BIOMILQ, INC. v. GUILIANO, 2023 NCBC 13

STATE OF NORTH CAROLINA
ORANGE COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
22 CVS 255
BIOMILQ, INC.,
Plaintiff,
v.
SHAYNE GUILIANO and 108LABS,
LLC,
Defendants.
ORDER AND OPINION ON
DEFENDANTS’ JOINT MOTION TO
DISMISS OR IN THE ALTERNATIVE
HOLD PROCEEDINGS IN ABEYANCE
1. 	THIS MATTER is before the Court on Defendants Shayne Guiliano
(“Mr. Guiliano”) and 108Labs, LLC’s (“108Labs” and together “Defendants”) filing on
15 June 2022 of the Joint Motion to Dismiss or in the Alternative Hold Proceedings
in Abeyance (the “Motion”). (ECF No. 73 [“Mot.”].) Pursuant to Rule 12(b)(6) of the
North Carolina Rules of Civil Procedure (the “Rules”), Defendants request dismissal
of Plaintiff BIOMILQ, Inc.’s (“BIOMILQ”) First Amended Complaint (“Amended
Complaint”), (Mot. 1), or in the alternative, that the Court stay all proceedings
pending the resolution of the ongoing equitable distribution matter between Mr.
Guiliano as plaintiff, and Dr. Leila Strickland (“Dr. Strickland”), BIOMILQ, and
Michelle Egger as defendants, in the District Court of Orange County, Case No.
22 CVD 283 (the “District Court Action”), (Mot. 1).
2. 	For the reasons set forth herein, the Court GRANTS in part and DENIES
in part the Motion.
Robinson, Bradshaw & Hinson, P.A., by J. Dickson Phillips and Stephen
D. Feldman, and Goodwin Procter, LLP, by Rachel M. Walsh for Plaintiff
BIOMILQ, Inc.
BIOMILQ, Inc. v. Guiliano, 2023 NCBC 13.

Bowens & Averhart, PLLC, by Stephon J. Bowens, and Carnes Warwick,
PLLC, by Tara D. Warwick and Jonathan A. Carnes for Defendant
108Labs, LLC.
Carnes Warwick, PLLC, by Tara D. Warwick and Jonathan A. Carnes
for Defendant Shayne Guiliano.
Robinson, Judge.
I. 	INTRODUCTION
3. 	This action arises out of a dispute between Defendants and BIOMILQ
regarding certain human cell-cultured technologies and products. 	The focus of the
dispute is on Mr. Guiliano’s alleged conduct prior to and on 18 February 2022, when
he allegedly photographed pages of a BIOMILQ-issued notebook containing trade
secret and confidential information. Defendants contend that they have contributed
to the development of BIOMILQ’s technology, patents, and alleged trade secrets, and
that Defendants have rights in them.
4. 	This Opinion concerns the Amended Complaint and the seven claims for
relief alleged therein. Defendants ask the Court to dismiss the Amended Complaint
in full, but to the extent any claim survives the motion to dismiss stage, Defendants
request that the Court stay this action until the District Court Action is fully resolved.
II. 	FACTUAL AND PROCEDURAL BACKGROUND
5. 	The Motion is brought, in part, pursuant to N.C.G.S. § 1A-1, Rule 12(b)(6)
for failure to state a claim upon which relief can be granted. Accordingly, the Court
is limited to its review of the Amended Complaint as to that aspect of the Motion.
Therefore, to the extent any party has relied on extraneous evidence to support their
respective positions, the Court has not considered that evidence.

6. 	The Court does not make findings of fact on a motion to dismiss pursuant
to Rule 12(b)(6), but only recites those factual allegations that are relevant and
necessary to the Court’s determination of the Motion. 	See, e.g., White v. White, 296
N.C. 661, 667 (1979) (stating that the purpose of “a motion to dismiss is to test the
law of a claim, not the facts which support it”).
7. 	BIOMILQ is a Delaware corporation with its principal place of business at
9 Laboratory Drive, Durham, NC 27709. 	(First Am. Compl. ¶ 6, ECF No. 42 [“Am.
Compl.”].)
8. 	Mr. Guiliano is an individual residing in Hillsborough, North Carolina.
(Am. Compl. ¶ 7.)
9. 	108Labs is a North Carolina limited liability company with its principal
place of business at 141 W. King Street, Hillsborough, NC 27278. (Am. Compl. ¶ 8.)
It is alleged that 108Labs did not execute an operating agreement.1 	(Am. Compl.
¶ 14.)
A. 	BIOMILQ, Inc.’s Formation and Events Preceding It
10. 	On or about 1 October 2013, Mr. Guiliano and Dr. Strickland, a doctor of
cell biology with post-doctoral research experience at Stanford Medical School,
founded 	108Labs. 	(Am. 	Compl. 	¶¶ 11, 	13.) 	At 	the 	time, 	Mr. 	Guiliano 	and
Dr. Strickland were married. 	(Am. Compl. ¶ 13.) 	BIOMILQ alleges Mr. Guiliano
1 Pursuant to N.C.G.S. § 57D-2-30(a), an LLC, such as 108Labs, can have a written operating
agreement executed by its members which governs its internal affairs. It is unclear from the
Amended 	Complaint whether 108Labs 	has 	an operating agreement. 	The Amended
Complaint alleges only that 108Labs “did not execute” one. (Am. Compl. ¶ 14.)

provided operational support for 108Labs, while Dr. Strickland focused on research,
scientific planning, and execution. (Am. Compl. ¶ 13.)
11. 	BIOMILQ alleges that in late 2013, Dr. Strickland began thinking about
ideas for synthesizing cell-cultured human milk outside the body. (Am. Compl. ¶ 12.)
Between 2013 and 2016, it alleges that 108Labs failed to secure outside funding, and
from 2016 to 2019, that 108Labs engaged in “little meaningful activity” such that
Mr. Guiliano and Dr. Strickland did not intend to pursue it further. 	(Am. Compl.
¶ 14.) 	Dr. Strickland allegedly ceased participation in 108Labs in March 2020 but
retained her partial ownership interest in it. (Am. Compl. ¶ 15.)
12. 	In or around August 2019, Dr. Strickland met Michelle Egger (“Ms. Egger”),
the co-founder of BIOMILQ. 	(Am. Compl. ¶ 20.) 	The Amended Complaint provides
that Dr. Strickland personally funded an experiment involving cell-cultured products,
arranging the work through 108Labs, but that she did not use 108Labs’s funds to pay
for the experiment. (Am. Compl. ¶ 21.)
13. 	Dr. Strickland and Ms. Egger founded and incorporated BIOMILQ in
January 2020. (Am. Compl. ¶ 23.)
14. 	In February 2020, BIOMILQ alleges it entered into an agreement with a
laboratory at the University of California at Davis for the laboratory to do testing
with samples provided by Dr. Strickland. 	(Am. Compl. ¶ 25.) 	The laboratory
completed 	the 	testing, 	and 	the 	results 	were 	shared 	with 	Dr. 	Strickland 	and
Mr. Guiliano. (Am. Compl. ¶ 26.)

15. 	BIOMILQ alleges that Mr. Guiliano was never involved with its research
or development efforts. (Am. Compl. ¶ 23.)
16. 	BIOMILQ hired Dr. Strickland in March 2020, and it alleges that she
thereafter assigned to BIOMILQ any intellectual property and business know-how
relating to the development of cultured mammary cells. (Am. Compl. ¶ 24.) By June
2020, BIOMILQ had $3.5 million in funding from various investors, and the next
month 	it 	opened laboratories 	in 	Durham, 	North 	Carolina, and hired its 	first
researchers. 	(Am. Compl. ¶ 28.) 	BIOMILQ continued to hire researchers and raise
funds through April 2022. (Am. Compl. ¶¶ 29–30.)
B. 	Patents, Patent Applications, and Trademarks at Issue
17. 	A number of patent applications relevant to this matter were filed with the
United States Patent and Trademark Office (“USPTO”) in 2020 and 2021, and some
of those applications ultimately resulted in patents.
18. 	On 8 January 2020, U.S. Provisional Patent Application No. 62/958,407,
titled “Live Cell Constructs for Milk Production and Methods Using the Same” was
filed, listing Dr. Strickland and Mr. Guiliano as the inventors and applicants (the
“ ’407 Application”). (Am. Compl. ¶ 32; Am. Compl. Ex. A, ECF No. 42.2.) BIOMILQ
alleges that Dr. Strickland assigned her interest in the ’407 Application to it on
10 April 2020. 	(Am. Compl. ¶ 33.) 	BIOMILQ also alleges that Mr. Guiliano was
included on the ’407 Application because of his personal relationship with Dr.
Strickland, and his “limited research into the scientific literature” done at her

