OPINION & ORDER On July 16, 2021, Plaintiff filed its First Amended Complaint asserting breach of contract, fraud, and unjust enrichment. Defendant now moves for a partial motion to dismiss Plaintiff’s fraud and unjust enrichment claims. For the reasons that follow, the motion is granted.1 BACKGROUND The following facts are drawn from Plaintiff’s First Amended Complaint (“Compl.”) and attached exhibits and are assumed to be true for the purpose of resolving this motion. See Stadnick v. Vivint Solar, Inc., 861 F.3d 31, 35 (2d Cir. 2017). Plaintiff FCX Solar, LLC (“FCX”) is an engineering consultancy and green technology firm that develops intellectual property and provides its engineering services to other solar power developers. Defendant FTC Solar, Inc. (“FTC”) develops and provides solar tracker systems to utilities and other large solar power producers. A solar tracker system “allows a photovoltaic cell to track the movement of the sun through the sky over the course of a day, increasing the efficiency and output of a solar array.” Compl. 3 I. The Parties’ Initial Relationship The parties’ relationship first began in September of 2017, when the sole members of FCX, Christopher Needham and Frank Oudheusden, met with FTC executives at the Solar Power International Conference in Las Vegas, Nevada. As a result of this meeting, “FTC retained Plaintiff for a narrow and time-limited consulting engagement” to help evaluate the market for solar trackers and provide analysis on one of FCX’s solar tracker models. Compl. 5; see also id. 29-30. As part of this arrangement, the parties signed a nondisclosure agreement. Compl. Ex. C. Under the protection of this nondisclosure agreement, Plaintiff shared some of its intellectual property concerning a “passive load-sharing damper” in an effort to see whether Defendant was interested in developing a further business relationship with it. This type of damper technology allows a solar tracker to withstand heavy winds by absorbing wind vibration, and as a result, provides solar tracker manufacturers significant cost-savings by reducing steel costs. Compl.
4, 31, 36. The parties did not enter into any other agreements at that time. II. The Parties Enter into the Consulting and License Agreements One year later, in September of 2018, both parties attended the 2018 Solar Panel International Conference in California. FTC hosted a booth at the conference, where it featured a prototype of a new solar tracker called the “FTC Voyager Tracker.” Needham and Oudheusden visited Defendant FTC’s booth, and upon viewing the Voyager Tracker, recognized that it seemed to use Plaintiff FCX’s damper design — the same intellectual property that it had shared with FTC a year earlier under the protection of the nondisclosure agreement. Oudheusden and Needham then approached FTC executives, including CEO Anthony Etnyre, to voice their concerns that FTC was using FCX’s protected intellectual property without a license. The parties held a meeting later that day, a summary of which was memorialized by Oudheusden in an email sent to Etnyre and Mitch Bowman, FTC’s director of engineering. See Compl. Ex. D at 3. In that email, Oudheusden states that, “[d]uring the course of [the initial discussions between FCX and FTC regarding the Voyager Tracker,] it was discovered that vital design features had a possible overlap with FCX intellectual property, which was disclosed to FTC. Those concerns were politely voiced and another meeting for later that day (4:30 pm) was set for discussion.” Id. After FCX had raised its concerns, Oudheusden explained that FTC “researched…their design process, timeline and technology with the broader FTC team and discovered that they had inadvertently overlapped Voyager design features with FCX IP. The intent of the overlap was unintentional, both parties (FTC and FCX) agreed that overlap existed and that a viable licensed solution could be reached amicably.” Id. During this meeting, the parties agreed that “FTC would enter into a licensing agreement with Plaintiff after all, as well as a consulting agreement so that Plaintiff could assist FTC with integrating Plaintiff’s damper technology.” Compl. 7. In responding to Oudheusden’s email, Etnyre confirmed that “[w]e are largely in alignment with the summary below,” and proposed the terms of a license agreement. Compl. Ex. D at 1. Over the next few months, the parties engaged in negotiations over the terms of the potential license and consulting agreements. As part of these negotiations, the parties discussed several different fee structures for potential inclusion in the proposed license agreement. One possible fee structure was to award Plaintiff a percentage of the cost savings that FTC achieved through using Plaintiff’s intellectual property against the baseline cost. FTC’s Mitch Bowman expressed concerns with this fee structure: “My only concern is the ‘COGS [cost of goods sold] with no IP overlap’ baseline? To really flush this out, we’d basically need to design and price a new product that will never be sold. We cannot afford to allocate already overloaded teams time to this exercise.” Compl. Ex. E. In other words, Bowman felt that it would not be worth FCX’s resources to create a baseline solar tracker that did not contain any of Plaintiff’s intellectual property since such a product did not already exist and would never be sold. Following negotiation of the terms of the potential license and consulting agreements, the parties eventually reached an oral agreement that Plaintiff memorialized in a non-binding Term Sheet. Compl. 