Truinject Corp. v. Nestlé Skin Health, S.A.

• Decision Date: 13 December 2019
• Docket Number: C.A. No. 19-592-LPS-JLH
• Parties: TRUINJECT CORP., Plaintiff, v. NESTLÉ SKIN HEALTH, S.A., GALDERMA, S.A., GALDERMA LABORATORIES, L.P., NESTLÉ SKIN HEALTH, INC., JOHN ROGERS, STUART RAETZMAN, SCOTT MCCREA, ALISA LASK and TIPHANY LOPEZ, Defendants.
• Court: U.S. District Court — District of Delaware

TRUINJECT CORP., Plaintiff, v. NESTLÉ SKIN HEALTH, S.A., GALDERMA, S.A., GALDERMA LABORATORIES, L.P.,NESTLÉ SKIN HEALTH, INC., JOHN ROGERS, STUART RAETZMAN,SCOTT MCCREA, ALISA LASK and TIPHANY LOPEZ, Defendants.

C.A. No. 19-592-LPS-JLH

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

December 13, 2019

REPORT AND RECOMMENDATION

Plaintiff Truinject Corp. ("Plaintiff" or "Truinject") filed this suit against Nestlé Skin Health, S.A., Galderma, S.A., Galderma Laboratories, L.P. ("Galderma Labs"), Nestlé Skin Health, Inc. (collectively, "Corporate Defendants"), John Rogers, Stuart Raetzman, Scott McCrea, Alisa Lask, and Tiphany Lopez (collectively, "Individual Defendants"), alleging breach of contract, fraud, patent infringement, trade secret misappropriation, and other related claims. (D.I. 112.)

Truinject alleges that it developed a training platform to teach medical professionals the proper technique for facial injections of neurotoxins (e.g., Botox) and dermal fillers (e.g., collagen). The platform includes a lifelike model of a human head, a syringe, and a computer interface that allows the user to see the location of the syringe needle in the model. Truinject is the assignee of multiple patents covering its technology.

Beginning in 2014, Truinject and some of the Corporate Defendants (who are all related) discussed potential business deals relating to Truinject's technology. These discussions continued for several years, but a deal was never consummated. Instead, some of the Corporate Defendants developed and launched their own competing injection training platform. The heart of Truinject's case is its allegation that Defendants misrepresented their interest in a business deal with Truinject in order to induce it to disclose its confidential information and trade secrets, which Defendants then used to develop a competing and infringing product.

Pending before the Court are five separate motions to dismiss. Nestlé Skin Health, S.A. moved to dismiss all claims against it for lack of personal jurisdiction under Rule 12(b)(2) or, in the alternative, for failure to state a claim under Rule 12(b)(6). In the remaining four motions, at least one defendant moved to dismiss each of the following counts for failure to state a claim under Rule 12(b)(6): Count I (breach of contract); Count II (breach of the implied covenant of good faith and fair dealing); Count IV (breach of the implied covenant); Count V (breach of contract); Count VI (breach of the implied covenant); Count VII (breach of contract); Count VIII (breach of the implied covenant); Count IX (breach of contract); Count X (breach of the implied covenant); Count XI (tortious interference); Count XVI (trade dress infringement); Count XIX (fraud); Count XX (fraud); Count XXI (fraud); Count XXII (fraud); Count XXIII (aiding and abetting); Count XXIV (fraud); and Count XXV (unfair competition).

This Report and Recommendation resolves Nestlé Skin Health, S.A.'s motion to dismiss. (D.I. 123.) For the reasons set forth below, I conclude that the Court lacks personal jurisdiction over Nestlé Skin Health, S.A. I therefore recommend that Nestlé Skin Health, S.A.'s motion be GRANTED.

I. BACKGROUND¹

Facial injections of neurotoxins and dermal fillers are becoming increasingly popular and create billions of dollars in revenue. (D.I. 112 ¶ 1.) Unfortunately, complications can occur and may include blindness, vision impairment, stroke, cheek rot, drooping eyelids, and misshapen facial features. (Id. ¶¶ 2-4, 48.) Many complications stem from inadequate training of the doctors who perform the injections. (Id. ¶ 5.) Before the technology at issue in this case, doctors learned to inject by practicing on either cadavers or live patients. (Id. ¶ 73-74.)

The founder of Truinject, Gabrielle Rios, recognized that inadequate training contributed to complications, and she conceived of a solution: "a sophisticated injection training platform, a virtual and augmented reality training system, and an interactive training application on tablets, all of which allow providers to refine their technique by repeatedly performing injections and receiving immediate feedback, all without exposing patients to the complications of bad injections." (Id. ¶¶ 6-10, 47-49.) Truinject subsequently developed technology "consist[ing] of an injectable, anatomically correct simulated face model," referred to as "Kate," and a smart syringe that allows medical professionals to practice injections. (Id. ¶ 51.) Truinject also developed an accompanying virtual and augmented reality platform and an interactive iPad app(collectively, the "Truinject Platform"), which aid in teaching the proper injection technique. (Id. ¶¶ 10-11, 51-52, 71.) Truinject holds at least three United States Patents protecting the Truinject Platform: U.S. Patent No. 9,792,836 ("'836 patent"), U.S. Patent No. 10,290,231 ("'231 patent"), and U.S. Patent No. 10,290,232 ("'232 patent"). (Id. ¶¶ 53, 57, 60.)

