Fairhaven Health LLC v. BioOrigyn LLC

District Court, W.D. Washington·Decided December 17, 2021·No. 2:19-cv-01860·Unknown

Opinion

HONORABLE RICHARD A. JONES 1

6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 Fairhaven Health, LLC, 9

Plaintiff, 10 Case No. 2:19-cv-01860-RAJ v. 11 ORDER

BioOrigyn, LLC, Joanna Ellington, aka 12 Joanna Clifton, and Dennis Clifton 13 Defendants. 14 15 I. INTRODUCTION Before the Court are three motions. Having considered the submissions of the 16 parties, the relevant portions of the record, and the applicable law, the Court finds that 17 oral argument is unnecessary. For the reasons below, Defendants’ Motion to Dismiss or, 18 in the Alternative, Motion for a More Definite Statement, and Motion for Partial 19 Summary Judgment (Dkt. # 46) is GRANTED in part and DENIED in part, and the 20 parties’ motions to seal (Dkt. ## 60, 67) are GRANTED. 21 22 II. BACKGROUND In late 2014 and early 2015, two businesses entered four agreements. Under those 23 agreements, one business, BioOrigyn, was supposed to develop products for the other, 24 Fairhaven. Broadly speaking, Fairhaven was supposed to buy a license to some of 25 BioOrigyn’s intellectual property. And, using that intellectual property, BioOrigyn was 26 supposed to develop products for Fairhaven. Four years later, in 2019, the relationship 27 1 between the businesses soured, giving rise to this litigation. The center of their dispute: 2 who owned the products and intellectual property that BioOrigyn developed, did 3 BioOrigyn make any misrepresentations before the parties entered the agreements, and 4 were the agreements breached or void? 5 Plaintiff Fairhaven Health LLC (“Fairhaven”) offers “natural, doctor-designed 6 products” to support fertility, pregnancy, breastfeeding, and overall women’s health. 7 Dkt. # 40 ¶ 17. To bring new products to market, Fairhaven consults research scientists 8 and physicians. Id. ¶ 18. One such consultant was Defendant BioOrigyn LLC 9 (“BioOrigyn”). Id. 10 Fairhaven and BioOrigyn’s relationship began in or around 2003.1 Dkt. # 68 at 33 11 (¶ 5). At the time, BioOrigyn offered a fertility lubricant product known as “Pre-Seed,” 12 which Fairhaven bought wholesale and distributed through its website. Id. 13 In 2012, nearly a decade later, BioOrigyn sold Pre-Seed to another company. Dkt. 14 # 62 ¶ 10. And Fairhaven continued to distribute Pre-Seed with the other company. Id. 15 ¶ 11. 16 A. 2014 Collaboration 17 The story of this dispute begins in 2014. In the summer and fall of that year, the 18 parties contemplated a new partnership. Dkt. # 62 ¶¶ 13-23; Dkt. # 68 ¶¶ 13-30. Each 19 remembers the formation and intended scope of that partnership differently. 20 According to BioOrigyn, at the time, it had certain intellectual property rights to 21 an “arabinogalactan patent family.” Dkt. # 62 ¶ 9. It often referred to those rights as the 22 “401 patents” or the “401 technology.” Id. BioOrigyn contemplated licensing those 23 rights to Fairhaven. Id. ¶¶ 15, 17. Then, using the 401 technology, BioOrigyn would 24 develop a “potential vaginal fertility drug” among other products for Fairhaven. Id. 25

