Logtale, Ltd. v. IKOR, Inc. et al

Filing 35


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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 LOGTALE, LTD., 5 6 No. C 11-5452 CW Plaintiff, v. 7 IKOR, INC., et al., 8 Defendants. ________________________________ 9 United States District Court For the Northern District of California 10 11 12 AND RELATED COUNTERCLAIMS AND THIRD-PARTY CLAIMS ________________________________/ ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS COUNTERCLAIMS; DENYING MOTION TO STRIKE; SETTING INITIAL CASE MANAGEMENT CONFERENCE Plaintiff and Counterdefendant Logtale, Ltd. moves to dismiss 13 the counterclaims of Defendant and Counterclaimant IKOR, Inc. 14 pursuant to Federal Rule of Civil Procedure 12(b)(6), and moves to 15 strike portions of the counter-complaint pursuant to Rule 12(f). 16 Defendants oppose the motion except as to dismissal of IKOR’s 17 unfair competition claim. 18 Court finds the matter suitable for decision without oral 19 argument. 20 papers filed by the parties, the Court grants the motion to 21 dismiss and grants leave to amend, as more fully set forth below. The matter is fully briefed and the Having considered the relevant legal authority and the 22 BACKGROUND 23 The following facts are admitted or alleged in the first 24 amended answer and counterclaim (1AA) to the first amended 25 complaint (1AC). 26 Defendant IKOR, Inc. is a South Dakota corporation in the 27 business of developing bovine-derived oxygen therapeutics and 28 related technologies and is the owner of three U.S. patents 1 related to tetrameric hemoglobin. 2 Canton and Tye are officers and directors of IKOR. 3 1AC ¶¶ 4, 15. Defendants 1AC ¶¶ 5-6. On or about October 20, 2006, Logtale and IKOR entered into a 4 Series A Preferred Stock Purchase Agreement (SPA), pursuant to 5 which IKOR sold and issued 1,999,840 shares of its Series A 6 Convertible Stock to Logtale at a purchase price of $2.5002 per 7 share. 8 dollar purchase, Logtale became the majority shareholder of 9 preferred stock in IKOR. United States District Court For the Northern District of California 10 1AC ¶ 17 and Ex. 1. As a result of this five million 1AC ¶ 17. On or about October 20, 2006, IKOR issued Amended and 11 Restated Articles of Incorporation, pursuant to which Logtale, as 12 the majority shareholder of preferred stock in IKOR, had the right 13 to elect, and did elect, Dr. Norman Wai to serve as a director on 14 the IKOR Board. 15 third-party complaint names Dr. Wai as a third-party defendant, 16 but IKOR has not filed proof that he has been served. 17 1AC ¶¶ 18-19 and Ex. 2. IKOR’s first amended Also on or about October 20, 2006, Logtale and Defendants 18 IKOR, Ross and Tye entered into an Investors’ Rights Agreement. 19 1AC ¶ 20 and Ex. 3. 20 Rights Agreement was to induce Logtale to purchase Series A 21 Preferred Stock and invest funds in IKOR pursuant to the Purchase 22 Agreement, as well as to govern Logtale’s rights as an investor in 23 IKOR. 24 Investors’ Rights Agreement were made between IKOR and New World 25 Mobile Holdings Ltd. (New World Mobile), a company incorporated in 26 the Cayman Islands and a subsidiary of New World Development 27 Company Limited (New World Development), a Hong Kong corporation. 28 1AA ¶ 20. Id. One of the stated purposes of the Investors’ Defendants allege that the negotiations leading to the Defendants allege that, at a relatively late stage in 2 1 the negotiations, New World Mobile requested that Logtale be 2 substituted for New World Mobile as the investor. 3 “shelf-corporation” registered in the British Virgin Islands with 4 no operational existence or significant capital at the time of 5 substitution. 6 substitution by Logtale was necessary because the proposed 7 investment in IKOR would cause disclosure difficulties for New 8 World Mobile and New World Development. 9 World Mobile as a third-party defendant but has not filed proof United States District Court For the Northern District of California 10 11 1AA ¶ 20. Logtale was a The investors explained that 1AA ¶ 20. IKOR names New that it has been served. IKOR alleges that, on or about October 20, 2006, it entered 12 into an Option and License and Manufacturing Agreement (License 13 Agreement) with Logtale. 14 The License Agreement granted Logtale a limited exclusive right to 15 manufacture, sell and distribute certain IKOR biopharmaceuticals 16 in designated territories, essentially Asia, Australia, and New 17 Zealand. 