52; Ex. G. On April 6, 2019, the parties entered into a year-long Consulting Agreement, in which Plaintiff agreed to provide FTC with consulting services regarding the “continued development of the Voyager single-axis tracker platform.” Compl. Ex. A. Pursuant to the Consulting Agreement, Plaintiff was to receive $190.00 per hour of work per individual (plus reimbursement of reasonable expenses). Id. Plaintiffs allege that the only reason why Oudheusden and Needham agreed to this “low hourly rate” was because they understood that they would primarily be compensated through royalty payments under the proposed License Agreement. Compl. 62. Several weeks later, on May 13, 2019, the parties entered into the License Agreement. Compl. Ex. B. Plaintiff asserts that some of the delay in signing the License Agreement was due to FCX’s “procrastination” failing to provide comments in a timely fashion. Compl. 70. In an email from Oudheusden to Etnyre inquiring about when FTC planned to execute the License Agreement, Oudheusden wrote that “Chris [Needham] and I would like to get to work on Voyager improvements.” Compl. Ex. H. Plaintiff asserts that this statement helps show that the parties understood the License and Consulting Agreements to be part of the same deal, since Plaintiff was not going to begin providing consulting work until the License Agreement was also executed. Compl. 73. Under the License Agreement, Plaintiff granted FTC a royalty-bearing license that, among other things, allowed FTC to “make Products and to sell and use Products incorporated into Solar Trackers.” Id. 75. The License Agreement defines “Product” to mean, on a country-by-country basis, any product the making, using, selling, offering for sale, importing or exporting in the country in question would (without the license granted hereunder) infringe directly, indirectly by inducement of infringement, or indirectly by contributory infringement, at least one issued Valid Claim or any pending Patent claim that would be hypothetically infringed if such pending claim were issued in its then pending state, in such country. Compl. Ex. B §1.8. The agreement further defines a “Valid Claim” to mean “(a) a claim of an issued and unexpired Patent that has not been abandoned, revoked, or held unenforceable or invalid in a decision from which an appeal cannot be taken; or (b) any claim in any pending application for a Patent that was filed in good faith and has not been cancelled, withdrawn, abandoned, or finally disallowed without the possibility of appeal or refiling of such application and has not been pending for more than five years.” Id. §1.13. Finally, the License Agreement defines “Solar Tracker” to mean a “device, installed at grade, incorporating the Product that uses a single-axis for orienting Solar Panels.” Id. §1.12. Plaintiff asserts that FTC’s Voyager Tracker was covered by these claims on the day that the License Agreement was signed and continues to be at all times since then. III. Milestone and Royalty Payments Pursuant to the License Agreement, Defendant was to compensate Plaintiff through both milestone and royalty payments. Specifically, FTC was required to make the following milestone payments: (a) $15,000 due within 30 days of the effective date; (b) $60,000 due within 30 days of FTC first including a device design in the bill of materials for a Solar Tracker than can be quoted by or ordered commercially from FTC or an affiliate; (c) $75,000 due within thirty days after FTC receives the first purchase order for the sale of a Solar Tracker; and (d) $50,000 due within 30 days after the first Patent issues with a Valid Claim covering a device or process for use in or with a Solar Tracker. Compl. 91; see also Compl. Ex. B §3.1 The License Agreement also required FTC to pay royalties of “$0.0015 per watt (direct current) for the first two ‘cumulative gigawatts of the designed DC output wattage of Solar Panels designed to be controlled by any Solar Tracker Sold by’ FTC or an affiliate.” Compl. 92; see also Compl. Ex. B §3.2. If $3 million in royalties were paid, the royalty per watt of output wattage would decline to “$0.00125 for the third cumulative gigawatt and $0.0010 per watt for watts in excess of the third cumulative gigawatt.” Compl. 93. Any royalties due were to be paid by FTC within thirty days after the end of each calendar quarter. Plaintiff asserts that FTC represented and warranted that the Voyager Tracker was a Solar Tracker and contained a covered Product for which these royalty payments would be owed. Finally, the License Agreement granted Plaintiff the option to terminate the agreement early if the royalties fell below a specific minimum amount, unless FTC made shortfall payments to satisfy the difference. Compl. Ex. B §3.3(a). Initially, the parties proceeded amicably as FTC began paying Plaintiff royalties under the License Agreement. Specifically, FTC paid Plaintiff $158,145 in royalties for Q3 of 2019, $380,580 for Q4 of 2019, $320,318.28 for Q1 of 2020, and $610,350 for Q2 of 2020. Compl.
