INNOVARE, LTD. v. SCITECK DIAGNOSTICS, INC., 2024 NCBC 36

STATE OF NORTH CAROLINA
HENDERSON COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
21 CVS 2180
INNOVARE, LTD., a Nevada Limited
Liability Company,
Plaintiff,
Counterclaim
Defendant,
v.
SCITECK DIAGNOSTICS, INC., a
Delaware Corporation,
Defendant,
Counterclaim
Plaintiff.
ORDER AND OPINION ON
CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT AND
DEFENDANT’S MOTION FOR
JUDGMENT ON THE PLEADINGS
THIS MATTER is before the Court on Defendant Sciteck Diagnostics, Inc.’s
(“Sciteck”) Motion for Judgment on the Pleadings (ECF No. 64), Sciteck’s Motion for
Partial 	Summary 	Judgment, 	(ECF 	No. 	66), 	and 	Plaintiff 	Innovare, 	LTD.’s
(“Innovare”) Motion for Partial Summary Judgment (ECF No. 70) (collectively,
“Motions”).
THE COURT, having considered the Motions, the briefs of the parties, the
arguments of counsel, and all appropriate matters of record, CONCLUDES that
Sciteck’s Motion for Partial Summary Judgment should be GRANTED in part, and
DENIED in part, that Innovare’s Motion for Partial Summary Judgment should be
GRANTED in part, and DENIED in part, and that Sciteck’s Motion for Judgment
on the Pleadings should be DENIED as moot.
Smith Debnam Narron Drake Saintsing & Myers, LLP, by Bettie Kelley
Sousa, for Plaintiff.
King Law Offices, PLLC, by James Patrick Andrew Twisdale, for
Defendant.
Davis, Judge.
Innovare, LTD. V. Sciteck Diagnostics, Inc., 2024 NCBC 36.

INTRODUCTION
1. 	In its most recent opinion in this case, the Court described the parties
as “proverbial ships passing in the night” due to the disparate nature of their
respective narratives about the “nature, extent and cessation of their business
relationship.” 	See Innovare, Ltd. v. Sciteck Diagnostics, Inc., 2023 NCBC LEXIS 8,
at **2 (N.C. Super. Ct. Jan. 19, 2023) (“2023 Opinion”). Now—over a year later and
with the benefit of extensive discovery—the parties continue to disagree about
virtually every aspect of their relationship to the point that they can hardly be said
to be sailing in the same ocean. This case ultimately cries out for resolution by a jury,
but the Court must first separate those claims that fail as a matter of law from those
claims that require resolution at trial.
FACTUAL AND PROCEDURAL BACKGROUND
2. 	“The Court does not make findings of fact on motions for summary
judgment; 	rather, 	the 	Court 	summarizes 	material 	facts 	it 	considers 	to 	be
uncontested.” 	McGuire v. Lord Corp., 2021 NCBC LEXIS 4, at **1–2 (N.C. Super.
Ct. Jan. 19, 2021) (cleaned up).
3. 	The highly disjointed record complicates the Court’s task of explaining
the factual background of this case. Nonetheless, what follows is the Court’s attempt
to summarize the facts—as the Court currently understands them—forming the basis
for the issues raised by the Motions and to determine which of those facts are
undisputed and which are contested.
4. 	Sciteck is a corporation that produces biological testing supplies. 	(See
Smith (30)(b)(6) Dep., at 19–20, ECF No. 67.1.)

5. 	Sciteck is organized under Delaware law and is one of several wholly
owned subsidiaries of Sciteck, Inc. (Smith (30)(b)(6) Dep., at 1, 17.) Sciteck, Inc. and
its subsidiaries are owned by a scientist named Jack Smith. (Smith (30)(b)(6) Dep.,
at 16–18.) 	Sciteck leases and operates its only facility in Fletcher, North Carolina.
(Smith (30)(b)(6) Dep., at 18–19.)
6. 	Sciteck develops and manufactures over fifty different biological testing
products ranging from “adulteration reagents” for urinalyses to “dry chemistry test
strips.” (Smith (30)(b)(6) Dep., at 19–20.) Its products are shipped both domestically
and internationally through a network of distributors. (Smith (30)(b)(6) Dep., at 21–
22, 27, 29.)
7. 	This lawsuit specifically involves Sciteck’s proprietary SARS-CoV-2
(“COVID-19”) testing strip called SalivaQuik. 	Sciteck developed SalivaQuik in
response to increased global demand for COVID-19 testing precipitated by the
COVID-19 pandemic. 	SalivaQuik is billed as a “high performance” COVID-19 test
that produces a result within three minutes and only requires a small saliva sample.
(Smith (30)(b)(6) Dep., at 158, 206, 233; ECF No. 67.9, at 26.)
8. 	Innovare is a limited liability company that is organized under Nevada
law. 	(Vuono (30)(b)(6) Dep., at 1, ECF No. 67.3.) 	Innovare provides consulting,
software development, and data collection services. (Vuono (30)(b)(6) Dep., at 8, 78.)
Ray Vuono and Tamara Caronite serve as Innovare’s managing members. 	(Vuono
(30)(b)(6) Dep., at 9.)
9. 	The relationship between the parties began in 2020 when Sciteck was
first introduced to Innovare. 	(Vuono (30)(b)(6) Dep., at 7.) 	Around that time,

Innovare sought COVID-19 test processing services from another wholly owned
subsidiary of Sciteck, Inc. called “Sciteck Clinical Laboratories” (“Sciteck Clinical”).
(Smith (30)(b)(6) Dep., at 17; Vuono (30)(b)(6) Dep., at 8; Caronite Dep., at 12–13,
ECF No. 67.4.) 	Sciteck Clinical is an accredited laboratory that conducts forensic
drug testing and other clinical laboratory services. (Smith (30)(b)(6) Dep., at 25.)
10. 	Initially, 	the 	relationship 	between 	Sciteck 	Clinical 	and 	Innovare
consisted 	of 	Innovare 	purchasing 	polymerase 	chain 	reaction 	tests 	for 	“saliva
collection purposes,” collecting test samples, and then sending those samples to
Sciteck Clinical for processing. 	When the samples reached Sciteck Clinical, they
would be run through a “mechanism to determine whether there [were] any positive
or negative findings for [COVID-19].” 	(Vuono (30)(b)(6) Dep., at 8; Smith (30)(b)(6)
Dep., at 30.)
11. 	At some point between September and November of 2020, Smith learned
that Innovare had developed a software called “Access Result,” which was designed
to help process and deliver COVID-19 test results. (Vuono (30)(b)(6) Dep., at 15, 16,
20–21, 23.) 	Specifically, Access Result would analyze photos of physical COVID-19
tests that were taken with users’ smartphones. 	(Vuono (30)(b)(6) Dep., at 17.) 	The
readings generated by Access Result could then be used as a type of “pass” to verify
or validate users’ COVID-19 test results to third parties. 	(Vuono (30)(b)(6) Dep., at
19.)
12. 	Innovare contends that after seeing a demonstration of the Access
Result software, Smith subsequently expressed interest in working with Innovare to
expand the software’s capabilities so as to allow Sciteck to provide automatic test

results to SalivaQuik users. 	(Vuono (30)(b)(6) Dep., at 15, 16, 21, 22.) 	Smith,
conversely, denies that he saw a demonstration of the Access Result software. (Smith
(30)(b)(6) Dep., at 32.)
13. 	Both parties agree that over a period of several weeks and months, they
held a series of discussions about the possibility of entering into some sort of formal
business relationship. 	While their recollections about the specific terms of those
discussions vary significantly, (see, e.g., Smith (30)(b)(6) Dep., at 33; Vuono (30)(b)(6)
Dep., at 15), both parties appear to agree that at least one of the purposes of their
prospective business relationship would be to allow Innovare to distribute SalivaQuik
tests on Sciteck’s behalf. (Vuono 30(b)(6) Dep., at 23; Smith (30)(b)(6) Dep., at 33.)
14. 	By February 2021, the parties were continuing to discuss the terms of
their prospective business relationship. At this point, the relationship was poised to
be 	multi-dimensional, 	encompassing 	Innovare’s 	distribution 	of 	SalivaQuik 	on
Sciteck’s behalf, as well as Innovare’s creation of a mobile application that would aid
at-home SalivaQuik testing. 	(ECF No. 71.6, at 7, 9–12.) 	At one point, Sciteck also
asked Innovare to handle overseas distribution of SalivaQuik. (ECF No. 71.6, at 2.)
15. 	With respect to the software application component of their relationship,
Sciteck sent Innovare what appears to be a list of the Food and Drug Administration’s
(“FDA”) requirements for mobile applications and software. 	(ECF No. 71.6, at 7.)
Meanwhile, Innovare created and shared with Sciteck a proposed website that was
intended to “support product orders with admin reporting and partner and consumer
login.” 	(ECF No. 71.6, at 4.) 	Additionally, the parties sent each other drafts of an
unsigned “Intellectual Property Licensing and Use Agreement” (“IPLUA,” ECF No.

