`
`
`
`Timothy Devlin (to be admitted pro hac vice)
`James Gorman III (to be admitted pro hac vice)
`Devlin Law Firm LLC
`1306 N. Broom Street, 1st Floor
`Wilmington, DE 19806
`Telephone: (302) 449-9010
`Facsimile: (302) 353-4251
`Email: tdevlin@devlinlawfirm.com
` jgorman@devlinlawfirm.com
`
`Seth W. Wiener, California State Bar No. 203747
`LAW OFFICES OF SETH W. WIENER
`609 Karina Court
`San Ramon, CA 94582
`Telephone: (925) 487-5607
`Email: seth@sethwienerlaw.com
`
`Attorneys for Plaintiff
`FULFILLIUM, INC.
`
`
`
`SUPERIOR COURT OF THE STATE OF CALIFORNIA
`
`COUNTY OF ORANGE
`
`
`Case No.:
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`[DEMAND FOR TRIAL BY JURY]
`
`
`
`
`FULFILLIUM, INC.,
`
` Plaintiff,
`v.
`
`RESHAPE MEDICAL LLC, SV HEALTH
`INVESTORS, LLC, AND INTERSECT
`PARTNERS, LLC, DOES 1 TO 100,
`INCLUSIVE;
`
` Defendants.
`
`
`Plaintiff Fulfillium, Inc. (“Fulfillium” or “Plaintiff”), for its Complaint against ReShape
`
`Medical LLC (“ReShape Medical LLC”), SV Health Investors, LLC (“SV Health”), Intersect
`
`Partners, LLC (“Intersect Partners”), and Does 1 to 100, inclusive (collectively “Defendants”) makes
`
`the allegations below.
`
`INTRODUCTION
`
`1.
`
`This is an action for trade secret misappropriation arising under the Uniform Trade
`
`Secrets Act, California Civil Code §§ 3426 et seq.
`
`PARTIES
`
`2.
`
`Fulfillium is a corporation organized and existing under the laws of the State of
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`-1-
`
`
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`29
`
`30
`
`31
`
`RESHAPE 1027
`
`

`

`
`
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`Delaware, with an address at 1136 Orchard Avenue, Napa, California 94558.
`
`3.
`
`On information and belief, ReShape Medical LLC is a limited liability company
`
`organized and existing under the laws of the State of Delaware with its principal place of business at
`
`100 Calle Iglesia, San Clemente, California 92672. ReShape Medical LLC can be served via its
`
`registered agent The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
`
`Wilmington, Delaware, 19801. ReShape Medical LLC is a wholly owned subsidiary of ReShape
`
`Lifesciences Inc. (“ReShape Lifesciences”) and the surviving entity of the merger of a subsidiary of
`
`ReShape Lifesciences and ReShape Medical, Inc.
`
`4.
`
`On information and belief, SV Health is a limited liability company organized and
`
`existing under the laws of the State of Delaware with its principal place of business at One Boston
`
`Place, 201 Washington Street, Suite 3900, Boston, Massachusetts 02108. SV Health Investors can be
`
`served via its registered agent The Corporation Trust Company, Corporation Trust Center, 1209
`
`Orange Street, Wilmington, Delaware, 19801. SV Health maintains a business in the State of
`
`California at 1700 Owens Street, Suite 585, San Francisco, CA 94158.
`
`5.
`
`On information and belief, Intersect Partners is a limited liability company organized
`
`and existing under the laws of the State of Nevada with places of business in Nevada and Minnesota.
`
`Intersect Partners can be served via its registered agent Sierra Corporate Services – Reno, 100 West
`
`Liberty Street 10th Floor, Reno, NV 89501.
`
`6.
`
`On information and belief, ReShape Medical LLC’s predecessor, ReShape Medical,
`
`Inc., was founded, funded, owned and controlled in relevant respect through a joint venture between
`
`by SV Life Sciences, LLC, which has reorganized as SV Health Investors, LLC and Intersect
`
`22
`
`Partners.
`
`7.
`
`The website of SV Health Investors states that “SV Health Investors, formerly SV Life
`
`Sciences, is a leading healthcare and life sciences venture capital and growth equity firm.” SV
`
`Health Investors and its predecessor SV Life Sciences have at all relevant times held one or more
`
`seats on ReShape Medical, Inc.’s Board of Directors.
`
`8.
`
`The first heading of the About Us page of SV Health Investors’ website is “Hands-on
`
`business partners.” Exhibit 1. The page explains that SV Health Investors “work hands-on with our
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`-2-
`
`
`
`
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`29
`
`30
`
`31
`
`RESHAPE 1027
`
`

