Frères v. Solazyme, Inc.

154 F. Supp. 3d 68, 2015 U.S. Dist. LEXIS 169822, 2015 WL 9302864
CourtDistrict Court, D. Delaware
DecidedDecember 21, 2015
DocketCiv. No. 14-1442-SLR
StatusPublished

This text of 154 F. Supp. 3d 68 (Frères v. Solazyme, 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
Frères v. Solazyme, Inc., 154 F. Supp. 3d 68, 2015 U.S. Dist. LEXIS 169822, 2015 WL 9302864 (D. Del. 2015).

Opinion

MEMORANDUM OPINION

ROBINSON, District Judge

I. PROCEDURAL BACKGROUND

Pending before the court aré multiple motions filed by the parties following an 18 month-long arbitration. Roquette Fréres, S.A (“Roquette”) is a French corporation with its principal place of business in Les-trem, France. Solazyme, Inc. (“Sola-zyme”) is a Delaware corporation with its principal place of business in South San Francisco, California. The court has jurisdiction pursuant to 28 U.S.C. § 1332.

Roquette initiated the litigation by filing an action for a declaratory judgment that any award -rendered by the CPR International Institute for Conflict Prevention & Resolution in-the arbitration- ‘ between Roquette and Sola-zyme is invalid and vacated and that the arbitration was terminated prior to the issuance of any award. A further declaration is sought that Roquette [71]*71and Solazyme are joint owners of the assets, including Intellectual Property, of Solazyme Roquette Nutritionals, LLC (“SRN”), a now dissolved 50/50 joint venture between Roquette and Solazyme.

(Civ. No. 14-1442, D.I. 1) Roquette filed a second declaratory judgment action in which it asserted

1) that the authority of an arbitral panel had terminated such that its order-for more discovery and new hearings is .unenforceable and, 2) alternatively, that regardless of whether the panel’s authority had terminated, proposed new discovery and hearing concerns an issue which is outside of the scope of the arbitral agreement under which the panel purported.to act.

(Civ. No. 15-125, D.1,1) The two actions were thereafter consolidated, with all-future filings being filed only in the lead, first-filed case. (Civ. No. 14-1442, D.I. 14; Civ. No. 15-125, D.I. 5)1

Solazyme’s answer to Roquette’s consolidated allegations included a counterclaim for confirmation of the arbitration award pursuant to 9 U.S.C. § 207, as well as counterclaims asserting trade secret misappropriation and breach of contract (D.I. 15). This pleading was followed by the filing of seven motions: (1) Solazyme’s motion for an order confirming the arbitration award (D.1.16); (2) Solazyme’s motion for a preliminary injunction (D.I. 26); (3) Roquette’s motion for summary judgment granting declaratory relief in its first declaratory judgment action (D.I. 43); (4) Roquette’s motion for summary judgment granting declaratory relief in its second declaratory judgment action (D.I. 47); (5) Roquette’s motion for an order vacating the arbitration award (D.I. 52); (6) Ro-quette’s motion for summary judgment for failure to identify trade secrets (D.I. 106); and Roquette’s motion for summary judgment of Solazyme’s claim for misappropriation of trade secrets (D.I. 110). Oral argument was heard on July 28, 2015.

II. FACTUAL BACKGROUND

Roquette and Solazyme were parties to a Joint Venture Operating Agreement dated November 3, 2010 (the “JVOA”) in which they formed a joint venture called Solazyme - Roquette Nutritionals, . -LLC (“SRN” or the “Joint Venture”). According to the JVOA, SRN was established for the purpose of “the-research and development, manufacture, distribution, sales, marketing and support” of products made with “microalgae-containing and microal-gae-derived substances” as ingredients for use in human foods and beverages, nutra-ceuticals, and animal feeds. (D.I. 36, ex. B at § 2.2 and ex. A at 4 and 7) The SRN joint venture was owned 50/50 by each of its two members.

As described in the JVOA, Roquette is a “global producer of starch and starch-based derivatives with expertise in the research, development, manufacture and sale of bio-products and the provision of related marketing, distribution, technical and administrative seryices, and Roquette also possesses certain intellectual property that could be used or useful in the development and production of products in the Field(Id. at 1) Solazyme was described as “a renewable oil and bio-products company with, certain intellectual property in the area of algal biotechnology that could be used or useful in the development and production' of products in the Field.” ' (Id.)

By 2013, “it became clear to the Parties that SRN was to dissolve” and “a dispute arose as to the proper assignment of [72]*72SRN’s intellectual property. Pursuant to the JVOA, the parties submitted to arbitration to resolve the dispute.” (D.I.15, ¶ 27) The parties served simultaneous arbitration demands on September 24, 2013. With both parties citing to § 21.1 of the JVOA,

Roquette demanded an arbitral award that it was a joint owner of SRN’s intellectual property and that said intellectual property should be jointly assigned to Roquette and Solazyme. Solazyme demanded an arbitral award that it was the sole -owner of SRN’s intellectual property because all of SRN’s intellectual property improved upon the intellectual property Solazyme contributed' to SRN....

(D.I. 15, ¶ 28)

The arbitral hearing commenced on September 25, 2014, and concluded on bctober 2, 2014. The parties and the three arbitrators (“the Panel”) agreed at the conclusion of the hearing to the simultaneous serving of post-hearing briefs on October 23, 2014, and to keeping the hearing open until the Panel had “gotten the briefs.”2 (D.I. 18, ex. BB at 1363) If the Panel “had further [specific] questions, there was a potential for a second round of follow-up briefing.” (Id., ex. BB at 1366) In response to the Panel’s query about the level of detail the parties expected,- counsel indicated that Roquette expected a “reasoned award,” 1.e., an award that provided “a reason” with “[t]he same detail as when we tell you the extent of the know-how.” (Id., ex. BB at 1364-65)

' The Panel subsequently notified the parties that the conclusion of the arbitration-hearing would instead take place on November 3, 2014, to accommodate travel abroad by one of the arbitrators. (D.I. 45, ex. 3) According to Roquette, the deadline for filing a decision was 15 days later, or November 18, 2014. (D.I. 44 at 2) On November 17, 2014, the Panel issued an Order which invited a further motion practice on two issues, the award of attorney fees and “newly discovered additional patent applications relating to the Joint Venture;” such motions were to be filed by December 1, 2014. (D.I. 18, ex. P) By letter dated November 26, 2014, Roquette ■objected to said order and to the fact that no decision had issued within the required 15-day period. (Id., ex. Q) Roquette’s objection was overruled. (Id., ex. S) So-lazyme filed its motion regarding fees and further evidence on December 1, 2014. (Id., ex. T) In response, Roquette maintained its objection to the jurisdiction of the Panel to resolve the parties’ dispute, which objection was, again, overruled. (Id., exs. U, V) By order dated February 10, 2015, the Panel directed Solazyme to identify for the Panel “all of the presently known patent applications filed by Ro-quette which Solazyme contends constitutes improvements to its intellectual property and/or were based upon work done using Solazyme microalgal strain and based upon Solazyme’s pre-SRN know[-]how.” (Id., ex. X) Also by order dated February 10, 2015, the Panel closed the hearing.

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Bluebook (online)
154 F. Supp. 3d 68, 2015 U.S. Dist. LEXIS 169822, 2015 WL 9302864, Counsel Stack Legal Research, https://law.counselstack.com/opinion/freres-v-solazyme-inc-ded-2015.