Bulwer v. EchoNous, Inc.

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BERNARD E. BULWER, M.D., Plaintiff, v. ECHONOUS, INC., Defendant.

Civil Action No. 23-cv-11097-ADB

United States District Court, D. Massachusetts

March 29, 2024

MEMORANDUM AND ORDER

Allison D. Burroughs United States District Judge

Plaintiff Dr. Bernard E. Bulwer (“Plaintiff” or “Bulwer”) brings claims for unjust enrichment and quantum meruit in connection with services he provided to Defendant EchoNous, Inc. (“Defendant” or “EchoNous”), a company that makes software for ultrasounds. [ECF No. 1 (“Compl.” or “Complaint”) ¶¶ 8, 19-30]. Now pending before the Court is EchoNous' motion to dismiss or, in the alternative, to transfer venue. [ECF No. 9]. For the reasons set forth below, the motion is DENIED.

I. BACKGROUND

A. Factual Background

The following facts are drawn from the Complaint, the well-pleaded allegations of which are taken as true for purposes of evaluating the motion to dismiss. See Ruivo v. Wells Fargo Bank, N.A., 766 F.3d 87, 90 (1st Cir. 2014).^[1]In addition, the Court considers the October 26, 2021 Independent Contractor Agreement between Bulwer and EchoNous, [ECF No. 10-1 (the “Agreement”)], which is not attached to the Complaint, but the authenticity of which is not disputed and which is central to the claims at issue here. See Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993) (although “[o]rdinarily, . . . any consideration of documents not attached to the complaint, or not expressly incorporated therein, is forbidden[] unless the proceeding is properly converted into one for summary judgement,” courts “have made narrow exceptions for documents the authenticity of which are not disputed by the parties; . . . for documents central to plaintiffs' claim; or for documents sufficiently referred to in the complaint”); see also [ECF No. 13 at 2-3 (“disputing] EchoNous' ability to refer to a document outside the four corners of the complaint,” but not arguing that the Agreement is inauthentic, and also stating that “[t]he contract at issue here is the Agreement, a contract by and between Dr. Bulwer and EchoNous, with an Effective Date of October 26, 2021”)].

1. The Parties

“Bulwer is a medical doctor who specialized in echocardiography (cardiac ultra-sound).” [Compl. ¶ 3]. He is a resident of Boston, Massachusetts. [Id.].

EchoNous is a company that sells an “FDA-approved point-of-care ultrasound (POCUS) device called ‘Kosmos.'” [Compl. ¶ 8]. It is a for-profit Delaware corporation with its principal place of business in Redmond, Washington. [Id. ¶ 4]. It is also “a registered corporation” in Massachusetts and has a registered agent in Boston. [Id.].

2. Pre-October 2021 Agreement Events

Around June 2020, EchoNous approached Bulwer to see if he would provide “expertise, materials, and services it needed to complement the echocardiography-related software” in the Kosmos device. [Compl. ¶ 8]. Specifically, they asked him “to help solve echocardiography-related software issues and problems they encountered with the original Kosmos artificial intelligence (AI)-enabled heart software known as the TRIO, as well as related problems with the two-day novice-user training method [EchoNous] employed.” [Id. ¶ 9]. He was ultimately “tasked by [EchoNous]'s cofounders, and previous executives, including key software and clinical staff,” with (1) “solv[ing] key design flaws identified in the” Kosmos software, and (2) “produc[ing] highly instructive training materials to simplify, improve, and scale a new training protocol for novice ultrasound users.” [Id. ¶ 10].

“As requested,” Bulwer then “provided expert leadership” and other specific services “for the development of the new and improved Kosmos . . . software (dubbed TRIO 2.0).” [Compl. ¶ 11]. He also “initiated, developed, and supervised a successful novice training method.” [Id.]. He performed these tasks “primarily from Boston, MA.” [Id.].

Between October 2 and 4, 2021, Bulwer “pre-piloted” the TRIO 2.0 software and ran a training with novice users in Redmond, WA. [Compl. ¶ 12]. Bulwer alleges that “[b]oth the improved TRIO 2.0 [software] and the successful novice user training protocol are key components in [EchoNous]'s pursuit of FDA approval for its Kosmos” device. [Id.].

