Ultratech, Inc. v. Ensure Nanotech (Beijing) et al, No. 3:2014cv05361 - Document 65 (N.D. Cal. 2015)
Court Description: ORDER DENYING DEFENDANT DONGJUN WANGS MOTION TO DISMISS by Hon. William Alsup denying 44 Motion to Dismiss.(whalc1, COURT STAFF) (Filed on 6/5/2015)
Download PDF
<![CDATA[
Ultratech, Inc. v. Ensure Nanotech (Beijing) et al Doc. 65 1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 11 For the Northern District of California United States District Court 10 ULTRATECH, INC. D/B/A/ ULTRATECH/CAMBRIDGE NANOTECH, No. C 14-05361 WHA Plaintiff, 12 13 14 15 16 17 v. ENSURE NANOTECH (BEIJING), INC., ENSURE NANOTECH LLC D/B/A ENSURE SCIENTIFIC GROUP LLC, and DONGJUN WANG, ORDER DENYING DEFENDANT DONGJUN WANG’S MOTION TO DISMISS Defendants. / 18 INTRODUCTION 19 In this action for misappropriation of intellectual property, one defendant moves to 20 dismiss all claims against him in his individual capacity for lack of personal jurisdiction and 21 failure to state a claim. For the reasons stated below, the motion is DENIED. 22 23 STATEMENT Cambridge NanoTech, Inc., was a Massachusetts company engaged in the manufacture 24 and sale of atomic-layer deposition systems, which are used in the manufacture of semiconductor 25 devices (First Amd. Compl. ¶¶ 1, 5, 39, Exh. A). In 2008, Cambridge NanoTech entered into a 26 sales-agency agreement with Start Science (Beijing) Co., Ltd. (id. ¶ 39). That agreement 27 provided that Start Science would serve as a sales agent for Cambridge NanoTech in Taiwan. 28 The agreement included a forum-selection clause and a clause providing that the agreement Dockets.Justia.com 1 would inure to the benefits of the successors of the parties to the agreement (id. Exh. A 2 Sections 5.2, 5.9). 3 Defendant Dongjun Wang, a citizen and resident of China, signed that agreement as 4 president of Start Science (id. ¶¶ 8, 39). Wang and Start Science were then given access 5 to Cambridge NanoTech’s marketing and sales information, including design drawings, manuals, 6 operating software, price lists, parts lists, vendor information, and competition analyses 7 (id. ¶ 43). 8 9 While Start Science was still acting as a sales agent for Cambridge NanoTech, Wang formed Ensure NanoTech (Beijing), Inc., and Ensure NanoTech LLC (collectively “Ensure NanoTech defendants”), as corporations organized in China and Ohio, respectively (id. ¶¶ 6, 7, 11 For the Northern District of California United States District Court 10 4, 48). Ensure NanoTech defendants engaged in the manufacture and sale of ALD equipment in 12 competition with Cambridge NanoTech (id. ¶¶ 49–50). Some of Ensure NanoTech’s digital 13 manuals included metadata listing Cambridge NanoTech model numbers and identifying 14 Cambridge NanoTech as the author of those files (id. ¶¶ 52, 56). In 2011, Cambridge NanoTech 15 terminated its sales agency relationship with Start Science (id. ¶ 45). 16 Our plaintiff, Ultratech, Inc., acquired Cambridge NanoTech in 2012 (id. ¶ 26). 17 Ultratech is the owner of U.S. Patent No. 8,202,575 (“the ’575 patent”), which covers ALD 18 technology (id. ¶ 32). Ultratech is a Delaware corporation with its principal place of business in 19 San Jose (id. ¶ 5). 20 Ultratech’s amended complaint includes claims against Wang and Ensure NanoTech 21 defendants for patent infringement, trade secret misappropriation, unfair competition, and 22 copyright infringement, as well as a claim against Wang for breach of the sales-agency 23 agreement. 24 Wang now moves to dismiss all claims against him individually for lack of personal 25 jurisdiction and failure to state a claim. This order follows full briefing and oral argument. 26 27 28 2 1 ANALYSIS 2 1. WANG’S RULE 12(b)(2) MOTION. 3 Wang argues that he is not subject to personal jurisdiction in this forum because he 4 has not purposefully directed any activities at the forum. Ultratech argues that Wang is subject 5 to the forum-selection clause in the sales-agency agreement between Ultratech’s predecessor-in- 6 interest, Cambridge NanoTech, and Wang’s company, Start Science. 