1 QUINN EMANUEL URQUHART KEKER & VAN NEST LLP

& SULLIVAN LLP STUART L. GASNER (S.B. #164675)

2 KEVIN P.B. JOHNSON (S.B. #177129) [email protected]
[email protected] LEO L. LAM (S.B. #181861)
3 VICTORIA F. MAROULIS (S.B. #202603) [email protected]
[email protected] BENEDICT Y. HUR (S.B. #224018)
4 ANDREW J. BRAMHALL (S.B. #253115) [email protected]
[email protected] 633 Battery Street
5 555 Twin Dolphin Dr., 5th Floor San Francisco, CA 94111-1809
Redwood Shores, California 94065 Telephone: (415) 391-5400
6 Telephone: (650) 801-5000 Facsimile: (415) 397-7188
Facsimile: (650) 801-5100
7

8 Attorneys for TWIST BIOSCIENCE CORP.

and EMILY LEPROUST
9

10 SUPERIOR COURT OF THE STATE OF CALIFORNIA

11 COUNTY OF SANTA CLARA
12

13
AGILENT TECHNOLOGIES, INC., a Case No. 16-cv-291137
14 Delaware Corporation,
DEFENDANTS ANSWER AND
15 Plaintiff, AFFIRMATIVE DEFENSES TO
v. PLAINTIFFS FIRST AMENDED
16 COMPLAINT
TWIST BIOSCIENCE CORP., a Delaware
17 Corporation; EMILY LEPROUST, an
Individual; and DOES 1 through 20, inclusive,
18 Defendants.
19
Action Filed: Feb. 3, 2016
20

21 Judge: Hon. Brian C. Walsh

Location: Department 1
22

23

24 -

25

26

27

28

Case No. 16-cv-291137

DEFENDANTS ANSWER AND AFFIRMATIVE DEFENSES TO PLAINTIFFS FIRST AMENDED COMPLAINT
 1 Defendants Twist Bioscience Corp. (Twist) and Emily Leproust (Leproust) (together

2 the Defendants), hereby answer the first amended complaint of plaintiff Agilent Technologies,

3 Inc. (Agilent or Plaintiff).

4 GENERAL DENIAL
5 Pursuant to California Code of Civil Procedure 431.30(d), Defendants hereby deny each

6 and every material allegation in the first amended complaint and further deny that Agilent has

7 been damaged in the manner alleged, in any manner, or in any amount.

8 FACTS SUPPORTING GENERAL DENIAL AND AFFIRMATIVE DEFENSES

9 1. Agilents lawsuit against Twist and Dr. Emily Leproust attempts to stifle the

10 legitimate and innovative work of a burgeoning start-up company and one of its top executives. In

11 particular, Agilents complaint wrongly tries to suffocate the creation of new technology and

12 solutions by a new business, and to diminish the freedom of innovators and entrepreneurs to seek

13 out more fulfilling work and succeed elsewhere.

14 Twists Innovative Origins

15 2. Twist originated as a collaboration between two engineers, Bill Banyai, Ph.D., and

16 Bill Peck, Ph.D., based on the idea that the synthetic DNA market could be revolutionized through

17 a new oligonucleotide synthesis and gene assembly technology. Applying their engineering

18 expertise, Banyai and Peck conceived of a new and innovative way to synthesize oligonucleotides

19 (oligos), which are short DNA sequences, and assemble them into longer DNA constructs, such

20 as genes, more effectively than existing technology allowed.

21 3. Dr. Banyai and Dr. Peck met in 2008 while working at Complete Genomics, a

22 DNA sequencing company in Mountain View, California. Banyai is a former Stanford engineer

23 with a Ph.D. in optical science from the University of Arizona, and previously worked as a

24 physicist at Lawrence Livermore National Laboratory in Livermore, California. Peck holds a

25 Ph.D. in mechanical engineering from the University of Alberta and completed a Stanford post-

26 doc at NASA.

27 4. Banyai and Peck began independently developing their start-up idea in 2011 while

28 working together at Complete Genomics, which had long been using synthesized oligos to

-2- Case No. 16-cv-291137

DEFENDANTS ANSWER AND AFFIRMATIVE DEFENSES TO PLAINTIFFS FIRST AMENDED COMPLAINT
 1 sequence human genomic DNA patterned on silicon chips. Banyai was hired in 2006 to build

2 Complete Genomics DNA sequencing team and technology from the ground up. Banyai

3 recruited Peck to join his team in 2008. Banyai, Peck, and Leproust left their respective jobs at

4 Complete Genomics and Agilent in April 2013 to pursue their start-up efforts in the form of Twist.

5 5. Banyai and Peck conceivedand later refined through collaboration with other

6 brilliant and accomplished scientists and engineersinnovative silicon-based technologies and

7 other innovations for synthesizing custom oligos and assembling them into longer synthetic DNA

8 constructs. These innovations are the subject of multiple patent applications filed by Twist. Two

9 of the applications have already been granted and issued as United States patents, having

10 undergone examination by the USPTO, which deemed Banyai and Pecks innovations to be novel

11 over older technology. Significantly, although Twists patents and applications manifest the

12 innovations conceived and developed by Banyai and Peck, not one of them is in dispute in

13 Agilents lawsuit. Agilent does not allege that Banyai and Peck incorporated Agilents purported

14 trade secrets into those patents and applications.

