Eastman v. Apple Inc., No. 3:2018cv05929 - Document 51 (N.D. Cal. 2019)
Court Description: ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS THIRD AMENDED COMPLAINT by Judge Jon S. Tigar. Case Management Statement due by 11/5/2019 by 5:00 PM. Initial Case Management Conference set for 11/12/2019 02:00 PM in Oakland, Courtr oom 6, 2nd Floor.The deputy clerk hereby certifies that on 8/20/19, a copy of this order was served by sending it via first-class mail to the address of each non-CM/ECF user listed on the Notice of Electronic Filing.(mllS, COURT STAFF) (Filed on 8/20/2019)
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 DARREN EASTMAN, 7 Plaintiff, 8 ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS THIRD AMENDED COMPLAINT v. 9 APPLE, INC., 10 Defendant. 11 United States District Court Northern District of California Case No. 18-cv-05929-JST Re: ECF No. 44 12 Before the Court is Defendant Apple, Inc.’s motion to dismiss Plaintiff Darren Eastman’s 13 14 pro se third amended complaint. ECF No. 44. The Court will grant the motion in part and deny it 15 in part. 16 I. 17 BACKGROUND The background of Eastman’s claims is set forth in greater detail in the Court’s orders on 18 Apple’s motions to dismiss Eastman’s prior complaints. See ECF Nos. 27, 39. In brief, Eastman, 19 a former Apple employee, alleges that he contributed to the invention of multiple Apple patents, 20 but that Apple failed to name him as a co-inventor on those patents. 21 According to Eastman, he disclosed “a novel process for redemption of virtual tickets 22 using a mobile device in his 2006 Intellectual Property Agreement (IPA)” with Apple that 23 “resoundingly matches” a patent Apple obtained for its “Passbook” application, U.S. Patent 24 Number 9,125,014 (the “’014 patent”). Third Amended Complaint (“TAC”), ECF No. 41 ¶ 10. 25 Eastman further alleges that, in 2009, he invented a “novel method to reliably retrieve a lost 26 smartphone or computing device,” id. ¶ 54, which he submitted through Apple’s internal system 27 and continued to advocate for internally, id. ¶¶ 73-75. Eastman asserts that this idea was 28 incorporated as the “Find my iPhone” feature initially released on June 15, 2010. Id. ¶ 74. Based United States District Court Northern District of California 1 on this concept, Eastman claims that he should have been named as a co-inventor on U.S. Patent 2 Numbers 9,104,896 (the “’896 patent”); 8,881,310 (the “’310 patent”); 9,706,032 (the “’032 3 patent”); 9,763,098 (the “’098 patent”); 8,666,367 (the “’367 patent”); 9,979,776 (the “’776 4 patent”); and 8,660,530 (the “’530 patent”) (collectively, the “phone-finding patents”). TAC 5 ¶¶ 109, 148, 204, 261, 283, 305, 331. 6 On August 13, 2018, Eastman filed this lawsuit pro se against Apple in state court. ECF 7 No. 1 ¶ 1. Eastman then filed his first amended complaint on August 22, 2018. Id. ¶¶ 2, 6. On 8 September 27, 2018, Apple timely removed the case to federal court. See ECF No. 1. After Apple 9 moved to dismiss Eastman’s claims, ECF No. 11, the Court severed and remanded Eastman’s 10 state-law claims stemming from his allegedly wrongful termination, concluding that it lacked 11 supplemental jurisdiction because Eastman’s termination was allegedly motivated by reasons 12 unrelated to his patent claims. ECF No. 27 at 6-7. As to the patent claims, the Court held that 13 Eastman had failed to state a claim because his allegations lacked sufficient detail as to his 14 purported contribution and the contributions that could be discerned described prior art 15 acknowledged on the face of the disputed patents. Id. at 10-12. The Court therefore dismissed the 16 patent claims with leave to amend. Id. at 12. 17 On December 5, 2018, Eastman filed his second amended complaint, adding a state-law 18 claim for defamation based on the alleged nonjoinder. ECF No. 28. Apple again moved to 19 dismiss. ECF No. 31. On April 10, 2019, the Court granted the motion. ECF No. 39. 20 Concerning the phone-finding patents, the Court reiterated that Eastman’s “concept of generating 21 a phone location that the phone’s owner could access remotely was already well established in the 22 prior art,” id. at 5, but concluded that Eastman’s filings “suggest[ed] that he may be able to 23 plausibly plead a claim based on concepts related to remotely initiating actions on lost phones,” id. 24 at 6. The Court reached a similar conclusion regarding the Passbook patent, and therefore did not 25 reach the adequacy of the defamation claims. Id. at 7-8. 