Viacom International Inc. et al v. YouTube, Inc. et al

Filing 903

Viacom International Inc. et al v. YouTube, Inc. et al

Doc. 903

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Leonard A. Rifkind, State Bar No. 133971 Email: [e-mail] Houman Chitsaz, State Bar No. 219469 Email: [e-mail] LAW OFFICES OF LEONARD A. RIFKIND 790 Mission Avenue San Rafael, California 94901 Telephone: [phone] Facsimile: [phone]] Steven A. Nielsen, State Bar No. 133864 Email: [e-mail] ALLMAN & NIELSEN, P.C. 100 Larkspur Landing Circle, Suite 212 Larkspur, California 94939 Telephone: [phone] Facsimile: [phone] Attorneys for Defendant and Cross-Complainant MOLECULAR DIAGNOSTICS, INC.

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION

DIAMICS, INC, a California corporation, Plaintiff,

) ) ) ) ) v. ) ) ) ) MOLECULAR DIAGNOSTICS, INC., a ) Delaware corporation, ) Defendant, ) ) _____________________________________ ) ) ) MOLECULAR DIAGNOSTICS, INC., a ) Delaware corporation, ) ) Cross-Complainant, ) ) ) ) -1CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

Case No. C05 02549 SI PATENT CROSS-COMPLAINT FOR INJUNCTIVE RELIEF AND DAMAGES: 1ST CAUSE OF ACTION: For Misappropriation Of Trade Secrets (Civil Code section 3426.1(b)) 2ND CAUSE OF ACTION: For Unfair Business Practices (Bus. & Prof. §§17200, et seq) 3RD CAUSE OF ACTION: For Constructive Trust 4TH CAUSE OF ACTION: For Conversion

Dockets.Justia.com

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

v. ) ) DIAMICS, INC., a California corporation; ) DIAMICS, LLC, a California limited liability ) company and DOES 1 through 160, inclusive, ) ) Cross-Defendant ) ) ) ) ____________________________________ ) ) 5TH CAUSE OF ACTION: For Infringement of the `164 Patent (35 U.S.C. § 271) 6TH CAUSE OF ACTION: For Infringement of the `576 Patent (35 U.S.C. § 271) 7TH CAUSE OF ACTION: For Infringement of the `513 Patent (35 U.S.C. § 271) 8TH CAUSE OF ACTION: For Infringement of Copyright (17 U.S.C. § 501 )

Cross-Complainant complains of Cross-Defendants, and each of them, and for causes of action alleged as follows: PARTIES 1. Cross-Complainant MOLECULAR DIAGNOSTICS, INC. (hereafter either

"MDI" or "Company") is, and at all times mentioned in this Complaint was, a publicly traded corporation organized and existing under the laws of the State of Delaware, with its principal place of business located in Chicago, Illinois. MDI is a biomolecular diagnostics company engaged in the design, development and commercialization of cost-effective screening systems to assist in the early detection of cancer. MDI is currently focused on the design and development of a fully-automated, objective analysis and diagnostic system for cervical cancer screening. 2. MDI is informed and believes and on that basis alleges Cross-Defendant

DIAMICS, INC., a corporation, is organized and existing under the laws of the State of California, and whose principal office is located in the County of Marin, State of California. 3. MDI is informed and believes and on that basis alleges that Cross-Defendant

DIAMICS, LLC, a limited liability company, is organized and existing under the laws of the State of California, and whose principal office is located in the County of Marin. 4. MDI does not know the true names and capacities of Cross-Defendants Does 1

through 160, inclusive, and therefore sues them by those fictitious names. MDI is informed and -2CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

believes, and on that basis alleges, that each of the Cross-Defendants named as a Doe was in some manner responsible for the injury and damage suffered by MDI as alleged in this Complaint. MDI is informed and believes, and on that basis alleges, that each of the CrossDefendants were the agents and employees of their co-Cross-Defendants, and each of them, and in doing the things alleged in this Complaint were acting within the scope of that agency or employment, and were acting with the consent, permission, and authorization of each and every other Cross-Defendant.

