Mayo Foundation for Medical Education and Research v. Knowledge to Practice

Background

Mayo and Knowledge to Practice, Inc. (K2P) entered into agreements under which K2P provided course-support services and licensed its online platform, while Mayo licensed certain Mayo content. The 2018 Master Agreement addressed the parties’ intellectual-property rights, confidential information, services, and payment obligations.

K2P alleged that Mayo employees accessed K2P’s platform and advertising account, disclosed K2P information to a contractor, and used K2P intellectual property, content, instructional design, and platform features in Mayo’s own online platform. K2P asserted seven counterclaims, including declaratory judgment, breach of contract, breach of the duty of good faith and fair dealing, civil theft, conversion, tortious interference with prospective economic advantage, and unjust enrichment.

Mayo filed a partial motion to dismiss five counterclaims under Federal Rule of Civil Procedure 12(b)(6), which tests whether the pleading states a legally sufficient claim. K2P later voluntarily dismissed its conversion and tortious-interference claims.

Civil Theft and Good-Faith Claims

The court dismissed K2P’s civil-theft claim. It held that the parties’ contract defined their property rights, so any rights K2P had concerning the disputed intellectual property and related materials arose from the 2018 Master Agreement. The court concluded that K2P’s remedy was a breach-of-contract claim rather than a civil-theft claim.

The court also dismissed K2P’s separate claim for breach of the implied duty of good faith and fair dealing. Under Minnesota law, that implied duty enforces existing contractual duties and does not create an independent cause of action. Because K2P based this claim on the same conduct as its breach-of-contract claim, the court found it was subsumed by that claim.

Unjust Enrichment

The court allowed K2P’s unjust-enrichment claim to proceed at the pleading stage. Although unjust enrichment generally is unavailable when an enforceable contract governs the dispute, Federal Rule of Civil Procedure 8 permits alternative or inconsistent claims. K2P represented that it was pleading unjust enrichment in the alternative and that the claim addressed conduct outside the 2018 Master Agreement.

The court stated that K2P ultimately would have to choose whether to proceed at trial under an unjust-enrichment theory or a breach-of-contract theory.

Disposition

Judge Susan Richard Nelson ordered that Mayo’s partial motion to dismiss was GRANTED IN PART, and DENIED IN PART. Specifically:

- The court granted the motion to dismiss Counts III and IV with prejudice. - The court denied the motion to dismiss Count VII. - The court denied the motion to dismiss Counts V and VI as moot because K2P had voluntarily dismissed those claims.

The opinion’s analysis identifies the dismissed claims as the good-faith-and-fair-dealing and civil-theft claims, and the claim allowed to proceed as unjust enrichment.