Alopexx, Inc. v. Xenothera

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ALOPEXX, INC., Plaintiff, v. XENOTHERA, Defendant.

Civil Action No. 22-11081-FDS

United States District Court, D. Massachusetts

April 28, 2023

MEMORANDUM AND ORDER ON DEFENDANT'S MOTION TO DISMISS ON FORUM NON CONVENIENS GROUNDS, OR TO STAY CASE PENDING RESOLUTION OF FIRST-FILED LITIGATION IN FRANCE

F. DENNIS SAYLOR IV, CHIEF JUDGE UNITED STATES DISTRICT COURT

This is an intellectual-property dispute stemming from the development of vaccine and antibody treatments used to treat infections. According to the complaint, in 2018, plaintiff Alopexx, Inc. provided defendant Xenothera with a small amount of its proprietary vaccine to conduct a single experiment. Xenothera allegedly used the results of the experiment to develop a competing product candidate, in violation of the parties' Material Transfer Agreement (“MTA”).

After Alopexx declined to provide Xenothera with a license to the vaccine-which Xenothera requires to produce its product-Xenothera filed suit in French commercial court seeking a declaration of licensing rights. Alopexx then filed suit in this court one month later, seeking a declaratory judgment of ownership rights in the vaccine, and alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. Xenothera has moved to dismiss on the basis of forum non conveniens. In the alternative, it seeks a six-month stay of this case to allow the French court to resolve any potential motions by Alopexx in that action.

For the reasons set forth below, the motion to dismiss on the basis of forum non conveniens will be denied, and the request for a stay will be granted, pending further order of the Court.

I. Background

The following facts are set forth as alleged in the complaint and attached exhibits.

A. Factual Background

Alopexx, Inc. is a biotechnology company incorporated in Delaware with a principal place of business in Cambridge, Massachusetts. (Compl. ¶ 13). Defendant Xenothera is a French biotechnology company with a principal place of business in Nantes, France. (Id. ¶ 14).

Alopexx develops novel immune therapies with the goal of reducing reliance on antibiotic drugs. (Compl. ¶ 5). Alopexx has two proprietary, clinical therapeutic candidates: a chemically synthesized vaccine called AV0328, and a human monoclonal antibody called F598. (Id.). F598 targets Poly-N-acetyl glucosamine (“PNAG”), a surface component of microbes that cause serious infections. (Id. ¶¶ 7, 17, 20). Alopexx plans to seek regulatory approval for F598 to be used to prevent hospital-acquired infections in intensive-care unit patients. (Id. ¶ 20). In 2022, it announced plans to hold an initial public offering to raise funds (at least in part) for Phase II clinical trials for both F598 and AV0328. (Id. ¶ 5).

On May 30, 2018, Alopexx entered into a Material Transfer Agreement (“MTA”) with Xenothera under which Alopexx agreed to provide Xenothera with a small amount of the AV0328 vaccine “free of charge.” (Compl. ¶¶ 30-31; Ex. 1 (“MTA”) ¶¶ 1.1, 2). According to the terms of the agreement, Xenothera would use the vaccine to conduct a single experiment “in order to obtain antibodies from animals that will be hyper-immunized against [it].” (Id. ¶ 28; MTA ¶ 1.3). Xenothera was not authorized “to use the [vaccine] after the expiry date of [the] Agreement” or for any other purpose without the consent of Alopexx. (Compl. ¶ 33; MTA ¶ 1.2). The MTA further provided that “[t]he Parties [] expressly agree that the right to use the [AV0328 vaccine], as granted under this Agreement, may not, under any circumstances, be construed as expressly or implicitly providing XENOTHERA with any ownership right or title, or option or license, whatsoever over the [AV0328 vaccine].” (Compl. ¶ 36; MTA ¶ 4.2). The MTA therefore “conveyed only a limited, temporary, and nonexclusive right to use AV0328.” (Compl. ¶ 36).

The MTA also contained the following choice-of-law and forum-selection clause:

This Agreement shall be construed and governed by the laws of the Commonwealth of Massachusetts without regard to Massachusetts' conflicts of law principles or of France. The Parties agree that any action arising out of or related to this Agreement may be brought in the Massachusetts state courts or the U.S. federal courts sitting in Boston, Massachusetts or in Nantes, France, and the parties each hereby submit to the in personum [sic] jurisdictions of each such courts for such purposes. The Parties hereby consent to service of process in any such action by internationally recognized courier or by registered mail at their respective addresses set forth on the first page hereof.

(MTA ¶ 13).