18 agreement was initially contemplated, it was never executed, and 19 IKOR and Logtale have been operating under the terms of the 20 License Agreement since 2006. 21 under the alleged License Agreement are known as Oxygen 22 Therapeutics and related hemoglobin-based biopharmaceuticals. 23 1AA, First Counterclaim ¶ 4. 24 Id. 1AA, First Counterclaim ¶ 1 and Ex. A. IKOR alleges that, although a more complete Id. The drugs licensed to Logtale IKOR alleges that Logtale created a Hong Kong corporation, 25 New A-IKOR, whose name was later changed to New A Innovation Ltd. 26 1AA, First Counterclaim ¶ 3. 27 manufactures and sells the licensed biopharmaceutical products 28 under the license granted to Logtale by IKOR. New A Innovation allegedly 3 Id. New A 1 Innovation is named by IKOR as a third-party defendant but IKOR 2 has not filed proof that it has been served. 3 IKOR cancelled the Logtale licenses in 2010, after having 4 given notice that Logtale was in default for uncured breaches of 5 the License Agreement, including, but not limited to, the 6 marketing and manufacturing of IKOR’s Oxygen Therapeutics and 7 related pharmaceuticals. 8 9 1AA, First Counterclaim ¶ 10. IKOR alleges that Logtale, as well as New A Innovation, New World Mobile and New World Development acting through Logtale, United States District Court For the Northern District of California 10 have breached the License Agreement by, among other things, 11 withholding royalties, failing to comply with auditing and 12 inspection requirements, and misusing IKOR’s proprietary 13 information. 14 1AA, First Counterclaim ¶ 14. Logtale filed this action on November 9, 2011, and filed an 15 amended complaint on February 13, 2012. 16 seeks injunctive relief and alleges claims against Defendants for 17 breach of contract, breach of fiduciary duties and breach of the 18 implied covenant of good faith and fair dealing. 19 The operative complaint Defendants filed an answer and counterclaim to the 1AC and 20 third-party complaint on March 23, 2012, then filed the 1AA on May 21 21, 2012. 22 counterclaims against Logtale: (1) breach of the License 23 Agreement, including failure to supply financial and manufacturing 24 information required by the agreement; (2) theft of intellectual 25 property under California’s Uniform Trade Secrets Act; (3) unfair 26 competition by copying IKOR’s drugs without paying royalties; and 27 (4) interference with prospective business opportunity by 28 thwarting IKOR’s efforts to obtain additional financing, in order In its most recent pleading, IKOR alleges the following 4 1 to drive IKOR into bankruptcy and acquire rights in IKOR’s 2 technology as a preferred shareholder in IKOR’s liquidation. 3 Logtale moves to dismiss IKOR’s counterclaims and to strike 4 certain allegations. 5 for unfair competition fails to state a claim for relief, but 6 otherwise opposes Logtale’s motion to dismiss and motion to 7 strike. IKOR concedes that the third counterclaim 8 9 United States District Court For the Northern District of California 10 LEGAL STANDARD I. Motion to Dismiss A complaint must contain a “short and plain statement of the 11 claim showing that the pleader is entitled to relief.” 12 Civ. P. 8(a). 13 state a claim, dismissal is appropriate only when the complaint 14 does not give the defendant fair notice of a legally cognizable 15 claim and the grounds on which it rests. 16 Twombly, 550 U.S. 544, 555 (2007). 17 complaint is sufficient to state a claim, the court will take all 18 material allegations as true and construe them in the light most 19 favorable to the plaintiff. 20 896, 898 (9th Cir. 1986). 21 to legal conclusions; “threadbare recitals of the elements of a 22 cause of action, supported by mere conclusory statements,” are not 23 taken as true. 24 (citing Twombly, 550 U.S. at 555). Fed. R. On a motion under Rule 12(b)(6) for failure to Bell Atl. Corp. v. In considering whether the NL Indus., Inc. v. Kaplan, 792 F.2d However, this principle is inapplicable Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 25 When granting a motion to dismiss, the court is generally 26 required to grant the plaintiff leave to amend, even if no request 27 to amend the pleading was made, unless amendment would be futile. 28 Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 5 1 F.2d 242, 246-47 (9th Cir. 1990). 2 amendment would be futile, the court examines whether the 3 complaint could be amended to cure the defect requiring dismissal 4 “without contradicting any of the allegations of [the] original 5 complaint.” 6 Cir. 1990). 