71.2, at 7–17), which they would ultimately revise multiple times until they reached
a final agreement.
16. 	On 18 February 2021, both parties signed a “Licensing and Master
Distributor Agreement” (“Distributor Agreement”), which had evolved from the
various drafts of the IPLUA and served to formalize the terms of the parties’ business
relationship. (Compl., Ex. A, ECF No. 2.) The Distributor Agreement is the operative
agreement between the parties that forms the basis for many of the issues in this
lawsuit.
17. 	As the Court noted in its 2023 Opinion, the Distributor Agreement “is
neither a model of specificity nor clarity.” 	Innovare, 2023 NCBC LEXIS 8, at **6.1
That said, its terms remain highly relevant to the issues currently before the Court.
Therefore, the Court deems it useful to quote the agreement—which is also notable
for its brevity—largely in its entirety.
This 	Agreement 	(this 	“Agreement”) 	is 	made 	and 	entered 	into 	on
February 18, 2021 (the “Effective Date”) by and between Innovare, Ltd.
a 	Nevada 	limited 	liability 	company 	(“Innovare”) 	and 	Sciteck®
Diagnostics, Inc., a Delaware corporation (“Sciteck”).
WHEREAS, Innovare has developed and owns intellectual property and
proprietary information (the “IP/Content”) to include but not limited to
software, 	websites 	(e.g. 	SalivaQuick 	[sic]), 	PDA 	and 	smart 	phone
software and Sciteck [sic] which has developed and manufactures a
rapid diagnostic single use test device technology (“SALIVAQUIK”). The
term “SalivaQuik” shall mean and include all rapid test strips produced
by Sciteck designed for COVID-19, influenza or any other infectious
disease which are part of Sciteck’s Chemtest® line of dry chemistry
products which “IP/Content” belong to Sciteck.
WHEREAS, Sciteck intends to bring the SalivaQuik to market prior,
during or after EUA submission(s) or after receipt of the Federal Drug
Administration’s [sic] (FDA) Emergency Use Authorization (“EUA”) for
1 It also contains a number of typographical errors.

laboratory, non-laboratory and/or at home use approval(s) pursuant to
the Instructions For Use. Sciteck principle [sic] operations are the
development, manufacturing, and selling products for dry chemistry test
strips, 	biotechnology, 	urinalysis, 	clinical 	chemistry, 	toxicology,
pharmaceuticals, treatment and safety applications and these products
wholly belong to Sciteck and are protected under this agreement.
BUSINESS [sic], Sciteck desires to use, as necessary and as permitted
hereunder, so much allowed by Innovare to use Innovare’s website,
software and/or smart phone applications software allowing Innovare to
distribute and sell Sciteck’s “IP/Content”, allowing users of Sciteck’s
SalivaQuik technology to access the software for use in determining test
results and any other functionality that may be available or updated
from time to time as needed.
Agreement
NOW, THEREFORE, in consideration of the premises [sic] contained
herein and the mutual covenants and restrictions of this Agreement, all
of which consideration is hereby deemed and acknowledged as both
received and adequate, Innovare and Sciteck agree as follows:
1. 	Definitions. (a) The term “IP/Content” with regards to Innovare
includes, but is not limited to the following: all creative designs and
concepts, 	logos, 	brands, 	photographs, 	images, 	copyrights,
trademarks, service marks, illustrations, videos, audio clips and
other 	media, 	production 	and 	operating 	manuals, 	associated
demonstration and marketing media, printed material, “online” and
electronic documentation, applications (sometimes referred to as
“SalivaQuick [sic] website”), source codes, object codes, QR codes,
software 	(including 	the 	design, 	application 	and content 	thereof
and/or therein), narrative and descriptive texts, and all “Innovare”,
SalivaQuick [sic] related websites (including www.salivaquick.com),
applications and all content contained therein regardless of the
formatting and presentation thereof and the phrase “Object Code”
shall be a computer-executable binary code. The phrase “Source
Code” shall mean the human-readable version of a software program
that can be compiled into object code, including all accompanying
programming notes, programming guides and commentary. The
IP/Content shall also include the following QR code, any derivations
thereof, and as may be amended or altered from time to time:
(b) The IP/Content belonging to Sciteck will be its patents pending,
patents, intellectual property, proprietary formulations, SalivaQuik
test 	strips, 	Sciteck 	technology 	and 	trademarks 	and 	pending

trademarks to include but not limited to SalivaQuikTM, Chemtest®,
AdultaCheck®, AutoUA®, Sciteck® and Inventeck®.
2. Grant of Licenses and Restrictions on Use of IP/Content by
Sciteck; Payment.
(a) Innovare 	hereby 	grants 	to 	Sciteck 	a 	nonexclusive 	license 	(the
“Sciteck License”), during the term of this Agreement, so long as
Sciteck is not in breach of this Agreement, to use the Innovare
Licensed 	IP/Content 	for 	the 	purposes 	contemplated 	in 	this
Agreement and Sciteck is expressly prohibited from using any form
of the Innovare Licensed IP/Content for any reason outside the scope
and purpose of this Agreement.
(b) Sciteck hereby grants to Innovare a non-exclusive license (the
“Sciteck License”), during the term of this Agreement, so long as
Innovare is not in breach of this Agreement, to use the Sciteck
Licensed 	IP/Content 	for 	the 	purposes 	contemplated 	in 	this
Agreement. Innovare is expressly prohibited from using any form of
the Sciteck Licensed IP/Content for any reason outside the scope and
purpose of this Agreement.
3. 	Term. This Agreement will commence on the date of the full
execution hereof and will continue for five (5) years, to be automatically
renewed 	thereafter 	for 	successive 	one 	(1) 	year 	periods, 	unless
terminated after year 3 per section 7.
4. Independent Relationship, Warranty and Indemnity.
(a) 	Innovare 	and 	Sciteck 	will, 	and 	throughout 	the 	term 	of 	this
Agreement 	will 	be, 	independent 	contractors 	and 	not 	employees,
partners or agents of the other. Neither Innovare or Sciteck shall have
any authority to bind the other to any agreement or contract nor shall it
have 	any 	authority 	to 	represent 	the 	other 	or 	their 	respective
technologies, intellectual property, business or systems in a fashion
other than that expressly set forth herein and Innovare shall not be
responsible for any operating expenses, fees, costs or charges, or any
income or other tax liabilities of Sciteck. Sciteck shall not be responsible
for any operating expenses, fees, costs, or charges, or any income or
other tax liabilities of Innovare and Sciteck represents and warrants to
Innovare 	that 	Sciteck’s 	production, 	distribution, 	and 	sale 	of 	the
SalivaQuik and Sciteck’s use of the Innovare Licensed IP/Content is and
will be at all times during the term of this Agreement in full compliance
in all respects with all local, state and federal rules, regulations,
restrictions, laws, guideline, ordinances and any similar obligation or
requirement 	including, 	but 	not 	limited 	to, 	the 	Federal 	Drug