request, but that the results of Mr. Guiliano’s work “were not incorporated into later
work by BIOMILQ.” (Am. Compl. ¶ 32.)
19. 	On 10 December 2020, U.S. Provisional Patent Application No. 63/199,164,
titled “Live Cell Constructs for Milk Production and Methods Using the Same” was
filed, listing Dr. Strickland as the sole inventor and BIOMILQ as the sole applicant
(the “ ’164 Application”). (Am. Compl. ¶ 34; Am. Compl. Ex. B, ECF No. 42.3.)
20. 	Eight days later, on 18 December 2020, U.S. Patent Application No.
17/247,672, titled “Live Cell Constructs for Production of Cultured Milk Product and
Methods Using the Same” was filed, listing Dr. Strickland as the sole inventor and
BIOMILQ as the sole applicant (the “ ’672 Application”).2 	(Am. Compl. ¶ 35.) 	The
’672 Application claims priority to both the ’407 Application and ’164 Application.3
(Am. Compl. ¶ 35.) On 7 September 2021, the ’672 Application issued as U.S. Patent
No. 11,111,477 (the “ ’477 Patent”). (Am. Compl. Ex. C, ECF No. 42.4.)
21. 	On 29 March 2021, U.S. Patent Application No. 17/301,216, titled “Milk
Product Compositions” was filed, listing Dr. Strickland as the sole inventor and
BIOMILQ as the sole applicant (the “ ’216 Application”). 	(Am. Compl. ¶ 42; Am.
Compl. Ex. F, ECF No. 42.7.) The ’216 Application claims priority to U.S. Provisional
Patent Application Nos. 63/030,149 and 63/200,480 (the “ ’149 Application” and the
“ ’480 Application”), each filed by Dr. Strickland as the sole inventor with BIOMILQ
2 The pleadings do not contain a copy of the ’672 Application.
3 37 C.F.R. § 1.78(a) contains the requirements necessary for later-filed patent applications
to “claim the benefit of” or “priority to” prior applications filed. See also 35 U.S.C. § 119(e).
Further, 37 C.F.R. § 1.78(d) contains provisions relating to claims under 35 U.S.C. §§ 120,
121, 365(c), or 386(c) for the benefit of a prior-filed nonprovisional application.

as the sole applicant. 	(Am. Compl. ¶¶ 40–42.) 	The ’216 Application disclosed milk
compositions containing specific natural components found in human breast milk.
(Am. Compl. ¶ 42.) On 28 December 2021, the ’216 Application issued as U.S. Patent
No. 11,206,843 (the “ ’843 Patent”). 	(Am. Compl. ¶ 43; Am. Compl. Ex. G, ECF No.
42.8.)
22. 	On 6 September 2021, U.S. Patent Application No. 17/467,358, titled “Live
Cell Constructs for Production of Cultured Milk Product and Methods Using the
Same,” was filed, listing Dr. Strickland as the sole inventor and BIOMILQ as the sole
applicant (the “ ’358 Application”). 	(Am. Compl. ¶ 37; Am. Compl. Ex. E, ECF No.
42.6.) The ’358 Application was a continuation of the ’672 Application and concerned
milk products separated from the cultured mammary cells that produced them. (Am.
Compl. ¶ 37; Am. Compl. Ex. E, ECF No. 42.6.) The ’358 Application claims priority
to the ’407 Application and ’164 Application. (Am. Compl. ¶ 37.)
23. 	BIOMILQ alleges that Dr. Strickland assigned all her rights, title and
interest in the preceding patents and patent applications to it. 	(Am. Compl. ¶¶ 36,
38, 42, 44.)
24. 	BIOMILQ was granted registration of the mark “BIOMILQ” and design at
Reg. No. 6,581,364 for research and development services in international class 42.
(Am. Compl. ¶ 46; Am. Compl. Ex. H, ECF No. 42.9.) On 3 August 2021, BIOMILQ
also applied to register the mark “BIOMILQ” and design serial number on an “intent-
to-use” basis for biotechnology milk products in international class 5, but it alleges

that application is awaiting examination. (Am. Compl. ¶ 47; Am. Compl. Ex. I, ECF
No. 42.10.)
C. 	Relevant Events Following the Formation of BIOMILQ, Inc.
25. 	In connection with her work for BIOMILQ, Dr. Strickland used notebooks
for recording “ideas, observations, and activities.” (Am. Compl. ¶ 50.) The Amended
Complaint alleges that she used the BIOMILQ-issued notebooks for taking detailed
notes about BIOMILQ’s “technology and product development, to-do lists for [its]
ongoing projects, ideas regarding processes and trouble-shooting for BIOMILQ’s
production, strategy regarding product development and commercialization, and
information relating to potential partnerships and investors for BIOMILQ.” 	(Am.
Compl. ¶ 50.) BIOMILQ alleges that all of Dr. Strickland’s notebooks are its property
and contain its trade secrets and confidential information, and that they were kept
in secure locations, including at least: at BIOMILQ’s offices; in a closed bag within
Dr. Strickland’s residence; in a closed bag together with a laptop when travelling
between home and work; or on Dr. Strickland’s work surface at home. (Am. Compl.
¶¶ 50–51.)
26. 	This 	case 	primarily 	involves 	Dr. 	Strickland’s 	notebook 	used 	from
approximately 1 December 2021 to 18 February 2022 (the “Notebook”). (Am. Compl.
¶ 52.) BIOMILQ alleges the Notebook contains trade secret information such as: (1)
BIOMILQ’s research and development efforts, including new products; (2) research
priorities and next steps for research and development; (3) BIOMILQ’s processes and
potential refinements and trouble-shooting for those processes; (4) potential partners

and suppliers; (5) personnel and hiring materials for potential employees; and (6)
strategies 	regarding 	product 	development 	and 	commercialization 	of 	products,
including notes from a board meeting where “BIOMILQ laid out plans for research
and development going forward for the next two years, and for commercializing
products for the next five years.” (Am. Compl. ¶ 52.)
27. 	In or around March 2020, Mr. Guiliano and Dr. Strickland separated.4
(Am. Compl. ¶ 53.) 	They had an informal joint custody arrangement of their two
children but lived separately. (Am. Compl. ¶ 54.)
28. 	On 18 February 2022, Mr. Guiliano was scheduled to drop the children off
at the marital home, where Dr. Strickland was living. 	(Am. Compl. ¶ 55.) 	At
5:56 p.m., Dr. Strickland received a text message from her child stating “Dads [sic]
taking photos of the stuff in your blue journal.” (Am. Compl. ¶ 55; Am. Compl. Ex. K,
ECF No. 42.12.) After receiving this message, Dr. Strickland sent a text message to
Mr. Guiliano stating “[g]et the [f__k] out of my journal[.]” 	(Am. Compl. ¶ 56; Am.
Compl. Ex. L, ECF No. 42.13.) In his response, Mr. Guiliano wrote “[i]t’s not fun to
see it open to a [redacted] project, but not news either. You should better protect your
trade secret theft . . . [t]his is my house, you should get an office.” (Am. Compl. Ex. L,
ECF No. 42.13.) BIOMILQ alleges that it would be “devastating” and “at a great risk
of losing its competitive position” if the contents of the Notebook were revealed to a
competitor. (Am. Compl. ¶ 60.)
4 The Court understands that the Orange County District Court Judge presiding over the
related proceeding has not made a determination on the date of separation.

