INTEGRATED GENOMICS v. GERNGROSS (February 24, 2011)

Integrated Genomics is in the business of mapping organisms' genomes and selling the data for commercial and noncommercial uses. In 2000, Tillman Gerngross, a Dartmouth College bioengineering professor, formed aprivate company to develop commercial uses for the genetic modification of yeast. In 2002, Gerngross sought to obtain a license to use data IG had developed regarding a species of yeast organism. The parties dispute whether Gerngross disclosed that he was seeking a license for commercial, rather than academic, purposes (the district court concluded that he had not). In any event, IG treated him as an academic customer. IG usually charges more to its commercial customers. Gerngross refused to sign IG's standard academic agreement, but did agree to some data publication restrictions. Merck acquired Gerngross’ company in 2006 for $400 million. IG accused Merck of using its data for commercial purposes. When Merck refused to compensate IG more generously, IG filed suit against Gerngross. It alleged that Gerngross fraudulently misrepresented his status when he acquired the license, breached an oral agreement to use the data for academic purposes only, and breach the written agreement that restricted publication. Judge Kennelly (N.D. Ill.) granted summary judgment to Gerngross on the oral contract claim (finding insufficient evidence of a contract), granted summary judgment to Gerngross on the written contract claim (concluding that internal data sharing was not publication), and entered judgment for Gerngross on the fraudulent misrepresentation claim after a bench trial (finding that Gerngross did not misrepresent the purpose of the data and that he had no duty to affirmatively volunteer its purpose, and concluding that IG failed to carry its burden that it would have made a difference). IG appeals the rulings with respect to the written agreement and fraudulent misrepresentation.

In their opinion, Judges Bauer, Rovner, and Hamilton affirmed. With respect to the written contract claim, the Court had to interpret Gerngross’ promise not to "publish" more than a certain amount of data per year. Applying state law, and particularly Illinois' rule to give contracts their plain meaning, the Court concluded that "publish" means disclosure to the public. Therefore, Gerngross’ sharing with Merck did not constitute a publication and was not a breach. With respect to the fraudulent misrepresentation claim, the Court concluded that there was sufficient evidence to support the district court's finding – and also sufficient evidence to support the finding urged by IG. The district court did not commit error in resolving the dispute as it did.