concluded AstraZeneca had not breached the 2001
Agreement and Herrmann later concurred in that conclusion. See Lingareddy Decl. { 15; but see
Section II(D), infra.

63 App. to AZ Mot. Summ. J., Ex. 13 June 15, 2009 Acharya Email.

6 Td.

65 App. to AZ Mot. Summ. J., Ex. 10 Apr. 27, 2009 Acharya Email; App. to AZ Mot. Summ. J.,
Ex. 31 Aug. 20, 2018 Dep. Tr. Anuradha Acharya (“Acharya Dep. Tr.”) at 159:6—-161:19.

66 App. to AZ Mot. Summ. J., Ex. 13 June 15, 2009 Acharya Email.

13
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.’ Neither Aha. 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”).°® 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[.]”©? Among those Guo expressly thanked was Marten
Hammar, who previously forwarded AstraZeneca’s “frozen copy” of Gene Logic

data.”

 

67 Id.

68 App. to AZ Mot. Summ. J., Ex. 14 2012 Guo Article.
69 Td. at 1-2.

70 Td. at 2.

14
In the article, Guo identified four “large-scale microarray datasets” that she
used to analyze gene expression patterns.’! 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.””* Guo described the
GeAZr database as containing “44928 human genes expressed across 100 normal
tissues[.]””?

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.””* Acharya offered to
discuss a license for AstraZeneca.’> At her deposition, Acharya confirmed that her
conclusion, after receiving notice of the 2012 Guo Article, was that AstraZeneca. was
still using BioExress.’° 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.””’ At his deposition, Lingareddy

 

| Td. at 8.

? Id.

2 Id.

™ App. to AZ Mot. Summ. J., Ex. 15 July 10, 2012 Acharya Email; App. to AZ Mot. Summ. J.,
Ex. 16 July 11, 2012 Acharya Email.

’> App. to AZ Mot. Summ. J., Ex. 15 July 10, 2012 Acharya Email; App. to AZ Mot. Summ. J.,
Ex. 16 July 11, 2012 Acharya Email.

7© Acharya Dep. Tr. at 169:1-170:11.

77 Td. at 225-26 (AZ Reply Ex. A).

15
testified that the 2012 Guo Article raised Ocimum’s suspicion that it may have a
claim against AstraZeneca.”®

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.”” 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.”°?

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.”*’ Lingareddy
confirmed at his deposition that Ocimum remained suspicious even after it received

1.82

Gorecki’s emai Ocimum did not, however, undertake any additional

investigation at that time.

 

’8 Lingareddy Dep. Tr. at 126:17-128:12. In its opposition to the motion for summary judgment,
Ocimum filed a declaration Mr. Lingareddy authored in which he directly contradicts his sworn
deposition testimony. For the reasons set forth below in Section II(D), even if the Court considered
and relied on that declaration, the factual dispute regarding Mr. Lingareddy’s suspicions does not
alter the inquiry notice analysis.

79 App. to AZ Mot. Summ. J., Ex. 17 Aug. 31, 2012 Gorecki Email.

89 Td.

8! App. to AZ Mot. Summ. J., Ex. 18 Aug. 31, 2012 Lingareddy Email.

82 T ingareddy Dep. Tr. at 161:2-16.

16
Il. 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. 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[.]’*4 The record must be viewed in the light most favorable to
the non-moving party.®°

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.*° 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.®’ “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.”®°

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

 

83 Super. Ct. Civ. R. 56(c).

4 Deloitte LLP v. Flanagan, 2009 WL 5200657, at *3 (Del. Ch. Dec. 29, 2009).
85 Gruwell v. Allstate Ins. Co., 988 A.2d 945, 947 (Del. Super. 2009).

86 Brzoska v. Olson, 668 A.2d 1355, 1364 (Del. 1995).

87 Id. (citing Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979)).

88 Id. (citing Wootten v. Kiger, 226 A.2d 238, 239 (Del. 1967)).

17
“clearly and unmistakably” would lead a prudent person to investigate and thereby
discover the basis for the cause(s) of action alleged.*

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).?? 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

91

enrichment is 3 years.” Normally, the statute of limitations begins to run “at the

92 The limitations period, however, may be tolled: (1) in

time of the wrongful act.
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.”

