Elysium's Puzzling Answer
(NOT Legal Advice; just speculation about the competing allegations)
I get it that Elysium thinks they got burned on price. Maybe they did, maybe they didn't, depending on exactly what were the terms of the MFN clause, and whether Chromadex's alleged breach was significant or insignificant.
I do not get it that because of the alleged breach, Elysium was entitled to order supplies, determine their own damages, and then refuse to pay if Chromadex did not agree with Elysium's damages assessment.
Moreover, Elysium's counterclaim for improperly tying sales of patented product to licensing the Niagen trademark makes no sense to me. Most tying law seems to be about tying different products -- like requiring a licensor of patented bolts to also use unpatented nuts. By contrast, a manufacturer licensing Crest toothpaste would seem to have a non-controversial right to require that the toothpaste be sold as "Crest" and not as something else, if the parties agreed to that. That's not a different product; it's the same product, so why would tying law apply? And if tying law does not apply, then how does market power become relevant? Call me puzzled.
Similarly, Elysium claims that they were fraudulently induced to into licensing the Niagen trademark because others were also required to do so. Even if others were NOT required to do so, that fraud claim would seem to rely on facts at the time of the contract, not later subsequent developments, which I am not sure that Elysium has alleged. Elysium perhaps admits this when they carefully change verb tenses when discussing this issue: "That WAS not true...Chromadex DOES not require" (emphasis added) as opposed to "Chromadex DID not require."
And again, Elysium claims that their exclusive right to bundle Niagen & PteroPure applies to resveratrol, too. Resveratrol is different from Pterostilbene, no matter how it is described by the parties, so unless the "substantially similar" language is in the supply agreement, this seems like a stretch to me, too.
Those are smart people over at Skadden, so maybe they see deeper possibilities, but I can imagine a judge tossing out all the alleged torts and telling the parties to settle their contract claims. If others can, too, that might be the reason why the CDXC stock price has been floating upward since Elysium's answer was filed on January 25th.