Administration’s [sic] EUA for the SalivaQuik. Both parties agree and
shall fully indemnify each other for any reasons.
4.[2] Price, Payment Terms. For Innovare’s sell [sic] and distribution
of the Sciteck Licensed IP/Content and/or products, Innovare shall
receive a royalty to be calculated and paid as follows: On or before the
last day of the month following the end of each quarter after the signing
of this agreement. [sic] Sciteck shall pay Innovare an amount equal to
the number of Strips sold and/or distributed by Innovare multiplied by
Thirty Cents ($0.30) for each strip sold (e.g. 30 cents per strip) and the
royalties will only be due on Sciteck’s receipt of funds for strips sold via
Innovare Distributorship and said funds shall have cleared Sciteck’s
accounts prior to payment of royalties for the quarter paid. The royalty
fees shall be inclusive for any and all use of programs, functions, and
services provided by Innovare. For clarity, the term “sold” means the
strips are no longer the property of Sciteck; the term “produced” means
the strips are still the property of Sciteck.
6. Innovare Distributorship. All pricings including the wholesale
price is [sic] determined and agreed upon by Innovare and Sciteck
collectively. Innovare and Sciteck will determine a base cost which will
include all costs of production including but not limited to packaging and
the Innovare license fee as well as any agreed upon base expenses. Any
amount added to the base expenses that will determine the base sale
price will be split evenly between Innovare and Sciteck. All sales must
be documented in a transaction log that will be maintained by Innovare
and may be updated to be an electronic order system when available.
7. Expressed Authority for Innovare Distributor. Innovare shall
use commercially reasonable efforts to market, distribute and sell the
Products in the Territory. Manufacturer, represents and warrants that
it has the right and authority to grant the above distribution rights to
Distributor. Innovare will be considered the Class A distributor and all
other 	distributors 	will 	be 	under 	Innovare 	and 	listed 	as 	Class 	B
Distributors. Sciteck issues expressed [sic] authority to Innovare as
Class A Distributor for SalivaQuik marketed products. All Class B
distributor sales, appointments and inquiries must be through the Class
A distributor. All sales must be documented in a transaction log that
will be maintained by Innovare and may be updated to be an electronic
order 	system 	when 	available. 	This 	Class 	A 	designation 	authority
includes all Domestic (USA) and International territories.
8. Termination. Either party to this Agreement may terminate this
Agreement for the following reasons: (i) a default by the other party
2 The Distributor Agreement contains two paragraphs labeled as “4” and none labeled as “5.”

hereto after expiration of all applicable notice and cure periods, (ii) a
breach of any representation contained herein, or (iii) the failure to
satisfy an obligation regarding payment. Either party can terminate at
any time with written notice after the 3rd year of the agreement. In case
of either Innovare or Sciteck’s acquisition the terms of the agreement
will not be affected.
9. Notice and Cure Periods. Each party has ten (10) business days
from the receipt of such notice within to cure such alleged default or
provide reasonable proof that such alleged default does not exist. Notice
to any party hereunder shall be deemed to have been given (i) when
delivered by hand or by Federal Express or a similar overnight courier,
or (ii) seven (7) days following the date on which such notice is deposited
in the United States Mail as Certified Mail, Return Receipt Requested,
First Class Postage.
. . .
13. Innovare Limited Use Authorization for “SalivaQuik”: Sciteck
hereby authorizes Innovare to use the Sciteck SalivaQuik IP solely for
the purposes contemplated in this Agreement. Innovare is expressly
prohibited from using any form of the Sciteck or SalivaQuik IP for any
reason outside the scope and purpose of this Agreement.
(Distributor Agreement, at 1–3.)3
18. 	In 	order 	for 	SalivaQuik 	to 	be 	legally 	capable 	of 	distribution 	for
diagnostic purposes within the United States, it first required “Emergency Use
Authorization” (“EUA”) from the FDA. (Smith (30)(b)(6) Dep., at 37.)
3 The parties’ arguments in this case suggest that since the beginning of their relationship,
they have been operating under different interpretations of several key provisions in the
Distributor Agreement. 	Just as one example, the parties dispute whether—as Innovare
contends—the agreement’s references to a “nonexclusive license” simultaneously grants
Innovare (1) an exclusive license to distribute SalivaQuik; and (2) a non-exclusive license to
distribute other Sciteck products, (Vuono (30)(b)(6) Dep., at 58), or whether—as Sciteck
contends—Innovare’s license is “non-exclusive all the way through and through” and solely
encompasses SalivaQuik (as opposed to any other Sciteck products). 	(Smith (30)(b)(6) Dep.,
at 59, 74.)

19. 	In its 2023 Opinion, the Court quoted information contained in Sciteck’s
counterclaims (that appear to be unchallenged) regarding FDA policies for EUA for
products such as SalivaQuik:
As background information, Sciteck’s counterclaims explain how a
medical product that has not yet received full regulatory approval may
nonetheless be used to “diagnose, treat or prevent serious or life-
threatening diseases” under Emergency Use Authorization (“EUA”)
authority. 	(Am. Countercls. ¶ 13.) 	However, certain criteria must be
met in order to obtain EUA approval, “including that there are no
adequate, approved, and available alternatives.” (Am. Countercls. ¶ 13.)
The formal process for obtaining EUA approval involves “an application,
relevant data and evidence, and a formal request that the FDA [Food
and 	Drug 	Administration] 	issue 	an 	EUA 	for 	the 	device.” 	(Am.
Countercls. ¶ 15.) 	“[T]he FDA has the authority to require additional
data and information on a case-by-case basis to ensure compliance with
the statutory criteria for EUA approval of a specific device[,]” and the
amount 	of 	required 	data 	can 	vary 	from 	device 	to 	device. 	(Am.
Countercls. ¶ 17.)
Generally, a device’s sponsor “engage[s] in studies and testing that are
compliant with and sufficient for the FDA’s EUA approval conditions.”
(Am. Countercls. ¶ 19.) 	This necessary testing is called Research Use
Only (“RUO”) activity, which the FDA strictly regulates, including
requiring labeling of all subject devices “for research use only.” 	(Am.
Countercls. ¶ 21.) 	The FDA provides pre-EUA guidelines, “which
include[] limiting testing ‘to laboratories certified to perform high
complexity testing, and at the point-of care when covered by the
laboratory’s 	. 	. 	. 	certificate 	for 	high 	complexity 	testing.’ 	” 	(Am.
Countercls. ¶ 26.)
Innovare, Ltd., 2023 NCBC LEXIS 8, at **2–3.
20. 	Thus, until such time as it received EUA authorization (or some other
specific approval from the FDA), SalivaQuik could only be used for RUO purposes
within the United States.4 (Vuono (30)(b)(6) Dep., at 214.)
4 To date, SalivaQuik has not received EUA approval from the FDA. (Smith (30)(b)(6) Dep.,
at 83.)

21. 	At some point between 2020 and July 2021, Sciteck began soliciting
Innovare’s assistance with conducting “usability and clinical studies” to supply data
for Sciteck’s planned application for EUA authorization of SalivaQuik. 	(Smith
(30)(b)(6) Dep., at 252.) The process of conducting such studies required Innovare to
distribute 	SalivaQuik tests 	to 	various 	existing clients, collect 	and process 	the
completed tests, and report the data to Sciteck. (See, e.g., ECF No. 71.23.)
22. 	Notably, 	and 	as 	discussed 	in 	more 	detail 	later 	in 	this 	Opinion,
Innovare’s assistance with these usability and clinical studies was not listed as one
of its contractual obligations in the Distributor Agreement. (Smith (30)(b)(6) Dep., at
283.)
23. 	One 	day 	after 	the 	Distributor 	Agreement 	was 	executed, 	Sciteck
forwarded Innovare a series of FDA guidelines regarding the distribution of COVID-
19 tests. (ECF No. 71.29.) These FDA guidelines reiterated that the distribution of
SalivaQuik for diagnostic purposes could only take place after the product received
“premarket clearance, approval, or Emergency Use Authorization (EUA) by the FDA
or appropriate notification[] per IV.C of [the Food and Drug Administration’s (FDA)]
guidance.” (ECF No. 71.29, at 2.)
24. 	Over the next several months, Innovare solicited its existing customers’
participation in usability and clinical studies for SalivaQuik. (ECF No. 67.9, at 23.)
To that end, Innovare contacted Sciteck on multiple occasions to request shipments
of SalivaQuik samples for testing purposes. 	For example, Innovare requested 650
samples on 25 March 2021 and another 400 samples on 27 April 2021. (ECF No. 71.8;
ECF No. 71.23, at 3.) 	In the course of making these requests, Innovare repeatedly

reassured Sciteck that the SalivaQuik samples would only be used for RUO purposes.
(ECF No. 71.23, at 3; ECF No. 71.8, at 2.)
25. 	On or around 17 August 2021, a Sciteck employee—Kerstin Lanier—
received a phone call (the “Alliance Phone Call”) from a representative of one of
Innovare’s customers, a company called “Alliance Title,” requesting an instructional
video regarding the proper use of SalivaQuik and informing Lanier that SalivaQuik
was being used to test Alliance Title employees (ECF No. 67.9, at 1.) 	After Lanier
notified Caronite at Innovare about the Alliance Phone Call, Caronite reassured
Lanier 	that 	she 	had 	separately 	contacted 	Alliance 	Title 	to 	explain 	that 	“the
[SalivaQuik] tests are RUO and not for sale or diagnostic purposes.” (ECF No. 67.9,
at 1.)
26. 	In this lawsuit, Sciteck points to the Alliance Phone Call as evidence
that Innovare had breached the Distributor Agreement by allowing SalivaQuik to be
used for non-RUO purposes in violation of FDA regulations. (Am. Countercls. ¶¶ 60–
65, ECF No. 57.) 	Vuono has testified, however, that Innovare was working with
Alliance Title “in order to validate [its] software,” that the SalivaQuik tests were
being used “for research use only” and not “for diagnostic purposes,” and that the
tests “weren’t being distributed in any way [ ] other than what we already agreed that
we were doing.”5 (Vuono 30(b)(6) Dep., at 171, 173.)
5 As further evidence that Innovare was distributing SalivaQuik for non-RUO purposes,
Sciteck also points to a separate phone call that it received from someone at Innovare
requesting additional SalivaQuik devices after the “Product Development Activities and
Usability and Clinical Studies” had been completed. 	(Smith (30)(b)(6) Dep., at 255–56.)
However, the precise date and time of this call are unclear from the record, as is the date
when the usability and clinical studies ceased. (See Smith (30)(b)(6) Dep., at 254–56.)