29. 	On 22 February 2022, counsel for BIOMILQ sent a cease-and-desist letter
to Mr. Guiliano demanding that (1) he return or sequester any photographs of the
Notebook, (2) he refrain from using any of the information in the photographs, and
from disseminating the photographs or the information contained in them to any
third parties, and (3) if any of the information was already shared with third parties,
that he identify those third parties. (Am. Compl. ¶ 61.) Mr. Guiliano acknowledged
receipt of the letter on 24 February 2022, but neither he nor his counsel responded.
(Am. Compl. ¶ 62.)
D. 	Procedural History
30. 	This action was initiated on 4 March 2022 on the filing of the Complaint,
(ECF No. 3), and was designated to the undersigned the same day (ECF Nos. 1, 7).
The Amended Complaint was filed as of right on 13 April 2022. (See Am. Compl.)
31. 	Contemporaneous with the filing of its Complaint, BIOMILQ filed its
Motion for Temporary Restraining Order and Preliminary Injunction. 	(ECF No. 4.)
On 8 March 2020, with the consent of all parties, the Court entered a Consent Order
on BIOMILQ’s Motion for Temporary Restraining Order (“TRO”). (ECF No. 17.) The
TRO provided that Mr. Guiliano would refrain from disseminating the information
contained in the Notebook or any photos he may have of it. 	(ECF No. 17.) 	That
restraining order has remained in effect throughout this litigation.
32. 	BIOMILQ 	alleges 	seven 	claims 	for 	relief 	against 	Mr. 	Guiliano: 	(1)
misappropriation of trade secrets pursuant to the North Carolina Trade Secrets
Protection Act, N.C.G.S. § 66-152 et seq. (the “TSPA”), (Am. Compl. ¶¶ 63–73);

(2) common law trademark infringement, (Am. Compl. ¶¶ 74–79); (3) unfair or
deceptive trade practices in violation of N.C.G.S. § 75-1.1 (the “UDTPA”), (Am.
Compl. ¶¶ 80–86); (4) common law unfair competition, (Am. Compl. ¶¶ 87–91); (5)
trespass to chattels, (Am. Compl. ¶¶ 92–97); (6) declaratory judgment regarding
certain trade secrets and other intellectual property pursuant to N.C.G.S. § 1-253,
(Am. Compl. ¶¶ 98–105); and (7) declaratory judgment regarding assignment of
patents and patent applications pursuant to N.C.G.S. § 1-253, (Am. Compl. ¶¶ 106–
17).
33. 	As against 108Labs, BIOMILQ alleges the same claims for (1) common law
trademark infringement, (2) unfair or deceptive trade practices, (3) common law
unfair competition, and (4) declaratory judgment as to intellectual property and
certain patents and patent applications alleged in Counts Six and Seven.
34. 	After two extensions of time for Defendants to respond to the Amended
Complaint, (ECF Nos. 57, 72), the Motion was filed on 15 June 2022 (Mot.).5
35. 	After full briefing, on 15 August 2022, BIOMILQ filed its Motion for Leave
to File Supplemental Brief in Response to the Motion. (ECF No. 90.) On 9 September
2022, the Court denied the motion without prejudice to the refiling of the motion with
a supporting brief as required by Business Court Rule 7.2. (ECF No. 94.) BIOMILQ
5 On 6 February 2023, following extensive briefing and two hearings on the Motion, counsel
for Defendants filed a document entitled Answer and Counterclaims. (ECF No. 120.) The
filing does not include a response to the averments in Plaintiff’s Complaint and provides that
“pursuant to [Rules] 12(a)(1)(a) and 12(b), the time to answer the [Amended] Complaint is
not yet required, as Defendants have a pending Motion to Dismiss before th[e] Court[.]” (ECF
No. 120, at 1.) 	The filing does, however, include over 100 pages of factual and legal
allegations. 	(See ECF No. 120.) 	The Court does not consider this filing as part of the
pleadings for purposes of the Motion and has not considered it in its analysis of the Motion.

then properly filed its motion, and after full briefing, the Court ordered that
BIOMILQ 	was 	permitted 	to 	file 	its 	supplemental 	brief 	and 	Defendants 	were
permitted to file a response brief. (ECF Nos. 95–98.)
36. 	A hearing on the Motion was held 17 November 2022 (the “Hearing”) at
which all parties were present and represented by counsel. (See ECF No. 101.) After
the Hearing, the Court entered an order permitting supplemental briefing on two
patent law issues, (see ECF No. 106), allowing each party to file an initial brief on the
issues and a subsequent response brief. 	A hearing regarding the supplemental
briefing was held on 3 February 2023 (the “Subsequent Hearing”) at which all parties
were present and represented by counsel. (See ECF No. 119.)
37. 	Having considered the Motion, briefing, and the arguments by counsel at
the Hearing and the Subsequent Hearing, the Motion is ripe for resolution.
III. 	LEGAL STANDARD
38. 	In ruling on a motion to dismiss pursuant to Rule 12(b)(6) of the North
Carolina Rules of Civil Procedure, the Court reviews the allegations in the Amended
Complaint in the light most favorable to Plaintiff. See Christenbury Eye Ctr., P.A. v.
Medflow, Inc., 370 N.C. 1, 5 (2017). 	The Court’s inquiry is “whether, as a matter of
law, the allegations of the complaint . . . are sufficient to state a claim upon which
relief may be granted under some legal theory[.]” 	Harris v. NCNB Nat’l Bank, 85
N.C. App. 669, 670 (1987). The Court accepts all well-pleaded factual allegations in
the relevant pleading as true. See Krawiec v. Manly, 370 N.C. 602, 606 (2018). The
Court is therefore not required “to accept as true allegations that are merely

conclusory, unwarranted deductions of fact, or unreasonable inferences.” Good Hope
Hosp., Inc. v. N.C. Dep’t of Health & Human Servs., 174 N.C. App. 266, 274 (2005)
(citation omitted).
39. 	Furthermore, the Court “can reject allegations that are contradicted by the
documents attached, specifically referred to, or incorporated by reference in the
complaint.” 	Moch v. A.M. Pappas & Assocs., LLC, 251 N.C. App. 198, 206 (2016)
(citation omitted). The Court may consider these attached or incorporated documents
without converting the Rule 12(b)(6) motion into a motion for summary judgment.
Id. (citation omitted). Moreover, the Court “may properly consider documents which
are the subject of a plaintiff’s complaint and to which the complaint specifically refers
even though they are presented by the defendant.” 	Oberlin Capital, L.P. v. Slavin,
147 N.C. App. 52, 60 (2001) (citation omitted).
40. 	Our Supreme Court has noted that “[i]t is well-established that dismissal
pursuant to Rule 12(b)(6) is proper when ‘(1) the complaint on its face reveals that no
law supports the plaintiff’s claim; (2) the complaint on its face reveals the absence of
facts sufficient to make a good claim; or (3) the complaint discloses some fact that
necessarily defeats the plaintiff’s claim.’ ” 	Corwin v. British Am. Tobacco PLC, 371
N.C. 605, 615 (2018) (quoting Wood v. Guilford Cty., 355 N.C. 161, 166 (2002)). This
standard of review for Rule 12(b)(6) is the standard our Supreme Court “uses
routinely . . . in assessing the sufficiency of complaints in the context of complex
commercial litigation.” Id. at 615 n.7 (citations omitted).

IV. 	ANALYSIS
41. 	Defendants move to dismiss all seven claims for relief alleged in the
Amended Complaint. 	In the alternative, Defendants request the Court stay the
present action pending the complete resolution of the District Court Action.
A. 	Count One: Misappropriation of Trade Secrets
42. 	In order for BIOMILQ’s misappropriation of trade secrets claim to survive
the 12(b)(6) stage, it must allege and “identify a trade secret with sufficient
particularity so as to enable a defendant to delineate that which he is accused of
misappropriating and a court to determine whether misappropriation has or is
threatened to occur.” 	Washburn v. Yadkin Valley Bank & Trust Co., 190 N.C. App.
315, 326 (2008) (citations omitted). “[G]eneral allegations in sweeping and conclusory
statements, 	without 	specifically 	identifying 	the 	trade 	secrets 	allegedly
misappropriated, [are] ‘insufficient to state a claim for misappropriation of trade
secrets.’ ” Krawiec v. Manly, 370 N.C. 602, 610 (2018) (quoting Washburn, 190 N.C.
App. at 327).
43. 	The TSPA defines a trade secret as “business or technical information,
including but not limited to a formula, pattern, program, device, compilation of
information, method, technique, or process that” both:
a. Derives independent actual or potential commercial value from not
being generally known or readily ascertainable through independent
development or reverse engineering by persons who can obtain economic
value from its disclosure or use; and

b. Is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy.
N.C.G.S. § 66-152(3) (2023); see also United Therapeutics Corp. v. Liquidia Techs.,
2022 NCBC LEXIS 120, at **8–9 (N.C. Super. Ct. Oct. 13, 2022) (citing Sterling Title
Co. v. Martin, 266 N.C. App. 593, 601 (2019)).
44. 	Our Courts have employed six factors when determining the existence of a
trade secret:
(1) the extent to which the information is known outside the business;
(2) the extent to which it is known to employees and others involved in
the business; (3) the extent of measures taken to guard the secrecy of
the 	information; 	(4) 	the 	value 	of 	information 	to 	business 	and 	its
competitors; (5) the amount of effort or money expended in developing
the information; and (6) the ease or difficulty with which the information
could properly be acquired or duplicated by others.
Combs & Assocs. v. Kennedy, 147 N.C. App. 362, 369–70 (2001). 	“ ‘These factors
overlap, and courts do not always examine them separately and individually.’ ”
United Therapeutics, 2022 NCBC LEXIS 120, at **9 (quoting Vitaform, Inc. v.
Aeroflow, Inc., 2020 NCBC LEXIS 132, at **19 (N.C. Super. Ct. Nov. 4, 2020)).
45. 	The TSPA defines misappropriation as the “acquisition, disclosure, or use
of a trade secret of another without express or implied authority or consent, unless
such trade secret was arrived at by independent development, reverse engineering,
or was obtained from another person with a right to disclose the trade secret.”
N.C.G.S. § 66-152(1). 	“General and conclusory allegations of misappropriation will
not survive a motion to dismiss.” 	United Therapeutics, 2022 NCBC LEXIS 120, at
**10 (citations omitted).

