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

Filing 35

ORDER by Judge Claudia Wilken GRANTING IN PART AND DENYING IN PART 27 MOTION TO DISMISS COUNTERCLAIMS; DENYING 27 MOTION TO STRIKE; SETTING INITIAL CASE MANAGEMENT CONFERENCE. (ndr, COURT STAFF) (Filed on 12/5/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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LOGTALE, LTD.,

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No. C 11-5452 CW

Plaintiff,
v.

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IKOR, INC., et al.,

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Defendants.
________________________________

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United States District Court
For the Northern District of California

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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

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the counterclaims of Defendant and Counterclaimant IKOR, Inc.

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pursuant to Federal Rule of Civil Procedure 12(b)(6), and moves to

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strike portions of the counter-complaint pursuant to Rule 12(f).

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Defendants oppose the motion except as to dismissal of IKOR’s

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unfair competition claim.

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Court finds the matter suitable for decision without oral

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argument.

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papers filed by the parties, the Court grants the motion to

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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

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BACKGROUND

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The following facts are admitted or alleged in the first

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amended answer and counterclaim (1AA) to the first amended

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complaint (1AC).

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Defendant IKOR, Inc. is a South Dakota corporation in the

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business of developing bovine-derived oxygen therapeutics and

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related technologies and is the owner of three U.S. patents

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related to tetrameric hemoglobin.

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Canton and Tye are officers and directors of IKOR.

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1AC ¶¶ 4, 15.

Defendants
1AC ¶¶ 5-6.

On or about October 20, 2006, Logtale and IKOR entered into a

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Series A Preferred Stock Purchase Agreement (SPA), pursuant to

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which IKOR sold and issued 1,999,840 shares of its Series A

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Convertible Stock to Logtale at a purchase price of $2.5002 per

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share.

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dollar purchase, Logtale became the majority shareholder of

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preferred stock in IKOR.

United States District Court
For the Northern District of California

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1AC ¶ 17 and Ex. 1.

As a result of this five million

1AC ¶ 17.

On or about October 20, 2006, IKOR issued Amended and

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Restated Articles of Incorporation, pursuant to which Logtale, as

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the majority shareholder of preferred stock in IKOR, had the right

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to elect, and did elect, Dr. Norman Wai to serve as a director on

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the IKOR Board.

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third-party complaint names Dr. Wai as a third-party defendant,

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but IKOR has not filed proof that he has been served.

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1AC ¶¶ 18-19 and Ex. 2.

IKOR’s first amended

Also on or about October 20, 2006, Logtale and Defendants

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IKOR, Ross and Tye entered into an Investors’ Rights Agreement.

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1AC ¶ 20 and Ex. 3.

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Rights Agreement was to induce Logtale to purchase Series A

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Preferred Stock and invest funds in IKOR pursuant to the Purchase

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Agreement, as well as to govern Logtale’s rights as an investor in

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IKOR.

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Investors’ Rights Agreement were made between IKOR and New World

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Mobile Holdings Ltd. (New World Mobile), a company incorporated in

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the Cayman Islands and a subsidiary of New World Development

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Company Limited (New World Development), a Hong Kong corporation.

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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
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the negotiations, New World Mobile requested that Logtale be

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substituted for New World Mobile as the investor.

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“shelf-corporation” registered in the British Virgin Islands with

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no operational existence or significant capital at the time of

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substitution.

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substitution by Logtale was necessary because the proposed

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investment in IKOR would cause disclosure difficulties for New

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World Mobile and New World Development.

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World Mobile as a third-party defendant but has not filed proof

United States District Court
For the Northern District of California

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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

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into an Option and License and Manufacturing Agreement (License

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Agreement) with Logtale.

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The License Agreement granted Logtale a limited exclusive right to

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manufacture, sell and distribute certain IKOR biopharmaceuticals

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in designated territories, essentially Asia, Australia, and New

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Zealand.

