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

Filing 66

ORDER by Judge Claudia Wilken GRANTING IN PART AND DENYING IN PART 46 MOTION TO DISMISS COUNTERCLAIMS. (ndr, COURT STAFF) (Filed on 8/14/2013)

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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.,
Plaintiff,

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No. C 11-5452 CW
ORDER GRANTING IN
PART AND DENYING
IN PART MOTION TO
DISMISS
COUNTERCLAIMS
(Docket No. 46)

v.
IKOR, INC., et al.,
Defendants.
________________________________/

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United States District Court
For the Northern District of California

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Plaintiff and Counterdefendant Logtale, Ltd. moves to dismiss
the counterclaims of Defendant and Counterclaimant IKOR, Inc.
pursuant to Federal Rule of Civil Procedure 12(b)(6) and to strike
portions of IKOR’s counter-complaint pursuant to Rule 12(f).
opposes the motion.

After considering the parties’ submissions,

the Court finds the matter suitable for decision without oral
argument and now grants the motion in part and denies it in part.
BACKGROUND

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IKOR

The following facts are admitted or alleged in Defendants’
second amended answer and counterclaims (2AA).
IKOR is a South Dakota corporation that develops bovine-

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derived oxygen therapeutics and related technologies.

Docket No.

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45, 2AA ¶ 4.

On October 20, 2006, Logtale purchased nearly two

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million shares of preferred stock in IKOR for just over five
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million dollars.

Id. ¶ 17.

As a result, Logtale became IKOR’s

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majority shareholder.

Id. ¶ 19.

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That same day, Logtale elected Dr. Norman Wai to serve as a
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director on IKOR’s board.

Id.

It also entered into two separate

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agreements with IKOR.
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Id.

The first was an Investors’ Rights

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Agreement, which outlined Logtale’s rights as a shareholder.

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¶¶ 18-20.

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Agreement with New World Mobile Holdings Ltd., a company

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incorporated in the Cayman Islands as a subsidiary of the Hong

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Kong-based corporation, New World Development Company Limited.

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Id. ¶ 20.

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asked to substitute Logtale, its alter ego, as the investor.

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¶ 11.

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corporation” registered in the British Virgin Islands with no

Id.

IKOR initially negotiated the Investors’ Rights

Late in the negotiations, however, New World Mobile
Id.

At the time of the agreement, Logtale was a “shelf-

United States District Court
For the Northern District of California

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operational existence or significant capital.

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World Mobile explained that Logtale’s substitution was necessary

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because the proposed investment in IKOR would cause disclosure

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difficulties for New World Mobile and New World Development.

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Id. ¶ 20.

New

Id.

The other agreement that the parties reached that day was a

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License and Manufacturing Agreement (LMA).

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Counterclaim ¶ 1, Ex. A.

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Logtale a limited exclusive right to manufacture, sell, and

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distribute certain IKOR biopharmaceutical products in designated

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territories within Asia, Australia, and New Zealand.

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Although the parties later sought to enter into a more complete

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licensing agreement, they never ultimately executed one because

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their lawyers “could not agree on the final language contained

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within the drafts of a more lengthy proposed agreement.”

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Nevertheless, IKOR alleges, despite their failure to execute a

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more complete agreement, the parties continued to operate under

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terms of the 2006 LMA.

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“understanding was manifested in a substantial transfer of

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technology and know-how” from IKOR to Logtale through New A

Id., First

According to IKOR, the LMA granted

Id.

Id.

Id. ¶ 2.

IKOR contends that this unwritten

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Innovation (NEWAI), a corporation created by Logtale to market

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IKOR’s products.

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was memorialized in “subsequent communications between the

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parties,” such as an e-mail that Dr. Wai sent on Logtale’s behalf

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to another IKOR director in August 2009.1

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Dr. Wai states,

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Id.

