Split verdict in ChromaDex-Elysium jury case with wins for both sides

By Stephen Daniells contact

- Last updated on GMT

© ftwitty / Getty Images
© ftwitty / Getty Images

Related tags: Nicotinamide riboside

After five years of litigation, jurors in federal district court in California delivered a split verdict in the years long legal dispute between ChromaDex and Elysium, with both sides claiming victory.

ChromaDex first filed a lawsuit against New York-based Elysium in late 2016 for alleged breach of contract and for not paying for an order of nicotinamide riboside (NR) and pterostilbene, which Elysium uses in its Basis dietary supplement. Over the years, ChromaDex filed additional claims relating to misappropriation of trade secrets, while Elysium counter sued, alleging that ChromaDex overcharged for the ingredients as well as disputing trademark and royalty agreements.

After a four-day trial, jurors agreed that Elysium had breached the supply agreement for the two ingredients and ordered the company to pay $2,983,350 in damages, plus estimated interest. Total damages from all of the parties’ claims and counterclaims together work out in ChromaDex's favor, with the California-based company to receive approximately $2.25 to $2.50 million in damages and interest.

“It took nearly five years and has been challenging for both companies, but the jury’s decision finally holds Elysium accountable for paying what it owes,”​ said ChromaDex CEO Rob Fried. “We now look forward to focusing on the next phase of global growth for Tru Niagen with partners including Sinopharm Xingsha, Nestlé Health Science, Walmart, A.S. Watson Group, H&H Group, W.R. Grace, and Ro.”

The jurors also made decisions in Elysium's favor, awarding the company a total of $1.9 million because of the disputed trademark and royalty agreements and for alleged violations by ChromaDex to a "most-favored-nation" pricing provision in the NR supply agreement between the two companies.

Additionally, the jurors rejected ChromaDex’s claims of misappropriation of trade secrets under State and Federal law, and they also rejected claims that Elysium aided and abetted an alleged breach of fiduciary duty by Mark Morris, a former ChromaDex executive who later joined Elysium and is currently employed as Elysium’s Chief Product Officer.

Morris himself was found to have breached a confidentiality agreement with then-employer ChromaDex and ordered to pay back $17,307.69. This, however, was significantly less than the $688,000 ChromaDex was seeking from Morris. 

Elysium CEO Eric Marcotulli stated in a press release that the company was “thrilled with the result of the California litigation.

“We have always had faith that the truth would prevail in our dispute with ChromaDex, and we are grateful to the members of the jury for their service and willingness to focus on the facts.”

Delaware and New York

Earlier this month​, a federal judge in the US District Court for the District of Delaware granted a request from Elysium Health to invalidate two Dartmouth College patents licensed by ChromaDex relating to nicotinamide riboside.

Elysium had been accused on infringing on the two patents - U.S. Patent No. 8,383,086 and U.S. Patent No. 8,197,807. However, Judge Connolly granted Elysium’s motion for summary judgement, stating that the patents in question were invalid because nicotinamide riboside, a form of vitamin B3, is a naturally-occurring vitamin, and therefore patent ineligible (Alice Corp. Pty.​ v. CLS Bank Int 'l​, 573 U.S. 208, 216 (2014)).

Another dispute between ChromaDex and Elysium is ongoing in the Southern District of New York.

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