PB Legacy, Inc. v. American Mariculture, Inc.

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

FORT MYERS DIVISION

PB LEGACY, INC, a Texas

Corporation and TB FOOD USA,

LLC,

Plaintiffs,

v. Case No: 2:17-cv-9-FtM-29NPM

AMERICAN MARICULTURE, INC.,

a Florida corporation,

AMERICAN PENAEID, INC., a

Florida corporation, and

ROBIN PEARL,

Defendants.

AMERICAN MARICULTURE, INC.,

a Florida corporation,

Counter-Plaintiff,

v.

PB LEGACY, INC, a Texas

Corporation, KENNETH

GERVAIS, and RANDALL AUNGST,

Counter/Third-Party

Defendants.

OPINION AND ORDER

This matter comes before the Court on defendants’ Motion for

Final Summary Judgment (Doc. #252) filed on November 19, 2019.

Plaintiffs filed a Response in Opposition (Doc. #273) on December

30, 2019, defendants filed a Reply (Doc. #282) on January 14, 2020,

and plaintiffs filed a Sur-Reply (Doc. #286) on January 28, 2020.

For the reasons set forth below, the motion is granted to the

extent that PB Legacy, Inc. is dismissed as a plaintiff. The

motion is otherwise denied.

I.

Summary judgment is appropriate only when the Court is

satisfied that “there is no genuine dispute as to any material

fact and that the movant is entitled to judgment as a matter of

law.” Fed. R. Civ. P. 56(a). “An issue of fact is ‘genuine’ if

the record taken as a whole could lead a rational trier of fact to

find for the nonmoving party.” Baby Buddies, Inc. v. Toys “R” Us,

Inc., 611 F.3d 1308, 1314 (11th Cir. 2010). A fact is “material”

if it may affect the outcome of the suit under governing law.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “A

court must decide ‘whether the evidence presents a sufficient

disagreement to require submission to a jury or whether it is so

one-sided that one party must prevail as a matter of law.’”

Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th

Cir. 2004)(quoting Anderson, 477 U.S. at 251).

In ruling on a motion for summary judgment, the Court views

all evidence and draws all reasonable inferences in favor of the

non-moving party. Scott v. Harris, 550 U.S. 372, 380 (2007); Tana

v. Dantanna’s, 611 F.3d 767, 772 (11th Cir. 2010). However, “if

reasonable minds might differ on the inferences arising from

undisputed facts, then the court should deny summary judgment.”

St. Charles Foods, Inc. v. America’s Favorite Chicken Co., 198

F.3d 815, 819 (11th Cir. 1999)(quoting Warrior Tombigbee Transp.

Co. v. M/V Nan Fung, 695 F.2d 1294, 1296-97 (11th Cir.

1983)(finding summary judgment “may be inappropriate even where

the parties agree on the basic facts, but disagree about the

factual inferences that should be drawn from these facts”)). “If

a reasonable fact finder evaluating the evidence could draw more

than one inference from the facts, and if that inference introduces

a genuine issue of material fact, then the court should not grant

summary judgment.” Allen v. Bd. of Pub. Educ., 495 F.3d 1306,

1315 (11th Cir. 2007).

II.

The relevant undisputed material facts are as follows:

At all relevant times, Primo Broodstock, Inc. (Primo), the

original plaintiff in this case, operated a commercial shrimp

breeding business and American Mariculture, Inc. (AMI) operated a

large indoor grow-out facility for shrimp in St. James City,

Florida. Because Primo had great success in breeding shrimp with

dramatically improved survival rates, Primo decided to market its

disease-resistant shrimp on a global scale. This required more

grow-out space than Primo’s Texas facility provided and brought

Primo into discussions with AMI.

To facilitate these discussions, on December 11, 2014, Primo

and AMI, through their corporate officers, executed a Mutual

Nondisclosure Agreement (the NDA). (Doc. #20-1.) The NDA

described the purpose of the agreement as follows: “AMI and [Primo]

wish to explore a business possibility in connection with which

each may disclose its Confidential Information to the other (the

Relationship.)” (Id. ¶ 1) (emphasis in original.) In relevant

part, the NDA provided that AMI and Primo would not disclose

“Confidential Information” to third parties and would not use such

information “for any purpose other than to carry out discussions

concerning, and the undertaking of, the Relationship.” (Id. ¶ 3.)

The commitments of the parties “shall survive any termination of

the Relationship between the parties, and shall continue” for

defined lengths of time thereafter. (Id. ¶ 8.) The NDA is governed

by Florida law. (Id. ¶ 9.)

The discussions proved fruitful, and on January 1, 2015, Primo

entered into a three-year shrimp farming Agreement (the Grow-Out

Agreement) with AMI. (Doc. #20-2.) Among other things, the Grow-

Out Agreement provided that AMI would grow post-larvae “Primo

shrimp” for Primo at AMI’s facility, which Primo would then live-

harvest and sell to third parties. (Doc. #20-2, Agreements ¶¶ 1-

2.) Shrimp which could not be harvested in that manner were to be

killed and sold as dead fresh or frozen shrimp product by AMI.

(Id. Agreements ¶ 3.) The Grow-Out Agreement is governed by

Florida law. (Id. ¶ 28.)

In January of 2016, Primo and AMI became involved in disputes

regarding Primo’s performance under the Grow-Out Agreement and

AMI’s billing. At some point between January 1 and January 20,

2016, Kenneth Gervais (Mr. Gervais), the President of Primo, and

Randall Aungst (Mr. Aungst), the Vice President of Primo, informed

Robin Pearl (Mr. Pearl), the AMI Chief Executive Officer, that

Primo had contracted to sell 100,000 Primo shrimp to a Chinese

company, which would result in $750,000 in revenue for AMI pursuant

to the Grow-Out Agreement. (Doc. #80, pp. 3-4; Doc. #235, p. 3.)

The transaction never materialized, Primo did not harvest or sell

the shrimp, and AMI never received payment. AMI therefore

notified Primo that it intended to harvest the Primo shrimp at its

facility. (Doc. #80, p. 4; Doc. #235, pp. 2-3.) Primo filed suit

against AMI in state court seeking to enjoin AMI from harvesting

the shrimp. (Id.)

On January 28, 2016, Mr. Pearl met Mr. Aungst (with Mr.

Gervais participating by telephone) to attempt a resolution of the

state-court litigation and the disputes under the Grow-Out

Agreement. (Doc. #80, pp. 4-5; Doc. #235, p. 3.) As a result of

this meeting, Mr. Pearl and Mr. Aungst signed a one-page, untitled

handwritten document (the Term Sheet) (Doc. #20-3.) The Term Sheet

contains nine numbered bullet points; three other unnumbered

bullet points were also written on the page. In part, the Term

Sheet stated that “AMI will give Primo [until] April 30th 2016 to

remove all animals.” (Doc. #20-3, p. 2.) The Term Sheet contained

no reference to which law governed.

Primo did not remove the shrimp from AMI’s facility by April

30, 2016. AMI retained the Primo shrimp and began breeding and

selling the shrimp on the open market. (Doc. #80, p. 5; Doc. #235,

p. 3.)