27. 	Meanwhile, in or around March 2021, Innovare began recruiting third-
party companies to serve as “Class B” SalivaQuik distributors pursuant to Section 7
of the Distributor Agreement. (See, e.g., ECF No. 71.9.) As quoted above, Section 7
provided that Innovare was designated a “Class A” distributor of SalivaQuik and that
all “Class B distributor sales, appointments and inquiries [had to go] through the
Class A distributor.” (Distributor Agrmt. § 7.)
28. 	As part of its recruitment efforts, Innovare reached out to a variety of
companies, including Medical Buyers Group LLC (“Medical Buyers”), Owen Test
Labs LLC (“Owen Labs”), and Select Medical Systems (“Select Medical”). 	Medical
Buyers expressed interest in purchasing a large volume of SalivaQuik tests at a base
price of $10 per test, (ECF No. 71.10, at 2), Owen Labs placed an order for 6,000
SalivaQuik tests, (ECF No. 71.12, at 2), and Select Medical placed an order for 25
SalivaQuik samples.6 (ECF No. 71.16, at 2.)
29. 	Throughout the process of recruiting Class B distributors, Innovare kept
Sciteck informed about its progress via email. 	(See ECF Nos. 71.9–71.12.) 	In
addition, updated information concerning the Class B distributors was purportedly
deposited into an electronic “Partner Portal” that Innovare had created. 	(Vuono
(30)(b)(6) Dep., at 80; Smith (30)(b)(6) Dep., at 111.) Although Sciteck appears to be
denying that it actually received information via the portal, Vuono testified that
individuals with Sciteck credentials logged into the Partner Portal at various points
between April and June of 2021. (Vuono Aff. ¶ 12, ECF No. 72.)
6 In a separate email exchange between Caronite and a representative from Select Medical,
Myron Myers, Myers stated that “[Smith] requested we connect with you [regarding]
Innovare[‘s] Distribution for AutoUA® and SVTTM product lines.” (ECF No. 71.11, at 3.)

30. 	At some point, Innovare began sending out samples of the SalivaQuik
tests to its newly recruited Class B distributors. 	(Smith (30)(b)(6) Dep., at 136–37.)
Innovare initially earned $290 from its deliveries of SalivaQuik tests to Select
Medical and Owen Labs. (Vuono (30)(b)(6) Dep., at 88.)
31. 	As months passed, Innovare continued to expand its network of Class B
distributors. 	In addition to its efforts in that regard within the United States,
Innovare also sought to establish Class B distributor relationships with companies in
other countries, including India, (ECF No. 71.31, at 2), Cambodia, (ECF No. 87.9, at
2), and Vietnam, (ECF No. 87.6, at 3; ECF No. 87.9.).
32. 	On 12 September 2021, Innovare agreed to sell six million SalivaQuik
tests to a California company called TJ Riley, Inc. (“TJ Riley”) at a total cost of $9
million. 	(ECF No. 71.33, at 17.) 	The TJ Riley contract stated that the SalivaQuik
tests sold thereunder were intended solely for international use and could not be
distributed 	domestically 	prior 	to 	SalivaQuik 	receiving 	the 	appropriate 	FDA
authorization.7 (TJ Riley Contract, at 17.)8
33. 	As part of its efforts to distribute SalivaQuik overseas, Innovare asked
Sciteck to register SalivaQuik on the FDA’s Unified Registration and Listing System
(“FURLS”).9 	(ECF No. 71.32, at 5.) 	Innovare further suggested that Sciteck’s
7 Although it appears that this proposed sale never actually went through, the record is
somewhat muddled as to why.
8 Sciteck asserts that it was never informed about the TJ Riley contract. (Am. Countercls. ¶
79.)
9 FURLS is the FDA’s electronic depository for documents and data submitted in connection
with products that have already been “cleared” by the FDA. 	(ECF No. 71.37, at 3; Smith
(30)(b)(6) Dep., at 305.)

application be accompanied by a notice that the product was “not being distributed.”
(ECF No. 71.36, at 2.) Innovare’s request was apparently prompted by its belief that
the regulatory bodies in other countries would be more likely to approve the
importation and distribution of SalivaQuik to their citizens if it was listed on FURLS.
(Smith (30)(b)(6) Dep., at 138.)
34. 	Sciteck ultimately declined to move forward with adding SalivaQuik to
FURLS after learning from an alleged “expert in the field of FDA complia[nce]” that
registering 	an 	unapproved 	device 	on 	FURLS 	would 	effectively 	misrepresent
SalivaQuik’s approval status with the FDA, leading to the potential for adverse legal
consequences. (ECF No. 71.37, at 3; Smith (30)(b)(6) Dep., at 138–39.)10
35. 	Meanwhile, Innovare was continuing to collect data from its usability
and clinical studies of SalivaQuik and report this data back to Sciteck. 	(ECF Nos.
71.24–71.27.) 	By 12 July 2021, Innovare reported that it had tested over 800
individuals on 25 separate dates as a part of these studies. (ECF No. 71.28, at 2.)
36. 	During this same time period, Innovare was engaged in ongoing efforts
to develop a SalivaQuik mobile application. (See, e.g., ECF No. 71.54.)
37. 	On 10 August 2021, Sciteck submitted an EUA application to the FDA
for SalivaQuik, using the data obtained from Innovare’s usability and clinical studies.
(ECF No. 67.8, at 5.)
38. 	On 4 October 2021, the FDA responded to Sciteck’s EUA application
with a list of concerns about the data contained therein. (ECF No. 67.8, at 5–6.) In
10 Sciteck contends that Innovare “tried to induce [Sciteck] to commit fraud” by directing it
to improperly add certain information on FURLS. (Smith (30)(b)(6) Dep., 137–39.)

this response, the FDA identified several deficiencies and apparently suggested that
some of the data was either inaccurate or questionably obtained. (ECF No. 67.8, at
5–8.) Additionally, with respect to the SalivaQuik mobile application, the FDA noted
that Sciteck had not “provided sufficient details to understand [its] software design
process and architecture.” (ECF No. 67.8, at 7.)
39. 	Soon after learning of the FDA’s concerns, a Sciteck employee, Lukas
Chaloupka, forwarded excerpts from the FDA’s response to Vuono, along with an
urgent request for a response within three days. 	Vuono responded by asking
Chaloupka to send him the FDA’s response in its entirety, but Sciteck declined to do
so. (ECF No. 71.38; Vuono (30)(b)(6) Dep., at 138.)
40. 	On 5 October 2021, Smith emailed Caronite to express his frustration
with what he believed to be Innovare’s failure to provide in a timely manner the
information requested by the FDA. Smith’s 5 October email stated, in relevant part,
as follows:
Let me be perfectly clear, Sciteck Diagnostics is the manufacturer of this
product and owns 100% all rights to the product, its production,
distribution, etc., and the FDA 100% agrees with this. They do not have
any time for nor do they want to talk to any distributors because they,
like us, know that distributors have no say in how anything is done or
going to be done. The next few days will be interesting, I am already
engaging other programmers to look at developing software to replace
the current software, and we have so many groups that want to be
distributors, it’s ridiculous. If Innovare wants to retain any chance to
distribute the SalivaQuik and/or provide the software for use with the
device, they will provide the information requested when requested.
We’ve already been through this with another distributor recently and
they literally got spanked by the FDA for not going through us. We are
not having this – you’re dreaming if you think we will allow it.
So please respond as quickly as you can to the information Lukas has
submitted to you ASAP. If you decide not to do this or are incapable of