7 II. 8 9 In determining whether Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Motion to Strike Pursuant to Federal Rule of Civil Procedure 12(f), the court may strike from a pleading “any redundant, immaterial, impertinent United States District Court For the Northern District of California 10 or scandalous matter.” 11 avoid spending time and money litigating spurious issues. 12 Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), 13 rev’d on other grounds, 510 U.S. 517 (1994). 14 if it has no essential or important relationship to the claim for 15 relief plead. 16 and is not necessary to the issues in question in the case. 17 “Superfluous historical allegations are a proper subject of a 18 motion to strike.” 19 they are often used as delaying tactics and because of the limited 20 importance of pleadings in federal practice. 21 922 F. Supp. 1450, 1478 (C.D. Cal. 1996). 22 granted unless it is clear that the matter to be stricken could 23 have no possible bearing on the subject matter of the litigation. 24 Colaprico v. Sun Microsystems, Inc., 758 F. Supp. 1335, 1339 (N.D. 25 Cal. 1991). Id. The purpose of a Rule 12(f) motion is to Matter is immaterial Matter is impertinent if it does not pertain Id. Id. Motions to strike are disfavored because 26 27 28 6 Bureerong v. Uvawas, They should not be 1 2 3 DISCUSSION I. Breach of Contract The first counterclaim for breach of contract alleges that on 4 or about October 20, 2006, “IKOR and Logtale entered into a[n] 5 Option and Licensing and Manufacturing Agreement,” and that 6 “[a]lthough a more complete agreement was initially contemplated, 7 it was never executed, and thus both IKOR and Logtale have been 8 operating under the terms of the Licensing Agreement since 2006.” 9 1AA, First Counterclaim ¶ 1. Logtale contends that IKOR fails to United States District Court For the Northern District of California 10 allege the existence of a valid License Agreement in support of 11 its breach of contract claim. 12 are not sufficient to state a claim for breach of contract, but 13 IKOR is granted leave to amend the allegations. As currently plead, the allegations 14 Courts apply general principles of contract interpretation 15 when interpreting the terms and scope of a licensing agreement. 16 Miller v. Glenn Miller Productions, Inc., 454 F.3d 975, 989 (9th 17 Cir. 2006) (citing Mendler v. Winterland Production, Ltd., 207 18 F.3d 1119, 1121 (9th Cir. 2000)). 19 contract interpretation is to give effect to the mutual intent of 20 the parties as it existed at the time of contracting.’” 21 (quoting United States Cellular Invest. Co. of Los Angeles v. GTE 22 Mobilnet, Inc., 281 F.3d 929, 934 (9th Cir. 2002)). 23 “‘The fundamental goal of Id. The Option Agreement entered by IKOR (referred to as the 24 Company) and Logtale (referred to as the Grantee) on October 20, 25 2006, states as follows: 26 1. GRANT OF OPTION. 27 1.1 In consideration of the sum of HK$1.00 now paid by the Grantee to the Company (receipt of which the Company hereby acknowledges), the Company 28 7 1 2 3 4 5 6 7 8 9 United States District Court For the Northern District of California 10 11 12 hereby irrevocably and unconditionally grants to the Grantee the option (the “Option”) to require the Company to enter into a license and manufacturing agreement (the “License and Manufacturing Agreement”) with the Grantee or any company as the Grantee may direct, on the principal terms set out in the Schedule hereto. 1.2 The Option may be exercised by the Grantee at any time during the period commencing from the date of this Agreement to the first anniversary hereof by serving an option notice in the form attached hereto as Exhibit A (the “Option Notice”) on the Company upon which the Option shall be deemed exercised. 1.3 Immediately after the service of the Option Notice, the Company and the Grantee shall negotiate diligently and in good faith, and use their best efforts to enter into the License and Manufacturing Agreement on the principal terms and conditions set out in the Schedule attached hereto within thirty (30) days after such service. 1AA, Ex. A (Docket No. 26-1) at 1. 13 Logtale contends that on the face of the Option Agreement, 14 the parties expressed their intent that the attached License 15 Agreement was a contingent, draft document, and further contends 16 that IKOR has not alleged that the parties ever signed or entered 17 into a written License Agreement. IKOR responds that the parties 18 treated the License Agreement as binding on them and intended the 19 writing to reflect their agreement. 