15 6. Early on, Twists founders approached venture capitalists with Banyai and Pecks

16 ideas for revolutionizing the synthetic DNA industry. Twists fundraising success came from

17 showing investors how the limitations of then-current technologies could likely be overcome if

18 Twist were able to pursue its silicon-based engineering solutions. With an early infusion of

19 capital based on this potential, Twist was able to quickly develop new, patentable technology.

20 7. Beginning with just Banyai, Peck, and Leproust in April 2013, Twist has now

21 grown to over 150 employees. Twists cutting edge, made-to-order synthetic DNA is offered to

22 researchers and companies for a wide range of uses, including personalized medicine,

23 pharmaceutical research, biodefense, genome engineering, and even data storage.

24 8. Numerous prospective employees have been drawn to Twist because of its proven

25 leadership, start-up atmosphere, and position at the leading edge of the synthetic DNA industry.

26 Twists employees have come from all over the industry and world, including many who followed

27 Banyai over the years from Complete Genomics, as well as Glimmerglass, the first company

28 Banyai founded.

-3- Case No. 16-cv-291137

DEFENDANTS ANSWER AND AFFIRMATIVE DEFENSES TO PLAINTIFFS FIRST AMENDED COMPLAINT
 1 Dr. Leprousts Loyalty To Agilent And Lawful Choice To Find New Employment
2 9. Dr. Emily Leproust earned a Ph.D. in Organic Chemistry in 2001 from the

3 University of Houston where she was published extensively for her research and development of

4 novel DNA microarray synthesis processes, including novel synthesis chemistry and microarray

5 characterization. Recognizing Leprousts talent, Agilent hired her even before she finished her

6 degree. For nearly 13 years, Leproust worked at Agilent, making important contributions to

7 Agilents research, development, and manufacturing of DNA microarray products and

8 applications, authoring and co-authoring numerous peer-reviewed papers, collaborating with

9 researchers at public universities, and undertaking increased responsibilities.

10 10. For many years, Agilent recognized Leprousts efforts, enthusiasm, and work ethic,

11 conferring promotions, awards, and additional opportunities on her. Indeed, Leproust was

12 consistently ranked in the top 10% of employees every year from 2000 to 2012.

13 11. Starting in 2006, Leproust pioneered, architected, and championed a product for

14 Agilent called SureSelect, which launched in 2009 and became a major success for the Genomics

15 division. It also made Agilent a major player in the field of DNA sequencing despite Agilent not

16 offering a sequencing machine. To make SureSelect a success, Leproust spent an increasing and

17 significant portion of her time on business duties, such as assisting the marketing, sales, and

18 customer support departments, while still earning top marks for her R&D accomplishments. After

19 that experience, Leproust wanted to get involved full-time in a business role, but instead the

20 opposite happened. Leproust had her responsibilities reduced to R&D work of lesser importance,

21 even having her SureSelect responsibilities reassigned to others.

22 12. Leproust nevertheless continued to loyally work full-time at Agilent until resigning

23 on April 12, 2013. Leproust faithfully performed her Agilent duties while employed there, each

24 year meeting, and exceeding, the goals set for her. Even after learning of Banyai and Pecks idea

25 for the company that became Twist, her interactions with them prior to leaving Agilent did not

26 encumber her work in advancing Agilents research nor divide her loyalties.

27 13. As Twists first and only Chief Executive Officer, Leproust has provided executive

28 leadership. Banyai and Peck have served as Chief Operating Officer and Chief Technology

-4- Case No. 16-cv-291137

DEFENDANTS ANSWER AND AFFIRMATIVE DEFENSES TO PLAINTIFFS FIRST AMENDED COMPLAINT
 1 Officer, respectively, since Twists founding, leading the technical work.

2 Agilents Opportunistic Lawsuit Against Leproust And Twist

3 14. The timing of Agilents lawsuit is tellingonly after waiting and watching Twists

4 success, and failing to perform in the marketplace on its own, has Agilent turned to litigation. In

5 April 2013, though fully aware that it could try to develop its own technology to compete with

6 other companies already in the synthetic DNA marketplace, Agilent decided to take a shortcut

7 through an investment in an outside company called Gen9 already doing work in the field.

