To every cow her calf; to every virus its copy?

Bavarian Nordic A/S v. Acambis Inc., 486 F.Supp.2d 354 (D. Del. 2007)

Plaintiff Bavarian Nordic is a Danish corporation; plaintiff Anton Mayr is a German national. They alleged tortious interference and unfair competition based on defendants’ commercial use of a certain virus, Modified Vaccinia Ankara (MVA) 572, useful in creating vaccines. Mayr worked on MVA 572 and was its sole source in the research community; in 1996, Bavarian Nordic entered into an exclusive contract with him, though one that was not supposed to interfere with noncommercial research. Simplifying a bit: a scientist who had worked with Mayr brought a derivative of MVA 572 to the National Institutes of Health (NIH) with him, and at his request, Mayr sent samples of the original to the NIH in 1995 and 2001. In 2002, the NIH announced a request for proposals for development and testing of a modified vaccine, which would include access to a master seed stock of MVA. The NIH split the contracts between Acambis and Bavarian Nordic.

Plaintiffs sued for conversion. The court determined that Maryland law applied, though it was the same as Massachusetts law (the other candidate). Conversion requires the plaintiff to show that the defendant wrongfully exercised ownership of, or control or dominion over, personal property to which it had no right of possession at the time. But this case doesn’t fit into the standard paradigm. First, conversion requires physical possession of plaintiff’s actual chattel. But plaintiffs never had physical possession of the specific material NIH gave Acambis. Mayr’s MVA was purified and cloned by NIH before distribution. Even if physical possession of copies of a chattel may support a conversion claim, the court couldn’t find cases in which the chattel was never in the possession of its alleged owner. Moreover, the case law suggests that a conversion action can only succeed when a defendant exercised exclusive control over the property. But Bavarian Nordic too has had access to MVA stock, albeit not the same sample.

If Bavarian Nordic had the right to immediate possession of the chattel, those problems might have been defeated, but there were problems in Mayr’s claim of title; despite his physical possession of the MVA stock, there was insufficient evidence that he was the legal owner of rights in MVA under German law. In contemporary records (c. 1974), Mayr worked with other scientists at a government agency and made no claim of ownership. Even assuming he had an ownership interest, he transferred the MVA to NIH without written restriction, so whatever expectations he had about noncommercial use didn’t bind NIH.

I find this case interesting because it demonstrates that problems salient in cyberspace – here, trouble with the concept of chattels – also pop up in dealing with biological materials.

The plaintiffs also alleged violations of the Lanham Act and Delaware’s deceptive trade practices law, because Acambis passed off its version of the MVA-based vaccine as a product of its own R&D. Even assuming that plaintiffs have a proprietary interest in MVA 572, these claims failed. After Dastar, the question is who produces the tangible goods offered for sale. Plaintiffs, however, attempted to evade this obvious barrier by arguing that defendants’ product was “‘self-replicating progeny of’ the MVA 572 virus which has been repackaged and relabeled under defendants’ trademark.” I think this is hopeless under Dastar – “self-replication” has to occur under particular physical circumstances, and defendants were in charge of those circumstances, thus they were legally responsible for the origin of the product. But the court took this alleged distinction seriously, and found that defendants’ end product was more than MVA 572, but a virus created by combining MVA with “a proprietary recipe of other additives and diluents to make a vaccine.” There was no disputed issue of material fact on this point, and thus the claim failed.

Separately, plaintiffs claimed that Acambis engaged in false advertising by making claims to the US government regarding Acambis’s “freedom to operate” with MVA. Given that the government -- the consumer receiving the allegedly false representations -- was responsible for providing MVA to Acambis in the first place, and that NIH had made similar statements about MVA, the court found that there was no cognizable false advertising claim. (I don’t know whether this is best categorized as lack of materiality, reliance, or something else, but the result sure seems right to me.)