Impossible Foods Inc. overcame claims it violated ethics rules when it directed undercover private investigators to obtain samples of a rival’s products during patent infringement litigation.
Judge
Bryson said it’s legal for companies to use investigators using fake names to look into potential wrongdoing around intellectual property, as Impossible did. The “courts have not set forth a bright-line rule indicating precisely when such pretextual investigations are permissible and when they are not,” he wrote, but ruled Impossible hadn’t crossed any ethical boundaries based on the evidence he’d seen.
The hiring of private eyes is not uncommon in intellectual property cases. However, their discovery by investigation targets is rare.
Bryson’s ruling—as well as a previously unreported phone transcript and Delaware Secretary of State’s Office public records recently obtained by Bloomberg Law—broaden what’s publicly known about Impossible’s probe.
Boston-based Motif, a Ginkgo Bioworks Inc. spinoff, learned about the investigation after discovering the name of an Impossible investigator that didn’t match an alias she’d used previously. In May, Motif filed subpoenas with the court to try to force the investigator to turn over documents and sit for a deposition. The company argued Impossible’s investigation was unethical and asked Bryson to force it to turn over its investigative records.
Impossible’s Legal Response
Ahead of the ruling, Impossible’s lawyer, Wendy Devine, a Wilson Sonsini partner, argued that it conducted an ethical investigation during a May 22 telephone conference held by Bryson, according to the transcript.
She said the investigation complied with Delaware lawyer ethics rules and called the counter-investigation a “sideshow” meant to prejudice Impossible.
It’s “common and ethical for patent owners to obtain and evaluate infringing products—such as Motif’s—in the marketplace,” Devine said.
The company’s investigators, she continued, hadn’t tried to elicit conversations with Motif employees that went beyond those they might have with an actual customer, and “there was no recording; and there was no intimidation; there was no payment of witnesses; there was none of that,” she said.
Motif lawyer Joe Paunovich, a partner at Quinn Emanuel Urquhart & Sullivan LLP, countered that Impossible’s PIs used false names and a “fictitious business” to “get into kitchens” and get Motif’s confidential information.
Bryson’s Opinion
Bryson ruled that Impossible’s investigation hadn’t violated Delaware’s ethics rules that generally bar lawyers from making significant false representations and contacting represented individuals.
On the conference call, he said the ethics rules leave wiggle room for investigations into alleged wrongdoing by a litigation opponent.
“I have the impression from my own experience back in the day that in trademark infringement cases, particularly where knockoffs are involved, people selling things on the street, there is—it’s not at all uncommon for private investigators to be retained,” Bryson commented.
Devine argued on the call that Impossible’s investigation fit such a pattern: an effort to unearth information about an alleged knockoff in the form of a lab-grown meat product.
Bryson ultimately agreed in his ruling.
The “only misrepresentations made by the investigators were as to their identity and purpose,” he wrote, emphasizing that he’d seen no evidence the investigators crossed ethical lines by trying to trick Motif employees into making unguarded statements that would affect the company’s legal position.
The misrepresentations were “more elaborate,” Bryson wrote, than some past cases involving private investigations. But this “was a necessary consequence” of Motif’s business strategy of only selling to businesses rather than to retail consumers, he said.
Scope of the Snooping
Public portions of earlier court filings had only identified one PI, Sarah Q. Nasir, and a single firm, Integrity One Solutions, as being involved in the undercover operation.
The recent ruling, new filings from Impossible, and the conference call transcript make clear that Impossible worked with three firms in total, including New York-based T&M USA LLC and California-based Paramount Investigative Services. Their investigators also attended food trade shows.
New documents from the case also shed additional light on a purported meal-kit company Food 4 Thought that Nasir and investigators at T&M used to identify themselves in an effort to get Motif samples, and a December 2022 Zoom call where Motif learned Nasir’s real name.
According to Motif’s initial statements to the court, Nasir was joined on the Zoom call by Bill Weller and Weller said he had a lawyer named Eric on the line with him.
Bryson asked Impossible to explain on the May 22 conference call.
“Eric is a T&M investigator,” Devine said. “He does happen to be a lawyer, but he was not on that call in his capacity as a lawyer.” Rather, she said, the T&M investigator had done the paperwork to set up Food 4 Thought, “and he was on that call in the event that there were any questions about the structure of the company.”
Food 4 Thought LLC was registered in Delaware in December 2018 under the name Brain Doctor Foods LLC, according to records from the state’s Division of Corporations. The name was changed in March 2019, according to the state records. The entity’s current status is listed as “cancelled,” with the records stating its registered agent resigned in April 2020 and the company didn’t name a replacement.
Investigations Closed
Bryson declined to issue an order barring future private investigation by Impossible, noting that its probes had all ceased by the time Motif sought court intervention.
On the conference call, Devine said the investigations had ultimately been unsuccessful—Impossible’s PIs had been unable to get the samples they needed. She said it would pursue samples through discovery.
Bryson also declined Motif’s request for Impossible’s investigative records. He said Motif could pursue them through discovery if it “believes that the investigators are in possession of information that is relevant to the merits of this case.”
Both companies on Monday responded to the ruling.
Motif said it is “unfortunate that they chose this path of misrepresentation instead of embracing healthy competition,” but that the company is “confident in our legal position.”
An Impossible spokesperson said via email that, “We’re pleased with Judge Bryson’s decision and remain confident in our case.”.
Motif is represented by Quinn Emanuel Urquhart & Sullivan LLP and Morris, Nichols, Arsht & Tunnell LLP. Impossible is represented by Wilson Sonsini Goodrich & Rosati.
The case is Impossible Foods Inc. v. Motif Foodworks, Inc., D. Del., 1:22-cv-311, order denying sanctions and discovery 6/2/23.
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