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

 

8° See Boerger v. Heiman, 965 A.2d 671, 675 (Del. 2009).

Third Am. Compl. §§ 162-210. The parties have not addressed this Court’s jurisdiction, or lack
thereof, to issue an injunction.

°! 10 Del. C. § 8106; Levey v. Brownstone Asset Mgmt., LP, 76 A.3d 764, 768 (Del. 2013)
(explaining that 10 Del. C. § 8106 applies to breach of contract claims); Vichi v. Koninklijke
Philips Elecs. N.V., 2009 WL 4345724, at *15 (Del. Ch. Dec. 1, 2009) (same for unjust
enrichment).

°2 Coleman v. PricewaterhouseCoopers, LLC, 854 A.2d 838, 842 (Del. 2004).

3 Id. (citing Isaacson, Stolper & Co. v. Artisans’ Sav. Bank, 330 A.2d 130, 132-33 (Del. 1974)).

18
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.””

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.” Similarly, the doctrine of inherently unknowable injuries

 

°4 6 Del. C. § 2006.

°5 Inre Dean Witter P’ship Litig., 1998 WL 442456, at *5 (Del. Ch. July 17, 1998) (citing Halpern
v. Barran, 313 A.2d 139, 143 (Del. Ch. 1973)), aff'd, 725 A.2d 441 (Del. 1999); see Nardo v.
Guido DeAscanis & Sons, Inc., 254 A.2d 254, 256 (Del. Super. 1969) (citing 34 Am. Jur.
Limitation of Actions § 234 (1941)) (“Fraudulent concealment required something affirmative in
nature designed or intended to prevent, and which does prevent, the discovery of facts giving rise

19
will toll the statute of limitations “while the discovery of the existence of a cause of
action is a practical impossibility.””° 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.”’

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.?® 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

 

to a cause of action-some actual artifice to prevent knowledge of the facts or some representation
intended to exclude suspicion and prevent inquiry.”).

% Dean Witter, 1998 WL 442456, at *5 (citing Ruger v. Funk, 1996 WL 110072, at *2 (Del. Super.
Jan. 22, 1996)).

97 Id.

°8 Ocimum Resp. at 59 (discussing App. to AZ Mot. Summ. J., Ex. 4 Jan. 5, 2005 Letter).

20
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

21
“could have been discovered by the exercise of reasonable diligence.””? 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.!°° Inquiry notice
does not require that a plaintiff be aware “of all of the aspects of the alleged wrongful
conduct.”!®! Rather, “the statute of limitations begins to run when plaintiffs should
have discovered the general fraudulent scheme.”!”

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[.]”'°? Those facts effectively must rise to the level of

 

»° Dean Witter, 1998 WL 442456, at *5 (citing Halpern, 313 A.2d at 143); Coleman, 854 A.2d at
842 (quoting Becker v. Hamada, Inc., 455 A.2d 353, 356 (Del. 1982)) (“[T]he statute of limitations
begins to run upon the discovery of facts ‘constituting the basis of the cause of action or the
existence of facts sufficient to put a person of ordinary intelligence and prudence on inquiry which,
if pursued, would lead to the discovery’ of such facts.”).

100 Coleman, 854 A.2d at 843 (quoting Becker, 455 A.2d at 356); see Dean Witter, 1998 WL
442456, at *6 (“[T]he limitations period begins to run when the plaintiff is objectively aware of
the facts giving rise to the wrong[.]”).

101 Dean Witter, 1998 WL 442456, at *7.

102 Td. (citing McCoy v. Goldberg, 748 F. Supp. 146, 158 (S.D.N.Y. 1990)).

103 See, e.g., iBio, Inc. v. Fraunhofer-Gesellschaft zur Forderung der Angewandten Forschung
E.V., 2018 WL 6493503, at *5 (Del. Ch. Dec. 10, 2018); Welenc v. Univ. of Delaware, 2017 WL
22
a “red flag” that would prompt a prudent person of ordinary intelligence to further
investigate a possible claim.'™

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.!®

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.'° 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

 

5665652, at *4 (Del. Super. Nov. 20, 2017); Sunrise Ventures, LLC v. Rehoboth Canal Ventures,
LLC, 2010 WL 363845, at *7 (Del. Ch. Jan. 27, 2010); Dean Witter, 1998 WL 442456, at *5.