8 Nevertheless, despite making a substantial initial investment in Gen9, Agilent failed to provide

9 Gen9 continued material support, either financially or through technology sharing. Instead, after

10 trying to entice Leproust back by offering her an R&D leadership position, Agilent set its sights on

11 litigation.

12 15. In February 2014, Agilent had its attorneys send letters to Twist ostensibly to

13 remind Leproust of her purported obligations regarding use of Agilent trade secrets and

14 confidential information. Agilent admitted in those letters that it knew Twist was in the process of

15 developing DNA products at the time, but took no legal action nor gave any indication it planned

16 to file a lawsuit. Agilent then sat idly for two years. Not until February 2016, after Twist had

17 done the hard work of establishing itself and its silicon-based technology as a game changer in the

18 synthetic DNA industry, did Agilent make any further moves. And this time, instead of

19 approaching Twist in any way, Agilent filed this lawsuit without any advance notice, falsely and

20 harmfully accusing Twist and Leproust of misconduct.

21 16. Despite supposed concern that its trade secrets were being misused and its interests

22 harmed, Agilent waited to file suit until after the media publicly reported an infusion of tens of

23 millions of dollars of new investor capital in Twist. Whats more, Agilent has based this lawsuit

24 on the misguided conceit that Agilents way of printing DNA, which was designed as an assembly

25 line for glass-slide microarrays, is the only way Twist could have achieved the results it did with

26 synthesized oligos, and that Twist must therefore be using Agilents technology. What Agilent

27 fails to realize is that Twists technology, unlike Agilents, was purpose built from the start for

28 creating commercial synthetic genes, which allowed for engineering trade-offs that Agilent did not

-5- Case No. 16-cv-291137

DEFENDANTS ANSWER AND AFFIRMATIVE DEFENSES TO PLAINTIFFS FIRST AMENDED COMPLAINT
 1 consider or could not implement.

2 17. Through this lawsuit, Agilent attempts to circumvent hard work, innovation, and

3 competition in the marketplace by litigating its way into a share of Twists hard-earned success.

4 The value of Twist and its technology, however, are based on the pioneering work of founders Bill

5 Banyai and Bill Peck, along with the business leadership of Emily Leproust: assets that Agilent

6 simply has no right to claim.

7 AFFIRMATIVE DEFENSES
8 18. By alleging the affirmative defenses set forth below, the Defendants do not agree or

9 concede that they bear the burden of production or persuasion on any of these issues, whether in

10 whole or in part. Defendants assert the following affirmative defenses to the first amended

11 complaint:

12 FIRST AFFIRMATIVE DEFENSE

13 Plaintiff has failed to state facts sufficient to constitute a cause of action.
14 SECOND AFFIRMATIVE DEFENSE
15 Plaintiff released, relinquished, waived, and/or abandoned any right to any of the claims
16 upon which Plaintiff now seeks relief.

17 THIRD AFFIRMATIVE DEFENSE

18 Plaintiffs claims are barred, in whole or in part, by any and all applicable statutes of
19 limitations.

20 FOURTH AFFIRMATIVE DEFENSE

21 Any alleged conduct or omission by Defendants was not the cause in fact or proximate

22 cause of any injury alleged by Plaintiff.

23 FIFTH AFFIRMATIVE DEFENSE

24 Plaintiffs purported trade secrets are not protectable or were otherwise not
25 misappropriated because they were already disclosed within the public domain, were generally

26 known, or were the subject of independent development or ready ascertainability.

27 SIXTH AFFIRMATIVE DEFENSE

28 Plaintiff has failed to state facts sufficient to support an award of punitive damages.

-6- Case No. 16-cv-291137

DEFENDANTS ANSWER AND AFFIRMATIVE DEFENSES TO PLAINTIFFS FIRST AMENDED COMPLAINT
 1 SEVENTH AFFIRMATIVE DEFENSE
2 Plaintiffs claims are barred, in whole or in part, by the doctrine of laches.

3 EIGHTH AFFIRMATIVE DEFENSE

4 Plaintiffs claims are barred, in whole or in part, because by virtue of its own conduct,

5 Plaintiff is estopped from recovering from Defendants.

6 NINTH AFFIRMATIVE DEFENSE

7 Plaintiffs claims are barred, in whole or in part, by the doctrine of unclean hands.

8 TENTH AFFIRMATIVE DEFENSE

9 Defendants have not committed the wrongs alleged in the first amended complaint. Thus,

10 Plaintiff is barred from recovery, in whole or in part, to the extent that recovery by Plaintiff would

11 constitute unjust enrichment and a windfall to Plaintiff.