In that e-mail,

I had confirmed to you and would confirm again that
Logtale/NEWAI had always respected IKOR’s rights under
the “License and Manufacturing Agreement” (“LMA”), which
for the time being are the terms set out in the Schedule
to the Option Agreement dated 20th October 2006 (the
“Option Agreement”). Logtale/NEWAI will continue to
respect and abide by the terms of the LMA and any and
all agreements entered into between IKOR and
Logtale/NEWAI and in particular IKOR’s exclusive
marketing right to Europe and U.S.A.

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United States District Court
For the Northern District of California

IKOR further contends that this understanding

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Id.
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In 2010, IKOR canceled Logtale’s marketing and distribution
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licenses because Logtale had allegedly breached the LMA.

Id.

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¶ 12.

In particular, IKOR alleges that Logtale -- acting through

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NEWAI, New World Mobile, and New World Development -- withheld
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royalties, failed to comply with the LMA’s auditing and inspection
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requirements, misused IKOR’s proprietary information, and sought
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to market IKOR’s pharmaceutical products outside of the
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territories designated for Logtale in the LMA.

Id. ¶¶ 9-11, 14.

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Logtale commenced this action in November 2011 and filed its
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1AC in February 2012.

It asserts claims against IKOR and two of

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IKOR’s officers and directors, James Canton and Ross Tye, for
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1

Because IKOR relies on this e-mail in its pleading, the Court
grants Logtale’s request to take judicial notice of this e-mail. See
Sams v. Yahoo! Inc., 713 F.3d 1175, 1179 (9th Cir. 2013) (holding that,
when considering a motion to dismiss under Rule 12(b)(6), courts “are
permitted to consider documents that were not physically attached to the
complaint where the documents’ authenticity is not contested, and the
plaintiff’s complaint necessarily relies on them”).

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breach of the Investors’ Rights Agreement, breach of fiduciary

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duties, and breach of the implied covenant of good faith and fair

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dealing.

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IKOR, Canton, and Tye filed their initial answer and

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counterclaims to the 1AC in March 2012 along with a third-party

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complaint against Wai, NEWAI, New World Mobile, and Gerald To, the

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managing director of New World Mobile and a shareholder in

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Logtale.

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counter-complaint, which the Court dismissed in December 2012 with

United States District Court
For the Northern District of California

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In May 2012, they filed their amended answer and

leave to amend.

Docket No. 35.

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Defendants filed their 2AA in January 2013.

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charges Logtale with breach of contract, violations of

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California’s Uniform Trade Secrets Act (UTSA), and interference

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with prospective business opportunities.

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Third Counterclaims ¶¶ 1-34.

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claims against Wai, NEWAI, New World Mobile, and To.

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Party Complaint ¶¶ 1-37.

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Defendants has been served.

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In it, IKOR

2AA, First, Second, and

IKOR also reasserts its third-party
Id., Third-

To date, none of the Third-Party

LEGAL STANDARD
I.

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

22

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

Fed. R.

On a motion under Rule 12(b)(6) for failure to

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Bell Atl. Corp. v.

In considering whether the

1

material allegations as true and construe them in the light most

2

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).

NL Indus., Inc. v. Kaplan, 792 F.2d

However, this principle is inapplicable

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

When granting a motion to dismiss, the court is generally

9

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

10
United States District Court
For the Northern District of California

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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

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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

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may strike from a pleading “any redundant, immaterial, impertinent

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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

Id.

The purpose of a Rule 12(f) motion is to

Matter is immaterial

Matter is impertinent if it does not pertain

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Id.

1

motion to strike.”

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

3

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.

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United States District Court
For the Northern District of California

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Motions to strike are disfavored because

Bureerong v. Uvawas,

They should not be

DISCUSSION
I.

Motion to Dismiss Counterclaims

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A.

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IKOR alleges that Logtale breached the LMA.

Breach of Contract (First Counterclaim)
Logtale contends

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that the LMA is not an enforceable contract because the parties

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never finalized its terms and failed to enter into a subsequent

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licensing agreement.

