MyECHeck, Inc. v. Zipmark, Inc. et al

Filing 19

ORDER signed by Judge John A. Mendez on 3/16/15 GRANTING 6 Motion to Dismiss all claims against Defendant Bhattacharya due to lack of personal jurisdiction and DENIES the motion to dismiss the patent and contract claims against Defendant Zipmark. (Meuleman, A)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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MYECHECK, INC.,

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2:14-cv-02399-JAM-KJN

Plaintiff,

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No.

v.
ZIPMARK, INC., JAY
BHATTACHARYA,

ORDER GRANTING IN PART AND
DENYNG IN PART DEFENDANTS’
MOTION TO DISMISS

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Defendants.
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Plaintiff MyECheck alleges that Defendants Zipmark, Inc. and

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Jay Bhattacharya breached a licensing agreement and continued to

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use licensed technology without authorization.

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dismiss, Defendants attack the sufficiency of the complaint’s

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allegations.

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part and denies in part Defendants’ motion. 1
I.

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For the reasons stated below, the Court grants in

FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

Plaintiff owns a patented technology that “makes an

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In this motion to

electronic image of [a] payor’s check, and processes it with the

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This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was
scheduled for February 11, 2015.
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Federal Reserve Banking System.”

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licensed this technology to Defendant Zipmark.

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Zipmark agreed to pay for this license in two installments: one

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of $50,000 and one of $35,000.

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that Zipmark paid the first installment but failed to pay the

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second.

Compl. ¶ 15.

Compl. ¶ 31.

Plaintiff
Compl. ¶¶ 28, 30.

Plaintiff alleges

Compl. ¶¶ 33-35.

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Plaintiff sued Defendant Zipmark and its CEO, Jay

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Bhattacharya, a “resid[ent] of the State of New York.”

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¶ 4.

Compl.

Plaintiff asserts claims for (1) breach of contract,

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(2) patent infringement, and (3) “[i]njunctive [r]elief” (Doc.

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#1).

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Defendant Bhuttacharya and the first two causes of action against

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Defendant Zipmark (Doc. #6).

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Defendant Zipmark (Doc. #7).

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II.

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Defendants move to dismiss all causes of action against

A.

Plaintiff opposes the motion as to

OPINION

Discussion
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Personal Jurisdiction

Defendants first move to dismiss all claims against

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Defendant Bhattacharya for lack of personal jurisdiction on the

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basis that the complaint lacks allegations of Bhattacharya’s

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contacts with California.

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Court to no relevant allegations and does not oppose dismissal,

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Opp. at 1, so Defendant’s motion is GRANTED.

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portions of Defendants’ motion related to Defendant

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Bhattacharya, including improper venue and sufficiency of the

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patent claim are moot.

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2.

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Mot. at 2.

Plaintiff points the

The remaining

Sufficiency of Patent Infringement Allegations

As to Defendant Zipmark, Defendants assert that Plaintiff’s
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patent infringement claim is insufficient because the complaint

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does not fully “identify or explain” the “technology” that it

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allegedly infringed.

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paragraph 15 of the complaint as an adequate description.

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at 10.

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Mot. at 11.

Plaintiff points the Court to
Opp.

As an initial matter, Defendants object to Plaintiff’s

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reliance on the declaration of Ed Starrs that Plaintiff

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submitted in support of its opposition.

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12(b)(6) motion, the Court cannot consider non-judicially

Reply at 2.

On this

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noticed facts outside of the pleadings.

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Dep’t of Corr., 151 F.3d 1194, 1197 n.1 (9th Cir. 1998).

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Court therefore does not consider the declaration.

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See Schneider v. Cal.
The

To plead a patent claim, a complaint must describe the

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allegedly infringing product with “at least as much detail as

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[Federal Rule of Civil Procedure] Form 18.”

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v. Tropical Flooring, 2014 WL 2795360, at *3 (C.D. Cal. June 13,

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2014) (citation omitted).

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an example of an adequate product description.

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reply argues that Bell Atlantic Corp. v. Twombly, 550 U.S. 544

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(2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), superseded

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Form 18.

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whether and when each standard applies, because Plaintiff’s

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complaint is adequate under either standard.

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Telecommum., Inc. v. Time Warner Cable, Inc., 714 F.3d 1277,

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1283-84 (Fed. Cir. 2013) (stating that Form 18 controls in the

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case of a conflict between the Form and Twombly/Iqbal, but “we

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should [not] seek to create conflict where none exists”).

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Reply at 2.

Unilin Beheer B.V.

Form 18 provides “electric motor” as
Defendants’

The Court does not reach the issue of

See K-Tech

The complaint here identifies the infringing product as
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“technology [that] makes an electronic image of the payor’s

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check, and processes it with the Federal Reserve Banking

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System.”