After hearing about the Truinject Platform, several companies, including Defendant Galderma Labs, "approached Truinject to develop a business relationship for the technology and science." (Id. ¶ 15.) Galderma Labs is an indirect subsidiary of Defendant Nestlé Skin Health, S.A., a Swiss corporation. (D.I. 112 ¶ 34; D.I. 161.) Galderma, S.A. is a wholly-owned subsidiary of Defendant Nestlé Skin Health, S.A. (D.I. 112 ¶ 31; D.I. 161.) Defendant Nestlé Skin Health, Inc. is a Delaware corporation and is a wholly-owned subsidiary of Nestlé Skin Health, S.A. (D.I. 112 ¶ 33; D.I. 161.)

In early 2014, an executive at Galderma Labs, Elizabeth Bentley, told Rios that Galderma Labs was interested in a potential partnership with Truinject. (Id. ¶ 90.) Bentley introduced Rios, via email, to several other employees of Galderma Labs, and they scheduled a phone meeting for September 5, 2014. (Id. ¶¶ 91-92.) Several executives participated on behalf of Galderma Labs, including Per Lango and Defendant Alisa Lask. (Id. ¶ 92.)

After the phone meeting, Galderma Labs arranged for Truinject to give a presentation on the Truinject Platform at Galderma Labs' headquarters in Texas. (Id. ¶ 17.) During the October 21, 2014 presentation, Truinject demonstrated Kate's functionality. (Id. ¶ 93.) Numerous employees from Galderma Labs "or affiliate[s]" attended the presentation, including Defendant Dr. John Rogers ("Rogers").² (Id. ¶¶ 94-95.) Lask asked Truinject to send its presentation slidesto Rogers. (Id. ¶ 96.) Rogers also sent an email to Rios, stating that his job responsibility at Galderma³ "will be do [sic] develop and shape the educational platforms for training physicians on injection technique" and that what Truinject was developing was "very much to [his] heart [sic]." (Id. ¶ 103.)

After the presentation, Lango expressed interest on behalf of Galderma Labs in buying global rights to Truinject's technology, and he requested a period of exclusivity during the due diligence process. (Id. ¶ 97.) The next day, on October 22, 2014, Rios, Lango, and Defendant Scott McCrea, Director of Business Development for Galderma Labs, had a call to further discuss a potential business relationship. (Id. ¶ 107.)

Galderma Labs and Truinject subsequently signed a Confidential Disclosure Agreement ("2014 CDA"). (Id. ¶ 98, Ex. 4.) The preamble to the CDA states that it was "made this 23^rd day of October, 2014 . . ., between GALDERMA LABORATORIES, L.P., a Texas limited partnership, . . . and its Affiliates ("Galderma") and TRUINJECT MEDICAL CORP. . . . ." The 2014 CDA does not define "Affiliates." (Id., Ex. 4 at 1.) The 2014 CDA contemplates that theparties would exchange confidential information in connection with a "possible business or collaborative opportunity with regard to Truinject's proprietary technology." (Id.) Under Paragraph 2.0, the parties agree "to hold in confidence and not publish or disclose the other's Confidential Information." (Id.) Pursuant to Paragraph 9.2, the parties agree that the state and federal courts in Delaware will have exclusive jurisdiction to resolve any claims arising out of the 2014 CDA. (Id., Ex. 4 at 2.)

Rios signed the 2014 CDA on behalf of "TruInject Medical Corp." on October 27, 2014. (Id., Ex. 4 at 3.) Quintin Cassady, Vice President of Galderma Labs, signed on behalf of "Galderma Laboratories, L.P." on October 29, 2014. (Id.) The 2014 CDA contains no signature block (or signature) for any "affiliates" of Galderma Labs. (Id.) Relying on the 2014 CDA, Truinject "provided [] Defendants with access to trade secrets and confidential information, including the names of vendors and information about Kate." (Id. ¶ 102.)

On October 28, 2014, McCrea told Rios that a partnership with Truinject would result in a global deal that would benefit both companies. (Id. ¶ 108.) McCrea also discussed entering into an exclusivity arrangement with Truinject during the due diligence process. (Id. ¶¶ 108-109.) He asked Rios to cancel all pending meetings that Truinject had scheduled with other interested potential partners. (Id.) Truinject refused to cancel previously scheduled meetings. (Id. ¶ 110.)

McCrea called Rios again on November 5, 2014 and emphasized the need for an exclusivity agreement. (Id. ¶ 111.) He also discouraged Rios from working with "Defendants'"⁴ competitors,who, according to McCrea, would steal Truinject's technology. (Id. ¶ 111.) During the call, McCrea promised that his company would not steal the technology and that they were serious about a deal. (Id.) Relying on McCrea's representations, Truinject canceled its scheduled meetings with Defendants' competitors. (Id. ¶ 112.)

On November 6, 2014, during an industry conference in San Diego, Truinject and several of the Corporate Defendants' employees had a private meeting. (Id. ¶ 113.) In attendance was Nestlé Skin Health, Inc.'s CEO, Didier Leclerqc. During the meeting, Truinject gave a live demonstration of Kate and allowed the attendees to simulate injections. (Id.) Leclerqc also...