doing it, then Sciteck will decide at a later time if we are to keep you as
one of our distributors and/or software providers.
(ECF No. 71.38, at 4.)
41. 	A few hours later, Caronite replied with an email seeking to reassure
Smith that Innovare was preparing the information necessary to respond to the
FDA’s concerns. (ECF No. 71.38, at 3–4.) Caronite added that “[Innovare wanted] to
be constructive” and that the parties’ “contract speaks for itself.” (ECF No. 71.38, at
3.) Additionally, Caronite stated that Innovare was “interested to move forward and
generate sales domestically and internationally upon regulatory approvals.” 	(ECF
No. 71.38, at 4.)
42. 	On 6 October 2021, Smith sent Caronite another email notifying her
that Sciteck would need to receive the updated information from Innovare by the
following morning in order to respond to the FDA. (ECF No. 71.38, at 2.)
43. 	On or around 7 October 2021, the FDA denied Sciteck’s EUA application
for SalivaQuik. (Smith (30)(b)(6) Dep., at 281.)
44. 	Counsel for Innovare sent a letter to Smith on 22 October 2021 accusing
Sciteck of breaching the Distributor Agreement based on Smith’s 5 October 2021
email. (ECF No. 71.39.)
45. 	On 28 October 2021, Smith responded in a letter asserting that it was
Innovare (not Sciteck) who had breached the Distributor Agreement by (1) using
SalivaQuik in violation of federal law; (2) inducing Sciteck to defraud Vietnamese
regulatory authorities by suggesting that Sciteck could add SalivaQuik to FURLS;
and (3) failing to properly validate its SalivaQuik mobile application and thus failing

to “provide a portion of Innovare’s ‘IP/Content’ per the [Distributor] Agreement[.]”
(ECF No. 71.40.)
46. 	Counsel for Innovare replied to Smith’s accusations by letter dated 5
November 2021, asserting that Sciteck’s allegations of breach of contract by Innovare
were “unmeritorious” and insisting that Innovare was entitled to payment for “past,
present, and future sales, including samples, for all [of Sciteck’s] IP-related products.”
The letter further stated that if Sciteck attempted to “avoid” its obligations under the
Distributor 	Agreement, 	Innovare 	would 	assert 	contract-related 	claims 	against
Sciteck that were potentially worth in excess of $1 billion. (ECF No. 71.46.)
47. 	Beginning in October 2021, Sciteck began contacting other software
developers to see whether they would be willing to create a SalivaQuik mobile
application, despite the fact that Innovare was apparently continuing its efforts in
this regard. 	(ECF Nos. 71.44–71.45.) 	Additionally, Sciteck began directly reaching
out to solicit other SalivaQuik distributors without Innovare’s knowledge. 	(Smith
(30)(b)(6) Dep., at 223–25; ECF Nos. 71.41–71.42.)
48. 	Sciteck also approached several other entities seeking assistance with
new usability and clinical studies. 	(Smith (30)(b)(6) Dep., at 224–25, 254–55; ECF
No. 71.47; ECF No. 71.48)).
49. 	On 21 December 2021—after this lawsuit had already been filed—the
FDA contacted Sciteck regarding concerns about the potential existence of false or
misleading 	claims 	on 	Sciteck’s 	website. 	(Smith 	(30)(b)(6) 	Dep., 	at 	213–15.)
Specifically, the FDA noted that Sciteck’s website listed SalivaQuik as having a
pending EUA authorization, even though such authorization had already been

denied. (Smith (30)(b)(6) Dep., at 214.) Because Innovare had created its own website
dedicated to SalivaQuik, Sciteck contacted Innovare—through counsel—to demand
that Innovare’s website also be updated to alleviate the FDA’s concerns, which
Sciteck contends has still not been done. (Smith (30)(b)(6) Dep., at 214–219.)
50. 	On 6 December 2021, Innovare initiated the present action by filing a
Complaint in Henderson County Superior Court. 	(Compl., ECF No. 2.) 	In its
Complaint, Innovare asserted claims for breach of contract, breach of the covenant of
good faith and fair dealing, unjust 	enrichment, 	declaratory judgment, specific
performance, and unfair and deceptive trade practices (“UDTP”) as well as a claim
for injunctive relief. (Compl. ¶¶ 24–60.)
51. 	This case was designated a complex business case and assigned to the
undersigned on 7 December 2021. (ECF No. 1.)
52. 	Sciteck filed an Answer and Counterclaims on 4 February 2022. (ECF
No. 10.)
53. 	On 19 January 2023, the Court issued its 2023 Opinion dismissing
several of Sciteck’s counterclaims and striking various affirmative defenses that it
had pled. See Innovare, Ltd., 2023 NCBC LEXIS 8, at **43.
54. 	Sciteck filed an Amended Answer and Counterclaims on 25 January
2023 in which it asserted the following claims against Innovare: (1) violation of the
Lanham Act; (2) unfair competition; (2) breach of contract; (3) breach of the covenant
of good faith and fair dealing; and (4) UDTP. (Am. Countercls., ¶¶ 121–161, ECF No.
57.)

55. 	On 28 June 2023, Sciteck filed its Motion for Judgment on the Pleadings,
and on 30 June 2023 filed its Motion for Summary Judgment. Innovare also filed its
cross-Motion for Summary Judgment on 30 June 2023.11
56. 	A hearing on the Motions took place on 28 March 2024 at which all
parties were represented by counsel, and the Motions are now ripe for resolution.
LEGAL STANDARD
57. 	It is well established that “[s]ummary judgment is proper ‘if the
pleadings, depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to any material fact
and that any party is entitled to a judgment as a matter of law.’ ” Morrell v. Hardin
Creek, Inc., 371 N.C. 672, 680 (2018) (quoting N.C. R. Civ. P. 56(c)). 	“[A] genuine
issue is one which can be maintained by substantial evidence.” 	Kessing v. Nat’l
Mortg. Corp., 278 N.C. 523, 534 (1971). 	“Substantial evidence is such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion and
means more than a scintilla or a permissible inference.” 	Daughtridge v. Tanager
Land, LLC, 373 N.C. 182, 187 (2019) (cleaned up).
58. 	On a motion for summary judgment, “[t]he evidence must be considered
‘in a light most favorable to the non-moving party.’ ” McCutchen v. McCutchen, 360
N.C. 280, 286 (2006) (quoting Howerton v. Arai Helmet, Ltd., 358 N.C. 440, 470
(2004)). 	“[T]he party moving for summary judgment ultimately has the burden of
11 All proceedings in this case following the filing of these Motions were stayed for several
months in connection with the withdrawal of Innovare’s original attorneys and the
substitution of its current counsel.

establishing the lack of any triable issue of fact.” 	Pembee Mfg. Corp. v. Cape Fear
Constr. Co., 313 N.C. 488, 491 (1985).
59. 	The party moving for summary judgment may satisfy its burden by
proving that “an essential element of the opposing party’s claim does not exist, cannot
be proven at trial, or would be barred by an affirmative defense, . . . or by showing
through discovery that the opposing party cannot produce evidence to support an
essential element of [the] claim[.]” Dobson v. Harris, 352 N.C. 77, 83 (2000). “If the
moving party satisfies its burden of proof, then the burden shifts to the non-moving
party to ‘set forth specific facts showing that there is a genuine issue for trial.’ ” Lowe
v. Bradford, 305 N.C. 366, 369–70 (1982) (quoting N.C. R. Civ. P. 56(e)). 	If the
nonmoving 	party 	does 	not 	satisfy 	its 	burden, 	then 	“summary 	judgment, 	if
appropriate, shall be entered against [the nonmovant].” United Cmty. Bank (Ga.) v.
Wolfe, 369 N.C. 555, 558 (2017) (quoting N.C. R. Civ. P. 56(e)).
60. 	When a party requests offensive summary judgment on its own claims
for relief, “a greater burden must be met.” 	Brooks v. Mt. Airy Rainbow Farms Ctr.,
Inc., 48 N.C. App. 726, 728 (1980). The moving party “must show that there are no
genuine issues of fact, that there are no gaps in his proof, that no inferences
inconsistent with his recovery arise from the evidence, and that there is no standard
that must be applied to the facts by the jury.” 	Parks Chevrolet, Inc. v. Watkins, 74
N.C. App. 719, 721 (1985). For that reason, it is “rarely . . . proper to enter summary
judgment in favor of the party having the burden of proof.” Blackwell v. Massey, 69
N.C. App. 240, 243 (1984).