7 8 The forum-selection clause in the sales-agency agreement between Cambridge NanoTech and Start Science states (First Amd. Compl. Exh A, Section 5.9): 9 Any litigation arising under or related to this Agreement shall be brought in the United States District Court or the state trial court for the division and county in which Client’s corporate headquarters are located at the time the litigation is initiated. Agent hereby submits to the personal jurisdiction of these courts and waives all objections to placing venue before them. 11 For the Northern District of California United States District Court 10 12 In order to reach Wang, the forum-selection clause must apply across three degrees of 13 separation. First, the forum-selection clause must inure to Ultratech as a result of its acquisition 14 of Cambridge NanoTech. Second, the forum-selection clause must apply to Wang, even though 15 he signed the sales-agency agreement on behalf of Start Science. Third, the tort claims against 16 Wang must relate to the contractual relationship between Cambridge NanoTech and Start 17 Science. This order finds that all three conditions are met for the breach-of-contract, trade 18 secret, and unfair competition claims, and that Wang is subject to personal jurisdiction in this 19 forum pursuant to the discretionary exercise of pendent personal jurisdiction for the remaining 20 claims. 21 A. Inuring to Ultratech. 22 The forum-selection clause specified the location of the client’s headquarters in 23 that agreement “at the time litigation is initiated” (First Amd. Compl. Exh. A, Section 5.9). 24 Ultratech argues that the forum-selection clause in the sales-agency agreement designated the 25 district court for the current location of its headquarters as the forum for litigation arising out 26 of the agreement, which is this district. Wang, by contrast, argues the forum-selection clause 27 designated the location of Cambridge NanoTech’s headquarters at the time the agreement was 28 executed, which was Massachusetts. The sales-agency agreement further provided the 3 1 agreement would inure to the benefit of “the parties, and their respective successors, successors 2 in title, and assigns” (id. Exh. A, Section 5.2). That provision does not specifically call out the 3 forum-selection clause, but rather refers to the agreement as a whole. 4 Neither our court of appeals nor any district court in our circuit has addressed the of the contract to which it applies as the location of the headquarters of a party to the agreement 7 at the time litigation is initiated. In the closest decisions on point, several district courts in our 8 circuit have permitted a successor-in-interest to enforce a forum-selection clause without any 9 specific provision detailing its enforceability in that circumstance. Ambler v. BT Americas Inc., 10 964 F. Supp. 2d 1169, 1173 (N.D. Cal. 2013) (Judge Edward Davila); South County Professional 11 For the Northern District of California enforceability of a forum-selection clause that designates the forum for litigation arising out 6 United States District Court 5 Park, Ltd. v. Orchard Supply Company LLC, Docket Nos. 14-civ-02348, 2014 WL 3706825 at 12 *3 (N.D. Cal. July 21, 2014) (Judge Paul Grewal); Comerica Bank v. Whitehall Specialties, Inc., 13 352 F. Supp. 2d 1077, 1080 (C.D. Cal. 2004) (Judge Robert Timlin). No district court in our 14 circuit has declined to permit a successor-in-interest to enforce a forum-selection clause. 15 Wang’s only dispute relating to Ultratech’s right to enforce the forum-selection clause 16 relies on the claim that the clause designated the district in which “Cambridge NanoTech was 17 then headquartered” (Def. Mot. at 8). He cites no source of authority in support of this claim. 18 In the absence of controlling authority, and with the benefit of persuasive holdings by 19 sister district courts, this order holds that the reach of the provision in question is a matter of 20 contract interpretation. At least at the pleading stage, our district is a proper venue for certain of 21 the claims alleged in light of the fact that Ultratech is a successor-in-interest to Cambridge 22 NanoTech. The parties to the sales-agency agreement clearly contemplated that Cambridge 23 NanoTech could change the location of its headquarters and the venue designation would follow 24 that change. The parties also agreed that the contract would “inure to the benefit of the parties, 