46. 	Defendants argue that BIOMILQ’s claim for misappropriation of trade
secrets must be dismissed because (1) the information in the Notebook was already
known by Mr. Guiliano because he was listed as an inventor on the ’407 Application,
and (2) Mr. Guiliano had a right to be in the marital home on 18 February 2022, and
leaving the Notebook out in the marital home affirmatively demonstrates that
BIOMILQ failed to take reasonable efforts to maintain its secrecy. (Defs.’ Br. Supp.
Mot. 11–12, ECF No. 77 [“Br. Supp.”].)
47. 	BIOMILQ argues that Mr. Guiliano’s contention that he knew the trade
secrets cannot be a basis for dismissing this claim. Further, BIOMILQ argues it has
pled reasonable efforts to maintain secrecy, including the measures Dr. Strickland
took with respect to the notebooks issued to her, and that Mr. Guiliano did not have
permission to access the Notebook or enter the home. (BIOMILQ’s Br. Resp. Mot. 20,
22, ECF No. 83 [“Resp. Br.”].)
1. 	Identifying the Trade Secret with Sufficient Particularity
48. 	BIOMILQ alleges that the Notebook contained its trade secret information,
including: (1) its research and development efforts, including new products; (2)
research priorities and next steps for research and development; (3) BIOMILQ’s
processes and potential refinements and trouble-shooting for those processes; (4)
potential partners and suppliers for BIOMILQ; (5) personnel and hiring material for
potential 	employees; 	and 	(6) 	strategies 	regarding 	product 	development 	and
commercialization of products including prospective plans for research, development,
and commercializing products. (Am. Compl. ¶¶ 52, 65.)

49. 	These allegations are sufficient to survive Rule 12(b)(6) scrutiny, and are
similar to allegations that have been sufficient in prior cases. See, e.g., S. Fastening
Sys. v. Grabber Constr. Prods., 2015 NCBC LEXIS 42, at *11 (N.C. Super. Ct. Apr.
28, 2015) (trade secrets were alleged as “confidential freight information, sales
reports, prices and terms books, sales memos, sales training manuals, commission
reports, and information concerning SFS’s relationship with its vendors”); Bldg. Ctr.,
Inc. v. Carter Lumber, Inc., 2016 NCBC LEXIS 79, at *11–13 (N.C. Super. Ct. Oct.
21, 2016) (trade secrets were alleged as including “confidential and proprietary
business 	information 	such 	as: 	names 	and 	contacts 	of 	customers; 	customer
preferences, including the needs, requirements, and values of customers; sales and
marketing 	strategies; 	pricing 	structures; 	margins 	and 	profits; 	manufacturing
technologies; and other confidential business information”).
2. 	Taking Reasonable Steps to Maintain the Secrecy of the
Alleged Trade Secrets
50. 	The far more difficult inquiry is whether BIOMILQ pled sufficient facts
demonstrating that it engaged in reasonable efforts to maintain the secrecy of its
alleged trade secrets.
51. 	North Carolina law is clear that to state a claim for misappropriation of
trade secrets, a plaintiff must allege that the trade secret information is subject to
reasonable efforts to maintain its secrecy. N.C.G.S. § 66-152(3)(b). “Plaintiffs must
allege the reasonable efforts taken . . . [because t]he mere assertion that [trade
secrets] were kept confidential is not enough to withstand a [Rule] 12(b)(6) motion to

dismiss.” 	McKee v. James, 2013 NCBC LEXIS 33, at *37–38 (N.C. Super. Ct. July
24, 2013) (citation omitted).
52. 	BIOMILQ 	contends 	that 	it 	alleged 	reasonable 	steps 	to 	keep 	this
information secret and confidential. (Resp. Br. 22–23; see Am. Compl. ¶¶ 66–67.) It
alleges that a full notebook, meaning one no longer in use, “is stored in a secure
location in BIOMILQ’s offices” and that Dr. Strickland’s filled notebooks are stored
in a locked drawer in her personal office at BIOMILQ. (Am. Compl. ¶ 67.)
53. 	While BIOMILQ alleges its security measures generally, it does not allege
measures taken to maintain the secrecy of the trade secrets at issue in the Notebook,
or what its security practices were for notebooks currently in use by Dr. Strickland.
Instead, BIOMILQ makes only general statements about how notebooks were treated
during use. It alleges that Dr. Strickland kept her notebooks in secure locations such
as (1) at BIOMILQ’s offices, (2) in a closed bag within her residence which, it alleges,
she does not share with Mr. Guiliano, (3) in a closed bag together with her laptop
when travelling between home and work, and (4) on her work surface at home. (Am.
Compl. ¶ 51.) However, North Carolina law is clear that stating something is “secure”
or “kept confidential” is not enough to survive a motion to dismiss without allegations
of efforts to protect the misappropriated trade secrets. 	See McKee v. James, 2013
NCBC LEXIS 33, at **37–38 (N.C. Super. Ct. July 24, 2013); Bldg. Ctr., Inc. v. Carter
Lumber, Inc., 2016 NCBC LEXIS 79, at *13–14 (N.C. Super. Ct. Oct. 21, 2016).
54. 	This case is similar to McKee v. James, where the complaint contained “no
allegations outlining the reasonable measures [p]laintiffs relied on to maintain the

secrecy of their construction methods.” 	2013 NCBC LEXIS 33, at **38. 	There, the
only allegation in the complaint mentioning the protection of plaintiffs’ confidential
information was that the information was password protected. Id. at **38. The Court
held that plaintiffs failed to allege facts tending to demonstrate reasonable efforts to
protect the secrecy of the information. Id. at **39.
55. 	Here, the sole protection afforded the Notebook on Dr. Strickland’s desk at
her shared home is analogous to the confidential information in McKee. Just as the
construction methods in McKee were protected only by a password, the Notebook was
protected only by a lock on the home to which Mr. Guiliano had access.6 	See also
Edgewater Servs. v. Epic Logistics, Inc., 2009 NCBC LEXIS 21, at **12–13 (N.C.
Super. Ct. Aug. 11, 2009) (recognizing that maintaining files in an unlocked room,
accessible to all employees without safeguards to ensure security, was not reasonable
under the circumstances given that “anybody could access the information . . . if they
knew where to go and what they were looking for”).
56. 	BIOMILQ cites Building Center Inc. v. Carter Lumber, Inc. to support its
contention that it has sufficiently alleged the reasonable secrecy efforts element,
claiming that “only where efforts to maintain secrecy of the allegedly misappropriated
trade secrets were completely absent have North Carolina courts dismissed claims at
the 12(b)(6) stage.” 2016 NCBC LEXIS 79, at *13. However, in Building Center, this
6 The Amended Complaint does not allege facts addressing whether Mr. Guiliano had a key
to the dwelling, or if the children had a key and let him in on the occasions that he took them
home after school. 	The Amended Complaint also does not allege that the Orange County
District Court Judge presiding over the related proceeding made a determination on whether
the house was Dr. Strickland’s private residence or whether Mr. Guiliano was prohibited
from entering it even though he holds title to it.