61. 	“A [Rule 12(c)] motion for judgment on the pleadings is the proper
procedure when all the material allegations of fact are admitted in the pleadings and
only questions of law remain. 	When the pleadings do not resolve all the factual
issues, judgment on the pleadings is generally inappropriate.” Ragsdale v. Kennedy,
286 N.C. 130, 137 (1974). “A complaint is fatally deficient in substance, and subject
to a motion by the defendant for judgment on the pleadings if it fails to state a good
cause of action for plaintiff and against defendant[.]” Bigelow v. Town of Chapel Hill,
227 N.C. App. 1, 3 (2013).
62. 	When deciding a motion under Rule 12(c), the Court may only consider
“the pleadings and exhibits which are attached and incorporated into the pleadings.”
Davis v. Durham Mental Health/Dev. Disabilities/Substance Abuse Area Auth., 165
N.C. App. 100, 104 (2004). The Court must “view the facts and permissible inferences
in the light most favorable to the nonmoving party.” Ragsdale, 286 N.C. at 137. “All
well pleaded factual allegations in the nonmoving party’s pleadings are taken as true
and all contravening assertions in the movant’s pleadings are taken as false. 	All
allegations 	in 	the 	non-movant’s 	pleadings, 	except 	conclusions 	of 	law, 	legally
impossible facts, and matters not admissible in evidence at the trial, are deemed
admitted by the movant[.]” Id. (internal citations omitted).
ANALYSIS
63. 	At the outset, it is helpful to note the relief being sought by the parties
in the present Motions. Innovare seeks the entry of summary judgment in its favor
as to all of Sciteck’s counterclaims and as to its own claims for breach of contract and
unjust enrichment. Sciteck requests that summary judgment be granted in its favor

as to all claims asserted by Innovare. In addition, Sciteck seeks the entry of judgment
on the pleadings in its favor as to Innovare’s claims for breach of contract, unjust
enrichment, declaratory judgment, specific performance, UDTP, and injunctive relief.
I. 	Motion for Judgment on the Pleadings
64. 	It is not entirely clear why Sciteck waited until the close of discovery to
file a Rule 12(c) motion—particularly given the fact that it has also filed a summary
judgment motion. 	In any event, the Court concludes that the arguments contained
in Sciteck’s Motion for Judgment on the Pleadings are substantively subsumed by the
arguments contained in its Motion for Summary Judgment. 	Therefore, the Motion
for Judgment on the Pleadings is DENIED as moot.
II. 	Motions for Summary Judgment
A. Claims in Common
65. 	Both parties have asserted claims for breach of contract, breach of the
implied covenant of good faith and fair dealing, and UDTP.
66. 	The Court deems it appropriate to analyze the parties’ respective
arguments in support of these claims together.
1. 	Breach of Contract
67. 	“The elements of a claim for breach of contract are the existence of a
valid contract and a breach of that contract’s terms.” 	JT Russell & Sons, Inc. v.
Russell, 2024 NCBC LEXIS 35, at **9 (N.C. Super. Ct. Feb. 28, 2024).
68. 	Innovare essentially makes three arguments to support its breach of
contract claim. First, it asserts that Sciteck anticipatorily repudiated the Distributor
Agreement by improperly threatening to replace Innovare as SalivaQuik’s distributor

unless Innovare agreed to provide extra-contractual services in support of Sciteck’s
EUA submission. 	(Innovare’s Br. Supp. Mot. Part. Summ. J., at 15, ECF No. 73.)
Second, Innovare contends that Sciteck breached the Distributor Agreement by
engaging with, and continuing to sell its products through, other distributors despite
Innovare’s status as the sole “Class A” distributor under the Distributor Agreement.
(Innovare’s Br. Supp. Mot. Part. Summ. J., at 16.) 	Third, Innovare argues that
Sciteck’s use of Innovare’s IP/Content to contact other distributors and software
providers exceeded the scope of use permitted under the Distributor Agreement.
(Innovare’s Br. Supp. Mot. Part. Summ. J., at 16.)
69. 	Sciteck’s 	counterclaim 	for 	breach 	of 	contract 	incorporates 	several
different theories. 	First, Sciteck contends that Innovare breached § 4(a) of the
Distributor Agreement by “distributing, selling, or providing as a service” SalivaQuik
without prior EUA from the FDA. 	Second, Sciteck asserts that Innovare breached
§ 2(a) of the Distributor Agreement by not providing software compatible with the
SalivaQuik 	product, 	thereby 	failing 	to 	“provide 	a 	portion 	of 	Innovare’s
‘IP/Content [.]’ ” 	Third, Sciteck argues that—unbeknownst to Sciteck—Innovare
misrepresented its authority to bind Sciteck to agreements regarding the sale of
SalivaQuik tests. Fourth, Sciteck accuses Innovare of establishing a price for the sale
of the SalivaQuik tests without input from Sciteck as required under the Distributor
Agreement. 	Finally, Sciteck asserts that Innovare received compensation from
selling SalivaQuik tests to third parties without informing Sciteck about these
payments or providing Sciteck with its proportionate share. (Am. Countercls. ¶ 146;
ECF No. 71.40.)

70. 	In evaluating the parties’ respective breach of contract claims, the Court
must first address two threshold issues.
71. 	The 	first 	threshold 	issue 	concerns 	Sciteck’s 	argument 	that 	any
ambiguities in the Distributor Agreement must be construed against Innovare
because Innovare was the primary drafter of the contract. 	(See Sciteck’s Br. Supp.
Def.’s Mot. Part. Summ. J., at 6–8, ECF No. 67.)
72. 	It is true that North Carolina courts have previously held that “when an
ambiguity is present in a written instrument, the court is to construe the ambiguity
against the drafter—the party responsible for choosing the questionable language.”
Novacare Orthotics & Prosthetics E., Inc. v. Speelman, 137 N.C. App. 471, 476 (2000).
See also Loyd v. Griffin, 2023 NCBC LEXIS 178, at **7 (N.C. Super. Ct. Dec. 29, 2023)
(“[A]ny ambiguities are to be resolved against the drafter.”).
73. 	As an initial matter, certain provisions of the Distributor Agreement do,
in fact, appear to be ambiguous. For example, it is unclear whether the Distributor
Agreement requires Innovare to create new software as part of its obligations
thereunder. It is also vague as to whether the Distributor Agreement was intended
to encompass other Sciteck products besides SalivaQuik.12
74. 	That said, the Court is unable to agree with Sciteck that any such
ambiguities must be construed against Innovare. 	The record shows that the
Distributor Agreement was negotiated between two sophisticated entities with each
side proposing various terms for possible inclusion into the final agreement. For this
reason, the rule of construction cited by Sciteck is inapplicable on these facts. 	See,
12 These are only two examples. Other ambiguities appear to exist as well.

e.g., Joyner v. Adams, 87 N.C. App. 570, 577 (1987) (holding that the rule that
“ambiguity in contract terms must be construed most strongly against the party
which drafted the contract” is inappropriate in situations “where the parties were at
arm’s length and were equally sophisticated . . .”).
75. 	The second threshold issue concerns Innovare’s contention that Sciteck
anticipatorily repudiated the Distributor Agreement. 	Innovare argues that Smith’s
5 October 2021 email to Caronite constituted such an anticipatory repudiation
because it stated Sciteck’s intent to no longer be bound by its contractual obligations
to Innovare unless Innovare provided information sufficient to satisfy the FDA’s
stated concerns about SalivaQuik—a condition that was nowhere stated in the
Distributor Agreement.
76. 	North Carolina courts define anticipatory repudiation as follows:
Repudiation is a positive statement by one party to the other party
indicating 	that 	he 	will 	not 	or 	cannot 	substantially 	perform 	his
contractual duties. 	When a party repudiates his obligations under the
contract before the time for performance under the terms of the contract,
the issue of anticipatory breach or breach by anticipatory repudiation
arises. 	One effect of the anticipatory breach is to discharge the non-
repudiating party from his remaining duties to render performance
under the contract.
Profile Invs. No. 25, LLC v. Ammons E. Corp., 207 N.C. App. 232, 236 (2010) (quoting
Millis Constr. Co. v. Fairfield Sapphire Valley, 86 N.C. App. 506 (1987)).
77. 	Our Court of Appeals has provided further illustration regarding the
applicability of this doctrine.
[T]he refusal to perform must be of the whole contract or of a covenant
going to the whole consideration, and must be distinct, unequivocal, and
absolute[.] . . . Furthermore, even a distinct, unequivocal, and absolute
refusal to perform is not a breach unless it is treated as such by the
adverse party. 	Upon repudiation, the non-repudiating party may at