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As the Court noted in its prior order dismissing IKOR’s

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counterclaims, the LMA did not, on its face, constitute a final

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agreement.

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clear that the parties expected to engage in further negotiations

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before finalizing their licensing agreement.

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that agreement, for instance, states:

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The signed Option Agreement attached to the LMA makes

One provision of

Immediately after the service of the Option Notice, the
Company [i.e., IKOR] and the Grantee [i.e., Logtale]
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.

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2AA, Ex. A at 1 (emphasis added).

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to negotiate a licensing contract, this provision demonstrates

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that the LMA was not, by its own terms, a binding agreement.

By granting Logtale the option

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See

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Beck v. American Health Group Intl., Inc., 211 Cal. App. 3d 1555,

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1562 (1989) (“Preliminary negotiations or an agreement for future

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negotiations are not the functional equivalent of a valid,

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subsisting agreement.” (citations and quotation marks omitted)).

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Despite the lack of a final written agreement, however, IKOR

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contends that the parties’ actions manifested an unwritten

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agreement because they effectively operated under the terms of the

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LMA from 2006 until 2010.

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as evidence of Logtale’s assent to the LMA.

IKOR points to Wai’s August 2009 e-mail
2AA, First

United States District Court
For the Northern District of California

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Counterclaim ¶ 2.

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substantial “technology and know-how” to NEWAI under the

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agreement.

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IKOR also alleges that it transferred

Id.

Of these two allegations, only the August 2009 e-mail offers

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a sufficient factual basis for IKOR’s contract claim.

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assertion that it shared unidentified “technology and know-how”

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with NEWAI does not suggest that Logtale (or any of its affiliated

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entities) intended to be bound by the LMA.

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whether the technology it transferred to NEWAI was the same

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technology described in the 2006 LMA.

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not alleged that it received anything in return for the technology

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it shared with Logtale.

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IKOR’s contention that both parties were operating under the terms

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of the LMA.

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IKOR’s

IKOR has not specified

More importantly, IKOR has

Thus, this allegation does not support

In contrast, Wai’s August 2009 e-mail contains sufficient

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factual details to suggest that Logtale may have assented to the

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LMA’s terms.

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mail and repeatedly uses language suggesting that the LMA may be

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binding.

Wai relies on the LMA at several points in his e-

For instance, in the e-mail’s second paragraph, he
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states that “Logtale/NEWAI will continue to respect and abide by

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the terms of the LMA and any and all agreements entered into

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between IKOR and Logtale/NEWAI.”

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(emphasis added).

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Logtale’s efforts to obtain regulatory approval for a certain

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drug, Wai states, “I believe Logtale/NEWAI is obliged and entitled

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to do [this] under the terms of the LMA.”

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added).

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to do [this] under the LMA.”

Ladine Decl., Ex. A, at 1

A few paragraphs later, while describing

Id. at 2 (emphasis

He also notes that “Logtale/NEWAI is no doubt authorized
Id. at 3 (emphasis added).

Taken

United States District Court
For the Northern District of California

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together, this language supports IKOR’s claim that the parties

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understood themselves to be bound by the LMA.

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may not be conclusive proof of this understanding, it provides a

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plausible basis for IKOR’s theory of liability and, as such, is

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sufficient to state a claim for breach of contract.

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Although the e-mail

Logtale points out that Wai expressly describes his e-mail as

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“non-binding” and “without prejudice.”

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however, refer to the e-mail itself and not to the LMA.

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(“[Y]ou should treat the contents of this letter as entirely

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‘without prejudice’” . . . (emphasis added)).

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mail contained other language contemplating further negotiations

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of the parties’ licensing arrangement, that language would merely

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raise a dispute of fact as to the parties’ intentions.

