ORDER

ROBERT W. PRATT, District Judge.

Currently before the Court is a motion to dismiss filed by Defendant Paper-Pak Industries ("PPI") on October 28, 2011. Clerk's No. 25. Plaintiff CO2 Technologies, Inc. ("CO2") filed a response in opposition to the motion on November 17, 2011. Clerk's No. 30. PPI filed a reply on December 2, 2011. Clerk's No. 37. CO2 filed a sur-reply on December 12, 2011. Clerk's No. 38-1.1 The matter is fully submitted.

I. FACTUAL & PROCEDURAL BACKGROUND

On June 1, 2005, PPI and CO2 entered into an agreement (hereinafter "the Agreement") "related to CO2's proprietary technology and related ingredients that are effective in enhancing shelf life and limiting microbial growth with respect to various foods and other organic goods, including meat and poultry products." Second Am. Compl. ¶ 13. Subject to certain restrictions, the Agreement grants PPI "a worldwide right and license to use the Technology and the Ingredients in the Meat and Poultry Market ... such license shall be exclusive (later amended to non-exclusive) for the Meat and Poultry Market in the U.S. and nonexclusive for the remainder of the world." Id. ¶ 14; see also Clerk's No. 22-1 at 1 (Agreement ¶ 2).

The Agreement defines "Technology" and "Ingredients" as follows:

Clerk's No. 22-1 at 1 (Agreement ¶ 1). Schedule A describes the following "Technology" and "Ingredients":

Id. at 4.

Additionally, the Agreement states:

Id. at 2 (Agreement ¶ 4(c)) (nonstandard punctuation in original). The Agreement also contains an integration clause providing that it "constitutes the entire agreement of the parties with respect to the subject matter hereof and may only be changed by written agreement signed by both parties." Id. at 3 (Agreement ¶ 8).

In an August 21, 2005 email to the CO2 Board of Directors, Ron Jensen ("Jensen") stated, on behalf of PPI, that "[w]hile we do have constituents in our offering that are in addition to CO2's, none of these constituents have in any way impeded the launch of the CO2 constituent." Second Am. Compl. ¶ 20. In a January 16, 2006 email to CO2 President Wes Boldt ("Boldt"), Jensen stated that "[a]s of today, we have 33 supermarket trials ongoing in January and February. These include some of the biggest players in the industry. All of these pads use CO2 constituent." Id. ¶ 21.

In February 2006, the parties agreed to modify certain terms of the Agreement in order to, inter alia, convert the license, which originally was an exclusive license, into a non-exclusive license. See Clerk's No. 22-1 at 7. On June 21, 2007, Jensen sent a letter to Boldt stating that PPI "has devoted considerable resources and funds to the development of the market for our ULTRA ZAP® XTENDAPAK active pad, which is the sole product we sell using your [CO2's] active CO2 generating ingredient." Id. ¶ 22.

However, on February 4, 2011, "Charles Ruggiero, on behalf of [PPI] stated that `the XtendaPak™ product line does not use any technology covered by the ... Agreement' and stated that `[w]e will need to address the return of past payments made by PPI to your client [i.e., CO2].'" Id. ¶ 23. Around this same time, PPI began "manufacturing and selling pads containing the licensed Technology and Ingredients without CO2's consent to the produce industry and without paying a royalty for pads sold to the Meat and Poultry Industry." Id. ¶ 25.

II. LAW AND ANALYSIS

To survive a Rule 12(b)(6) motion to dismiss for failure to state a claim, a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). In reviewing a complaint, a court must "accept as true all of the factual allegations contained in the complaint," and must draw "all reasonable inferences... in favor of the plaintiff." Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir.2008) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A viable complaint must include "enough facts to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 570, 127 S.Ct. 1955).

Twombly, 550 U.S. at 570, 127 S.Ct. 1955. "The plausibility standard requires a plaintiff to show at the pleading stage that success on the merits is more than a `sheer possibility.' It is not, however, a `probability requirement.'" Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009) (quoting Iqbal, 129 S.Ct. at 1949).

