Trana Discovery Inc. v. So. Research Inst. (P)

In this contract action, the district court did not err in granting summary judgment to the appellee on claims of fraud and negligent misrepresentation.

The appellant has developed a technology that it believes can help find new drugs to treat HIV. It collaborated with the appellee, a contract research organization, to put its technology to work by testing chemical compounds for signs that they inhibited the reproduction of HIV. The appellant brought this action after the testing yielded inconsistent results.

The appellant’s “false negatives” theory of misrepresentation alleges that the appellee failed to identify certain promising compounds as potential HIV treatments. But stripped to its core, this theory attempts to shoehorn a claim for professional negligence or breach of contract into one for negligent misrepresentation. The appellant has not shown that any breach introduced false information into the report at issue. Thus, this theory fails.

The appellant’s “false positives” theory of misrepresentation alleges that the appellee falsely identified other compounds as potential treatments when in fact they were not. But to establish reasonable reliance on the appellee’s reports, the appellant must have incurred patent expenses related to the two “false positive” compounds between the June and December 2010 reports. At oral argument, counsel couldn’t represent that any relevant patents were filed before January 2011. Failure to address this critical timing issue dooms the appellant’s claim.

Affirmed.

Trana Discovery Inc. v. So. Research Inst. (P), No. 17-2136, Feb. 7, 2019. 4th Cir. (Richardson) from EDNC at Raleigh (Boyle).



Categories: 4th U.S. Circuit Court of Appeals, Opinions, Published

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