Rocket Pharmaceuticals, Inc. v. Lexeo Therapeutics, Inc.

Background

Rocket alleged that Lexeo and two former Rocket employees, Kenneth Law and Sonia Gutierrez, misappropriated Rocket’s trade secrets. Rocket asserted a federal claim under the Defend Trade Secrets Act and related New York claims for trade-secret misappropriation, breach of contract, tortious interference with contractual relations, and unfair competition.

Rocket alleged that Law downloaded nearly 123,000 Rocket emails and documents to his personal computer, including materials marked confidential, and also copied files to USB drives and an external hard drive. It alleged that Gutierrez forwarded a link to her personal email containing a substantial amount of Rocket’s confidential manufacturing information. Both employees allegedly joined Lexeo while contractual restrictions and confidentiality obligations remained in effect. Rocket also alleged that Law and Gutierrez performed similar work at Lexeo, including work involving Lexeo’s treatment for PKP-2 arrhythmogenic cardiomyopathy.

Lexeo, Law, and Gutierrez moved under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim. For purposes of those motions, the court accepted the complaint’s factual allegations as true and drew reasonable inferences in Rocket’s favor.

Trade-secret claims

The court held that Rocket plausibly alleged that it possessed trade secrets. Rocket identified categories of information concerning the production and development of AAV and lentiviral treatments, AAV optimization research, clinical trials, patient information, manufacturing processes, testing, dosing, and related business information. Rocket also identified particular documents allegedly taken by Law and described the trade-secret information those documents contained.

The court further held that Rocket plausibly alleged that it took reasonable steps to protect the information. Those alleged steps included employee confidentiality agreements, need-to-know access, restrictions on physical and electronic access, key-fob controls, security personnel, video surveillance, and confidentiality agreements with third parties.

The court concluded that the allegations plausibly supported trade-secret misappropriation theories against all defendants. As to Law, the alleged downloading and retention of Rocket’s information supported theories that he improperly acquired and used trade secrets. As to Lexeo, the court relied on the combination of allegations that Lexeo hired Law and Gutierrez, that they allegedly took substantial confidential information, that they worked in similar roles at Lexeo, and that Lexeo obtained regulatory clearance for its competing treatment shortly after Rocket obtained clearance. The court described the allegations against Gutierrez as thin but sufficient, based on her alleged forwarding of Rocket information, her work with Law, and the alleged use of the information at Lexeo.

The court emphasized that these were plausibility findings at the pleading stage, not final findings that misappropriation occurred. It noted that the case against Gutierrez could look different at summary judgment or trial.

Contract claims

The court held that Rocket plausibly alleged breach-of-contract claims against Law and Gutierrez. The alleged employment agreements required them to keep Rocket’s information confidential, prohibited certain competitive business activities during specified periods, and required them to inform Rocket of their new employers. Rocket alleged that both joined Lexeo, failed to identify Lexeo as their new employer, and retained or disclosed Rocket information. The court also found that Rocket plausibly alleged damages because the alleged conduct could have harmed Rocket’s competitive position in developing its gene therapies.

Tortious-interference claim

The court held that Rocket plausibly alleged that Lexeo intentionally procured breaches of the employees’ contracts. The court reasoned that Lexeo allegedly knew or should have known about the contracts and that Rocket plausibly alleged the employees would not have breached the confidentiality provisions without Lexeo’s employment offers. The court therefore allowed the tortious-interference claim against Lexeo to proceed.

Unfair-competition claim

The court dismissed Rocket’s unfair-competition claim as duplicative. Rocket based that claim on the alleged retention, disclosure, and use of its confidential information. The court concluded that the same allegations formed the basis of the trade-secret claims, the employees’ breach-of-contract claims, and the tortious-interference claim against Lexeo. Because Rocket did not allege separate acts of unfair competition, the court dismissed that claim as to all defendants.

Disposition

The conclusion states that Lexeo’s motion to dismiss was GRANTED IN PART and DENIED IN PART and that the Individuals’ motion to dismiss was GRANTED IN PART and DENIED IN PART. The unfair-competition claim, identified as Count VI in the opinion and mistakenly labeled Count VII in the complaint, was dismissed as to all defendants. The remaining challenged claims were not dismissed at this stage.