JURISDICTION 5. This is a civil action for, inter alia, patent infringement, injunctive relief, and

damages arising under the United States Patent Act, 35 U.S.C. § 1, et seq. Jurisdiction is conferred upon this court pursuant to 28 U.S.C. § 1331 and 1338(a). Jurisdiction of this court is also founded on 28 U.S.C. § 1332, in that it is a civil action between citizens of different states in which the amount in controversy exceeds $75,000.00, exclusive of costs and interest. This action includes, inter alia, claims for infringement of copyright, conferring jurisdiction under 28 U.S.C. § 1331 and 1338(a).

VENUE 6. Venue properly lies in this judicial district pursuant to 28 U.S.C. § 1391(a)(2).

INTRADISTRICT ASSIGNMENT 7. Intradistrict Assignment properly lies with this court because a substantial part of

the events giving rise to the claim occurred in Marin County, California. \\\ \\\ \\ GENERAL ALLEGATIONS

-3CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

8.

MDI is informed and believes and on that basis alleges that DIAMICS, LLC, and

DIAMICS, Inc., (collectively hereafter "DIAMICS," and all conduct of DIAMICS is attributable to DOES 1 to 160) developed products through the unlawful conversion, disclosure and/or use of trade secrets, copyrighted material, privileged information held by former employees of MDI, arising from assets, patents, and proprietary information owned by MDI. 9. MDI has developed products, trade secretes, written marketing and descriptive

material, procedures, and patents which have been and continue to be unlawfully used, copied, disclosed, or infringed by DIAMICS. Such items include, but are not limited to the following: a. United States Patent number 6,475,164 entitled the "Physician's collector." b. United States Patent number 6,663,576 entitled "Cervical screening system" c. United States Patent number 6,352,513 entitled "Personal cervical cell collector." d. The InPath TM System and related image analysis systems, which screen for cancer and cancer related diseases. e. The Cocktail CVXTM which detects and highlights abnormal cervical cells. f. The Automated Image Proteomic System or AIPSTM used to analyze cervical cell samples. g. Mapping systems based on obtaining cervical cell specimens locationally preserved on a MDI cervical cell collector. h. Cellular liquid preservatives designed to optimize molecular based testing. i. Other cervical cancer testing products. j. Photographs of cell studies. k. PowerPoint presentations. Collectively, the products and services summarily described in Paragraph 9 (a) to 9 (k), inclusive, are hereafter referred to as Molecular Diagnostic, Inc.'s Corporate Assets ("MDI's Assets"). \\\ FIRST CAUSE OF ACTION -4CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10.

Misappropriation of Trade Secrets (California Civil Code section 3426.1(b)) Against All Cross-Defendants and DOES 1 to 20

Cross-Complainant incorporates by reference each and every allegation set forth

in Paragraphs 1 to 9, inclusive. 11. MDI's Assets were developed at great expense and effort over the past

approximately seven years. All persons working for MDI, who have ever been given permission to access to MDI's Assets, were made explicitly aware of its proprietary and confidential nature. 12. MDI's Assets are unavailable to the public or to others in biomolecular industry,

and would be of great value to MDI's competitors such as Cross-Defendants. MDI's assets have been the subject of reasonable efforts to maintain their confidentiality, including restricting access to those employees of MDI who must use them in performing their jobs. 13. DIAMICS' employees, Peter Gombrich and Warren Maltzman were formerly

employees of MDI. As such, they were entrusted with access to and protection of MDI's Assets. 14. In connection with their employment agreements with MDI, Gobrich and

Maltzman acknowledged in writing their duty to protect MDI's assets as confidential, and to relinquish all rights or access to MDI's assets and inventions if they left their employment at MDI. A true and correct copy of Gombrich's employment agreement is attached hereto as Exhibit "A" and is incorporated herein by reference. A true and correct copy of Maltzman's employment agreement is attached hereto as Exhibit "B" and is incorporated herein by reference. 15. DIAMICS' alleged main product is known as the Cervical Analysis System

("CAS"), which appears to be almost identical to MDI's Cocktail CVXTM and/or other MDI Assets which are derived thought the use and/or knowledge of MDI trade secrets. MDI is informed and believes and on that basis alleges DIAMICS has directly, or indirectly through the acts of Gombrich or Maltzman, misappropriated MDI's trade secrets or confidential information as defined in California Civil Code section 3426.1, subdivision (b). As a proximate and legal

