Maverick Therapeutics, Inc. v. Millennium Pharmaceuticals, Inc. ( 2020 )

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
MAVERICK THERAPEUTICS, INC., )
)
Plaintiff, )
)
and )
)
MILLENNIUM PHARMACEUTICALS, ) C.A. No. 2019-0002-SG
INC. )
)
Plaintiff-Intervenor, )
)
v. )
)
HARPOON THERAPEUTICS, INC., )
)
Defendant. )
MEMORANDUM OPINION
Date Submitted: December 17, 2019
Date Decided: April 3, 2020
Jody C. Barillare, of MORGAN, LEWIS & BOCKIUS LLP, Wilmington, Delaware;
OF COUNSEL: Rollin B. Chippey II and Benjamin P. Smith, of MORGAN, LEWIS
& BOCKIUS LLP, San Francisco, California, Attorneys for Plaintiff.
John P. DiTomo, Elizabeth A. Mullin, and Aubrey J. Morin, of MORRIS, NICHOLS,
ARSHT & TUNNELL LLP, Wilmington, Delaware; OF COUNSEL: John Ruskusky
and Lisa C. Sullivan, of NIXON PEABODY, LLP, Chicago, Illinois, Attorneys for
Plaintiff-Intervenor.
Gregory P. Williams, Steven J. Fineman, Nicole K. Pedi, and Angela Lam, of
RICHARDS, LAYTON & FINGER, P.A., Wilmington, Delaware; OF COUNSEL:
Martin S. Schenker and Benjamin H. Kleine, of COOLEY LLP, San Francisco,
California, and Michelle S. Rhyu, of COOLEY, LLP, Palo Alto, California, Attorneys
for Defendant.
GLASSCOCK, Vice Chancellor
This post-trial Memorandum Opinion concerns the application of medical
engineering at the molecular level, to permit the human body’s own defensive
mechanisms to more effectively destroy cancerous tumors. The science involved,
to the extent pertinent to the legal issues, is described below, at a descriptive level
consonant with the writer’s ability to comprehend it. Learning of the ability to
conceive of such an application of molecular science, and then of the work to apply
it to alleviate human suffering, is both humbling and inspiring.
Unfortunately, the behavior of some of the parties, from a legal perspective,
is not inspiring, and the legal issues themselves are mundane. Defendant Harpoon
Therapeutics, Inc. (“Harpoon”) was in development of two methodologies to
enhance the cancer-fighting properties of “T cells” in humans. To grossly
oversimplify, inherently active T cell enhancement activates T cells generally;
conditionally active enhancement activates T cells in the presence of tumors. Each
method has potential in the treatment of different cancers. Harpoon induced Takeda
Pharmaceutical Company Limited (“Takeda”) to invest in the conditionally active T
cell business, with Harpoon spinning off the conditionally active part of its business
to a new entity, Plaintiff Maverick Therapeutics, Inc. (“Maverick”) and Takeda
using its wholly owned subsidiary, Plaintiff-Intervenor Millennium
Pharmaceuticals, Inc. (“Millennium”), as an investment and collaboration vehicle to
work with Maverick. Part of the deal was a covenant by Harpoon not to compete
for four years in the existing conditionally active T cell field, the “Maverick Field.”
Immediately thereafter, however, Harpoon commenced development of a
conditionally active T cell process using a different activation method than the one
transferred to Maverick. Maverick brought this litigation for breach of this
contractual non-compete and misappropriation of trade secrets, and Millennium
alleges fraud in the inducement of its investment in Maverick. This post-trial
Memorandum Opinion concerns whether the non-compete was drawn broadly
enough to encompass Harpoon’s new methodology (I conclude that it was not),
whether Harpoon developed that methodology through purloined Maverick trade
secrets (I conclude that it did not), and whether Harpoon fraudulently induced
Millennium’s investment (I conclude that it did).
My reasoning is below.
I. BACKGROUND1
This is a post-trial Memorandum Opinion. The trial took place over six days,
September 9–13, and 17, 2019. The parties lodged 28 depositions and submitted a
1
Citations to Joint Trial Exhibits (“JX”) are expressed as JX __, at __. Page numbers for JXs are
derived from the stamp on each JX page. For clarity, certain citations to JXs reference the section
number of a document (§) instead of the JX page. Citations in the form “Tr.” refer to the trial
transcript.
2
joint exhibit list consisting of over 1200 exhibits. The following facts were
stipulated by the parties or proven by a preponderance of evidence at trial.2
A. The Parties and Relevant Non-Parties
Plaintiff Maverick is a Delaware corporation with a principal place of business
in Brisbane, California.3
Plaintiff-Intervenor Millennium is a Delaware corporation and wholly owned
subsidiary of non-party Takeda.4 Millennium’s principal place of business is in
Cambridge, Massachusetts.5
Defendant Harpoon is a Delaware corporation with its principal place of
business in South San Francisco, California.6
Non-parties Dr. Luke Evnin and Dr. Patrick Baeuerle founded Harpoon to
capitalize on potential cancer treatments they developed.7 Evnin is also the founder
of a private equity firm, MPM Capital, and has led investments in many
biotechnology companies.8 He serves as chairman of the board of directors for
2
To the extent there was conflicting evidence, I have weighed the evidence and made findings
based on the preponderance of the evidence. In pursuit of brevity, I sometimes omit from this
Background discussion testimony in conflict with the preponderance of the evidence. In such
cases, I considered the conflicted testimony, and I rejected it.
3
Join Proposed Agreed-Upon Findings of Fact, Docket Item (“D.I.”) 324 (“Stip.”), ¶ 1.
4
Id. ¶ 2.
5
Id.
6
Id. ¶ 3.
7
Id. ¶ 4.
8
Id. ¶¶ 4–5.
3
Harpoon (the “Harpoon Board”) and previously served as chairman of the board of
directors for Maverick (the “Maverick Board”).9 Baeuerle serves as a director on
the Harpoon Board and previously served as an observer on the Maverick Board, as
well as acting as a member of Maverick’s Scientific Advisory Board and consultant
to Maverick’s management.10 Non-party Dr. Jeanmarie Guenot is also a co-founder
of Harpoon and served as Harpoon’s founding Chief Executive Officer (CEO) and
President.11
B. Factual Background
1. T Cell Therapy
T cell therapy is a leading area of drug development and a potential cure for
certain types of cancer.12 The human body produces “T cells,” white blood cells that
target and kill other cells in the body that are infected with viruses or pathogens.13
T cell engager drugs, or “T cell engagers,” are protein molecules designed in a
laboratory and injected into the blood stream.14 These therapeutic drugs bring the
body’s T cells and cancer cells together, causing the T cells to kill the cancer cells.15
9
Id. ¶ 5.
10
Id. ¶ 6.
11
Id. ¶ 7.
12
Id. ¶ 8.
13
Id. ¶ 11.
14
Id. ¶ 12.
15
Id.
4
T cell engagers accomplish this through the use of “binding domains,” protein
structures that bind, or “engage” certain cells.16 T cell engagers, therefore, generally
have a “T cell engaging domain” to bind to T cells, and a “cancer targeting domain”
to bind to cancer cells.17
Cancers, generally, can be placed into two categories: blood cancers and solid
tumor cell cancers.18 One problem T cell therapies encountered is that the T cell
engagers were “inherently active,” meaning they always recruited T cells and bound
to cancer cells.19 Unfortunately, certain healthy cells, including those in the body’s
vital organs, sometimes display the same proteins, called “antigens,” on their surface
as solid tumor cancer cells.20 Thus, “inherently active” T cell therapies risked
binding T cells to healthy cells and harming the patient.21 In blood cancers, T cell
therapies proved successful because even though the T cell therapy killed both
malignant and healthy blood cells, it did not kill the patient, given the body’s ability
to rapidly regenerate blood cells.22 The technology was not similarly benign,
16
Id.
17
Id.
18
See Tr. 504:6–505:1 (DuBridge).
19
See Stip., ¶ 9.
20
Id.
21
Id.; Tr. 504:6–505:1 (DuBridge).
22
Stip., ¶ 10.
5
however, when used to tread solid tumor cancer cells.23 Thus, to date, T cell
therapies have only been used to treat blood cancers, such as leukemia.24
2. Harpoon Develops the TriTAC and ProTriTAC Platforms
a. Inherently Active versus Conditionally Active T Cell
Therapies
The goal in founding Harpoon was to develop T cell therapies for solid tumor
cancers by addressing the shortcomings of then-existing T cell therapies.25 Harpoon
did so in two ways. First, it developed a drug with three binding sites that, in
addition to binding to T cells and cancer cells, bound to a third site, a protein
normally found in the blood called albumin.26 Albumin prolongs the T cell
engagers’ existence in the body, giving it more time to work.27 A molecule with this
property of three binding sites is called “tri-specific.”28 Second, Harpoon developed
a “conditionally active” therapy using a “prodrug design” that worked like a normal
T cell engager but that remained inactive until it was in the presence of a cancer
cell.29 Cancer cells release certain unique enzymes, or “proteases,” and these
23
See id. ¶ 9.
24
See Tr. 1436:4–18 (Baeuerle).
25
Stip., ¶ 13; Tr. 1078:6–22 (Evnin).
26
Stip., ¶ 14.
27
Id. ¶¶ 14–15. Before this advancement, the body eliminated T cell engagers from the
bloodstream so quickly that patients required continual intravenous infusion to receive treatment.
Tr. 453:17–454:10 (Geesaman), 868:1–7 (Marasco).
28
Stip., ¶ 15.
29
Id. ¶ 19.
6
proteases “activate” the conditionally active T cell engager, with the result that it
only recruits T cells in the presence of cancer cells.30
Thus, T cell therapies can generally be divided into “inherently active”
therapies and “conditionally active” therapies. Conditionally active therapies are
also referred to as “inducible” therapies, meaning the therapy drug’s active state is
induced at the tumor site. Thus, “conditionally active T cell therapy” and “inducible
T cell therapy” refer to the same concept.
Harpoon called the first advancement—prolonging the life of the therapy drug
through albumin binding—its “TriTAC” platform.31 The TriTAC platform is an
inherently active T cell engager.32 Harpoon called the second advancement—
keeping the drug inactive until in the presence of a cancer cell—its “ProTriTAC”
platform.33 In early 2016, these developments were in the nascent stages, without
enabling data.34 In March 2016, Harpoon filed an initial patent application for both
concepts and potential compounds encompassed by the technology. 35 The patent
30
Id.
31
Id. ¶¶ 14, 16. TriTAC is short for “Tri-Specific T-cell Activating Construct.” Id. ¶ 14.
32
Tr. 1452:13–23 (Baeuerle).
33
Stip., ¶ 22. ProTriTAC stands for “Pro-Tri-Specific T-cell Activating Construct.” In other
words, it is the TriTAC construct, but in addition it possesses the conditionally activated aspect
that makes it a “prodrug.” Tr. 505:19–506:8 (DuBridge).
34
Tr. 518:21–519:6 (DuBridge), 1184:4–13, 1189:2–21 (Evnin).
Stip., ¶ 20 (U.S. Provisional Application No. 62/305,092, titled “Inducible Binding Proteins and
35
Methods of Use”).
7
application stated the purpose of the technology was “to specifically destroy cancer
cells, while leaving healthy cells and tissues intact and undamaged.”36 At the time
of the patent filing, Harpoon had not yet decided on a specific molecule design for
its ProTriTAC therapy.37 The patent provided “non-limiting examples” and
contemplated alternative designs that could embody the technology described.38
To date, the FDA has approved one inherently active T cell therapy, and that
approval is limited to treating blood cancers.39 The FDA has not approved any
conditionally active T cell therapies.40
b. The ProTriTAC Molecule
As noted above, Harpoon developed a conditionally active T cell engager it
called ProTriTAC.41 The ProTriTAC design had three “binding domains,”
sometimes referred to as “binding sites,” which are the parts of the molecule that
allow it to attach to specific cells it encounters in the body.42 The first binding site
36
Id.
37
Tr. 1524:8–17 (Baeuerle); see also JX 132 (correspondence between DuBridge and Baeuerle
contemplating various molecule designs).
38
JX 133, at 48–49 (Patent application stating, “[i]t should be understood that various alternatives
to the embodiments of the invention described herein may be employed in practicing the
invention.”), 58–60 (figures illustrating concepts).
39
Stip., ¶ 18.
40
Id.
41
See Id. ¶¶ 19, 22.
42
Id. ¶¶ 12, 14.
8
is the “cancer targeting domain,” which attaches to cancer cells.43 The second
binding site is the “T cell engaging domain,” which attaches to T cells. 44 The third
binding site is the “half-life extension domain,” which attaches to the albumin
protein that extends the molecule’s life.45
The ProTriTAC’s T cell engaging domain was made of a “single chain
variable fragment,” or “scFv.”46 Two smaller chains comprise the scFv: a variable
heavy (vH) chain and a variable light (vL) chain.47 The vH and the vL chains must
be joined in order for the scFv to successfully form the T cell engaging domain and
enable it to recruit T cells.48
Harpoon’s advancement was to create a design that “split” the scFv and held
the vH and vL chains apart until an activation event in the tumor microenvironment
(i.e. inside the tumor) permitted them to come together.49 Once allowed to come
together, the vH and vL chains made the scFv complete, thus “activating” and giving
43
Id. ¶ 14.
44
Id.
45
Id.
46
JX 133, at 17–19, 58–59.
47
JX 133, at 58–59; Tr. 1725:2–11 (Lin).
48
Tr. 1740:11–1741:20 (Lin). In some citations to the trial transcript for the ProTriTAC design,
the witnesses are explaining the functions of Maverick’s later COBRA molecule, but that molecule
is based on Harpoon’s original ProTriTAC design, and so, where such is the case, the testimony
accurately describes Harpoon’s original ProTriTAC design.
49
Id. at 589:1–5 (DuBridge).
9
the T cell engaging domain the ability to effectively recruit T cells.50 In other words,
as Harpoon conceived it, the ProTriTAC design would be unable to effectively
recruit T cells until an activation event caused by an element present in cancer
tumors removed the split in the scFv, thus permitting T cell recruitment.51 Harpoon
sometimes referred to this approach as the “split scFv” or “split dimer” concept.52
Associated with this concept of activation is the concept of “binding affinity.”
Essentially, binding affinity is the measurement of how long and with what degree
of strength two things tend to stay together.53 With the ProTriTAC molecule, the
vH and vL chains, on their own, have no binding affinity to T cells; once they come
together after the activation event, the complete scFv chain has a binding affinity to
T cells.54 The impairment—here, the split in the scFv chain—works much like an
on/off switch, preventing binding when it is in place, and permitting binding when
it is removed.55
50
Id. at 589:1–5 (DuBridge), 1740:11–1741:20 (Lin).
51
Id. at 1740:11–1741:20 (Lin).
52
Id. at 1079:18–1080:3-8 (Evnin), 583:9–23 (DuBridge).
53
Id. at 558:18–559:6 (DuBridge). Technically, binding affinity is the binding strength between
“a ligand and its binding site,” meaning the portion of the molecule that attracts a specific partner.
See id. at 616:23-617:2 (DuBridge). A molecule as a whole has a binding affinity, and the
particular binding sites on the molecule also have binding affinities, which may differ from the
binding affinity of the molecule, depending on the context. Id. at 1930:20–1931:23 (Tidor)
(discussing test that isolates the binding affinity of the immune effector target site from the binding
affinity of the whole molecule).
54
Id. at 1932:7–24 (Tidor).
55
Id. at 756:4–19 (Landes), 692:10–14 (May).
10
Harpoon had two separate ideas for splitting the scFv to achieve a
conditionally active molecule.56 The first idea involved a “linker” that prevented the
formation of the scFv until a protease—the enzyme released by cancer cells—in the
tumor microenvironment cleaved the linker.57 The second idea paired “dummy”
domains with the existing domains: a dummy vH paired with the functional vL, and
a dummy vL paired with the functional vH.58 Once the molecule came within the
tumor microenvironment, the cancer cell’s proteases cleaved the links between the
dummy and functional domains, allowing the dummy domains to fall away and the
functional domains to come together, creating a fully-functional scFv with an active
T cell engaging domain.59 These two ideas shared a common feature: neither
approach allowed the ProTriTAC design to bind to T cells until proteases in the
tumor microenvironment cut the linkers away, allowing the vH and vL chains to
come together and create the fully-functional scFv.60
56
Id. at 1080:9–13 (Evnin).
57
JX 133, at 59; Tr. 509:11–510:4 (DuBridge); Stip., ¶ 19.
58
JX 155, at 4–5; Tr. 513:6–514:8, 582:18–23 (DuBridge).
59
Tr. 583:1–5 (DuBridge).
60
Id. at 582:6–584:11 (DuBridge).
11
This is a graphic representation of Harpoon’s ProTriTAC designs:
61
These two approaches to creating conditionally active T cell engagers were
the only ones Harpoon had developed by the time it spun out the new company,
Maverick.62
3. Harpoon Spins Out Maverick
Around the time of the patent filing in early 2016, Harpoon began considering
strategic transactions to sell off portions of its technology portfolio.63 At that point,
Harpoon was still actively developing both conditionally active and inherently active
61
JX 131, at 60–61.
62
Tr. 1079:20–1080:13 (Evnin), 1459:24–1460:8 (Baeuerle). Harpoon had a concept for another
conditionally active T cell engager called TetraTAC, discussed further below, but this engager had
four domains and therefore fell outside the “Maverick Field” the parties eventually developed. Tr.
1463:1–24 (Baeuerle).
63
Id. at 1080:20–1081:12 (Evnin).
12
T cell therapies.64 It reached out to several companies regarding a strategic
transaction, but Takeda expressed the most interest.65 The parties quickly centered
on a build-to-buy structure for a potential transaction—meaning that Takeda would
invest in the new company and then have an option to purchase it after a certain time
period.66 Under the dual build-to-buy the parties discussed, Harpoon would spin out
certain technologies into a new company, Maverick, and Millennium—Takeda’s
subsidiary—would enter separate build-to-buy collaborations with each of Harpoon
and Maverick.67 The parties commenced negotiations with this structure in mind.68
When negotiations commenced, Maverick did not yet exist, and so there was
some confusion over whether Harpoon’s counsel, Wilson Sonsini Goodrich &
Rosati (“WSGR”), represented both Harpoon and the not-yet-existing spinout,
Maverick, or just Harpoon.69 Harpoon contends it represented and negotiated on
behalf of the not-yet-existing Maverick.70 For practical purposes, a joint privilege
64
Stip., ¶ 21.
65
Tr. 1081:13–1082:4 (Evnin).
66
Id. at 1082:5–1083:17 (Evnin).
67
Id. at 1082:13–1083:11 (Evnin); Stip., ¶ 21.
68
Stip., ¶ 21.
69
Compare Tr. 379:7–11 (Hurff) (“Q: You also understood that [WSGR] was representing
Maverick during the negotiations of the ATA and collaboration agreement; isn’t that right? A:
Yes.”) with Tr. 1355:4–8 (Hostetler) (“Maverick was not a client of [WSGR], correct . . . ? A:
Yes, that is correct. It was not a client.”). WSGR’s attorney, at trial, testified that his firm
represented “the future interests of Maverick” because it wanted both companies to succeed. Tr.
1318:2–15 (Hostetler).
70
Id. at 1094:24–1095:4 (Evnin), 1318:2–15 (Hostetler).