once treat it as a breach of the entire contract and bring his action
accordingly. . . . Thus, breach by repudiation depends not only upon the
statements and actions of the allegedly repudiating party but also upon
the response of the non-repudiating party.
Profile Invs. No. 25, LLC, 207 N.C. App. at 237 (citations omitted).
78. 	In addition, our Court of Appeals has also held that “if a party to the
contract states that he cannot perform except on some condition which goes outside
the terms of his contract then the statement will constitute a repudiation.” 	Millis
Constr. Co., 86 N.C. App. at 511.
79. 	Here, although admittedly the statements by Smith in his 5 October
2021 	email 	about 	terminating 	the 	agreement 	appear 	to 	be 	conditioned 	upon
Innovare’s provision of extra-contractual services, the threat of termination cannot
be properly characterized as “absolute” or “unequivocal.” Instead, by its very terms,
Smith’s email stated that “Sciteck [would] decide at a later time if [it would keep
Innovare] as one of [its] distributors and/or software providers.” (ECF No. 71.38, at
5 (emphasis added).) Moreover, the response email sent by Caronite clearly reflected
Innovare’s 	belief 	that 	the 	Distributor Agreement 	remained in 	effect 	and that
Innovare desired to preserve its contractual relationship with Sciteck. 	(ECF No.
71.38, at 3–4.) Finally, Smith’s follow-up email on 6 October did not repeat his prior
threat to terminate the contract. (ECF No. 71.38, at 2.)
80. 	Thus, although Innovare’s counsel later took the position that Smith’s 5
October 	email 	constituted 	an 	anticipatory 	repudiation, 	Innovare’s 	immediate
reaction 	was 	quite 	different—stating 	its 	desire 	for 	the 	parties’ 	contractual
relationship to continue. For these reasons, the Court concludes that no anticipatory
repudiation of the Distributor Agreement exists on these facts.

81. 	Having disposed of these threshold issues, the Court concludes that in
all other respects significant questions of fact remain with respect to both parties’
claims for breach of contract. 	Much ink could be spilled detailing the numerous
disputed issues that exist between the parties about what the Distributor Agreement
actually required and how the opposing party failed to comply with its respective
obligations under the agreement. 	Suffice it to say, however, that these issues must
be decided by a jury. 	Accordingly, both parties’ Motions for Summary Judgment as
to the breach of contract claims are DENIED.
2. 	Breach of the Implied Covenant of Good Faith and Fair
Dealing
82. 	“Under North Carolina law, every enforceable contract contains an
underlying implied covenant of good faith and fair dealing ‘that neither party will do
anything 	which 	injures 	the 	right 	of 	the 	other 	to 	receive 	the 	benefits 	of 	the
agreement.’ ” Kelly v. Nolan, 2022 NCBC LEXIS 78, at **19 (N.C. Super. Ct. July 19,
2022) (citing Bicycle Transit Auth., Inc. v. Bell, 314 N.C. 219, 228 (1985)).
83. 	The basis for both parties’ claims for breach of the implied covenant of
good faith and fair dealing largely mirrors the grounds for their respective breach of
contract claims.
84. 	Accordingly, the Court likewise DENIES both parties’ Motions for
Summary Judgment with respect to their claims for breach of the covenant of good
faith and fair dealing. 	See Woodcock v. Cumberland Cnty. Hosp. Sys., 2023 NCBC
LEXIS 130, **36 (N.C. Super. Ct. Oct. 18, 2023) (denying motion for summary
judgment because “[Plaintiff’s] claim for breach of the implied covenant of good faith

and fair dealing [was] based on the same acts as his claim for breach of contract,” for
which summary judgment was also denied).
3. 	Unfair and Deceptive Trade Practices
85. 	“To prevail on a claim of [UDTP] a plaintiff must show (1) an unfair or
deceptive act or practice, or an unfair method of competition, (2) in or affecting
commerce, (3) which proximately caused actual injury to the plaintiff or to his
business.” Stamatakos v. Carolina Urology Partners, PLLC, 2024 NCBC LEXIS 28,
at **25 (N.C. Super. Ct. Feb. 20, 2024) (quoting Spartan Leasing Inc. v. Pollard, 101
N.C. App. 450, 460–61 (1991)); see also N.C.G.S. § 75-1.1.
86. 	North Carolina courts have held that “[a]ctions for [UDTP] are distinct
from actions for breach of contract, and a mere breach of contract, even if intentional,
is not sufficiently unfair or deceptive to sustain an action under N.C.G.S. § 75-1.1.”
McDonald v. Bank of N.Y. Mellon Trust Co., 259 N.C. App. 582, 589 (2018) (quoting
SunTrust Bank v. Bryant/Sutphin Props., LLC, 222 N.C. App. 821, 826 (2012)).
“When a plaintiff alleges a UDTP violation based upon a breach of contract, the
plaintiff ‘must show substantial aggravating circumstances attending the breach to
recover under [N.C.G.S. § 75-1.1].’ ” Dan King Plumbing Heating & Air Conditioning,
LLC v. Harrison, 281 N.C. App. 312, 320 (2022).
87. 	The Court has carefully considered the parties’ respective arguments as
to why such aggravating circumstances exist in this case with regard to the opposing
party’s alleged conduct. 	The Court ultimately concludes that the evidence upon
which each party relies is insufficient to elevate the other side’s allegedly breaching
conduct into a valid claim for UDTP.

88. 	However, as discussed below, the Court is denying Innovare’s summary
judgment motion as to Sciteck’s counterclaim for trademark infringement under the
Lanham Act.
89. 	This Court has previously held that a claim for trademark infringement
(if proven) can constitute a UDTP. See JCG & Assocs. LLC v. Disaster Am. USA LLC,
2022 NCBC LEXIS 156, at **21 (N.C. Super. Ct. Dec. 12, 2022) (“This infringement
is also an unfair and deceptive practice that is in or affecting commerce under section
75-1.1.”); Ray Lackey Enters., Inc. v. Vill. Inn Lakeside, Inc., 2016 NCBC LEXIS 9, at
**37 (N.C. Super. Ct. Jan. 29, 2016) (“Acts of trademark infringement are per se
unfair and deceptive trade practices.”).
90. 	Accordingly, 	the 	Court 	GRANTS 	Sciteck’s 	Motion 	for 	Summary
Judgment as to Innovare’s UDTP claim but DENIES Innovare’s Motion for Summary
Judgment as to Sciteck’s UDTP claim.
B. Innovare’s Remaining Claims
91. 	The remaining claims pled by Innovare in its Complaint are claims for
declaratory judgment, specific performance, injunction, and unjust enrichment.
92. 	In its briefing on the pending Motions, Innovare has stated that it is
voluntarily dismissing its claim for declaratory judgment. 	(Innovare’s Br. Opp.
Sciteck’s Mot. Part. Summ. J., at 11, ECF No. 88.) 	Therefore, the Court GRANTS
summary judgment in favor of Sciteck as to that claim.
93. 	Moreover, at the 28 March hearing, counsel for Innovare was unable to
articulate a valid basis for its causes of action for specific performance and injunction.

Therefore, the Court likewise GRANTS Sciteck’s Motion for Summary Judgment as
to these two claims.
94. 	Accordingly, the only remaining claim by Innovare that the Court must
address is Innovare’s claim for unjust enrichment.
95. 	The elements of a claim for unjust enrichment are as follows:
First, one party must confer a benefit upon the other party. . . . Second,
the benefit must not have been conferred officiously, that is it must not
be conferred by an interference in the affairs of the other party in a
manner that is not justified in the circumstances. . . . Third, the benefit
must not be gratuitous. . . . Fourth, the benefit must be measurable.
. . . Last, the defendant must have consciously accepted the benefit.
Butler v. Butler, 239 N.C. App. 1, 8 (2015) (quoting JPMorgan Chase Bank, Nat’l Ass’n
v. Browning, 230 N.C. App. 537, 541–42 (2013)).
96. 	Innovare’s unjust enrichment claim is based upon its contention that it
undertook extensive extra-contractual efforts in connection with the usability and
clinical studies discussed earlier in this Opinion at Sciteck’s request for the purpose
of assisting Sciteck in its quest to obtain EUA from the FDA. 	Specifically, these
efforts included “spen[ding] many hours signing up third parties for sample collection
events[,] . . . personally travel[ing] around the country to collect such samples[,]”
“develop[ing] a survey to use with participants from whom Innovare collected
samples[,]” 	providing 	the 	survey 	results 	to 	Sciteck, 	and 	ultimately 	collecting
approximately 1,322 samples over 25 separate dates. 	(Vuono Aff. ¶¶ 16–17, 19.)
Innovare further asserts that it undertook these efforts in reliance upon Sciteck’s
representations that it would pay Innovare for its assistance. 	(Vuono Aff. ¶ 15–16.)
Innovare contends that it has never been compensated by Sciteck for any of the above-
referenced efforts. (Vuono Aff. ¶ 17; Vuono (30)(b)(6) Dep., at 212.)