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Entertainment, Inc. v. Superior Court, 62 Cal. App. 4th 348, 358

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(1998) (“Whether it was the parties’ mutual intention that their

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oral agreement to the terms contained in a proposed written

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agreement should be binding immediately is to be determined from

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the surrounding facts and circumstances of a particular case and

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is a question of fact for the trial court.”); Sparks v. Vista Del
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Id. at 1.

These terms,
See id.

Even if Wai’s e-

See Banner

1

Mar Child & Family Servs., 207 Cal. App. 4th 1511, 1519 (2012)

2

(“Where the existence of a contract is at issue and the evidence

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is conflicting or admits of more than one inference, it is for the

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trier of fact to determine whether the contract actually existed.”

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(citations and quotation marks omitted; emphasis added).

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disputes may not be resolved on a motion to dismiss.

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because the August 2009 e-mail can plausibly be read as evidence

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of a binding licensing contract between the parties, IKOR has

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plead sufficient facts to state a contract claim.

Such

Accordingly,

United States District Court
For the Northern District of California

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B.

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As an alternative to its contract claim, IKOR asserts a

Theft of Intellectual Property (Second Counterclaim)

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misappropriation claim under UTSA.

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the Court finds that there is no enforceable agreement between the

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parties, then Logtale/NEWAI has misappropriated trade secrets from

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IKOR.”

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alleges that it granted Logtale and NEWAI remote internet access

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to “all of IKOR’s proprietary manufacturing[] and production

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information -- basically how one makes IKOR’s drug.”

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Counterclaim ¶ 21.

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failed to compensate it for this information but also used the

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information “to gain approvals from the drug authorities in Hong

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Kong and the EMEA, Europe and SFDA, China.”

It asserts, “In the event that

2AA, Second Counterclaim ¶ 19.

In particular, IKOR

2AA, Second

IKOR contends that Logtale and NEWAI not only

Id. ¶ 22.2

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To state a claim for misappropriation of trade secrets under

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UTSA, a plaintiff must allege that the defendant (1) “disclose[d]

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or use[d] the trade secret of another without express or implied

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consent” and (2) “at the time of the disclosure or use, [the

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2

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IKOR’s pleading does not identify what agencies or organizations
are represented by the acronyms “EMEA” and “SFDA.”

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defendant] knew or had reason to know that its knowledge of the

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trade secret was derived from a person who owed a duty to the

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entity seeking relief to maintain the trade secret’s secrecy or

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limit its use.”

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Supp. 2d 1111, 1117 (N.D. Cal. 1999) (citing Cal. Civ. Code

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§ 3426.1(b)(2)(B)).

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matter of the trade secret with sufficient particularity to

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separate it from matters of general knowledge in the trade or of

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special knowledge of those persons . . . skilled in the trade.’”

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United States District Court
For the Northern District of California

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Imax Corp. v. Cinema Technologies, Inc., 152 F.3d 1161, 1164-65

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(9th Cir. 1998) (quoting Universal Analytics v. MacNeal-Schwendler

12

Corp., 707 F. Supp. 1170, 1177 (C.D. Cal. 1989), aff’d, 914 F.2d

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1256 (9th Cir. 1990)).

14

Bayer Corp. v. Roche Molecular Sys., Inc., 72 F.

“The plaintiff ‘should describe the subject

Here, IKOR has not identified its trade secrets with

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sufficient particularity to state a claim under UTSA.

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defines a trade secret as:

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27
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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
public or to other persons who can obtain economic
value from its disclosure or use; and
(2) Is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy.
Cal. Civ. Code § 3426.1(d).

Although IKOR alleges that it shared

numerous manufacturing, packaging, and marketing “protocols” with
Logtale and NEWAI, it fails to explain which of these protocols,
if any, are proprietary and actually pertain to its own
pharmaceutical products.

Indeed, of all the supposed trade

secrets listed in IKOR’s counter-complaint, only one relates to a
10

1

specific IKOR drug -- namely, “clinical data for animal trials

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relating to IKOR 2084.”

