Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Application of Medytox, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

July 16, 2019

In Re APPLICATION OF MEDYTOX, INC. FOR AN ORDER PURSUANT TO 28 U.S.C. SECTION 1782 TO CONDUCT DISCOVERY FOR USE IN A FOREIGN PROCEEDING

          REPORT AND RECOMMENDATION ON APPLICATION FOR ASSISTANCE IN FOREIGN LITIGATION

          Doris L. Pryor, United States Magistrate Judge

         Medytox, Inc. (“Medytox”), has filed this Application for Assistance in Foreign Litigation and requests that the Court issue an order granting it leave to obtain discovery for use in a foreign court proceeding, pursuant to 28 U.S.C. § 1782. Medytox seeks to take the deposition of and submit thirteen (13) requests for production to its former employee and Respondent, Byung Kook Lee (“Dr. Lee”). Medytox intends to use this information in connection with a case pending in the Seoul Central District Court in Republic of Korea.[1] (No. 2017Ga-Hap574026). In that case, Medytox has sued Daewoong Pharmaceuticals Co., Ltd. and Daewoong Co., Ltd. (the “Daewoong Defendants”) for misappropriation of trade secrets.

         Background

         Medytox is a Korean biopharmaceutical company that develops and produces C. botulinum toxin Type A neurotoxin (“BTX”) biopharmaceutical drugs. Medytox's principal place of business is located in Seoul, Korea. BTX drugs are used cosmetically to remove skin wrinkles and used medically to treat certain muscular conditions. One of the most well-known BTX drugs is Botox, which is sold by Allergan.

         According to Medytox, the Daewoong Defendants distributed Botox in Korea for Allergan from April 1995 to May 2006, and again from April 2007 to January 2009.[2] In 2010, the Daewoong Defendants filed a claim for a new BTX drug with the Korean Ministry of Food and Drug Safety, asserting that they had discovered a BTX strain that they isolated from Korean soil. The Korean Ministry of Food and Drug Safety approved the Daewoong Defendants' BTX drug, Nabota, in November 2013. Because Medytox believed that the Daewoong Defendants' development of a BTX drug in such a short timeframe was improbable, and their explanation for how they acquired the BTX strain was impossible, Medytox launched an internal investigation into the potential theft of its BTX trade secrets, including the potential theft of Medytox's own BTX strain.

         To develop a BTX drug, a manufacturer needs both a BTX strain and a process to safely handle, develop, and commercialize the strain. Medytox invested millions of dollars and conducted extensive research to successfully commercialize and develop its BTX strain into a drug called Meditoxin. During its development of Meditoxin, Medytox accumulated a substantial amount of confidential and proprietary information that it uses for the manufacture of the drug, all of which was compiled into a comprehensive manual called the Master Production and Control Record (“Master Record”).

         Dr. Lee worked as a researcher for Medytox in Korea from 2004 through 2008. Dr. Lee's position required that he be given access to Medytox's BTX strain and Master Record, along with other proprietary information related to the Meditoxin manufacturing process.

         In August 2008, Dr. Lee left Medytox to pursue graduate studies at Hanyang University in Korea. While at Hanyang University, Dr. Lee and CW Suh, an employee of the Daewoong Defendants, worked and authored an academic paper together. Both Dr. Lee and Mr. Suh studied under the same professor, Eun-Kyu Lee, and worked in the same lab together.

         Dr. Lee worked as a consultant for the Daewoong Defendants starting in 2010. He would advise the Daewoong Defendants on the safe management of botulinum toxin strains. In 2011, Dr. Lee began working as a visiting scholar at Purdue University in Indiana. During his time at Purdue, Dr. Lee worked with Dr. Kinam Park, a professor with close ties to the Daewoong Defendants. Eventually, Dr. Lee enrolled in a post-doctorate program at Purdue. Currently, Dr. Lee resides in the Southern District of Indiana.

         As a result of Medytox's internal investigation, in January 2017, Medytox filed a criminal complaint with the Seoul Metropolitan Police Agency (“SMPA”) against the Daewoong Defendants and Dr. Lee. [Dkt. 15 at 4]. After filing its complaint, Medytox learned that Mr. Suh had obtained a BTX strain and related trade secrets from a friend at Hanyang University, an individual who Medytox understood to be Dr. Lee. Additionally, Medytox believes that senior management at Daewoong instructed Mr. Suh to encourage Dr. Lee to provide the Daewoong Defendants with the key components of Medytox's Master Record and its BTX strain. In connection with the criminal complaint, the SMPA requested an interview with Dr. Lee, who ultimately travelled to Korea for two days of interviews. [Dkt. 18-1 at 1.]

