Elysium's MSJ Opposition Brief
ChromaDex here sought Summary Judgment throwing out several of Elysium's claims, specifically Patent Misuse, Unjust Enrichment, Fraudulent Inducement, and several breach of contract claims.
Elysium says that is entitled to get a to a jury on all these claims. here is Elysium's Brief:
1. Patent Misuse
Elysium continues to insist that ChromaDex Conditioned Supply of NR on Customers’ Use of, or Purchase of a License to Use, the NIAGEN® Trademark. We've been over this a hundred times. I do not see any evidence that it happened, or even any reason to believe that it might have somehow happened and left no evidence. We'll see what the judge says.
Elysium cites a statement in an early contract draft in which Elysium would have been required to USE trademarks, but that doesn't show that the royalties were in exchange for trademarks, that it ever had to PAY for them.
I am mystified by Elysium's claim that the presence of a voluntary right to use trademarks constitutes patent misuse. It is a normal commercial condition.
I also am mystified by Elysium's attempt to transform poor draftsmanship into a different deal from the one the parties intended to strike:
By its very title, the “Trademark License and Royalty Agreement,” ties the royalty to the trademark license. The trademark license was expressly granted “subject to the requirements specified in this Agreement,” (preamble) one of which was that Elysium “shall pay to ChromaDex” royalties on net sales of Elysium’s products.
Anyway; I've had my say -- we'll see what the Court says.
2. Fraudulent Misrepresentation
Elysium complains that ChromaDex falsely told it that every customer had to sign a trademark agreement and pay royalties, but fails to show that the statement was false when made. Elysium cites Live Cell, but Live Cell did not sign a supply agreement. Elysium also cites HPN and Doctor's Best, which came afterwards.
I think this is a bullshit claim for other reasons -- I don't think that stating the terms on which you will do business is falsifiable, because you can change your mind. The statement "We require all customers to do something," might be true right now when I say it, even if it was false yesterday and tomorrow because I changed my mind.
There is a certain abstract logic to Elysium's position, but it doesn't make real-world sense. So maybe Judge Carney will let it go past summary judgment, but if he does, it will be a devil to prove at trial, and especially to prove damages.
3. Breach of Contract
Elysium says it did not have to comply with the statutory and contractual notice provisions regarding cGMP procedures.
Then there's some noise about whether the expert properly evaluated whether there was an Acetamide breach (ChromaDex said Elysium's testing procedure was no good).
My impression of the evidence is that Elysium's Mystery NR tested high for Acetamide -- much higher than the legal limit in California -- so they sold the Acetamide-tainted Basis into states other than California, but ChromaDex's NR was not so-tainted. So it's weird to have Elysium making the Acetamide claim, when evidence in the record suggests they don't care that much, which, I don't know, looks like waiver or estoppel or unclean hands, or something equitable.
However, if I were the judge I wouldn't wade into any of this, because Elysium has to show damages to assert their claim, and the evidence is clear that they sold all their product for full price. No damages, no claim. Even on summary judgment.
Elysium says it does have damages, and that ChromaDex hasn't disproved it.
Of course, this could resolve differently. There are evidentiary motions concurrently pending, and maybe one or the other parties' damages expert will be disqualified in whole or in part, which would change the weight of the evidence.
I will be slightly surprised if any of these Elysium claims make it past summary judgment, but I'll be very surprised if they all do. We'll see.