Effective November 23, 2016, Primo and its Shareholders

entered into a $2.7 million-plus Asset Purchase Agreement (the

Asset Purchase Agreement) with Ningbo-Tech Bank Co., Ltd. (Ningbo)

in which Ningbo agreed to purchase substantially all of Primo’s

broodstock business assets. (Doc. #253-1.) Specifically, the

Asset Purchase Agreement agreed to sell and assign:

all of [Primo’s] right, title and interest in, to and

under all of the assets, properties and rights of every

kind and nature, whether real, personal or mixed,

tangible or intangible (including goodwill), wherever

located and whether now existing or hereafter acquired

(other than the Excluded Assets), which relate to, or

are used or held for use in connection with, the Business

(collectively, the "Purchased Assets"), . . . .

(Doc. #253-1, p. 8, § 2.01.) This provision then identified

fourteen specific categories of assets being sold. (Id. pp. 8-9,

§ 2.01(a)-(n).)

Under the Asset Purchase Agreement, contracts which were not

Assigned Contracts were Excluded Contracts, and were not included

as Purchased Assets being sold to Ningbo. (Id. p. 9, § 2.02(b).)

The Schedule of Assigned Contracts did not include either the NDA

or the Grow-Out Agreement. (Id. p. 68.) Accordingly, Primo’s

interests in the NDA and the Grow-Out Agreement were not being

sold or assigned to Ningbo, but remained with Primo.

While the Asset Purchase Agreement “is made effective as of

November 23, 2016” (Id. p. 7), the consummation of its transactions

did not actually take place until the Closing. (Id. p. 8, § 2.01;

p. 13, § 3.01.) After the execution of the Asset Purchase

Agreement and prior to the Closing, the Primo business was to be

operated by a Service Provider pursuant to a Management Agreement.

(Id. pp. 32-33, § 6.01.) The Asset Purchase Agreement is governed

by Delaware law. (Id. p. 57, § 10.10.)

On January 9, 2017, TB Food USA, LLC (TB Food) was authorized

by internal resolution to accept an assignment of Ningbo’s interest

in the Asset Purchase Agreement. (Doc. #253-3, pp. 71-74.) The

parties agree that on or about this date Ningbo assigned its

interest in the Primo broodstock business to TB Food. Because the

Closing had not yet taken place, Ningbo’s assignment to TB Food

did not require Primo’s consent. (Doc. #253-1, § 10.07.)

Since Primo’s interests in the NDA and the Grow-Out Agreement

were not being sold or assigned to Ningbo in the Asset Purchase

Agreement, they were not included in Ningbo’s assignment to TB

Food. Additionally, the Closing had not yet occurred, so the asset

sale had not been consummated.

Also on January 9, 2017, Primo filed this federal action

against defendants AMI, American Penaeid, Inc. (API), and Mr. Pearl

(collectively, Defendants). (Doc. #1.) On January 26, 2017, Primo

filed a nine-count Amended Complaint (Doc. #20) against the three

Defendants.

Effective February 17, 2017, Primo and TB Food executed a

First Amendment to Asset Purchase Agreement (Doc. #253-1, pp. 121-

26.) One of the Shareholders (GF Trust) listed in the Asset

Purchase Agreement had been determined not to have been a

shareholder, was removed as a party to the Asset Purchase

Agreement, and agreed to provide a Restrictive Covenant Agreement

(Doc. #253-2, pp. 3-11) at the Closing. The Schedule 2.01(c)

(Assigned Contracts) section was amended to delete a Lease, but

was not amended to include the NDA or the Grow-Out Agreement.

Additional changes not relevant to the issues in this case were

also agreed upon, and the Asset Purchase Agreement as amended was

ratified by the parties. Thus, after the First Amendment to the

Asset Purchase agreement, Primo still retained its interests in

the NDA and Grow-Out Agreement. The First Amendment is governed

by Delaware law. (Id. at ¶9.)

Also effective February 17, 2017, Primo and TB Food executed

an Assignment and Assumption Agreement (Doc. #253-2, pp. 17-20)

(the Assignment.) Pursuant to the Assignment, Primo sold and

assigned, and TB Food purchased and accepted, “all of [Primo’s]

right, title and interest in and to the contracts listed in Section

2.02(c) of the Disclosure Schedules to the Original Agreement as

amended by the First Amendment (the ‘Assigned Contracts.’).” (Id.

p. 17) (emphasis in original.) The Assignment is governed by

Delaware law. (Id. ¶ 6.) As noted, neither the NDA nor the Grow-

Out Agreement were identified as an Assigned Contract in the Asset

Purchase Agreement or its First Amendment or in the Assignment.

On February 20, 2017, the Closing of the Asset Purchase

Agreement took place. (Doc. #253-3, p. 88.)

Primo Broodstock, Inc. thereafter changed its name to PB

Legacy, Inc. (Doc. #86, ¶¶ 4-5.) On May 15, 2017, with the consent

of all parties, the name Primo Broodstock, Inc. was changed on the

Amended Complaint to PB Legacy, Inc., and TB Food, USA LLC was

added as a plaintiff. (Doc. #87.)1

On December 4, 2018, the Court filed an Opinion and Order

(Doc. #135) granting defendants’ request for partial summary

judgment as to the conversion claim in Count II and the unjust

enrichment claim in Count IX. The Court found that Counts II and

1 While the Order (Doc. #87) refers to TB Foods USA, LLC, the

correct name is apparently TB Food USA, LLC. The Court refers to

PB Legacy and TB Food collectively as “Plaintiffs.”

IX were preempted by the Florida Uniform Trade Secrets Act (FUTSA)

claim in Count V.

On October 24, 2019, PB Legacy and TB Food entered into an

Assignment of Claims Agreement (the Assignment of Claims). (Doc.

#271-1.) “To the extent the Asset Purchase Agreements do not

already provide, for clarity” PB Legacy assigned TB Food its

right, title and interest in and to the claim or claims

of [PB Legacy] arising out of or related to the business

relationship between American Mariculture, Inc. (“AMI”),

American Penaeid, Inc.(“API”), and Robin Pearl (“Pearl”)

on one hand, and [PB Legacy] on the other hand (the

“Claim”), including but not limited to those that [PB

Legacy] has filed and is litigating in the Litigation as

defined above including all rights, title and interest

[PB Legacy] has in the [Grow-Out Agreement] with AMI,

API and/or Pearl.

(Doc. #271-1, p. 2.) The Assignment of Claims identifies “the

Litigation” as the present federal case, Case No. 2-17-cv-9, and

states that “[t]he Plaintiffs’ claims and the Counterclaim arise

out of or are related to the business relationship among the

Defendants and the Counter-Defendants from 2014 through 2016.”

(Id.) The Assignment of Claims also provided:

All liabilities of Assignor not set forth in

the Asset Purchase Agreements remain with

Assignor including those under the “Growout

Agreement.” This Assignment does not affect

Assignor’s rights, title or interest in the

Intellectual Property Litigation.

(Id.) The Assignment of Claims further provided that it “is

effective as of January 9, 2017 but is formalized as of the date

of the signatures of the Parties, below.” (Id. p. 1.) The

Assignment of Claims is governed by Texas law. (Id. at ¶ 4.)

III.

