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In Lavvan, Inc. v. Amyris, Inc., No. 21-1819 (2d Cir. Sept. 15, 2022),[1] the Second Circuit affirmed order denying motion to compel arbitration, holding that there was not clear and unmistakable evidence in the parties’ contract of an intent to arbitrate arbitrability and that the appellant’s claims were not subject to arbitration.

Factual Background
Plaintiff-Appellee Lavvan, Inc. (“Lavvan”) brought an action against Defendant-Appellant Amyris, Inc. (“Amyris”) in district court, claiming both trade secret misappropriation under the Defend Trade Secrets Act and patent infringement. Amyris moved to compel arbitration, which the district court denied. On appeal, Amyris argued for reversal of the district court’s denial of its motion to compel arbitration on the grounds that: (1) the parties delegated the question of arbitrability to an arbitrator to decide; and (2) even if this were not the case, Lavvan’s claims are subject to arbitration. The court affirmed the denial of Amyris’s motion to compel.

The Court’s Decision

First, the court addressed Amyris’s argument that the parties delegated the issue of arbitrability to the arbitrator. The court cited precedent that courts should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so. The court found that, on the facts, there was not “clear and unmistakable evidence” of an intent to arbitrate arbitrability in the parties’ Research, Collaboration and License Agreement (“RCLA”).

The RCLA contained two subsections related to dispute resolution. The first, subsection 7.1.1, provided that “all disputes that cannot be resolved by the management of both parties” would be committed to arbitration. The second, subsection 7.2.1, provided that if “a dispute arises with respect to the scope, ownership, validity, enforceability, revocation or infringement of any Intellectual Property, … such dispute will not be submitted to arbitration and either Party may initiate litigation.”

When interpreting these two provisions, the court found that the RCLA did not express a broad intent to arbitrate all aspects of all disputes. The court also rejected Amyris’s argument that because the RCLA incorporated the ICC Arbitration Rules, the parties intended to arbitrate arbitrability, finding that the ICC Rules were incorporated into only one of the dispute resolution subsections, and not into the subsection exempting intellectual property disputes from arbitration. According to the court, this suggested that the parties intended for the ICC Rules to apply only to those disputes that the parties agreed to arbitrate.

Second, the court addressed Amyris’s argument that the district court erred in concluding that Lavvan’s claims were not subject to arbitration. The court concluded that the claims asserted in Lavvan’s complaint were clearly disputes of the sort exempted from arbitration under Section 7.2.1 of the RCLA, given that the claims involved trade secret misappropriation and patent infringement, which fall within the “ownership,” “enforceability,” and “infringement” of intellectual property rights held by Lavvan and Amyris. The court also rejected Amyris’s argument that Lavvan’s claims derived from the same set of circumstances that Lavvan had separately brought to an arbitral tribunal, finding that the fact that these intellectual property claims were intertwined with the contractual issues being arbitrated provided no basis on which to require claims exempted from arbitration to be subject to it.

For these reasons, the court affirmed the judgment of the district court.

This Article was originally published in the North America Newsletter.

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Christina Cerutti is an associate in Baker McKenzie's New York office. As a member of the North America Banking, Finance & Major Projects Practice Group, she practices in the areas of insurance and reinsurance. She advises insurers and reinsurers on complex, high-value contentious and non-contentious matters, including domestic and international commercial litigation, arbitration, and coverage disputes. Christina also advises both domestic and foreign insurance industry clients on regulatory, transactional, and corporate matters involving licensing and other compliance issues. Christina's pro bono practice focuses on youth clients, including incarcerated teenage parents. She has provided project and development support to juvenile justice organizations, and assisted with efforts to increase incarcerated youths’ access to and relationship with their children. Christina also acts as an alumna mentor to current law students at William & Mary Law School, and serves as a resource by providing professional and career-related advice for future attorneys. She enjoys giving back to students interested in the practice of law by serving as a judge for the national Vincent J. Apruzzese High School Mock Trial Competition. Christina Cerutti can be reached at [email protected] and + 1 212 626 4038.


David Zaslowsky has been practicing international litigation and international arbitration for more than 35 years. He has been Chambers ranked in international arbitration and also sits as an arbitrator. He specializes in technology cases and is the editor of the firm's Blockchain blog and its International Litigation & Arbitration Newsletter.