25 and their respective successors, successors in title, and assigns” (First Amd. Compl. Exh 1, 26 Section 5.2) (emphasis added). If Cambridge NanoTech was free to move the venue by simply 27 changing its headquarters designation, then that power should be accorded to Ultratech as well. 28 4 1 One possible exception would be if Cambridge NanoTech was still in existence, even sales-agency agreement acquired directly or indirectly by Ultratech. Upon inquiry by the Court, 4 Ultratech has shown that all contract rights of Cambridge NanoTech were acquired by Ultratech 5 in 2012. Cambridge NanoTech continues to exist as an unincorporated division of Ultratech, 6 but there is no indication that it is a separate entity that holds any rights relating to the sales- 7 agency agreement, and Wang points to no evidence to the contrary. Wang’s only argument 8 on this point is that contract rights did not appear on a schedule of assets to be acquired by 9 Ultratech. A comprehensive review of the merger demonstrates that the schedule referenced 10 is not the exhaustive list of assets acquired, but rather the list of personal property acquired. 11 For the Northern District of California if as a shell corporation, in Massachusetts, and continued to own any assets relating to the 3 United States District Court 2 The contract rights were included in the full scope of the purchased assets. If discovery reveals 12 that the Court misunderstands the facts, then the parties may move for a change of venue to 13 Massachusetts. 14 A second possible exception would be if the headquarters had been moved to a distant 15 location like Israel. In that circumstance, a question of reasonableness would arise, meaning the 16 power to re-designate headquarters might be limited by a rule of reason, insofar as it relates to 17 litigation venue. This consideration is not present here because all that has occurred is a change 18 from Massachusetts to California — if anything, a shift to a more convenient forum for Wang. 19 20 B. Applicability to Wang. The next degree of separation concerns whether Wang in his individual capacity is bound 21 by the forum-selection clause. A forum-selection clause in an agreement extends to “a range of 22 transaction participants, parties and non-parties.” Manetti-Farrow, Inc. v. Gucci America, Inc., 23 858 F.2d 509, 514 n.5 (9th Cir. 1988) (emphasis added). In Manetti-Farrow, that range of 24 non-parties included officers of a signatory corporation sued in their individual capacity. 25 Our court of appeals has not elaborated on the scope of that range of transaction participants 26 except to apply a forum-selection clause to sister corporations of a party to an agreement where 27 their alleged liability was closely related to the contractual relationship. Holland America Line 28 Inc. v. Wartsila North America, Inc., 485 F.3d 450, 456 (9th Cir. 2007). It has, however, 5 1 continued to cite to this aspect of the Manetti-Farrow decision with approval. See TAAG Linhas 2 Aereas de Angola v. Transamerica Airlines, Inc., 915 F.2d 1351, 1354 (9th Cir. 1990). 3 With one exception, every district court in our circuit that has considered whether to agreement to which it applies in his or her individual capacity has enforced that forum-selection 6 clause, provided the claims in the suit related to the contractual relationship. Sawyer v. Bill Me 7 Later, Inc., Docket No. 10-civ-04461, 2011 WL 7718723 at *4 (C.D. Cal. Oct. 21, 2011) 8 (Judge S. James Otero); Randhawa v. Skylux Inc., Docket No. 09-civ-2304, 2009 WL 5183953 9 at *10 (E.D. Cal. Dec. 21, 2009) (Judge William Shubb); Aspitz v. Wtness Systems, Inc., Docket 10 No. 07-civ-02068, 2007 WL 2318004 at *1 (N.D. Cal. Aug. 10, 2007) (Judge Richard Seeborg); 11 For the Northern District of California apply a forum-selection clause to a corporate officer or related company that was not part of the 5 United States District Court 4 Graham Technology Solutions, Inc. v. Thinking Pictures, Inc., 949 F. Supp. 1427, 1434 (N.D. 12 Cal. 1997) (Judge Edward Infante). 