As a result of the unopposed motion to amend the pleadings

(Doc. #86) and the Order (Doc. #87) granting that motion, each

count of the Amended Complaint is being prosecuted by two

plaintiffs: PB Legacy, Inc. and TB Food USA, LLC. Defendants

assert that TB Food USA, LLC is an improper plaintiff as to Count

I, and that PB Legacy, Inc. is an improper plaintiff as to the

remaining counts. (Doc. #252, pp. 1-2.) The Court concludes that

TB Food USA, LLC is the only proper plaintiff as to all counts.

Defendants’ initial Motion focuses on whether TB Food and PB

Legacy are a real party in interest as to various counts of the

Amended Complaint. In their Reply, Defendants shift their focus,

asserting that TB Food and/or PB Legacy lack constitutional

standing to assert various claims. Although Defendants appear to

use the terms “standing” and “real party in interest”

interchangeably, each is a distinct legal concept.2

Standing to sue is a doctrine rooted in the

traditional understanding of a case or

controversy. The law of Article III standing,

2 The Court addresses constitutional standing, despite being

first raised in a reply brief, because “every court has an

independent duty to review standing as a basis for jurisdiction at

any time, for every case it adjudicates.” Fla. Ass'n of Med.

Equip. Dealers, Med-Health Care v. Apfel, 194 F.3d 1227, 1230 (11th

Cir. 1999)(citations omitted).

which is built on separation-of-powers

principles, serves to prevent the judicial

process from being used to usurp the powers of

the political branches. Our standing doctrine

accomplishes this by requiring plaintiffs to

alleg[e] such a personal stake in the outcome

of the controversy as to ... justify [the]

exercise of the court's remedial powers on

[their] behalf. To establish Article III

standing, the plaintiff seeking compensatory

relief must have (1) suffered an injury in

fact, (2) that is fairly traceable to the

challenged conduct of the defendant, and (3)

that is likely to be redressed by a favorable

judicial decision. Absent such a showing,

exercise of its power by a federal court would

be gratuitous and thus inconsistent with the

Art. III limitation.

Our standing decisions make clear that

standing is not dispensed in gross. To the

contrary, a plaintiff must demonstrate

standing for each claim he seeks to press and

for each form of relief that is sought. The

same principle applies when there are multiple

plaintiffs. At least one plaintiff must have

standing to seek each form of relief requested

in the complaint.

Town of Chester, N.Y. v. Laroe Estates, Inc., 137 S. Ct. 1645,

1650–51 (2017)(citations and internal punctuation omitted).

Rule 17(a) of the Federal Rules of Civil Procedure provides

that “[a]n action must be prosecuted in the name of the real party

in interest.” Under this Rule, the real party in interest is “‘the

party who, by the substantive law, has the right sought to be

enforced.’” Symonette v. V.A. Leasing Corp., 648 F. App'x 787,

789 (11th Cir. 2016)(quoting Lubbock Feed Lots, Inc. v. Iowa Beef

Processors, Inc., 630 F.2d 250, 257 (5th Cir. 1980)). Unlike

standing, the real party in interest requirement is not a

constitutional prerequisite that implicates a court’s subject

matter jurisdiction. See Dunn v. Advanced Med. Specialties, Inc.,

556 F. App'x 785, 789 (11th Cir. 2014). Rather, the purpose of

the real party in interest rule is “to protect the defendant

against a subsequent action by the party actually entitled to

recover, and to insure generally that the judgment will have its

proper effect as res judicata.” Fed. R. Civ. P. 17 Advisory

Committee Notes. A party may have constitutional standing and

still not be a real party in interest. See e.g., Barger v. City

of Cartersville, Ga., 348 F.3d 1289, 1290 (11th Cir. 2003),

overruled on other grounds by Slater v. United States Steel Corp.,

871 F.3d 1174 (11th Cir. 2017).

A. Standing/Real Party in Interest as to Count I

In Count I, PB Legacy and TB Food allege that AMI breached

the NDA and the Grow-Out Agreement. Defendant AMI argues that TB

Food is not a real party in interest, and has no constitutional

standing, to assert this breach of contract claim. This is so,

AMI asserts, because TB Food was not a party to the contracts and

no interest in these contracts was ever transferred to TB Food by

Primo.

It is undisputed that TB Food was not a party to either the

NDA or the Grow-Out Agreement. Primo has, however, executed

contracts and assignments which impact who is a proper plaintiff

as to Count I.

As discussed above, the November 23, 2016 Asset Purchase

Agreement agreed to sell and assign substantially all of Primo’s

assets to Ningbo except “Excluded Asssets.” Excluded Assets

included contracts which had not been assigned to Ningbo, and

neither the NDA nor the Grow-Out Agreement was on the Schedule of

Assigned Contracts. (Doc. #253-1, p. 8.) Thus, Ningbo was not to

receive an interest in either the NDA or the Grow-Out Agreement

pursuant to the Asset Purchase Agreement. When Ningbo assigned

its acquired rights to TB Food on or about January 9, 2017, that

assignment did not include Primo’s interests in the NDA or Grow-

Out Agreement (since those interests were not Ningbo’s to assign).

Additionally, regardless of what interest was to be conveyed at

Closing, Closing had not yet occurred, and so no sale or assignment

had been consummated. Accordingly, when Primo filed the original

Complaint on January 9, 2017, and the Amended Complaint on January

27, 2017, it was the real party in interest and had constitutional

standing to assert its claim for breach of the NDA and the Grow-

Out Agreement. Defendant’s arguments to the contrary are rejected.

The February 17, 2017 First Amendment to the Asset Purchase

Agreement added nothing which affected the transfer of Primo’s

interest in the NDA or the Grow-Out Agreement. Thus, at the

February 20, 2017 Closing, TB Food did not acquire any interest in

the NDA or the Grow-Out Agreement.

Recently, in the Assignment of Claims on October 24, 2019, PB

Legacy (formerly Primo) assigned its claims under the NDA and the

Grow-Out Agreement to TB Food. Specifically, PB Legacy assigned

TB Food its

right, title and interest in and to the claim or claims

of [PB Legacy] arising out of or related to the business

relationship between American Mariculture, Inc. (“AMI”),

American Penaeid, Inc.(“API”), and Robin Pearl (“Pearl”)

on one hand, and [PB Legacy] on the other hand (the

“Claim”), including but not limited to those that [PB

Legacy] has filed and is litigating in the Litigation as

defined above including all rights, title and interest

[PB Legacy] has in the [Grow-Out Agreement] with AMI,

API and/or Pearl.

(Doc. #271-1, p. 2.) Thus, PB Legacy assigned all its rights and

interests “arising out of or related to the business relationship

between American Mariculture, Inc. (“AMI”), American Penaeid,

Inc.(“API”), and Robin Pearl (“Pearl”) on one hand, and [PB Legacy]

on the other hand (the “Claim”), . . . .” (Id.) The Assignment

further defined what was being assigned as “including but not

limited to those that [PB Legacy] has filed and is litigating in

the Litigation as defined above including all rights, title and

interest [PB Legacy] has in the [Grow-Out Agreement] with AMI, API

and/or Pearl.” (Id.)

Texas law, which governs the Assignment of Claim, has long

allowed the assignment of causes of action. HSBC Bank USA, N.A. v.

Watson, 377 S.W.3d 766, 774 (Tex. App.—Dallas 2012, pet. dism'd).