26 27 On May 15, 2019, Eastman filed the operative TAC, which spans 191 pages, 86 of which are dedicated to comparing his notes and the patents’ claims. ECF No. 41. Eastman also 28 2 United States District Court Northern District of California 1 expanded his inventorship claim to include the ’367, ’776, and ’530 patents. Id. Apple again 2 moves to dismiss. ECF No. 44. 3 II. LEGAL STANDARD 4 A complaint must contain “a short and plain statement of the claim showing that the 5 pleader is entitled to relief,” in order to “give the defendant fair notice of what the . . . claim is and 6 the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration 7 in original) (first quoting Fed. R. Civ. P. 8(a)(2); then quoting Conley v. Gibson, 355 U.S. 41, 47 8 (1957)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, 9 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 10 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when 11 the plaintiff pleads factual content that allows the court to draw the reasonable inference that the 12 defendant is liable for the misconduct alleged.” Id. “Dismissal under Rule 12(b)(6) is appropriate 13 only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable 14 legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). 15 The Court must “accept all factual allegations in the complaint as true and construe the pleadings 16 in the light most favorable to the nonmoving party.” Knievel v. ESPN, 393 F.3d 1068, 1072 (9th 17 Cir. 2005). Moreover, “[a] document filed pro se is to be liberally construed and a pro se complaint, 18 19 however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted 20 by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007) (internal quotation marks and citations 21 omitted). 22 III. DISCUSSION 23 A. Successive Motions to Dismiss 24 The Court first addresses Eastman’s argument that Apple waived the ability to rely on 25 additional patents in its Rule 12(b)(6) challenge by failing to cite them in its motions to dismiss 26 Eastman’s prior complaints. ECF No. 46 at 8. 27 With some exceptions not relevant here, Rule 12(g)(2) precludes a party bringing a 28 3 United States District Court Northern District of California 1 successive Rule 12 motion from “raising a defense or objection that was available to the party but 2 omitted from its earlier motion.” Fed. R. Civ. P. 12(g)(2). Apple contends that this rule does not 3 apply to amended complaints, citing cases in which “[c]ourts in this Circuit therefore have 4 permitted defendants moving to dismiss an amended complaint to make arguments previously 5 made and to raise new arguments that were previously available.” In re WellPoint, Inc. Out-of- 6 Network UCR Rates Litig., 903 F. Supp. 2d 880, 893 (C.D. Cal. 2012) (collecting cases); ECF No. 7 48 at 11. The Court observes that Apple’s authority is comprised of cases from other districts and 8 is contrary to the weight of authority in this district and the clear implication of recent Ninth 9 Circuit case law. In re Apple Iphone Antitrust Litig., 846 F.3d 313, 316-20 (9th Cir. 2017) 10 (applying Rule 12(g) analysis to series of motions to dismiss series of multiple amended 11 complaints); Green v. ADT, LLC, No. 16-CV-02227-LB, 2016 WL 5339800, at *6 (N.D. Cal. 12 Sept. 23, 2016) (“Thus, under Rule 12(g) and (h), courts in this district have precluded defendants 13 from raising previously available but unmade arguments in motions to dismiss after a complaint is 14 amended.”) (collecting cases); see also 5C Charles A. Wright & Arthur R. Miller, Federal Practice 15 & Procedure § 1388 (3d ed. 2005) (“The filing of an amended complaint will not revive the right 16 to present by motion defenses that were available but were not asserted in timely fashion prior to 17 the amendment of the pleading; conversely, a Rule 12 defense that becomes available because of 18 new matter in the amended complaint may be asserted by motion.” (footnote omitted)). Nonetheless, even under Rule 12(g)(2), Apple is not precluded from renewing the 19 20 argument that Eastman’s amendments have failed to cure the defects in his claims. In addition, 21 Apple’s reliance on additional prior art materials appears a reasonable response to the new factual 22 allegations in Eastman’s latest complaint. Rule 12(g)(2) thus does not bar this motion.1 B. 23 Inventorship Claims 1. 24 Legal Standard As a general matter, patents must list all of the true inventors. Trovan, Ltd. v. Sokymat SA, 25 26 27 28 Nor does the Court find that Apple’s use of charts containing single-spaced quotations resulted in a violation of the page limits set forth in this district’s local rules. See Civil L.R. 3.4(c)(2), 7.2, 7.4. 