13
between Harpoon and Maverick existed throughout this litigation regarding certain
communications between Harpoon personnel and counsel at WSGR.71 And
Harpoon’s co-founder Guenot would sign the spinout agreement for Maverick.72 As
a substantive matter, however, negotiations for the spinout as a whole were between
Harpoon on one side, and Takeda, acting through Millennium, on the other. 73 In
addition, although Millennium was not a party to the Asset Transfer Agreement (the
“ATA”) between Maverick and Harpoon, it commented on and approved that
agreement.74
a. The Parties Negotiate for Two Separate Build-to-Buys:
Harpoon and Maverick
Much of the discussions in early negotiations centered on dividing the
technologies on which Maverick would focus versus the technologies on which
Harpoon would focus. Harpoon emphasized that it possessed a “discovery
platform,” which would allow Millennium to invest at the earliest stages of
71
This joint privilege applied through trial, requiring some courtroom choreography.
72
See JX 1.
73
Tr. 237:13–20 (Hurff), 714:22–715:9 (Hiett), 1189:22–1191:4, 1199:8–17, 1256:20–1257:18
(Evnin), 1340:16–1341:10 (Hostetler). The parties often refer to Millennium and Takeda
interchangeably. Millennium, in its briefing, refers to its claims as “Takeda’s causes of action.”
Post-Trial Response Br. of Millennium Pharmaceuticals, Inc., D.I. 321 (“Millennium Reply
Brief”), at i. For the sake of clarity, to the extent possible, I attempt to distinguish between these
entities in this Memorandum Opinion.
74
Stip., ¶¶ 29–30. The Asset Transfer Agreement (“ATA”) also disclaims third-party
beneficiaries. JX 1, § 9.14.
14
development.75 Millennium witnesses testified that a discovery platform, to them,
meant “a breadth of potential” that covered an entire field or range of experimental
ideas.76 This understanding matched initial explorations: to maximize the value of
both build-to-buys, Harpoon would continue to work on inherently active T cell
therapies, and Maverick would be spun out to work on conditionally active T cell
therapies, with Millennium investing in both.77 Meetings between Millennium’s
Chris Arendt and Harpoon’s Patrick Baeuerle and Luke Evnin seemed to match this
concept of a broad platform for Maverick: they referred to the conditionally active
platform as a “discovery platform,” and Baeuerle described the conditional
technology as “modular,” which Arendt took to mean it was a versatile platform with
many elements that could be rearranged.78
Harpoon’s representations at this time, including a presentation, identified the
Harpoon trajectory as working on the TriTAC platform—or inherently active
technology—and identified the Maverick trajectory as working on the ProTriTAC
75
Tr. 22:6–9 (Hurff), 8:16–9:10, 12:4–11 (Arendt), 1255:14–18 (Evnin).
76
Id. at 8:16–9:10 (Arendt).
77
Id. at 20:16–24 (Arendt), 1082:13–1084:4 (Evnin) (testifying that Harpoon “would spin out the
nascent conditionally active technology into a new company, which we then referred to as
Maverick.”).
78
Id. at 12:4–23, 13:9–14:19 (Arendt).
15
platform—or conditionally active technology.79 According to Millennium, Harpoon
never departed from this basic divide of the technologies.80
In June 2016, Millennium sent concept sheets to Harpoon to begin
establishing the structure of the build-to-buy transactions.81 These concept sheets,
like the discussions, identified Harpoon’s pursuit of its inherently active platform (at
that time called TRIDENT) and Maverick’s pursuit of Harpoon’s inducible
platform.82 Six term sheets exchanged by Harpoon and Millennium over June and
July 2016 all stated that Maverick would spinout “technology and intellectual
property relating to [Harpoon’s] inducible T-cell engagement platform.”83
Millennium communicated through meetings and term sheets that the conditionally
active platform would require significant development, and that what attracted
79
JX 143, at 65 (describing the partnership as dividing Harpoon into “TRIDENTS [i.e. inherently
active] (build to buy)” and “CD3 Inducible Platforms (spinout)”); Tr. 19:3–20:24, 21:8–23
(Arendt), 1082:13–23 (Evnin).
80
Tr. 21:8–23, 25:21–26:14, 37:15–38:14 (Arendt); 222:17–223:19 (Hurff).
81
See JX 156.
82
Id. at 2 (“Harpoon Collaboration. During a research term of approximately four years, the parties
would collaborate on the development of Harpoon’s Trident platform”), 4 (“Maverick Spin Out. .
. . Harpoon would spinout a newly created entity (‘Maverick‘) that would hold the technology and
intellectual property relating to its inducible T-cell engagement platform.”). The parties use the
terms “platform” and “space” interchangeably to describe areas of technology. Thus, the
“inducible space” or the “conditionally active platform” describe generally technologies associated
with conditionally active T cell engagers.
83
Id. at 4 (June 3, 2016 term sheet); JX 159, at 5 (June 13, 2016 term sheet); JX 168, at 8 (June
23, 2016 term sheet); JX 167, at 6 (June 24, 2016 term sheet); JX 169, at 8 (June 29, 2016 term
sheet); JX 191, at 8, 20 (July 21, 2016 term sheet).
16
Takeda was the “bold vision” of the early-stage discovery.84 To achieve this,
Millennium witnesses testified, they intended the Maverick spinout to create a
“broad kind of ring fence” around the concept of the inducible T cell platform and
permit “different ways” to achieve conditionality, an intent they testified that they
communicated to Harpoon.85
Presentations and term sheets through July and August 2016 maintained this
concept. Dr. Robert DuBridge, a Harpoon scientist who joined Maverick upon its
spinout, gave a presentation to Takeda emphasizing that the conditionally active
technology would have different iterations along the way, and that there would be
different ways to achieve conditional activation.86 Evnin, Guenot, and Baeuerle all
attended this presentation and did not voice disagreement with the description
DuBridge provided.87 At the same time as these discussions and presentations
described a broad discovery platform, they all focused on a conditionally active
design that utilized the “split scFv” feature of the ProTriTAC design, described
84
JX 156, at 4, JX 167, at 3, 7; JX 168, at 3, 9, 14, 18; JX 169, at 9, 15, 20; Tr. 226:10–228:12
(Hurff), 31:6–33:24, 36:16–37:6 (Arendt).
85
Tr. 36:11–39:17, 47:17–48:4, 48:9–18, 49:3–50:11, 50:14–51:11 (Arendt) (testifying Maverick
spinout intended to create “ring-fence” around inducible space); Tr. 96:10–21 (Arendt) (testifying
the “ring-fence” concept was communicated clearly to Harpoon); see also JX 191, at 23 (defining
“Maverick Platform Improvements” as “any optimization, enhancement, improvement or
modification to any of the [various] components of the Maverick Licensed Intellectual Property”).
86
JX 155; JX 187, at 49; Tr. 42:22–44:2, 44:23–45:21 (Arendt), 526:18–527:5 (DuBridge).
87
Tr. 46:8–17 (Arendt).
17
above.88 In other words, while it expected to invest in a broad discovery platform,
Millennium understood that the existing technology Harpoon would spin out into
Maverick involved the “split scFv” design.89 This made sense, given that at the time
of these negotiations, Harpoon had never worked on or shown Millennium a
conditionally active platform that did not utilize this design.90
b. The Parties Define the Maverick Field as Millennium Settles
on a Single Build-to-Buy
Once negotiations had progressed by August 2016, Harpoon commenced
defining the “Maverick Field”—the precise definition of what would be spun out in
the new company—in the ATA.91 By this point, Harpoon understood that Takeda
might invest in both build-to-buys, or it might invest in only one build-to-buy, and
so each company needed a “growth path” for its future.92
Each side proceeded with negotiations, but they proceeded with distinct
concepts of what the Maverick Field encompassed. Millennium continued to view
88
E.g. JX 152, at 7; JX 187, at 48–57; JX 278, at 5.
89
See JX 171, at 2 (Arendt describing conditional aspect of Maverick as “scFv that has been sliced
in half”); JX 262, at 8 (describing “Inducible T-cell Engager Platform Overview” and noting that
activation is achieved by “local formation of a functional CD3 scFv”); JX 378, at 1 (describing
“scFv . . . coming together” as activation tool); JX 395, at 3–4 (describing Maverick “M[ode] O[f]
A[ction] as reconstitution of cleaved scFv”). One exception was that Millennium was aware of
Harpoon competitors that used different techniques for achieving conditionality, and they wanted
the “broad kind of ring fence” to encompass these alternative approaches. Tr. 50:14–51:11,
208:14–209:20 (Arendt).
90
Tr. 144:22–147:24 (Arendt), 386:1–13 (Hurff).
91
Evnin Dep. Tr. Vol. I, 90:10–92:6; JX 195-A.
92
Tr. 1089:1–11 (Evnin).
18
the Maverick Field as a broad discovery platform ring-fencing the concept of
inducible T cell engagers.93 Further, Millennium personnel believed they
communicated this understanding to Harpoon through various meetings,
discussions, and emails.94 By contrast, internal emails between Evnin, Guenot, and
counsel at WSGR—emails never shared with Millennium—reveal that they intended
the Maverick Field to be limited to the split scFv design described above, which was
the only concept of conditionally active T cell engager Harpoon had developed at
that point.95 Harpoon internally exchanged multiple drafts of the “Maverick Field”
(the contractual language that would ultimately define the transferred intellectual
property), revising the definition until, according to their testimony, they had what
they felt was a “[s]imple and clear” definition that captured the split scFv inducible
design.96
Consistent with this intent to limit the Maverick Field, Harpoon and WSGR
made several revisions intended to “close loopholes” that could have allowed
93
Tr. 223:8–224:14, 387:15–389:4 (Hurff), 52:15–54:20, 63:3–23, 69:17–24 (Arendt).
94
JX 241 (September 2, 2016 diligence meeting overview); JX 278 (Presentation from September
2, 2016 meeting); JX 288, at 3 (meeting notes inquiring whether definition of Maverick Field is
“broad enough to capture all relevant rights that should be allocated”); Tr. 63:3–23, 69:17–24,
72:14–73:3 (Arendt), 241:11–242:2 (Hurff).
95
JX 206, at 1 (discussing whether to give Maverick all inducible or only “the current Maverick
embodiment”); Tr. 1095:14–1096:16 (Evnin); Guenot Dep. Tr. 67:13–18; JX 227-A, at 1 (Evnin
writing, “trying to keep [the Maverick Field] focused on the current Maverick invention or
something very close to it”).
96
JX 238, at 1 (WSGR counsel writing, “this matches my understanding of the technology and IP.
Simple and clear.”); JX 235, at 1; JX 220; Tr. 1333:5–19 (Hostetler), 1152:19–1153:1 (Evnin). .
19
Harpoon to bypass the Maverick Field and utilize the split scFv design in the future.97
Counsel at WSGR testified that the intent was to protect Maverick’s right to exploit
the split scFv design while preserving Harpoon’s ability to continue to explore other
inducible technologies.98 In internal correspondence, WSGR counsel wrote that the
“main thing that shifts the balance is keeping the concept of inducible within
Harpoon.”99 Millennium, for its part, also requested revisions to the language in the
ATA, discussed further below, such as broadening terms to encompass all T cell
target sites rather than a specific one.100
In late October 2016, after Millennium entered into non-disclosure
agreements and performed due diligence on Harpoon’s technology, it expressed an
interest only in Harpoon’s ProTriTAC platform, in other words, the inducible
technology to be spun out into Maverick.101 The parties proceeded with negotiations
toward the single build-to-buy, with Harpoon remaining an independent company.
On November 3, 2016, Baeuerle sent plans for the separation of the companies
titled, “Separation of Harpoon (TriTAC platform) and Maverick (Pro-TriTAC
97
See JX 318, at 1; Tr. 1349:1–10 (Hostetler); JX 246, at 1–2; JX 245, at 1; JX 251-A, at 1; JX
250-A, at 1–2; Tr. 1221:3–10 (Evnin).
98
Tr. 1328:15–1329:13 (Hostetler).
99
JX 246, at 1.
100
Tr. 257:13–258:8, 260:21–261:2 (Hurff). Millennium also revised albumin-specific language
to a broader definition encompassing any half-life extending domain. Tr. 250:1–251:1 (Hurff).
101
Stip., ¶ 22.
20
platform).”102 Further, during this negotiation period, Harpoon did not employ the
term “Maverick design,” “split scFv,” or “split dimer” to describe what it intended
to transfer, nor do these terms appear in the finalized contracts.103 Harpoon
personnel testified that they thought communicating the limitations in the Maverick
Field definition was unnecessary because, as Evnin put it, he believed the definition
“was understood by all.”104 By contrast, Millennium witnesses testified that at
meetings they specifically discussed moving beyond the split scFv design, given that
it was unproven at that point.105
Starting in November 2016, after Millennium had settled on a single build-to-
buy transaction, the negotiations hit a snag. Because it had decided not to purchase
Harpoon, Millennium agreed to license back all of the Maverick IP for Harpoon’s
use outside the Maverick Field (the “Grant-Back License”).106 At that point, the
Maverick Field was limited to immune effector target binders that bound to CD3,
the most popular and well-known T cell target.107 Millennium realized that as the
Maverick Field was drafted at that time, Harpoon would be able to “generate an
102
JX 366, at 3.
103
Tr. 78:13–79:10, 198:17–199:5 (Arendt), 450:6–15 (Geesaman); 532:11–533:1 (DuBridge);
1224:1–1225:10, 1261:21–1262:3 (Evnin), 1382:7–11, 1388:13–20 (Gerber), 1351:24–1352:3
(Hostetler); Guenot Depo. Tr. 21:18–25; JX 1, § 1.56.
104
Id. at 1261:21–1262:3 (Evnin).
105
Tr. 78:13–79:10 (Arendt).
106
JX 383, § 2.2(b).
107
JX 383, § 1.50.
21
essentially similar platform” simply by using a T cell target other than CD3. 108 It
proposed rewriting the definition to replace “CD3” with “Immune Effector Target,”
a defined term that included all T cell receptors, as well as adding the non-
compete.109
In early December, Harpoon rejected the proposal to expand the Maverick
Field language from “CD3” to “Immune Effector Target.”110 At Millennium, Arendt
“freaked out.”111 He worried that without this expansion from “CD3” to “Immune
Effector Target,” he was “losing . . . exclusive inducible platform.”112 Hurff
summarized that Arendt hoped to “[b]uild a wall around all things T-cell (preclude
any inducible platform to Harpoon for T-cells, not just CD3).”113 Hurff, in the same
email, proposed alternatives to Arendt’s “minimum/final” position to “preclude any
inducible platform to Harpoon for T-cells.”114 These alternatives included limiting
the Grant-Back License, shortening the length of the non-compete for an expanded
field, or revising the financial terms.115 Ultimately, Millennium achieved the
108
See JX 445, at 3.
109
JX 406, §§ 1.43, 1.56, 7.5.
110
See JX 433, at 13–14
111
See JX 426, at 1.
112
JX 445, at 2.
113
Id.
114
Id. at 3–4.
115
Id.
22
expanded definition, and the final Maverick Field reflects the broader “Immune
Effector Target” as a defined term, the definition of which includes all T cell
targets.116
At the very end of December, two days before the ATA was signed, Evnin
wrote an email to Maverick CSO Hans-Peter Gerber and Harpoon CEO Dr. Gerald
McMahon summarizing the deal terms.117 In this summary, Evnin described the
Maverick Field as “inducible T cell engagers (except NKT cells) of the ‘Maverick’
design.”118 The next day, Guenot wrote to the Harpoon and Maverick Boards,
summarizing the deal, and used this same language: the Maverick Field would be
“Inducible T cell engagers (except NKT cells) of the ‘Maverick’ design.”119 Thus,
on the eve of the transaction, Harpoon appeared to attempt to communicate, however
vaguely, that it viewed the transferred IP as an inducible T cell engager of a specific
design, rather than broad rights to the inducible space. Harpoon never clarified what
it meant by the term “Maverick Design,” and Maverick CSO Gerber and Maverick
116
JX 1, §§ 1.56, 1.43. “Natural killer T cells” were excluded at Harpoon’s request. JX 1, § 1.43.
117
JX 550, at 1.
118
Id.
119
Id.
23
Board member Geesaman never asked.120 These summaries were not shared directly
with Millennium.
Harpoon and Maverick entered the ATA on December 30, 2016, and
Millennium and Maverick entered a Collaboration Agreement (the “Collaboration
Agreement”), which provided for funding from Millennium, as well as a Warrant to
Purchase Common Stock of Maverick Therapeutics, Inc. (the “Warrant Agreement”
and together with the ATA and Collaboration Agreement, the “Agreements”), which
provided Millennium with the right to later acquire Maverick.121 Shortly after the
spinout finalized, other large pharmaceutical companies that had expressed interest
in Harpoon—including Merk, Eli Lilly, Pfizer, Johnson & Johnson, and
AZ/MEDI—communicated that they were only interested in the conditionally active
platform.122
The parties thus entered into these contracts without explicitly having
discussed the limits of the Maverick Field. At trial, each party offered circumstantial
evidence that the other party shared its understanding of the Maverick Field.
120
Tr. 480:6–481:3 (Geesaman), 1422:6–1423:8 (Gerber). Geesaman had used the term “the
Maverick Technology” in a memo describing the split scFv design, but also described potential
arrangements as being “quite flexible.” JX 593, at 6; Tr. 483:8–486:19 (Geesaman).
121
Stip., ¶ 23; JX 2; JX 3.
122
JX 644, at 2 (Merk); JX 740, at 2 (Eli Lilly); JX 758, at 6 (Pfizer), 12 (AZ/MEDI); JX 769, at
4 (Johnson & Johnson); JX 1200, at 2 (Eli Lilly).
24
Harpoon purported to show that Millennium understood the Maverick Field as
limited to the split scFv design:
• In personal notes, Millennium’s business negotiator Chris Hurff wrote
that Arendt’s position on the spinoff was that “[Harpoon] can go for
inducible, just not based on this IP.”123
• As discussed, Hurff offered alternative negotiating positions, one of
which was to impose “[s]ome time limit before Harpoon could do any
T-cell work (3 years?).”124 At this point, a non-compete prohibiting
Harpoon’s work in the Maverick Field for four years was already in
place, and so Harpoon infers that if Hurff understood that a three-year
limitation would go beyond what was already in place, Millennium
understood the current definition did not include all work on
conditionally active platforms.125
• Millennium’s descriptions of the Maverick technology in presentations
to Takeda match the split scFv concept.126
• On the date the ATA was signed, Arendt wrote that “version 2” of the
Maverick technology might be an “entirely new conditional approach
if approved at [Joint Steering Committee].”127 Under the Collaboration
Agreement, Joint Steering Committee approval was only required if a
design was outside the Collaboration Field, which was defined largely
identical to the Maverick Field, except that it limited the immune
effector targets to CD3, a specific T cell expression.128 Thus, Harpoon
infers, Millennium understood that new approaches to inducible T cell
engagers would fall outside the Maverick Field.
• WSGR counsel recalled discussions of lab notebook redactions for
transferring IP to Maverick that he suggested, based on his proposed
123
JX 426, at 1.
124
JX 445, at 3.
125
At trial, Hurff was unable to reconcile these positions and testified that he may have forgotten
about the existing non-compete when he wrote this email. Tr. 357:7–363:22 (Hurff).
126
See JX 262, at 8–9; JX 583, at 5–7; JX 1017, at 5, 6–7, 17, 25, 29. Essentially, these
presentations describe the ProTriTAC technology as it existed, including the split scFv design.
127
JX 562, at 1.
128
JX 2, § 2.1.1(c), § 3.4 (requiring approval if immune effector targets are expanded beyond
CD3).
