Sidense Corp. v. Kilopass Technology Inc. et al

Filing 38

CLARIFICATION OF PRIOR ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS (Illston, Susan) (Filed on 1/23/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SIDENSE CORP.,

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United States District Court
For the Northern District of California

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No. C 11-04112 SI

Plaintiff,

CLARIFICATION OF PRIOR ORDER
GRANTING IN PART AND DENYING IN
PART DEFENDANTS’ MOTION TO
DISMISS

v.

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KILOPASS TECHNOLOGY INC. and
CHARLIE CHENG,

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Defendants.

/

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On January 4, 2012, the Court issued an Order granting in part and denying in part the motion

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by defendants Kilopass Technology, Inc. and its CEO Charlie Cheng (“Kilopass”) to dismiss plaintiff

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Sidense’s First Amended Complaint (“FAC”). The FAC contained five causes of action which in turn

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variously incorporated ten paragraphs containing substantive allegations (¶¶ 10-19). Some of the causes

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of action incorporated selected paragraphs; others incorporated all of them. Following the issuance of

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the Order resolving the motion to dismiss, Sidense raised a question in the parties’ January 13, 2012

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Joint Case Management Statement as to which claims survived the Court’s order.

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The first cause of action, for defamation, incorporated ¶¶ 10, 13, 14, 17, 18, and 19. The Court

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dismissed ¶ 13 from that cause of action as time barred, and ¶¶ 15 and 18 for failure to state a claim for

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defamation. The second cause of action, for Unfair Competition/Disparagement under the Lanham Act

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§ 43(a), incorporated ¶¶ 11-16. The Court dismissed ¶¶ 12, 15, and 16 for failure to state a claim for

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false advertising.

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The third, fourth, and fifth causes of action - for intentional interference with contractual

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relations, intentional interference with prospective economic advantage, and unfair competition under

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Cal. Bus. and Prof. Code § 17200, respectively - were not discussed paragraph by paragraph in the

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Order. With respect to intentional interference with contractual relations and prospective economic

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relations, the Court wrote that “for the purpose of a 12(b)(6) motion, Sidense has sufficiently stated its

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claims in ¶¶ 10-19 to put Kilopass on notice of its claims and to raise the claims for relief above the

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speculative level.” Order at 27. With respect to unfair competition, the Court stated that because “a

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number of Sidense’s causes of action survive Kilopass’ other theories of dismissal, they are sufficiently

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pled as unfair competition under § 17200.”
In the Joint Case Management Statement, Sidense contends that the Court’s conclusion that the

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complaint was dismissed with respect to all causes of action as they relate to ¶¶ 12, 13, 15, 16, and 18,

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is inconsistent with the Court’s finding that Sidense had sufficiently stated its claims for intentional

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United States District Court
For the Northern District of California

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interference in ¶¶ 10-19. The question Sidense appears to pose is whether ¶¶ 12, 13, 15, 16, and 18

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survive with respect to the intentional interference and UCL claims.

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The answer is no. In its discussion of intentional interference and unfair competition (the third

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through fifth causes of action), the Court adopted Sidense’s characterization of the defamation and false

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advertising claims (i.e., the first and second causes of action) as “predicate acts” on which the latter

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claims relied. See Sidense Opp. to Kilopass’ Mot. to Dismiss, at 24-25; see also, e.g., Rice v. Fox

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Broad. Co., 330 F.3d 1170, 1182 (9th Cir. 2003) (Lanham Act false advertising and § 17200 claims “rise

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and fall together.”) Unlike the first and second causes of action, Sidense did not plead specific facts in

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its third through fifth causes of action. Compare ¶¶ 22, 23, and 28, with ¶¶ 35-45. It simply

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incorporated by reference the earlier claims and then recited the required elements of each cause of

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action. The Court, in agreeing that Sidense sufficiently established the latter causes of action, was

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relying on the surviving prior claims.

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The conclusion the Court set forth in its order remains.

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IT IS SO ORDERED.

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Dated: January 23, 2012
SUSAN ILLSTON
United States District Judge

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