In Ashcroft v. Iqbal, the Supreme Court described a "two-pronged approach" for evaluating complaints challenged under Rule 12(b)(6). Iqbal, 129 S.Ct. at 1949-50. First, a court should divide the allegations between factual and legal allegations; factual allegations should be accepted as true, but legal allegations should be disregarded. Id. Second, the factual allegations must be parsed for facial plausibility. Id. at 1950. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 1949.

A. Count 1

In Count 1, CO2 alleges that PPI:

Second Am. Compl. ¶ 25. PPI argues that Count 1 should be dismissed "to the extent it is based on allegedly unauthorized sales" because "[t]he primary alleged conduct about which Count 1 complains — selling licensed technology outside the meat and poultry industry — does not breach any section of the Agreement." Def.'s Br. at 1, 7 (Clerk's No. 28-1).

In support of this argument, PPI notes that the Agreement contains no express "restriction on using the covered technology outside the meat and poultry markets." Id. at 7 (internal quotation marks omitted). CO2 does not seriously dispute this contention; however, it argues that it is still entitled to bring a claim for breach of contract. See Pl.'s Br. at 5 (Clerk's No. 30). Specifically, CO2 argues that in the Agreement, it "granted much more than a patent license," including "the right to use proprietary know-how related to the patents and other technology." See id. According to CO2, "[i]n contrast to a license dealing solely with a patent, when the license is based upon a grant of technical information and the licensee exceeds the terms of the grant, the appropriate remedy is a suit for breach of contract based on an implied covenant not to do so." Id. (citing Eli Lilly & Co. v. Emisphere Techs., Inc., 408 F.Supp.2d 668 (S.D.Ind. 2006) (comma omitted)).

In response, PPI argues that "the mere fact that the Agreement mentions `know-how'... does not trump the well-established rule against reading nonexistent covenants into a license agreement." Def.'s Reply at 4 (Clerk's No. 37). PPI asserts that "[c]ourts will only imply covenants into an integrated contract `when the implied term is not inconsistent with some express term of the contract, and where there arises from the language of the contract itself ... an inference that it is absolutely necessary[] to introduce the term to effectuate the intention of the parties.'"2 Def.'s Br. at 8 (quoting B & J Mfg. Co. v. Hennessy Indus., Inc., No. 73 C 2174, 1976 WL 21072, at *3 (N.D.Ill. Oct. 19, 1976) (ellipsis in PPI's brief)).

As an initial matter, the law on this issue is not nearly as clear as PPI's arguments suggest. PPI relies on one non-binding3 line of cases where courts have refused to read negative covenants (i.e., covenants not to exceed the scope of the license) into patent licenses. See Def.'s Br. at 7-8 (citing B & J Mfg., 1976 WL 21072, at *3, and Fla. Canada Corp. v. Union Carbide & Carbon Corp., 280 F.2d 193, 194-95 (6th Cir.1960)). However, there is also non-binding authority that supports CO2's position. See Eli Lilly & Co. v. Emisphere Techs., Inc., 408 F.Supp.2d 668, 687-90 (S.D.Ind.2006) (discussing the various conflicting authorities including, e.g., Shaw v. E. I. DuPont De Nemours & Co., 126 Vt. 206, 226 A.2d 903 (1967), aff'd following rehearing, 152 U.S.P.Q. 723 (1967)). In this case, CO2 alleges that it granted technical know-how in addition to the patent licenses.4 See Second Am. Compl. ¶ 13 (referring to a license of CO2's "proprietary technology," not just license for the patents); id. ¶ 15 (alleging that CO2 conveyed a right to use "related know-how," not just a license for the patents). Therefore, CO2's claim falls outside the "straight patent license" cases upon which PPI relies.5 See B & J Mfg., 1976 WL 21072, at *1 (dealing with a license for patents only, not for related technical information); Fla. Canada Corp., 280 F.2d at 194 (dealing with a settlement agreement related to a previous patent license); see also Eli Lilly, 408 F.Supp.2d at 688 ("[S]hould the license be based upon a grant of technical information, then the balance tips in the opposite direction. Here the licensor has granted more than a mere forbearance from suit. He has actually delivered a package of valuable information to the licensee. Should the licensee exceed the terms of the grant, the sole appropriate remedy is a suit for breach of contract based on an implied covenant not to do so." (quoting Einhorn, Patent Licensing Transactions § 1.03[4] (2004)). In other words, contrary to PPI's suggestion, not all of CO2's alleged rights could be fully and fairly vindicated by a claim for patent infringement. See Def.'s Br. at 7. For all of these reasons, and taking all of CO2's allegations as true, the Court simply cannot say that CO2 has failed to state a plausible claim in Count 1. Therefore, Count 1 shall not be dismissed.