25
redactions, indicated the transferred IP was limited to the split scFv
design in the provisional patent application.129
• During negotiations, no one at Harpoon explicitly told anyone at
Millennium that they would not be developing conditionally active T
cell engagers after the spinout.130
Conversely, Millennium and Maverick purported to show that they
understood the Maverick Field as encompassing a broad range of inducible T cell
platforms and that Harpoon, though it understood this, never disabused them of the
notion or shared its own intent:
• Millennium representatives as well as Harpoon employees that joined
Maverick as of the spinout testified, corroborated by contemporaneous
notes and correspondence, that they understood the Maverick Field to
encompass all conditionally active T cell engagers.131
• New Maverick employees, including CSO Gerber and CEO Jim
Scibetta testified the reason they joined Maverick was because of the
exclusive right to work with conditionally active T cell engagers, and
that they would not have joined the company if they knew its protected
work was limited to a single design.132
• Likewise, Millennium representatives testified that the factor justifying
the planned massive investment in Maverick was their understanding
129
Tr. 1338:18–1339:5 (Hostetler).
130
Tr. 287:10–290:24, 307:13–18 (Hurff). Hurff testified at his deposition that Harpoon had
expressly said they would not compete in the inducible space following the spinout, but at trial
testified that he could not recall any specific conversations to that effect. Id.
131
JX 422, at 20–21 (Gerber’s notes describing spinout as giving “[Takeda] exclusive access to
T[]cell”); JX 583, at 3 (presentation describing spinout as “[o]ption to acquire Inducible T-Cell
Engager company Maverick . . . and the company’s Discovery Platform”); Tr. 1375:3–20, 1381:3–
14, 1384:19–1385:12 (Gerber).
132
JX 422, at 20–21; Tr. 1375:3–1382:11 (Gerber); JX 370, at 1; JX 366, at 3; Tr. 545:1–547:7
(DuBridge), 885:10–21 (Scibetta), 644:13–645:17 (May). In total, nine Harpoon employees
accepted employment with Maverick as of the spinout. JX 1, at Schedule 1.113. DuBridge, tasked
with separating the companies, testified that he did so based on the understanding that Maverick
would be working in the conditionally active T cell engager field, and Harpoon would not. Tr.
535:7–537:19, 545:20–546:4 (DuBridge).
26
that the Maverick IP covered the entire conditionally active T cell
engager platform.133
Although it has designed over 750 different molecules since the spinoff, Maverick
has not researched any designs that do not utilize the split scFv concept.134 Maverick
scientists DuBridge and Arendt both acknowledged that inducible T cell engager
designs exist, including some invented by Harpoon, that fall outside the Maverick
Field and that Harpoon would be free to develop these.135
c. Harpoon Avoids Disclosing Plans to Develop Inducible T
Cell Engagers After the Spinout
Prior to the transaction, Harpoon never informed Millennium that it intended
to develop competitive conditionally active T cell therapies following the Maverick
spinout.136 To the contrary, Harpoon emphasized its intent to continue to develop
its inherently active platform.137 In communications with investors regarding its
Series B financing in December 2016, Evnin and Harpoon CEO McMahon stated
that “the Pro-TriTAC platform for conditional activation of T cells in the tumor
microenvironment, has been spun out into sister company Maverick,” and that
133
JX 426; Tr. 422:4–423:5 (Hurff); JX 451, at 1–4; JX 527-PPT, at 3; Tr. 439:13–24, 442:16–
443:2, 444:12–23, 446:2–447:8, 458:17–459:8, 461:13–18 (Geesaman).
134
Tr. 518:21–519:1, 588:11–589:10 (DuBridge).
135
Id. at 577:18–578:23, 579:4–10 (DuBridge), 199:11–24 (Arendt).
136
Id. at 247:18–22 (Hurff), 461:13–18 (Geesaman), 547:11–15 (DuBridge), 1401:5–11 (Gerber),
1215:1–8, 1238:8–12, 1258:20–1259:2 (Evnin).
137
Id. at 19:10–20:6 (Arendt), 1226:22–1227:12 (Evnin), 1381:8–17, 1385:4–12 (Gerber).
27
“Harpoon has retained rights for Pro-TriTACs (conditional activation in the tumor)
for the engaging of all other immune cells (except T cells)”; a position that mirrors
Millennium’s current litigation position.138 In an email to Bard Geesaman shortly
before the transaction closed, Evnin described the Maverick Field simply as
“[i]nducible T cell engagers.”139 He stated in an internal email to Baeuerle and
McMahon that due to the non-compete that would be included as part of the
transaction, “the inducible element . . . is off limits.”140
Around the same time, less than two weeks before the transaction closed,
Evnin and Baeuerle discussed a plan for Harpoon’s future inventions in light of the
non-compete the parties were negotiating.141 Evnin described the spinout to
Baeuerle as being “for cd3 directed inducible antibodies,” and noted Millennium’s
push to expand this definition to all T cell targets.142 He wrote that such a change
would prevent Harpoon from competing “in the space of T cell redirection therapy
with an inducible Maverick like approach (on the IP that is currently filed or on
current know how).”143 Baeuerle responded that it “[w]ould be great to have a CD3
138
JX 430, at 1; see also JX 438, at 1; JX 456, at 1; JX 558, at 1; JX 590, at 1. Harpoon continued
to use the same language in investor communications immediately after the spinout. JX 623, at 1;
JX 655, at 1.
139
JX 587, at 1.
140
JX 630, at 1.
141
JX 476, at 1–3.
142
JX 476, at 2.
143
Id.
28
binding domain formed from two pieces defined in the Maverick Field (…because I
have an idea to get to T cell engagers without).”144 Evnin replied, “I think if we
invent something NEW it is not part of this deal. . .”145 Baeuerle confirmed, “[t]hat’s
what I am up to. Perhaps we should invent after the deal is closed.”146 Baeuerle
went on to describe his idea: “It does not depend on bipartite CD3 binder (T’s
[Takeda]’s nightmare).”147 Evnin suggested, “[p]erhaps better for in person at this
point,” and Baeuerle agreed to take the discussion offline.148
In addition, on October 14, 2016, during due diligence, Harpoon filed a patent
application involving conditionally active technology.149 Harpoon withheld
disclosure of this patent information from Millennium. Harpoon claimed that
because its disclosure obligations were contained to the Maverick Field, and because
it considered the Maverick Field to be limited to the split scFv design, it was not
obliged to disclose this patent application regarding a conditionally active
144
Id.
145
JX 474, at 1.
146
Id.
147
JX 476, at 1.
148
Id. At trial, Baeuerle testified they took the discussion offline not to avoid a paper trail but
because Evnin was physically nearby at MPM Capital’s office and a face-to-face discussion would
be simpler. Tr. 1467:12–22 (Baeuerle).
149
JX 336.
29
engager.150 Nonetheless, Harpoon withdrew the application for the remainder of the
due diligence period and only refiled it after the Agreements were finalized and the
spinout completed, assuring that Millennium did not see it.151
Shortly before closing, on December 21, 2016, Evnin reminded others that “in
the context of a [joint] release with Takeda we do not want to [be] raising their ire
about other technologies currently at Harpoon (that they do not know about now).”152
Evnin testified that he wanted to avoid reopening negotiations, particularly around
the Maverick Field definition.153 Maverick’s soon-to-be CSO, Gerber, was included
on this email.154
d. The Parties Finalize the Agreements
Harpoon spun off Maverick at the end of December 2016.155 On December
30, Harpoon and Maverick entered into the ATA, which governed the spinout.156 A
week later, Maverick and Millennium entered into the Collaboration Agreement,
which provided for funding from Millennium, as well as the Warrant Agreement,
150
Compare JX 405, at 27 (requiring disclosure of all intellectual property) with JX 433, at 30
(requiring disclosure of intellectual property “relating to the Maverick Field”); Tr. 1163:23–
1165:25 (Evnin).
151
See JX 904, at 3; Tr. 1231:12–1233:2 (Evnin); Guenot Depo Tr. 25:23–26:14, 29:1–18; 215:14–
216:8.
152
JX 500, at 1.
153
Tr. 1180:3–1182:16 (Evnin).
154
JX 500, at 1.
155
Stip., ¶ 35.
156
Id. ¶ 23; JX 1.
30
which provided Millennium with the right to later acquire Maverick.157 While
Millennium planned to invest substantially in Maverick, it was not a party to the
ATA.158 However, as noted, Harpoon sought Millennium’s approval of the final
ATA, and Harpoon had communicated with Millennium regarding the terms of all
three Agreements.159
Under the terms of the ATA, Maverick provided Harpoon with a $6.75 million
promissory note, payable in two years.160 Maverick transferred 4,086,720 shares of
common stock and 15,000,000 shares of Series A Preferred Stock to Harpoon, which
Harpoon disbursed pro rata to its shareholders.161 Also upon Maverick’s spinout,
Harpoon employees, including DuBridge, accepted employment with Maverick.162
Evnin became the chair of the Maverick Board, Baeuerle became an observer of the
Maverick Board, and both of them joined the “Takeda-Maverick Joint Steering
Committee.”163 At the same time, both Evnin and Baeuerle continued to serve on
157
Stip., ¶ 23; JX 2; JX 3.
158
Stip., ¶¶ 29–30.
159
Tr. 237:13–20 (Hurff), 714:22–715:9 (Hiett); 1189:22–1191:4, 1199:8–17, 1256:20–1257:18
(Evnin), 1340:16–1341:10 (Hostetler).
160
Stip., ¶ 38. Harpoon has repaid this note. Id.
161
Id.
162
Id. ¶ 39.
163
Id. ¶ 40.
31
the Harpoon Board.164 Millennium recognized at least Baeuerle’s dual service as a
potential risk.165
After the spinout, Maverick renamed the ProTriTAC platform the COBRA
platform.166
e. Harpoon’s Non-Compete
Under § 7.5 of the ATA, Harpoon agreed that it would not compete with
Maverick in the Maverick Field for four years.167 This meant that Maverick had the
exclusive right for four years to research, develop, manufacture, and commercialize
any product in the Maverick Field.168 The finalized ATA defines the Maverick Field
in § 1.56:
“Maverick Field” means multi-specific Antigen-binding molecules that
include: (a) at least one domain that binds to an Immune Effector Target
that (i) is formed from two domains, each of which is impaired for
Immune Effector Target binding, and (ii) undergoes a resultant increase
in Immune Effector Target binding affinity of at least 50 fold after an
activation event; (b) at least one domain that binds to one or more
164
Id. ¶ 41.
165
See JX 583, at 19.
166
Stip., ¶ 39. COBRA stands for Conditional Bispecific Redirected Activation.
167
JX 1, § 7.5 (Harpoon agreeing that it would not “anywhere in the word, directly or indirectly,
engage in the Business [of researching, developing, manufacturing or commercializing any
product within the Maverick Field] in any manner . . . until four (4) years after the Distribution [of
Maverick stock to Harpoon]” and that the noncompete was “reasonable and properly required for
the adequate protection of Maverick’s interest in the [business of researching, developing,
manufacturing or commercializing any product within the Maverick Field].”).
168
Stip., ¶ 31.
32
Therapeutic Targets; and (c) at least one half-life extension domain,
which domains (a) through (c) may be linked in various orders.169
The term “Immune Effector Target” is further defined in ATA § 1.43 as “a Target
that is expressed by a T cell and induces a therapeutic cytolytic T cell response upon
binding, provided that natural killer T cells shall not be considered T cells for the
purposes of this definition.”170
Plaintiffs testified that at the time the parties entered the ATA, the Maverick
Field definition above encompassed all then-existing conditionally active T cell
engagers.171 Additionally, Plaintiffs testified that the Maverick Field was broad
enough to encompass several approaches to conditionally active T cell engagers
being used by other competitors then in the market.172
Various assets related to the Maverick field, including contracts, tangible
assets, permits, books and records, claims, and a number of employees, were also
transferred to Maverick under the ATA.173 Following the transfer of the intellectual
169
JX 1, § 1.56.
170
JX 1, § 1.43. Harpoon requested a carve-out of “Natural Killer T Cells” from the definition to
develop a different technology not at issue in this litigation. Stip., ¶ 27. The carve-out was narrow
and did not affect Maverick’s work. Tr. 267:12–268:23, 269:23–270:10 (Hurff).
171
Tr. 209:21–210:1, 213:13–20 (Arendt), 551:24–554:1, 548:16–549:22, 556:20–557:3, 608:20-
609:6 (DuBridge).
172
This included molecules designed by CytomX, Amunix, and Genetech. Tr. 69:17–24, 209:21–
210:1, 213:13–20 (Arendt), 551:24–554:1, 548:16–549:22, 556:20–557:3, 608:20–609:6
(DuBridge).
173
JX 1, §§ 2.1(b)–(f), 4.1, Schedule 1.113.
33
property in the ATA, Maverick gave Harpoon the Grant-Back License to use the
intellectual property “outside the Maverick Field.”174
4. After the Spinout, Harpoon Develops a New Conditionally Active
T Cell Engager
Following the Maverick spinout, Harpoon began generating ideas for a new
conditionally active T cell therapy as early as January 2017.175 Harpoon CEO
McMahon testified that the search for a conditionally active platform that did not
use the split scFv design began immediately after the spinout.176 Baeuerle described
Harpoon’s early concepts, some of which he had begun developing before the
spinout, as “science fiction” designs.177 In March 2017, McMahon prepared a
presentation for an investor that stated Harpoon was “unencumbered . . . to develop
new protease-dependent activation of T and other immune cells.”178 Another
presentation in June included the same language.179
174
JX 1, § 2.2(b)–(c).
175
Stip., ¶ 42.
176
Tr. 1682:16–22 (McMahon).
177
JX 537, at 1; Tr. 1464:1–11 (Baeuerle).
178
JX 646, at 12.
179
JX 690, at 27.
34
a. Harpoon Continues to Avoid Disclosing its Work on
Conditionally Active T Cell Engagers to Maverick or
Millennium
However, in public statements after the spinout, Harpoon described the
companies in a way that conformed to Millennium’s understanding of a broad
Maverick Field. In preparation for a Series B financing press release in May 2017,
Harpoon’s public relations consultant proposed text that stated Harpoon was
“developing research platforms targeting [t-cells?] that become activated by
proteases in the tumor micro-environment.”180 McMahon responded, “[d]o not say
T cells – that is Maverick and Takeda would sue us.”181
In a public comment for a Biocentury article on the spinout in June 2017,
Evnin stated:
In this particular case, [the spinout] made a lot of sense because we had
somebody interested in a piece of the Harpoon portfolio of
technologies, and they were willing to put a huge amount of money
exclusively behind that one piece to make it the corner of the IP estate.
[Harpoon and Maverick] obviously have a shared history, but these two
companies now have their own distinct trajectory.182
Harpoon’s head of business development emailed McMahon regarding Evnin’s
statement: “This is a great article..[.] although it seems to imply that Maverick got
rights to all related conditionally-active TriTAC which I don’t think is accurate. I’m
180
JX 681, at 1.
181
Id.
182
JX 748, at 2.
35
sure Maverick doesn’t know that but it is misleading...”183 In the same article,
McMahon stated, “[w]e’ve carefully, strategically carved the Maverick platform out
of Harpoon and it really is not competing. This was a self-contained technology and
was therefore relatively new and easy to bring into a separate business.”184
In February 2018, Harpoon solicited Takeda—Millennium’s parent
company—for investment in its inherently active technologies.185 Harpoon
modified the slide deck for its presentation to avoid disclosing its work on
conditionally active T cell engagers.186 McMahon instructed Harpoon’s head of
business development to remove all references to the development of “Pro”—i.e.
inducible—technologies from an existing investor slide deck for the purpose of
sending it to Takeda.187 At trial, he testified that he did not want to reveal Harpoon’s
ProTriTAC research at that time because it would be competitive with Maverick,
which Takeda was funding through Millennium.188 Evnin commented in the email
chain, “[p]lease recall that Takeda is the Maverick partner . . . . they would not be
excited to hear about some of [Harpoon’s] work . . . . e.g. on T cell engagers.”189
183
JX 749, at 1.
184
JX 748, at 2.
185
JX 808.
186
See JX 808; Tr. 1277:12–1278:2 (Evnin).
187
JX 808, at 1.
188
Tr. 1667:2–23, 1668:8–1669:4 (McMahon).
189
JX 814, at 1.
36
And Baeuerle wrote, “Takeda will be super sensitive re conditional triTACs. And I
will get under scrutiny . . .”190 McMahon replied, “which is why we removed any
reference to Pro-Tritac in the slides.”191
b. Harpoon Maintains Access to Maverick’s Confidential
Information
Following the Maverick spinout, both Evnin and Baeuerle had extensive
access to Maverick’s research at the same time that Harpoon was developing
competing technology.192 Evnin and Baeuerle participated in Maverick board
meetings, joint steering committee meetings, and scientific advisory board
meetings.193 Baeuerle worked as an “acting CSO” at Maverick, and Evnin also
worked intimately with the scientists at Maverick to develop Maverick’s COBRA
molecule.194 Millennium witnesses testified that the company only granted this level
of access based on the understanding that Harpoon was limiting its own work to
inherently active platforms.195 While Evnin recognized that with the development
of a new conditionally active platform, Harpoon was working as a direct competitor
190
Id.
191
Id.
192
Tr. 1273:11–1274:4, 1277:12–1278:2 (Evnin), 1558:16–1559:14 (Baeuerle).
193
Id. at 549:8–15, 562:15–563:3, 564:4–566:21 (DuBridge), 893:8–894:14 (Scibetta), 653:13–
654:3, 664:10–22, 670:16–672:15 (May).
194
Id. at 1495:10–15, 1469:6–1471:1, 1558:16–1559:14 (Baeuerle).
195
Id. at 417:23–418:8, 419:9–14 (Hurff), 74:2–19 (Arendt).
37
of Maverick, he did not disclose this fact to Maverick or Millennium.196 Baeuerle
and Evnin testified that they refrained from disclosing the competition due to their
confidentiality obligations to Harpoon.197 Likewise, other members of the Maverick
Board, including Geesaman, knew of Harpoon’s conditional platform and did not
disclose it to Maverick for the same reason.198
Baeuerle testified that his practice was to “firewall” the intellectual property
of each company he started to prevent it from influencing his work at subsequent
companies; similarly, here, he testified he prevented what he learned in his work at
Maverick from influencing his work at Harpoon.199 Both Evnin and Baeuerle
testified that they were not involved in the development of any conditionally active
platforms at Harpoon, though Baeuerle’s name would appear on slides and draft
patent applications associated with the ProTriTAC technology, and Evnin would
request to be listed as an inventor.200 Further, in May 2017, Evnin sent an email to
McMahon at Harpoon containing slides from a Maverick board meeting regarding
196
Id. at 1174:20–24, 1175:15–20 (Evnin), 899:8–23 (Scibetta). Evnin conceded he would not
allow someone working for a competitor to serve on Harpoon’s Board due to the potential conflicts
of interest. Id. at 1267:12–1269:17 (Evnin).
197
Id. at 1516:23–1517:5 (Baeuerle).
Id. at 488:1–10 (Geesaman). Dr. Dan Hicklin also served on both Maverick’s and Harpoon’s
198
Boards and did not disclose Harpoon’s ProTriTAC molecule. Id. at 940:19–941:18 (Scibetta).
199
Id. at 1495:7–14, 1556:14–22 (Baeuerle).
200
JX 718 (slide deck bearing Baeuerle’s name); JX 730 (email chain discussing inventor-ship of
patent application); JX 791 (email noting Evnin’s request to be listed as inventor); Tr. 1278:3–19
(Evnin), 1559:15–24 (Baeuerle).
