Science-Swiping Claims May Stick to UC Professor

SAN FRANCISCO (CN) - Advancing claims against a University of California professor, a federal judge deemed the case "rare" in that it describes both a bait-and-switch and an inside job.

The case pits Parallel Synthesis Technologies Inc. against Joseph DeRisi, a UCSF professor of biochemistry and biophysics who was close with Parallel's senior scientist, Brian Baxter.

In 2008, DeRisi contacted Parallel to express his interest in a patent-pending multiplexed assay it calls Parallume. The assay is an efficient method for researchers "to identify the components of a particular mix of nucleic acids and protein-antibody pairs," U.S. Magistrate Judge Paul Grewal explained in a ruling Tuesday.

In the 10 years it has spent developing the platform, Parallel has received $6.02 million in grant funding and has spent $7 million. The company said it has developed Parallume-encoded beads, optical instrumentation, kits and protocols.

While preparing a grant proposal to the Keck Foundation in 2008, DeRisi allegedly wanted to bring Parallel in as a subcontractor to create and supply Parallume beads.

Parallel said DeRisi also told it that he had a large financial backer who wanted to fund the development of technology regarding disease surveillance, and that DeRisi wanted to work with Parallume on the task.

After providing DeRisi with sample Parallume beads for a grant "pre-proposal," Parallel said it heard from DeRisi several weeks later that his presentation went well. The professor allegedly told Parallel that if he got the grant, it would be "mutually beneficial."

Parallel said it gave DeRisi more Parallume samples and a letter of reference but that DeRisi ceased contact with the company while going on to receive a $1 million grant.

Baxter meantime left his position at Parallel but stayed on as an independent contractor, conducting research in DeRisi's UCSF lab, Parallel said. The company claimed that Baxter was covertly sharing confidential information with DeRisi and plagiarizing Parallel's confidential work.

It said Baxter and DeRisi later published an article in the journal "Lab on a Chip" that plagiarized key elements of Parallume. Parallel allegedly recognized its Parallume beads as the materials at the heart of the article, which noted that the research came with support from the Keck Foundation,

Parallel said the two researchers now offer commercial licenses through the university's website to use the Parallume-derived technology their paper described.

Judge Grewal preserved some claims against the researchers, UCSF and the Board of Regents for the University of California on Tuesday.

"The bait-and-switch. The inside job. Certain complaints tell the story of the former. Others the story of the latter," his opinion opens. "Rare is the complaint that, like the first amended complaint in this case, tells the story of both."

Parallel sufficiently alleged that Baxter breached his duty of loyalty, both as an employee and as an independent contractor, by colluding with DeRisi and copying Parallel's confidential information on Parallume, according to the ruling

DeRisi must also face claims that he aided and abetted Baxter during the latter's employment with Parallel. During this time, DeRisi knew that any information provided by Baxter may have been given outside of Parallel's authorization, the court found.

The court deemed it less clear, however, that Baxter, once became an independent contractor, had the requisite knowledge that Baxter still owed a duty to Parallel.

Grewal also advanced Parallel's intentional-fraud and false-advertising claims against Baxter and DeRisi. Though the pair's claimed that they do not compete commercially with Parallel, Parallel has alleged that they both advertise for and sell licenses for the same Parallume technology.

As for the misappropriation-of-trade-secrets claim, Grewal disagreed with the researchers that Parallel's disclosure of trade secrets in its patent application extinguished any secrecy that the information enjoyed.

Parallel had noted that its patent application did not include the specific information about its Parallume technology at issue in this case, and thus did not disclose any proprietary information in the public domain.

The judge did dismiss the company's claims against UCSF, its interim chancellor, the regents board and that board's individual voting members, finding that they are entitled to sovereign immunity. Parallel may amend those claims.

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