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rest of the items on the list -- including market research,

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manufacturing protocols, and packaging procedures -- fail to

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identify IKOR’s specific ownership interest in the information.

6

The Court previously dismissed IKOR’s misappropriation claim for a

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similar failure to identify its trade secrets with sufficient

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particularity.

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at 12-13 (“IKOR also refers to an application by third-party

2AA, Second Counterclaim ¶ 23a.3

The

See Docket No. 35, Order Dismissing Counterclaims,

United States District Court
For the Northern District of California

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defendant New A Innovation for approval to market an IKOR drug in

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Europe after IKOR terminated the [LMA] with Logtale, but does not

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sufficiently identify the drug or IKOR’s ownership interest in

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it.”).

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Even setting aside this deficiency, IKOR’s misappropriation

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claim fails because it has not alleged sufficient facts to show

16

that Logtale or NEWAI used any of its proprietary information

17

without its “express or implied consent.”

18

Supp. 2d at 1117.

19

granted Logtale and NEWAI “remote access” to its proprietary

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information pursuant to the LMA and that Logtale misappropriated

21

the information by refusing to compensate IKOR in return.

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Second Counterclaim ¶ 21.

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is that IKOR has expressly plead its misappropriation claim as an

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alternative to its contract claim: as discussed above, IKOR is

25

only pursuing a misappropriation claim to the extent that “the

Bayer Corp., 72 F.

In its counter-complaint, IKOR asserts that it

2AA,

The problem with this theory, however,

26
27
28

3

IKOR’s Second Counterclaim includes two paragraphs numbered 23.
To avoid confusion, this order refers to the first of these paragraphs
as “23a” and the second as “23b.”

11

1

Court finds that there is no enforceable agreement between the

2

parties.”

3

between the parties,” then Logtale was never required to

4

compensate IKOR for its information or to keep IKOR’s information

5

confidential.

6

the existence of a binding contract between the parties.

7

absence of such a contract, IKOR simply granted Logtale and NEWAI

8

access to its information voluntarily -- without any reciprocal

9

promise of compensation or confidentiality.

United States District Court
For the Northern District of California

10

Id. ¶ 19.

But if there was “no enforceable contract

In short, IKOR’s misappropriation claim depends on
In the

Thus, IKOR has failed to state a valid claim for

11

misappropriation of trade secrets.

12

it voluntarily granted Logtale or NEWAI access to its proprietary

13

information, leave to amend would be futile.

14

therefore dismissed with prejudice.

15

C.

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18
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20
21
22
23
24

Because IKOR has alleged that

This claim is

Interference with Prospective Business Opportunity
(Third Counterclaim)

IKOR alleges that Logtale and NEWAI deliberately sought to
hinder its efforts to obtain financing from foreign investors.
Specifically, IKOR contends that NEWAI applied for “approval in
the European market for what was essentially IKOR’s drug” in order
to “cloud and counteract IKOR’s own representation to its
prospective investors that it had exclusive rights to this
market.”

Id., Third Counterclaim ¶ 30.

IKOR contends that

NEWAI’s actions ultimately “discourage[d] these investors from

25
26
27
28
12

1

making any investment in IKOR” and, therefore, constitute unlawful

2

interference with a prospective business opportunity.4

3

Id.

To state a claim for claim for intentional interference with
prospective economic advantage, the plaintiff must allege (1) an

5

economic relationship between the plaintiff and some third party,

6

with the probability of future economic benefit to the plaintiff;

7

(2) the defendant’s knowledge of the relationship; (3) intentional

8

acts on the part of the defendant designed to disrupt the

9

relationship; (4) actual disruption of the relationship; and (5)

10
United States District Court
For the Northern District of California

4

economic harm to the plaintiff proximately caused by the acts of

11

the defendant.

12

4th 1134, 1153 (2003).

13

that, to satisfy the first element of this claim, the plaintiff

14

must identify a specific business relationship that the defendant

15

disrupted.