104 Wilhelm v. Marston, 2013 WL 6170625, at *6 (Del. Super. Nov. 20, 2013); see also Coleman,
854 A.2d at 843.

105 App. to AZ Mot. Summ. J., Ex. 9 A.K. Marsh. 27, 2009 Email Chain; App. to AZ Mot. Summ. J., Ex.
8 A.K. Marsh. 26, 2009 Thompson Email.

106 App. to AZ Mot. Summ. J., Ex. 8 A.K. Marsh. 26, 2009 Thompson Email.

23
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 Jn 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'”’ 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 plaintiff's 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

 

'07 673 A.2d 159, 163 (Del. 1996).
24
of the case,” that a plaintiff's 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.”!°8. 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 plaintiff's level of knowledge and education; (2) the extent of
his recourse to medical evaluation; (3) the consistency of the medical
diagnosis; and (4) plaintiff's follow-up efforts during the period of
latency following initial recourse to medical evaluation.'

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.''® Facts that make
a person suspicious of a cause of action manifestly are ones that should prompt a

person to investigate further.

 

108 7.
109 Tg
110 Coleman, 854 A.2d at 842.

25
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 Octmum’s database and was using it, no reasonable jury could
conclude Ocimum conducted a diligent inquiry by asking counsel to look into the

' To be “diligent,” an inquiry must be

issue for no more than 30 minutes."
“reasonable”; once a plaintiff's suspicions are triggered, he is expected to act with
alacrity to explore those suspicions as well as other possible instances of non-
compliance.''* 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

 

I App. to AZ Mot. Summ. J., Ex. 12 May 21, 2009 Thompson Email.

12 See, e.g, In re Tyson Foods, Inc., 919 A.2d 563, 585, 590-91 (Del. Ch. 2007) (holding that
plaintiffs are under an obligation to exercise reasonable diligence and the statute of limitations will
not shield a dilatory plaintiff who fails to act with such care); Certainteed Corp. v. Celotex Corp.,
2005 WL 217032, at *10-11 (Del. Ch. Jan. 24, 2005) (holding that once a plaintiff had notice that
at least one of the facilities purchased was not in the warranted condition, the plaintiff was “duty-
bound to investigate and try to discover all of its claims” against the defendant); Dean Witter, 1998
WL 442456, at *6 (holding that a plaintiff in possession of facts that make him suspicious must
conduct a reasonably diligent inquiry).

26
acted with reasonable diligence in investigating its suspicions.'!? 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.''* 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.”'!> 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

 

'l3 AstraZeneca argued that the fact Ocimum consulted counsel indicates as a matter of law that it
was on inquiry notice of its claims. There is some case law to support that argument. See Wilhelm,
2013 WL 6170625, at *6 (quoting Began v. Dixon, 547 A.2d 620, 623 (Del. Super. 1988)), aff'd,
2014 WL 4748608 (Del. Sept. 25, 2014). That precedent, however, arises in different factual
contexts than the issue before this Court. In any event, I need not rely on that case law given my
conclusions above. I also have not adopted AstraZeneca’s argument that Ocimum is “bound by
the acts of [its] lawyer-agent.” See Levey, 76 A.3d at 769 (quoting Vance v. Irwin, 619 A.2d 1163,
1165 (Del. 1993)).

114 See Dean Witter, 1998 WL 442456, at *7-8 (discussing information available to the plaintiffs
that undermined their assertion that their reliance on the defendants’ representations tolled the
statute of limitations, “the critical inquiry ... is: were plaintiffs entitled to rely on defendants’
representations for as long as they did[?]”) (alterations omitted).

"5 Tq. at *8 (alterations omitted).

27
concluded that inquiry notice may arise before a plaintiff has full or complete
knowledge of the extent of its claims.''® 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 contract claim in July
2012.

Even if the Court concluded that the information Ocimum knew in 2009 did
not rise to the level of inquiry notice, or even if Ocimum’s brief consultation with
counsel constituted a diligent inquiry, the record nevertheless is clear that Ocimum
was on inquiry notice by July 2012 and possessed at that time sufficient facts on
which to assert a breach of contract claim against AstraZeneca. This action therefore

is time-barred for that separate reason.