1 4 1 Irori, 299 F.3d 1292, 1301 (Fed. Cir. 2002). “Conception is the touchstone of invention, and it 2 requires a definite and permanent idea of an operative invention, including every feature of the 3 subject matter sought to be patented.” In re VerHoef, 888 F.3d 1362, 1366 (Fed. Cir. 2018) 4 (internal quotation marks and citation omitted). A definite and permanent idea, in turn, exists 5 “when the inventor has a specific, settled idea, a particular solution to the problem at hand, not 6 just a general goal or research plan.” Id. (citation omitted). 7 In order for an invention to have co-inventors, they “need not ‘physically work together or 8 at the same time,’ ‘make the same type or amount of contribution,’ or ‘make a contribution to the 9 subject matter of every claim of the patent.’” Vapor Point LLC v. Moorhead, 832 F.3d 1343, 1349 10 (Fed. Cir. 2016) (quoting 35 U.S.C. § 116). Rather, a joint inventor must: United States District Court Northern District of California 11 (1) contribute in some significant manner to the conception or reduction to practice of the invention, (2) make a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention, and (3) do more than merely explain to the real inventors well-known concepts and/or the current state of the art. 12 13 14 15 In re VerHoef, 888 F.3d at 1366 (quoting Pannu v. Iolab Corp., 155 F.3d 1344, 1351 (Fed Cir. 16 1998)). 17 The issuance of a patent “creates a presumption that the named inventors are the true and 18 only inventors.” Ethicon Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 1460 (Fed. Cir. 1998). But 19 “[a] person who alleges that he is a co-inventor of the invention claimed in an issued patent who 20 was not listed as an inventor on the patent may bring a cause of action to correct inventorship in a 21 district court under 35 U.S.C. § 256.” Vapor Point LLC, 832 F.3d at 1348 (quoting Eli Lilly & Co. 22 v. Aradigm Corp., 376 F.3d 1352, 1357 n.1 (Fed. Cir. 2004)).2 To overcome the presumption of 23 correctness, “the alleged co-inventor or co-inventors must prove their contribution to the 24 25 26 27 28 2 35 U.S.C. § 256(a) provides in full: Whenever through error a person is named in an issued patent as the inventor, or through error an inventor is not named in an issued patent, the Director may, on application of all the parties and assignees, with proof of the facts and such other requirements as may be imposed, issue a certificate correcting such error. 5 1 conception of the claims by clear and convincing evidence,” Ethicon, 135 F.3d at 1461, “and must 2 provide evidence to corroborate the alleged joint inventor’s conception,” Eli Lilly & Co., 376 F.3d 3 at 1362. 4 5 6 7 8 United States District Court Northern District of California 9 “The overall inventorship determination is a question of law, but it is premised on underlying questions of fact.” Eli Lilly & Co., 376 F.3d at 1362. 2. Request for Judicial Notice Apple’s inventorship arguments largely turn on documents for which it requests judicial notice. ECF No. 44 at 11. With two exceptions, “district courts may not consider material outside the pleadings when 10 assessing the sufficiency of a complaint under Rule 12(b)(6) of the Federal Rules of Civil 11 Procedure.” Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 998 (9th Cir. 2018), cert. denied 12 sub nom. Hagan v. Khoja, No. 18-1010, 2019 WL 429555 (U.S. May 20, 2019). Under the first 13 exception – judicial notice pursuant to Federal Rule of Evidence 201 – “[t]he court may judicially 14 notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the 15 trial court’s territorial jurisdiction; or (2) can be accurately and readily determined from sources 16 whose accuracy cannot reasonably be questioned.” The court “must take judicial notice if a party 17 requests it and the court is supplied with the necessary information.” Fed. R. Evid. 201(c)(2). 18 However, courts “cannot take judicial notice of the contents of documents for the truth of the 19 matters asserted therein when the facts are disputed.” Cal. Sportfishing Prot. All. v. Shiloh Grp., 20 LLC, No. 16-CV-06499-DMR, 2017 WL 3136443, at *5 (N.D. Cal. July 24, 2017). 21 “Unlike rule-established judicial notice, incorporation-by-reference is a judicially created 22 doctrine that treats certain documents as though they are part of the complaint itself.” Khoja, 899 23 F.3d at 1002. Its purpose is to “prevents plaintiffs from selecting only portions of documents that 24 support their claims, while omitting portions of those very documents that weaken − or doom − 25 their claims.” Id. at 1002. 