While Texas law allows an assignee to file in its own name or in

the name of the assignor, it is the assignee who is the real party

in interest. “An assignee may file suit and recover either in his

own name or in the name of the assignor. Nevertheless, whatever

name he chooses to sue under, when a cause of action is assigned

or transferred, the assignee becomes the real party in interest

with the authority to prosecute the suit to judgment.” S. County

Mut. Ins. Co. v. Ochoa, 19 S.W.3d 452, 465 (Tex. App. 2000), on

reh'g (May 11, 2000)(citations omitted). Given TB Food’s ability

to prosecute the case in its own name, there is no need for PB

Legacy to remain a named plaintiff. Thus, there can be no question

that, based upon the Assignment, as of October 24, 2019, TB Food

became the real party in interest and the only plaintiff with

constitutional standing.3

Judgment will be entered dismissing PB Legacy from Count I

without prejudice.

3 The Assignment was purported to be made retroactively

effective to January 9, 2017, (Doc. #271-1, p. 1), the date the

original Complaint was filed. Whatever effect the purported

retroactive effective date may have on the rights and obligations

between PB Legacy and TB Food, it does not re-write history for

constitutional standing purposes. The historical fact remains

that on the dates the Complaint and Amended Complaint were filed,

Primo had retained its interests in both the NDA and the Grow-Out

Agreement.

B. Standing/Real Party in Interest for Counts II through IX

Defendants argue they are entitled summary judgment against

PB Legacy on Counts II4 through IX because Primo (now PB Legacy)

assigned away its interests in such claims prior to filing the

Amended Complaint. Defendants assert that Primo had assigned all

claims except those under the NDA and Grow-Out Agreement to Ningbo

as of January 9, 2017. Because the assignee is the real party in

interest, Defendants argue that Primo was not the real party in

interest and lacked standing to assert Counts II through IX when

it filed the Amended Complaint. Defendants also assert that the

statute of limitations has now run on Counts III, IV, and V, so

dismissal as to these counts must be with prejudice.

For the reasons discussed regarding Count I, Primo/PB Legacy

had retained all of its rights under the NDA and Grow-Out

Agreement, but has recently assigned away its right to sue for

the claim or claims of [PB Legacy] arising out of or

related to the business relationship between American

Mariculture, Inc. (“AMI”), American Penaeid,

Inc.(“API”), and Robin Pearl (“Pearl”) on one hand, and

[PB Legacy] on the other hand (the “Claim”), including

but not limited to those that [PB Legacy] has filed and

is litigating in the Litigation as defined above

including all rights, title and interest [PB Legacy] has

in the [Grow-Out Agreement] with AMI, API and/or Pearl.

(Doc. #271-1, p. 2.) The “Litigation” as defined in the Assignment

of Claims includes all claims in this case. (Id. at p. 1, ¶ A.)

4 The Court previously dismissed Count II. See (Doc. #185.)

Since Counts II through IX all constitute claims which have now

been assigned to TB Food, and since an assignee may prosecute the

cause of action in its own name, PB Legacy no longer has any

interests in such claims. PB Legacy has neither constitutional

standing to assert the claims nor real party in interest status,

while TB Foods has both. The Court grants Defendants’ motion in

part and dismisses without prejudice PB Legacy as a plaintiff in

Counts II through IX.

IV.

Defendants also argue they are entitled to summary judgment

on each of the counts for substantive reasons. The Court addresses

each count.

A. The Breach of Contract Claim (Count I)

Count I asserts a breach of contract claim against AMI,

alleging that AMI breached the NDA and the Grow-Out Agreement.

AMI argues it is entitled to summary judgment because the NDA was

superseded by the Grow-Out Agreement, and AMI thus had no further

obligations under the NDA. As to the alleged breach of the Grow-

Out Agreement, AMI argues that the Term Sheet terminated the Grow-

Out Agreement, thus extinguishing AMI’s obligations under the

Grow-Out Agreement. Thus, according to AMI, its only surviving

obligations were set forth in the Term Sheet, which Count I does

not allege AMI violated. (Doc. #252, pp. 9-11.)

(1) AMI’s Alleged Breach of the NDA

Count I of the Amended Complaint asserts that AMI breached

the NDA by “failing to preserve the ‘Confidential Information’ (as

defined in the NDA) that had been imparted to it by Primo.” (Doc.

#20, ¶ 84.)

On December 10, 2014, Primo and AMI entered into the NDA, in

which they agreed

(i) to hold in trust and confidence, and not disclose to

any third parties (except as provided herein), any

Confidential Information and (ii) not to use any

Confidential Information for any purpose other than to

carry out discussions concerning, and the undertaking

of, the Relationship. Each party agrees that it will

disclose Confidential Information only to its directors,

officers, employees, representatives, advisors.

Contractors or agents (collectively, “Representatives”)

who have a clear need to know such information in order

to carry out the discussions regarding the Relationship.

(Doc. #20-1, p. 1.) The NDA defined “Confidential Information”

as:

any information, technical data, or know-how, including,

but not limited to, that which relates to business plans,

private placements, research, product plans, products,

services, customers, markets, software, developments,

inventions, processes, designs, drawings, engineering,

hardware configuration information, marketing, sales or

finances of the disclosing party or any of its

affiliates, which is designated in writing to be

confidential or proprietary, or if given orally, is

confirmed promptly in writing as having been disclosed

as confidential or proprietary.

(Id. p. 2.) The NDA further provided that it remained in effect

“for a period terminating on the later to occur of (i) five (5)

years following the date of [the NDA] or (ii) three (3) years from

the date on which Confidential Information is disclosed under [the

NDA].” (Id. p. 3.) The NDA provided that it “shall be governed

by and construed and enforced in accordance with the internal laws

of the State of Florida.” (Id.)

AMI asserts that its obligations under the NDA came to an end

because the NDA was superseded by the January 1, 2015 Grow-Out

Agreement between Primo and AMI. The “specific primary goal” of

the Grow-Out Agreement was to “use a defined portion of AMI grow-

out capacity to produce broodstock for Primo for sale to third

parties.” (Doc. #20-2, p. 2.) Primo agreed to “supply AMI at no

cost with 100 breeder pairs (200 animals) every three months” and

AMI agreed to grow “Post-larva [] Primo” shrimp. (Doc. #20-2, p.

4.)

The Grow-Out Agreement also contained the following “merger”

or “integration” clause:

This agreement, together with the exhibits described

below which are attached hereto and incorporated herein

for all purposes, set forth all agreements between AMI

and Primo relative to the Premises. All prior

negotiations and agreements are merged herein, and no

subsequent agreement relative to the subject matter

hereof or modification of this agreement shall be

binding unless reduced to a writing signed by both

parties hereto. The following exhibits have been

attached to and incorporated into this agreement: [blank

space].

(Id. p. 5.) The Grow-Out Agreement further provided that it “shall

be governed by the law of the State or Florida.” (Id.)

“The well established rule of law is that a contract may be

discharged or extinguished by merger into a later contract entered

into between the parties in respect to the same subject which

replaces the original contract.” Aly Handbags, Inc. v. Rosenfeld,

334 So.2d 124, 126 (Fla. 3d DCA 1976) (citing 7 Fla. Jur. Contracts

§ 166 (1956)). AMI’s assertion that “the Grow-Out Agreement

supersedes the NDA” (Doc. #252, p. 9) is, however, incorrect.