Bulwer also alleges that his services during this time benefited EchoNous. First, Bulwer “provided [EchoNous] with the foundation for expanding and scaling Kosmos' . . . sales strategies for echocardiography . . . applications and services globally,” including a “partnership with US2ai, an AI software company whose software can automatically analyze heart images acquired using the Kosmos TRIO 2.0” software. [Compl. ¶ 13]. Second, he helped “solve[] the ‘ease of use' shortfalls noted by [EchoNous], as well as in a published report in a scientific ultrasound journal.” [Id. ¶ 14]. Third, “[t]he result and benefit of Dr. Bulwer's . . . services . . . was a ‘best-in-class,' ‘improved,' and ‘enhanced' TRIO 2.0 [software] as universally marketed by [EchoNous].” [Id.]. Overall, the improved software product and training has been “ubiquitously messaged” and marketed, and “is central to Kosmos' market expansion and sales strategy, including its partnership with US2ai.” [Id.].

EchoNous' “cofounders and their former CEO consistently acknowledged the value provided by Dr. Bulwer. For example, the cofounders and former executives of Defendant designated Dr. Bulwer [their] ‘authority on the heart.' Defendant also made it known that ‘Bernard [Dr Bulwer] is highly valued.'” [Compl. ¶ 15]. Moreover, “[t]he parties both reasonably expected that Dr. Bulwer would be compensated for the expertise, materials, and services he provided to [EchoNous] from June 2020 through October 25, 2021.” [Id. ¶ 16]. For example, Bulwer avers that “in 2020, Kevin Goodwin, Defendant's co-founder and former CEO[,] wrote to Dr. Bulwer that ‘ [i]mportantly, we will cut you in on the economics.'” [Id.]. He alleges that “[t]o date,” though, he “has not been sufficiently compensated for the benefit he conferred upon EchoNous from June 2020 through October 25, 2021.” [Id. ¶ 18].

3. The October 2021 Agreement

On October 26, 2021, EchoNous and Bulwer signed an “Independent Contractor Agreement.” [Agreement at 1, 7]. The Agreement provides that EchoNous “engages” Bulwer “as an independent contractor to provide certain services to [EchoNous] on the terms and conditions set forth in this Agreement. This Agreement shall commence on October 26, 2021 (the ‘Effective Date').” [Id. § 1.1]. Further, it states that “[t]he term of this Agreement shall commence on the Effective Date and shall continue for a period of 12 months or until the Services [are] completed.” [Id. § 2]. The “Services” to be provided are defined as the following:

Advisor to the Company in the field of Cardiology. As a Cardiology Advisor, Contractor will be responsible for the strategy, direction and execution of initiative to build global adoption of the Company's product in cardiology in close collaboration with the CEO. Specifically, Contractor will be responsible for the following:

a. Guiding overall evidence development strategy to support reimbursement, protocol integration, and regulatory approvals, including guidance regarding clinical utility and health economic/outcomes research studies in cardiology.

b. Providing medical and clinical leadership in future product development with focus in cardiology.

c. Lead in the Company's efforts in educating physicians, payers, regulators in the value of Kosmos and other Company products in cardiology.

d. Represent the medical/clinical perspective in board meetings, investor meetings, regulatory and medical communities, and collaborators/partners and other meetings with key stakeholders in the area of cardiology, as requested from time to time.

e. In collaboration with the Chief Innovation Officer, provide key guidance for the development of new products and features for cardiology.

f. Monitor competitive landscape closely and assist company in responding to competitive threats in cardiology.

g. Provide clinical support and work with other members of the management team to develop and communicate the overall corporate strategy.

h. Other duties as mutually agreed from time to time.

[Agreement § 1.2, Schedule 1].

Regarding payment, the Agreement provides that “[a]s full compensation for the Services and the rights granted to [EchoNous] in this Agreement, [EchoNous] shall pay [Bulwer] the fees set forth on Schedule 1 (the “Fees”),” which is “Fifteen Thousand Dollars per month USD ($15,000) to be paid by EchoNous, Inc.” [Agreement § 3.1, Schedule 1]. EchoNous also “agrees to use its commercially reasonable efforts to grant such number of stock options in the Company (‘Grant') that, in the Company's sole judgment and discretion, reflect [Bulwer]'s contribution to the Company,” subject to certain conditions. [Id. at Schedule 1].

As for additional relevant provisions, the Agreement has a forum selection clause that states the following:

13.3 This Agreement shall be governed by and construed in accordance with the internal laws of the State of Washington without giving effect to any choice or conflict of law provision or rule. Any legal suit, action or proceeding arising out of or related to this Agreement or the matters contemplated hereunder shall be instituted exclusively in the federal courts of the United States or the courts of the State of Washington in each case located in the city of Seattle and County of King, and you irrevocably submit to the exclusive jurisdiction of such courts in any such suit, action or proceeding and waive any objection based on improper venue or forum non conveniens....

[Agreement § 13.3 (the “Forum Selection Clause”)]. In addition, it has an integration clause that provides...