26 27 The Ninth Circuit has recently expressed frustration with “[t]he overuse and improper application of judicial notice and the incorporation-by-reference doctrine,” explaining that 28 6 United States District Court Northern District of California 1 “[d]efendants face an alluring temptation to pile on numerous documents to their motions to 2 dismiss to undermine the complaint, and hopefully dismiss the case at an early stage. Yet the 3 unscrupulous use of extrinsic documents to resolve competing theories against the complaint risks 4 premature dismissals of plausible claims that may turn out to be valid after discovery.” Id. at 998. 5 In particular, the Khoja court emphasized that courts should tread carefully in judicially noticing 6 the contents of a record to contradict the complaint’s operative allegations where “there is a 7 reasonable dispute as to what the [record] establishes.” Id. at 1001. This Court has echoed those 8 concerns in denying similar requests for judicial notice. See Rollins v. Dignity Health, 338 F. 9 Supp. 3d 1025, 1031 (N.D. Cal. 2018) (“Defendants repeatedly do what Khoja forbids – ask the 10 Court to take judicial notice of documents that they then use as a basis to challenge the factual 11 averments in the complaint.”). Even more to the point, the Federal Circuit – in an intervening decision that Apple fails to 12 13 cite − has rejected the use of judicial notice to support precisely the argument Apple seeks to make 14 here. See CODA Dev. S.R.O. v. Goodyear Tire & Rubber Co., 916 F.3d 1350 (Fed. Cir. 2019).3 15 In Coda, the district court dismissed plaintiff Coda’s inventorship claims under § 256, relying in 16 large part on two points. First, the disputed patent “actually identifie[d]” Coda’s alleged invention 17 as “prior art,” including a reference to Coda’s own international patent application disclosing 18 similar concepts. Coda Dev. s.r.o. v. Goodyear Tire & Rubber Co., No. 5:15-CV-1572, 2016 WL 19 5463058, at *5 (N.D. Ohio Sept. 29, 2016). Second, the district court, over objection, took 20 judicial notice of an article published by Coda’s CEO, reasoning that the court “need not 21 determine whether any portion of the article is actually true or factually correct in order to 22 determine whether it was a 2008 public disclosure of something Coda now claims was secret when 23 disclosed to Goodyear in 2009.” Id. at *2. Based on a side-by-side comparison of the complaint’s 24 25 26 27 28 3 As the Federal Circuit acknowledged in Coda, the proper application of the Rule 12(b)(6) standard, including the propriety of judicial notice, is a matter of “the regional circuit’s law.” 916 F.3d at 1357. Here, the Coda court’s analysis reinforces the general principles articulated by the Ninth Circuit in Khoja, as applied to a matter within the Federal Circuit’s expertise. The Court discerns no material difference between Ninth Circuit and the Sixth Circuit law in this area. See id. (applying Sixth Circuit law). 7 1 allegations and the article’s contents, the court concluded that the article publicly disclosed each 2 element. Id. at *5. United States District Court Northern District of California 3 The Federal Circuit reversed, explaining that the district court’s analysis was procedurally 4 improper. As to the first point, the court explained that “to the extent the district court relied on 5 the ’586 patent and [the] prior, published patent application to determine that the alleged novel 6 trade secrets were already in the prior art, such a determination was improper at this stage, for at 7 least the reason that it constituted an inference adverse to Plaintiffs when there were other 8 reasonable inferences to draw in their favor.” CODA Dev. S.R.O., 916 F.3d at 1360 n.7. The 9 Federal Circuit likewise faulted the district court’s use of judicial notice, explaining that “whether 10 the [Coda CEO’s] article actually disclosed those alleged novel trade secrets was a reasonably 11 (indeed, hotly) disputed factual issue – one outside any judicial-notice exception to the general 12 rule requiring conversion, and one that should not have been resolved adversely to Plaintiffs on a 13 motion to dismiss.” Id. at 1360. 14 Here, Apple requests judicial notice of two patents and a patent application. ECF No. 44 at 15 11; ECF No. 45 ¶¶ 13-15. Apple asserts that it does not rely on those documents “for the truth of 16 any disclosure therein, but rather, to what was in the public realm at the time they were filed.” 