`

`
`
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`portfolio companies as trusted advisers and partners from formation to exit. We help them develop
`
`business strategy, make connections within our networks, and guide them through both smooth and
`
`turbulent times toward a successful exit.” Id. According to the website, “[t]he SV team has more
`
`than 400 aggregate years of healthcare operating experience – which means we can work as true
`
`partners with our entrepreneurs, and develop strong relationships with them through the full life cycle
`
`of their ventures.” Id.
`
`9.
`
`On information and belief, SV Health and its predecessor SV Life Sciences along with
`
`Intersect Partners have directed, controlled, actively induced and/or conspired with ReShape Medical,
`
`Inc., and subsequently ReShape Medical LLC, to take the actions that form the basis for this
`
`10
`
`Complaint.
`
`10.
`
`Upon information and belief, Intersect Partners and SV Health have jointly managed
`
`ReShape Medical since its inception.
`
`11.
`
`On October 2, 2017, EnteroMedics, Inc. acquired ReShape Medical, Inc. for cash and
`
`securities in the value of approximately $38 million. This acquisition and merger was announced on
`
`October 3, 2017. http://ir.enteromedics.com/releasedetail.cfm?ReleaseID=1042545. ReShape
`
`Medical LLC is an additional entity that resulted from this merger. On October 23, 2017,
`
`EnteroMedics, Inc. announced its name change to ReShape Lifesciences Inc.
`
`http://ir.enteromedics.com/releasedetail.cfm?ReleaseID=1044913.
`
`12.
`
`Plaintiff is ignorant of the true names and capacities of the Defendants sued herein as
`
`Does 1 to 100, inclusive, and therefore sues these Defendants by such fictitious names. Plaintiff will
`
`amend this Complaint to allege their true names and capacities when ascertained.
`
`13.
`
`At all times relevant herein, and at the time of the transactions complained of, each of
`
`the Defendants were the agent and employee of each of the remaining Defendants, and in doing the
`
`things hereinafter alleged, was acting within the scope of such agency.
`
`JURISDICTION
`
`14.
`
`This court has jurisdiction over ReShape Medical LLC and SV Health because each is
`
`a resident of the State of California. This court has jurisdiction over ReShape Medical LLC, SV
`
`Health, and Intersect Partners because each conducts and solicits business within the State of
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`-3-
`
`
`
`
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`29
`
`30
`
`31
`
`RESHAPE 1027
`
`