97. 	Normally, “[i]f there is a contract between the parties[,] the contract
governs the claim[,] and the law will not imply a contract.” 	Booe v. Shadrick, 322
N.C. 567, 570 (1988). 	Here, of course, a contract did, in fact, exist between the
parties—that is, the Distributor Agreement.
98. 	However, Innovare is asserting that it is nevertheless entitled to assert
an unjust enrichment claim because it provided services for Sciteck that were not
required under the contract and for which no compensation was paid. 	Courts
applying North Carolina law have allowed claims for unjust enrichment to proceed
under analogous circumstances. 	See, e.g., Touchline Video, Inc. v. Intercollegiate
Women’s Lacrosse Coaches Ass’n, 2022 U.S. Dist. LEXIS 96280, at *17 (M.D.N.C. May
31, 2022) (“A claim for unjust enrichment for any benefit beyond that required by the
[contract at issue] would not be preempted by the presence [of] the contract. At the
very 	least, 	it 	is 	a 	question 	of 	material 	fact 	as 	to 	whether 	the
benefits . . . conferred . . . were 	extra-contractual.”); 	see 	also 	Tumlin 	v. 	Tuggle
Duggins P.A., 2018 NCBC LEXIS 217, at *37–38 (N.C. Super. Ct. Dec. 18. 2018)
(“While [plaintiff] cannot use an unjust enrichment claim to insulate his potential
failure to prove his contract claim, it is not clear at this time whether his evidence
presented at trial will include gratuitous extra-contractual services, the value of
which [defendant] accepted. Therefore, the Court defers its final consideration of the
unjust enrichment claim until the evidentiary record is fully presented at trial.”).
99. 	Here, as the Court has already held in its 19 January 2023 Opinion, the
Distributor Agreement imposed responsibility on Sciteck—not Innovare—to ensure
that regulatory approval was obtained. Therefore, services performed by Innovare at

Sciteck’s request to help Sciteck in its efforts to obtain EUA (or any other type of FDA
approval) were outside the parties’ contractual relationship. 	However, the Court
finds that there is a factual dispute over whether Sciteck actually received a
measurable benefit from Innovare’s actions. That issue must be decided by a jury.
100. 	For these reasons, the Court DENIES 	the Motions for Summary
Judgment for both Innovare and Sciteck on Innovare’s unjust enrichment claim.
C. Sciteck’s Remaining Counterclaims
101. 	Sciteck’s remaining counterclaims include a counterclaim under the
federal Lanham Act, 15 U.S.C. § 1125, and a claim for unfair competition under North
Carolina law.
102. 	At the 28 March hearing, counsel for Sciteck conceded that it had
mistakenly 	reasserted 	its 	unfair 	competition 	claim 	when 	filing 	its 	amended
counterclaims after the Court had dismissed that claim in its 19 January 2023
Opinion.
103. 	Accordingly, summary judgment is GRANTED in favor of Innovare as
to Sciteck’s unfair competition counterclaim. Therefore, the Court need only address
Sciteck’s Lanham Act counterclaim.
104. 	The Lanham Act provides, in relevant part, as follows:
(1) Any person who, on or in connection with any goods or services, or
any container for goods, uses in commerce any word, term, name,
symbol, 	or 	device, 	or 	any 	combination 	thereof, 	or 	any 	false
designation of origin, false or misleading description of fact, or false
or misleading representation of fact, which—
(A) 	is likely to cause confusion, or to cause mistake, or to
deceive as to the affiliation, connection, or association of such
person with another person, or as to the origin, sponsorship, or

approval of his or her goods, services, or commercial activities by
another person, or
(B) 	in commercial advertising or promotion, misrepresents the
nature, characteristics, qualities, or geographic origin of his or her
or another person’s goods, services, or commercial activities
shall be liable in a civil action by any person who believes that he or she
is or is likely to be damaged by such act.
15 U.S.C. § 1125(a).
105. 	As the Court explained in its 2023 Opinion, Sciteck’s counterclaim under
the Lanham Act is based largely upon allegations that Innovare has continued to
represent itself as being authorized to sell and distribute SalivaQuik even after its
license to do so ended following the termination of the Distributor Agreement. Sciteck
further asserts that Innovare has misled consumers into believing that Sciteck
distributed SalivaQuik for non-RUO purposes without FDA approval. This conduct,
Sciteck contends, has caused the company to suffer reputational harm. (19 Jan. 2023
Op. ¶ 71; Am. Countercls. ¶¶ 121–34.) 	The Court finds from its examination of the
record that a genuine issue of material fact exists on this subject.
106. 	Sciteck also argues that Innovare continues to maintain a live website
featuring references to SalivaQuik.13 Innovare does not appear to deny this assertion
and instead claims that it is still permitted to do so because of the lack of clarity over
when, if ever, the Distributor Agreement was actually terminated. Because a factual
dispute exists over when the contract between the parties ended, a jury must decide
whether Innovare’s continued maintenance of its SalivaQuik website (or any other
actions it took while representing itself to others as a licensed distributor of
13 www.salivaquik.com

SalivaQuik) exceeded the scope of its rights under the Distributor Agreement so as
to violate the Lanham Act.
107. 	Finally, Sciteck’s Lanham Act claim is also based on its contention that
Innovare engaged in a “relabeling” or “repackaging” scheme. 	This evidence—
according to Sciteck—supports the conclusion that “Innovare falsely designated the
origin of the SalivaQuik tests and that such false designation was likely to cause
consumer confusion.” 	(Sciteck’s Br. Opp. Pl.’s Mot. Part. Summ. J., at 18, ECF No.
85; ECF No. 67.1, at 293–99, 302–03.) The Court finds that questions of fact exist on
this theory as well.
108. 	Sciteck’s contentions, if proven at trial, would be sufficient for it to show
a violation of the Lanham Act. 	Indeed—as the Court noted in its 2023 Opinion—a
number of other courts have recognized the validity of Lanham Act claims premised
on analogous theories. See, e.g., Halo Optical Prods. Inc. v. Liberty Sport, Inc., 2017
U.S. Dist. LEXIS 41084, at *27–33 (N.D.N.Y. Mar. 22, 2017) (granting summary
judgment for plaintiff distributor on a Lanham Act claim concerning use of a
trademark 	beyond 	the 	scope 	of 	a 	licensing 	agreement); 	Ford 	Motor 	Co. 	v.
Thermoanalytics, Inc., 2015 U.S. Dist. LEXIS 145965, at *9, 13–14 (E.D. Mich. Oct.
28, 2015) (finding trademark infringement when the defendant “exceeded the scope
of the [l]icensing [a]greement” and the former licensee created a “likelihood of
confusion” by continuing to use the formerly licensed trademark).
109. 	For these reasons, Innovare’s summary judgment motion is DENIED
with respect to Sciteck’s claim under the Lanham Act.

CONCLUSION
THEREFORE, IT IS ORDERED as follows:
1. 	Sciteck’s Motion for Summary Judgment is GRANTED as to Innovare’s claims
for UDTP, declaratory judgment, specific performance, and injunction, and
those claims are DISMISSED with prejudice. 	The remainder of Sciteck’s
Motion for Summary Judgment is DENIED.
2. 	Sciteck’s Motion for Judgment on the Pleadings is DENIED as moot.
3. 	Innovare’s Motion for Summary Judgment is GRANTED as to Sciteck’s
counterclaim for unfair competition, and that claim is DISMISSED with
prejudice. 	The remainder of Innovare’s Motion for Summary Judgment is
DENIED.
SO ORDERED, this the 29th day of May, 2024.
/s/ Mark A. Davis
Mark A. Davis
Special Superior Court Judge
for Complex Business Cases