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agreement was initially contemplated, it was never executed, and

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IKOR and Logtale have been operating under the terms of the

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License Agreement since 2006.

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under the alleged License Agreement are known as Oxygen

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Therapeutics and related hemoglobin-based biopharmaceuticals.

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1AA, First Counterclaim ¶ 4.

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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,

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New A-IKOR, whose name was later changed to New A Innovation Ltd.

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1AA, First Counterclaim ¶ 3.

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manufactures and sells the licensed biopharmaceutical products

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under the license granted to Logtale by IKOR.

New A Innovation allegedly

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Id.

New A

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Innovation is named by IKOR as a third-party defendant but IKOR

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has not filed proof that it has been served.

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IKOR cancelled the Logtale licenses in 2010, after having

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given notice that Logtale was in default for uncured breaches of

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the License Agreement, including, but not limited to, the

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marketing and manufacturing of IKOR’s Oxygen Therapeutics and

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related pharmaceuticals.

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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

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have breached the License Agreement by, among other things,

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withholding royalties, failing to comply with auditing and

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inspection requirements, and misusing IKOR’s proprietary

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information.

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1AA, First Counterclaim ¶ 14.

Logtale filed this action on November 9, 2011, and filed an

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amended complaint on February 13, 2012.

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seeks injunctive relief and alleges claims against Defendants for

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breach of contract, breach of fiduciary duties and breach of the

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implied covenant of good faith and fair dealing.

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The operative complaint

Defendants filed an answer and counterclaim to the 1AC and

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third-party complaint on March 23, 2012, then filed the 1AA on May

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21, 2012.

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counterclaims against Logtale: (1) breach of the License

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Agreement, including failure to supply financial and manufacturing

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information required by the agreement; (2) theft of intellectual

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property under California’s Uniform Trade Secrets Act; (3) unfair

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competition by copying IKOR’s drugs without paying royalties; and

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(4) interference with prospective business opportunity by

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thwarting IKOR’s efforts to obtain additional financing, in order

In its most recent pleading, IKOR alleges the following

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to drive IKOR into bankruptcy and acquire rights in IKOR’s

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technology as a preferred shareholder in IKOR’s liquidation.

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Logtale moves to dismiss IKOR’s counterclaims and to strike

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certain allegations.

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for unfair competition fails to state a claim for relief, but

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otherwise opposes Logtale’s motion to dismiss and motion to

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strike.

IKOR concedes that the third counterclaim

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United States District Court
For the Northern District of California

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LEGAL STANDARD
I.

Motion to Dismiss
A complaint must contain a “short and plain statement of the

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claim showing that the pleader is entitled to relief.”

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Civ. P. 8(a).

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state a claim, dismissal is appropriate only when the complaint

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does not give the defendant fair notice of a legally cognizable

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claim and the grounds on which it rests.

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Twombly, 550 U.S. 544, 555 (2007).

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complaint is sufficient to state a claim, the court will take all

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material allegations as true and construe them in the light most

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favorable to the plaintiff.

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896, 898 (9th Cir. 1986).

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to legal conclusions; “threadbare recitals of the elements of a

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cause of action, supported by mere conclusory statements,” are not

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taken as true.

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(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)

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When granting a motion to dismiss, the court is generally

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required to grant the plaintiff leave to amend, even if no request

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to amend the pleading was made, unless amendment would be futile.

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Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911
5

1

F.2d 242, 246-47 (9th Cir. 1990).

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amendment would be futile, the court examines whether the

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complaint could be amended to cure the defect requiring dismissal

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“without contradicting any of the allegations of [the] original

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complaint.”

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Cir. 1990).

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II.

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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

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or scandalous matter.”

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avoid spending time and money litigating spurious issues.

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Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993),

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rev’d on other grounds, 510 U.S. 517 (1994).

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if it has no essential or important relationship to the claim for

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relief plead.

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and is not necessary to the issues in question in the case.