`

`
`
`
`
`
`
`
`California and within this County. Each Defendant is subject to this Court’s general and specific
`
`personal jurisdiction because each Defendant has sufficient minimum contacts within the State of
`
`California and this County, pursuant to due process and/or the California Long Arm Statute,
`
`California Code of Civil Procedure § 410.10, because each Defendant purposefully availed itself of
`
`the privileges of conducting business in the State of California and in this County, because each
`
`Defendant regularly conducts and solicits business within the State of California and within this
`
`County, and because Fulfillium’s causes of action arise directly from each Defendant’s business
`
`contacts and other activities in the State of California and this County.
`
`VENUE
`
`15.
`
`Venue is proper in this County because some or all of the Defendants are resident in
`
`this County, each Defendant conducts business in this County, the claims alleged in this Complaint
`
`arise in this County, and acts of trade secret misappropriation have taken place and are continuing to
`
`take place in this County.
`
`FACTUAL ALLEGATIONS
`
`16.
`
`Dr. Richard D. Y. Chen was born in Taiwan in 1958 and emigrated to the United
`
`States in 1972. Dr. Chen obtained an undergraduate degree in biochemistry and molecular biology
`
`from Harvard University in 1979. Dr. Chen next attended medical school at Northwestern University
`
`and obtained an M.D. in 1983. Dr. Chen performed his internship in general surgery and continued in
`
`his residency in neurosurgery at the Johns Hopkins Hospital in the 1980’s.
`
`17.
`
`Dr. Chen obtained a Master’s Degree in Business Administration from Stanford
`
`University in 1990. Following matriculation, Dr. Chen began working in the investment banking
`
`department at Morgan Stanley & Company. Thereafter, Dr. Chen continued working in financial
`
`services making investments in and assisting start-up companies primarily in the technology sector.
`
`18.
`
`In 1999, Dr. Chen started conceiving innovative ideas of his own by combining his
`
`experiences at the crossroads of medicine and technology. After the tragic events of September 11,
`
`2001, prospects in the technology investment markets began to slow. Dr. Chen decided to focus on
`
`developing and commercializing these ideas into entrepreneurial ventures.
`
`19.
`
`Dr. Chen conceived of a bariatric medical device and procedure whereby a novel
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`-4-
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`29
`
`30
`
`31
`
`RESHAPE 1027
`
`

`

`
`
`
`
`
`
`
`balloon device is delivered endoscopically to reduce the interior volume of the stomach and impede
`
`the flow of ingested food and thereby effectively reduce the calories consumed. To mitigate
`
`potentially fatal consequences of premature rupture and migration, which were significant
`
`deficiencies in earlier devices within this class, safety was provided by two or more chambers filled
`
`with fluids.
`
`20.
`
`Because obesity is a complex, multifactorial disease, Dr. Chen invested at least two
`
`years’ time i) analyzing critically over a thousand scientific papers relating from the genetic basis of
`
`obesity to interventions in clinical therapy to the psychosocial impact of the disease, and ii) attending
`
`scientific research conferences on the basic underpinnings of the field and major medical conferences
`
`in the United States and overseas to learn about the state of the art in therapy and how the various
`
`medical specialties played their role in its treatment. Gaining insight from these activities, Dr. Chen
`
`further refined key elements of his idea and its implementation into everyday medical practice.
`
`21.
`
`Dr. Chen then presented his idea, on a confidential basis, to leading researchers and
`
`clinicians in the field, including the former presidents of the American Gastroenterology Association,
`
`the American Society of Bariatric Surgeons and its overseas counterpart, the International Federation
`
`for the Surgery of Obesity. Practically everyone he contacted responded favorably with the
`
`willingness to commit to participate further in developing the medical device and procedure. Each of
`
`these disclosures was subject to a mutual understanding and obligation of confidentiality. Only
`
`individuals who were under written obligations of confidentiality were provided information
`
`regarding Fulfillium’s trade secrets.
`
`22.
`
`Dr. Chen contributed funds and his intellectual property to form Fulfillium, Inc. in
`
`2004 and filed his first provisional patent application on May 3, 2004. Dr. Chen raised seed capital
`
`from friends and family to take the idea to the next stage of development. Dr. Chen attended trade
`
`shows in medical device manufacture. Dr. Chen engaged consultants including engineers to help
`
`develop the device and former regulators to explore the pathway for FDA approval. Prototypes were
`
`constructed and animal lab facilities were evaluated.
`
`23.
`
`Dr. Chen next embarked on raising venture capital to prove the concept. Given his
`
`past experience in the venture business, Dr. Chen adopted a set of practices for disclosure to protect
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`-5-
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`29
`
`30
`
`31
`
`RESHAPE 1027
`
`