B. Count 2

In the alternative, CO2 alleges that it entered into the Agreement, in part, "to penetrate the Meat and Poultry Market through [PPI]'s established market position."6 Second Am. Compl. ¶ 29. According to CO2, PPI "did not penetrate the Meat and Poultry Market on behalf of CO2" and, therefore, breached ¶ 4(c) of the Agreement. Id. ¶ 30. PPI argues that Count 2 should be dismissed because "the Agreement provides no recourse for disappointment in sales activity."7 Def.'s Br. at 10. According to PPI, the Agreement "grants [it] the right to sell certain patented technology ... but it does not force PPI to sell anything, let alone specify a minimum sales level." Id.

In response, CO2 argues that its "primary reason for entering into the ... agreement and sharing its proprietary know-how with PPI was to take advantage of PPI's established market position in order to penetrate the Meat and Poultry Market." Pl.'s Br. at 6 (citing Clerk's No. 22-1 at 1 (Agreement Preamble) ("WHEREAS, Licensor desires to penetrate the Meat and Poultry Market through Licensee's established market position....")). Thus, according to CO2, "the benefit sought was to get CO2's product to the desired market more quickly than it could do ... by itself or through another licensee" and "[i]n this context, PPI agreed to refrain from any actions which would substantially inhibit the ability of either party from gaining the benefit from the ... Agreement." Id. at 6-7 (citing Clerk's No. 22-1 at 2 (Agreement ¶ 4(c))). CO2 asserts that "PPI did not refrain as promised" because it "mislead CO2 by indicating that PPI was developing CO2's technology for the Meat and Poultry Industry." Id. at 7. However, "[a]fter relying upon these and other acts and statements, CO2 learned on February 4, 2011 that PPI's XtendaPak™ product line does not use any of the technology covered by the ... Agreement." Id. (citing Second Am. Compl. ¶ 23). CO2 asserts that if it had "known its technology was not being promoted, [it] would have terminated the Agreement and licensed to others to promote the product," but did not do so "as a result of the misleading statements." Id. Thus, according to CO2, it has stated a valid claim for breach of ¶ 4(c) of the agreement. See id.

As PPI points out in its reply, CO2's arguments do not entirely match its allegations. See Def.'s Reply at 7. CO2 has not alleged that it relied on these misrepresentations — i.e., it would have terminated the Agreement (or taken other actions to penetrate the market) but for the alleged misrepresentations. See id.; Second Am. Compl. ¶¶ 1-32. In its sur-reply, CO2 argues that it did not have to plead "reliance and ... inaction" because "they are not elements of a breach of contract claim." Pl.'s Sur-Reply at 4.

Thus, as best as the Court can discern from CO2's rather opaque briefs, it appears that CO2's theory is that the Agreement required PPI to refrain from harming CO2's ability to benefit from the Agreement and that PPI did such harm by misleading CO2 about its use (or rather, nonuse) of CO2's technology in PPI's product development. See id. However, Count 2 does not actually allege that any of PPI's statements were misleading. See Second Am. Compl. ¶ 23 (alleging that Ruggiero's February 2011 statement was "in contrast to ... Jensen's previous statements," but not alleging that "Jensen's previous statements" were either false or meant to mislead). Moreover, the plain language of Count 2 alleges that the breach is based upon a failure to "penetrate the Meat and Poultry Market," with no mention of any misleading statements or actions. Id. ¶ 30 (emphasis added); see also id. ¶¶ 28-29, 31-32. Thus, Count 2 does not state a claim under the theory CO2 currently asserts. Accordingly, Count 2 shall be dismissed.

III. CONCLUSION

For the foregoing reasons, "Defendant Paper-Pak Industries' Motion to Dismiss Plaintiff's Second Amended Complaint" (Clerk's No. 25) is GRANTED in part and DENIED in part. Count 2 is hereby dismissed without prejudice.

IT IS SO ORDERED.