38
its conditionally active platform and wrote, “[s]ee these slides in case this sparks
something.”201 Evnin described this at trial as an “inadvertent” disclosure of
Maverick’s confidential information, testifying that he had not intended to send the
full contents of the email thread, but only a smaller portion that did not contain
confidential information.202
c. Harpoon Invents a New ProTriTAC Molecule
On June 1, 2017, Harpoon hired Dr. Jack Lin, in part to help develop
conditionally active therapies.203 Lin came to Harpoon with experience with
antibodies, proteases, and “peptide masking,” a technique with the potential to make
protease-activated inducible therapies.204 However, Lin had no direct experience
with T cell engager technologies.205 Lin’s mandate at Harpoon was to develop an
inducible platform without using the split scFv design.206 He would be aided in this
endeavor, he was told, by existing concepts and ideas already at Harpoon relating to
inducible platforms.207 Upon arrival, Lin checked to see if he was “allowed to talk
freely with [Baeuerle] on everything we do on the inducible formats” because of “his
201
JX 669, at 1.
202
Tr. 1299:14–20, 1305:5–1306:4 (Evnin).
203
Stip., ¶ 43.
204
Tr. 1721:18–1725:19, 1726:3–1727:14 (Lin).
205
Id. at 1727:7–14, 1797:22–1798:5 (Lin).
206
Id. at 1732:24–1733:14 (Lin).
207
Id. at 1799:17–1800:2, 1802:20–1803:1 (Lin).
39
affiliation with Maverick.”208 Lin’s supervisor, Dr. Holger Wesche, told him, “feel
free to talk with [Baeuerle] about anything.”209
Lin testified that within two weeks of employment at Harpoon, he had a
scientific epiphany—a “serendipitous eureka moment.”210 By incorporating a
peptide mask into part of the albumin binding domain (the third binding domain of
the TriTAC molecule), he could achieve conditional activity.211 He showed this to
colleagues almost immediately, which included two meetings with Baeuerle on July
17 and 18 to discuss his concept.212 Baeuerle testified at trial that at the second of
these meetings, he made a “tiny modification” of Lin’s whiteboard drawings of the
concept.213 After the meetings, Baeuerle prepared a slide deck outlining these
concepts and naming the molecules depicted in the slides “Novel ProTriTAC
Designs.”214 This slide deck by Baeuerle was the first instantiation what became a
key change from Lin’s original insight in any Harpoon materials—that change being
to mask the CD3 (i.e. the T cell) binding domain, rather than the tumor target
208
JX 713, at 1.
209
Id.
210
Tr. 1745:4–15, 1800:3–12 (Lin).
211
Id. at 1737:8–1740:10 (Lin).
212
Id. at 1544:4–1545:8 (Baeuerle).
213
Id. at 1543:4–1544:3 (Baeuerle).
JX 717, at 2. The name is admittedly easy to confuse with Harpoon’s prior ProTriTAC, which
214
was transferred to Maverick and subsequently renamed COBRA. Going forward in this
Memorandum Opinion, “ProTriTAC” refers to Harpoon’s conditionally active molecule, and
“COBRA” refers to Maverick’s conditionally active molecule.
40
domain, as Lin had originally conceived it.215 Baeuerle emailed these slides to Lin
and told him that he should “[f]eel free to modify and to take ownership for the
slides.”216
As noted previously, Baeuerle testified that he was uninvolved in the
invention or development of Harpoon’s ProTriTAC, and that he included his name
on the slides only because he had created the graphics—not the ideas.217 According
to his testimony, he contained his work at Harpoon entirely to inherently active
technologies, and he never approached the ProTriTAC project except for this one
interaction with Lin.218 Baeuerle and Evnin later emailed each other about
Harpoon’s new ProTriTAC design without including Lin on the correspondence or
mentioning his role as designer.219 At trial, Lin testified that his supervisor, Dr.
Holger Wesche, suggested the key change from his original idea—moving masking
from the tumor to the T cell domain—which, once incorporated into the design,
formed the core structure for Harpoon’s new ProTriTAC molecule.220 Lin suggested
215
Tr. 1818:9–16 (Lin).
216
JX 717, at 1.
217
Tr. 1477:16–20. As Baeuerle noted and the slide deck shows, Lin’s name is listed first and in
a larger, bolded font, which Baeuerle testified indicated the concepts were Lin’s. Tr. 1478:4–10
(Baeuerle).
218
Id. at 1472:8–22 (Baeuerle).
219
JX 730, at 2.
220
Tr. 1745:22–1746:13, 1749:8–1750:2 (Lin). Lin’s testimony at his deposition was somewhat
inconsistent. Lin testified that Wesche’s role, “[i]f any,” was “not significant.” Lin Dep. Tr.
167:5–15. However, at other points in his deposition, he identified Wesche as the one who
41
Wesche was identified as an author on the subsequent slide deck because he was
Lin’s supervisor.221
d. Harpoon’s New ProTriTAC Molecule
Harpoon’s ProTriTAC molecule is a conditionally active T cell therapy
platform.222 It is a multi-specific antigen-binding molecule because it binds to: (1)
a tumor antigen; (2) CD3 epsilon, which is an Immune Effector Target expressed on
T cells, and (3) albumin.223 In other words, the Harpoon ProTriTAC is “functionally
similar” and utilizes the same “building blocks” as Maverick’s COBRA molecule,
except for the way that it activates.224
As described previously, the CD3 binding site is a specific type of T cell
binding site, the part of the molecule that recruits T cells. The CD3 binding site is
made of a scFv, which in turn is made of a vL chain and a vH chain.225 Maverick’s
COBRA molecule prevents the scFv from recruiting T cells by keeping the two parts
of the scFv separated until the molecule is in the tumor microenvironment.226 Once
suggested the change in masking, consistent with his trial testimony. Lin Dep. Tr. 135:6–19,
136:8–137:18, 142:13–20.
221
Lin Dep. Tr. 166:10-17.
222
Stip., ¶ 49.
223
Id. ¶ 50.
224
Tr. 1558:4–15 (Baeuerle), 571:22–572:6, 572:18–573:7 (DuBridge); JX 970, at 1 (email from
Scibetta to Baeuerle noting similarities of molecules); JX 987 (notes from DuBridge regarding
conversation with Baeuerle about similarities of molecules).
225
Tr. 1725:2–11, 1740:11–1741:20 (Lin).
226
Id. at 589:1–5 (DuBridge).
42
there, the separators fall away, and the scFv comes together, creating an active T cell
binding site.227 By contrast, in Harpoon’s new ProTriTAC molecule, the scFv
remains together at all times.228 But it is covered by a peptide mask that prevents it
from recruiting T cells.229 In the tumor microenvironment, when the peptide mask
is removed, the T cell binding site, already fully formed behind the mask, is fully
freed to recruit T cells.230
Harpoon’s ProTriTAC is also different as it relates to binding affinity.
Because the scFv remains together, the immune effector target site (i.e. the scFv)
maintains the potential to bind to T cells, and thus it has binding affinity.231
However, because the peptide mask imitates the binding site on the T cell (and
because the peptide mask is always nearby on the molecule), the scFv’s binding
affinity causes it to attach to the peptide mask rather than to T cells.232 Thus, as long
227
Id.
228
Id. at 1737:8–18 (Lin).
229
Id. at 1736:19–1737:2, 1737:19–1738:2, 1739:18–1740:2 (Lin), 798:9–12 (Landes), 871:1–13
(Marasco). As the witnesses explained, this peptide mask is a “decoy” located on a different part
of the ProTriTAC molecule, and so the molecule tends to bind to it, thus preventing T cell
recruitment, but the molecule is not always bound to the peptide mask, and so some of the time it
has the potential to recruit T cells despite not being in the tumor microenvironment. Id. at
1736:19–1737:2, 1737:19–1738:2, 1739:18–1740:2 (Lin).
230
Id. at 800:3–14, 800:23–801:8 (Landes).
231
Id. at 1930:20–1931:23 (Tidor) (discussing test that isolates the binding affinity of the immune
effector target site and demonstrates it maintains binding affinity).
232
Id. at 1733:14–1738:2 (Lin).
43
as the peptide mask inhibits the immune effector target’s ability to bind to T cells,
the ProTriTAC molecule as a whole will not bind to T cells.233
This is a graphic representation of Harpoon’s new ProTriTAC molecule:
234
233
Id.
234
JX 785.
44
e. The Building Blocks of Harpoon’s ProTriTAC Molecule and
Maverick’s COBRA Molecule
Harpoon developed its new ProTriTAC molecule at a speed that Baeuerle
testified surprised him, and which struck Maverick as evidence that Harpoon was
using pre-validated research.235 The companies’ comparative costs reflected the
speed of development: in total, Harpoon spent around $9.1 million to develop its
ProTriTAC molecule, compared to Maverick’s $40 million expenditure to develop
its COBRA molecule.236
Conditionally active T cell engagers rely on several components, and each
component, like the therapy drug itself, requires effort and expenditure to develop.
Maverick estimates it has spent 150,000 hours of research in developing the COBRA
molecule, including working over a year on the research necessary to select the
individual components.237 Building a conditionally active molecule requires
selecting and developing, among others, four aspects: (1) tumor target selection, (2)
proteases and protease cleavable linker selection, (3) combinations of these tumor
235
Tr. 1552:21–1553:8 (Baeuerle) (testifying he was surprised at how quickly Lin was able to
develop the ProTriTAC molecule), 788:9–789:5 (Landes) (testifying ProTriTAC’s development
exceeded ordinary speeds).
236
Id. at 1759:20–1760:6 (Lin) (testifying that Harpoon’s total research expenditures to date for
ProTriTAC are around $9.1 million), 897:13-20 (Scibetta) (testifying that Maverick has spent
around $40 million to date).
237
Id. at 563:23–564:3 (DuBridge), 656:14–23, 659:13–17, 660:22–661:8 (May), 897:3–12
(Scibetta).
45
targets and proteases; and (4) tumor cell lines.238 Research regarding these
component parts, like development of the technology as a whole, is highly
confidential.239 Both Maverick’s COBRA molecule and Harpoon’s ProTriTAC
molecule utilize identical component parts for the above aspects of their
molecules.240 The similarity is close enough that a Maverick witness thought graphic
presentations of the two molecules might be confused for each other.241
EGFR is a tumor antigen target with properties that make it a strong candidate
for conditionally active therapies.242 EpCAM is another tumor antigen target with
properties that also make it a candidate for conditionally active therapies.243
Maverick estimated it spent 24,000 hours of research determining that EGFR and
EpCAM would be effective targets in combination with the protease MMP9.244
MMP9 is a tumor-associated protease that is used in T cell therapy because it is most
often found in tumor microenvironments.245 Selecting MMP9 from the 569
238
Id. at 563:4–22, 564:4–565:12 (DuBridge), 780:16–781:20 (Landes).
239
Id. at 650:12–651:1 (May). Maverick takes protective measures in its business practices to
maintain this confidentiality, including confidentiality agreements, employee restrictions, and
physical security measures. See JX 923; JX 687; JX 789; JX 1090.
240
Tr. 1768:19–1769:24, 1773:11–1774:6, 1780:21–1781:7 (Lin), 571:22–573:7 (DuBridge).
241
Id. at 570:22–571:15 (DuBridge).
242
Id. at 1768:19–1769:24 (Lin).
243
Id. at 1774:1–1776:13 (Lin).
244
Id. at 649:6–650:11, 656:14–23, 660:22–661:8 (May).
245
Id. at 1748:11–17, 1781:20–1783:15 (Lin).
46
proteases in the human body required an estimated 12,000 hours of research from
Maverick.246 HCT-116 is a cell line for human colorectal cancer, called a
“xenograph model.”247 Like the other components, it requires research to determine
that it is an optimal cell line with relation to EGFR and EpCAM.248
Maverick considers its work on these components and their combinations to
be trade secrets.249 Maverick’s research could provide a roadmap to construct a
viable therapy; however, various instances and combinations of EGFR, EpCAM,
MMP9, and HCT-116 have been seen previously in available literature and used for
the development of immunotherapies.250 Amunix, an immunotherapy competitor,
had contemplated these four components in combination in a publicly disclosed
246
JX 432, at 13 (identifying 569 proteases in the human body); Tr. 658:22–659:17 (May)
(testifying the selection of MMP9 required 12,000 hours of research).
247
Tr. 707:12–709:13 (May).
248
See JX 651, at ¶ 452 (identifying possibility of combining EpCAM and HCT-116); JX 1076, at
¶ 109 (identifying HCT-116 as one of “[t]housands” of potential cell lines); Tr. 662:14–663:18
(May) (testifying regarding research required to select cell line).
249
Tr. 648:6–11, 657:10–659:12, 660:2–11, 661:9–662:7, 662:14–663:18 (May), 779:12–780:2,
780:16–781:20 (Landes).
250
E.g. JX 69 (article exploring EGFR); JX 79 (same); JX 90 (article exploring cell lines); JX 113
(article exploring application of MMP9); JX 580 (CytomX proof-of-concept poster identifying
EGFR as tumor target); JX 651 (patent application identifying EGFR and EpCAM as tumor
targets); JX 660 (Amunix proof-of-concept poster identifying EpCAM as tumor target); JX 738
(patent application identifying EGFR, EpCAM, and MMP9 as tumor targets and protease); Tr.
705:5–707:7 (May), 1790:17–1791:1 (Lin). The Plaintiffs seek to exclude all scholarly articles
offered by Harpoon as inadmissible hearsay, but I find that Harpoon is not relying on these
scholarly articles for the truth of the matter asserted but rather for the fact of their publication, i.e.,
to prove that certain scientific knowledge was publicly available. See Freeman v. Minnesota Min.
& Mfg. Co., 675 F. Supp. 877, 884 n.5 (D. Del. 1987).
47
patent application in March 2017.251 However, even this patent application
contemplates several possible proteases in combination with EpCAM—in other
words, it did not isolate these four as Maverick’s COBRA molecule did.252
Harpoon offered additional evidence showing it possessed knowledge of each
component as a possible tumor target, protease, or cell line from publicly available
sources or past experience:
• Prior to working at Harpoon, Lin had worked on therapeutics that
targeted EGFR and encountered studies suggesting it could be used as
a tumor target, and at Harpoon he had access to data that pushed him
toward its use.253 Harpoon had conducted prior research in 2016
contemplating EGFR as a tumor target.254
• Amunix identified EpCAM as a tumor target by March 2017, although
it was one of many potential targets.255 Harpoon had contemplated
EpCAM as a possible tumor target—among several options—in a prior
patent application, and it conducted its own research on EpCAM in
2018.256
• Other companies published the use of MMP9 as a protease in
conditionally active T cell therapies.257 Maverick disclosed its use of
251
JX 651; see also Tr. 1790:17–1791:1 (Lin).
252
Tr. 705:5–707:7 (May).
253
Tr. 1769:12–24, 1770:5–1771:9 (Lin); see also JX 118 (CytomX poster showing EGFR as
tumor target).
254
JX 435, at 10 (2016 Harpoon presentation identifying EGFR as tumor target); Tr. 1769:19–24,
1771:10–24 (Lin). Maverick also disclosed EGFR as a representative tumor target in its patent
application for COBRA. JX 738, at ¶ 17.
255
JX 651; JX 660; Tr. 705:5–706:12 (May).
256
JX 133, at 53 (Harpoon patent application identifying EpCAM among seven possible target
antigens); JX 774, at 6 (Harpoon order form purchasing “EPCAM protein” for laboratory
research); Tr. 1776:9–13 (Lin) (testifying that Harpoon conducted research regarding EpCAM
binders in January 2018).
257
JX 178, at 90–91 (2016 CytomX patent application identifying MMP9 as possible protease
among large field of possibilities); Tr. 705:5–706:12 (May) (acknowledging Amunix disclosed
48
MMP9 in a patent application in September 2017.258 Harpoon
conducted independent research to develop “protease-cleavable linker
sequences,” and it did not utilize the same sequences as Maverick.259
• HCT-116 has been used as a cell line in T cell engager research since
2010.260 Harpoon conducted research with HCT-116 in 2016 prior to
the spinout.261 Additionally, other companies had publicly disclosed
the use of HCT-116 for testing conditional T cell engagers.262
The usefulness of these components depends not only on the identification but also
the combination in the T cell engager. Combinations of EGFR, EpCAM, MMP9,
and HCT-116 have also appeared in public literature as useful for the development
of immunotherapies, though this literature typically presented a field of possible
options, rather than the exact combination Maverick—and later Harpoon—utilized
MMP9 as possible protease in 2017); Tr. 1782:12–1783:10 (Lin) (testifying that both CytomX and
Amunix provided evidence of the opportunity to use MMP9 as protease).
258
JX 133, at 50 (March 2017 Maverick patent application disclosing MMP9 as one of a field of
possible proteases); JX 738, at ¶¶ 358, 126 (September 2017 Maverick patent application
disclosing “[t]he protease MMP9” as being “known to be overexpressed in tumor cells” and thus
a selected protease); Tr. 602:6–13 (DuBridge) (acknowledging disclosure of MMP9 as one of
many possible proteases).
259
Tr. 1784:13–1785:15 (Lin) (testifying regarding independent experiments), JX 1076, at 43
(Ploegh’s expert report comparing Maverick and Harpoon’s linker sequences cleavable by MMP9
and concluding they are distinct).
260
Tr. 707:12–709:13 (May) (acknowledging HCT-116’s use known as early as 2010 and in
connection with MMP9 by 2016), 1788:10–1789:18 (Lin) (testifying regarding available studies
on HCT-116’s use as cell line with relation to both EGFR and EpCAM); JX 48 (2004 paper on
HCT-116); JX 79 (2010 paper addressing use of HCT-116 as cell line in T cell-engaging
antibodies); JX 90 (2012 paper addressing use of HCT-116 in antibody targeting); JX 113 (2015
paper studying use of HCT-116 as cell line in relation to MMP9).
JX 153, at 1 (email from Guenot explaining that “[t]he reason for picking HCT116 is that this
261
model worked well for the EGFR”); Tr. 606:13–23 (DuBridge).
262
JX 580 (CytomX poster utilizing HCT-116 as cell line in T cell engager); JX 651, at 32 (Amunix
patent application disclosing HCT-116 with regard to T cell engager).
49
in their molecules.263 Harpoon researched some combinations prior to Maverick’s
spinout.264 However, it conducted no research regarding the specific combination
of these four components—EGFR, EpCAM, MMP9, and HCT-116—prior to
selecting them as components for its new ProTriTAC molecule.265
f. Harpoon Announces the New ProTriTAC and Maverick Sues
Harpoon informed Maverick of its newly-developed conditionally active
technology a few days before publicly announcing the platform at the annual
meeting of the Society for Immunotherapy of Cancer (“SITC”) in Washington, D.C
on November 9, 2018.266 Baeuerle called Maverick CEO Jim Scibetta on November
6 and told him that Harpoon was developing a conditionally active T cell engager.267
Scibetta then spoke with Evnin, who confirmed that Harpoon was in fact a
competitor with Maverick.268 At the SITC conference, Harpoon announced its new
molecule, ProTriTAC, and offered proof-of-concept data (the “SITC Poster”).269
Two days later, on November 11, Harpoon announced the closing of its $70 million
263
E.g. Tr. 602:6–13 (DuBridge), 705:5–707:7 (May), 1790:17–1791:1 (Lin); JX 69; JX 79; JX
90; JX 113; JX 580; JX 651; JX 660; JX 738.
264
Tr. 603:4–14, 604:12–17, 606:13–23 (DuBridge); JX 133, at 50, 53 (Harpoon patent application
contemplating possible component combinations as of March 2016).
265
Tr. 787:10–788:8 (Landes), 1833:14–1835:13 (Lin).
266
Stip., ¶¶ 44–45.
267
Tr. 897:23–898:13 (Scibetta).
268
Id. at 899:8–23 (Scibetta).
269
Stip., ¶ 45; JX 785.
