LAVVAN, Inc. v. Amyris, Inc.

Background

Lavvan sued Amyris for alleged trade-secret misappropriation and patent infringement. The companies had explored working together to produce synthetic cannabinoids. In March 2019, they entered into a Research, Collaboration, and License Agreement that gave Lavvan an exclusive license to certain Amyris intellectual property concerning cannabinoid research, development, manufacturing, and commercialization.

The agreement generally required unresolved disputes to be settled through arbitration under the International Chamber of Commerce rules. But it separately stated that disputes concerning the scope, ownership, validity, enforceability, revocation, or infringement of intellectual property would not be submitted to arbitration and could instead be litigated in a court or other tribunal with jurisdiction.

Lavvan alleged that Amyris’s announcement that it would begin fermenting a cannabinoid referred to products involving intellectual property licensed exclusively to Lavvan. Lavvan filed an arbitration request and then filed this lawsuit.

Amyris’s Motion to Compel Arbitration

Amyris argued that the agreement required arbitration and that questions about whether the dispute was arbitrable should be decided by an arbitrator. It also argued that Lavvan’s claims were really contract claims disguised as intellectual-property claims.

The court rejected those arguments. It found clear language in the agreement excluding intellectual-property disputes from arbitration. The court also examined the allegations rather than relying only on the labels Lavvan gave its claims. It concluded that Lavvan had pleaded two intellectual-property claims and that the fact that those claims might require analysis of the agreement did not turn them into ordinary contract claims. The court therefore denied Amyris’s motion to compel arbitration.

Trade-Secret Claim

The court addressed Lavvan’s claim under the Defend Trade Secrets Act. To state such a claim, Lavvan had to allege that it owned a trade secret and that Amyris misappropriated it.

Lavvan identified alleged trade secrets involving market opportunities, regulatory requirements for cannabinoids, and analyses concerning manufacturers. It alleged that it developed this information through specialized personnel and market research, and that the information could help bring products to market more quickly. Lavvan also alleged that it protected the information through measures including encryption, nondisclosure agreements, limits on employee access, and contractual penalties for unauthorized public statements.

The court held that these allegations were sufficiently specific at the motion-to-dismiss stage. It also rejected Amyris’s argument that there could be no misappropriation because Amyris had received the information lawfully under the agreement. The court explained that the Defend Trade Secrets Act can treat unauthorized use or disclosure as misappropriation when the information was obtained under circumstances creating a duty to maintain its secrecy or limit its use. Because the agreement prohibited use of trade secrets outside its scope, and Lavvan alleged that Amyris used trade secrets in developing new cannabinoids, the court held that the claim could proceed.

Patent-Infringement Claim

Amyris argued that Lavvan’s patent allegations were merely conclusory. The court disagreed. Lavvan identified the patents it claimed were infringed, described how Amyris allegedly infringed them, and alleged that Amyris developed and produced cannabinoids using patents licensed exclusively to Lavvan.

The court acknowledged that Lavvan had not specified exactly which patent claims were infringed or which particular Amyris product, service, or activity caused the infringement. But it held that those details were not required at this stage, particularly because the relevant information was allegedly within Amyris’s control. The court concluded that Lavvan had pleaded enough facts for the patent-infringement claim to survive dismissal.

Disposition

Judge J. Paul Oetken denied Amyris’s motion to compel arbitration or, alternatively, to dismiss. The court directed Amyris to file its answer within 21 days after the opinion and order and directed the Clerk of Court to close the motions at Docket Numbers 13 and 36.