In arguing that the Grow-Out Agreement extinguished AMI’s

obligations – and Primo’s right to sue – under the NDA, AMI relies

on the Grow-Out Agreement’s provision stating that it “set[s] forth

all agreements between AMI and Primo.” (Doc. #20-2, p. 5.) But

the integration clause does not state that it supersedes every

agreement Primo and AMI ever entered, as AMI suggests. AMI fails

to quote the full, relevant portion of the Grow-Out Agreement,

which states:

This agreement, . . . set[s] forth all

agreements between AMI and Primo relative to

the Premises. All prior negotiations and

agreements are merged herein, and no

subsequent agreement relative to the subject

matter hereof or modification of this

agreement shall be binding unless reduced to

a writing signed by both parties hereto.

(Doc. #20-2, p. 5)(emphasis added.) The Grow-Out Agreement thus

limits its integration clause’s applicability to “all agreements

between AMI and Primo relative to the Premises.” (Id.) (emphasis

added.)

The subject matters of the two agreements are quite different

from one another. The NDA is limited to prohibiting AMI from

disclosing Primo’s confidential information to third parties,

while the Grow-Out Agreement provides the terms and manner in which

AMI would grow post-larvae shrimp for Primo, and how Primo would

compensate AMI for doing so. Nothing in the Grow-Out Agreement,

which relates to the Premises for raising the shrimp, discusses or

allows AMI to disclose confidential information it had previously

received.

Since the NDA and the Grow-Out Agreement concern different

subject matters, the Court finds that the Grow-Out Agreement does

not supersede the NDA. Therefore, the Court denies AMI’s motion

for summary judgment as to alleged breach of the NDA in Count I.

(2) AMI’s Alleged Breach of the Grow-Out Agreement

Count I also alleges that AMI breached its contractual

obligations under the Grow-Out Agreement by “transferr[ing] all

right, title, and interest in the Primo shrimp to API, its wholly-

owned subsidiary . . . .” (Doc. #20, ¶ 88.) AMI argues that the

Term Sheet, “[w]hile pithy,” “explicitly terminated” the Grow-Out

Agreement, and thus extinguished AMI’s responsibilities under the

Grow-Out Agreement. (Doc. #252, p. 10.) In response, TB Food

asserts that the Term Sheet is not a binding contract because it

did not include “the essential specific terms pertaining to the”

parties’ purported agreement, and therefore did not terminate the

parties’ responsibilities under the Grow-Out Agreement. (Doc.

#273, p. 23.)

Florida law is clear that a subsequent agreement can terminate

or modify a contract. St. Joe Corp. v. McIver, 875 So. 2d 375,

381 (Fla. 2004)(“It is well established that the parties to a

contract can discharge or modify the contract, however made or

evidenced, through a subsequent agreement.”). Florida law is also

clear that “[c]ontracting parties are at liberty to address any

issue they see fit, including the question of whether their

agreement may be modified at all, and, if so, how.” Okeechobee

Resorts, L.L.C. v. E Z Cash Pawn, Inc., 145 So.3d 989, 993 (Fla.

4th DCA 2014) (citation omitted).

Here, the Grow-Out Agreement imposed restrictions on

subsequent agreements or modifications:

This agreement, together with the exhibits described

below which are attached hereto and incorporated herein

for all purposes, set forth all agreements between AMI

and Primo relative to the Premises. All prior

negotiations and agreements are merged herein, and no

subsequent agreement relative to the subject matter

hereof or modification of this agreement shall be

binding unless reduced to a writing signed by both

parties hereto. The following exhibits have been

attached to and incorporated into this agreement: [blank

space].

(Id. p. 5.)(emphasis added.) The Term Sheet was “reduced to a

writing signed by both parties” and relates “to the subject matter”

of the Grow-Out Agreement. Thus, if the Term Sheet is a

“subsequent agreement” or a “modification” of the Grow-Out

Agreement, it will be “binding.”

Essentially, AMI asserts that the Term Sheet is a new contract

which terminated the Grow-Out Agreement, while TB Food asserts

that the Term Sheet is not a contract at all. The Court agrees

that the “subsequent agreement” language requires the existence of

a valid contact, but concludes that the Term Sheet does not

qualify.

The relevant contract principles are well established under

Florida law. To succeed on a breach of contract claim, one of the

elements a plaintiff must establish is the existence of a valid

contract. Friedman v. New York Life Ins. Co., 985 So. 2d 56, 58

(Fla. 4th DCA 2008)(citations omitted). “To prove the existence

of a contract, a plaintiff must [establish]: (1) offer; (2)

acceptance; (3) consideration; and (4) sufficient specification of

the essential terms.” Vega v. T-Mobile USA, Inc., 564 F.3d 1256,

1272 (11th Cir. 2009) (applying Florida law)(citations omitted).

For a contract to be binding, the parties must mutually assent to

the essential terms of an agreement. David v. Richman, 568 So. 2d

922, 924 (Fla. 1990). “So long as any essential matters remain

open for further consideration, there is no completed contract.”

Jacksonville Port Auth., City of Jacksonville v. W.R. Johnson

Enterprises, Inc., 624 So. 2d 313, 315 (Fla. 1st DCA 1993)(citation

and quotation omitted).

Florida law provides no precise definition as to what

constitutes an “essential term.” Nichols v. Hartford Ins. Co. of

the Midwest, 834 So. 2d 217, 219 (Fla. 1st DCA 2002)(citations

omitted). Rather, “essential terms will vary widely according to

the nature and complexity of each transaction and will be evaluated

on a case by case basis.” Socarras v. Claughton Hotels, Inc., 374

So. 2d 1057, 1060 (Fla. 3d DCA 1979)(citation omitted). A court

may consider any number of factors, including “the type of contract

at issue, the number of terms agreed upon relative to all of the

terms to be included, the number of details yet to be ironed out,

the relationship of the parties, and the degree of formality

attending similar contracts . . . .” Midtown Realty, Inc. v.

Hussain, 712 So. 2d 1249, 1252 (Fla. 3d DCA 1998)(citation and

quotation omitted).

Here, AMI contends the Term Sheet was a contract intended to

formalize the termination of Primo and AMI’s business relationship

and to settle the state court litigation between the parties.

Indeed, Primo’s attorney referred to the Term Sheet as “an untitled

contract.” (Doc. #1-5, p. 3.) The form and substance of this

document, however, are inconsistent with “the degree of formality

attending similar contracts” intended to settle complex business

disputes and litigation, and to terminate a contractual

relationship involving hundreds of thousands of dollars. Hussain,

712 So. 2d at 1252.

As noted above, this one-page, handwritten document contains

nine numbered bullet points, with three other unnumbered bullet

points also written on the page. Portions of the Term Sheet are

illegible, some bullet points have checkmarks next to them, while

others do not, and most of the bullet point “provisions” are

comprised of incomplete sentences. It is clear that the contents

of this document fail to encompass all essential terms between

Primo and AMI. See Hussain, 712 So. 2d at 1252 (“[I]t is more

than reasonable to conclude that the parties did not intend to be

bound by a skeletal Letter of Intent . . . .”); see also Morningstar

Healthcare, L.L.C. v. Greystone & Co., No. 8:05-CV-949-T-MAP, 2007

WL 9736041, at *6 (M.D. Fla. Aug. 27, 2007)(rejecting argument

that “sophisticated parties . . . sufficiently spelled out all the

essential terms for financing a complex, multi-million dollar,

highly regulated asset in a brief, written paragraph.”). It is

not reasonable to believe that the one-sheet handwritten,

sometimes cryptic note sets forth all terms to terminate a contract

with a business which just ten months later sold for over $2.7

million.