50
Series C financing round, part of which would be used to develop its ProTriTAC
platform.270
Over the next week, Scibetta had several meetings and phone calls with
Harpoon. On November 12, Scibetta told Evnin that he should remove himself from
the Maverick Board, and Evnin agreed.271 Evnin told Scibetta that if Takeda wished
to redo the deal, given the new competitive landscape, this was an option.272 Scibetta
then met with McMahon and learned that the ProTriTAC had been in development
for eighteen months, ever since the spinout.273 In further communications, Evnin
acknowledged again that Harpoon and Maverick were competitors and noted,
regarding their disagreement over whether the new ProTriTAC fell within the
Maverick Field, that it was “too bad the Takeda lawyers missed that in drafting.”274
In a follow-up email on November 15, Evnin reiterated a willingness to revisit the
deal with Takeda and Millennium based on Harpoon’s new invention “if Takeda
wants to get out of the Agreement.”275
270
Stip., ¶ 48.
271
Tr. 909:14–910:10 (Scibetta). Evnin would ultimately resign a few weeks later, around
Thanksgiving. Tr. 912:23–913:6 (Scibetta).
272
Id. at 910:11–19 (Scibetta).
273
Id. at 914:20–915:13 (Scibetta).
274
Id. at 916:18–917:24, 956:1–24 (Scibetta); JX 983.
275
JX 984, at 1.
51
C. Procedural History
Maverick filed its complaint and a motion for a temporary restraining order
(“TRO”) on January 3, 2019.276 I heard argument regarding the TRO on January 18,
2019 and denied the motion.277 On April 30, Millennium filed a Motion to
Intervene.278 I granted the Motion to Intervene on May 8, and Millennium filed its
complaint on May 14.279 Discovery motion practice and disputes followed, and I
issued a Letter Opinion resolving some of them on August 9, 2019.280 A six-day
trial took place September 9 – September 13, and September 17, 2019. I heard post-
trial argument on December 17, 2019, and I considered the matter fully submitted at
that time.281
II. ANALYSIS
Maverick filed claims against Harpoon for breach of contract and
misappropriation of trade secrets. Millennium filed claims against Harpoon for
fraud, tortious interference with business relations and with contract, unfair
276
Verified Compl. for Inj. Relief for Breach of Contract and Misappropriation of Trade Secrets,
D.I. 1; Pl.’s Mot. for Temporary Restraining Order, D.I. 1.
277
Oral Argument on Mot. for TRO before V.C. Glasscock on 1.18.2019, D.I. 26.
278
Mot. to Intervene, D.I. 110.
Telephonic Oral Argument and Rulings of the Court on Millennium Pharmaceuticals, Inc.’s
279
Mot. to Intervene, D.I. 147; Verified Compl. in Intervention, D.I. 135.
280
Maverick Therapeutics, Inc. v. Harpoon Therapeutics, Inc., 2019 WL 3763953 (Del. Ch. Aug.
9, 2019).
281
Post-Trial Oral Argument Transcript, D.I. 351.
52
competition, and unjust enrichment. Although the parties offered some expert
testimony regarding damages, I specified at trial that this initial Opinion would
address issues of liability only—assuming damages—and that I contemplated a
further damages stage contingent on my findings here.282
A. Maverick’s Claims
1. Breach of Contract
A breach of contract requires (1) a contractual obligation, (2) a breach of that
obligation, and (3) resulting damages.283 “When the contract is clear and
unambiguous,” this Court will “give effect to the plain meaning of the contract’s
terms and provisions.”284 Plain meaning is often elucidated with help from
dictionaries.285 By contrast, “when contractual language in issue is reasonably
susceptible to more than one meaning . . . extrinsic evidence will be considered to
resolve the ambiguity.”286 However, “[c]ontract terms are not ambiguous merely
282
Tr. 1980:12–1981:7.
283
Interim Healthcare, Inc. v. Spherion Corp., 884 A.2d 513, 548 (Del. Super. 2005), aff’d, 886
A.2d 1278 (Del. 2005).
284
Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159–60 (Del. 2010) (citing Rhone–Poulenc
Basic Chem. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192, 1195 (Del. 1992)).
285
Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728, 738 (Del. 2006) (“Under well-
settled case law, Delaware courts look to dictionaries for assistance in determining the plain
meaning of terms which are not defined in a contract.” (citing Nw. Nat’l Ins. Co. v. Esmark, Inc.,
672 A.2d 41, 44 (Del. 1996))).
286
Supermex Trading Co., Ltd. v. Strategic Sols. Grp., Inc., 1998 WL 229530, at *3 (Del. Ch. May
1, 1998).
53
because the parties to the contract disagree” about the meaning.287 As explained
below, I find the contract language of the Maverick Field definition unambiguous,
and so the contractual language is itself “the binding expression of the parties’
intent.”288
The parties do not dispute that the non-compete in § 7.5 of the ATA is valid
and enforceable. Their disagreement for the breach-of-contract claim is limited to
whether Harpoon’s new ProTriTAC molecule falls inside of the Maverick Field. If
it does, then Harpoon’s development of the ProTriTAC molecule was and is in
violation of its non-compete under § 7.5.289
As previously described, the Maverick Field is defined in § 1.56 of the ATA:
“Maverick Field” means multi-specific Antigen-binding molecules that
include: (a) at least one domain that binds to an Immune Effector Target
that (i) is formed from two domains, each of which is impaired for
Immune Effector Target binding, and (ii) undergoes a resultant increase
in Immune Effector Target binding affinity of at least 50 fold after an
activation event; (b) at least one domain that binds to one or more
287
Seidensticker v. Gasparilla Inn, Inc., 2007 WL 4054473, at *2 (Del. Ch. Nov. 8, 2007).
288
Martin Marietta Materials, Inc. v. Vulcan Materials Co., 56 A.3d 1072, 1105 (Del. Ch. 2012).
Because I find the contractual language unambiguous, I do not resolve the parties’ arguments
regarding the step transaction doctrine and whose intent is relevant when considering extrinsic
evidence. Additionally, the parties made various evidentiary objections to evidence on the basis
of irrelevance because it concerned the parties’ intent (Harpoon) or undisclosed intent
(Millennium). In light of my finding here, I consider these evidentiary objections moot.
289
ATA, § 7.5 (“Harpoon hereby agrees that, effective as of the Distribution, none of Harpoon nor
any of Harpoon’s controlled Affiliates (which, for the avoidance of doubt, shall not include
Maverick) shall, anywhere in the world, directly or indirectly, engage in the Business in any
manner . . . until four (4) years after the Distribution,” with “Business” defined as “the business of
researching, developing, manufacturing or commercializing any product within the Maverick
Field.”).
54
Therapeutic Targets; and (c) at least one half-life extension domain,
which domains (a) through (c) may be linked in various orders.290
The parties agree that the Maverick Field encompasses the split scFv design
for achieving conditionality utilized in Maverick’s COBRA molecule. However,
this fact does not entail that the language is therefore limited to the split scFv design.
In other words, it would be improper to conclude that Harpoon’s ProTriTAC falls
outside the Maverick Field solely on the basis that it differs from Maverick’s
COBRA molecule. Nothing in the language chosen by the parties supports such a
reading.
Although conceptually complex, the Maverick Field definition, broken down,
describes seven characteristics of a molecule. If any one of these characteristics do
not describe Harpoon’s ProTriTAC molecule, then it falls outside the Maverick
Field, and Harpoon did not breach the non-compete by developing it. The seven
characteristics, which restate the Maverick Field in a perhaps more digestible
manner, are:
1. The molecule is “a multi-specific Antigen-binding” molecule;
2. The molecule has “at least one domain that binds to an Immune Effector
Target”;
3. The domain that binds to the Immune Effector Target is “formed from
two domains”;
4. The two domains that form the domain that binds to the Immune
Effector Target are “each . . . impaired for Immune Effector Target
binding”;
290
ATA, § 1.56.
55
5. The domain that binds to the Immune Effector Target “undergoes a
resultant increase in Immune Effector Target binding affinity of at least
50 fold after an activation event”;
6. The molecule has at least one domain that “binds to one or more
Therapeutic Targets”; and
7. The molecule has “at least one half-life extension domain.”291
The parties’ disagreement centers on the third, fourth, and fifth elements described
above. The parties do not dispute that the ProTriTAC molecule satisfies the other
four elements. In other words, the dispute centers only on § 1.56 (a)(i)–(ii), which
describes the molecule’s domain that binds to the Immune Effector Target (i.e. the
T cell or immune effector target binding domain) as well as its binding affinity.
Based on the plain meaning292 of the contractual language, I find Harpoon’s
ProTriTAC molecule is not within the Maverick Field. The language in § 1.56
(a)(i)–(ii) must be read as a whole to comprehend the plain meaning. The
descriptions in subsection (a)(1), that the T cell binding domain is “formed from two
domains” and that these domains are “each impaired for Immune Effector Target
Binding,” read in isolation, are reasonably susceptible to multiple interpretations.293
However, the Maverick Field definition clarifies the proper reading in subsection
291
ATA, § 1.56.
292
“Plain,” in this context, means clear, based on the language chosen by the parties, in light of
the specialized knowledge sufficient to understand the technical terms used therein, as described
in some detail in the Background section of this Memorandum Opinion. A finding of lack of
ambiguity does not require that the language be immediately comprehensible to a casual reader or
man in the street.
293
ATA, § 1.56 (a)(i).
56
(a)(ii) when it states that the T cell binding domain “undergoes a resultant increase
in Immune Effector Target binding affinity of at least 50 fold after an activation
event.”294 This language clarifies that the Maverick Field is describing a molecule
activated through the event of separately impaired domains coming together to form
the T cell binding domain, which does not describe Harpoon’s ProTriTAC molecule.
I explain in greater detail below.
First, the word “domain” in § 1.56 (a) refers to the T cell binding site. As
explained in the factual recitation, the T cell binding site is a scFv.295 The phrase
“two domains” refers to the vL and vH chains that make up the two halves of the
scFv.296 Thus, the phrase “formed from two domains” means that the scFv is
“formed from” the vL and the vH chains. Read in isolation, this is susceptible to
multiple interpretations. Harpoon contends that it describes an act of creation, in the
sense that the Immune Effector Target binding domain is created from the joining
of two domains.297 This comports with dictionary definitions of the verb “form,”
which include the intransitive meaning, “to take form: come into existence,” as well
294
ATA, § 1.56 (a)(ii) (emphasis added).
295
JX 133, at 17–19, 58–59.
296
Id. at 58–59; Tr. 1725:2–11 (Lin).
297
Def. Harpoon Therapeutics, Inc.’s Opening Post-Trial Br., D.I. 307, (“Harpoon Opening
Brief”), at 31–32, 34–35.
57
as the transitive form, “to arrange,” or “to shape or mold into a certain state.”298 The
Plaintiffs, conversely, contend that “formed from” merely means “comprising”; they
argue that every scFv domain consists of a vH and vL domain, and therefore every
scFv domain is “formed from” those two domains.299 In other words, they argue that
no act of creation is implied, and the words merely describe the makeup of a scFv
domain.300 This, too, comports with some dictionary meanings of “form,” which
can mean “to serve to make up or constitute.”301 Thus, taken in isolation, the phrase
is susceptible to both readings.
Likewise, the phrase “each of which is impaired,” read in isolation, is arguably
ambiguous. Harpoon contends “each of which” implies the domains are separately
impaired for binding.302 Here, the definition uses “each” as a pronoun, which merely
means “each one,” but the adjectival definition of “each” means “every one of two
or more people or things considered separately.”303 Thus, Harpoon’s argument that
298
Form, Merriam Webster’s Online Dictionary, https://www.merriam-webster.com/dictionary/
form.
299
Pl. Maverick Therapeutics, Inc.’s Post-Trial Br., D.I. 309, (“Maverick Opening Brief”), at 27–
29.
300
Id.
301
Form, Merriam Webster’s Online Dictionary, https://www.merriam-webster.com/dictionary/
form.
302
Harpoon Opening Brief, at 31–33, 35.
303
Each, Merriam Webster’s Online Dictionary, https://www.merriam-webster.com/dictionary/
each.
58
“each” implies separate treatment is supported by the dictionary definition.304
Maverick contends “each of which” could be synonymous with “both of which”;
they argue that as long as the vH and vL domains are impaired for Immune Effector
Target binding, they are “each” impaired because they are “both” impaired.305
“Both” means “the one as well as the other,” but when used as a conjunction it can
indicate “the inclusion of each of two or more things.”306 While the linguistic
distinction between “each” and “both” suggests Harpoon’s reading is more
reasonable, when isolated, the phrase is susceptible to both interpretations.
The next subpart in the Maverick Field, § 1.56 (a)(ii), to my mind, resolves
this ambiguity and clarifies what type of molecule design the Maverick Field
definition is describing. It is worth reciting the contractual language again here:
“Maverick Field” means multi-specific Antigen-binding molecules that
include: (a) at least one domain that binds to an Immune Effector Target
that (i) is formed from two domains, each of which is impaired for
Immune Effector Target binding, and (ii) undergoes a resultant increase
in Immune Effector Target binding affinity of at least 50 fold after an
activation event. . .307
304
Maverick argues that Harpoon redlines the contract by adding terms like “separately” and
“formation event.” Red-lining, or blue-pencilling, is a revision to introduce something not there;
by contrast, a word’s inherent meanings and connotations are present, and thus drawing out those
meanings through dictionary work does not constitute improper red-lining or blue-pencilling.
Rather, it is an illumination of the plain language already present.
305
Maverick Opening Brief, at 30–32.
306
Both, Merriam Webster’s Online Dictionary, https://www.merriam-webster.com/dictionary/
both.
307
ATA, § 1.56.
59
Thus, Section 1.56(a)(ii) states that the Immune Effector Target binding domain—
which, as noted, is “formed from two domains . . . each of which is impaired”—
“undergoes a resultant increase in Immune Effector Target binding affinity of at least
50 fold after an activation event.”308 The clarifying word is the word “resultant,”
and the key question is, what must the increase in binding affinity “result” from?
Harpoon points to the placement of the word “resultant” just after the
provision that the Maverick Field refers to molecules formed from two impaired
domains. Accordingly, it argues that a molecule in the Maverick Field is one where
the increase in binding affinity results from the formation event that subpart (a)(i)
describes, when two domains, each separately impaired, join to form the Immune
Effector Target binding domain.309 Maverick, by contrast, contends that “resultant”
is used “to clarify that the post-activation event increase in binding affinity must be
caused by the activation event.”310 They argue that placement of “resultant” in
subpart (a)(ii) would make it absurd for the word to modify or clarify subpart
(a)(i).311 In other words, Maverick’s construction is based primarily on the use of
308
ATA, § 1.56(a)(ii).
309
Harpoon Opening Brief, at 30–31, 36.
310
Pl. Maverick Therapeutics, Inc.’s Post-Trial Reply Br., D.I. 322 (“Maverick Reply Brief”), at
12.
311
Id. at 11–12.
60
parenthetical subpart designations within the sentence describing the Maverick
Field.
I agree with Harpoon and disagree with Maverick.
First, the language in subpart (a)(ii), “undergoes a resultant increase in
Immune Effector Target binding affinity of at least 50 fold after an activation event,”
already implies causation without the word “resultant.” If “resultant” were
jettisoned, and the subpart read, “undergoes an increase in Immune Effector Target
binding affinity of at least 50 fold after an activation event,” it would not lose any
meaning, and this suggests that “resultant” is not clarifying the causality of the
activation event but, rather, signifying the causality of the formation of the binding
domain described in subpart (a)(i).312
Second, it is not—pace Maverick—absurd to read “resultant” as modifying
the preceding subpart. I note that using parenthetic romanettes to designate subparts
does not of necessity alter the meaning of the sentence so enhanced. I also note that
it is a more natural construction that “resultant” follow, rather than precede, the
language defining the causative force. “I walked under a low doorway, and as a
result bumped my head” is a more natural English construction than “my resultant
head bump occurred after walking through a low doorway.” Maverick’s reading is
Technically, the use of “after” could be merely temporal, and not imply causation, but such
312
would be a strained reading in context.
61
unnatural. Harpoon’s is not. Thus, it makes sense that “resultant” refers to the just-
described formation event, and not the to-be-described activation event, given its
placement at the beginning of subpart (a)(ii). Moreover, this reading of the language
resolves the arguably ambiguous phrases in subpart (a)(i). If the fact that the T cell
binding domain is “formed from two domains . . . each of which is impaired” results
in something, then it becomes reasonable to interpret those phrases as describing an
event, as Harpoon does. That event, I find in light of the relevant science as
explained in the evidence submitted at trial, can only reasonably be interpreted as
the joining of separately impaired domains to form a functional binding domain. I
do not find the “Maverick Field” reasonably susceptible to the Plaintiffs’ reading
because it would render “resultant” surplus, rather than giving the word its proper
function, which is to clarify that the formation of the binding domain from two
impaired domains results in an increase in binding affinity.
Having interpreted the contract language in the Maverick Field, I find that
Harpoon’s ProTriTAC molecule does not fit this definition. The ProTriTAC
molecule has a fully-formed scFv binding domain from the beginning.313 The vL
and vH domains are both impaired, and it is not their joining that results in the
increase in binding affinity; rather, it is the removal of the peptide mask from the
313
Tr. 1737:8–18 (Lin).
62
fully-formed domain.314 Therefore, the ProTriTAC molecule is not “formed from
two domains, each of which is impaired,” and because there is no activation resulting
from the formation event of separately impaired domains, it does not undergo “a
resultant increase in Immune Effector Target binding affinity . . . after an activation
event.”315
Having made this determination, I do not need to resolve the parties’ dispute
over whether the ProTriTAC molecule undergoes a 50-fold increase in binding
affinity, which is the other disputed portion of the Maverick Field definition. I
conclude, accordingly, that Harpoon has not breached the non-compete by
developing the ProTriTAC molecule.
2. Misappropriation of Trade Secrets
Maverick has also brought a claim for misappropriation of trade secrets. To
succeed on its claim that Harpoon misappropriated trade secrets, Maverick must
prove by a preponderance of the evidence that “(1) a trade secret exists; (2) the
plaintiff communicated the secret to the defendant; (3) there was an express or
implied understanding that the secrecy of the matter would be respected; and (4) the
secret information was improperly used or disclosed to the injury of the plaintiff.”316
314
Id. at 800:3–14, 800:23–801:8 (Landes).
315
ATA, § 1.56.
316
Elenza Inc. v. Alcon Labs. Holding Corp., 183 A.3d 717, 721 (Del. 2018)
63
I focus on the final element of the claim here because I find that even if trade secrets
existed, Maverick did not prove at trial by preponderance of the evidence that the
trade secrets were improperly used or disclosed to Maverick’s injury.
What Maverick did successfully demonstrate is that Dr. Luke Evnin and Dr.
Patrick Baeuerle put themselves in an improvident and conflicted situation at the two
companies, and that this improvident situation led to reasonable suspicions of
improper use of Maverick trade secrets. Maverick put forward evidence that made
it reasonably conceivable to imagine that Evnin and Baeuerle acted as conduits to
funnel Maverick’s confidential information and research to Harpoon’s own
conditionally active ProTriTAC platform in violation of trade secret laws and their
fiduciary duties. But reasonably conceivable is not probable, which is the burden of
proof Maverick must carry. Harpoon offers an alternative explanation for
ProTriTAC’s success, which is that Dr. Jack Lin had a “serendipitous eureka
moment” of insight, and that from this insight Harpoon built the ProTriTAC
molecule using publicly available scientific knowledge as well as its own experience
much more efficiently than Maverick. Important to my decision, I found Lin’s
testimony in this regard credible. Without evidence showing it was more likely than
not that Harpoon built its molecule on illegitimately-obtained information, I decline
to find liability for the misappropriation of trade secrets. I explain further below.