20 If there is a manifest intention that the agreement is not 21 binding until reduced to a formal writing that is executed by both 22 parties, there is no binding contract until this occurs. Rennick 23 v. OPTION Care, Inc., 77 F.3d 309, 316 (9th Cir. 1996). On the 24 other hand, “[w]hen parties intend that an agreement be binding, 25 the fact that a more formal agreement must be prepared and 26 executed does not alter the validity of the agreement.” Blix St. 27 Records, Inc. v. Cassidy, 191 Cal. App. 4th 39, 48 (2010). 28 8 1 “‘Whether a writing constitutes a final agreement or merely an 2 agreement to make an agreement depends primarily upon the 3 intention of the parties. 4 be determined by a construction of the instrument taken as a 5 whole.’” 6 3d 1555, 1562 (1989) (quoting Smissaert v. Chiodo, 163 Cal. App. 7 2d 827, 830 (1958)). 8 9 In the absence of ambiguity this must Beck v. American Health Group Intl., Inc., 211 Cal. App. In support of its contention that the parties’ agreement to negotiate and execute a license agreement is not a binding United States District Court For the Northern District of California 10 contract, Logtale cites Beck, where the court held that a letter 11 drafting “the outline of our future agreement” was “merely an 12 ‘agreement to agree’ which cannot be made the basis of a cause of 13 action.” 14 considered the writing to determine the parties’ intention, and 15 held that the language of the letter indicated an intent to 16 forward the letter outlining the terms of the proposed agreement 17 to corporate counsel “for the drafting of a contract,” and to 18 discuss the draft further. 19 court in Beck found that the letter contemplated further 20 negotiations and that no binding agreement would result until a 21 formal contract was drafted by an attorney. 22 and IKOR outlined the proposed “terms and conditions” of their 23 contemplated agreement in greater detail than did the parties in 24 Beck, they nevertheless failed to memorialize their final 25 agreement in writing. 26 face, evidences the parties’ intent to enter into a written 27 license agreement only after engaging in further negotiations. 211 Cal. App. 3d at 1562-63. There, the court Beck, 211 Cal. App. 3d at 1563. 1AA, Ex. A. 28 9 Id. The Although Logtale The Option Agreement, on its 1 The Schedule attached to the Option Agreement is entitled 2 “Term Sheet - License and Manufacturing Agreement,” and sets out 3 the principal terms and conditions of the License Agreement. 4 Ex. A at 6. 5 enter into a license and manufacturing agreement “may be 6 exercised” by Logtale by serving notice in the form attached to 7 the Option Agreement, after which the parties would “use their 8 best efforts to enter into the License and Manufacturing Agreement 9 on the principal terms and conditions set out in the Schedule.” 1AA, The Option Agreement provides that the option to United States District Court For the Northern District of California 10 Id. at 1. 11 allege that Logtale exercised the option or otherwise consented to 12 the terms of the written licensing agreement. 13 the parties “have been operating under the terms of the Licensing 14 Agreement since 2006” is insufficient to show the existence of a 15 valid license agreement. 16 may demonstrate that the parties’ actions evidence an agreement. 17 “‘Words are frequently but an imperfect medium to convey thought 18 and intention. 19 and demonstrate by their conduct that they knew what they were 20 talking about the courts should enforce that intent.’” 21 Summary of Cal. Law (10th ed. 2005) Contracts § 749, p. 838. 22 As currently plead, the first counterclaim does not The allegation that However, additional factual allegations When the parties to a contract perform under it 1 Witkin, IKOR seeks leave to amend its counterclaim, contending that 23 the parties’ correspondence demonstrates that they acted as if 24 there was a licensing agreement between them. 25 letter from Dr. Wai on behalf of Logtale dated August 21, 2009, 26 which acknowledges the validity of the terms of the License 27 Agreement set forth in the schedule to the Option Agreement. 28 10 They refer to a Opp. 1 at 14. 2 contract claim is dismissed with leave to amend. 3 II. Because amendment may not be futile, the breach of Theft of Intellectual Property 4 Logtale seeks dismissal of the second counterclaim for theft 5 of intellectual property. 