IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF UTAH, CENTRAL DIVISIONMAX INTERNATIONAL, LLC, a Utahlimited liability companyPlaintiff,v.VITIMMUNE, INC., a Florida Corporation,dba Robkeller.comDefendant.
MEMORANDUM DECISION ANDORDER GRANTINGMOTION TO DISMISS
Case No. 2:11-cv-00970 DNJudge David NufferPlaintiff Max International, LLC (Max) brought an action against Defendant VitImmune,Inc. (VitImmune), alleging that VitImmune violated an agreement between the parties.
Inresponse, VitImmune filed a motion to dismiss Max’s Complaint and also moved for an award of attorney’s fees.
FACTUAL AND PROCEDURAL BACKGROUND
On July 1, 2007, VitImmune and Max entered into a Product License Agreement(License). Under the License, Max agreed to “license [VitImmune]’s Glutathione technology forthe purpose of producing and marketing said technology in a form agreed upon by the parties.”
The License was “an exclusive world-wide license,” meaning that VitImmune would “notlicense the glutathione technology to any other Company” except under certain circumstances.
On December 23, 2010, Max and VitImmune entered into a second agreement—aSettlement, Amendment and Modification Agreement (Settlement Agreement)—which modified
1
Complaint, docket no. 2, filed October 19, 2011.
2
[Defendant’s] Motion to Dismiss for Failure to State a Claim, docket no. 5, filed November 29, 2011.
3
License ¶ 3, attached as Exhibit 1 to Complaint, docket no. 2, filed October 19, 2011.
4
License ¶ 3.
Case 2:11-cv-00970-DN Document 21 Filed 02/02/12 Page 1 of 7
2
the License. Under the Settlement Agreement, Max and VitImmune agreed that “Max’s licenseof Vitimmune’s Glutathione technology shall be
non-exclusive
and that Vitimmune shall havethe right to market or license such technology as Vitimmune may determine in its solediscretion . . . .”
The only limit on VitImmune’s discretion to license was that VitImmune couldnot “license its Glutathione technology to
another entity
while Max is making timely paymentsdue under this agreement.”
Subsequently, VitImmune began selling its glutathione technologythrough a website it created.
Max filed a Complaint based on two allegations. First, that it was the “exclusive licenseeof VITIMMUNE’S glutathione technology pursuant to the LICENSE and the [SettlementAgreement],”
and second, that it was current on all payments under the Settlement Agreement.
Max therefore claimed VitImmune breached the parties’ agreement by creating and maintaininga website to sell the glutathione technology.
MOTION TO DISMISSVitImmune argues that dismissal of Max’s Complaint is appropriate because, under thecontrolling agreement (the Settlement Agreement) Max does not have an exclusive license to sell
5
Settlement Agreement ¶ 3, attached as Exhibit 2 to Complaint, docket no. 2, filed October 19, 2011 (emphasisadded). In its entirety, paragraph 3 of the Settlement Agreement provides:Non-Exclusivity. Notwithstanding any term to the contrary in the License, the Parties agree thatMax’s license of Vitimmune’s Glutathione technology shall be non-exclusive and that Vitimmuneshall have the right to market or license such technology as Vitimmune may determine in its solediscretion except that Vitimmune shall not license its Glutathione technology to another entitywhile Max is making timely payments due under this agreement. Max at its option may continueto keep Vitimmune from licensing the technology to another entity by making consecutivemonthly payments (the first such payment being 30 days after the last required payment is made)in the amount of $50,000 per month after all required payments are made.
6
Settlement Agreement ¶ 3 (emphasis added).
7
Complaint ¶ 7.
8
Id.
¶ 9;
see also
id.
¶¶ 12, 15.
9
Id.
¶ 6.
10
Id.
¶ 9.
Case 2:11-cv-00970-DN Document 21 Filed 02/02/12 Page 2 of 7
3
VitImmune’s glutathione technology.
VitImmune argues that the Settlement Agreement “doesnot preclude VitImmune from directly
marketing
or
selling
its glutathione technology to
any
person or entity;”
rather, VitImmune “is only restricted from
licensing
that technology toanother entity.”
VitImmune therefore argues that because it did not license its glutathionetechnology to another entity (instead, it simply sold the technology through a self-createdwebsite), Max’s claims are defeated as a matter of law.
The court agrees.“The court’s function on a Rule 12(b)(6) motion is not to weigh potential evidence thatthe parties might present at trial, but to assess whether the plaintiff’s complaint alone is legallysufficient to state a claim for which relief may be granted.”
“In doing so, all facts alleged inthe complaint are taken as true and all reasonable inferences are indulged in favor of theplaintiffs.”
However, “the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.”
There is no factual support for Max’s first allegation that Max was the “exclusivelicensee” of VitImmune’s glutathione technology. While it is true that Max held exclusivelicense under the original License, the parties’ Settlement Agreement made clear that,“
[n]otwithstanding any term to the contrary in the License
, . . . Max’s license of Vitimmune’sGlutathione technology shall be
non-exclusive
,”
which meant that VitImmune was free to
11
See
[Defendant’s] Memorandum in Support of Motion to Dismiss (Supporting Memorandum), docket no. 6, filedNovember 29, 2011, at 8.
12
Supporting Memorandum at 2 (emphasis in original).
13
Id.
(emphasis in original).
14
See id.
15
Tal v. Hogan
, 453 F.3d 1244, 1252 (10th Cir. 2006) (citation omitted).
16
Id.
(citation omitted).
17
Ridge at Red Hawk, L.L.C. v. Schneider
, 493 F.3d 1174, 1177 (10th Cir. 2007) (emphasis omitted).
18
Settlement Agreement ¶ 3 (emphasis added).
Case 2:11-cv-00970-DN Document 21 Filed 02/02/12 Page 3 of 7
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