Fibrogen, Inc. v. Hangzhou Andao Pharmaceutical LTD.

Background

FibroGen, Inc. asserted eight claims against two former scientists and the companies they started. The claims included correction of patent inventorship under 35 U.S.C. § 256, a declaration of patent ownership, and six claims alleging breaches of contract and implied covenants.

The defendants—Hangzhou Andao Pharmaceutical Ltd., Kind Pharmaceuticals LLC, Dr. Dongliu, and Dr. Shaojiang Deng—had moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal for failure to state a legally sufficient claim. They separately moved under Rule 26(c) for a protective order staying discovery until the dismissal motion was resolved. They also moved to expedite the hearing on the discovery-stay motion.

Court’s Analysis

The court applied a two-part test used in the Northern District of California for deciding whether to stay discovery while a potentially case-ending motion is pending. First, the motion must potentially dispose of the entire case, or of the issue targeted by discovery. Second, the motion must be capable of resolution without additional discovery.

The court found the first requirement satisfied because the defendants sought dismissal of the inventorship claim for failure to allege necessary facts and dismissal of the contract claims as legally void under California public policy. The court stated that, if granted, the motion to dismiss would dispose of all claims. The court did not decide the merits of that motion.

The court also found the second requirement satisfied. A Rule 12(b)(6) motion examines the legal sufficiency of the facts pleaded in the complaint. The court accepts factual disputes in the plaintiff’s favor and considers whether the complaint itself contains sufficient allegations. It therefore concluded that information outside the complaint and additional discovery were not needed to decide the dismissal motion.

Disposition

The court found good cause to stay discovery pending resolution of the motion to dismiss. It granted the defendants’ motion to temporarily stay discovery. Discovery was ordered stayed until the court issued a decision on the motion to dismiss.

The court denied as moot the administrative motion to expedite the hearing date. Because discovery was stayed, the court found it premature to implement a scheduling order and vacated the April 27, 2023 initial case-management conference. This order did not decide the pending motion to dismiss or the underlying claims.