Court found that there were three security measures pled by plaintiff, including a
“password-protected login, controlled and permission-restricted access on a need-to-
know basis, and confidentiality policies and/or agreements.” Id. at *14.
57. 	Unlike in Building Center, BIOMILQ has pled that, at most, the Notebook
was protected by Dr. Strickland individually or by the home. It does not allege that
the Notebook stayed in a locked drawer or room within the home, nor does it allege
any restricted access to the Notebook, or any confidentiality policies or agreements,
like in Building Center. 	Keeping the Notebook in a closed bag at home, in a closed
bag when travelling between work and home, or on a work surface at home, are not
measures taken to maintain the secrecy of the trade secrets.
58. 	Given that BIOMILQ alleges the trade secrets contained in the Notebook
were highly sought after by competitors, that Mr. Guiliano was allegedly pursuing
cell-cultured human milks, that Mr. Guiliano on at least some occasions brought the
children to Dr. Strickland’s residence, and that Dr. Strickland was keeping the
Notebook unlocked in a building at least partially owned by Mr. Guiliano and to
which he had access, at least on the occasions he took the children to the home, the
measures BIOMILQ took to maintain the secrecy of the Notebook are unreasonable
under the circumstances.
59. 	Even giving BIOMILQ the benefit of an expansive and forgiving reading of
the Amended Complaint, it has failed to allege reasonable measures to maintain the
secrecy of the Notebook and the alleged trade secrets contained therein. 	Since the
Amended Complaint fails to allege facts specific to a required element of the

misappropriation claim, the Motion is GRANTED as to Count One and that claim is
hereby dismissed without prejudice.7
B. 	Count Two: Common Law Trademark Infringement
60. 	“Under 	North 	Carolina 	law, 	a 	common 	law 	claim 	for 	trademark
infringement of an unregistered mark is analyzed under federal law standards
regarding infringement claims of unregistered trademarks.” Cty. of Wake Johnson &
Morris, PLLC v. Abdelbaky & Boes, PLLC, 2017 NCBC LEXIS 89, at *13 (N.C. Super.
Ct. Sept. 28, 2017) (citations omitted). For the common law trademark infringement
claim to survive at the Rule 12(b)(6) stage, BIOMILQ must allege “(a) [that] it has a
valid and protectable mark, and (b) that [Defendants’] use of its mark is likely to
cause confusion among consumers.” 	Id. at *13–14 (citing Lone Star Steakhouse &
Saloon, Inc. v. Alpha of Va., Inc., 43 F.3d 922, 930 (4th Cir. 1995); B & J Enters. v.
Giordano, 329 Fed. App’x 411, 416 (4th Cir. 2009)).
61. 	Defendants argue that Count Two must be dismissed because the Amended
Complaint fails to allege that the mark “BIOMILQ” was used by BIOMILQ at any
definitive time prior to the use of the mark by Defendants. 	(Br. Supp. 13.)
Defendants contend that 108Labs was the first to use the word mark “BIOMILQ” in
7 Notwithstanding the Court’s conclusions that this claim should be dismissed, “[t]he decision
to dismiss an action with or without prejudice is in the discretion of the trial court.” First
Fed. Bank v. Aldridge, 230 N.C. App. 187, 191 (2013). The Court concludes, in the exercise
of its discretion, that dismissal of BIOMILQ’s misappropriation of trade secrets claim should
be without prejudice to BIOMILQ’s right to attempt to reassert such claim through proper
factual allegations by way of a motion to amend.

December 2019, and therefore that it has priority over any alleged use by BIOMILQ
of that word mark.8 (Br. Supp. 13–14.)
62. 	BIOMILQ argues that it has alleged “(1) it has valid protectable rights in
the BIOMILQ mark, and (2) that Defendants’ use of a colorable imitation is likely to
cause confusion among consumers.” 	(Resp. Br. 24 (citing Windsor Jewelers, Inc. v.
Windsor Fine Jewelers, LLC, 2009 NCBC LEXIS 19, at *64 (N.C. Super. Ct. Feb. 16,
2009)).) It argues that, at this stage, nothing else is required for the claim to survive.
The Court agrees.
63. 	BIOMILQ alleged it has used the word mark “BIOMILQ” since no later
than 2020, and that Defendants’ use of the mark is likely to cause confusion by
misleading the public into inferring an affiliation between Defendants and BIOMILQ.
(Am. Compl. ¶¶ 75, 77–78.) 	BIOMILQ has satisfied the pleading requirements for
this claim to survive the Motion, and therefore the Motion is DENIED with respect
to Count Two.
C. 	Count Three: Unfair and Deceptive Trade Practices
64. 	BIOMILQ brings its claim for violations of the UDTPA against Defendants
for (1) falsely representing that Mr. Guiliano’s own ventures are affiliated with
BIOMILQ, and (2) trade secret theft. (Resp. Br. 25.)
65. 	To state a claim for a violation of the UDTPA, a plaintiff must allege that
“(1) defendant committed an unfair or deceptive act or practice, (2) the action in
8 While Defendants assert that 108Labs has priority as the first to use the word mark
“BIOMILQ”, Defendants rely on information outside the Amended Complaint for this
proposition.

question was in or affecting commerce, and (3) the act proximately caused injury to
the plaintiff.” Dalton v. Camp, 353 N.C. 647, 656 (2001). “A practice is unfair if it is
unethical or unscrupulous, and it is deceptive if it has a tendency to deceive.” Id.
66. 	BIOMILQ 	alleges 	a 	violation 	of 	the 	UDTPA 	against 	Defendants 	for
knowingly and intentionally misrepresenting to BIOMILQ’s potential investors that
Defendants 	were 	affiliated 	with 	BIOMILQ 	and 	its 	technology. 	As 	against
Mr. Guiliano only, BIOMILQ alleges a violation of the UDTPA for theft of the
Notebook and the trade secret information therein. (Am. Compl. ¶¶ 81, 83.)
67. 	As to the first alleged violation of the UDTPA, this claim appears to rely on
BIOMILQ’s claim for trademark infringement alleged in Count Two. 	(Am. Compl.
¶¶ 77, 81.) 	Pursuant to N.C.G.S. §§ 80-11–13, a claim for common law trademark
infringement may constitute a violation of the UDTPA. 	See also Window Gang
Ventures, Corp. v. Salinas, 2019 NCBC LEXIS 24, at *55 (N.C. Super. Ct. Apr. 2,
2019) (“Window Gang’s allegations in support of its surviving claims for trademark
infringement . . . support[s] the denial of [d]efendants’ [m]otion to dismiss Window
Gang’s UDTPA claim”).
68. 	Therefore, because the Court at this stage declines to dismiss the common
law trademark infringement claim, the Court DENIES in part the Motion as to this
claim to the extent it relies on the allegations in Count Two. However, given that the
misappropriation of trade secrets claim is dismissed, the Court GRANTS in part the
Motion, without prejudice, to the extent this claim is premised on Count One.

D. 	Count Four: Common Law Unfair Competition
69. 	BIOMILQ brings its unfair competition claim against Defendants, alleging
Defendants’ claims of connection with BIOMILQ, including its technology, were
misleading and deceiving. (Am. Compl. ¶ 88.) BIOMILQ alleges that it developed its
own technology and patents, without contribution from 108Labs or Mr. Guiliano.
(Am. Compl. ¶ 89.)
70. 	“The gravamen of unfair competition is the protection of a business from
misappropriation of its commercial advantage earned through organization, skill,
labor, and money.” 	Henderson v. U.S. Fid. & Guar. Co., 346 N.C. 741, 749 (1997).
“Unfair competition has been found to encompass a range of behaviors ‘such as
trademark infringement, imitation of a competitor’s product or its appearance,
interference with a competitor’s contractual relations, [and] disparagement of a
competitor’s product or business methods, and misappropriation of a competitor’s
intangible 	property 	rights 	such 	as 	advertising 	devices 	or 	business 	systems.’ ”
Gateway Mgmt. Servs. v. Carrbridge Berkshire Grp., Inc., 2018 NCBC LEXIS 45, at
*19–20 (N.C. Super. Ct. May 9, 2018) (quoting Stearns v. Genrad, Inc., 564 F. Supp.
1309, 1320 (M.D.N.C. 1983)).
71. 	“Courts have recognized that a claim for common law unfair competition is
analyzed as a claim for unfair or deceptive trade practices under [N.C.]G.S. § 75-1.1.”
Cty. Wake PDF Elec. & Supply Co., LLC v. Jacobsen, 2020 NCBC LEXIS 103, at *26
(N.C. Super. Ct. Sept. 9, 2020); see also Global Textile Alliance, Inc. v. TDI Worldwide,
LLC, 2018 NCBC LEXIS 104, at *23 (N.C. Super. Ct. Oct. 9, 2018) (“The standard

