Mayo Foundation for Medical Education and Research v. Knowledge to Practice, Inc.
0:21-cv-01039
| D. Minnesota | Feb 10, 2022Background
- Mayo Foundation (Minnesota nonprofit) contracted with Knowledge to Practice, Inc. (K2P) beginning in 2014 to convert Mayo’s in‑person board review courses into blended and online courses under a 2018 Master Agreement defining IP, licenses, confidentiality, royalties, and exclusivity.
- K2P developed a successful Cardiovascular Live Blended Course and related subspecialty courses and hosted them on the K2P proprietary platform.
- Mayo later developed its own online platform (with a vendor, CWS) and launched it in late 2019, offering courses substantially similar to K2P’s; K2P alleges Mayo accessed K2P’s platform/AdWords and took confidential/pricing and design information.
- Mayo sued for declaratory judgment that the courses are Mayo’s property and that Mayo does not infringe K2P IP; K2P counterclaimed on multiple theories including civil theft, breach of contract, breach of the implied covenant, conversion, tortious interference, and unjust enrichment.
- Mayo moved to dismiss several counterclaims; K2P voluntarily dismissed conversion and tortious interference. The Court resolved the remaining motion on the pleadings.
Issues
| Issue | Plaintiff's Argument (Mayo) | Defendant's Argument (K2P) | Held |
|---|---|---|---|
| Civil theft (Minn. Stat. § 604.14) | Contract governs property rights so civil‑theft is improper; remedy is breach of contract | Mayo stole K2P property and committed an independent tort (theft) beyond contract | Dismissed with prejudice — where contract defines ownership the claim sounds in contract, not civil theft |
| Breach of implied covenant of good faith & fair dealing | Claim is subsumed by breach‑of‑contract and cannot be maintained as a separate cause of action | Mayo’s conduct independently breached the covenant | Dismissed with prejudice — Minnesota law does not recognize a separate contract‑based claim apart from the underlying breach claim |
| Unjust enrichment | Barred because an enforceable contract governs the relationship | Pleaded in the alternative and may cover conduct outside the contract | Denied — unjust enrichment may be pleaded in the alternative at the pleading stage, but plaintiff must elect theory before trial |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must be plausible to survive dismissal)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (conclusory allegations insufficient)
- Hager v. Arkansas Dep’t of Health, 735 F.3d 1009 (8th Cir. 2013) (Rule 12(b)(6) standards)
- Illig v. Union Elec. Co., 652 F.3d 971 (8th Cir. 2011) (materials courts may consider on a motion to dismiss)
- Medtronic, Inc. v. ConvaCare, Inc., 17 F.3d 252 (8th Cir. 1994) (Minnesota does not recognize a separate cause of action for breach of the implied covenant apart from breach of contract)
- Genz‑Ryan Plumbing & Heating Co. v. Weyerhaeuser NR Co., 352 F. Supp. 3d 901 (D. Minn. 2018) (unjust enrichment is an equitable remedy and may be unavailable where an applicable contract exists)
- Mono Advert., LLC v. Vera Bradley Designs, Inc., 285 F. Supp. 3d 1087 (D. Minn. 2018) (permitting unjust enrichment pleaded in the alternative)
- Lonesome Dove Petroleum, Inc. v. Holt, 889 F.3d 510 (8th Cir. 2018) (party ultimately must choose contract or unjust enrichment theory at summary judgment/trial)
- Kalman v. Morris‑N. Am., Inc., 531 So. 2d 394 (Fla. Dist. Ct. App. 1988) (contractual relationship precludes statutory civil theft)
- Florida Power & Light Co. v. Utilities Servs. of Am., Inc., 550 So. 2d 13 (Fla. Dist. Ct. App. 1989) (civil theft award inappropriate where contract governs the parties’ rights)