`

`
`
`
`
`
`
`
`the intellectual properties he developed. Under this set of practices, Dr. Chen did not disclose any
`
`trade secret information to anyone unless he had confirmed an agreement that it would be kept
`
`confidential. On January 25, 2005, Dr. Chen spoke with Dr. Samuel Wu, M.D. of SV Life Sciences
`
`(predecessor of SV Health) to discuss Fulfillium’s technology on a confidential basis. All parties
`
`confirmed that the conversations regarding Dr. Chen’s ideas were subject to an oral agreement of
`
`confidentiality. On February 10, 2005, Dr. Chen attended a meeting including the SV Life Sciences
`
`team in Boston led by partner David Milne via a videoconference call hosted at the SV Life Sciences
`
`offices at 950 Tower Lane, Ste. 1535, Foster City, California. Dr. Chen understood the meeting to be
`
`confidential and, consistent with that, Dr. Chen’s presentation slides were all marked “STRICTLY
`
`CONFIDENTIAL.” All parties confirmed that the conversations surrounding this meeting were
`
`subject to an oral agreement of confidentiality.
`
`24.
`
`In addition, SV Life Sciences representatives had due diligence calls with various
`
`Fulfillium scientific advisors. These due diligence phone calls were for expert validation of
`
`Fulfillium’s therapeutic concept and did not include presentations of Fulfillium’s product
`
`development plans or trade secrets.
`
`25.
`
`Dr. Wu informed Dr. Chen that the due diligence was “looking good” and that SV Life
`
`Sciences was contemplating a term sheet. Dr. Wu noted that although he, in California, had taken a
`
`point person role in the development of the deal, SV Life Sciences’ medical device group was
`
`headquartered in Boston and he was not part of the group. Thus, going forward SV Life Sciences
`
`would prefer to partner with a venture capital firm in California who could more effectively monitor
`
`Fulfillium’s activities.
`
`26.
`
`Among other venture capital firms, Dr. Chen separately gave a confidential
`
`presentation to Sprout Partners. Dr. Chen delivered the presentation to Sprout partners Jeani
`
`Delagardelle at Sprout’s Menlo Park office and Andrew Firlik, M.D. via conference call on March 4,
`
`2005. Sprout and Fulfillium understood that the conversations surrounding this presentation were
`
`confidential because the parties previously signed and executed a written non-disclosure agreement.
`
`Ms. Delagardelle later invited Dr. Chen to attend as Sprout’s guest at the annual American Heart
`
`Association luncheon, a key event in the industry. Ms. Delagardelle took on a lead role by referring
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`-6-
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`29
`
`30
`
`31
`
`RESHAPE 1027
`
`

`

`
`
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`another venture capital firm as a potential co-investor. Dr. Chen eventually made an introduction
`
`between SV Life Sciences and Sprout.
`
`27.
`
`During the foregoing meetings and communications with SV Life Sciences and
`
`Sprout, Dr. Chen provided confidential and detailed disclosures of Fulfillium’s preferred clinical trial
`
`design and regulatory approval strategy. All of the relevant parties to the foregoing meetings and
`
`communications understood the conversations that occurred were subject to either oral or written
`
`agreements of confidentiality.
`
`28.
`
`On information and belief, neither SV Life Sciences nor Sprout had any substantial
`
`previous knowledge or experience with balloon treatments for obesity.
`
`29.
`
`On information and belief, all of SV Life Sciences’ and Sprout’s knowledge
`
`concerning Dr. Chen’s novel balloon designs for obesity as of the Spring of 2005 was supplied by Dr.
`
`12
`
`Chen.
`
`30.
`
`In the Spring of 2005, Ms. Delagardelle indicated that the due diligence process would
`
`be delayed somewhat due to the fact that the healthcare group principals of Sprout were forming a
`
`new firm, New Leaf Venture Partners. Ms. Delagardelle asked Dr. Chen if this would pose a
`
`problem. Dr. Chen responded that time was of the essence but a short delay under the circumstances
`
`would be manageable.
`
`31. Meanwhile, Dr. Chen continued to interface with SV Life Sciences. SV Life Sciences
`
`arranged for Dr. Chen to meet George Wallace (venture partner for SV Life Sciences) on May 16,
`
`2005 at a restaurant in Chicago. During the meeting Mr. Wallace proposed terms and conditions
`
`under which he would work with Fulfillium. In addition to other compensation, Mr. Wallace
`
`demanded greater than 25% stake in Fulfillium after the first round of financing by venture capital
`
`firms. Given the ownership dilution that typically occurs during the first round of financing, Mr.
`
`Wallace was effectively demanding majority ownership of Fulfillium. Dr. Chen noted that Mr.
`
`Wallace’s requested equity share was more than two to four times greater than that typically allotted
`
`to a CEO brought in to run a company at Fulfillium’s stage of development. Mr. Wallace offered no
`
`justification other than to say that he needed to compensate his business partner, a practicing
`
`radiologist in Minnesota, and would not proceed without including his business partner. Dr. Chen
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`-7-
`
`
`
`
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`29
`
`30
`
`31
`
`RESHAPE 1027
`
`