13 The exceptional case is Pinnacle Fitness and Recreation Management LLC v. Jerry and 14 Vickie Moyes Family Trust, No. 08-civ-1368, 2010 WL 5141686 at *2 (S.D. Cal. Dec. 13, 2010) 15 (Judge Marilyn Huff), which rested on the premise that a non-party could only be subject to 16 a forum-selection clause if she “agree[d] to be so bound.” This interpretation swallowed 17 the rule of Manetti-Farrow by effectively precluding non-parties from being subject to the 18 forum-selection clause, since a person’s agreement to be personally bound by the agreement 19 would make that person a party to the agreement. 20 This order follows the prevailing trend of enforcing a forum-selection clause against a 21 non-party officer where the claims against the officer in his individual capacity relate to the 22 contractual relationship, at least where the officer is a signatory and where the officer is accused 23 of subverting the very agreement he signed. As discussed below, at least some of the claims 24 against Wang individually relate to the contractual relationship between Cambridge NanoTech 25 and Start Science. Accordingly, he is subject to the forum-selection clause of the sales-agency 26 agreement. But that does not end the jurisdictional inquiry. 27 28 6 1 2 C. Relationship to the Claims. Wang must be subject to personal jurisdiction for each claim in Ultratech’s complaint. 3 Action Embroidery Corp. v. Atlantic Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir. 2004). 4 A forum-selection clause may apply to tort claims if adjudication of those claims require 5 interpretation of the underlying agreement. Manetti-Farrow, 858 F.2d at 513. 6 Ultratech’s claims for trade secret misappropriation, unfair competition, and breach-of- 7 contract all require interpretation of the sales-agency agreement. The trade secret and unfair 8 competition claims will both require interpretation of the agreement to determine the scope of 9 information provided to Wang and the scope of confidentiality and exclusivity provisions protecting that information (id. ¶¶ 89, 91, 99). The breach-of-contract claim plainly requires 11 For the Northern District of California United States District Court 10 interpretation of the agreement. 12 This order need not resolve whether Ultratech’s patent or copyright claims will require 13 interpretation of the sales-agency agreement. Our court of appeals has adopted a concept of 14 “pendent personal jurisdiction,” which permits a court to assert personal jurisdiction over a claim 15 if it arises out of a “common nucleus of operative facts” with the claims over which it has an 16 independent basis for personal jurisdiction. Action Embroidery, 368 F.3d at 1180. Each of the 17 five claims in Ultratech’s complaint arises out of the allegation that Wang formed Ensure 18 NanoTech defendants to compete with Cambridge NanoTech, now Ultratech, with copies of its 19 devices and materials, and relying on misappropriated trade secrets and proprietary information. 20 Joint adjudication of the patent and copyright claims alongside the claims against Wang for trade 21 secret misappropriation, unfair competition, and breach-of-contract, serves the goals of “judicial 22 economy, avoidance of piecemeal litigation, and overall convenience of the parties,” as 23 contemplated in Action Embroidery. Id. at 1182. 24 Wang’s argument that he is not bound by the forum-selection clause because he is 25 not the alter ego of Start Science is irrelevant to this inquiry. Wang’s role as the subverter 26 of the contract gives rise to each of Ultratech’s claims, and that is sufficient to apply the 27 forum-selection clause to him for those claims, even as a non-party to the contract. 28 Manetti-Farrow, 858 F.2d at 514. 7 1 Similarly, this order need not address Wang’s contention that his contacts with the forum 2 are insufficient under the standards for general or specific jurisdiction. Because Wang is subject 3 to the forum-selection clause, he has consented to personal jurisdiction here, regardless of the 4 scope of his contacts. 