-5CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

result of DIAMICS' acts of misappropriation and threatened and actual use of MDI's Assets and trade secrets, DIAMICS will be and has been unjustly enriched. 16. As an additional proximate and legal result of DIAMICS' acts of

misappropriation, MDI has sustained, and unless this court intervenes to restrain DIAMICS' conduct, MDI will continue to sustain, great and irreparable injury in that MDI will lose: (i) the confidential nature of the MDI Assets and MDI's trade secrets; (ii) MDI's competitive advantage from years of research and development; (iii) the reasonable investment backed expectations of its shareholders; and (iv) the ability to attract new investor capital critical to MDI's ongoing operations. MDI has no adequate remedy at law for these injuries, and unless DIAMICS and its employees, agents and representatives are restrained from using MDI's Assets in the future, MDI will be compelled to continue to bring lawsuits to protect its interests. Therefore, MDI seeks injunctive relief enjoining and restraining DIAMICS from disclosing, using or applying in any way MDI's Assets. 17. MDI is informed and believes and on that basis alleges that DIAMICS committed

their acts of misappropriation willfully and maliciously in that MDI intended by its conduct to drive MDI out of business. DIAMICS' conduct justifies an award to MDI to recover exemplary damages under California Civil Code section 3426.3, and attorney fees under California Civil Code section 3426.4. 18. Wherefore, Cross-Complainant prays for relief and damages as hereinafter stated.

SECOND CAUSE OF ACTION Unfair Business Practices (Bus. & Prof. §§17200, et seq.) Against All Cross-Defendants and Does 21 to 40

19.

MDI incorporates by reference each and every allegation set forth in Paragraphs 1

to 18 inclusive.

-6CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

20.

As a result of Gombrich's and Maltzman's prior employment status with MDI,

and while in a position of responsibility, trust, and confidence, Gombrich and Maltzman became intimately familiar with the whole of MDI's business operations, and were granted access to and gained knowledge of numerous trade secrets and confidential and proprietary information that are the Assets of MDI. 21. MDI is informed and believes and on that basis alleges Cross-Defendants

DIAMICS have directly, or indirectly through the acts of Gombrich or Maltzman, misappropriated MDI's trade secrets or confidential information. 22. MDI is further informed and believes and alleges that in the course of competing

with MDI, DIAMICS have used and continue to use MDI's trade secrets and confidential and proprietary Assets. 23. DIAMICS' conduct has given it a substantial competitive advantage to which it is

not entitled. DIAMICS' wrongful use of MDI's Assets has manifested itself, by way of illustration only, and without limitation, as follows: new shareholder investment, critical to the continuation of MDI's business operations, has effectively ceased since DIAMICS' public announcement that it is starting a competing company that is essentially debt free and has the former CEO and Vice President of MDI at its helm. 24. DIAMICS has wrongfully misappropriated, or has attempted to wrongfully

misappropriate, MDI's trade secrets, the confidential and proprietary MDI Assets, and MDI's reputation, and goodwill. Such actions are likely to mislead the public and constitute unfair competition in violation of Business and Professions Code sections 17200 et seq. CrossDefendants' actions also constitute a violation of the Uniform Trade Secrets Act, Civil Code sections 3426 et seq., and therefore constitute unlawful business practices within the meaning of Business and Professions Code sections 17200 et seq. 25. Cross-Complainant seeks injunctive relief and damages and other relief as

hereinafter stated. \\\ \\ -7CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 \\\ \\\ \\\ \\\ \\ to 25. 27. 26.

THIRD CAUSE OF ACTION CONSTRUCTIVE TRUST Against All Cross-Defendants, and DOES 41 to 60

MDI incorporates by reference each and every allegation set forth in Paragraphs 1

MDI's Assets are comprised of products and the development of procedures as

describe with more specificity in paragraph 9 of this complaint and referred to as MDI's Assets. 28. MDI's Assets are the sole proprietary property of MDI and the persons or entities

which have a valid contractual right to use or license portions of MDI's Assets. 29. DIAMICS has misappropriated MDI's Assets without consent. DIAMICS

continues to use MDI's Assets without consent or payment to MDI, constituting unjust enrichment. 30. As a proximate and direct result of these DIAMICS' misappropriation of MDI's

assets, MDI seeks imposition of a constructive trust against DIAMICS and in favor of MDI as beneficiary. 31. As a further proximate and direct result of DIAMICS' conversion of MDI's

Assets, MDI seeks appointment of a receiver to hold and safeguard MDI's Assets during the pendency of this action. 32. Cross-Complainant seeks injunctive relief and damages and other relief as

hereinafter stated

-8CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to 32. 34. 33.