 

16 See, e.g., iBio, Inc., 2018 WL 6493503, at *6 (“Inquiry notice does not require actual discovery
of the reason for the injury. Nor does it require plaintiff[’s] awareness of all of the aspects of the
alleged wrongful conduct.”) (internal quotations omitted); VLIW Tech., LLC vy. Hewlett-Packard
Co., 2005 WL 1089027, at *15 (Del. Ch. May 4, 2005) (“Courts have consistently rejected the
notion that the ‘statute of limitations only begins running when a plaintiff can unassailably
establish a legal claim for trade secret misappropriation, [as that] would effectively eviscerate the
statute of limitations in all cases in which the plaintiff never discovers ‘smoking gun’ evidence of
misappropriation.’”); BAF Sys. Info. & Elec. Sys. Integration Inc. v. Aeroflex, Inc., 2012 WL
1901269, *8 (D. Del. May 15, 2012) (holding the fact that a plaintiff “could reasonably discern
that he suffered some harm caused by the defendant’s conduct [was] sufficient to” trigger the
statute of limitations) (emphasis added).

28
Guo’s article reflected that she worked with AstraZeneca employees,
including Marten Hammar, and was given access to a “large-scale microarray
dataset” that Guo explained was an in-house source AstraZeneca purchased from
Gene Logic. Guo described the dataset as containing “44928 human genes
expressed across 100 normal tissues.”!!’ Ocimum’s CEO and President both were
suspicious after reading the 2012 Guo Article. Indeed, Lingareddy testified at his
deposition that the 2012 Guo Article made him suspicious that Ocimum had a claim
against AstraZeneca. Acharya similarly testified that the 2012 Guo Article, and
specifically the reference to data AstraZeneca purchased from Gene Logic, led her
to believe that AstraZeneca “had the database” and was using it.''® Acharya went
so far as to specifically raise her suspicions directly with AstraZeneca.

Ocimum’s suspicions based on the 2012 Guo Article, coupled with the
information previously obtained from AstraZeneca in 2009, more than met the
inquiry notice standard. In fact, by July 2012, Ocimum did not just have sufficient
facts to prompt a diligent inquiry, it had sufficient facts adequately to plead a cause
of action against AstraZeneca for breach of contract. Armed with those facts,

Ocimum cannot rescue its untimely claims by arguing it relied on Andrew Gorecki’s

 

"7 App. to AZ Mot. Summ. J., Ex. 14 2012 Guo Article at 8.
"18 Acharya Dep. Tr. at 169-70, 225-26.

29
August 31, 2012 email stating that the database Guo referenced was a data source
AstraZeneca developed after the Wind-Down Period using AZ Results.

That statement should not have — and in fact did not — allay Ocimum’s
suspicions. If anything, AstraZeneca’s express admission that it developed its own
database using data it classified as AZ Results should have prompted Ocimum to
wonder whether AstraZeneca retained not just data but some or all of the Gene Logic
Software. Ocimum should have been alarmed, rather than placated, by
AstraZeneca’s admission that it created its own data source using data obtained
during the license period, which Guo described as a “large-scale dataset” containing
“44928 human genes expressed across 100 normal tissues.” In any event, there is no
factual basis on which the jury could conclude Ocimum relied on Gorecki’s
representation. Lingareddy’s contemporaneous reaction to Gorecki’s email
confirms that he believed AstraZeneca was “blowing smoke” and his suspicions
were not allayed.''?

Ocimum contends inquiry notice did not arise in July 2012 because no amount
of additional investigation would have uncovered AstraZeneca’s allegedly wrongful
conduct. Ocimum points out that the original theories advanced in its first complaint

are not the theories on which it now relies, and the true nature of AstraZeneca’s

 

'19 See Tyson Foods, 919 A.2d at 585 (“Even where a defendant uses every fraudulent device at
its disposal to mislead a victim or obfuscate the truth, no sanctuary from the statute will be offered
to the dilatory plaintiff who was not or should not have been fooled.”)

30
breach of contract and trade secret misappropriation was not apparent until after
discovery commenced in this case.