5 Wang also argues that he is not subject to personal jurisdiction in this forum because the 6 claims alleged against him relate to conduct done in the course of his employment for Ensure 7 NanoTech defendants. Wang cites to Richtek Technology Corp. v. uPI Semiconductor Corp., 8 No. 09-civ-05659, 2011 U.S. Dist. LEXIS 58354 at *15–16 (N.D. Cal. Jan. 3, 2011), as support 9 for that contention. There, patent and copyright infringement claims against individual defendants were dismissed for lack of personal jurisdiction because plaintiff failed to allege 11 For the Northern District of California United States District Court 10 that each individual had personally performed the acts necessary to state a claim. Some of the 12 defendants had visited the forum state in the course of their employment, but that was 13 insufficient to establish jurisdiction. Whether the claims alleged against Wang relate to 14 conduct done in the course of his employment is discussed in resolving Wang’s Rule 12(b)(6) 15 motion. That argument is irrelevant here; Wang has consented to personal jurisdiction in this 16 forum by way of the forum-selection clause. 17 If discovery somehow reveals that the foregoing facts are untrue, for example, if 18 discovery shows that Wang was not a signatory to the sales-agency agreement, then a summary 19 judgment motion directed at that issue will be entertained. Meanwhile, Wang’s motion to 20 dismiss for lack of personal jurisdiction is DENIED. 21 2. WANG’S RULE 12(b)(6) MOTION. 22 Defendant Dongjun Wang moves to dismiss for failure to state a claim against him as 23 an individual because his allegedly infringing conduct was done in the course of employment 24 for Ensure NanoTech defendants or Start Science. Ultratech argues that it has sufficiently pled 25 claims against Wang for conduct done in his individual capacity, or in the alternative, that Wang 26 is the alter ego of Ensure NanoTech (Beijing) and Start Science. 27 28 8 1 To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain sufficient 2 factual allegations to “state a claim for relief that is plausible on its face.” Bell Atlantic Corp. v. 3 Twombly, 550 U.S. 544, 570 (2007). Each claim against Wang is addressed in turn. 4 5 A. Patent Infringement. Ultratech’s complaint alleges claims against Wang for direct, induced, and contributory 6 patent infringement (First Amd. Compl. ¶¶ 68, 70, 74–75). Wang argues that each of these 7 claims should be dismissed because the facts that relate to those claims relate to his conduct as 8 an employee of Ensure NanoTech defendants, not as an individual. 9 Direct Infringement. A claim for direct patent infringement need only satisfy the requirements of Form 18 in 11 For the Northern District of California United States District Court 10 (1) the Appendix to the Federal Rules of Civil Procedure in order to state a claim. In re Bill of 12 Lading Transmission and Processing Systems Patent Litigations, 681 F.3d 1323 (Fed. Cir. 13 2012). Form 18 requires: 14 15 16 (1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that defendant has been infringing the patent by making, selling, and using the device embodying the patent; (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5) a demand for an injunction and damages. 17 McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1357 (Fed. Cir. 2007). Ultratech’s 18 complaint satisfies each of these requirements (First Amd. Compl. ¶¶ 19, 32, 68, 71, 86–87). 19 Accordingly, Ultratech has stated a claim for direct patent infringement. 20 (2) Indirect Infringement. 21 The “corporate veil” may shield an officer of a corporation from personal liability for 22 inducement of patent infringement committed in the name of the corporation unless that officer 23 “actively assist[ed]” with the corporation’s induced infringement. Wordtech Systems, Inc. v. 24 Integrated Networks Solutions, Inc., 609 F.3d 1308, 1316 (Fed. Cir. 2010). Similarly, a 25 corporate officer may be personally liable for indirect infringement regardless of the corporate 26 form if he “personally participat[ed]” in contributory infringement. Id. at 1317. 27 The complaint alleged that Wang exercised broad and complete control over Ensure 28 NanoTech defendants’ business and operations, and Wang does not dispute that the facts alleged 9 1 plausibly establish that he actively assisted with Ensure NanoTech defendants’ induced 2 infringement or personally participated in their contributory infringement (First Amd. Compl. 