26 1 At the time, BioOrigyn was doing business as “INGFertility.” Dkt. # 68 ¶ 5. For purposes of this order, the Court will not distinguish between the entities and will refer to 27 either as BioOrigyn. 1 ¶¶ 15, 17. But from the beginning, BioOrigyn says, it represented to Fairhaven that it 2 could not help Fairhaven develop a “fertility lubricant.” See, e.g., id. ¶¶ 15, 16, 20. 3 Fairhaven, on the other hand, has a different account. It says that it sought to 4 engage BioOrigyn as a consultant. Dkt. # 68 at 36 (¶¶ 14-15). Fairhaven intended to 5 retain BioOrigyn to design, develop, patent, and market new Fairhaven products. Id. 6 Specifically, Fairhaven sought BioOrigyn’s help to develop a “menopause lubricant” and 7 a “fertility lubricant with a drug claim.” Id. The parties further contemplated the 8 development of “a fertility lubricant, pregnancy/birth lubricant, menopause lubricant, 9 mucus product with drug claim, ultrasound gel, and douche/rinse.” Id. at 37 (¶ 18). 10 In late 2014, the parties consummated their partnership through three agreements: 11 the 2014 Consulting Agreement, the 2014 License Agreement, and the 2014 Asset 12 Purchase Agreement (together, the “2014 Agreements”). Under the 2014 License 13 Agreement, BioOrigyn licensed its rights to the 401 patents to Fairhaven. Dkt. # 39 Ex. 14 D. And under the 2014 Asset Purchase Agreement, BioOrigyn sold a trademark to 15 Fairhaven. Dkt. # 40 ¶ 46; Dkt. # 62 ¶ 19. BioOrigyn describes these three agreements 16 as “inter-related”; Fairhaven describes them as “a confounding web.” Dkt. # 40 ¶ 46; 17 Dkt. # 62 ¶ 15. 18 Apparently, under these agreements, BioOrigyn would grant Fairhaven a license to 19 the 401 patents (the 2014 License Agreement). Using those patents, BioOrigyn would 20 develop products for Fairhaven (the 2014 Consulting Agreement). And Fairhaven would 21 advertise those products under the IsoLove trademark that it bought from BioOrigyn (the 22 2014 Asset Purchase Agreement). See, e.g., Dkt. # 47-1 at 16-17; Dkt. # 53 at 39-41; 23 Dkt. # 63-2 at 1-3. 24 B. Invention Disclosure Form 25 The parties entered the 2014 Agreements in late 2014. The 2014 Consulting 26 Agreement was executed on October 15. Dkt. # 39 Ex. C. Explained in more detail 27 below, under the consulting agreement, the rights to certain BioOrigyn creations created 1 under the agreement would be assigned to Fairhaven. Dkt. # 39 at 79 (§ 5(b)). 2 In December 2014, more than a month after executing the 2014 Consulting 3 Agreement, BioOrigyn concluded that it could, in fact, develop a fertility lubricant for 4 Fairhaven. Dkt. # 62 ¶¶ 50-64.2 BioOrigyn then notified Fairhaven of a new invention. 5 Dkt. # 62-1 at 55-56. To summarize the invention and its underlying technology, 6 BioOrigyn drafted an “invention disclosure form,” or “IDF.” Dkt. # 62 ¶ 60. 7 Initially, however, BioOrigyn did not share that IDF with Fairhaven. Dkt. # 62-1 8 at 55-56. It believed that the technology described in the IDF was not covered by the 9 2014 Agreements.3 Id.; Dkt. # 62 ¶¶ 57-66. It also believed that the IDF technology 10 contained “very novel recipes and formulation[s].” Dkt. # 62-1 at 55-56. Given that, 11 BioOrigyn asked Fairhaven to sign a new license agreement to the IDF technology before 12 BioOrigyn disclosed it. Id.; Dkt. # 62 ¶¶ 57-66. Ultimately, in January 2015, BioOrigyn 13 disclosed the IDF to Fairhaven, who agreed to buy a license to the IDF technology. Dkt. 14 # 39 Ex. B; Dkt. # 63-8. 15 C. Procedural History 16 In 2019, nearly five years later, Fairhaven sued BioOrigyn. Dkt. # 1. In short, 17 Fairhaven alleges that BioOrigyn made several misrepresentations during the parties’ 18 2014 and 2015 contract negotiations. 19 For one thing, Fairhaven alleges that it owned the IDF technology from the start. 20 Dkt. # 40 ¶¶ 83-86. It alleges that BioOrigyn developed the IDF technology under the 21 2014 Consulting Agreement, and thus any of BioOrigyn’s intellectual property rights to 22 the IDF technology were assigned to Fairhaven under that agreement. Id. Because 23 2 Initially, BioOrigyn believed that it could not develop a fertility lubricant for Fairhaven 24 because of a “non-compete” obligation with another entity. Dkt. # 62 ¶ 59. The Court 25 has sealed information about that obligation. For more context, see Docket No. 47 paras. 50-59. 26 3 The Court refers to the technology disclosed in the IDF (the “novel non-toxic isotonic 27 gels”) simply as the “IDF technology.” Dkt. # 47-1 at 165-168. 1 BioOrigyn misrepresented that the IDF technology belonged to it and not Fairhaven, 2 Fairhaven alleges that BioOrigyn breached the 2014 Consulting Agreement and that the 3 2015 License Agreement is void. Id. ¶¶ 94-194. 4 On January 24, 2020, BioOrigyn moved to dismiss Fairhaven’s complaint. Dkt. 5 # 18. The Court granted that motion in part and denied it in part. Dkt. # 37.

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