which a plaintiff must meet to recover on an unfair competition claim under the
common law is not appreciably different from a claim for unfair or deceptive trade
practices.” (cleaned up)).
72. 	Because the same analysis for UDTPA claims applies to claims for common
law unfair competition, and that these allegations mirror those against Defendants
in Count Two, the Court concludes that this claim survives dismissal to the extent it
is based on Count Two. See Global Textile Alliance, 2018 NCBC LEXIS 159, at *23.
Therefore, the Motion is DENIED as to Count Four.
E. 	Count Five: Trespass to Chattels
73. 	“The tort of trespass to chattels is a trespass to personal property based on
an ‘injury to possession.’ ” 	Dishner v. Goneau, 2017 NCBC LEXIS 7, at *12 (N.C.
Super. Ct. Jan. 30, 2017) (quoting Fordham v. Eason, 351 N.C. 151, 155 (1999)). To
state a claim of trespass to chattels, a plaintiff must allege that it “had either actual
or constructive possession of the [personal property] in question at the time of the
trespass, and that there was an unauthorized, unlawful interference [with] or
dispossession of the property.” 	Fordham, 351 N.C. at 155. 	“Actual possession
consists of exercising dominion over” or “making ordinary use of” the property, while
constructive possession exists where “there is title granting an immediate right to
actual possession.” Id. “The key to assessing possession under a trespass to chattel
claim is determining if there is a right to present possession whenever so desired, or
a right to immediate actual possession.” Id. (citing Carson v. Noblet, 4 N.C. 136, 136
(1814); White v. Morris, 8 N.C. 301, 303 (1821)).

74. 	An unauthorized, unlawful interference or dispossession of the property
may be shown by alleging that “(1) a person dispossesses the other of the chattel; or
(2) the chattel is impaired as to condition, quality, or value; or (3) the possessor is
deprived of use of chattel for a substantial time; or (4) bodily harm is caused to the
possessor or some person or thing in which possessor has a legally protected interest.”
HSG, LLC v. Edge-Works Mfg. Co., 2015 NCBC LEXIS 91, at *18 (N.C. Super. Ct.
Oct. 5, 2015) (citation omitted). “A party may not merely claim that another accessed
or touched [its] property without permission; instead [it] must show that such access
or touching actually interfered with [its] use of the property in some fashion.” 	Id.
(citation omitted).
75. 	Defendants argue that BIOMILQ has failed to satisfy the element of actual
or constructive possession of the Notebook, arguing that the Notebook was outside its
possession because it was in Dr. Strickland’s possession, unsecured and unattended.
(Br. Supp. 19.)
76. 	The Amended Complaint alleges that Mr. Guiliano photographed the
Notebook while in Dr. Strickland’s residence, and that, even though the Notebook
was in the custody of Dr. Strickland, it was possessed by BIOMILQ. 	(Am. Compl.
¶¶ 93–94.) 	Therefore, 	it 	alleges 	BIOMILQ 	had 	constructive 	possession 	of 	the
Notebook, given that Dr. Strickland was its employee. 	The Court agrees with
BIOMILQ that the allegations in the Amended Complaint marginally meet the
pleading requirement for the first required element of the claim.

77. 	As to the second required element, BIOMILQ alleges that Mr. Guiliano, by
photographing each page and turning the pages of the Notebook, intentionally
trespassed and caused harm to BIOMILQ’s interest in its confidential business
information and trade secrets. (Am. Compl. ¶¶ 95–96.) However, this is insufficient
to meet the pleading requirements because, even viewing the allegations in the light
most 	favorable 	to 	BIOMILQ, 	it 	has 	not 	alleged 	an 	unauthorized, 	unlawful
interference with or dispossession of the property.
78. 	BIOMILQ has not alleged the existence of any of the four non-exclusive
factors provided by the Court in Edge-Works Manufacturing. 	BIOMILQ has not
alleged that Mr. Guiliano dispossessed it of the Notebook; it has not alleged that the
condition, quality, or value of the Notebook was impaired; it has not alleged that it
was deprived of using the Notebook for a substantial time; and, it has not alleged that
bodily harm was caused to the possessor. 	See Edge-Works Mfg. Co., 2015 NCBC
LEXIS 91, at *18. Rather, BIOMILQ alleged at most that the purported trade secrets
contained within the Notebook were devalued. 	That, however, is an intellectual
property issue fit for a different cause of action. 	Therefore, the pleadings do not
support a viable claim for trespass to chattels, and the Motion is hereby GRANTED
as to Count Five.
F. 	Counts Six and Seven: The Declaratory Judgment Claims
79. 	“A motion to dismiss for failure to state a claim is seldom appropriate ‘in
actions for declaratory judgments, and will not be allowed simply because the plaintiff
may not be able to prevail.’ ” Morris v. Plyler Paper Stock Co., 89 N.C. App. 555, 557

(1988) (quoting N.C. Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434, 439
(1974)). 	“Rather, a motion to dismiss a declaratory[ ]judgment claim is appropriate
only when the complaint does not allege an actual, genuine existing controversy,
which prevents a court from entering a purely advisory opinion.” Bennett v. Bennett,
2019 NCBC LEXIS 19, at *30–31 (N.C. Super. Ct. Mar. 15, 2019) (cleaned up). The
question is not whether the plaintiff will prevail on their claim, “[i]t is only whether
they have identified an actual, genuine controversy.” Id. at *32.
1. 	Count Six
80. 	BIOMILQ’s claim for declaratory judgment in Count Six alleges that “an
actual controversy exists . . . as to the ownership of certain trade secrets, know-how,
processes, and confidential and/or proprietary information, or other intellectual
property developed by BIOMILQ.” 	(Am. Compl. ¶ 100.) 	It also alleges that these
assets are “the sole property of BIOMILQ” and that Defendants have no ownership
rights in, or rights to use, those assets. (Am. Compl. ¶¶ 101–02.) BIOMILQ alleges
it suffered from Defendants’ contention of ownership to third parties when potential
investors reached out to BIOMILQ for clarification, and then ultimately declined to
invest in BIOMILQ. (Am. Compl. ¶ 104.) Therefore, BIOMILQ alleges it is entitled
to a declaration from the Court as to its ownership rights in these assets. (Am. Compl.
¶ 105.)
81. 	Defendants contend that Count Six must be dismissed because there is no
actual 	controversy. 	According 	to 	Defendants, 	all 	BIOMILQ’s 	activities 	and
intellectual property are derived from “inventions, discoveries, intellectual property,

and patentable processes created by Dr. Strickland and [Mr.] Guiliano under the
banner of 108Labs.” 	(Br. Supp. 20–21.) 	This argument by Defendants seems to
confirm, rather than dispel, the existence of a genuine dispute.
82. 	Here, BIOMILQ has identified and pled an actual, genuine controversy
between it and Defendants concerning the ownership rights of certain trade secrets,9
know-how, 	and 	other 	intellectual 	property 	developed 	as 	early 	as 	2019. 	The
controversy arises out of the parties’ opposing contentions regarding Dr. Strickland’s
alleged assignment agreement with BIOMILQ in March 2020. (Am. Compl. ¶ 24.)
83. 	BIOMILQ 	has 	adequately 	stated 	a 	claim 	for 	declaratory 	judgment.
Therefore, the Motion with respect to Count Six is hereby DENIED.
2. 	Count Seven
84. 	Count 	Seven 	requests 	a 	declaratory 	judgment 	on 	BIOMILQ’s 	and
Defendants’ respective rights to use or to exclude others from using the subject matter
of the patents discussed herein at Part II.B. (Am. Compl. ¶ 108; see supra ¶¶ 18–22.)
85. 	Federal courts have exclusive jurisdiction over claims arising under federal
patent law, but they do not have general subject matter jurisdiction over all issues
involving patents. See 28 U.S.C § 1338; 35 U.S.C. § 256 (2023). Federal jurisdiction
under 28 U.S.C. § 1338(a) extends “only to those cases in which a well-pleaded
complaint establishes either (1) that federal patent law creates the cause of action or
9 The Court has granted the Motion as to Count One for BIOMILQ’s failure to allege sufficient
facts concerning its efforts to maintain the secrecy of alleged trade secrets in the Notebook.
Therefore, to the extent BIOMILQ requests a declaratory judgment concerning its ownership
of that information, the claim does not survive the Motion. However, to the extent BIOMILQ
seeks a declaratory judgment with respect to other trade secrets, Count Six survives.

