DR. MOHAMED R. MAHFOUZ, as Seller’s Representative and on behalf of TechMah CMF LLC v. DEPUY SYNTHES PRODUCTS, INC.

CourtDistrict Court, D. Delaware
DecidedDecember 19, 2025
Docket1:25-cv-00445
StatusUnknown

This text of DR. MOHAMED R. MAHFOUZ, as Seller’s Representative and on behalf of TechMah CMF LLC v. DEPUY SYNTHES PRODUCTS, INC. (DR. MOHAMED R. MAHFOUZ, as Seller’s Representative and on behalf of TechMah CMF LLC v. DEPUY SYNTHES PRODUCTS, INC.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DR. MOHAMED R. MAHFOUZ, as Seller’s Representative and on behalf of TechMah CMF LLC v. DEPUY SYNTHES PRODUCTS, INC., (D. Del. 2025).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

DR. MOHAMED R. MAHFOUZ, ) as Seller’s Representative and on behalf of ) TechMah CMF LLC, ) ) Plaintiff, ) ) v. ) C.A. No. 25-445-JLH-EGT ) DEPUY SYNTHES PRODUCTS, INC., ) ) Defendant. )

REPORT AND RECOMMENDATION

Presently before the Court is Defendant DePuy Synthes Products, Inc.’s (“Defendant” or “DePuy”) motion to dismiss the Complaint for failure to state a claim. (D.I. 23). For the reasons set forth below, the Court recommends that DePuy’s motion to dismiss be GRANTED-IN-PART and DENIED-IN-PART. I. BACKGROUND This case arises from a joint development project gone awry. Dr. Mohamed R. Mahfouz (“Plaintiff”) was approached by Johnson & Johnson subsidiary, DePuy, to develop certain craniomaxillofacial (“CMF”) products. (D.I. 2 ¶¶ 2 & 3). DePuy encouraged Plaintiff to create TechMah CMF LLC (“TechMah”) to develop the CMF products and to receive venture capital funding from Johnson & Johnson Innovation (“JJDC”). (Id. ¶ 23). After Plaintiff founded TechMah, JJDC funded 75% of TechMah’s budget, and Plaintiff and his business partners funded the rest. (Id. ¶ 24). To formalize the development plans, TechMah and DePuy entered into a Development Agreement in early December 2023 to create certain CMF products. (Id. ¶¶ 5, 25; see also D.I. 2, Ex. A). As part of the Development Agreement, TechMah and DePuy created a Work Plan that set out development goals and established a Joint Steering Committee (“JSC”) to guide the development. (D.I. 2 ¶ 29; see also D.I. 2, Ex. A at Annex A). At the same time the Development Agreement was formed, TechMah and DePuy also entered into an Interest Purchase Agreement (“IPA”) that required DePuy to purchase Plaintiff’s (and other’s) interests in TechMah if the “Purchase Trigger” provision of the IPA was satisfied. (D.I. 2 ¶¶ 27-28). Relevant here, the

IPA incorporated the provisions of the Development Agreement (id. ¶ 28; see also D.I. 2, Ex. B § 11.07), and the IPA’s Purchase Trigger specifically incorporated portions of the Development Agreement’s Work Plan (D.I. 2 ¶¶ 28-29; see also D.I. 2, Ex. B § 1.02). The Work Plan set forth deadlines for the completion of certain development milestones for the CMF products. (D.I. 2 ¶¶ 33-37). One such milestone was obtainment of FDA clearance for the Release 2 Product under Section 510(k) of the Federal Drug and Cosmetic Act, which governs pre-market notice by manufacturers intending to market a medical device. (D.I. 2 ¶¶ 35 & 37; D.I. 2, Ex. A at Annex A § 2.2.3.1).1 The Work Plan set a deadline of January 31, 2024 for this regulatory clearance for the Release 2 Product. (D.I. 2, Ex. A at Annex A § 2.2.3.1). Under the terms of the Development Agreement, if TechMah reasonably anticipated that

it would fail to meet one of the Work Plan’s deadlines, TechMah could notify the JSC and – subject to the JSC’s approval of a revised development plan – prevent DePuy from asserting its right under Section 9.4 to terminate the Development Agreement early for failure to meet a milestone deadline. (D.I. 2 ¶¶ 41, 43; see also D.I. 2, Ex. A §§ 9.1, 9.4). The Development Agreement further provided that TechMah was entitled to a termination fee if DePuy exercised this right to terminate. (D.I. 2 ¶ 43; see also D.I. 2, Ex. A § 9.4).

