Better Meat Co. v. Emergy, Inc.

CourtDistrict Court, E.D. California
DecidedJune 7, 2024
Docket2:21-cv-02338
StatusUnknown

This text of Better Meat Co. v. Emergy, Inc. (Better Meat Co. v. Emergy, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Better Meat Co. v. Emergy, Inc., (E.D. Cal. 2024).

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 The Better Meat Co., No. 2:21-cv-02338-KJM-CKD 12 Plaintiff, ORDER 13 v. 14 Emergy, Inc., et al., 1S Defendants. 16 17 Emergy, Inc., the defendant in this action, asserts several counterclaims against The Better 18 | Meat Co. and Augustus Pattillo. Better Meat and Pattillo seek summary judgment. The 19 | counterclaims fall into two broad groups: patents and trade secrets. As explained in this order, 20 | Emergy has not cited “particular parts of materials in the record” to support an essential part of its 21 | patent claims. Fed. R. Civ. P. 56(c)(1)(A). Emergy instead offers generic references to its 22 | records and allegations. Although Emergy argues it needs more time to conduct discovery, it has 23 | explained neither why it could not have conducted that discovery sooner nor what in particular it 24 | hopes to obtain. Better Meat and Pattillo are entitled to summary judgment of the four patent 25 | claims. For the trade secret claims, however, Emergy has identified genuine disputes of material 26 | fact within the record. The court thus grants Better Meat’s motion in part.