3 ¶¶ 21, 74). Nor does Wang dispute that he himself induced Ensure NanoTech defendants to 4 infringe the ’575 patent (Id. ¶ 75). Rather, Wang’s challenge to this claim is that Ultratech has 5 failed to plead “knowledge that the induced acts constitute patent infringement” as required for 6 both induced and contributory infringement. Global-Tech Appliances, Inc. v. SEB S.A., 564 U.S. 7 ____, 131 S. Ct. 2060, 2068 (2011). 8 9 Not so. The complaint alleged that Wang knew or should have known that the ALD systems made and sold by the Ensure NanoTech defendants were copies of specific Ultratech systems, and indeed, that he directed those companies to make and sell them (First Amd. Compl. 11 For the Northern District of California United States District Court 10 ¶¶ 50–59). It further alleged that Wang had knowledge of, or was willfully blind to, the fact that 12 the ALD systems Ensure NanoTech allegedly copied from Cambridge NanoTech were protected 13 by patents because Wang signed the sales-agency agreement, which explicitly reserved 14 Cambridge NanoTech’s intellectual property rights in its systems (id. ¶¶ 18, 86). 15 From these facts, one could plausibly infer that Wang knew of, or was willfully blind to, 16 the existence of the ’575 patent, and specifically intended for Ensure NanoTech defendants’ 17 ALD systems to infringe the patents that covered Ultratech’s ALD systems. Accordingly, 18 Ultratech has stated claims against Wang for induced and contributory patent infringement. 19 20 B. Trade Secret Misappropriation. A plaintiff states a claim under the California Uniform Trade Secrets Act, Cal. Civ. Code. 21 3426 et seq., if it can show: (1) that the plaintiff owned a trade secret, (2) that the defendant 22 acquired, disclosed, or used that trade secret through improper means, and (3) that the 23 defendant’s actions harmed the plaintiff. CytoDyn of N.M., Inc. v. Amerimmune Pharm., Inc., 24 160 Cal. App. 4th 288, 297 (2008). Wang only disputes whether Ultratech adequately pled the 25 second element as to him individually. 26 Ultratech has sufficiently pled facts that plausibly show that Wang acquired and 27 disclosed facts that he was obligated not to use or disclose. Specifically, the complaint alleged 28 that Wang received Cambridge NanoTech’s trade secrets pursuant to the sales-agency 10 1 agreement, that he knew or should have known that information constituted trade secrets, and 2 that he subsequently disclosed that information, or personally directed Start Science to disclose 3 that information to Ultratech (First Amd. Compl. ¶¶ 39–44, 90). These facts state a plausible 4 claim that Wang himself acquired, disclosed, or used Ultratech’s trade secrets without 5 authorization. C. 6 7 Unfair Competition. A plaintiff sufficiently pleads common law unfair competition under California law by 8 alleging “(1) that [plaintiff] had invested substantial time, skill or money in developing its 9 property; (2) that [defendants] appropriated and used [plaintiff’s] property at little or no cost; (3) that [defendants’] appropriation and use of [plaintiff’s] property was without the 11 For the Northern District of California United States District Court 10 authorization or consent of [plaintiff]; and (4) that [plaintiff] could establish that it has been 12 injured by [defendants’] conduct.” City Solutions, Inc. v. Clear Channel Communications, 13 365 F.3d 835, 842 (9th Cir. 2004) (citing Balboa Insurance Co. v. Trans Global Equities, 14 218 Cal. App. 3d 1327, 1342 (1990)). 15 Wang argues only that Ultratech has not alleged any facts that plausibly state a claim 16 against him individually. As with the trade secret misappropriation claim, Ultratech has alleged 17 that Wang, himself, disclosed information that he received pursuant to the sales-agency 18 agreement (First Amd. Compl. ¶¶ 39–44, 99). Accordingly, Ultratech has stated a claim for 19 common law misappropriation against Wang as an individual. D. 20 21 Breach-of-Contract. Ultratech claims that Wang breached the sales-agency agreement. Wang argues that he 22 was not personally bound to the terms of that agreement, so he can’t be held personally liable for 23 breaching it. 24 “Directors and officers are not personally liable on contracts signed by them for and on 25 behalf of the corporation unless they purport to bind themselves individually.” Vasquez v. 26 Trojan Metals, 176 F.3d 486 (9th Cir. 1999) (quoting United States Liability Insurance Co. v. 27 Haidinger-Hayes, 1 Cal. 3d 586, 595 (1970)). However, an officer may be liable for breach-of- 28 contract if was the alter ego of the breaching party. 