Infectolab Americas LLC v. ArminLabs GmbH

Background

Infectolab Americas LLC and IGeneX, Inc. brought claims against ArminLabs GmbH under the Lanham Act and state law. In an earlier order, the court dismissed several claims asserted only by Infectolab, allowing amendment of two claims: intentional interference with prospective economic advantage and tortious interference with contract. Infectolab reasserted those claims in its Second Amended Complaint and added a claim for declaratory relief concerning its alleged exclusive right under an agreement with Autoimmun Diagnostika GmbH, referred to as AID, to use certain products to test residents of the United States.

ArminLabs again moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to state a legally recognized claim. ArminLabs argued that Infectolab had not adequately alleged disruption of a contract or economic relationship, economic harm, or a basis for declaratory relief. Infectolab opposed the motion.

Count IV: Intentional Interference with Prospective Economic Advantage

Under California law, this claim requires an economic relationship with a third party that probably would have produced a future benefit, the defendant’s knowledge of that relationship, intentional wrongful conduct designed to disrupt it, actual disruption, and economic harm caused by the disruption. The relationship must exist when the alleged interference occurs; a general hope of future business is not enough.

Infectolab said that at least nine United States customers had used ArminLabs’s testing services and later began using Infectolab’s services after ArminLabs stopped accepting blood samples from the United States during the COVID-19 pandemic. Infectolab identified two clinics that had previously considered its services but chose ArminLabs because of its lower prices, and later began using Infectolab’s services.

The court held that Infectolab had not alleged an existing relationship with those clinics or the other customers when the alleged interference occurred. Infectolab also confirmed at the hearing that it was not claiming to have had such existing relationships. The court rejected Infectolab’s argument that its agreement with AID created a protected expectation of business, reasoning that the alleged market consisted generally of physicians and patients who could choose other suppliers, including IGeneX. The court therefore granted ArminLabs’s motion to dismiss Count IV and dismissed that claim without leave to amend.

Count V: Tortious Interference with Contract

A claim for tortious interference with contract requires a valid contract between the plaintiff and a third party, the defendant’s knowledge of the contract, intentional conduct designed to induce a breach or disruption, actual breach or disruption, and resulting damage. An actual breach is not necessarily required; alleged interference that makes a contract more burdensome, costly, or less valuable can be sufficient at the pleading stage.

Infectolab based this claim on its agreement with AID. It alleged that ArminLabs interfered with Infectolab’s exclusive right to use AID’s products for testing services to United States residents, requiring Infectolab to compete with ArminLabs and making the agreement less valuable. Infectolab did not allege that its supplier relationship with AID had changed or that it could not perform its contractual obligations. But the court treated Infectolab’s interpretation of the agreement as true for purposes of the motion and concluded that the alleged undermining of its exclusive right and reduction in the agreement’s value were enough to state a claim.

The court denied ArminLabs’s motion to dismiss Count V.

Count VI: Declaratory Relief

Infectolab sought a declaration that its agreement with AID gave it the exclusive right to use the products to test United States residents and that ArminLabs’s continued use of the products interfered with Infectolab’s rights and business relationships.

The court concluded that the declaratory-relief claim was duplicative of the contract-interference claim. It also found that Infectolab had not persuasively shown that declaratory relief was otherwise appropriate regarding possible future conduct by ArminLabs, which was not a party to the agreement. The court therefore granted ArminLabs’s motion to dismiss Count VI without leave to amend.

Disposition

The court granted in part and denied in part ArminLabs’s motion to dismiss. It granted the motion as to Count IV, intentional interference with prospective economic advantage, and Count VI, declaratory judgment, without leave to amend. It denied the motion as to Count V, tortious interference with contract. The order did not decide whether Infectolab would ultimately prove the remaining contract-interference claim.