1 I. BACKGROUND 2 The party opposing summary judgment is entitled to the assumption that any disputes 3 about the evidence will be resolved in its favor, and the evidence is viewed in the light most 4 favorable to that party’s claims. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 5 587–88 (1986). For the dispute between Better Meat and Emergy, this rule largely means the 6 court accepts the accounts of Emergy’s two cofounders, Tyler Huggins and Justin Whiteley, as 7 told in the declarations they each have filed. See generally Huggins Decl., ECF No. 171-13; 8 Whiteley Decl., ECF No. 171-14. 9 Huggins and Whiteley founded Emergy in 2015. Huggins Decl. ¶ 4; Whiteley Decl. ¶ 2. 10 At the time, they were studying mycelia—the fibrous, root-like subsurface structure of 11 mushrooms and other fungi—in graduate school at the University of Colorado Boulder. Huggins 12 Decl. ¶ 2. About two years later, they were awarded a grant to continue their research at the U.S. 13 Department of Energy’s Argonne National Laboratory in Chicago. Id. ¶ 5. They discovered a 14 way to maintain the mycelial structure during its cultivation, which allowed them to produce 15 organic masses with a density and firmness of their choice, from “soft and fluffy” to “hard and 16 brittle.” Id. ¶ 8. As early as December 2017, Huggins and Whiteley believed there would be a 17 variety of real-world uses for their discovery, from treating water to storing energy and, most 18 importantly for this case, in some ways related to foods and drinks. See id. ¶¶ 10, 17. They 19 began experimenting. See id. ¶ 10. Eventually, some of their experiments produced mycelia that 20 had a texture and structure that resembled animal meat. Id. They later rebranded Emergy as 21 “Meati Foods” and began selling mycelia in grocery stores as a meat alternative. Id. ¶ 11. 22 While Huggins and Whiteley were working on their experiments at Argonne, Augustus 23 Pattillo contacted Huggins to ask if their company was hiring. Id. ¶ 14. He was a graduate of the 24 University of Colorado and had built a mycelium-based system for remediating petroleum 25 pollution. See Pattillo Decl. ¶ 4, ECF No. 163-4; Theodore Decl. Ex. 13, ECF No. 163-25. 26 Huggins and Whitely eventually hired Pattillo to help with their research as a lab technician 27 through a one-year Department of Energy fellowship hosted by Emergy. Huggins Decl. ¶¶ 14– 28 16. Huggins and Whiteley trained him. Id. ¶ 16. He oversaw experiments Huggins and Whiteley 1 had designed and learned about their plans for Emergy’s future. See id. ¶¶ 16–17. He had “full 2 access” to Emergy’s labs and to its confidential information within the secure government facility 3 where he worked. Id. ¶ 18; Whiteley Decl. ¶ 6. His work went beyond the lab, too. He went to 4 the United Kingdom to discuss a potential partnership between Emergy and another company 5 developing meat substitutes with fungal biomass. Huggins Decl. ¶ 20. He also taste-tested the 6 mycelia. See id. ¶¶ 22–23. 7 In 2018, Pattillo asked Huggins and Whiteley to make him a co-founder and give him a 8 one-third stake in the company. Id. ¶ 24. They said no, but they offered him a full-time job and 9 an equity stake. Id. Pattillo declined and left the company. Id. 10 The experiments and processes Pattillo observed and conducted at Argonne were 11 proprietary and very sensitive from Huggins’ and Whiteley’s point of view. Pattillo had signed a 12 nondisclosure agreement when he began working with them. Id. ¶ 14. Whiteley reminded him 13 about that agreement when he left, and Pattillo reassured both Whiteley and Huggins he would 14 neither take Emergy’s technology with him nor work with the specific strain of organism Emergy 15 was using. Whiteley Decl. ¶ 9. Though Huggins had concerns about Pattillo based on a vague 16 “gut feeling,” Huggins Dep. at 33–34, ECF No. 122-2, he and Whiteley had never seen Pattillo 17 take anything sensitive from the lab, they never noticed anything was missing and as time went 18 on, they saw nothing to substantiate Huggins’s concern, see Huggins Decl. ¶¶ 18, 25; Whiteley 19 Decl. ¶ 6. There was nothing suspicious on Pattillo’s LinkedIn page, either, and when Huggins 20 and Pattillo later ran into one another at a cultured meat conference, Pattillo told Huggins he had 21 nothing to worry about; according to Pattillo, his current project had nothing to do with what 22 Huggins and Whiteley were working on at Emergy. Huggins Decl. ¶ 28; see also Pattillo Reply 23 Decl. ¶¶ 6–10, ECF No. 173-6. 24 As it turned out, however, Pattillo had started a company that was developing and 25 marketing a meat alternative made from mycelia. See Pattillo Decl. ¶ 9. His company eventually 26 became Better Meat, and it obtained patents for “shelf-stable protein food ingredients” made from 27 “cultured fungal biomass and a limited amount of water,” which listed Pattillo as the sole inventor 28 and Better Meat as assignee. See id. Ex. B, ECF No. 163-6; see also Exs. C–E, ECF Nos. 163-7 1 to 163-9.1 Pattillo has now left Better Meat for reasons unrelated to the dispute with Emergy, 2 Pattillo Decl. ¶ 12, ECF No. 163-4, but for the sake of simplicity here, the court refers to Better 3 Meat and Pattillo together as “Better Meat.” 4 Although a nonprovisional application for one of the Better Meat patents was published in 5 March 2020, Huggins and Whiteley did not begin to suspect Pattillo had taken or misused 6 Emergy’s proprietary information until June of the next year, when Better Meat announced a new 7 facility in Sacramento and said it would produce its meat alternative there. See Huggins Decl. 8 ¶ 29. According to an article published at the time, Pattillo’s co-founder said Better Meat had 9 been operating in “stealth mode” for the previous three years. Elaine Watson, Introducing Rhiza, 10 Food Navigator USA (June 8, 2021, 9:14 AM GMT).2 11 Huggins and Whiteley did not believe it was possible for Better Meat to have brought a 12 product to the market so quickly on its own unless Pattillo had taken something from Emergy. 13 See, e.g., Huggins Decl. ¶ 30. Attorneys representing Emergy contacted Pattillo and his 14 co-founder about a month after Better Meat’s announcement. See Mroz Letter (July 16, 2021), 15 ECF No. 163-52. They argued Pattillo had violated his nondisclosure agreement, had 16 misappropriated Emergy’s trade secrets and was liable for unfair competition. See id. at 2–4. 17 Better Meat’s attorneys denied these claims and any liability. See Theodore Letter (Aug. 5, 18 2021), ECF No. 163-54.

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Bluebook (online)
Better Meat Co. v. Emergy, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/better-meat-co-v-emergy-inc-caed-2024.