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than that required by Form 18 and many of the cases interpreting

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it.

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Optical Co., Ltd., 2013 WL 5934698, at *2-*3 (N.D. Cal. Nov. 4,

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2013) (concluding that “an imaging lens” adequately puts

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defendant on notice of alleged infringing product); Applera

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Corp. v. Thermo Electron Corp., 2005 WL 524589, at *1 (D. Del.

Compl. ¶ 15.

This description is even more detailed

See, e.g., Largan Precision Co., Ltd. v. Genius Elec.

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Feb. 5, 2005) (finding “mass spectrometer systems” sufficiently

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detailed).

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(“[C]omplaints frequently survive a motion to dismiss where they

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accuse a general category of products.”) (citations and

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quotation marks omitted).

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description of paragraph 15 as vague is without merit.

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at 11:7-10; Reply at 3:12-16.

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See also Unilin Beheer B.V., 2014 WL 2795360, at *3

The Court finds that Defendants’
See Mot.

Paragraph 15 is also sufficient under the Twombly/Iqbal

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pleading standard.

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[that] makes an electronic image of the payor’s check, and

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processes it with the Federal Reserve Banking System” is

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“neither ‘bald’ nor ‘conclusory.’”

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1202, 1216 (9th Cir. 2011) (citation omitted).

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provides at least plausible facts that give Defendants notice of

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the technology they allegedly used without authorization.

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id. at 1212.

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Alleging that Defendants used “technology

See Starr v. Baca, 652 F.3d
This allegation

See

Because Plaintiff has adequately identified the technology

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at issue, the Court DENIES Defendants’ motion to dismiss

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Plaintiff’s patent infringement claim as to Defendant Zipmark.
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3.

Sufficiency of Contract Allegations

Defendants argue that Plaintiff did not plead a valid

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contract on which to base its breach of contract claim.

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“MyECheck Services Agreement” and the “Amendment to Services

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Agreement” (“Amendment”) attached to the complaint.

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As Defendants note, the complaint itself misidentifies these

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documents in certain places.

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Mot. at

Plaintiff cites no law in response, but points to the

Opp. at 11.

See Compl. ¶¶ 39, 42.

Defendants first appear to question the authenticity of the

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Service Agreement and Amendment.

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to “[t]he alleged ‘true and correct’ copy of the Services

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Agreement”; noting that Exhibit 1 is “unexecuted”; stating that

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Exhibit 3 “was never actually ‘executed by the parties’ [and]

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does [not] contain an effective date”).

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“exhibit[s] to a pleading” — are “part of the pleading for all

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purposes.”

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take the facts contained in these document as true — just as it

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does with all other facts in the pleadings.

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Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by

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Davis v. Scherer, 468 U.S. 183 (1984).

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not entertain Defendant’s factual dispute as to whether the

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documents are an accurate reflection of the parties’ agreement.

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Defendants next suggest that the documents “contradict” or

See Mot. at 13:6-13 (referring

Fed. R. Civ. P. 10(c).

These documents — as

The Court must therefore

See Scheuer v.

The Court therefore may

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are otherwise “inconsistent with” the complaint.

See Mot. at

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13; Reply at 4-5.

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out that the alleged Services Agreement does not mention the

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“‘second’ license fee.”

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out in the Amendment.

To support this position, Defendants point

Reply at 4:21.

But the fees are laid

See Compl. Exh. 3 ¶ 1(e).
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These fees

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match — rather than contradict — the allegations in the

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complaint.

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fact that the Amendment contains no signatures makes it

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inconsistent with the complaint.

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But providing an unsigned copy of the agreement does not

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preclude the existence of a signed copy or of an otherwise valid

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agreement.

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the fact that the documents do not “mention the ‘913 Patent.”

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Mot. at 13:8.

See Compl. ¶ 31.

Defendants also argue that the

See Mot. at 13; Reply at 4-5.

Finally, Defendants draw the Court’s attention to

But Defendants do not cite any case holding that

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a licensing contract is only valid if it cites the relevant

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patent.

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The Court therefore rejects Defendants’ arguments and holds

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that the allegations — when taken in the light most favorable to

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Plaintiff — establish the existence of a valid contract.

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Defendants’ motion to dismiss the contract claim against

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Defendant Zipmark is DENIED.

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III.

ORDER

The Court GRANTS Defendants’ motion to dismiss all claims

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against Defendant Bhattacharya due to lack of personal

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jurisdiction and DENIES the motion to dismiss the patent and

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contract claims against Defendant Zipmark.

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IT IS SO ORDERED.
Dated: March 16, 2015

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