64
To briefly recount the facts, following the spinout, Evnin and Baeuerle
remained intimately involved in the development of the COBRA molecule at
Maverick.317 Part of COBRA’s development was the selection of component
parts—immune effector targets, cancer cell targets, proteases, and cell lines.318
Evnin and Baeuerle attended board meetings and acted as scientific advisors, and so
they were exposed to all of Maverick’s ongoing research.319
Meanwhile, Harpoon, without telling Maverick, was developing a competitive
molecule, the development of which would unarguably benefit from the ongoing
research at Maverick. Evnin and Baeuerle testified that they were not involved with
Harpoon’s development of ProTriTAC, and that they never informed Maverick of
Harpoon’s work due to confidentiality obligations.320
At trial, Maverick described several suspicious circumstances that arose from
this scenario.
First, Lin brought his “new ProTriTAC” invention to Baeuerle and discussed
it with him, and afterward Baeuerle created a slide deck outlining the concept and
317
Tr. 1273:11–1274:4, 1277:12–1278:2 (Evnin), 1558:16–1559:14 (Baeuerle).
318
Id. at 563:4–22, 564:4–565:12 (DuBridge), 780:16–781:20 (Landes).
319
Id. at 549:8–15, 562:15–563:3, 564:4–566:21 (DuBridge), 893:8–894:14 (Scibetta), 653:13–
654:3, 664:10–22, 670:16–672:15 (May), 1495:10–15, 1469:6–1471:1, 1558:16–1559:14
(Baeuerle).
320
Id. at 1278:3–19 (Evnin), 1559:15–24, 1516:23–1517:5 (Baeuerle).
65
listing himself as an author alongside Lin—albeit in a smaller font.321 Baeuerle
discussed the “new ProTriTAC” with Evnin.322 He provided edits and commentary
on the SITC Poster that publicly disclosed the ProTriTAC molecule.323 Lin thanked
him on several occasions for his time and his help.324 At trial, Baeuerle testified that
his assistance was entirely cosmetic—creating graphics, fixing typos, acting as a
sounding board—rather than substantive.325 Similarly, Evnin discussed ProTriTAC
with Baeuerle and requested to be listed as an inventor due to an ancillary invention.
And while on one occasion, Evnin forwarded (probably inadvertently) confidential
Maverick information to Harpoon’s CEO, Evnin also testified he never engaged
substantively with the ProTriTAC platform at Harpoon.326
Second, the SITC Poster revealed that ProTriTAC employed the same tumor
targets (EGFR and EpCAM), protease (MMP9), and cell line (HCT-116) as the
321
Id. at 1544:4–1545:8 (Baeuerle); JX 717, at 2.
322
JX 730, at 2.
323
Tr. 1553:22–1556:1 (Baeuerle).
324
Id. at 1555:4–1556:1 (Baeuerle).
325
Id. at 1553:22–1554:13 (Baeuerle). Maverick also points to a November 5, 2018 email from
Baeuerle to Wesche in which Baeuerle writes, “Given that MAV is going for EGFR, we may want
to do EpCAM to not appear overly competitive.” JX 952, at 1. While this email is suspicious as
it relates to Harpoon’s competition, Maverick disclosed its use of EGFR in a patent application in
September 2017. JX 738; see also JX 767.
326
JX 730 (email discussing inventor-ship of patent application); JX 791 (email noting Evnin’s
request to be listed as inventor); Tr. 1278:3–19 (Evnin); JX 669, at 1 (forwarding confidential
information to Harpoon CEO McMahon); Tr. 1299:14–20, 1305:5–1306:4 (Evnin) (describing
email disclosure as inadvertent).
66
COBRA molecule.327 This appeared suspicious to Maverick, and rightly so: this
exact combination of targets, protease, and cell line had never previously been
used.328 Maverick concludes the component research was misappropriated.
Harpoon points to journal articles, patent applications, and presentations that it says
allowed it to select from a narrow field of potential components and that made its
ultimate choices the best candidates.
At trial, Lin testified as to how his team selected each component. Lin had
prior experience and Harpoon had done prior research on EGFR.329 Harpoon had
conducted its own research on EpCAM and seen other patents that contemplated it
as a tumor target.330 Maverick, among other companies, had disclosed the use of
MMP9 in conditionally active T cell therapies.331 HCT-116 had been commonly
used as a cell line, and patent disclosures and Harpoon’s prior work suggested it was
optimal.332 In addition, a patent application by a third party—Amunix—disclosed
the combination of these four elements in a narrow pool of possible options.333 In
327
Tr. 1768:19–1769:24, 1773:11–1774:6, 1780:21–1781:7 (Lin), 571:22–573:7 (DuBridge).
328
See id. at 570:22–571:15 (DuBridge).
329
Id. at 1769:12–24, 1770:5–1771:24 (Lin); JX 435, at 10.
330
JX 651; JX 660; JX 133, at 53; JX 774, at 6; Tr. 1776:9–13 (Lin).
331
JX 178, at 90–91; Tr. 1782:12–1783:10 (Lin); JX 133, at 50; JX 738, at ¶¶ 358, 126.
332
Tr. 1788:10–1789:18 (Lin); JX 48; JX 79; JX 90; JX 113; Tr. 606:13–23 (DuBridge); JX 580;
JX 651, at 32.
333
See JX 651.
67
other words, Harpoon testified that it landed on the same combination of components
for its ProTriTAC molecule because it independently determined, just as Maverick
did, that this was the best combination of targets, protease, and cell line.
I agree with Maverick that this evidence is suspicious. Evnin and Baeuerle,
by maintaining any interaction at all—even cosmetic commentary and guidance—
with Harpoon’s ProTriTAC platform, crossed the boundaries of divided loyalties at
the two companies.334 Consequently, and in light of Harpoon’s fraud discussed
below, I found their testimony of limited credibility. I also agree that viewing
Harpoon’s selection of an identical set of components as fortuitous merits a
jaundiced eye. At the same time, Maverick offers only circumstantial evidence and
asks me to infer from these suspicious circumstances that inappropriate disclosures
in fact occurred. Taking the record as a whole, I find the evidence insufficient to
reach that conclusion. Harpoon’s witnesses—Lin in particular—testified credibly at
trial about his revelatory scientific process, what role each person at Harpoon played,
and how the initial “eureka” moment developed into the ProTriTAC molecule
disclosed on the SITC Poster through the mining of publicly available scientific
research as well as Harpoon’s own internal research. In order to find for Maverick,
I must find Lin’s testimony to be deluded or perjurious, which strikes me, after
hearing it, as unlikely. Weighing the evidence, the innocent invention of Harpoon’s
334
Notably, Maverick has not brought a breach of fiduciary duty claim against Baeuerle or Evnin.
68
ProTriTAC molecule is not so unlikely as to convince me that it is more likely than
not that Harpoon lied about its development process.
In sum, Evnin’s and Baeuerle’s choices are by no means models of fiduciary
behavior, particularly where divided loyalties and dual roles at competitive
companies are involved. They should have maintained better separation than they
did in their roles at the two companies. Harpoon’s selection of the same components
utilized in Maverick’s COBRA molecule are suspicious at first glance—after
hearing testimony, that selection, absent purloined information, also appears logical.
The evidence does not convince me that it is more likely than not that Harpoon
designed the ProTriTAC molecule using confidential information misappropriated
from Maverick.
B. Millennium’s Claims
Millennium never entered a contract with Harpoon. It was not a party to the
ATA.335 Thus, it cannot bring contract claims against Harpoon because Harpoon
never made any contractual representations to it.336 Millennium was a party to the
Collaboration Agreement (under which it agreed with Maverick to fund Maverick
research) as well as the Warrant Agreement (under which it obtained from Maverick
335
Stip., ¶¶ 29–30; JX 1.
336
Harpoon itself emphasizes this point in its post-trial briefing. See Harpoon Opening Brief, at
47–51.
69
a right to purchase Maverick after a set time period).337 The Agreements were
sufficiently intertwined, however, that Millennium negotiated all three Agreements
and gave final approval to the ATA.338 Millennium therefore brings tort claims
against Harpoon, arguing that Harpoon fraudulently induced it into entering the
Collaboration and Warrant Agreements with Maverick by misleading it into thinking
that Maverick would have broad rights in the inducible T cell engager space free
from competition from Harpoon for four years.
Millennium also claims that Harpoon’s entrance into the inducible space with
the invention of the ProTriTAC molecule constitutes tortious interference and unfair
competition. In the alternative, it argues Harpoon was unjustly enriched. I find there
is sufficient evidence to prove that Harpoon is liable for fraud, but I deny
Millennium’s claims for tortious interference with contract and business relations,
and for unfair competition. Because finding liability for fraud provides Millennium
with a legal remedy, its claim for unjust enrichment—pled in the alternative—
necessarily falls away. My reasoning is below.
1. Fraud and Fraudulent Inducement
The elements of fraud and fraudulent inducement are the same339:
337
Id. ¶ 23; JX 2; JX 3.
338
Tr. 237:13–20 (Hurff), 714:22–715:9 (Hiett); 1189:22–1191:4, 1199:8–17, 1256:20–1257:18
(Evnin), 1340:16–1341:10 (Hostetler).
339
Indeed, since inducement is an element of fraud, separating the torts is tautological.
70
(1) a false representation, usually one of fact, made by the defendant;
(2) the defendant’s knowledge or belief that the representation was
false, or was made with reckless indifference to the truth; (3) an intent
to induce the plaintiff to act or to refrain from acting; (4) the plaintiff’s
action or inaction taken in justifiable reliance upon the representation;
and (5) damage to the plaintiff as a result of such reliance.340
Each element of fraud has further legal nuances, which I explore as I walk through
the elements below. After examining the evidence, I find that Harpoon fraudulently
induced Millennium into investing in Maverick because, while affirming
Millennium’s broad understanding of Maverick’s trajectory, Harpoon intentionally
concealed its competitive efforts to avoid disclosing its understanding of the
Maverick Field definition it crafted.
a. Harpoon’s False Representation
The first element of fraud, a “false representation,” can take several forms: it
may be an “overt misrepresentation” (i.e. a lie), a “deliberate concealment of
material facts,” or else “silence in the face of a duty to speak.”341 To show deliberate
concealment, Millennium must prove that Harpoon “took some action affirmative in
nature designed or intended to prevent, and which [did] prevent, the discovery of
facts giving rise to the fraud claim, some artifice to prevent knowledge of the facts
340
Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLLP, 2018 WL 6311829, at
*32 (Del. Ch. Dec. 3, 2018) (citing E.I. DuPont de Nemours & Co. v. Fla. Evergreen Foliage, 744
A.2d 457, 461–62 (Del. 1999); Stephenson v. Capano Dev., Inc., 462 A.2d 1069, 1074 (Del.
1983)).
341
Stephenson, 462 A.2d at 1074; see also Corporate Prop. Assocs. 14 Inc. v. CHR Holding Corp.,
1008 WL 963048, at *6 (Del. Ch. Apr. 10. 2008).
71
or some representation intended to exclude suspicion and prevent inquiry.”342
Likewise, if “before the consummation of a business transaction,” Harpoon
“acquire[d] information that the speaker ‘knows will make untrue or misleading a
previous representation that when made was true,’” then it had a duty to speak.343
Early in the spinout negotiations, Harpoon made several affirmative
representations to Millennium. It emphasized that the Maverick technology was a
broad discovery platform.344 It represented that the concept behind the dual build-
to-buys was Harpoon’s continuation of inherently active therapies, with Maverick
taking on conditionally active therapies.345 This representation was not limited to
conversations or discussions, merely. Harpoon offered a graphic presentation of the
companies that confirmed these divergent paths: Harpoon would continue its work
on inherently active engagers, and Maverick would work with the new inducible
technology.346
342
Metro Comm. Corp. BVI v. Advanced Mobilecomm Techs. Inc., 854 A.3d 121, 150 (Del. Ch.
2004) (quoting Lock v. Schreppler, 426 A.2d 856, 860 (Del. Super. 1981)).
343
Great Hill Equity Partners, 2018 WL 6311829, at *32 (quoting In re Wayport, Inc. Litig., 76
A.3d 296, 323 (Del. Ch. 2013)).
344
Tr. 22:6–9 (Hurff), 8:16–9:10, 12:4–11 (Arendt), 1255:14–18 (Evnin).
345
Id. at 1082:13–1084:4 (Evnin) (“[W]e would spin out the nascent conditionally active
technology into a new company, which we then referred to as Maverick.”), 20:16–24 (Arendt).
346
JX 143, at 65 (PowerPoint describing the partnership as dividing Harpoon into “TRIDENTS
[i.e. inherently active] (build to buy)” and “CD3 Inducible Platforms (spinout)”); Tr. 19:3–20:24,
21:8–23 (Arendt), 1082:13–23 (Evnin).
72
Early concept sheets the parties exchanged laid out this divide unequivocally:
“Harpoon would spinout a newly created entity (‘Maverick’) that would hold the
technology and intellectual property relating to its inducible T-cell engagement
platform.”347 Over the course of two months of negotiations, the parties exchanged
six term sheets, and every one included identical language stating that the new
Maverick company would contain “technology and intellectual property relating to
[Harpoon’s] inducible T-cell engagement platform.”348 A presentation from future
Maverick scientist Dr. Robert DuBridge and discussions with Millennium personnel
confirmed this understanding: Maverick was set to explore conditional activation in
a broad discovery platform, with numerous paths and iterations on the way.349
This evidence sufficiently proves that Harpoon understood that Millennium
believed it was investing in the inducible T cell space, broadly defined, and not a
specific technology. The fact that presentations and discussions focused on the split
scFv design currently at Harpoon does not disprove Millennium’s broad
understanding of the Maverick company trajectory: the original ProTriTAC (which
347
JX 156, at 4.
348
JX 156, at 4 (June 3, 2016 term sheet); JX 159, at 5 (June 13, 2016 term sheet); JX 168, at 8
(June 23, 2016 term sheet); JX 167, at 6 (June 24, 2016 term sheet); JX 169, at 8 (June 29, 2016
term sheet); JX 191, at 8, 20 (July 21, 2016 term sheet).
349
Tr. 42:22–44:2, 44:23–45:21 (Arendt), 526:18–527:5 (DuBridge); see also JX 191, at 23
(defining “Maverick Platform Improvements” as “any optimization, enhancement, improvement
or modification to any of the [various] components of the Maverick Licensed Intellectual
Property”).
73
became COBRA) was the inducible technology at Harpoon that would lay the
groundwork for the Maverick space. This was the understanding Harpoon possessed
when it drafted the Maverick Field.
Contemporaneous with drafting the Maverick Field, Harpoon stated freely in
internal emails never shared or discussed with Millennium that it intended to draft a
definition limiting the Maverick Field to the existing split scFv design.350 Harpoon
argues that these internal emails, such as Hostetler’s descriptions of the Maverick
Field definition as “simple and clear,” conclusively demonstrate the lack of
fraudulent intent or false representation.351 The correspondence demonstrates that
Harpoon, internally, found the language accomplished what it wanted in its contract
with Maverick; it does not speak to how Harpoon then acted in its negotiations and
dealings with Millennium.
Harpoon expressly contemplated the idea that it would continue to work on
inducible T cell engagers, using concepts other than the split scFv technology it
considered to comprise the Maverick Field.352 Yet, Harpoon never used the terms
“split scFv” or “split dimer” in the Maverick Field definition, and over the course of
the next several months of ongoing negotiations, it never once clarified to
350
JX 206, at 1; JX 227-A, at 1; see also Tr. 1095:14–1096:16 (Evnin).
351
See JX 238, at 1; Harpoon Opening Post-Trial Br., at 62.
352
See JX 246, at 1.
74
Millennium its narrower perception of the Maverick Field—indeed, it never used the
terms “split scFv” or “split dimer” with Millennium at all.353 Harpoon’s silence is
telling, particularly when Millennium personnel testified that they communicated
their intent to move beyond the current inducible designs, which were, at that point,
unproven.354 Harpoon’s trial testimony—that such clarifications were unnecessary
because the definition it composed for its contract with Maverick was so clear it was
“understood by all”—is unconvincing in light of the content and history of the
negotiations that laid out such a clear direction for Maverick in the inducible space
and a clear direction for Harpoon in the inherently active space.
Prior to signing the ATA with Maverick, Harpoon took several actions that
demonstrate an active concealment of its intent to continue developing inducible T
cell engagers. In the middle of negotiations, Harpoon filed a patent application for
conditionally active technology.355 It claimed it did not need to disclose the patent
application because it did not relate to the Maverick Field—nonetheless, it withdrew
the application and refiled it just after all three Agreements were finalized.356 In the
353
Tr. 78:13–79:10, 198:17–199:5 (Arendt), 450:6–15 (Geesaman), 532:11–533:1 (DuBridge),
1224:1–1225:10, 1261:21–1262:3 (Evnin), 1382:7–11, 1388:13–20 (Gerber), 1351:24–1352:3
(Hostetler); Guenot Depo. Tr. 21:18–25; JX 1, § 1.56.
354
Tr. 78:13–79:10 (Arendt).
355
JX 336.
356
See JX 904, at 3; Tr. 1231:12–1233:2 (Evnin); Guenot Depo Tr. 25:23–26:14, 29:1–18; 215:14–
216:8.
75
two months leading up to the spinout, Harpoon continued to communicate that the
companies were on separate trajectories, divided along the boundaries of inherently
and conditionally active technology. In November, Baeuerle sent plans to DuBridge
and Wesche for the separation of the companies, entitled “Separation of Harpoon
(TriTAC platform) and Maverick (Pro-TriTAC platform).”357 In email
communications related to its series B financing in the month before the spinout,
Harpoon described the company trajectories in line with Millennium’s
understanding: “the Pro-TriTAC platform for conditional activation of T cells in the
tumor microenvironment, has been spun out into sister company Maverick . . .
Harpoon has retained rights for Pro-TriTACs (conditional activation in the tumor)
for the engaging of all other immune cells (except T cells).”358 In other words,
Harpoon’s public representation to Millennium could hardly have been clearer that
the companies had distinct and divergent trajectories: Harpoon was not going to do
work that Maverick did. In the same vein, prior to the deal’s close, Guenot sought
Millennium’s approval for a narrow and specific carveout for inducible work on a
specific type of T cell, “Natural Killer T cells.”359 This last-minute revision could
357
JX 366, at 3.
358
JX 430, at 1; see also JX 438, at 1; JX 456, at 1; JX 558, at 1; JX 590, at 1.
359
Stip., ¶ 27.
76
only corroborate Millennium’s view that if Harpoon wanted back into the broad
inducible space it was giving to Maverick, it would ask for it.
In contrast to this presentation of the companies’ trajectories as separate, in
internal emails in the weeks leading up to the spinout, Evnin and Baeuerle discussed
new ways to achieve conditionally active T cells but agreed to “invent after the deal
is closed.”360 Similarly, Evnin told others at Harpoon to keep quiet about
technologies at Harpoon that Takeda “do[es] not know about now.”361
The testimony from Harpoon’s witnesses at trial did not credibly overcome
the scenario this evidence presents. Harpoon understood Millennium entered
negotiations with a broad concept of investing in the inducible T cell space. Harpoon
confirmed this understanding by representing the company trajectories as separate
and exclusive. It then crafted the Maverick Field definition with the intent—which
it took pains not to disclose—to limit the Maverick Field to certain technologies so
that it could compete in the inducible space in the future. Knowing that if
Millennium knew its intent, the Maverick Field would be renegotiated, it withdrew
a patent, postponed invention, and encouraged silence rather than communication to
avoid “raising the[] ire” of Millennium, who it understood conceived the Maverick
Field differently.
360
JX 474, at 1.
361
JX 500, at 1.
