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Roederer v. Treister

United States District Court, D. Oregon, Medford Division

March 5, 2014

MARIO ROEDERER, individually, and on, behalf of FLOWJO, LLC, an Oregon Limited Liability Company, PLAINTIFFS,
v.
ADAM TREISTER, individually, and TREE STAR, INC., an Oregon corporation, DEFENDANTS. ADAM TREISTER, individually, and TREE STAR, INC., an Oregon corporation, COUNTER-CLAIMANTS,
v.
MARIO ROEDERER, individually, COUNTER-DEFENDANT

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[Copyrighted Material Omitted]

Page 1155

For Mario Roederer, individually, and on behalf of FLOWJO, LLC an Oregon Limited Liability Company, Plaintiff, Counter Defendant: Adam Wolek, Kalpesh Shah, LEAD ATTORNEYS, James Oakley, Thomas J. Hayes, Todd Rowden, PRO HAC VICE, Todd A. Rowden, Thompson Coburn LLP, Chicago, IL; David B. Paradis, LEAD ATTORNEY, Brophy Schmor LLP, Medford, OR; Raymond Stewart, LEAD ATTORNEY, LEAD ATTORNEY, Thompson Coburn LLP, Washington, DC.

For Adam Treister, Tree Star, Inc., an Oregon corporation, Defendants, Counter Claimants: Dylan J Liddiard, Jasmine Owens, LEAD ATTORNEYS, Dale Bish, PRO HAC VICE, Wilson Sonsini Goodrich & Rosati, Palo Alto, CA; Joseph E. Kellerman, Hornecker Cowling Hassen & Heysell, Medford, OR.

OPINION

Page 1156

ORDER GRANTING PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION

MARK D. CLARKE, United States Magistrate Judge.

This matter came before the Court on Plaintiffs' motion for preliminary injunction pursuant to Federal Rule of Civil Procedure 65(a). The Court grants Plaintiffs' motion as specified in this Order and enters the following findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 65(d):

FINDINGS OF FACT[1]

The Parties

1. Mario Roederer, Ph.D., is an individual and citizen of Bethesda, MD.

2. Adam Treister is an individual and citizen of Ashland, Oregon.

3. FlowJo, LLC is a limited liability company organized under the Oregon Limited Liability Company Act. It has two members, Dr. Roederer and Mr. Treister, who each own 50% of the company.

4. Tree Star, Inc. is a corporation organized under the laws of Oregon with its principal place of business in Ashland, Oregon. Tree Star was the manager of FlowJo, LLC until July 8, 2013.

Procedural History

5. Plaintiffs Roederer and FlowJo, LLC filed this action against Defendants on June 18, 2013, alleging breach of contract, breach of fiduciary duty and other claims. Dkt. 1. Plaintiffs amended their complaint on October 4, 2013 to seek a declaratory judgment of intellectual property ownership and to allege trademark infringement and copyright infringement against Defendants. Dkt. 29.

6. Plaintiffs moved for a preliminary injunction on October 16, 2013. Dkt. 33. In their motion, Plaintiffs request that this Court preliminarily enjoin Defendants from any attempted transfer of rights to FlowJo software or related intellectual property and order Defendants to direct all licensing and sales revenue from FlowJo software into a constructive trust until further order of this Court. Id.

7. The Court conducted an evidentiary hearing on Plaintiffs' motion on February

Page 1157

27 and 28, 2014. Dkt. 91 & 92. At the hearing, the Court heard testimony from Dr. Mario Roederer on behalf of Plaintiffs, and from Dr. Michael Stadnisky and Ms. Ming Wai Monica Ip on behalf of Defendants. Dkt. 91. The Court also heard argument from counsel for the parties. Dkt. 92.

The Technology At Issue

8. The technology at the center of the parties' dispute is flow cytometry software. Flow cytometry is used in biotechnology applications to analyze and identify different cells in a cell sample. Plaintiffs' Ex. 1, at 1, 4. Devices called flow cytometers use lasers to measure certain properties of cell samples. Plfs' Ex. 1, at 4. Flow cytometers are used in HIV disease management, cancer diagnoses, stem cell transplantations for cancer therapy, and immune therapy monitoring. Plfs' Ex. 1, at 2-3.

9. FlowJo software is used to help research scientists and doctors analyze data produced by flow cytometers. Plfs' Ex. 1, at 1, 4. The software has been marketed and sold under the FlowJo name since 1997, and through a website, www.flowjo.com, since 2000. Plfs' Ex. 2; Dkt. 34, Ex. 2, Roederer Aff. ¶ 6; Ex. 14 at 4.

The Parties' Agreements

10. On June 23, 1997, Dr. Roederer and Mr. Treister entered into an agreement " to facilitate development and marketing of FlowJo." Plfs' Ex. 2. Pursuant to paragraph 3 of that agreement, net profits from licensing of FlowJo software were to be divided on a 50%-50% basis between Dr. Roederer and Mr. Treister. Plfs' Ex. 2.

11. After the 1997 agreement was entered into, sales of FlowJo software continued to increase. By 2006, the parties sought a more comprehensive agreement to govern the growing company. Plfs' Ex. 4.

12. On February 14, 2006, Dr. Roederer, Mr. Treister and defendant Tree Star entered into an Operating Agreement that governs the relationship between the parties regarding FlowJo software sales. Plfs' Ex. 5. This Operating Agreement specifies that FlowJo is an Oregon manager-managed limited liability company whose sole members are Dr. Roederer and Mr. Treister, who each have a 50% ownership interest in the company. Id. The Operating Agreement provides that Tree Star acts as FlowJo's manager. Id.

13. Section 1.6 of the FlowJo, LLC Operating Agreement provides that FlowJo was " formed for the purpose of the development, ownership, marketing, and distribution of flow cytometry software." Section 1.10 provides that " All real and personal property of the Company [FlowJo, LLC], of any kind or nature, shall be owned by the Company as an entity, and no member shall have any ownership interest in such property in the member's individual name or right, and each member's interest in the Company shall be personal property for all purposes." Section 2.2 provides that each member's interest in " 'FlowJo flow cytometry software, and all improvements thereto" is owned by FlowJo, LLC and that " each member shall contribute his or its interest in all rights, licenses, and accounts receivable associated with such property."

14. The Operating Agreement specifies that the members are to split the profits from licensing of FlowJo software in accordance with their respective ownership interests, i.e., equally.

15. Section 4.6.1 of the Operating Agreement provides that:

The Manager shall not have the authority to, and covenants and agrees that the Manager shall not, ...

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