In addition, “the relationship of the parties” further

demonstrates that the Term Sheet is lacking essential terms of a

termination agreement. Midtown Realty, Inc, 712 So. 2d at 1252.

Since the inception of the parties’ business relationship, Primo

and AMI had executed two written agreements (the NDA and the Grow-

Out Agreement) stating that Primo shrimp broodstock was Primo’s

intellectual property. The Term Sheet states “AMI will not destroy

animals” and “AMI will give Primo April 30th 2016 to remove all

animals.” (Doc. #20-3, p. 2.) Yet it fails to state the legal

consequences if Primo failed to remove its purported intellectual

property from AMI’s facility.

AMI argues that this omission definitively establishes that

Primo transferred its ownership interests in the Primo broodstock

to AMI when Primo failed to remove its shrimp from AMI’s facility

by April 30, 2016. Neither the omission nor the sparse language

in the Term Sheet supports such a significant consequence. The

omission relating to the impact on Primo’s ownership interests in

its intellectual property – which Primo had vigorously safeguarded

since the inception of the parties’ relationship - is not a

“nonessential or small item[].” Williams v. Ingram, 605 So. 2d

890, 893 (Fla. 1st DCA 1992). Indeed, the parties’ competing

arguments as to the effect of this absent provision demonstrates

it is one of the most essential terms to the parties’ alleged

agreement.5

5 AMI nonetheless argues the Term Sheet is a binding contract

because Primo undertook some actions consistent with the Term

Sheet’s requirements (Primo voluntarily dismissed AMI from the

state court litigation). The Court is unpersuaded, as “neither

[a] contract nor any of its provisions come into existence” when

essential terms are lacking. Gibson v. Courtois, 539 So. 2d 459,

460 (Fla. 1989).

The Court finds the Term Sheet is not an enforceable contract

because it is lacking essential terms to the parties’ alleged

agreement. Johnson Enterprises, 624 So. 2d at 315 (“[I]f there

has been no agreement as to essential terms, an enforceable

contract does not exist.”). Therefore, the Court finds that the

Term Sheet did not supersede the Grow-Out Agreement as a

“subsequent agreement” and therefore denies this portion of AMI’s

motion as to Count I.

The Grow-Out Agreement also provided that it could be modified

by a signed written document:

All prior negotiations and agreements are merged herein,

and no subsequent agreement relative to the subject

matter hereof or modification of this agreement shall be

binding unless reduced to a writing signed by both

parties hereto. The following exhibits have been

attached to and incorporated into this agreement: [blank

space].

(Id. p. 5)(emphasis added.) In contrast to terminating a contract,

a modification merely replaces some terms of a valid and existing

agreement while keeping those not abrogated by the modification in

effect. Bornstein v. Marcus, 275 So. 3d 636, 639 (Fla. 4th DCA

2019) (citation omitted). “Whether the parties have validly

modified a contract is usually a question of fact.” McIver, 875

So. 2d at 382. The Court finds that the issue of whether the Term

Sheet is a valid modification of the Grow-Out Agreement is a matter

on which there are disputed issues of material fact, thus

precluding summary judgment. AMI’s motion for summary judgment on

Count I is denied.

B. The Defamation Claim (Count III)

In Count III, TB Food asserts a defamation claim against

Defendants. TB Food contends that in late 2016, Defendants:

falsely conveyed to the public that (i) the breeder

shrimp that Primo was offering for sale, including

through its exclusive distributor in China (i.e.,

Haimao), are “fake” and not the “real Primo” shrimp,

(ii) Primo had abandoned all intellectual property

rights in the shrimp it left behind with AMI on April

30, 2016, and (iii) Primo had given the full bank of all

its genetic lines to AMI under the Grow-Out Agreement,

while retaining none of the lines for itself at its

headquarters in Brookshire, Texas.

(Doc. #20, ¶¶ 114-16.) TB Food further alleges that Defendants

made such defamatory statements in the Chinese media and in sales

publications in 2016. (Id.)

Defamation6 is defined as “the unprivileged publication of

false statements which naturally and proximately result in injury

to another.” Wolfson v. Kirk, 273 So. 2d 774, 776 (Fla. 4th DCA

1973).

A claim of defamation requires “the following

five elements: (1) publication; (2) falsity;

6 Defendants assert that this count is more properly

characterized as slander. (Doc. #252, p. 11.) “Slander is a

spoken or oral defamation of another which is published to others

and which tends to damage that person's reputation, ability to

conduct that person's business or profession, and which holds that

person up to disgrace and humiliation.” Scott v. Busch, 907 So.

2d 662, 666 (Fla. 5th DCA 2005). The Court accepts plaintiffs’

characterization of Count III.

(3) actor must act with knowledge or reckless

disregard as to the falsity on a matter

concerning a public official, or at least

negligently on a matter concerning a private

person; (4) actual damages; and (5) statement

must be defamatory.” Jews For Jesus, Inc. v.

Rapp, 997 So.2d 1098, 1106 (Fla. 2008).

Clearly, a false statement about another is a

required element of defamation. Cape Publ'n,

Inc. v. Reakes, 840 So.2d 277, 279-80 (Fla.

5th DCA 2003). However, “falsity only exists

if the publication is substantially and

materially false, not just if it is

technically false.” Smith v. Cuban Am. Nat'l

Found., 731 So.2d 702, 707 (Fla. 3d DCA 1999).

“Under the substantial truth doctrine, a

statement does not have to be perfectly

accurate if the ‘gist’ or the ‘sting’ of the

statement is true.” Id. at 706. “The question

of falsity, the [Supreme] Court held,

‘overlooks minor inaccuracies and

concentrates upon substantial truth.’ ” Id. at

707 (quoting Masson v. New Yorker Magazine,

Inc., 501 U.S. 496, 516, 111 S.Ct. 2419, 115

L.Ed.2d 447 (1991) ). Furthermore, in

determining whether a statement is

“substantially true,” the statement in

question must be read in full context of its

publication. Id. at 705-06.

“Where a communication is ambiguous and

reasonably susceptible of a defamatory

meaning, it is for the trier of fact to decide

whether the communication was understood in

the defamatory sense.” Perry v. Cosgrove, 464

So.2d 664, 666 (Fla. 2d DCA 1985); see also

Pep Boys, 711 So.2d at 1328 (“The questions of

whether the broadcast contained false

statements and/or statements that could be

interpreted as false are questions of fact

which should be left for a jury to determine

where the communication is ambiguous and is

reasonably susceptible of a defamatory

meaning.”).

Kieffer v. Atheists of Florida, Inc., 269 So. 3d 656, 659-60 (Fla.

2d DCA 2019).