12 ELEVENTH AFFIRMATIVE DEFENSE

13 Plaintiff is barred from recovery, in whole or part, because any actions taken by
14 Defendants, if any, with respect to Plaintiff, were based on an honest, reasonable, and good faith

15 belief in the facts as known and understood at the time.

16 TWELFTH AFFIRMATIVE DEFENSE

17 At all relevant times, Plaintiff consented to and approved all the purported acts and
18 omissions about which Plaintiff now complains.

19 THIRTEENTH AFFIRMATIVE DEFENSE

20 Plaintiffs claims are barred, in whole or in part, to the extent the purported acts and
21 omissions about which Plaintiff now complains are licensed or otherwise authorized by persons or

22 entities with the right to license or authorize.

23 FOURTEENTH AFFIRMATIVE DEFENSE

24 Plaintiffs claims for a constructive trust are barred or otherwise unavailable, either in
25 whole or part, under the California Uniform Trade Secrets Act and California contract law.

26 FIFTEENTH AFFIRMATIVE DEFENSE

27 Plaintiffs claims for a constructive trust are barred, either in whole or part, because

28 Defendants alleged profits, gains, increases in value, or equity interests are not the result of any

-7- Case No. 16-cv-291137

DEFENDANTS ANSWER AND AFFIRMATIVE DEFENSES TO PLAINTIFFS FIRST AMENDED COMPLAINT
 1 conduct complained of by Plaintiff.

2 SIXTEENTH AFFIRMATIVE DEFENSE

3 Plaintiffs claims are barred because they seek to enforce purported contract provisions that

4 are against public policy and are therefore void and unenforceable, including under Cal. Business

5 and Professions Code 16600 et seq.

6 SEVENTEENTH AFFIRMATIVE DEFENSE

7 Plaintiffs claims are barred because Plaintiff failed to take reasonable efforts and/or

8 precautions to protect its purported trade secrets.

9 EIGHTEENTH AFFIRMATIVE DEFENSE

10 Plaintiffs claim for misappropriation of trade secrets was brought and has been maintained
11 in bad faith, as Plaintiff had no evidence of misappropriation prior to commencing this lawsuit and

12 continues to maintain this suit even after exculpatory evidence has been made known.

13 NINETEENTH AFFIRMATIVE DEFENSE

14 Plaintiff has failed to state facts sufficient to support an award of attorneys fees against
15 Defendants.

16 TWENTIETH AFFIRMATIVE DEFENSE

17 Plaintiffs request for injunctive relief is improper as there is no likelihood of future injury
18 to Plaintiff and there exists an adequate remedy at law to address the claims set forth in the first

19 amended complaint.

20 TWENTY FIRST AFFIRMATIVE DEFENSE

21 Plaintiff voluntarily and with knowledge assumed the risk of all damages of which Plaintiff

22 complains.

23 TWENTY SECOND AFFIRMATIVE DEFENSE

24 Plaintiff failed to take reasonable efforts or make reasonable expenditures to mitigate
25 and/or avoid the damages of which Plaintiff complains.

26 TWENTY THIRD AFFIRMATIVE DEFENSE

27 Plaintiffs claim for breach of contract is barred, either in whole or in part, because there is

28 no enforceable contract, including because there was no mutual assent or exchange of valuable

-8- Case No. 16-cv-291137

DEFENDANTS ANSWER AND AFFIRMATIVE DEFENSES TO PLAINTIFFS FIRST AMENDED COMPLAINT
 1 consideration between the parties to the alleged contract.

2 RESERVATION OF RIGHTS
3 Defendants reserve the right to assert additional defenses, including based on additional

4 information learned or obtained during discovery.

6 PRAYER FOR RELIEF

7 Wherefore, Defendants pray for relief as follows:

8 1. That the Complaint be dismissed with prejudice and that Plaintiff take nothing

9 thereby;

10 2. For Defendants costs of suit, including reasonable attorneys fees;

11 3. For attorneys fees and costs pursuant to California Civil Code Section 3426.4; and

12 4. For such other and further relief as the Court may deem proper.

13

14

15 DATED: January 30, 2017 Respectfully submitted,

16

17 By
18
QUINN EMANUEL URQUHART
19 & SULLIVAN, LLP
Kevin P.B. Johnson
20 Victoria F. Maroulis
21 Andrew J. Bramhall

22 KEKER & VAN NEST LLP

Stuart L. Gasner
23 Leo L. Lam
Benedict Y. Hur
24
Attorneys for TWIST BIOSCIENCE CORP.
25 and EMILY LEPROUST
26

27

28

-9- Case No. 16-cv-291137

DEFENDANTS ANSWER AND AFFIRMATIVE DEFENSES TO PLAINTIFFS FIRST AMENDED COMPLAINT