`

`
`
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`never disclosed the trade secrets to Mr. Wallace.
`
`32.
`
`Thereafter, no further discussion took place between Mr. Wallace and Dr. Chen.
`
`Instead, unbeknownst to Dr. Chen, decision makers in SV Life Sciences sought to launch a new
`
`company with Mr. Wallace as the CEO based on Fulfillium’s technology and trade secrets, which
`
`were misappropriated despite the repeated oral agreements of confidentiality with SV Life Sciences.
`
`In the early summer of 2005, Ms. Delagardelle of New Leaf sent a brief email to Dr. Chen advising
`
`that New Leaf was considering a deal that SV Life Sciences was proposing. Dr. Chen presumed that
`
`SV Life Sciences was proposing bringing to market an alternative solution that would be different
`
`from the technology developed and confidentially disclosed by Dr. Chen. Dr. Chen would later
`
`discover that SV Life Sciences’ venture headed by Mr. Wallace was premised not on some
`
`alternative solution but rather Fulfillium’s technology and trade secrets.
`
`33.
`
`On information and belief, Mr. Wallace’s new company, called Abdominis, Inc., was
`
`formed during the summer of 2005 and was funded by New Leaf, Intersect Partners, and SV Life
`
`Sciences. Upon information and belief, both SV Life Sciences, Intersect Partners, and New Leaf not
`
`only provided capital, but as typical early stage venture capital firms, provided direct guidance in the
`
`company’s development and controlled the operations of the company through their board
`
`17
`
`membership.
`
`34.
`
`Abdominis was subsequently renamed ReShape Medical, Inc. Hereafter, “Reshape
`
`Medical, Inc.” will refer to Abdominis, Inc. and its successor-in-interest Reshape Medical, Inc.
`
`35.
`
`As is typical for a medical start-up company, ReShape Medical, Inc. operated in
`
`“stealth mode” during development. ReShape Medical, Inc. started pivotal clinical trials in 2012 and
`
`applied for FDA approval in 2014. The FDA granted Pre-Marketing Approval to the ReShape
`
`Duo™ device and treatment method on July 28, 2015.
`
`36. When ReShape Medical, Inc. emerged from stealth mode and began commercial
`
`operations, Dr. Chen learned that ReShape Medical, Inc. had copied his trade secrets, including his
`
`entire clinical trial “playbook.” ReShape Medical, Inc. copied, among other things, Dr. Chen’s
`
`clinical trial design and his selection of the principal investigator.
`
`37.
`
`On information and belief, the board of directors and officers of ReShape Medical,
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`-8-
`
`
`
`
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`29
`
`30
`
`31
`
`RESHAPE 1027
`
`