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“Superfluous historical allegations are a proper subject of a

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motion to strike.”

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they are often used as delaying tactics and because of the limited

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importance of pleadings in federal practice.

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922 F. Supp. 1450, 1478 (C.D. Cal. 1996).

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granted unless it is clear that the matter to be stricken could

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have no possible bearing on the subject matter of the litigation.

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Colaprico v. Sun Microsystems, Inc., 758 F. Supp. 1335, 1339 (N.D.

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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

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Bureerong v. Uvawas,

They should not be

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DISCUSSION
I.

Breach of Contract
The first counterclaim for breach of contract alleges that on

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or about October 20, 2006, “IKOR and Logtale entered into a[n]

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Option and Licensing and Manufacturing Agreement,” and that

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“[a]lthough a more complete agreement was initially contemplated,

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it was never executed, and thus both IKOR and Logtale have been

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operating under the terms of the Licensing Agreement since 2006.”

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1AA, First Counterclaim ¶ 1.

Logtale contends that IKOR fails to

United States District Court
For the Northern District of California

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allege the existence of a valid License Agreement in support of

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its breach of contract claim.

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are not sufficient to state a claim for breach of contract, but

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IKOR is granted leave to amend the allegations.

As currently plead, the allegations

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Courts apply general principles of contract interpretation

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when interpreting the terms and scope of a licensing agreement.

16

Miller v. Glenn Miller Productions, Inc., 454 F.3d 975, 989 (9th

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Cir. 2006) (citing Mendler v. Winterland Production, Ltd., 207

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F.3d 1119, 1121 (9th Cir. 2000)).

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contract interpretation is to give effect to the mutual intent of

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the parties as it existed at the time of contracting.’”

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(quoting United States Cellular Invest. Co. of Los Angeles v. GTE

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Mobilnet, Inc., 281 F.3d 929, 934 (9th Cir. 2002)).

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“‘The fundamental goal of

Id.

The Option Agreement entered by IKOR (referred to as the

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Company) and Logtale (referred to as the Grantee) on October 20,

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2006, states as follows:

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1. GRANT OF OPTION.

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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

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United States District Court
For the Northern District of California

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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.

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Logtale contends that on the face of the Option Agreement,
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the parties expressed their intent that the attached License
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Agreement was a contingent, draft document, and further contends
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that IKOR has not alleged that the parties ever signed or entered
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into a written License Agreement.

IKOR responds that the parties

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treated the License Agreement as binding on them and intended the
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writing to reflect their agreement.
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If there is a manifest intention that the agreement is not
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binding until reduced to a formal writing that is executed by both
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parties, there is no binding contract until this occurs.

Rennick

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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,
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the fact that a more formal agreement must be prepared and
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executed does not alter the validity of the agreement.”

Blix St.

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Records, Inc. v. Cassidy, 191 Cal. App. 4th 39, 48 (2010).
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“‘Whether a writing constitutes a final agreement or merely an

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agreement to make an agreement depends primarily upon the

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intention of the parties.

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be determined by a construction of the instrument taken as a

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whole.’”

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3d 1555, 1562 (1989) (quoting Smissaert v. Chiodo, 163 Cal. App.

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2d 827, 830 (1958)).

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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

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contract, Logtale cites Beck, where the court held that a letter

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drafting “the outline of our future agreement” was “merely an

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‘agreement to agree’ which cannot be made the basis of a cause of

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action.”

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considered the writing to determine the parties’ intention, and

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held that the language of the letter indicated an intent to

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forward the letter outlining the terms of the proposed agreement

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to corporate counsel “for the drafting of a contract,” and to

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discuss the draft further.

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court in Beck found that the letter contemplated further

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negotiations and that no binding agreement would result until a

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formal contract was drafted by an attorney.

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and IKOR outlined the proposed “terms and conditions” of their

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contemplated agreement in greater detail than did the parties in

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Beck, they nevertheless failed to memorialize their final

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agreement in writing.