FOURTH CAUSE OF ACTION CONVERSION Against All Cross-Defendants, and DOES 61 to 80

MDI incorporates by reference each and every allegation set forth in Paragraphs 1

At all times mentioned herein, MDI was in possession or had the right to

immediate possession or was the owner with right to possession of certain personal property consisting of its Assets. 35. At all times herein, MDI's Assets as set forth in paragraph 9 of this complaint had

a reasonable fair market value of not less than $50,000,000.00 to persons with knowledge in the field of biomolecular diagnostics. 36. Within the past year, DIAMICS, through the acts of Gombrich and Maltzman,

obtained MDI's Assets and converted them to DIAMICS' own use. 37. DIAMICS' conversion of MDI's Assets proximately and directly caused damage

to MDI in that DIAMICS has gained an unfair competitive advantage. As a direct and proximate result of DIAMICS' conversion, MDI has suffered pecuniary loss in the sum according to proof at trial, but not less than $50,000,000.00. 38. DIAMICS' actions in converting MDI's Assets to its own use was motivated by

DIAMICS' fraudulent, oppressive and malicious actions to take MDI's proprietary trade secrets, and convert the same to their own use without compensation and with an intent to put MDI out of business. Therefore, MDI is entitled under California Civil Code section 3294, subdivision (a) to punitive damages in an amount sufficient to punish DIAMICS and deter similar conduct in the future. 39. Cross-Complainant seeks injunctive relief and damages and other relief as

hereinafter stated.

-9CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to 39. 41. 40.

FIFTH CAUSE OF ACTION (Infringement of the `164 Patent) (35 U.S.C. § 271) Against All Cross-Defendants, and DOES 81 to 100

MDI incorporates by reference each and every allegation set forth in Paragraphs 1

On November 5, 2002, the United States Patent and Trademark Office duly and

legally issued U.S. Patent No. 6,475,164 ("the `164 Patent") entitled Physician's collector. 42. MDI is the owner, by valid assignment, of all right, title and interest in the `164

Patent. A copy of the `164 Patent is attached to the Compliant as Exhibit "C". 43. Upon information and belief, DIAMICS has developed a product or series of

products known as the Cervical Analysis System ("CAS"). Upon information and belief, DIAMICS has been, and currently is, directly and indirectly infringing the `164 Patent by , inter alia, by making, using, marketing, selling, reselling, offering for sale CAS and other products. 44. Upon information and belief, DIAMICS has had actual and constructive

knowledge of the `164 Patent since November 2002. 45. Upon information and belief, DIAMICS has and is willfully infringing the `164

Patent, and will continue unless enjoined by this court. 46. Pursuant to 35 U.S.C. § 283, MDI is entitled to a permanent injunction against

further infringement. As a direct and proximate consequence of DIAMICS' infringement of the `164 Patent, MDI has suffered and will continue to suffer irreparable injury and damages in an amount not yet determined for which MDI is entitled to relief. 47. Pursuant to 35 U.S.C. § 284, MDI is entitled to damages for infringement and

treble damages. 48. Cross-Complainant seeks injunctive relief and damages and other relief as

hereinafter stated.

-10CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to 48. 50. 49.

SIXTH CAUSE OF ACTION (Infringement of the `576 Patent) (35 U.S.C. § 271) Against All Cross-Defendants, and DOES 101 to 120

MDI incorporates by reference each and every allegation set forth in Paragraphs 1

On December 16, 2003 the United States Patent and Trademark Office duly and

legally issued U.S. Patent No. 6,663,576 ("the `576 Patent") entitled Cervical screening system. 51. MDI is the owner, by valid assignment, of all right, title and interest in the `576

Patent. A copy of the `576 Patent is attached to the Compliant as Exhibit "D". 52. Upon information and belief, DIAMICS has developed a product or series of

products known as the Cervical Analysis System ("CAS"). Upon information and belief, DIAMICS has been, and currently is, directly and indirectly infringing the `576 Patent by , inter alia, by making, using, marketing, selling, reselling, offering for sale CAS and other products. 53. Upon information and belief, DIAMICS has had actual and constructive

knowledge of the `576 Patent since December 2003. 54. Upon information and belief, DIAMICS has and is willfully infringing the `576

Patent, and will continue unless enjoined by this court. 55. Pursuant to 35 U.S.C. § 283, MDI is entitled to a permanent injunction against

further infringement. As a direct and proximate consequence of DIAMICS' infringement of the `576 Patent, MDI has suffered and will continue to suffer irreparable injury and damages in an amount not yet determined for which MDI is entitled to relief. 56. Pursuant to 35 U.S.C. § 284, MDI is entitled to damages for infringement and

treble damages. 57. Cross-Complainant seeks injunctive relief and damages and other relief as

hereinafter stated.