17 ECF No. 44 at 11. But Apple does not simply ask the Court to take judicial notice of the fact that 18 the documents were in the public realm. Rather, Apple asks the Court to judicially notice the 19 documents’ contents as disclosing all of Eastman’s claimed inventions, through precisely the same 20 side-by-side comparison the Federal Circuit deemed improper. See CODA Dev. S.R.O., 916 F.3d 21 at 1356 (explaining that district court erred when it “adopted Defendants’ mapping of the 22 [judicially noticed] article’s contents to the complaint’s description of the elements disclosed to 23 Goodyear and concluded that the article publicly disclosed each of those elements”); ECF No. 44 24 at 14-19. At least at this stage, Eastman’s dispute as to “whether the [documents] actually 25 disclosed those alleged [inventions]” is reasonable, and one that the Court cannot resolve via 26 judicial notice. CODA Dev. S.R.O., 916 F.3d at 1360. 27 Accordingly, the Court DENIES Apple’s request to take judicial notice of Exhibits J, K, 28 8 1 and L.4 3. 2 Apple’s argument that Eastman’s contributions to the phone-finding patents, as reflected in 3 4 his notes, “constitute nothing more than what was already known in the prior art,” ECF No. 44 at 5 12, rests on materials for which the Court denies judicial notice, see id. at 14-19. The Court 6 therefore denies Apple’s motion to dismiss these claims. 4. 7 9 10 Passbook Patent As explained above, the Court cannot consider Apple’s prior art argument based on 8 United States District Court Northern District of California Phone-Finding Patents Exhibit L. ECF No. 44 at 21. The Court turns to Apple’s remaining arguments regarding this claim. 11 Apple first stresses that Eastman has conceded that “he did not contribute to the invention 12 of any claim that includes the proximity fence concept.” ECF No. 44 at 20. In the TAC, Eastman 13 states that “the only claims [he] cannot attach some previous conception to involve the proximity 14 fence. The proximity fence exists only from smartphones, which didn’t exist a decade earlier[,] 15 when [Eastman] originally devised a solution for the problem.” TAC ¶ 493. Apple reasons that, 16 because the independent claims of the ’014 patent each set forth a claim limitation containing the 17 proximity fence concept, see ECF No. 45-8 at 12:47-63, 14:14-29, 15:36-50, Eastman has 18 conceded that he did not contribute to any claim whatsoever in the ’014 patent. ECF No. 48 at 6- 19 7. The Court is not persuaded that this hyper-technical and ungenerous reading of Eastman’s pro 20 se complaint accurately characterizes his inventorship claim or his concession. Fairly read, 21 Eastman concedes that he did not develop the proximity fence concept, but does not disclaim 22 inventorship as to every claim which, as a matter of patent law, includes that concept. Therefore, 23 this concession does not foreclose Eastman’s inventorship claim. See Vapor Point LLC, 832 F.3d 24 at 1348-49 (“All inventors, even those who contribute to only one claim or one aspect of one 25 26 27 28 4 The Court does not, however, disturb its prior conclusion that the Apple patents for which Eastman seeks correction of inventorship are incorporated by reference, because they are extensively referenced throughout the complaint and form the basis for his claims. See ECF No. 27 at 11 n.7 (citing Khoja, 899 F.3d at 1002). 9 1 United States District Court Northern District of California 2 claim of a patent, must be listed on that patent.”). Apple next asserts that Eastman fails to allege that he communicated his exhibits to Apple 3 or any of the named inventors of ’014 patent. ECF No. 44 at 20-21. But Eastman need not have 4 shared his notes themselves with Apple. The notes serve as Eastman’s corroborating evidence of 5 the specific ideas he shared when he “disclosed the ticketing problem and his solution” to Apple 6 during the process of his 2006 IPA. TAC ¶ 98; see id. ¶ 375 (“[Eastman’s] notes represent a 7 crucial narrative to corroborate [Eastman’s] pre-employment Apple IPA in Exhibit 7.”). As the 8 Court explained in its prior order, it can reasonably infer that this is what Eastman alleges 9 occurred. ECF No. 39 at 5 n.3. 