         Medytox represents that through its investigation, it learned Dr. Lee was in extensive contact with the Daewoong Defendants during the development of their drug, Nabota. Before leaving Medytox, Dr. Lee allegedly printed several copies of Medytox's Master Record and emailed to his personal email address documents containing a number of Medytox's proprietary trade secrets. Medytox also discovered that sometime in 2008, Dr. Lee used his access card to enter Medytox's strain reserve, where he removed and took with him a viable BTX strain. Medytox believes that Dr. Lee stole its BTX strain and the related Master Record and then sold those items to the Daewoong Defendants. Medytox also believes that the Daewoong Defendants encouraged Dr. Lee to carry out this theft.

         On June 6, 2017, Medytox filed a lawsuit against the Daewoong Defendants and Dr. Lee in state court in Orange County, California (Cause No: 30-2017-00924912-CU-IP-CJC) (the “California Action”). Medytox picked California because it believed that it could pursue claims against all of the Defendants there. On October 12, 2017, the California Superior Court granted Dr. Lee's motion to dismiss for lack of personal jurisdiction. [Dkt. 16-3.] Regarding the Daewoong Defendants' Motion to Dismiss, the California Court found that the appropriate forum to adjudicate the remaining allegations was Korea, and thus stayed the California Action pending the resolution of proceedings in Korea. [Dkt. 16-3].

         On October 30, 2017, Medytox filed suit against the Daewoong Defendants in Seoul Central District Court in Korea, alleging theft and misappropriation of trade secrets (the “Korean Action”). Dr. Lee was not named as a party in the Korean Action. This litigation is ongoing, and the Korean court has ordered the parties to conduct sporulation testing on their BTX strains to determine the origin of the Daewoong Defendants' BTX strain. [Dkt. 2-1 at 5.]

         On May 4, 2018, Medytox brought a separate suit against Dr. Lee in state court in Marion County, Indiana (Cause No. 49D01-1805-PL-017584) (the “Indiana Action”). Medytox's Indiana complaint alleged the following counts against Dr. Lee: (i) violation of the Indiana Uniform Trade Secrets Act; (ii) breach of contract; (iii) conversion; (iv) unjust enrichment; and (v) violation of the Korean Unfair Competition Prevention and Trade Secret Protection Act. On October 4, 2018, the Marion County Court dismissed Count Five and stayed the remaining counts pending resolution of the Korean Action.

         Discussion

         On July 13, 2018, Medytox filed an application for judicial assistance in the Southern District of Indiana, pursuant to 28 U.S.C. § 1782, to obtain discovery from Dr. Lee to use in the Korean Action. Medytox's application, accompanied by two declarations and a memorandum of law, seeks evidence from Dr. Lee relating to his work with both Medytox and the Daewoong Defendants and their representatives during the time of the development and production of the Daewoong Defendants' drug, Nabota.

         Title 28 U.S.C. §1782 authorizes a federal district court to order the production of evidentiary materials for use in foreign legal proceedings, provided the materials are not privileged. Intel v. Advanced Micro Devices, Inc., 542 U.S. 241, 247 (2004). The purpose of § 1782 is to provide efficient means of assistance to parties in international litigation seeking “discovery relating to that litigation in a federal district court, and in the discretion of that court, . . . obtain[ing] as much discovery as it could if the lawsuit had been brought in that court rather than abroad.” Heraeus Kulzer, GmbH v. Biomet, Inc., 633 F.3d 591, 594 (7th Cir. 2011). In addition, § 1782 also aims to encourage “foreign countries by example to provide similar means of assistance to our courts.” Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79, 84 (2nd Cir. 2004). § 1782 provides in relevant part:

The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or . . . upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. . . . The order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing. To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure.

28 U.S.C.A. § 1782(a).

         In 1855, Congress first provided for federal-court aid to foreign tribunals, specifically by authorizing the federal courts to respond to letters rogatory forwarded through diplomatic channels. Intel, 542 U.S. at 241. The scope of federal courts' authority to assist foreign tribunals has expanded ever since. Id. “Section 1782 is the product of congressional efforts . . . to provide federal-court assistance in gathering evidence for use in foreign tribunals.” Glock v. Glock, Inc., 797 F.3d 1002, 1007 (11th Cir. 2015) (citing Intel, 542 U.S. at 241). In its ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.