-11CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to 59. 59. 58.

SEVENTH CAUSE OF ACTION (Infringement of the `513 Patent) (35 U.S.C. § 271) Against All Cross-Defendants, and DOES 121 to 140

MDI incorporates by reference each and every allegation set forth in Paragraphs 1

On March 5, 2002 the United States Patent and Trademark Office duly and

legally issued U.S. Patent No. 6,352,513 ("the `513 Patent") entitled Personal cervical cell collector. 60. MDI is the owner, by valid assignment, of all right, title and interest in the `513

Patent. A copy of the `513 Patent is attached to the Compliant as Exhibit "E". 61. Upon information and belief, DIAMICS has developed a product or series of

products known as the Cervical Analysis System ("CAS"). Upon information and belief, DIAMICS has been, and currently is, directly and indirectly infringing the `513 Patent by, inter alia, by making, using, marketing, selling, reselling, offering for sale CAS and other products. 62. Upon information and belief, DIAMICS has had actual and constructive

knowledge of the `513 Patent since March 2002. 63. Upon information and belief, DIAMICS has and is willfully infringing the `513

Patent, and will continue unless enjoined by this court. 64. Pursuant to 35 U.S.C. § 283, MDI is entitled to a permanent injunction against

further infringement. As a direct and proximate consequence of DIAMICS infringement of the `513 Patent, MDI has suffered and will continue to suffer irreparable injury and damages in an amount not yet determined for which MDI is entitled to relief. 65. Pursuant to 35 U.S.C. § 284, MDI is entitled to damages for infringement and

treble damages. 66. Cross-Complainant seeks injunctive relief and damages and other relief as

hereinafter stated. -12CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to 66. 68. 67.

EIGHTH CAUSE OF ACTION (Infringement of Copyright) (17 U.S.C. § 501 and common law ) Against All Cross-Defendants, and DOES 141 to 160

MDI incorporates by reference each and every allegation set forth in Paragraphs 1

MDI is the owner of Mechanism Overview a copyrighted work. The first page of

Mechanism Overview is attached herein as Exhibit "F". MDI is the owner of the copyright. 69. Upon information and belief, Cross-Defendants have proliferated and used MDI's

copyrighted works without the authority to do so. Accordingly, because Cross-Defendants have violated the exclusive rights of MDI, Cross-Defendants have committed infringement of MDI's copyright under 17 U.S.C. 501. 70. MDI seeks an injunction, damages, attorney fees, and statutory damages provided

for in the Copyright Act and other damages and remedies pursuant to the common law of California and/or Illinois.

WHEREFORE, Cross-Complainant demands judgment against all Cross-Defendants and each of them for:

ON THE FIRST CAUSE OF ACTION: 1. As against all Cross-Defendants, their agents, employees, and all persons in concert or participation with them, orders temporarily, preliminarily, and permanently: (a) Enjoining and restraining them from disclosing, using or applying in any way any of MDI's Assets.

-13CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

(b) Ordering them to return or turn over to MDI all copies of information or materials from MDI's assets, together with all other property of MDI in their possession or under their control that contains or refers to MDI's Assets; and (c) Enjoining and restraining them from altering, destroying, or otherwise disposing of any records or physical evidence relating to (i) MDI's Assets, (ii) the actions of Cross-Defendants as alleged above, or (iii) MDI. 2. Compensatory damages for lost profits in a sum according to proof for so long as the misappropriation continues, together with interest as permitted by law. 3. Ordering an accounting of any profits improperly made by Cross-Defendants, and imposing a constructive trust on the profits in favor of Cross-Complainant. 4. Exemplary damages as the court may determine, but in no event less than double the amount of actual damages. 5. Costs of this action and reasonable attorney fees as authorized by California Civil Code section 3426.4.

