Biosynthetic Cannabis Producer Alleges Trade Secret Infringement

On September 10, Lavvan, self-described as a producer “of natural cannabinoid ingredients using its advanced cellular agriculture platform,” commenced a trade secret misappropriation and patent infringement suit against Amyris, self-described as a company that uses a “proprietary process of engineering (yeast) organisms ” to create everything from “plant-sugars to anti-malarial drugs.” The complaint, filed in the Southern District of New York, alleged that the defendant breached a contract between the parties by using trade secrets of Lavvan to disseminate processes for the creation of synthetic cannabinoids to competitors that were initially developed by infringing upon patents held by Amyris, but licensed for exclusive use by Lavvan.

The plaintiff proffered that the agreement developed with the defendant sought to “biosynthetically develop rare chemicals found in cannabis plants, known as cannabinoids, for commercial use.” According to Lavvan, “the division of labor under the (contract) was straightforward: Amyris would develop for Lavvan yeast strains specifically engineered to produce a series of cannabinoids through fermentation, and Lavvan would have the exclusive right to then use those yeast strains to manufacture and commercialize the cannabinoids, as well as an exclusive license to all of Amyris’s intellectual property reasonably necessary to develop or produce those cannabinoids.” In exchange, Amyris received “hundreds of millions of dollars in…payments, in addition to the $10 million initial influx of cash Lavvan paid Amyris at the outset of the partnership.”

The plaintiff claimed that the defendant failed to meet any of the terms of the aforementioned contract. Lavvan alleged that instead, Amyris immediately chose to “abandon its contractual commitment to Lavvan, and steal for itself the yeast strains and molecules Amyris was developing for Lavvan under the (contract) while leveraging the funding provided to it by Lavvan.” While many of the specifics around the defendant’s alleged actions that breached contractual obligations were redacted from the plaintiff’s pleadings, the un-redacted portions revealed that Lavvan averred that Amyris committed numerous wrongs. Examples were that the defendant made false public statements regarding the progression of their performance under the contract to inflate stock values, provided samples to third parties using intellectual property exclusively licensed to the plaintiff, and expressed “intent to commercialize without Lavvan” despite Lavvan’s claims that the contract prevented any competitive use of the commercialization trade secrets the defendant accessed while working with Lavvan.

Lavvan sought damages of “no less than $881 million, which represents the sum of a discounted cash flow of Lavvan’s expected future profits….” Additionally, the plaintiff sought an injunction preventing further misappropriation of commercialization trade secrets and enjoining further infringement upon all patents for which the agreement with Amyris provided an exclusive license to Lavvan, specifically U.S. Patent Nos. 8,415,136/8,603,800/8,859,261/9,914,941/9,410,214 (concerning the formation of Acetyl-CoA) and U.S. Patent Nos. 7,172,886/7,667,017/7,622,282/7,736,882/7,915,026 (concerning the formation of isopentenyl pyrophosphate).

Lavvan is represented by Roche Cyrulnik Freedman LLP