1 “Release 2 Product” includes preoperative planning software for surgeons, design software to create titanium plates and implants, and titanium surgical guides for reconstructive surgery of the midface and eye socket. (D.I. 2, Ex. A at Annex A §§ 2.1.1 & 2.2.1.1; see also D.I. 2, Ex. A at Annex F). In January 2023, TechMah had a pre-submission meeting with the FDA for its Release 2 Product. (D.I. 2 ¶ 56). The Release 2 Product was ultimately granted 510(k) clearance on July 11, 2024. (Id. ¶ 64). At that point, TechMah believed that it had satisfied the Purchase Trigger of the IPA, but DePuy disagreed. (Id. ¶ 65). Over the ensuing months, the parties conferred at length

about whether TechMah had satisfied the Purchase Trigger. (Id. ¶¶ 66-73). Meanwhile, during this time, DePuy continued to conduct due diligence on acquiring TechMah – diligence that had begun on February 1, 2024. (Id. ¶ 71). By November 12, 2024, DePuy asserted that TechMah had not satisfied a condition precedent for DePuy’s obligation to close – namely, that 510(k) regulatory clearance for the Release 2 Product be obtained by January 31, 2024. (Id. ¶¶ 74-75). DePuy therefore refused to purchase Plaintiff’s interest in TechMah under the IPA. (Id. ¶ 74). On April 9, 2025, Plaintiff responded by filing this derivative action on TechMah’s behalf pursuant to Federal Rule of Civil Procedure 23.1. (Id. ¶¶ 96, 99-110). Plaintiff asserts claims for breach of the IPA (Count I) and the Development Agreement (Count II), as well as claims for conversion (Count III) and

misappropriation of trade secrets under the Delaware Uniform Trade Secret Act (“DUTSA”) (Count IV) and the federal Defend Trade Secrets Act (“DTSA”) (Count V). (See id. ¶¶ 111-59). On May 23, 2025, DePuy filed the present motion to dismiss all claims of the Complaint. (D.I. 23). Briefing was complete on September 12, 2025. (D.I. 24, 29 & 30). II. LEGAL STANDARD In ruling on a motion to dismiss under Rule 12(b)(6), the Court must accept all well-pleaded factual allegations in the complaint as true and view them in the light most favorable to the plaintiff. See Mayer v. Belichick, 605 F.3d 223, 229 (3d Cir. 2010); see also Phillips v. Cnty. of Allegheny, 515 F.3d 224, 232-33 (3d Cir. 2008). The Court is not, however, required to accept as true bald assertions, unsupported conclusions or unwarranted inferences. See Mason v. Delaware (J.P. Court), C.A. No. 15-1191-LPS, 2018 WL 4404067, at *3 (D. Del. Sept. 17, 2018); see also Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). Dismissal under Rule 12(b)(6) is only appropriate if a complaint does not contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). This plausibility standard obligates a plaintiff to provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555. Instead, the pleadings must provide sufficient factual allegations to allow the Court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.” In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1420 (3d Cir. 1997) (cleaned up). III. DISCUSSION The Court begins with the claim at the center of this dispute – breach of the IPA. The Court then turns to the breach of the Development Agreement claim, followed by the trade secret

misappropriation claims and the conversion claim. A. Breach of the Interest Purchase Agreement (Count I) Plaintiff asserts that DePuy’s refusal to purchase TechMah constitutes a breach of the IPA. (D.I. 2 ¶ 114).

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DR. MOHAMED R. MAHFOUZ, as Seller’s Representative and on behalf of TechMah CMF LLC v. DEPUY SYNTHES PRODUCTS, INC., Counsel Stack Legal Research, https://law.counselstack.com/opinion/dr-mohamed-r-mahfouz-as-sellers-representative-and-on-behalf-of-techmah-ded-2025.