(2) that the plaintiff’s right to relief necessarily depends on resolution of a substantial
question of federal patent law, in that patent law is a necessary element of one of the
well-pleaded claims.” 	Christianson v. Cold Indus. Operating Corp., 486 U.S. 800,
808–09 (1988) (cleaned up). 	For cases arising under § 1338(a), Congress has
expressly eliminated state jurisdiction. See Gunn v. Minton, 568 U.S. 251, 257 (2013).
However, “[t]he mere existence of a patent law issue does not necessarily mean that
the claim arises under federal patent law.” 	Litéra Corp. v. Martinez, 2017 NCBC
LEXIS 35, at *19 (N.C. Super. Ct. Apr. 19, 2017).
86. 	Where a claim “finds its origins in state rather than federal law,” the
Supreme Court has “identified a special and small category in which arising under
jurisdiction still lies.” Gunn, 568 U.S. at 258. “[F]ederal jurisdiction over a state law
claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3)
substantial, and (4) capable of resolution in federal court without disrupting the
federal-state balance approved by Congress.” 	Id. 	Where all four elements are met,
“jurisdiction is proper because there is a ‘serious federal interest in claiming the
advantages thought to be inherent in a federal forum’[.]” Id. (quoting Grable & Sons
Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 314 (2005)).
87. 	Whether a claim depends on a substantial question of patent law “must be
determined from what necessarily appears in the [party’s] statement of his own
claim.” 	Christianson, 486 U.S. at 809. 	“If on the face of a well-pleaded complaint
there are reasons completely unrelated to the provisions and purposes of the patent
laws why the party may be entitled to the relief it seeks, then the claim does not arise

under patent law.” 	Litéra Corp., 2017 NCBC LEXIS 35, at *19–20 (cleaned up)
(citations omitted).
88. 	“[I]nventorship is a question of who actually invented the subject matter
claimed in a patent,” whereas “[o]wnership . . . is a question of who owns legal title to
the subject matter claimed in a patent, patents having the attributes of personal
property.” 	See Beech Aircraft Corp. v. EDO Corp., 990 F.2d 1237, 1248 (Fed. Cir.
1993). 	“[T]he question of who owns patent rights, and on what terms, typically is a
question exclusively for state courts and not one arising under United States patent
laws.” 	Int’l Nutrition Co. v. Horphag Research Ltd., 257 F.3d 1324, 1329 (Fed. Cir.
2001). 	For example, “[i]f a party’s claim of ownership arises based on an express
assignment contract or an implied-in-fact contract then state law controls, and the
claim does not involve a question of federal patent law.” 	Litéra Corp., 2017 NCBC
LEXIS 35, at *21–22 (citing Morris v. Scenera Research, LLC, 2012 NCBC LEXIS 1,
at *16 (N.C. Super. Ct. Jan. 4, 2012)). 	However, “if a party’s claim of ownership
depends 	entirely 	on 	the 	assertion 	that 	he 	invented 	the 	technology, 	then 	the
‘ownership claim . . . turn[s] on the question of inventorship’ and federal patent law
controls.” 	Id. at *22 (citing CamSoft Data Sys., Inc. v. S. Elecs. Supply, Inc.,
638 F. App’x 255, 263 (5th Cir. 2015)).
89. 	Here, the critical issue before the Court is whether BIOMILQ’s Count
Seven for declaratory judgment necessarily depends upon the issue of inventorship,
given that it is well established that “inventorship is a unique question of patent law”

that cannot be adjudicated by state courts. HIF Bio, Inc. v. Yung Shin Pharms. Indus.
Co., 600 F.3d 1347, 1353 (Fed. Cir. 2010).
90. 	BIOMILQ alleges that “an actual controversy exists between the parties as
to the ownership of the ’358 Application, the ’149 Application, the ’480 Application,
the 	’216 	Application, 	the 	’477 	Patent, 	and 	the 	’843 	Patent, 	and 	patents 	and
applications claiming priority to the same.” 	(Am. Compl. ¶ 108.) 	It alleges that
Dr. Strickland, as the sole named inventor on the ’358 Application and the ’478
Patent, assigned all her rights in those to BIOMILQ. (Am. Compl. ¶ 109.) It further
alleges that Dr. Strickland, as the sole named inventor on the ’149 Application, the
’480 Application, the ’216 Application, and the ’843 Patent, assigned all rights in each
of those to BIOMILQ. (Am. Compl. ¶ 110.)
91. 	BIOMILQ alleges that Mr. Guiliano “falsely and repeatedly asserted that
he was involved in the development of, or is entitled to exploit for his and 108Labs’[s]
own benefit, at least a portion of the subject matter claimed” in the listed patents and
patent applications. 	(Am. Compl. ¶ 111.) 	It also alleges that Mr. Guiliano has
asserted that Defendants have an ownership interest in those patents and patent
applications. (Am. Compl. ¶ 112.) Therefore, BIOMILQ seeks a declaration that it is
the sole owner of the patents and patent applications, and that Defendants have no
ownership or claim to ownership of them, including no rights in or rights to control
or direct activities related the patents and patent applications. (Am. Compl. ¶ 115.)
92. 	The relevant inquiry is “whether ‘the only possible theory upon which relief
could be granted . . . would be one in which determining the true inventor(s) of

competing patents is essential,’ in which event the claim arises under patent law.”
Litéra Corp., 2017 NCBC LEXIS 35, at *20 (quoting HIF Bio, Inc., 600 F.3d at 1353).
Here, it is not, and thus Count Seven does not arise under federal patent law.
93. 	Here, BIOMILQ alleges that, except for the ’407 Application, it is the owner
of the patents and applications discussed herein. 	(Am. Compl. ¶ 108.) 	BIOMILQ
alleges that its ownership in the patents and applications is a result of Dr. Strickland
assigning her “rights in each of those patents and applications to BIOMILQ.” 	(Am.
Compl. ¶ 109–10.)
94. 	In its allegations concerning ownership, BIOMILQ does not raise any
arguments concerning the validity or invalidity of the inventorship of the patents and
patent applications. 	In fact, at the Subsequent Hearing, the Court asked counsel if
either side contended that there was a real, present controversy over inventorship.
Counsel for Defendants stated that Defendants did not wish to make a claim for
inventorship in this Court, and counsel for BIOMILQ reiterated that Count Seven is
expressly limited to the issue of its ownership resulting from Dr. Strickland’s
assignment agreements. 	Counsel for BIOMILQ also clarified that Count Seven, as
alleged, concerns the various ways Mr. Guiliano has allegedly asserted that the
patents and patent applications should properly belong to him or to 108Labs through
some operation of contract or corporate laws. 	(See Am. Compl. ¶ 116–17.) 	Counsel
argued, therefore, that Count Seven is a claim properly presented to a state court
rather than a federal court.

95. 	BIOMILQ 	has 	expressly 	limited its 	Count 	Seven 	to 	the issue 	of 	its
ownership of the ’358 Application, the ’149 Application, the ’480 Application, the ’216
Application, 	the 	’477 	Patent, 	the 	’843 	Patent, 	and 	those 	patents 	and 	patent
applications claiming priority to the same. (Am. Compl. ¶ 114–15.) If a party’s claim
of ownership arises based on an assignment contract, either express or implied, state
law controls, and the claim need not be dismissed for lack of subject matter
jurisdiction. See Litéra Corp., 2017 NCBC LEXIS 35, at *21–22; CamSoft Data Sys.,
638 Fed. Appx. at 263 (“To be certain, there will be disputes over ownership in which
inventorship is immaterial. 	For example, parties may make other arrangements,
such as a contract, that result in the automatic assignment of ownership rights to
persons other than the undisputed inventor.”); Int’l Nutrition Co., 257 F.3d at 1329
(“[T]he question of who owns patent rights, and on what terms, typically is a question
exclusively for state courts and not one arising under United States patent laws.”);
see also Speck v. North Carolina Dairy Foundation, Inc., 311 N.C. 679, 686–87 (1984)
(The Supreme Court of North Carolina, dealing with a patent ownership issue,
finding that “the secret process developed through the research of the plaintiffs
belonged to the University absent a written contract by the University to assign,”
thus indicating that ownership of patentable processes is adjudicated in state court).
96. 	Further, even if Defendants, in answering the Amended Complaint, raise a
defense of inventorship, that is not enough to remove this case to federal court. See
Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 14 (1983) (“[A] case
may not be removed to federal court on the basis of a federal defense . . . even if the

defense is anticipated . . . and even if both parties admit that the defense is the only
question truly at issue in the case.”).
97. 	Therefore, this Court has subject matter jurisdiction to reach Defendants’
Motion as to BIOMILQ’s Count Seven because the claim concerns ownership of
certain patent rights, not the inventorship of those patents or patent applications.
Further, based on the allegations in the Amended Complaint and the exhibits thereto,
BIOMILQ has identified and pled an actual, genuine controversy between it and
Defendants 	concerning 	the 	ownership 	rights 	of 	the 	’358 	Application, 	the 	’149
Application, the ’480 Application, the ’216 Application, the ’477 Patent, and the ’843
Patent, 	arising 	out 	of 	opposing 	contentions 	regarding 	Dr. 	Strickland’s 	alleged
assignment to BIOMILQ of her rights in them. 	Therefore, BIOMILQ has stated a
claim for declaratory judgment, and the Motion is hereby DENIED as to Count
Seven.
G. 	Defendants’ Request the Court Stay the Business Court Action,
Pending Resolution of the District Court Action
98. 	In addition to seeking dismissal of all claims, the Motion alternatively
requests a stay of any surviving claims. In this regard, Defendants contend that the
issues before the Court are “interrelated” to those in the District Court Action and
that, because the parties and subject matter overlap, the Court must stay the matters
pending before it. 	(Br. Supp. 22.) 	Defendants contend that “[a]ll of the matters in
this litigation as to ownership of intellectual property and patentable processes are
interrelated to” the District Court Action. (Br. Supp. 22.)