Ocimum relies on cases like Incyte Corp. v. Flexus Biosciences, Inc.'?° to
argue that summary judgment should be denied when there is a factual dispute as to
whether any further investigation would have revealed a sufficient factual basis to

21 Although it is true that courts will not apply the statute of

plead a cause of action.
limitations in a way that forces litigants to file suits “based merely on suspicions and
fears[,]”!?? it equally is true that the statute of limitations begins to run, at the latest,
when a plaintiff has such suspicions and sufficient facts to state a cause of action.
Accordingly, Incyte and the other cases on which Ocimum relies are inapposite
because none of those cases involved a plaintiff with sufficient facts to plead a cause
of action. Again, inquiry notice is not limited to cases in which a plaintiff has full
knowledge of all the facts and the existence of a claim; inquiry notice is triggered

when a plaintiff has knowledge of sufficient facts to support a claim. Although

Ocimum might not have been able to discover the precise facts on which it now

 

120 2017 WL 7803923 (Del. Super. Nov. 1, 2017).

1 Incyte, 2017 WL 7803923, at *5; see also Accenture Global Servs. GmbH vy. Guidewire
Software Inc., 691 F. Supp. 2d 577, 594 (D. Del. 2010) (denying summary judgment because it
was not clear that a deeper investigation by plaintiffs would have uncovered its cause of action);
Coleman, 854 A.2d at 843 (holding the Court erred in granting summary judgment because, inter
alia, if the plaintiffs were on inquiry notice, “it cannot be determined, on the present record,
whether a diligent inquiry by plaintiffs would have uncovered facts sufficient for them to assert an
accounting malpractice claim.”).

122 Accenture, 691 F. Supp. 2d at 594.

31
relies to support its claim, Ocimum had sufficient facts to state a breach of contract
claim based on the same essential factual contention: that AstraZeneca retained data

after termination in breach of the 2001 Agreement.

D. The Lingareddy declaration does not inject into the record disputed
factual issues that preclude summary judgment.

In support of its opposition to AstraZeneca’s Motion, Ocimum submitted a
declaration by Subash Lingareddy. AstraZeneca maintains that the declaration is a
“sham affidavit,” and the Court should not consider it. As an initial matter, I agree
that Lingareddy’s declaration likely constitutes a “sham affidavit” that cannot be
relied upon to defeat a motion for summary judgment. A sham affidavit is one
submitted by a party opposing summary judgment in an effort to contradict earlier
sworn deposition testimony.'*? The Court will strike such an affidavit if it finds the
following factors are met: the affidavit (i) contradicts prior sworn testimony, (ii)
given in response to unambiguous questions, (iii) yielding clear answers, (iv)
without adequate explanation, (v) in order to defeat a summary judgment motion.'™4

The Lingareddy declaration satisfies those factors. Through the declaration,
Lingareddy attempts to contradict or hedge his deposition testimony regarding

Ocimum’s suspicions in 2009 and 2012. As just one example, Lingareddy states in

 

123 Shimko v. Honeywell Int'l Inc., 2014 WL 4942189, at *4 (Del. Super. Sept. 30, 2014); In re
Asbestos Litig., 2006 WL 3492370, at *4 (Del. Super. Nov. 28, 2006).
124 Ig

32
his deposition that the 2012 Guo Article did not prompt suspicions at Ocimum
because it did not refer to data being “normalized,” and such suspicions did not arise
until Guo published a second article in 2013.'*° In contrast, Lingareddy testified at
his deposition, plainly and in response to unambiguous questions, that specific
statements and pages in the 2012 Guo Article fueled Ocimum’s suspicion that
AstraZeneca was using the Gene Logic database and had “normalized” the data.!*
Ocimum does not offer an adequate explanation for Lingareddy’s changed
recollection.

Even if the Court considered Lingareddy’s declaration, however, the
testimony contained therein does not alter the Court’s conclusions regarding inquiry
notice. Even if Lingareddy himself was not suspicious, Ocimum’s other
representatives’ testimony establishes that Ocimum was suspicious by July 2012 that
AstraZeneca improperly retained Database Information. Acharya believed in July
2012 that AstraZeneca had the database and was using it, and Acharya’s suspicions
and the facts known to Ocimum are more than enough to constitute inquiry notice

under Delaware law.