6 entered into the License Agreement to obtain rights to IKOR’s 7 trade secrets, has failed to pay royalties or otherwise comply 8 with the License Agreement, and has misappropriated IKOR’s 9 technology and trade secrets with the intent to market IKOR’s That counterclaim alleges that Logtale United States District Court For the Northern District of California 10 biopharmaceuticals in markets that IKOR owns, namely the United 11 States and the European Union. 12 21. 13 ¶ 17. 14 technology even after IKOR cancelled the alleged License 15 Agreement, and that if Logtale prevails on its argument that there 16 was never a licensing agreement, then Logtale’s use of IKOR’s 17 technology was theft from the very beginning. 18 alleges that Logtale has plotted with the Chinese government and 19 the Chinese military to acquire IKOR’s trade secrets and patents 20 for commercial and military use and competition with IKOR. 21 Second Counterclaim ¶ 22. 22 1AA, Second Counterclaim ¶¶ 17, IKOR alleges, “At this point, it looks like theft.” Id. IKOR contends that Logtale continued to use IKOR’s IKOR further 1AA, IKOR seeks relief under the Uniform Trade Secrets Act (UTSA), 23 as adopted in California, Cal. Civ. Code § 3426 et seq. 24 defines a trade secret as 25 26 27 28 The UTSA information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) Derives independent economic value, actual or potential, from not being generally known to the 11 public or to other persons who can obtain economic value from its disclosure or use; and 1 2 (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 3 4 Cal. Civ. Code § 3426.1(d). 5 misappropriation may be enjoined” under this statute. 6 Code § 3426.2(a). 7 8 Cal. Civ. In Bayer Corp. v. Roche Molecular Sys., Inc., the court recognized, 9 A corporation misappropriates a trade secret when (1) it discloses or uses the trade secret of another without express or implied consent, and (2) at the time of the disclosure or use, it knew or had reason to know that its knowledge of the trade secret was derived from a person who owed a duty to the entity seeking relief to maintain the trade secret’s secrecy or limit its use. Cal. Civ. Code § 3426.1(b)(2)(B)(iii). The Court may order affirmative acts to protect a trade secret in appropriate circumstances. Cal. Civ. Code § 3426.2(c). 10 United States District Court For the Northern District of California “Actual or threatened 11 12 13 14 15 Bayer Corp. v. Roche Molecular Sys., Inc., 72 F. Supp. 2d 1111, 16 1117 (N.D. Cal. 1999). 17 Logtale contends that IKOR has failed to identify with 18 reasonable particularity how its intangible proprietary 19 information is a property interest capable of being converted or 20 stolen. To identify the trade secrets at issue, IKOR refer to its 21 patent rights, defined in the alleged License Agreement as “[a]ll 22 patents and patent applications of any kind anywhere in the world 23 owned or controlled by IKOR during the term of the Agreement,” and 24 IKOR Know-How, defined as “[a]ny proprietary information, trade 25 secrets, techniques, materials and data owned or controlled by 26 IKOR.” Opp. at 15; 1AA, Ex. A at 7. IKOR also refers to an 27 application by third-party defendant New A Innovation for approval 28 12 1 to market an IKOR drug in Europe after IKOR terminated the License 2 Agreement with Logtale, but does not sufficiently identify the 3 drug or IKOR’s ownership interest in it. A claimant seeking relief for misappropriation of trade 5 secrets “must identify the trade secrets and carry the burden of 6 showing that they exist.” 7 991 F.2d 511, 522 (9th Cir. 1993). 8 describe the subject matter of the trade secret with sufficient 9 particularity to separate it from matters of general knowledge in 10 United States District Court For the Northern District of California 4 the trade or of special knowledge of those persons . . . skilled 11 in the trade.’” 12 1161, 1164-65 (9th Cir. 1998) (quoting Universal Analytics v. 13 MacNeal-Schwendler Corp., 707 F. Supp. 1170, 1177 (C.D. Cal. 14 1989), aff’d, 914 F.2d 1256 (9th Cir. 1990)). 15 the allegations supporting the second counterclaim fail to 16 identify the alleged trade secrets with sufficient particularity. 17 MAI Sys. Corp. v. Peak Computer, Inc., “The plaintiff ‘should Imax Corp. v. Cinema Technologies, Inc., 152 F.3d As currently plead, Under California law, when information “is generally known in 18 the trade and already used by good faith competitors, it is not a 19 protectable trade secret and injunction should not issue.” 20 Paper & Packaging Prods., Inc. v. Kirgan, 183 Cal. App. 3d 1318, 21 1326 (1986). 22 protection for patented IKOR technology. 