16

Inc., 42 Cal. App. 4th 507, 522 (1996) (“The law precludes

17

recovery for overly speculative expectancies by initially

18

requiring proof the business relationship contained ‘the

19

probability of future economic benefit to the plaintiff.’”)); Roth

20

v. Rhodes, 25 Cal. App. 4th 530, 546 (1994) (“[A]n essential

21

element of the tort of intentional interference with prospective

22

business advantage is the existence of a business relationship

23

with which the tortfeasor interfered.

Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.
California courts have consistently held

See Westside Center Associates v. Safeway Stores 23,

Although this need not be a

24
4

25
26
27
28

IKOR also alleges that “Logtale/NEWAI intentionally withheld
information that it was required to provide so as to preclude IKOR from
making new drug applications in both the United States and the European
markets and thereby disrupt the acquisition of new financing by IKOR.”
2AA, Third Counterclaim ¶ 33. IKOR does not appear to rely on this
allegation in its opposition and the Court has already held that
Logtale’s alleged withholding of information from IKOR does not provide
a basis for a tortious interference claim. See Docket No. 35, at 15-16.

13

1

contractual relationship, an existing relationship is required.”

2

(citations omitted)).

3

IKOR has failed to satisfy this requirement.

Although its

4

counter-complaint identifies the consultant it hired to search for

5

potential investors, it does not identify a single investor who

6

actually planned to do business with IKOR.

7

Integration, Inc. v. Melman, 2010 WL 890140 (N.D. Cal.) (“To the

8

extent plaintiff alleges interference with hypothetical,

9

‘potential,’ or ‘prospective’ relationships, the claim is not

Silicon Labs

United States District Court
For the Northern District of California

10

cognizable under California law.” (citations omitted)).

11

allusions to unnamed investors are not sufficient to state a

12

claim.

13

(E.D. Cal. 1998) (dismissing tortious interference claim where the

14

plaintiff, a physician, alleged an “economic relationship with his

15

existing patients and potential patients” but failed to “specify

16

the identities of the alleged patients”).

IKOR’s

Cf. Janda v. Madera Cmty. Hosp., 16 F. Supp. 2d 1181, 1189

17

Even if IKOR had identified specific investors, it has not

18

alleged sufficient facts to show that NEWAI’s conduct “actually

19

disrupted” IKOR’s relationship with those investors.

20

complaint does not identify the name of the drug for which NEWAI

21

sought approval, the governmental body or agency to which NEWAI

22

applied, when NEWAI submitted its application, or whether NEWAI’s

23

application was even public.

24

impossible to determine whether NEWAI’s application would have

25

plausibly had any effect on IKOR’s potential investors.

26

IKOR has thus failed to state a claim for tortious

27

Its counter-

Without this information, it is

interference with prospective business opportunity.

28
14

Because IKOR

1

has already amended this claim twice without curing its

2

deficiencies, the Court now dismisses this claim with prejudice.

3

II.

Motion to Dismiss Third Party Complaint

4

IKOR filed its initial third-party complaint in March 2012

5

but has yet to file proof of service on Third-Party Defendants,

6

all of whom reside in Hong Kong.

7

third-party complaint, citing IKOR’s failure to complete service.

8
9

Logtale moves to dismiss the

Rule 4(m) imposes a 120-day time limit on domestic service
but does not set a time limit for completing service on a

United States District Court
For the Northern District of California

10

defendant who resides outside of the United States.

11

Natoli, 936 F.2d 432 (9th Cir. 1991).

12

held that “the amount of time allowed for foreign service is not

13

unlimited,” Nylok Corp. v. Fastener World Inc., 396 F.3d 805, 807

14

(7th Cir. 2005); see also Feliz v. MacNeill, 493 Fed. App’x 128,

15

131 (1st Cir. 2012) (“[C]ourts have leave to dismiss for failure

16

to serve abroad when a plaintiff is dilatory.”), the Ninth Circuit

17

has never specifically imposed any time limit on serving a foreign

18

defendant.

