Genfit S. A. v. CymaBay Therapeutics

Background

Genfit S.A. asserted six causes of action against CymaBay Therapeutics, Inc. The first two alleged violations of the federal Defend Trade Secrets Act and the California Uniform Trade Secrets Act. The third and fourth alleged intentional and negligent interference with prospective economic advantage. The fifth alleged aiding and abetting a breach of fiduciary duty, and the sixth alleged violation of California’s Unfair Competition Law.

CymaBay moved to dismiss under Rule 12(b)(6), which allows dismissal when a complaint does not allege enough facts to state a legally valid claim. The court considered the pleadings and did not consider documents outside the amended complaint when deciding the trade-secret claims.

Court’s reasoning

The court held that the first and second causes of action were subject to dismissal to the extent they relied on information other than Genfit’s clinical trial protocol in its entirety. Genfit’s allegations that it had not made the information public and that the information was not generally known did not provide enough factual support for the required element of secrecy. The court also rejected Genfit’s theory that its use, endorsement, or adoption of publicly available information could itself make that information a trade secret.

The court dismissed the third and fourth causes of action to the extent they were based on CymaBay’s alleged interference with Genfit’s ability to market its drug to patients. The future commercialization of the drug was too speculative to show that the lost economic advantage was reasonably likely to occur. The court also dismissed those claims to the extent they concerned Genfit’s alleged economic relationship with Dr. Hirschfield, the Toronto Centre for Liver Disease, and the University of Toronto. Genfit had not alleged enough facts to show that the alleged interference was the reason it was reasonably likely to retain those relationships, particularly in light of its allegation that Dr. Hirschfield had breached a confidentiality obligation.

The court dismissed the fifth cause of action because Genfit had not alleged facts showing that CymaBay gave substantial assistance or encouragement to Dr. Hirschfield’s alleged breach of fiduciary duty. The court noted that CymaBay’s allegedly wrongful acts occurred after the alleged disclosure of the protocol, and that any additional breach by Dr. Hirschfield was described too vaguely. The sixth cause of action was dismissed because it was derivative of the third, fourth, and fifth causes of action.

Disposition

The court granted CymaBay’s motion to dismiss. The first and second causes of action were dismissed with leave to amend to the extent they were based on alleged trade secrets other than the protocol in its entirety. The third, fourth, fifth, and sixth causes of action were dismissed with leave to amend. The court stated that the identified deficiencies might be cured through amendment.

Genfit’s second amended complaint, if any, was due by October 15, 2021. If Genfit did not file one by that date, the action would proceed on the remaining claims in the first amended complaint. The court continued the initial case-management conference from October 15 to November 19, 2021. It also denied as moot Genfit’s objection to reply evidence and CymaBay’s motion to strike that objection. Judge Maxine M. Chesney signed the order.