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face, evidences the parties’ intent to enter into a written

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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.

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9

Id.

The

Although Logtale

The Option Agreement, on its

1

The Schedule attached to the Option Agreement is entitled

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“Term Sheet - License and Manufacturing Agreement,” and sets out

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the principal terms and conditions of the License Agreement.

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Ex. A at 6.

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enter into a license and manufacturing agreement “may be

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exercised” by Logtale by serving notice in the form attached to

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the Option Agreement, after which the parties would “use their

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best efforts to enter into the License and Manufacturing Agreement

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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

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Id. at 1.

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allege that Logtale exercised the option or otherwise consented to

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the terms of the written licensing agreement.

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the parties “have been operating under the terms of the Licensing

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Agreement since 2006” is insufficient to show the existence of a

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valid license agreement.

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may demonstrate that the parties’ actions evidence an agreement.

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“‘Words are frequently but an imperfect medium to convey thought

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and intention.

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and demonstrate by their conduct that they knew what they were

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talking about the courts should enforce that intent.’”

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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

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there was a licensing agreement between them.

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letter from Dr. Wai on behalf of Logtale dated August 21, 2009,

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which acknowledges the validity of the terms of the License

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Agreement set forth in the schedule to the Option Agreement.

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10

They refer to a

Opp.

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at 14.

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contract claim is dismissed with leave to amend.

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II.

Because amendment may not be futile, the breach of

Theft of Intellectual Property

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Logtale seeks dismissal of the second counterclaim for theft

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of intellectual property.

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entered into the License Agreement to obtain rights to IKOR’s

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trade secrets, has failed to pay royalties or otherwise comply

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with the License Agreement, and has misappropriated IKOR’s

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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

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biopharmaceuticals in markets that IKOR owns, namely the United

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States and the European Union.

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21.

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¶ 17.

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technology even after IKOR cancelled the alleged License

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Agreement, and that if Logtale prevails on its argument that there

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was never a licensing agreement, then Logtale’s use of IKOR’s

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technology was theft from the very beginning.

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alleges that Logtale has plotted with the Chinese government and

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the Chinese military to acquire IKOR’s trade secrets and patents

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for commercial and military use and competition with IKOR.

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Second Counterclaim ¶ 22.

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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),

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as adopted in California, Cal. Civ. Code § 3426 et seq.

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defines a trade secret as

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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
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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).

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misappropriation may be enjoined” under this statute.

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Code § 3426.2(a).

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8

Cal. Civ.

In Bayer Corp. v. Roche Molecular Sys., Inc., the court
recognized,

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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
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patents and patent applications of any kind anywhere in the world
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owned or controlled by IKOR during the term of the Agreement,” and
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IKOR Know-How, defined as “[a]ny proprietary information, trade
25
secrets, techniques, materials and data owned or controlled by
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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.”

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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.’”

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1161, 1164-65 (9th Cir. 1998) (quoting Universal Analytics v.

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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.

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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.

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III. Interference with Prospective Business Opportunity

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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

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of future economic benefit to the plaintiff; (2) the defendant’s

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knowledge of the relationship; (3) intentional acts on the part of

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the defendant designed to disrupt the relationship; (4) actual

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disruption of the relationship; and (5) economic harm to the

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plaintiff proximately caused by the acts of the defendant.

19

Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1153

20

(2003).

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must plead intentional acts by the defendant that are wrongful

22

apart from the interference itself, and are designed to disrupt

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the relationship.

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defendant “engaged in conduct that was wrongful by some legal

25

measure other than the fact of interference itself” such as

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“conduct that is recognized as anticompetitive under established

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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

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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

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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

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in the United States and in Europe.

25

¶¶ 40, 43; Opp. at 17.

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existence of an economic relationship between IKOR and a third

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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.

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Dated: 12/5/2012
CLAUDIA WILKEN
United States District Judge

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