Argued: December 11, 2018
from the United States District Court for the Eastern
District of North Carolina at Raleigh. Terrence W. Boyle,
Chief District Judge. (5:13-cv-00848-BO)
K. Shipman, SHIPMAN & WRIGHT, LLP, Wilmington, North
Carolina, for Appellant.
Conrad Lester, MAYNARD, COOPER & GALE, P.C., Birmingham,
Alabama, for Appellee.
William C. Reiss, SHIPMAN & WRIGHT, LLP, Wilmington,
North Carolina, for Appellant.
W. Thagard III, John C. Neiman, Jr., MAYNARD, COOPER &
GALE, P.C., Birmingham, Alabama, for Appellee.
KING, DIAZ, and RICHARDSON, Circuit Judges.
RICHARDSON, CIRCUIT JUDGE.
Trana Discovery, Inc. has developed a technology that it
believes can help find new drugs to treat HIV. It
collaborated with Defendant-Appellee Southern Research
Institute, a contract research organization, to put its
technology to work by testing chemical compounds for signs
that they inhibited the reproduction of HIV. When the testing
yielded inconsistent results, Trana sued Southern for fraud
and negligent misrepresentation.
Trana's view, Southern made two actionable
misrepresentations in its research reports. First, Southern
allegedly failed to identify certain promising compounds as
potential HIV treatments. Trana calls these test results
"false negatives." Second, Southern falsely
identified other compounds as potential treatments when in
fact they were not. Trana refers to these latter results as
"false positives." After discovery, the district
court granted summary judgment for Southern on both theories.
was founded in 2000 by scientists with expertise in
"transfer RNA" (or "tRNA"), a molecule in
the human body. Some viruses, including HIV, use tRNA to
reproduce. Trana's scientists developed a proprietary
test (in the lingo of biochemists, an "assay") that
could quickly identify chemical compounds with the potential
to inhibit HIV's reproduction by targeting the
virus's use of ...