77
This evidence is sufficient to prove that prior to the spinout, Harpoon made a
false representation both by “deliberate concealment of material facts,” and by
maintaining “silence in the face of a duty to speak.”362
b. Harpoon’s Knowledge that the Representation was False
A false representation, by itself, is insufficient; Millennium must also show
that Harpoon knew of the falsity and made it with reckless indifference to the truth.
This requires something more than ordinary negligence; Millennium must show that
Harpoon exhibited conscious disregard for the truth.363 I find this element satisfied.
The facts that demonstrate active concealment, described above, I find also
demonstrate the scienter necessary for this second element of fraud. I will not repeat
them in full. Harpoon understood Millennium’s broad concept of the field. It
confirmed that understanding by unequivocally representing that the companies had
separate, non-overlapping futures—one with inherently active technologies, one
with conditionally active technologies. It then drafted the Maverick Field definition
to allow it to compete, but it maintained complete silence regarding its intent to
compete. Harpoon’s intentionality is demonstrated by its affirmative acts, such as
withdrawing and refiling the patent application, and reminding Harpoon personnel
not to discuss technologies on which it was actively working.
362
Stephenson v. Capano Dev., 462 A.2d 1069, 1074 (Del. 1983).
363
Metro Comm. Corp. BVI v. Advanced Mobilecomm Techs. Inc., 854 A.3d 121, 147 (Del. Ch.
2004).
78
The email exchange between Evnin and Baeuerle in the final two weeks
before the spinout is illustrative of the knowledge Harpoon possessed. Baeuerle
indicated that it “[w]ould be great to have a CD3 binding domain formed from two
pieces defined in the Maverick Field (...because I have an idea to get to T cell
engagers without.”364 Evnin responded, “I think if we invent something NEW it is
not part of this deal. . .”365 Baeuerle suggested, “[p]erhaps we should invent after
the deal is closed” because the concept he was working on was “T’s [Takeda’s]
nightmare.”366 The exchange provides a window in Harpoon’s intent to compete
with Maverick and its knowledge that it needed to keep this intent hidden from
Millennium, the company that would invest in Maverick. This, in turn, demonstrates
that it knew its representations of divergent company trajectories was false, and it
knew that its silence was actively concealing the true nature of the spinout from
Millennium.
Because the fraud claim necessarily focuses on Harpoon’s actions to induce
Millennium into participating in the spinout, my focus is on the period prior to
Millennium’s signing the Collaboration and Warrant Agreements. However,
Harpoon’s ongoing concealment, post-spinout, provides additional telling evidence
364
JX 476, at 2.
365
JX 474, at 1.
366
JX 476, at 1.
79
of its knowledge during the negotiation phase. In preparing press releases in May
2017, Harpoon’s CEO McMahon instructed the public relations consultant to
eliminate mentions of Harpoon’s work on conditionally active T cell engagers
because “that is Maverick and Takeda would sue us.”367 In June 2017, Biocentury
published an article, in which Evnin and McMahon both commented on the spinout
and described the companies’ trajectories in a way that confirmed Millennium’s
understanding—not Harpoon’s.368 McMahon specifically stated that Harpoon
“carefully, strategically carved the Maverick platform out of Harpoon and it really
is not competing.”369 Internal commentary on the article from Harpoon personnel
show that it knew these statements were inaccurate.370 Similarly, when Harpoon
approached Takeda for funding of its inherently active platform, it scrubbed mention
of its inducible T cell engagers to avoid scrutiny.371 “Please recall that Takeda is the
Maverick partner,” Evnin wrote, “they would not be excited to hear about some of
[Harpoon’s] work . . . . e.g. on T cell engagers.”372
JX 681, at 1. McMahon’s testimony at trial that his email was merely an “unfortunate phrasing”
367
was unconvincing.
368
JX 748, at 2.
369
Id.
370
JX 749, at 1.
371
JX 814, at 1.
372
Id.
80
Although evidence regarding post-spinout knowledge is not dispositive, it
provides insight into Harpoon’s knowledge of the falsehood it conveyed to
Millennium through active concealment and silence. The parties’ differing
understandings of Harpoon’s non-compete obligations as circumscribed by the
Maverick Field and the companies’ trajectories was not due to Harpoon’s accident
or its negligence. Rather, Harpoon, intending to continue to work on conditionally
active T cell engagers, carefully avoided disclosing that intent, not just prior to the
spinout, but for almost a year and a half afterward while it followed through and
became a competitor with Maverick. I find that Harpoon had knowledge of its false
statements made through concealment and silence.
c. Harpoon Made the False Representations to Induce
Millennium to Participate in the Maverick Spinout through the
Collaboration and Warrant Agreements
The third element of fraud requires that the defendant made the false
statements recklessly or with the specific intent to obtain the desired action.373 Such
scienter may be demonstrated through circumstantial evidence, including
demonstrating motive and opportunity for the inducement.374 In cases where a fraud
claim centers on a transaction, the transaction itself may serve as both the motive
and opportunity to commit the fraud.
373
Deloitte LLP v. Flanagan, 2009 WL 5200657, at *8 (Del. Ch. Dec. 29, 2009).
374
Id.
81
Here, Millennium has demonstrated motive and opportunity that support
finding Harpoon’s false representations were made to induce Millennium to
participate in the spinout through the Collaboration and Warrant Agreements with
Maverick. As a part of the spinout, Harpoon received $6.75 million through a
promissory note from Maverick, as well as over 4 million shares of Maverick
common stock and 15 million shares of Maverick preferred stock, which it
distributed to its stockholders pro rata.375 Originally, when the parties first discussed
a transaction in the spring of 2016, they contemplated a dual build-to-buy—Takeda
would invest in both companies, with the option to purchase both.376 Thus, motives
were not necessarily skewed in one direction. By August 2016, when the parties
were negotiating the Maverick Field, it was clear that Takeda was considering
investing in only one build-to-buy, Maverick, which motivated Harpoon to ensure
that it had an independent “growth path” for its future.377 In October 2016, following
Takeda’s due diligence, Takeda (through Millennium) narrowed its interest to
Maverick as a single build-to-buy.378
At that point, Harpoon faced a future as an independent company, and it had
a motive to maintain a space for itself at the cutting edge of immunotherapy. As Lin
375
Stip., ¶ 38.
376
Id. ¶ 21.
377
Tr. 1089:1–11 (Evnin).
378
Stip., ¶ 22.
82
testified, inducible T cell engagers were the “next shiny thing,” and they were where
the market was likely moving in the immunotherapy space.379 This would be
confirmed for Harpoon shortly after the spinout as large pharmaceutical companies
unanimously expressed interest in inducible technologies but not inherently active
technologies.380 On February 24, 2017, less than two months after the spinout,
Harpoon’s CFO quipped, “Maybe we can do another spin out? Whaler
Therapeutics?”381 He continued, “inducible seems very attractive to the market . . .
[a]ssume this is why Takeda ended up with Maverick vs just an investment in
Harpoon or ownership of Harpoon.”382 McMahon responded, “[s]omewhat foolish
but we will take advantage of this enthusiasm next year.”383
In addition to its motivation to maintain a cutting-edge space in
immunotherapy, possibly to create another spinout, Harpoon had the opportunity. It
still had Baeuerle and Evnin, who had invented the initial ProTriTAC concept that
became the Maverick spinout. Baeuerle had ideas for new developments in the
inducible space.384 In fact, even during negotiations, Harpoon had ideas for
379
Tr. 1827:4–19 (Lin).
380
JX 644, at 2 (Merk); JX 740, at 2 (Eli Lilly); JX 758, at 6 (Pfizer), 12 (AZ/MEDI); JX 769, at
4 (Johnson & Johnson); JX 1200, at 2 (Eli Lilly).
381
JX 644, at 1.
382
Id.
383
Id.
384
See JX 476, at 2.
83
inducible T cell engagers far enough along to file a patent application.385 Then, it
had the opportunity to define the Maverick Field in collaboration with counsel,
without the need to disclose that it was “trying to keep [the Maverick Field] focused
on the current Maverick invention or something very close to it.”386 Meanwhile,
Baeuerle was inquiring if Harpoon could get specific language into the Maverick
Field definition that would allow him to design around it, and “get to T cell engagers
without,” a possibility he dubbed “T’s [Takeda’s] nightmare.”387
In sum, I find that Millennium has proved, through competent circumstantial
evidence, that Harpoon made its false statements with the intent to induce
Millennium into investing in Maverick, and while Millennium thought Maverick
would have plenary rights to the inducible T cell space, Harpoon maintained,
through concealment and silence, its intent to continue innovation in that sector of
immunotherapy, which was proving attractive to investors.
d. Millennium Justifiably Relied on the False Representations
Millennium must also demonstrate it justifiably relied on Harpoon’s
representations when it participated in the spinout by entering the Warrant and
Collaboration Agreements with Maverick. This means, first, that it did not know
385
JX 336.
386
JX 227-A, at 1.
387
JX 476, at 1.
84
Harpoon made a false statement.388 Thus, if Millennium in fact shared Harpoon’s
understanding of the Maverick Field in negotiations, then it cannot have justifiably
relied. A plaintiff must not walk blindly into a situation, but rather is expected to
undertake reasonable diligence to verify statements.389 If Millennium should have
discovered Harpoon’s intent or the plain meaning of the Maverick Field, it did not
justifiably rely.
Finally, “the inducing ‘representation must not only be material, but must
concern an essential part of the transaction.’”390 In light of the fact that Millennium
was aware of the language defining the scope of Harpoon’s non-compete (i.e. the
Maverick Field), and in light of the fact that I have found this language
unambiguous, justifiable reliance is a steep hill for Millennium to climb despite the
fact that it was not a party to the contract; nonetheless, I find it has reached that
summit.
388
See Universal Enter. Grp., L.P. v. Duncan Petroleum Corp., 2013 WL 3353743, at *14 (Del.
Ch. July 1, 2013) (quoting NACCO Industries, Inc. v. Applica Inc., 997 A.2d 1, 29 (Del. Ch.
2009)).
389
See Paron Capital Mgmt., LLC v. Crombie, 2012 WL 2045857, at *7 (Del. Ch. May 22, 2012),
aff’d, 62 A.3d 1223 (Del. 2013).
390
Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLLP, 2018 WL 6311829, at
*33 (Del. Ch. Dec. 3, 2018) (quoting E.I. DuPont De Nemours & Co. v. Fla. Evergreen Foliage,
744 A.2d 457, 462 (Del. 1999)).
85
i. Millennium did not Share Harpoon’s Understanding of
the Maverick Field
As just described, if Millennium knew that the Maverick Field was limited to
the split scFv design and entered its contracts with Maverick with this understanding,
then it did not justifiably rely on Harpoon’s statements suggesting a broad company
trajectory for Maverick, as examined above. It would be unreasonable of
Millennium to knowingly agree to a narrow Maverick Field definition for the non-
compete and at the same time rely on Harpoon’s representations that the companies
had non-overlapping trajectories, which implied that it would not be a competitor.
Harpoon does not deny that it refrained from explicitly discussing, during
negotiations, the limitations it intended the Maverick Field to carry (Harpoon
maintains that the definition was so clear and succinct such clarifications were
unnecessary).391 Instead, Harpoon essentially relies on five pieces of evidence that
it contends demonstrate Millennium understood all along that the Maverick Field
was limited to molecules that utilized the split scFv concept. I examine this evidence
in some detail below because of the weight Harpoon places on it to demonstrate the
parties’ mutual understanding.
The “3-year” alternative. First, negotiations hit a snag when Millennium
realized that as the Maverick Field was then currently drafted, Harpoon would be
391
Tr. 1261:21–1262:3 (Evnin).
86
able to “generate an essentially similar platform” simply by using a T cell target
other than CD3.392 Harpoon initially rejected Millennium’s resulting attempt to
expand the Maverick Field definition to include all T cell targets. 393 Millennium’s
Chris Arendt worried that without this broader definition, he was “losing . . .
exclusive inducible platform.”394 Chris Hurff summarized what Arendt hoped to
accomplish by expanding the definition to all T cell targets: “Build a wall around all
things T-cell (preclude any inducible platform to Harpoon for T-cells, not just
CD3).”395 In other words, it appears that Millennium believed that by expanding
from a “CD3 target” to any “Immune Effector Target,” it was effectively capturing
the inducible T cell platform, which aligned with its understanding of the Maverick
spinout.396
Hurff then listed several “alternatives” if Millennium could not successfully
“[b]uild a wall around all things T-cell.”397 One of these alternatives was to impose
“[s]ome time limit before Harpoon could do any T-cell work (3 years?).”398 At that
point, the ATA already contemplated a 4-year non-compete for Harpoon. Harpoon
392
See JX 445, at 3.
393
JX 433, at 13–14.
394
JX 445, at 2.
395
Id.
396
See JX 445.
397
Id. at 2–3.
398
Id. at 3.
87
maintains that Hurff’s suggestion of a 3-year prohibition on “any T cell work” shows
that Hurff understood the limits of the Maverick Field and wanted to exchange a
shorter non-compete for a broader field definition.399 Harpoon improperly interprets
this evidence, to my mind, for two reasons. First, it appears that at this juncture,
Millennium believed it did not have exclusive rights to the inducible platform as
long as the Maverick Field definition limited immune effector targets to CD3, rather
than T cell targets broadly.400 Thus, proposing a shorter non-compete in exchange
for an expanded definition (“any T-cell work”) makes some sense. The final
Maverick Field definition in fact expanded the definition from “CD3” to the defined
term “Immune Effector Target,” and thus it appears that Millennium succeeded in
expanding the definition without having to trade a shorter non-compete period.
Based on Arendt’s and Hurff’s emails, it further appears that the expansion of the
definition to “Immune Effector Target,” from Millennium’s perspective,
successfully “precluded any inducible platform to Harpoon for T-cells.”401 In other
words, Millennium thought it had sufficiently extended the “ring-fence” to support
its (then and current) understanding of the Maverick Field. Therefore, the alternative
399
Harpoon Opening Brief, at 52–55. At trial, Hurff struggled to explain what he meant, at one
point proposing that he may have forgotten about the existing non-compete. Tr. 357:7–363:22
(Hurff).
400
JX 445, at 3.
401
See id. at 2–3.
88
3-year non-compete makes sense as an alternative proposition at a prior point in the
negotiations. Second, Hurff’s proposal, taken literally (“any T-cell work”), would
also prevent Harpoon from working on all inherently active T cell engagers—
essentially, it would shut Harpoon’s doors for three years. I find Hurff’s statement,
from that point of view, imprecise at best, but Harpoon’s proposition that it
demonstrates Hurff’s understanding of a narrow Maverick Field as it was ultimately
defined is not credible.
“Version 2” of Maverick. Second, on the date the ATA was executed,
December 31, 2016, Arendt wrote Hurff that “version 2” of the Maverick technology
might be an “entirely new conditional approach if approved at [Joint Steering
Committee].”402 The ATA requires joint steering committee approval for any work
done outside of the “Collaboration Field.”403 The Collaboration Field is identical to
the Maverick Field, except that it limits immune effector targets to the most popular
target: CD3. Harpoon interprets this statement to mean that Arendt understood the
Maverick Field to be limited to the split scFv design because a “new version”
referenced a new approach to achieving conditionality, which, Arendt was implying,
was outside the Maverick Field. I find this unpersuasive. Arendt’s statement,
402
JX 562, at 1.
403
The Collaboration Field is defined in § 1.13 of the Collaboration Agreement. JX 2, § 1.13.
Sections 2.1.1(c) and 3.4 require joint steering committee approval for developments outside the
Collaboration Field. JX 2, §§ 2.1.1(c), 3.4.
89
contemplating a “new version,” matches up with his concerns expressed earlier that
month that Millennium intended the Maverick platform to develop quickly beyond
CD3 to other immune effector targets.404 Such a development would require joint
steering committee approval under the Collaboration Agreement. Given Arendt’s
previous emails and concerns, his reference to an “entirely new conditional
approach” requiring joint steering committee approval is best read, to my mind, as a
reference to non-CD3 immune effector targets, not methods of conditionality.
Harpoon “can go for inducible.” Third, Hurff wrote in internal notes that
from Arendt’s perspective, “[Harpoon] can go for inducible, just not based on this
IP.”405 Harpoon sees this as clear evidence that Millennium understood the
Maverick Field was limited to “this IP,” which per Harpoon referred to the split scFv
design.406 Once again, in the context of negotiations, this interpretation is not
persuasive. This email chain is part of a key point in the negotiations in December
2016, when Millennium realized that if the Maverick Field only encompassed CD3
immune effector targets, then the Grant-Back License would permit Harpoon to
create a knockoff technology by simply using a different immune effector target.
404
See JX 445, at 3 (expressing a desire “to make sure that innovation can still happen in Maverick
in terms of platform improvements/innovations beyond CD3.”).
405
JX 426, at 1.
406
Harpoon Opening Brief, at 52 (Arendt’s statement “is diametrically opposed to Millennium’s
current position that Harpoon cannot pursue inducible T cell engagers.”).
90
Hence the email was entitled, “Chris A freaked out…”407 As discussed,
Millennium’s ultimate reaction was to negotiate an expansion of the definition from
CD3 to any “Immune Effector Target,” which it believed effectively built a “ring-
fence” around inducible T cell engagers. The entire sentence—rather than the
snippet Harpoon extracts—makes sense in this context: “For this investment we
need full IP; [t]hey can go for inducible just not based on this IP.”408 In other words,
“this IP” logically refers to “full IP.” To justify its massive investment in the
Maverick technology, Millennium required access to the “full IP,” or all T cell
targets (not just CD3). Harpoon could continue to work on inducible technology,
but it could not do so on “this IP,” meaning it could not use inducible technology to
target T cells.
Conditionally active T cell engagers exist outside the Maverick Field. Fourth,
at depositions and at trial, Arendt and DuBridge both admitted that Harpoon’s
TetraTAC concept as well as certain other theoretical designs fall outside the
Maverick Field, thus demonstrating that the Maverick Field could not have
encompassed the entire inducible T cell space.409 Moreover, Maverick’s numerous
407
JX 426, at 1.
408
JX 426, at 1.
409
Tr. 577:18–578:23, 579:4–10 (DuBridge), 199:11–200:4 (Arendt).
91
molecule designs—over 750 to date—all employ the split scFv design.410 Showing
that an inducible T cell engager invented after the spinout can fall outside
Millennium’s understanding of the Maverick Field, however, cannot reasonably be
taken to mean that Millennium shared a narrow understanding of the Maverick Field.
At the time of negotiations, all of Harpoon’s designs utilized the split scFv design.411
Arendt and DuBridge testified that they believed the Maverick Field encompassed
other approaches to conditionality known at that time.412 And Maverick had a good
reason not to depart from the split scFv design following the spinout: namely, it
worked. Having taken an unproven concept and created a functional molecule, there
would be little motive to immediately move on to new designs.
“T cell engager of the ‘Maverick’ design.” Fifth, in the final days before
signing the ATA, Evnin and Guenot created deal summaries describing the Maverick
Field as conditionally active T cell engagers of the “Maverick design.”413 Harpoon
410
Id. at 518:21–519:1, 588:11–589:10 (DuBridge). Harpoon also points to Millennium’s
presentations at Takeda pre-spinout and notes that their descriptions of the technology all describe
the split scFv design. See JX 262, at 8–9; JX 583, at 5–7; JX 1017, at 5, 6–7, 17, 25, 29; see also
JX 171, at 2. Given that the initial ProTriTAC design was the sole then-current basis of Harpoon’s
inducible platform, it is hardly surprising that presentations and descriptions of the technology
described that design. Millennium has pointed to other presentations and communications that
indicate it intended to modulate and expand beyond that design. See JX 155; JX 187, at 49; Tr.