Defendants contend that TB Food’s defamation claim fails as

a matter of law because the statements published by defendants

were not false. Defendants assert that their alleged statements

that Primo’s distributor in China was selling “fake” Primo shrimp

and that only API was selling the “real Primo” shrimp “is

substantially and demonstrably true.” (Doc. #252, p. 12.)

Defendants argue that such statements were true then, and are true

now, because Wudi Tenfly owns the rights to the tradename “pu rui

mo” (the phonetic spelling of the Chinese word for “Primo”) in

China under Chinese law. And since Wudi Tenfly had not granted

Haimao (Primo’s distributor in China) a license to use the

trademarked term “pu rui mo” in China, Defendants assert that API

was in fact the only party selling “real” pu rui mo shrimp in

China.

As TB Food notes in its Response, Wudi Tenfly did not grant

API the right to use the name “pu rui mo” until 2019. (Doc. #171-

2.) This does not retroactively establish the truth of Defendants’

alleged statement in 2016 that only API had the “real” Primo or

“pu rui mo” shrimp. The Court finds that Defendants have not shown

that the undisputed material facts establish that their alleged

statements regarding “real” and “fake” Primo shrimp were

“substantially and demonstrably true” in 2016.

Defendants also contend that their alleged statements that

Primo abandoned its intellectual property were not false because

the Term Sheet “terminated any ‘intellectual property’ rights

created by the” Grow-Out Agreement. (Doc. #252, p. 13.) The Court

has rejected that there was a contractual termination for the

reasons noted supra, and concluded that whether there was a

modification is an issue for the trier of fact. The Court cannot

otherwise determine on summary judgment that such statements do

not give rise to a claim for defamation. Kieffer v. Atheists of

Fla., Inc., 269 So. 3d 656, 659 (Fla. 2d DCA 2019)(“Where a

communication is ambiguous and reasonably susceptible of a

defamatory meaning, it is for the trier of fact to decide whether

the communication was understood in the defamatory sense.”

(citation and quotation omitted)).

Defendants also argue they are entitled to summary judgment

because their allegedly defamatory publications are qualifiedly

privileged under Florida law. Under Florida law, even where a

party makes a defamatory publication, “no liability will attach to

it if it was published upon an occasion that makes it qualifiedly

privileged and the privilege was not abused.” Thomas v. Tampa Bay

Downs, Inc., 761 So. 2d 401, 404 (Fla. 2d DCA 2000)(citation

omitted). The “essential elements of the qualified privilege are:

(1) good faith; (2) an interest in the subject by the speaker or

a subject in which the speaker has a duty to speak; (3) a

corresponding interest or duty in the listener or reader; (4) a

proper occasion; and (5) publication in a proper manner.” Id.

(citations omitted). Defendants bear the burden of proving their

entitlement to the qualified privilege. Kieffer v. Atheists of

Fla., Inc., 269 So. 3d 656, 660 (Fla. 2d DCA 2019)(citation

omitted). “The question of whether allegedly defamatory

statements are [] privileged is one of law to be decided by the

court and consequently is ripe for determination on motion for

summary judgment.” Stephens v. Geoghegan, 702 So. 2d 517, 522 (Fla.

2d DCA 1997) (internal citation omitted).

Defendants contend their allegedly defamatory publications

are privileged because they had “a duty to inform actual and

potential Chinese customers of the provenance of [their] product,

as well as the circumstances by which [they] came into possession

of that product.” (Doc. #252, p. 13.) Florida courts have

provided little guidance as to how a party satisfies the duty

element. In general, “[t]he nature of the duty or interest may be

public, personal or private, either legal, judicial, political,

moral, or social.” Lewis v. Evans, 406 So. 2d 489, 492 (Fla. 2d

DCA 1981).

The Court finds no basis for concluding Defendants had a duty

to inform potential Chinese customers in 2016 that only API was

selling “real” Primo shrimp and that Primo was selling “fake” Primo

shrimp. As noted supra, API was not granted a license to use the

Chinese trademark “pu rui mo” until 2019 – approximately three

years after Defendants’ allegedly defamatory communications. The

Court likewise finds no basis for finding that Defendants had a

duty to inform potential Chinese customers that Primo had abandoned

its rights to its intellectual property. Because Defendants have

not established this duty element, the Court finds that Defendants

have failed to carry their burden in establishing their entitlement

to summary judgment based on qualified privilege. Defendants’

motion as to Count III is therefore denied.

C. Trade Secret and Unfair Competition Claims (Counts IV through

VIII)

TB Food asserts claims against Defendants for trade secret

misappropriation under the Defend Trade Secrets Act (Count IV) and

the Florida Trade Secrets Act (Count V); unfair competition under

the Lanham Act (Count VI) and Florida common law (Count VII); and

violation of the Florida Deceptive and Unfair Trade Practices Act

(Count VIII). Defendants argue that “neither state nor federal

law recognize[] intellectual property rights in bred shrimp or any

other bred animal,” and thus contend that Primo shrimp cannot

qualify as trade secrets. (Doc. #252, pp. 13-14.) Defendants

assert they are entitled to summary judgment on Counts IV through

VIII, which (according to Defendants) are all premised on the

existence of a trade secret in shrimp under state and federal law.

The Defend Trade Secrets Act broadly defines a trade secret

as:

all forms and types of financial, business, scientific,

technical, economic, or engineering information,

including patterns, plans, compilations, program

devices, formulas, designs, prototypes, methods,

techniques, processes, procedures, programs, or codes,

whether tangible or intangible, and whether or how

stored, compiled, or memorialized physically,

electronically, graphically, photographically, or in

writing if--

(A) the owner thereof has taken reasonable measures to

keep such information secret; and

(B) the information derives independent economic value,

actual or potential, from not being generally known to,

and not being readily ascertainable through proper means

by, another person who can obtain economic value from

the disclosure or use of the information.

18 U.S.C. § 1839(3). Florida law similarly defines a trade secret

as follows:

information, including a formula, pattern, compilation,

program, device, method, technique, or process that:

(a) Derives independent economic value, actual or

potential, from not being generally known to, and not

being readily ascertainable by proper means by, other

persons who can obtain economic value from its

disclosure or use; and

(b) Is the subject of efforts that are reasonable under

the circumstances to maintain its secrecy.

Fla. Stat. § 688.002(4).

While Defendants concede that the definition of a trade secret

is “undeniably broad in reach,” (Doc. #252, p. 15), they contend

that TB Food has failed to establish that Primo possessed a trade

secret as contemplated by the foregoing statutes. Defendants

reason that “[b]oth statutes are focused on ‘information’ as the

fundamental nature of an alleged trade secret” and Primo’s shrimp

broodstock cannot satisfy such definition. (Doc. #252, p. 15.)

Throughout this case, Plaintiffs have submitted evidence

detailing the manner in which Primo selectively bred its genetic

line of shrimp to be resistant to White Spot and Early Mortality

Syndrome (EMS) – diseases which are prevalent in shrimp grown in

Asian non-biosecure ponds and can kill shrimp before reaching

“table” size. (Doc. #271-7, p. 4.) Primo sold its White Spot and

EMS resistant post-larvae shrimp to farmers in China, who could

grow such shrimp in non-biosecure ponds and profitably sell the

grown shrimp as “table” shrimp. (Id.) To prevent such farmers

from being able to perpetually breed the post-larvae Primo shrimp

on their own – and negate the need to purchase Primo broodstock -

Primo would sell those customers “locked” pairs of breeder shrimp.