23 Prods., Inc. v. Marron Carrel, Inc., 674 F.2d 1336, 1342 (9th Cir. 24 1982) (“Matters disclosed in a patent publication destroy any 25 trade secret contained therein.”) (applying Pennsylvania trade 26 secret law). 27 counterclaim for patent infringement but abandoned that claim in 28 the amended answer and counterclaim, and may not revive the trade Am. Thus, Defendants may not assert trade secret See Henry Hope X-Ray Logtale argues that Defendants initially alleged a 13 1 secret claim as one for patent infringement. 2 address this argument or demonstrate that amendment would not be 3 futile as to its published patents. 4 IKOR patent rights is therefore dismissed without leave to amend. 5 Because amendment may not be futile with respect to protectable 6 trade secrets that are not in the public domain, the counterclaim 7 is dismissed with leave to amend to allege that. 8 III. Interference with Prospective Business Opportunity 9 IKOR fails to The counterclaim for theft of IKOR’s fourth counterclaim for relief alleges interference United States District Court For the Northern District of California 10 with prospective business opportunity. 11 elements of a tort claim for intentional interference with 12 prospective economic advantage are (1) an economic relationship 13 between the plaintiff and some third party, with the probability 14 of future economic benefit to the plaintiff; (2) the defendant’s 15 knowledge of the relationship; (3) intentional acts on the part of 16 the defendant designed to disrupt the relationship; (4) actual 17 disruption of the relationship; and (5) economic harm to the 18 plaintiff proximately caused by the acts of the defendant. 19 Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1153 20 (2003). 21 must plead intentional acts by the defendant that are wrongful 22 apart from the interference itself, and are designed to disrupt 23 the relationship. 24 defendant “engaged in conduct that was wrongful by some legal 25 measure other than the fact of interference itself” such as 26 “conduct that is recognized as anticompetitive under established 27 state and federal positive law.” 28 Sales, U.S.A., Inc., 11 Cal. 4th 376, 393 (1995). Under California law, the Korea To meet the third element, intentional acts, a plaintiff Id. at 1154. This requires a showing that the Della Penna v. Toyota Motor 14 1 The fourth counterclaim alleges that IKOR secured a contract with the United States Army and with Northwestern University to 3 conduct research in the area of wound healing, and that Logtale 4 tried to interfere and obstruct IKOR’s business. 5 Counterclaim ¶ 39. 6 intentional interference with prospective economic advantage fails 7 to allege that Logtale did anything to interfere with the Army 8 contract. 9 defendants have obtained equipment subject to export controls by 10 United States District Court For the Northern District of California 2 misrepresenting to the United States Department of Commerce that 11 they have rights to distribute IKOR’s biopharmaceuticals and have 12 thereby jeopardized IKOR’s reputation as a defense contractor. 13 Because IKOR fails to allege actual disruption of a contractual 14 relationship or economic harm that is proximately caused by 15 Logtale, the claim for intentional interference with prospective 16 business opportunity with the Army and Northwestern University is 17 dismissed. 18 elements of the claim; IKOR may not amend the counterclaim to 19 assert new grounds for relief. 1AA, Fourth Logtale contends that the counterclaim for IKOR responds that Logtale and the third-party Leave to amend is granted only to cure the deficient 20 IKOR also contends that Logtale has withheld information 21 necessary for IKOR to meet the Food and Drug Administration’s 22 strict requirements for reporting findings from clinical tests or 23 studies, and has precluded IKOR from making new drug applications 24 in the United States and in Europe. 25 ¶¶ 40, 43; Opp. at 17. 26 existence of an economic relationship between IKOR and a third 27 party, intentional acts by Logtale designed to disrupt that 28 relationship, actual disruption of the relationship, or economic 1AA, Fourth Counterclaim These allegations fail to claim the 15 1 harm proximately caused by the intentional acts. 2 the motion to dismiss, IKOR fails to address any of the specific 3 elements of a claim for intentional interference of prospective 4 business advantage. 5 claim is dismissed with prejudice as to the allegations of 6 interference with IKOR’s new drug applications in the United 7 States and in Europe. 