ON THE SECOND CAUSE OF ACTION: 1. A decree that the above acts of Cross-Defendants were, and are, unfair acts of competition in violation of Business and Professions Code section 17200 et seq; 2. Temporary and permanent orders enjoining Cross-Defendants from: (a) destroying or disposing of any documents memorializing any part of CrossComplainant's trade secrets or confidential or proprietary Assets; (b) disclosing or using Cross-Complainant's trade secrets or confidential and proprietary Assets and requiring Cross-Defendants to return to Cross-Complainant all documents memorializing any part of Cross-Complainant's trade secrets or confidential or proprietary information; (c) continuing to act in a manner that violates Gombrich's and Maltzman's fiduciary and implied duties to MDI; and

-14CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

(d) unfairly competing with MDI, misappropriating MDI's Assets, trade secrets, and confidential and proprietary information, and wrongfully interfering with MDI's continuing and prospective economic relations with third parties; 3. Pursuant to Business and Professions Code section 17203 and pursuant to the equitable powers of the court, restitution to MDI from all Cross-Defendants of all funds acquired by means of any practice determined to constitute unfair competition; 4. Appointment of a receiver; and 5. An award of reasonable attorney fees as authorized by Civil Code section 3426.4;

ON THE THIRD AND FOURTH CAUSES OF ACTION: 1. Damages for the value of MDI's IP at the time of the conversion in the amount of $30,000,000; 2. Prejudgment interest at the legal rate on the value of the converted property pursuant to Civil Code section 3336; 3. Damages for the time and money properly expended in pursuit of the converted property in an amount according to proof at trial; and 4. Punitive and exemplary damages in a sum according to proof.

ON THE FIFTH, SIXTH, AND SEVENTH CAUSES OF ACTION (Infringement of MDI Patents) 1. That Cross-Defendants be held to have infringed upon the `164, `576, and `513 patents. 2. That Cross-Defendants, their subsidiaries, affiliates, parents, successors, assigns, officers, agents, servants, employees, attorneys, and all persons acting in concert or in participation with them, or any of them, be temporarily and preliminarily enjoined during the litigation of this action, and permanently enjoined thereafter from infringing, contributing to the infringement of, and inducing infringement of the `164, `576, and `513 patents, and specifically from directly or indirectly making, using, selling, or offering for sale, any products or services embodying the

-15CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

inventions of the `164, `576, or `513 patents during the life of the claims of the patents, without the express written authority of MDI. 3. That Cross-Defendants be directed to fully compensate MDI for all damages attributable to Cross-Defendants' infringement of the `164, `576, and `513 patents in an amount according to proof at trial. 4. That this case be deemed exceptional. 5. That all damages awarded be trebled. 6. That Cross-Defendants be ordered to deliver to MDI, for destruction at MDI's option, all products that infringe the`164, `576, or `513 patents. 7. That Cross-Defendants be required to account for all gains, profits, advantages, and unjust enrichment derived from its violations of law. 8. That MDI be awarded reasonable attorney's fees. 9. That MDI be awarded the costs of suit, and an assessment of interest. 10. That MDI have such other, further, and different relief as the court deems proper under the circumstances.

ON THE EIGHTH CAUSE OF ACTION (Infringement of Copyright) 1. For judgment against Cross-Defendants for MDI's damages. 2. For an injunction enjoining the Cross-Defendants from distributing or posting on the Internet, or anywhere else, MDI's copyrighted information. 3. For statutory damages provided for in the Copyright Act. 4. For damages provided by common law.

ON ALL CAUSES OF ACTION: 1. Costs of suit; and, 2. Such other and further relief as the court may deem proper.

-16CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Dated:

December 2, 2005

LAW OFFICES OF LEONARD A. RIFKIND

By:__/S/_Leonard A. Rifkind_____________ Leonard A. Rifkind, Esq. Attorney for Defendant and Cross-Complainant MOLECULAR DIAGNOSTICS, INC.

-17CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Dated:

DEMAND FOR JURY TRIAL Cross-Complainant hereby demands a trial by jury of all issues triable by a jury.

December 2, 2005

LAW OFFICES OF LEONARD A. RIFKIND

By:__/S/_Leonard A. Rifkind_____________ Leonard A. Rifkind, Esq. Attorney for Defendant and Cross-Complainant MOLECULAR DIAGNOSTICS, INC.

-18CROSS-COMPLAINT DIAMICS, INC. V. MOLECULAR DIAGNOSTICS, INC Case No. C05 02549.