10 Finally, Apple argues that Eastman’s ideas are all described in the background and 11 summary sections of the ’014 patent, and therefore constitute prior art that cannot be an inventive 12 contribution as a matter of law. ECF No. 44 at 21-23. As noted above, the Federal Circuit in 13 Coda instructed that district courts should generally refrain from making this determination on a 14 motion to dismiss. CODA Dev. S.R.O., 916 F.3d at 1360 n.7 (noting that the district court erred 15 where it “relied on the [disputed] patent and [a] prior, published patent application to determine 16 that the alleged novel trade secrets were already in the prior art”). With this guidance in mind, the 17 Court concludes that Eastman’s claims have evolved to a level of factual detail sufficient to 18 preclude resolution of Apple’s argument. Previously, Eastman alleged only the bare terms of his 19 2006 IPA, with no explanation as to how those concepts connected to the ’014 patent’s specific 20 claims. ECF No. 39 at 7. Noting that the face of the patent indicated the existence of “prior art 21 mobile ticketing programs,” the Court found that more explanation from Eastman was needed to 22 plausibly infer that his alleged contributions were inventive. Id. Now that Eastman has provided 23 that explanation in great detail, TAC ¶¶ 374-429, the Court cannot undertake the fact-bound 24 analysis that Apple proposes. See CODA Dev. S.R.O., 916 F.3d at 1360 n.7. 25 Accordingly, the Court denies Apple’s motion to dismiss this claim. 26 C. 27 Because the Court concludes that Eastman has adequately stated a claim for correction of Defamation 28 10 1 inventorship, it turns to his defamation claims based on Apple’s failure to name him as a co- 2 inventor. United States District Court Northern District of California 3 Apple first contends that these claims are barred by the one-year statute of limitations 4 applicable to defamation claims. ECF No. 44 at 23-24; see also Cal. Code Civ. Proc. § 340(c). 5 Eastman does not dispute that his claims are facially untimely, but he seeks relief under various 6 equitable doctrines. ECF No. 46 at 13-15. Apple’s reply does not address Eastman’s equitable 7 estoppel or equitable tolling arguments. See Lantzy v. Centex Homes, 31 Cal. 4th 363, 383-84 8 (2003) (explaining the two doctrines). Further, Apple’s cursory argument that no delayed 9 discovery rule applies to Eastman’s defamation claims is not entirely convincing. Shively v. 10 Bozanich, Apple’s sole authority, reasoned that “[t]he discovery rule has not, however, been 11 applied to postpone the accrual of a cause of action based upon the publication of a defamatory 12 statement contained in a book or newspaper. . . . Plaintiff does not explain satisfactorily how the 13 equitable considerations that may apply to a defamation that is hidden from view might apply to a 14 defamation that is made public in a book.” 31 Cal. 4th 1230, 1250 (2003). Given the facial 15 distinctions between the publication of a patent or patent application and “a book that was 16 distributed to the general public,” id. at 1253, simply citing Shively does not foreclose Eastman’s 17 argument. 18 Apple alternatively argues that, even if Eastman’s claims are timely, the omission of his 19 name from a patent fails to state a claim for defamation as a matter of law because “[a] published 20 statement cannot be defamatory if it does not identify the plaintiff.” ECF No. 44 at 24. To be 21 more precise, for a claim based on an “alleged injurious falsehood of a statement,” such as libel, 22 “the plaintiff must effectively plead that the statement at issue either expressly mentions him or 23 refers to him by reasonable implication.” Blatty v. N.Y. Times Co., 42 Cal. 3d 1033, 1045-46 24 (1986). This “‘of and concerning’ or specific reference requirement limits the right of action for 25 injurious falsehood, granting it to those who are the direct object of criticism and denying it to 26 those who merely complain of nonspecific statements that they believe cause them some hurt.” Id. 27 at 1044. The rule applies to a “claim against a nonmedia defendant in a purely commercial 28 11 1 dispute” as well. Hartford Cas. Ins. Co. v. Swift Distrib., Inc., 59 Cal. 4th 277, 293 (2014). “In 2 California, whether statements can be reasonably interpreted as referring to plaintiffs is a question 3 of law for the court.” SDV/ACCI, Inc. v. AT & T Corp., 522 F.3d 955, 959 (9th Cir. 2008). United States District Court Northern District of California 4 Here, Eastman has not adequately alleged facts from which the Court can plausibly infer 5 that his omission from the patents refers to him by reasonable implication. While the listing of 6 inventors on a patent implies that no other person invented it, the group referred to by implication 7 is simply every other person. The California Supreme Court’s analysis in Blatty is instructive. 8 There, plaintiff alleged that his novel had been omitted from a list of New York Times bestsellers. 9 Blatty, 42 Cal. 3d at 1046. The Blatty court reasoned that the group referred to by implication was 10 everyone potentially eligible for the list, namely, all “books currently in print and their authors.” 