 

125 T ingareddy Decl. 26.

126 Lingareddy Dep. Tr. at 126-28. Although Lingareddy states in his declaration that the 2012
Guo Article did not refer to data being “normalized,” that is inaccurate. See App. to AZ Mot.
Summ. J., Ex. 14 2012 Guo Article at 8; Third Am. Compl. ff 27-36.

33
E. The continuing breach doctrine does not preserve Ocimum’s claims.

Ocimum contends the continuing breach doctrine'*’ tolls the statute of
limitations with respect to its breach of contract claims.'?® Although Ocimum
characterizes this doctrine as a “tolling” theory, the doctrine properly is applied in
determining when a claim accrues.'*? The continuing breach doctrine creates an
exception to the rule that a breach of contract claim accrues at the time a contract is
breached.'°° The doctrine acknowledges that there may be limited circumstances in
which a breach of contract claim cannot be alleged at the time of breach because
damages cannot be ascertained at that time. Under this exception, if there is a
continuing injury for which the damages cannot be determined until the alleged
wrong ceases, the statute of limitations begins to run on the last date of the alleged
wrong,!?!

The continuing breach doctrine applies in narrow and unusual factual

situations where the alleged wrongful acts are so inexorably intertwined that there is

2 3

but one continuing wrong.'3? This is not such a situation.’3> Ocimum argues

 

'27 The doctrine alternatively is called the “continuous contract” doctrine.

8 Ocimum Resp. at 65-66.

129 4M General Holdings LLC v. The Renco Group, Inc., 2016 WL 4440476, at *11 (Del. Ch. Aug.
22, 2016).

130 Tq

131 Branin v. Stein Roe Investment Counsel, LLC, 2015 WL 4710321, at *7 (Del. Ch. July 31,
2015).

132 4M General Holdings LLC, 2016 WL 4440476, at *11-12.

'33 Ocimum raised the continuous contract doctrine at the motion to dismiss stage. At that time,
the Court concluded the record was not sufficiently developed to rule on the applicability of the

34
AstraZeneca has continued to breach Sections 6.1(c) and 6.3 of the 2001 Agreement
by using Ocimum’s trade secrets internally and with third party collaborators.'**: But
that is not a proper application of the continuing breach doctrine. Ifa plaintiff could
allege a prima facie case for breach of contract after a single incident, the doctrine
does not apply, even if a defendant engages in “numerous repeated wrongs of
similar, if not same, character over an extended period.”!° Therefore, the fact that
AstraZeneca continued to retain or use Ocimum’s trade secrets does not alter when
the breach of contract claim accrued because Ocimum could have alleged a claim

after the initial breach.

F. Ocimum’s other claims also are time barred.
Because Ocimum was aware by July 2012 of facts indicating AstraZeneca
improperly retained data after the 2001 Agreement’s termination, Ocimum also was

on inquiry notice of all other potential claims premised on the same factual basis.!°°

 

continuous contract doctrine to this case. Ocimum Biosolutions (India) Ltd. v. AstraZeneca UK
Ltd., Dec. 29, 2016 Opinion at 33-35 (Trans. ID 60005499) (currently under seal). The record
now is developed, however, and it is plain that Ocimum could have alleged a breach of contract
claim after AstraZeneca’s initial breach of the 2001 Agreement.

'34 Ocimum Resp. at 65-66.

135 Price vy. Wilm. Trust Co., 1995 WL 317017, at *2-3 (Del. Ch. May 19, 1995).

136 Certainteed, 2005 WL 217032, at *11 (Plaintiff had reason to suspect two very serious
contractual breaches and therefore could not fail to act with diligence as to other possible
breaches); Jn re Nine Sys. Corp. S’holder Litig., 2013 WL 4013306, at *11 (Del. Ch. July 31, 2013)
(plaintiffs’ inquiry notice as to one element of wrongdoing relating to stock options placed it on
inquiry notice of “any wrongdoing relating to the options” that may have occurred in that period
because had plaintiffs investigated the known incident of wrongdoing, they would have discovered
the other incidents.).

35
Ocimum’s unjust enrichment claim, along with its trade secret claim, all arise from
the same alleged misconduct: AstraZeneca’s improper use and retention of
Ocimum’s intellectual property. A plaintiff may not circumvent the statute of
limitations by asserting other claims based on the same factual predicate that
underlies an untimely claim.

