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  • Writer's pictureShelly Albaum

CDXC-Elysium Discovery Update

There was a not-very-important filing today:

The parties are supposed to agree on how they are going to hand over to each other the information that will allow them to create a factual record sufficient for trial. This report documents the parties' agreement so far.

Or lack thereof, more likely.

It's mostly predictable stuff, like the specific issues upon which discovery is sought (e.g., ChromaDex is going to investigating whether Elysium really was ramping up sales around the time of its big order, and Elysium is going to ask whether ChromaDex made false statements during their negotiations).

There is also technical stuff, like the data format for electronic information.

What's potentially interesting are:

(1) The two parties' statements of the case just get clearer and crisper (pages 3-9)

(2) ChromaDex is ready to mediate a resolution, Elysium is not (page 13)

(3) We can expect dueling motions for summary judgment after Discovery is complete (page 12)

If you're curious about the difference between Motions to Dismiss, which we have already seen, and Motions for Summary Judgment, which lie in our future, the difference is subtle but important:

Motion to Dismiss means that the thing you are alleging is not against the law. So if you're Elysium and you are accused of defrauding your supplier by placing huge orders, lying about them, stealing employees, and then refusing to pay, in your motion to dismiss you might ask the judge to rule that once parties have formed a contract, subsequent lies and abuse don't count as fraud as long as your behavior involves the subject matter of the contract. And if you're Elysium, the judge might grant your wish.

Motion for Summary Judgment means that the thing you are alleging might be against the law, but you have not brought forth adequate evidence that it happened. So if you are ChromaDex and during negotiations you said, "All customers are required to sign an agreement that governs how our trademarks are used," and the judge (inexplicably) rules that that could be a fraudulent statement at the Motion to Dismiss stage, the judge might still grant Summary Judgment later upon determining that although it MIGHT have been a false statement, the actual evidence that Elysium is able to muster does not show that it WAS a false statement when made, even though ChromaDex's policy about handling trademark licenses was different in both the future and the past -- there is NO evidence that it was different on that day (e.g., there was no concurrent negotiation in which ChromaDex took a contrary position).

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