11 Id. The court further explained that plaintiff therefore could not satisfy the specific reference 12 requirement because where that “group is large − in general, any group numbering over twenty- 13 five members − the courts in California and other states have consistently held that plaintiffs 14 cannot show that the statements were ‘of and concerning them.’” Id. The group referred to by 15 implication in Apple’s patents is even larger than in Blatty. 16 Without more, a reader of one of those patents would have no reason to perceive that the 17 alleged omission referred to Eastman in particular, as opposed to the undifferentiated morass of 18 other people not named. Eastman alleges that “[m]any people internally at Apple knew [he] was 19 the original and true inventor of Find my iPhone, but nobody else did; including the public or 20 ‘partner companies’ in the industry where [Eastman] might potentially work.” TAC ¶ 448. For 21 those who did not know that Eastman claimed to be the inventor of Find my iPhone, the Court 22 cannot plausibly infer that they would discern any reference to Eastman. See Fitbit, Inc. v. Laguna 23 2, LLC, No. 17-CV-00079-EMC, 2018 WL 306724, at *8 (N.D. Cal. Jan. 5, 2018) (“It is hard to 24 see how a party unidentified and unknown to the audience of the alleged defamation can claim it 25 was defamed and injured.”). Moreover, under Blatty, Eastman cannot satisfy the specific 26 reference requirement merely by alleging that he “suffered injury by loss of the benefits that 27 inclusion [on the patents] would have brought.” 42 Cal. 3d at 1037; see also TAC ¶ 447 (“If 28 12 1 plaintiff was properly joined on [the patent] applications, its further beyond doubt he likely would 2 have secured employment in his industry in four years’ time.”). In other words, it is not enough 3 that Eastman was prevented from asserting his inventorship status to others without fear of 4 contradiction. United States District Court Northern District of California 5 But it appears plausible to the Court that a person aware that Eastman claimed to have 6 invented these concepts could reasonably understand his omission from the patents to refer to him 7 by reasonable implication, namely, by contradicting his claims. Sharratt v. Hous. Innovations, 8 Inc., 310 N.E.2d 343 (Mass. 1974), the out-of-state authority on which Eastman relies, lends 9 support to this reasoning. ECF No. 46 at 13; TAC ¶¶ 445-447. In Sharratt, an architect’s 10 customer allegedly issued a brochure for a new building that correctly named another architect 11 working on the project but omitted the plaintiff. 310 N.E. 2d at 344-45. Although it did not 12 directly discuss the specific reference requirement, the court accepted plaintiffs’ allegation that 13 “[f]rom this statement it could be inferred that the individual plaintiff was not the architect nor had 14 the corporate plaintiff contracted to provide these architectural services, despite their 15 representations to the contrary to those with whom they had business dealings.” Id. at 142. Apple 16 does not address Sharratt. 17 The Court need not conclusively decide the issue, however, because under California law 18 “a defamatory statement that is ambiguous as to its target not only must be capable of being 19 understood to refer to the plaintiff, but also must be shown actually to have been so understood by 20 a third party.” SDV/ACCI, 522 F.3d at 960. There is no allegation that any third party in fact read 21 any, let alone all, of the patents and actually understood them as referring to Eastman. 22 The Court will therefore grant the motion to dismiss Eastman’s defamation claims. 23 Because this is the first time the Court has addressed the adequacy of the merits of these claims, it 24 will grant leave to amend. 25 26 27 CONCLUSION For the foregoing reasons, the Court DENIES the motion to dismiss Eastman’s inventorship claims. The Court GRANTS the motion and dismisses without prejudice Eastman’s 28 13 1 2 3 4 5 6 7 8 9 defamation claims. Eastman may file an amended complaint regarding his defamation claims only, not later than thirty days from the date of this order. The case management conference currently scheduled for August 21, 2019 is continued to November 12, 2019. Case management statements are due November 5, 2019. IT IS SO ORDERED. Dated: August 20, 2019 ______________________________________ JON S. TIGAR United States District Judge 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14
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