42:22–44:2, 44:23–45:21 (Arendt), 526:18–527:5 (DuBridge). Moreover, even in the
presentations delivered to Takeda, the slides clearly stated, that Harpoon “would be prohibited
from working on the inducible T-cell engagers.” JX 583, at 5.
411
Tr. 144:22–147:24 (Arendt), 386:1–13 (Hurff).
412
Id. at 606:24–609:6 (DuBridge), 212:5–213:20 (Arendt).
413
JX 550, at 1; JX 556, at 1.
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argues that the Plaintiffs’ failure to probe the meaning of these two words
demonstrates that the recipients shared the understanding that the “Maverick Field”
was limited to a “Maverick design” that, in turn, was limited the “split scFv” or “split
dimer” design.414 But this is a tautology; if Harpoon wanted the words “Maverick
design” to clarify its understanding of the Maverick Field after months of silence,
then it needed to do more. Without clarifying that the “Maverick design” is a
limitation, these words simply state that the Maverick Field encompasses molecules
of the design described in the Maverick Field. If Millennium believed—as I find it
did—that Maverick’s design encompassed virtually all known conditionally active
T cell engagers, then specifying that the Maverick Field is limited to the “Maverick
design” does not narrow the Maverick Field.
In addition, I note that it was soon-to-be Maverick personnel, not Millennium,
who received these deal summaries, and so using these emails as evidence of
Millennium’s understanding would be improper.415 Soon-to-be Maverick CSO
414
Harpoon Opening Brief, at 44–46.
415
Harpoon does not argue that this evidence should weigh against Millennium, only contending
that it impeaches the testimony of Maverick’s personnel. See Harpoon Opening Brief, at 42–46.
Similarly, Harpoon says that the parties’ shared understanding is evident because it gave
presentations and sent slide decks to certain Maverick Board members post-spinout that should
have alerted them to its work in the inducible T cell space, and no one objected. See JX 614, at
37–39; JX 1109, at 9; JX 1111. The evidence does not suggest that Maverick personnel attended
the presentations, reviewed the slides, or, if they did, that they should have understood that
Harpoon was engaging in competitive work. Moreover, Harpoon does not contend it shared any
of this with Millennium.
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Gerber and Maverick Board member Geesaman—who received these emails—
testified that they “blew past” or “ignored” these words because they were so vague.
It not reasonable to conclude, as Harpoon does, that the reason Gerber and Geesaman
were unconcerned was because using the language “of the ‘Maverick’ design”
comported with their understanding that their new company was limited to the split
scFv approach to conditionality. Evnin and Guenot never used the term “Maverick
design” elsewhere, and they also never used the terms “split scFv” or “split dimer”
in negotiations.416 If Gerber and Geesaman had probed the meaning of “Maverick
Design,” the parties may have been forced to clarify their understandings about the
Maverick Field and the spinout, but their failure to do so does not demonstrate a tacit
agreement as to Maverick’s scope, and it certainly does not do so with regard to
Millennium.
Harpoon put great weight on the evidence I have reviewed in depth, above. It
argued that from these statements and this behavior, I should conclude that
Millennium understood that it was investing in a specific design of a conditionally
active molecule, and that it also understood that Harpoon was free to compete if it
could come up with another design outside this limited scope.417 Harpoon’s
416
Tr. 78:13–79:10, 198:17–199:5 (Arendt), 450:6–15 (Geesaman), 532:11–533:1 (DuBridge),
1224:1–1225:10, 1261:21–1262:3 (Evnin), 1382:7–11, 1388:13–20 (Gerber), 1351:24–1352:3
(Hostetler); Guenot Depo. Tr. 21:18–25.
417
Harpoon Opening Brief, at 51–57.
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interpretation of the evidence is strained. Each piece is either inconclusive or it
supports the idea that Millennium was attempting to negotiate for—and thought it
succeeded in negotiating for—a broad ring-fence around the conditionally active
platform. The contemporary statements and presentations by Maverick and
Millennium, and the credible testimony of several of their witnesses at trial,
particularly Arendt and DuBridge, corroborate this interpretation of the evidence.
As a final note on this point, the access Millennium permitted to Evnin and
Baeuerle post-spinout also supports the idea that Millennium believed Maverick to
be working free from the threat of competition from Harpoon. Arendt credibly
testified that neither Maverick nor Millennium would have allowed access to
confidential information if they knew that Harpoon intended to contemporaneously
develop a molecule with a similar function that would directly compete with the
COBRA molecule.418 Even Evnin admitted at trial that allowing such access to a
board member of a direct competitor would be “unusual.”419 I would describe it as
“inexplicable.”
In the aftermath of the SITC Poster revelation, when Maverick’s CEO
Scibetta confronted Evnin about the ProTriTAC molecule, their divergent
perspectives on the Maverick Field, and Harpoon’s status as a competitor, Scibetta
418
Tr. 417:23–418:8, 419:9–14 (Hurff), 74:2–19 (Arendt).
419
Id. at 1267:12–1269:17 (Evnin).
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testified that Evnin told him it was “too bad Takeda’s lawyers missed that in
drafting.”420 After months of silence regarding its understanding of the Maverick
Field, and after its active concealment of its intent to compete, Harpoon appeared to
confirm that Millennium “missed” something when it failed to comprehend the
limits Harpoon embedded in the ATA’s definition of the Maverick Field.
ii. Despite the Plain Meaning of the Maverick Field,
Millennium Reasonably Believed the Maverick Field
was Broad
Having found earlier in this Opinion that the Maverick Field definition is
unambiguous and cannot reasonably be interpreted to include the ProTriTAC
molecule, I nonetheless find that Millennium reasonably believed when it engaged
in negotiations of the Maverick Field definition and entered the Collaboration and
Warrant Agreements with Maverick that that definition encompassed the inducible
space. As I noted earlier, proving justifiable reliance in the face of an unambiguous
contract is a steep hill to climb. For the reasons described below, I find that in this
unique context, Millennium has offered evidence demonstrating that despite the
unambiguous contractual language between Harpoon and Maverick, it justifiably
relied on Harpoon’s false representations.
420
Id. at 916:18–917:24, 956:1–24 (Scibetta); JX 983 (Scibetta’s corresponding contemporaneous
notes confirming Evnin’s statement).
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As a preliminary matter, the fact that the Maverick Field has a plain meaning
does not mean that it has a simple meaning, or one that is easy to apprehend. The
Maverick Field definition is highly technical and concerns scientific concepts.
Despite the scientific training of those involved, failure to apprehend the plain
meaning of a definition of a conditionally active T cell therapy platform that
describes multi-specific antigen-binding molecules is not the same as, say, failure to
apprehend contract terms for the sale of a used car, or even the sale of a mundane
corporate entity. Millennium’s failure to comprehend a contract I found difficult,
yet unambiguous, does not conclusively show that Millennium walked blindly into
its agreements with Maverick or failed to undertake reasonable diligence in
ascertaining the meaning of the Maverick Field.421 This is so for several reasons.
First, as Harpoon itself stresses, Millennium was not a party to the ATA.422
As described in the factual recitation, the contractual posture was odd: prior to the
spinout, the same Harpoon personnel who are now Defendants also represented and
negotiated on behalf of Maverick.423 Thus, while Millennium commented on,
approved, and negotiated various terms in the ATA—including the Maverick
421
See Paron Capital Mgmt., LLC v. Crombie, 2012 WL 2045857, at *7 (Del. Ch. May 22, 2012),
aff’d, 62 A.3d 1223 (Del. 2013).
422
Harpoon Opening Brief, at 47–48.
423
See Tr. 1094:24–1095:4 (Evnin); Guenot Dep. Tr. 180:11–12 (“The Maverick deal team is . . .
the same as the Harpoon deal team.”).
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Field—it was not a party to that contract, and was, per explicit contractual terms, not
an intended beneficiary thereof, and it was not negotiating on behalf of the not-yet-
existent company, Maverick. It was Harpoon’s Guenot, not anyone at Millennium,
who ultimately signed the ATA for Maverick.424 As a result, Harpoon felt no need,
legally or practically, to discuss or reveal its contractual intent with Millennium.425
Harpoon, in fact, has maintained a joint privilege between itself and Maverick for
the entirety of this litigation to protect communications that conveyed the contractual
intent that existed between the parties to the ATA—Harpoon and Maverick. In other
words, while Millennium was intimately involved in contract negotiations, Harpoon
kept it at arm’s length when it came to contract communications. Had Millennium
been a party to the ATA, Harpoon might have divulged more of its intent regarding
the “simple and clear” meaning it claimed that Harpoon and Maverick shared.426
Second, the evidence leads me to two pertinent factual findings. The first is
that Harpoon was aware that Millennium thought it was investing in a company with
rights to a broad field encompassing inducible T cell engagers free from
424
See JX 1.
425
See Harpoon Opening Brief, at 12–18.
426
See JX 238, at 1. Harpoon argues that its attorney Hostetler’s descriptions of the Maverick
Field definition as “simple and clear” conclusively demonstrate the lack of fraudulent intent.
Harpoon Opening Brief, at 62. This demonstrates that Harpoon, internally, found the language
accomplished what it wanted; it does not speak to how Harpoon then acted in its negotiations and
dealings with Millennium, or the reasonableness of Millennium’s reliance thereon.
98
competition.427 The next is that Harpoon, with clear contractual intent internally,
felt that it could nonetheless keep Millennium’s misunderstanding intact and thereby
avoid reopening contract negotiations.428 I conclude from these findings that
Harpoon itself believed it was possible to create a binding contract based on a
carefully nurtured misunderstanding by a non-party to that contract.
Third, as discussed above, the evidence in negotiations shows that Millennium
realized the Maverick Field might be narrow, and it reacted by negotiating changes
it believed returned the Maverick Field to a broad field definition it had first
conceived.429 Originally, the Maverick Field only encompassed molecules that
targeted CD3, the most popular T cell target.430 When the parties contemplated
licensing back all of the Maverick IP to Harpoon for work outside the Maverick
Field, Millennium realized that Harpoon could simply replicate a T cell engager with
a different immune effector target.431 Understandably, Millennium’s focus zeroed
in on this part of the Maverick Field. The correspondence in evidence supports the
conclusion that when Millennium expanded the definition from CD3 to the defined
term “Immune Effector Target,” it believed that this expansion created a ring-fence
427
See Section II.B.1.a–b, supra.
428
See Section II.B.1.a, supra.
429
See JX 433; JX 426; JX 445.
430
See JX 433.
431
See JX 445, at 3.
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around inducible T cell engagers.432 In other words, with its focus on “Immune
Effector Targets,” and its belief from communications with Harpoon that Maverick
was getting a broad field, Millennium may reasonably have failed to probe other
facets of the intractable but nonetheless unambiguous descriptions in the Maverick
Field.
Fourth, also discussed above, as of the time of the spinout, the Maverick Field
encompassed all existing conditionally active T cell engagers so far as Millennium
knew.433 Only after the spinout did Harpoon invent (or finish inventing) TetraTAC
and the new ProTriTAC, causing Millennium to discover that the Maverick Field
was not in fact all-encompassing.434 Inducible T cell engagers, however, were a new
concept when Harpoon began developing its initial ProTriTAC. Millennium
witnesses credibly testified they believed the Maverick Field captured other
inducible platforms being developed at competing companies.435 Thus, while
Millennium could have negotiated for a more plain-spoken field definition, it was
432
Compare id. at 3 (Arendt noting that a definition limited to CD3 did not encompass all T cell
engagers, and that “defin[ing] the field as T cell engagement, not just CD3 engagement” would
“preclude any inducible platform to Harpoon for T-cells, not just CD3”) with ATA § 1.56
(finalized Maverick Field, with “CD3” replaced by defined term “Immune Effector Target”).
433
See Tr. 606:24–609:6 (DuBridge), 209:9–210:7, 213:13–20 (Arendt). This included existing
molecules designed by CytomX, Amunix, and Genetech. Tr. 69:17–24, 209:21–210:1, 213:13–
20 (Arendt), 551:24–554:1, 548:16–549:22, 556:20–557:3, 608:20–609:6 (DuBridge).
434
Id. at 577:18–578:23, 579:4–10 (DuBridge), 199:11–24 (Arendt).
435
Id. at 606:24–609:6 (DuBridge), 213:13–20 (Arendt).
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not unreasonable, given the contract language and the state of immunotherapy, for it
to rely on its broad understanding of the Maverick Field.
As a final note, Baeuerle testified that at the time of the spinout, his ideas for
alternative methods of achieving conditionality—what would become TetraTAC—
were “science fiction” concepts that never even approached workability.436 Lin
described his discovery of conditionality through peptide masks on the albumin
binding domain as a “serendipitous eureka moment.”437 There is, to my mind, little
reason to fault Millennium for not predicting then-unimaginable molecular concepts
that would draw out the recalcitrant nuances of the Maverick Field definition.
This has been a long-winded explanation of why I find that Millennium
reasonably believed—and thus justifiably relied on—a misapprehension of an
unambiguous contract between Harpoon and Maverick. Millennium helped
negotiate a complex and highly technical definition with Harpoon. Nonetheless,
Millennium was not a party or third-party beneficiary to that contract, and so it is
bringing a tort, not a contract claim. As such, its claim is that it relied on the many
representations that Harpoon made to it during the course of the transaction, not
merely the Maverick Field definition. Harpoon shut Millennium out of
communications regarding its intent for the Maverick Field and actively prevented
436
Id. at 1459:24–1460:15, 1531:9–24 (Baeuerle).
437
Id. at 1745:4–15, 1800:3–12 (Lin).
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Millennium from discovering its misapprehension. Harpoon has successfully
demonstrated its understanding of the contract was correct. Thus, it has escaped
contract damages. Nevertheless, and in light of all the evidence proffered, I find it
reasonable to conclude that Millennium reasonably believed that Maverick’s
trajectory and Harpoon’s non-compete were broad despite the lack of ambiguity in
the Maverick Field definition.
iii. A Broad Field Definition was a Causal Factor in
Millennium’s Decision to Enter the Collaboration and
Warrant Agreements
As noted, the mere fact that information was material does not support fraud;
the information must play a causal role in the decision that underlies the fraud
claim.438 Millennium witnesses credibly testified that Takeda would have
considered the investment absurd if it imagined that it was investing in the
intellectual property around a single method or path to conditionality and leaving the
field open to competition from Harpoon.439 Takeda, through Millennium, has
invested tens of millions of dollars in Maverick to date, and plans to invest more.440
438
Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLLP, 2018 WL 6311829, at
*33 (Del. Ch. Dec. 3, 2018) (quoting E.I. DuPont De Nemours & Co. v. Fla. Evergreen Foliage,
744 A.2d 457, 462 (Del. 1999)).
439
Tr. 422:4–423:5 (Hurff); see also JX 451, at 1–4; JX 527-PPT, at 3.
440
Tr. 926:4–13 (Scibetta) (testifying Millennium invested over $100 million in “nondilutive
financing” for the right to purchase Maverick), 1047:2–16 (Nachtwey) (testifying that Millennium
has made investment payments of $65.25 million through the third quarter of 2019).
102
It would not have done so without the broad “ring fence” around conditionality that
it believed Maverick would enjoy.441
e. Millennium’s Damages are Presumed at This Stage
Damages is the final element of proving a fraud claim. As noted, however, I
indicated at trial that a damages phase would follow, contingent on finding
liability.442 At this point, I assume that Millennium suffered damages in satisfaction
of this element of the tort, subject to proof at an ensuing damages phase.
2. Tortious Interference with Business Relations and with Contract
Millennium makes an argument that Harpoon interfered with its contractual
and business relationships with Maverick. Tortious interference with contract
requires (1) a contract, (2) the defendant’s knowledge of the contract, (3) intentional
interference with the contract without justification, (4) causing termination or
breach, and (5) damage.443 Here, a contract existed because Millennium entered the
Collaboration and Warrant Agreements with Maverick. Harpoon, given its
involvement in negotiations, clearly knew of these contracts. However, even if
Harpoon interfered, Millennium has not demonstrated that Harpoon’s actions caused
a termination or a breach of the Collaboration or Warrant Agreements. Although
441
See JX 426, at 1 (Hurff noting, “[f]or this investment we need full IP”).
442
Tr. 1980:12–1981:7.
443
Cryovac Inc. v. Pechiney Plastic Packaging, Inc., 430 F. Supp. 2d 346, 357 (D. Del. 2006).
103
Millennium claims that Harpoon’s actions “resulted in a Material Adverse Change”
that constitutes a breach, it offers no evidence to support this.444 Therefore, I find
Harpoon is not liable for tortious interference with contract.
Tortious interference with business relations requires (1) reasonable
probability of a business relationship or expectancy, (2) intentional interference with
the relationship or expectancy, (3) causation, and (4) damages, examined in light of
a privilege to lawfully compete.445 Here, Millennium had a reasonable probability
of a business relationship through its Collaboration and Warrant Agreements with
Maverick. There is no evidence, however, that Harpoon intentionally interfered with
Millennium and Maverick’s business relationship. Even though, as I found, Harpoon
fraudulently induced Millennium to enter the contracts with Maverick, Harpoon’s
actions in developing the ProTriTAC molecule were not aimed at—and did not
disrupt—Maverick’s ability to develop conditionally active T cell engagers,
Millennium’s ability to fund Maverick, or Millennium’s option to purchase
Maverick. While the advent of a new competitor in the market may have changed
the prospects of success, there is no evidence that Harpoon intentionally interfered
with the business relationship between Maverick and Millennium, which is
444
Corrected Post-Trial Br. of Millennium Pharmaceuticals, Inc., D.I. 316 (“Millennium Opening
Brief”), at 68.
445
Lipson v. Anesthesia Serv., P.A., 790 A.2d 1261, 1285 (Del. Super. 2001).
104
circumscribed by the Collaboration and Warrant Agreements. Although the new
competition changes the competitive landscape, Maverick’s funding remains intact,
and Millennium retains the option to purchase.446 Therefore, Harpoon is not liable
for tortious interference with business relations.
3. Unfair Competition
Millennium also contends that Harpoon has unfairly competed with it or with
Maverick. The elements for unfair competition are (1) a reasonable expectancy of a
business relationship, (2) defendant’s wrongful interference with that relationship,
and (3) defeat of the expectancy and harm.447 In evaluating tortious interference
with business relations above, I found that there was no wrongful interference with
the business relationship that exists between Millennium and Maverick. There is no
proof of interference with Maverick’s or Millennium’s trade with any third party;
which, given current technology, would appear not to be possible. Thus, the second
prong of the claim for unfair competition is not met, and Harpoon is not liable for
this tort.
4. Unjust Enrichment
Unjust enrichment is an equitable concept, unavailable if a legal remedy
exists. Millennium has pled unjust enrichment in the alternative if no tortious
446
Tr. 1050:16–1051:19 (Nachtwey).
447
Ethpharm S.A. France v. Abbott Labs., 598 F. Supp. 2d 611, 618 (D. Del. 2009).
105
conduct is demonstrated.448 Having found that Millennium proved fraud on the part
of Harpoon, Millennium has a remedy at law and the unjust enrichment claim falls
away.449
III. CONCLUSION
Maverick has not proved its claims against Harpoon for breach of contract or
misappropriation of trade secrets, and those claims are dismissed. Millennium has
proved liability for fraud by Harpoon. Millennium has not proved its claims for
tortious interference with contract and business relations or unfair competition, and
those claims are dismissed along with unjust enrichment, pled in the alternative. The
parties should confer and inform the Court about proceeding to a determination of
damages for Harpoon’s fraud liability and should provide an appropriate form of
order consistent with this Memorandum Opinion.
448
Millennium Opening Brief, at 71.
449
Millennium Opening Brief, at 71 (“Takeda concedes that if it prevails on its other claims, it has
a remedy at law; this claim is therefore presented in the alternative.”).
106