11 1 This order need not evaluate whether Wang was personally bound by the sales-agency 2 agreement because Ultratech has adequately pled that Wang was the alter ego of Start Science. 3 An individual can be deemed an alter ego of a corporation if: (1) there is a unity of interest and 4 ownership such that the separate personalities of the corporation and the individual no longer 5 exist, and (2) an inequitable result will follow if the acts are treated as those of the corporation 6 alone. Automotriz Del Golfo De California S.A. de C.V. v. Resnick, 47 Cal. 2d 792, 796 (1957). 7 The complaint alleges that Wang was the president, principal, and sole owner of Start 8 Science, that he controlled all aspects of Start Science’s business and day-to-day operations, 9 and that he negotiated and signed the sales-agency agreement (First Amd. Compl. ¶¶ 8, 21). From these facts, one could plausibly infer there was a unity of interest between Wang and Start 11 For the Northern District of California United States District Court 10 Science. Other factors, such as commingling of funds, disregard of corporate formalities, and 12 undercapitalization are often considered in evaluating alter ego liability. Sonora Diamond 13 Corp. v. Superior Court, 83 Cal. App. 4th 523 (2000). Those considerations are better evaluated 14 with the benefit of discovery. At this stage, Ultratech has adequately shown a unity of interest. 15 As to inequitable result, given the strong allegations that Wang used his position as a 16 controlling shareholder of Start Science and as a signatory to the sales-agency to position himself 17 to misappropriate materials received by him pursuant to that agreement, it would be plainly 18 inequitable for Wang to escape liability for subverting the confidentiality and exclusivity 19 protections he negotiated and agreed to on behalf of Start Science simply because he was not 20 personally a party to the agreement. Accordingly, Ultratech has stated a claim against Wang for 21 breach-of-contract. 22 23 E. Copyright Infringement. In order to establish copyright infringement, two elements must be proven: (1) 24 ownership of a valid copyright, and (2) copying of constituent elements of the work that are 25 original. Rice v. Fox Broadcasting Co., 330 F.3d 1170, 1174 (9th Cir. 2003). Wang only 26 disputes whether the complaint alleged that he personally copied elements of Ultratech’s 27 copyrighted material. 28 12 1 The complaint alleged that Wang provided, or personally directed Start Science to 2 provide, copies of copyrighted materials such as instruction manuals and software to Ensure 3 NanoTech defendants and their customers without authorization from Cambridge NanoTech or 4 Ultratech, or that he personally directed Ultratech to copy those materials (First Amd. Compl. 5 ¶¶ 116–122). Wang cannot meaningfully argue that he himself brought copies of Cambridge 6 NanoTech’s copyrighted materials across the threshold from Start Science to Ensure NanoTech 7 defendants in his capacity as an employee of either company. Ultratech has plausibly stated a 8 claim against Wang for copyright infringement. 9 Wang’s argument that Ultratech’s claims should be dismissed because corporate officers are not liable for the torts of a corporation is inapposite. Wang spills two pages worth of ink 11 For the Northern District of California United States District Court 10 discussing decisions that dismissed claims against individuals whose alleged tortious conduct 12 was done in their capacity as officers (Def. Mot. at 13–14). But Ultratech has adequately pled 13 facts that demonstrate that Wang himself, or as the alter ego of Start Science, performed acts that 14 make out each claim for relief. The corporate veil cannot protect Wang from liability for these 15 claims. 16 17 CONCLUSION For the foregoing reasons, Dongjun Wang’s motion to dismiss is DENIED. 18 19 IT IS SO ORDERED. 20 21 Dated: June 5, 2015. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 22 23 24 25 26 27 28 13
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