`

`
`
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`Inc. knew or had reason to know of the foregoing facts and events at the time ReShape Medical, Inc.
`
`first submitted the ReShape Duo™ product for FDA approval in 2012.
`
`38.
`
`On October 2, 2017, EnteroMedics, Inc. acquired ReShape Medical, Inc. for cash and
`
`securities in the value of approximately $38 million. This acquisition and merger was announced on
`
`October 3, 2017. http://ir.enteromedics.com/releasedetail.cfm?ReleaseID=1042545. ReShape
`
`Medical LLC is an additional entity that resulted from this merger. On October 23, 2017,
`
`EnteroMedics, Inc. announced its name change to ReShape Lifesciences Inc.
`
`http://ir.enteromedics.com/releasedetail.cfm?ReleaseID=1044913.
`
`39.
`
`Upon information and belief, as a result of the aforementioned merger, ReShape
`
`Medical LLC and ReShape Lifesciences Inc. are the entities that now hold the liabilities of ReShape
`
`Medical, Inc. Fulfillium reserves the right to include additional entities if it later discovers that
`
`ReShape Medical, Inc.’s liabilities have been transferred elsewhere as a result of the aforementioned
`
`13
`
`merger.
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`FIRST CAUSE OF ACTION
`
`TRADE SECRET MISAPPROPRIATION
`
`(Against All Defendants)
`
`40.
`
`Plaintiff incorporates by reference the preceding paragraphs of this Complaint as
`
`though fully set forth herein.
`
`41.
`
`This claim is asserted against ReShape Medical LLC, Intersect Partners, and SV
`
`Health for misappropriation of Fulfillium’s trade secrets and for conspiring to misappropriate such
`
`21
`
`trade secrets.
`
`42.
`
`The specific trade secrets that ReShape Medical, Inc., Intersect Partners, SV Health,
`
`and/or their agents misappropriated, despite the repeated oral and/or written agreements of
`
`confidentiality, include at least three aspects of Dr. Chen’s clinical trial “playbook.” Three key
`
`protocols in the playbook optimized the experimental rigor of the trial, especially in combination, in
`
`contrast to the typical product development approach to optimize the conditions for favorable
`
`outcomes. The first is the counterintuitive control arm that “stacked the deck” against the
`
`experimental arm. To tease out efficacy due to the device alone, the device therapy had to show
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`-9-
`
`
`
`
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`29
`
`30
`
`31
`
`RESHAPE 1027
`
`

`

`
`
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`statistically better results over the most efficacious non-interventional therapy available, namely diet
`
`and exercise counseling. The second is the trial primary and secondary endpoints that set high bars
`
`for not just efficacy but clinical efficacy. To gain acceptance in the bariatric scientific community,
`
`not only the results have to be statistically significant, but the difference between the two arms had to
`
`be wide enough to warrant an interventional device therapy. The third is the counterintuitive and
`
`gastric device-focused principal investigator selection premise. To provide even further confidence
`
`in the results to overcome the stigma of gastric balloons, the trial was to be conducted under the
`
`watchful eyes of investigators of consummate skill and reputation. All of the above were developed
`
`after Dr. Chen’s extensive study of the shortcomings of previous gastric devices.
`
`43.
`
`Upon information and belief, based on EnteroMedics’s acquisition of ReShape
`
`Medical, Inc. and the publically available regulatory documents relating to said merger, ReShape
`
`Medical LLC assumed all, or at least a portion of, the liabilities of ReShape Medical, Inc., including
`
`the present trade secret misappropriation claims. To the extent that ReShape Medical LLC has taken
`
`on the liability of ReShape Medical, Inc., it is liable for ReShape Medical, Inc.’s misappropriation;
`
`and/or to the extent ReShape Medical LLC continues to rely on and/or profit from ReShape Medical,
`
`Inc.’s misappropriation, it is liable for that continuing activity. Fulfillium reserves the right to assert
`
`this count against additional entities if it later discovers that ReShape Medical, Inc.’s liabilities have
`
`been transferred elsewhere as a result of the aforementioned merger.
`
`44.
`
`The disclosures of each of these three trade secrets were made pursuant to the
`
`aforementioned written and/or oral agreements of confidentiality to SV Life Sciences, Intersect
`
`Partners and New Leaf. On information and belief, these trade secrets were conveyed to Mr.
`
`Wallace, Intersect Partners, ReShape Medical LLC and SV Health who each used them for their own
`
`23
`
`benefit.
`
`45.
`
`A significant portion of the information used by ReShape Medical, Inc. to design its
`
`device and obtain FDA approval constitute Fulfillium trade secrets in that they: (a) constitute
`
`information that derives independent economic value from not being generally known to the public or
`
`to other persons who can obtain economic value from its disclosure or use; and (b) have been the
`
`subject of reasonable efforts to maintain their secrecy.
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`-10-
`
`
`
`
`
`24
`
`25
`
`26
`
`27
`
`28
`
`29
`
`30
`
`31
`
`RESHAPE 1027
`
`