19

See Lucas v.

While other circuits have

Here, IKOR has spent nearly a year attempting to serve its

20

third-party complaint on Wai, NEWAI, New World Mobile, and To.

21

summons for these Third-Party Defendants was issued in August 2012

22

and the Court set an initial deadline of December 8, 2012 for IKOR

23

to serve them.

24

needed until the end of December 2012 to complete service, the

25

Court extended IKOR’s deadline to January 7, 2013.

26

IKOR has not filed any requests for further extensions of time

27

since then.

A

After IKOR represented that its process server

28
15

Docket No. 37.

1

Although IKOR’s eleven-month delay in serving Third-Party

2

Defendants is significant -- as is IKOR’s failure to keep the

3

Court apprised of the reasons for the delay -- dismissal is not

4

warranted at this time.

5

to complete service has been deliberate and, as noted above, the

6

Ninth Circuit has not imposed a time limit on foreign service.

7

Furthermore, Logtale will not be prejudiced by allowing IKOR to

8

continue its efforts to complete service.

9

motion to dismiss the third-party complaint is denied.

United States District Court
For the Northern District of California

10

There is no evidence that IKOR’s failure

Accordingly, Logtale’s

III. Motion to Strike

11

Logtale moves to strike two statements from IKOR’s Second

12

Counterclaim for misappropriation of trade secrets.

13

seeks to strike five sentences describing the various ways that

14

Logtale allegedly breached the LMA.

15

¶ 19.

16

made misrepresentations to the federal government in order to

17

acquire equipment that was “previously used for chemical and

18

biological warfare.”

19

First, it

2AA, Second Counterclaim

Second, it seeks to strike a sentence alleging that Logtale

Id. ¶ 23.

The first of these statements is directly relevant to IKOR’s

20

breach of contract claim and, therefore, should not be stricken.

21

Colaprico, 758 F. Supp. at 1339 (“[M]otions to strike should not

22

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

23

have no possible bearing on the subject matter of the

24

litigation.”).

25

dismissed, its allegations about Logtale’s breach of the LMA still

26

support its surviving contract claim.

27
28

Even if IKOR’s misappropriation claim is

In contrast, IKOR’s second statement, alleging that Logtale
made false statements to the federal government, has no bearing on
16

1

IKOR’s contract claim nor any other subject in this litigation.

2

Moreover, IKOR’s allegation that Logtale made these false

3

statements in order to acquire equipment previously used for

4

warfare is both “impertinent” and “scandalous.”

5

12(f).

6

granted.

Accordingly, Logtale’s motion to strike this statement is

7
8
9

Fed. R. Civ. P.

CONCLUSION
For the reasons set forth above, Logtale’s motion to dismiss
and motion to strike (Docket No. 46) is GRANTED in part and DENIED

United States District Court
For the Northern District of California

10

in part.

11

prejudice.

12

IKOR’s counter-complaint: “Logtale/NEWAI (New Zealand) has made

13

false and misleading statements to the U.S. Department of Commerce

14

in order to acquire certain equipment that was under export

15

controls and that was previously used for chemical and biological

16

warfare.”

17

IKOR’s Second and Third Counterclaims are dismissed with
In addition, the following sentence is stricken from

2AA, Second Counterclaim ¶ 23.

A case management conference will be held at 2:00 p.m. on

18

Wednesday, September 4, 2013 in Courtroom 2 at 1301 Clay Street,

19

Oakland, California.

20

management statement in advance of the conference pursuant to

21

Civil Local Rule 16-9.

22

must provide a detailed description of its efforts to complete

23

service on Third-Party Defendants since January 2013.

24

motion for a status conference (Docket No. 60) is DENIED as moot.

25

The parties must submit a joint case

In the case management statement, IKOR

Logtale’s

IT IS SO ORDERED.

26
27
28

Dated: 8/14/2013

CLAUDIA WILKEN
United States District Judge
17