It is irrelevant that Ocimum might not have appreciated that AstraZeneca’s
retention and use of the data constituted a misappropriation of trade secrets, as
opposed to a breach of contract. Ocimum was aware of the facts that could give rise
to the trade secret claim, and that is all that inquiry notice requires.!°’ In VLIW
Technology, LLC v. Hewlett-Packard Co., the Court of Chancery explained that
“(t]he cause of action accrues when the claimant knows or should know the relevant
facts,” not when the claimant knows the “legall[] basis for the cause of action.”’** As
in VLIW, because the facts underlying both the contract claim and trade secret claim
were the same, the conclusion that the plaintiff was on inquiry notice of the contract
claim extends with equal force to Ocimum’s trade secret and unjust enrichment
claims.'°?

In an attempt to preserve at least some of its claims, Ocimum argues the statute

of limitations does not bar claims based on (1) misconduct that occurred after August

 

87 VLIW, 2005 WL 1089027, at *13-14.
138 Td. at *13.
139 Td. at *13, 15.

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21, 2012, (2) “undisclosed” trade secret misappropriation, including
misappropriation of Ocimum’s database architecture, toxicology models, and
pathology images, or (3) AstraZeneca’s past or continuing use of Ocimum’s trade
secrets with third party collaborators since Ocimum was not aware of those
collaborations before discovery in this case. To the extent these arguments go to
Ocimum’s continuing contract theory, they are discussed and rejected above.'*° To
the extent these arguments go to Ocimum’s trade secret claims, Ocimum’s
contentions misapprehend the nature of a trade secret claim and misstate Delaware
law.

Under 6 Del. C. § 2006, a “continuing misappropriation constitutes a single
claim” that accrues when the misappropriation reasonably could be discovered.!*!
That “single claim” rule means a plaintiff may not bring separate trade secret claims
for each use of the same trade secret, and the single claim accures when the
misappropriation was or could have been discovered.'** Ocimum’s trade secret

claim accrued no later than July 2012, when Ocimum was or should have been

 

140 See Section II(E), infra.

'4) 6 Del. C. § 2006. |

142 Id.; Forcier v. Microsoft Corp., 123 F. Supp. 2d 520, 525 (N.D. Cal. 2000) (quoting
Intermedics, Inc. v. Ventritex, Inc., 822 F. Supp. 634, 653-54 (N.D. Cal. 1993)) (quoting an
identical statutory provision and explaining that the language “reflects a rejection of the continuing
wrong theory (i.e., rejection of the idea that each subsequent act of misappropriation of a trade
secret creates a new claim for a plaintiff and begins a new period of limitations).”) (internal
quotations omitted). Because Delaware has adopted the Uniform Trade Secret Act (UTSA), it
looks to other UTSA states’ decisions for guidance. See VLIW, 2005 WL 1089027, at *13 n.56.

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suspicious that AstraZeneca wrongfully retained Ocimum’s data. Accordingly, all
claims based on that misappropriation are untimely, even those based on
AstraZeneca’s continued use of the data after August 21, 2012. Moreover, just as in
non-trade secret cases, Ocimum’s inquiry notice as to one trade secret claim should
have alerted it to the risk that AstraZeneca misappropriated additional trade secrets
shared under the same confidential relationship.'*? Here, Ocimum shared all the
allegedly misappropriated trade secrets under the same contractual relationship, and
all Ocimum’s trade secret claims therefore are barred under Section 2006, including
those based on AstraZeneca’s collaborations with third parties or alleged
misappropriation of Ocimum’s database architecture, toxicology models, and

pathology images.

Il. CONCLUSION

For the foregoing reasons, AstraZeneca’s motion for summary judgment
based on the statute of limitations is GRANTED as to all the claims remaining in
this case. The trial scheduled to begin on January 21, 2020 shall be removed from
the calendar. The parties’ remaining summary judgment motions and motions
regarding the admissibility of expert testimony are MOOT. Ocimum’s outstanding

motion for sanctions shall be resolved by the special master who presently is

 

'43 Intermedics, 822 F. Supp. 634, 654, 657 (N.D. Cal. 1993); see also Certainteed, 2005 WL
217032, at *11.

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considering that motion. The parties shall forward a copy of this opinion to the

special master.

IT ISSO ORDERED.

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