99. 	In North Carolina, the district courts are “the proper division . . . for the
trial of civil actions and proceedings for annulment, divorce, equitable distribution of
property, alimony, child support, child custody and the enforcement of separation or
property settlement agreements between spouses, or recovery for the breach thereof.”
N.C.G.S. § 7A-244. 	In an equitable distribution action, the district court must
“determine what is the marital property and divisible property and shall provide for
an equitable distribution of the marital property and divisible property between the
parties[.]” N.C.G.S. § 50-20(a). The purpose of the Equitable Distribution Act is “to
divide property equitably, based upon the relative positions of the parties at the time
of divorce, rather than on what they may have intended when the property was
acquired.” Mims v. Mims, 305 N.C. 41, 54 (1982).
100. 	In Baldelli v. Baldelli, the Court of Appeals decided an issue factually
similar to the issue now before the Court. 	249 N.C. App. 603 (2016). 	In that case,
the parties were separated in 2013 and filed claims for equitable distribution of their
marital property in Moore County District Court. Id. at 604. Plaintiff later filed an
action in Moore County Superior Court, asserting five claims related to businesses
incorporated during the marriage. 	Id. 	Defendant moved to dismiss the action in
Superior Court, and in the alternative, requested that court hold the action in
abeyance until the district court matter was settled. 	Id. 	The Superior Court
dismissed the action for lack of subject matter jurisdiction, and plaintiff appealed. Id.
at 604–05. On appeal, the Court of Appeals found that the Superior Court erred by
dismissing the action. Id. at 605.

101. 	The 	Court 	of 	Appeals 	in 	Baldelli, 	relying 	on 	its 	prior 	decision 	in
Jessee v. Jessee, applied the “prior pending action” doctrine in finding that the
dismissal was in error. Id.; see Jessee v. Jessee, 212 N.C. App. 426, 438 (2011). The
prior pending action doctrine is
intended to prevent the maintenance of a subsequent action that is
wholly unnecessary and, for that reason, furthers the interest of judicial
economy. The ordinary test for determining whether or not the parties
and causes are the same for the purpose of abatement by reason of the
pendency of the prior action is this: Do the two actions present a
substantial identity as to parties, subject matter, issues involved, and
relief demanded?
Jessee, 212 N.C. App. at 438 (internal citations and marks omitted). In applying this
test, the Baldelli Court found that while “it is possible that the equitable distribution
action could resolve the [breach of fiduciary duty claim], it is also possible that the
equitable 	distribution 	action 	will 	leave 	these 	issues 	unresolved, 	or 	. . . 	leave
[p]laintiffs without the full remedy that would be provided in the superior court
action.” Baldelli, 249 N.C. App. at 607.
102. 	In Jessee v. Jessee, the Court of Appeals held that, even though the “prior
pending action” doctrine did not mandate dismissal of the superior court action,
where “there is a clear interrelationship between the two cases, such that the
equitable distribution portion of the domestic relations case should be resolved prior
to the determination of the [superior court] case,” the superior court case should be
“held in abeyance pending resolution of the domestic relations case[.]” 	Jessee, 212
N.C. App. at 439.

103. 	In Burgess v. Burgess, ownership of a company jointly owned by a husband
and wife was at issue in an equitable distribution action, and while that case was
pending, the wife filed a shareholder derivative suit in superior court. 205 N.C. App.
325, 326 (2010). 	The Court of Appeals held that the superior court had jurisdiction
over the wife’s claims for breach of fiduciary duty and for an accounting and
inspection of corporate books and records, because those claims did not involve the
division of marital property, were outside the scope of N.C.G.S. § 50-20, and were
separate claims of the corporation. 	Id. at 331–32. 	The court held that even if the
corporation were added as a party to the district court action, the wife in Burgess
would not be entitled to the relief she sought in the derivative action, and the district
court could not obtain jurisdiction over the shareholder derivative suit by statute.
Id. at 333–34.
104. 	Here, the Business Court action is the first filed action because it was
initiated on 4 March 2022 with the filing of the Complaint. (ECF No. 3.) The record
indicates that the District Court Action was initiated on 8 March 2022. 	(ECF No.
75.2.) 	Consequently, this case differs from Baldelli, Jessee, and Burgess, given that
the Business Court action predates the District Court Action.
105. 	Further, the parties and causes of action before the Court differ from those
in the District Court Action. 	In this case, the parties are BIOMILQ, Mr. Guiliano,
and 	108Labs, 	while 	in 	the 	District 	Court 	Action, 	the 	parties 	are 	BIOMILQ,
Mr. Guiliano, Dr. Strickland, and Ms. Egger. 	Moreover, as in Burgess, the issues
involved and relief demanded here are dissimilar from those in the District Court

Action. 	As discussed at length herein, this case concerns the separate claims of
BIOMILQ 	regarding 	Defendants’ 	alleged 	trademark 	infringement, 	unfair 	and
deceptive trade practices, unfair competition, and ownership over certain claimed
trade secrets and intellectual property. 	The District Court Action concerns the
identification and distribution of Dr. Strickland and Mr. Guiliano’s marital and
divisible property. Thus, there is hardly overlap, if any, between this action and the
District Court Action.10 Just as in Burgess, this case does not involve the division of
marital property, and even if the parties in each action were identical, BIOMILQ
would not be entitled to the relief it seeks here in the District Court Action.
106. 	Because the Court determines that the two cases are not sufficiently
interrelated that a stay, at this time, is warranted, the Court hereby DENIES the
Motion as to Defendants’ request to hold these proceedings in abeyance, without
prejudice.
V. 	CONCLUSION
107. 	THEREFORE, for the foregoing reasons, the Court hereby GRANTS in
part, and DENIES in part, the Motion as follows:
a. 	The Motion is GRANTED as to Count One, and this claim is
dismissed without prejudice;
10 The Amended Complaint alleges that Dr. Strickland used “her personal funds to pay for”
the first cell-cultured human breast milk experiment in November 2019, and that she “did
not use 108Labs funds to pay for the experiment” even though the work was arranged
through 108Labs. 	(Am. Compl. ¶ 21.) 	Dr. Strickland also allegedly rented lab space and
equipment under the name of 108Labs. (Am. Compl. ¶ 22.) Given the procedural posture of
this case and the District Court Action, these allegations are not sufficient to give rise to a
conclusion that any of the issues before this Court would require it to divide and distribute
marital property.

b. 	The Motion is DENIED as to Count Two;
c. 	The Motion is GRANTED in part, and DENIED in part as to Count
Three, and this claim is dismissed in part without prejudice to the extent it
is premised on Count One;
d. 	The Motion is DENIED as to Count Four;
e. 	The Motion is GRANTED as to Count Five, and this claim is
dismissed without prejudice;
f. 	The Motion is DENIED as to Count Six;
g. 	The Motion is DENIED as to Count Seven; and
h. 	The alternative Motion to hold proceedings in abeyance pending
resolution of the District Court Action is DENIED without prejudice.
Pursuant to Rule 12(a)(1)(a), Defendants shall serve a responsive pleading within 20
days of entry of this Order.
IT IS SO ORDERED, this the 10th day of February, 2023.
/s/ Michael L. Robinson
Michael L. Robinson
Special Superior Court Judge
for Complex Business Cases