8 9 In response to Because amendment appears to be futile, this IKOR also alleges that Logtale has obstructed its attempts to obtain additional financing for research to complete the testing United States District Court For the Northern District of California 10 necessary for new drug applications. 11 ¶ 39; Opp. at 18. 12 identify a particular economic relationship between IKOR and some 13 third party, which would probably provide future economic benefit 14 to IKOR. 15 Inc., 42 Cal. App. 4th 507, 522 (1996) (“The law precludes 16 recovery for overly speculative expectancies by initially 17 requiring proof the business relationship contained ‘the 18 probability of future economic benefit to the plaintiff.’”)). 19 IKOR suggests that Logtale and the third-party defendants have 20 been attempting to “drive IKOR into bankruptcy or damage the 21 company,” but fails to plead intentional or unlawful acts designed 22 to disrupt an economic relationship with some third party. 23 LiMandri v. Judkins, 52 Cal. App. 4th 326, 340 (1997) (“‘a 24 plaintiff seeking to recover for an alleged interference with 25 prospective contractual or economic relations must plead and prove 26 as part of its case-in-chief that the defendant not only knowingly 27 interfered with the plaintiff’s expectancy, but engaged in conduct 28 that was wrongful by some legal measure other than the fact of 1AA, Fourth Counterclaim As currently plead, the counterclaim fails to See Westside Center Associates v. Safeway Stores 23, 16 See 1 interference itself.’” 2 Sales, U.S.A., Inc., 11 Cal. 4th 376, 393 (1995)) (emphasis in 3 original). 4 disruption of the relationship, or economic harm proximately 5 caused by the intentional acts. 6 futile, the claim is dismissed with leave to amend to cure these 7 defects with respect to the alleged interference with IKOR’s 8 prospective financing. 9 IV. United States District Court For the Northern District of California 10 (quoting Della Penna v. Toyota Motor The allegations also fail to demonstrate actual Because amendment may not be Counterclaim for Injunctive Relief Logtale further seeks dismissal of IKOR’s counterclaim for 11 injunctive relief. 12 counterclaim for injunctive relief.1 13 equitable relief on its other counterclaims. 14 counterclaims are dismissed with leave to amend, Logtale’s motion 15 to dismiss the prayer for injunctive relief is granted with leave 16 to re-allege it if any of the counterclaims are successfully 17 amended. 18 V. 19 IKOR has not alleged an independent Instead, it simply seeks Because those Motion to Strike Logtale moves to strike allegations that it contends are 20 immaterial to the dispute. 21 allegations to demonstrate their relevance to the counterclaims, 22 with the exception of the allegations related to the abandoned 23 counterclaim for unfair competition, 1AA at 30:24-27. 24 that counterclaim is dismissed, the motion to strike the 25 allegation at page 30, paragraph 34, is denied as moot. IKOR seeks leave to amend the Because Because 26 27 28 1 IKOR alleges a third-party claim for injunctive relief, but the third-party complaint is not presently before the Court. 17 1 IKOR is granted leave to amend the counterclaims within the 2 limited scope discussed above, Logtale’s motion to strike is 3 denied. 4 5 CONCLUSION For the foregoing reasons, Logtale’s Motion to Dismiss the 6 Counterclaims is GRANTED, WITH LEAVE TO AMEND as to the first, 7 second and fourth counterclaims for relief. 8 motion to dismiss the third counterclaim for unfair competition is 9 unopposed and granted with prejudice. (Docket No. 27.) The Logtale’s motion to dismiss United States District Court For the Northern District of California 10 the counterclaim for injunctive relief is GRANTED with leave to 11 amend and its motion to strike is DENIED. 12 IKOR may file an amended counter-complaint within twenty-one 13 days of the date of this order. 14 respond to the amended counter-complaint twenty-one days 15 thereafter. 16 third-party complaint upon third-party defendants Dr. Wai, New 17 World Mobile, and A Innovation pursuant to Federal Rule of Civil 18 Procedure 4(l) within three days of this Order. 19 Logtale must answer or otherwise IKOR must also file proof of timely service of its The initial case management conference will be held on 20 January 16, 2013. 21 management statement by January 9, 2013. 22 The parties must file a revised joint case IT IS SO ORDERED. 23 24 25 Dated: 12/5/2012 CLAUDIA WILKEN United States District Judge 26 27 28 18

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