(Id. pp. 6-9.) These “locked” pairs were genetically derived from

a limited number of family lines, so the second and third

generations of these “locked” pairs would suffer from inbreeding

and would not be as disease resistant as the first generation.

(Id.); (Doc. #271-5, p. 95.) The only way to prevent such

inbreeding effects would be to breed the “locked” pairs’ offspring

with Primo shrimp from an unrelated family line (which would be

impossible without access to Primo’s entire genetic bank). (Doc.

#271-7, pp. 6-9); (Doc. #271-5, p. 127.)

In short, Primo’s broodstock business was premised on

knowledge of the underlying Primo shrimp genetics, the manner in

which its shrimp can be successfully bred for generations as

broodstock, and the manner in which “locked” pairs can be used to

prevent customers from breeding such pairs as broodstock lines.

The Court finds such information may qualify as being among the

“all forms and types” of “business, scientific, technical, [and]

economic [] information” under the Defend Trade Secrets Act. 18

U.S.C. § 1839(3). The Court similarly finds such information to

be a “method, technique, or process” that “[d]erives independent

economic value . . . from not being generally known,” as

contemplated by the Florida Trade Secrets Act. Fla. Stat. §

688.002(4).

While Defendants are correct that neither statute “include[]

the terms ‘goods,’ or ‘animals’” as definitions of trade secrets,

(Doc. #252, p. 15), that is not dispositive. Indeed, courts have

found “goods” and underlying genetics to constitute trade secrets

in analogous situations. See Pioneer Hi-Bred Int'l, Inc. v. Holden

Found. Seeds, Inc., No. CIV. 81-60-E, 1987 WL 341211, at *31 (S.D.

Iowa Oct. 30, 1987)(“[T]he genetic messages of H3H and H43SZ7

[lines of corn] are ‘trade secrets’” because “[t]he genetic message

of these lines of corn which Pioneer spent a great amount of money

and effort developing is akin to a secret formula.”); Midwest

Oilseeds, Inc. v. Limagrain Genetics Corp., 231 F. Supp. 2d 942,

953 (S.D. Iowa 2002)(“Genetic information can be property.”).7

The Court is also unpersuaded by Defendants’ assertion that

Neil Gervais, Primo’s chief scientist, disclaimed any trade secret

interests in Primo’s broodstock. Defendants rely on Mr. Gervais’

deposition testimony where he testified that:

I never used a term ‘Primo method.’ I never marketed a

term Primo method. I would -- I was never asked to define

what that ever meant, that Primo didn't sell a method.

Primo sold animals. The person that sold Primo coined

that term.

(Doc. #275-1, p. 92.) The Court does not find such testimony

dispositive of the legal issue of whether the Primo broodstock

genetics, and the accompanying information, constitute trade

secrets. Indeed, Mr. Gervais also testified at deposition that he

has limited knowledge of the legal principles relevant to this

analysis:

Now techniques, if y'all say that this is intellectual

property that can be defended in court, [] that's the

lawyer's definitions. It's not, it's not my world. It's

not my, my area of expertise.

(Doc. #271-5, p. 95.)

7 Defendants rely on N. Carolina Farm P'ship v. Pig

Improvement Co., 163 N.C. App. 318 (2004) in arguing that animal

genetics cannot constitute a trade secret. The Court is

unpersuaded because this case involved neither the federal nor

Florida state statute involved in the present case.

For the foregoing reasons, the Court declines to hold that

Primo’s broodstock cannot as a matter of law “fall within the

statutory definitions of ‘trade secret’ under state or federal

law.” (Doc. #252, p. 14.) The Court thus denies Defendants’

motion as to Counts IV through VIII.

D. The Lanham Act Claim (Count VI)

Defendants also move for summary judgment on the merits of TB

Food’s Lanham Act claim in Count VI. Defendants assert they are

entitled to summary judgment because “Plaintiffs do not possess

the trademark rights to the mark, pu-rui-mo, in China,” and Count

VI is predicated upon Defendants’ alleged misappropriation of the

“Primo” tradename. (Doc. #252, p. 17.)

Contrary to Defendants’ argument, Count VI is not entirely

premised on Defendants’ alleged improper use of the “Primo” or “pu

rui mo” tradename. Indeed, in relevant part, Count VI alleges

that Defendants engaged in unfair competition practices in

violation of the Lanham Act by (1) “wrongfully misappropriat[ing]

the Primo Method and other trade secrets of Primo”; and (2) making

“false and misleading statements of fact . . . concerning

[Defendants’] purported rights over significant portions of

Primo’s broodstock and associated intellectual property rights.”

(Doc. #20, ¶¶ 154-55.) While Count VI alleges that Defendants’

actions caused “confusion regarding the affiliation, connection,

or association of Defendants to Primo’s proprietary shrimp

broodstock and Primo’s tradename,” (Doc. #20 ¶ 156), it does not

allege that Defendants’ use of the name “pu rui mo” in China is

the sole – or even primary – basis for such a Lanham Act claim.

Defendants also argue they are entitled to summary judgment

on this claim because “Wudi Tenfly owns the Chinese mark [pu rui

mo] that underlies Plaintiffs’ Lanham Act claim.” (Doc. #252, p.

19.) On January 9, 2020, the Court modified its Preliminary

Injunction in this case to “exclude the term pu rui mo from its

scope” since a Chinese court has determined that Wudi Tenfly owns

the rights to the tradename “pu rui mo” in China. (Doc. #281, p.

17.) The Court found that such modification was warranted because

the Preliminary Injunction’s previous prohibition of Defendants’

use of “pu rui mo” in China would be inconsistent with the Chinese

court’s legal determination under Chinese law.

While it is clear that the tradename “pu rui mo” belongs to

Wudi Tenfly in China under Chinese law, that issue is not

dispositive as to whether Defendants violated the Lanham act as

alleged in Count VI. Indeed, as noted supra, the crux of the claim

in Count VI is that Defendants allegedly “misappropriated the Primo

Method and other trade secrets of Primo” and “made false and

misleading statements of fact . . . concerning their purported

rights over significant portions of Primo’s broodstock and

associated intellectual property.” (Doc. #20, ¶¶ 154-55.) The

Court is aware of no legal basis – and Defendants cite to none –

supporting Defendants’ assertion that they are immune from Lanham

Act liability for the alleged trade secret misappropriation and

false statements regarding Primo’s intellectual property rights

because Wudi Tenfly owns the “pu rui mo” tradename. Defendants’

motion as to Count VI is therefore denied.

Accordingly, it is now

ORDERED :

1. Defendants’ Motion for Final Summary Judgment (Doc.

#252) is GRANTED IN PART AND DENIED IN PART.

2. The Motion is GRANTED to the extent that PB Legacy, Inc.

is dismissed without prejudice as a plaintiff as to Counts I

through IX.

3. The Motion is otherwise DENIED.

DONE AND ORDERED at Fort Myers, Florida, this 1Qth day of

April, 2020.

ox EOP

aff le hy ) Z. A Kook

J9GHN E. STEELE

SHNIOR UNITED STATES DISTRICT JUDGE

Copies: Counsel of record