In the spring of 2019, Xenothera allegedly communicated the result of the experiment described in the MTA to Alopexx, and wrote that it was interested in negotiating “an official right to use your vaccine in order to move forward, and define financial compensation if the product happens to be successful.” (Compl. ¶¶ 40-41). The parties apparently did not discuss the licensing request further. (Id. ¶ 41).

In January 2021, Xenothera contacted Alopexx to discuss work that it had allegedly performed with antisera derived from the 2018 experiment, which it referred to as XAB05. (Id. ¶¶ 42-43). XAB05 can only be produced by immunizing animals with the AV0328 vaccine. (Id. ¶ 7). Both antibodies target PNAG to treat and prevent microbial infections. (Id.). Xenothera requested a license to AV0328 so that it could continue to produce XAB05, and proposed launching a trial to compare its antibody to the one produced by Alopexx. (Id. ¶¶ 43-44). Alopexx asked Xenothera to prepare a non-overlapping indication for XAB05 that would not compete with F598. (Id. ¶ 45). Xenothera apparently did not do so, and the parties never entered into a licensing agreement. (Id. ¶ 47).

According to the complaint, in March 2022, Alopexx learned that Xenothera had continued to conduct studies using the antisera derived from the preliminary experiment. (Compl. ¶ 49). The complaint alleges that these studies “were aimed at developing a competitor to Alopexx's F598 product candidate.” (Id. ¶ 49). Alopexx also learned that Xenothera had been recruiting investors in its XAB05 product, apparently without disclosing that it could not be developed without license rights to AV0328. (Id. ¶ 50). Xenothera declined to provide Alopexx with additional information about its use of the AV0328 vaccine upon request. (Id. ¶¶ 51-52).

In June 2022, Xenothera filed a lawsuit against Alopexx in the commercial court in Nantes, France, claiming licensing rights to the AV0328 vaccine, and seeking payment of 120 million euros in the alternative. (Id. ¶ 53). The complaint alleges that Xenothera has falsely suggested that XAB05 is a viable competitor to F598, when in fact XAB05 is not viable without Xenothera securing a legal right to Alopexx's vaccine. (Id. ¶ 55). Xenothera's lawsuit and false claims have allegedly harmed Alopexx as it prepares its initial public offering, because its value depends in large part on “the value of its intellectual property and its plans for product development.” (Id. ¶¶ 54-55).

B. Procedural Background

Plaintiff filed this suit on July 6, 2022. The complaint asserts claims for declaratory relief (Count 1), breach of contract (Count 2), breach of the implied covenant of good faith and fair dealing (Count 3), and unjust enrichment (Count 4). Alopexx seeks a declaratory judgment that Xenothera is not entitled to ownership rights, titles, options, or licenses as to the AV0 328 vaccine. (Compl. ¶ 63). It also seeks damages for diminished demand for Alopexx stock caused by Xenothera's license claims and for legal fees and costs associated with defending against the French suit, as well as restitution for the value of Xenothera's use of the AV0328 vaccine. (Compl. ¶¶ 75, 82, 92).

On August 31, 2022, defendant moved to dismiss the complaint pursuant to the doctrine of forum non conveniens, or alternatively to stay the case in favor of the proceeding currently pending in France. At the same time, defendant moved to dismiss Counts 2 through 4 pursuant to Fed.R.Civ.P. 12(b)(6). In the event that the case is not entirely dismissed or stayed, defendant has requested an extension of time to respond to Count 1 within 14 days of the resolution of the Rule 12(b)(6) motion.

II. Motion to Dismiss on the Basis of Forum Non Conveniens

Defendant has moved to dismiss on the basis of forum non conveniens. Defendant first contends that the forum-selection clause contained within the MTA bars plaintiff from filing suit in this court. Even if the forum-selection clause is not dispositive, defendant asserts that the interests of convenience and efficiency weigh in favor of litigating the suit in French court.

A. Whether the Forum-Selection Clause Governs

The Supreme Court has stated that “the appropriate way to enforce a forum-selection clause pointing to a state or foreign forum is through the doctrine of forum non conveniens.” Atlantic Marine Construction Co Inc. v. United States District Court for the Western District of Texas et al., 571 U.S. 49, 60 (2013). Both parties contend that the forum-selection clause contained within the MTA dictates the outcome of this motion.^[1]

The forum-selection clause reads as follow:

This Agreement shall be construed and governed by the laws of the Commonwealth of Massachusetts without regard to Massachusetts' conflicts of law principles or of France. The Parties agree that any action arising out of or related to this Agreement may be brought in the Massachusetts state courts or the U.S. federal courts sitting in Boston, Massachusetts or in Nantes, France, and the parties each hereby submit to the in personum [sic]

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