`

`
`
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`46.
`
`Through SV Life Sciences (SV Health) and Intersect Partners (and their
`
`misappropriation of Dr. Chen’s trade secrets, which were protected via repeated confidentiality
`
`agreements), Mr. Wallace, and Sprout, ReShape Medical LLC, Intersect Partners, and SV Health
`
`acquired confidential, expert validated, trade secret information about all aspects of Fulfillium’s
`
`business, including clinical trial design and regulatory strategy. Specifically, ReShape Medical LLC,
`
`Intersect Partners, and SV Health misappropriated at least the three aforementioned aspects of Dr.
`
`Chen and Fulfillium’s clinical trial playbook.
`
`47.
`
`Upon information and belief, ReShape Medical LLC, Intersect Partners, and SV
`
`Health have relied upon and used that trade secret information in some or all aspects of its business,
`
`including raising capital, product design, procedure design, and FDA clinical trial design.
`
`48.
`
`The actions alleged above constitute a wrongful misappropriation of Fulfillium’s trade
`
`secrets. They also constitute a wrongful conspiracy among the board directors and officers of and
`
`investors in ReShape Medical LLC, Intersect Partners, and SV Health to misappropriate Fulfillium’s
`
`14
`
`trade secrets.
`
`49.
`
`As a direct and proximate result of the actions alleged above, Fulfillium has been shut
`
`out of the market. By misappropriating Fulfillium’s technology and launching a competing company,
`
`ReShape Medical LLC, Intersect Partners, and SV Health prevented Fulfillium from raising the funds
`
`required to bring its product to market.
`
`50.
`
`As a direct and proximate result of the actions alleged above, ReShape Medical LLC,
`
`Intersect Partners, and SV Health have been unjustly enriched in an amount no less than the business
`
`opportunity deprived from Fulfillium.
`
`51.
`
`In doing the acts hereinabove alleged, each of ReShape Medical LLC, Intersect
`
`Partners, and SV Health and its investors have engaged in willful and malicious misappropriation by
`
`reason thereof, and Fulfillium is entitled, as against each of them, to twice the amount of its actual
`
`damages and/or the amounts by which ReShape Medical LLC, Intersect Partners, and SV Health
`
`have been unjustly enriched as exemplary damages pursuant to Civil Code § 3426.3(c).
`
`52.
`
`By the aforesaid acts, ReShape Medical LLC, Intersect Partners, and SV Health have
`
`irreparably injured Fulfillium and such injury will continue unless enjoined by this Court.
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`-11-
`
`
`
`
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`29
`
`30
`
`31
`
`RESHAPE 1027
`
`

`

`
`
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`PRAYER
`
`WHEREFORE, Plaintiff prays for judgment against Defendants as set forth below:
`
`1.
`
`An adjudication that each of ReShape Medical LLC, Intersect Partners, and SV Health
`
`has misappropriated and conspired to misappropriate Fulfillium’s trade secrets;
`
`2.
`
`An adjudication that Fulfillium have judgment against each of Defendants for
`
`compensatory damages and/or unjust enrichment in an amount not less than the sum of $50 million;
`
`3.
`
`An adjudication that Fulfillium have judgment against each of ReShape Medical LLC,
`
`Intersect Partners, and SV Health for exemplary damages under Civil Code § 3624.3(c) in the amount
`
`not less than twice the amount of Fulfillium’s actual damage or the amounts by which each of
`
`ReShape Medical LLC, Intersect Partners, and SV Health has been unjustly enriched;
`
`4.
`
`An adjudication that each of Defendants be ordered to deliver up to Fulfillium all
`
`documents, electronic and otherwise, containing Fulfillium trade secret information, and all products
`
`developed using such information;
`
`5.
`
`An adjudication that each of Defendants and their subsidiaries, affiliates, parents,
`
`successors, assigns, officers, agents, servants, employees, attorneys, and all persons acting in concert
`
`or in participation with them, or any of them, be temporarily and preliminarily enjoined during the
`
`pendency of this action, and permanently enjoined thereafter, from further misappropriation,
`
`disclosure and/or use of any Fulfillium trade secret information.
`
`6.
`
`An award of Fulfillium’s reasonable costs and fees, including attorneys’ fees, with
`
`20
`
`interest; and
`
`21
`
`7.
`
`An award to Fulfillium of such other and further relief as this Court deems just and
`
`22
`
`proper.
`
`Plaintiff Fulfillium, Inc. demands a trial by jury for all those issues so triable.
`
`JURY DEMAND
`
`
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`-12-
`
`
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`29
`
`30
`
`31
`
`
`
`
`
`
`
`
`
`
`
`RESHAPE 1027
`
`

`

`
`
`
`
`Dated: September 7, 2018
`
`
`
`LAW OFFICES OF SETH W. WIENER
`
`
`By: ________________________________________
`Seth W. Wiener
`Attorneys for Plaintiff
`Fulfillium, Inc.
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`29
`
`30
`
`31
`
`
`
`
`
`
`
`
`
`COMPLAINT FOR TRADE SECRET
`MISAPPROPRIATION
`
`-13-
`
`
`
`RESHAPE 1027
`
`

`

`
`
`EXHIBIT 1
`EXHIBIT 1
`
`RESHAPE1027
`
`RESHAPE 1027
`
`

`

`About SV – SV
`
`http://svhealthinvestors.com/about/
`
`mm
`
`T
`
`)
`
`V
`
`1
`
`-
`
`Hands-on
`business
`partners
`
`SV Health Investors, formerly SV Life Sciences,
`is a leading healthcare and life sciences
`venture capital and growth equity firm.
`
`Our goal is to transform healthcare - one investment at a time
`- by supporting the entrepreneurs who create and build
`breakthrough companies and treatments.
`
`With over $2 billion in capital under management in seven
`private healthcare funds, a 20-year track record in the US and
`Europe and offices in Boston, San Francisco and London, SV
`Health Investors drives game-changing innovation.
`
`Transforming
`healthcare
`
`We are more than investors - because
`healthcare entrepreneurs need more than
`money.
`
`1 of 4
`
`10/6/2017, 2:16 PM
`
`RESHAPE 1027
`
`

`

`About SV – SV
`
`http://svhealthinvestors.com/about/
`
`operating experience. We’ve faced and overcome the full
`range of industry challenges. We’ve walked in the
`entrepreneur’s shoes - we’ve founded and run businesses
`ourselves. As a result of our experience, we’re able to spot
`issues and opportunities.
`
`We don’t take a one-size-fits-all approach to investing. We are
`organized by sector, and we develop specific strategies for
`three healthcare segments: Biotechnology, Medical Devices,
`and Healthcare Services and Digital Health.
`
`Through our multi-sector domain expertise, extensive industry
`relationships and diverse, experienced team of exclusive
`venture partners who are proven company builders, we work
`hands-on with our portfolio companies as trusted advisers
`and partners from