Alifax Holding Spa v. Alcor Scientific Inc.
1:14-cv-00440
D.R.I.Sep 29, 2015Background
- Plaintiffs Alifax Holding SpA and subsidiary Sire Analytical Systems Srl allege that former Sire employee Francesco Frappa joined Alcor Scientific, then misappropriated Plaintiffs’ trade secrets and helped Alcor develop competing ESR analyzers and file a patent.
- Plaintiffs assert three claims: patent infringement (Count One), misappropriation of trade secrets under the Rhode Island UTSA (Count Two), and breach of a confidential relationship (Count Three).
- Defendants moved to dismiss Counts Two and Three under Rule 12(b)(6) and to strike Plaintiffs’ request for a constructive trust in one of Alcor’s patents under Rule 12(f).
- Plaintiffs amended to add Sire as plaintiff to cure a real-party-in-interest concern.
- The Amended Complaint identifies two categories of alleged trade secrets: (1) information about the “Mecca” project and resulting CPS technology; and (2) use of ultrasound to disrupt/redistribute red blood cells.
- Court reviewed pleadings under Iqbal/Twombly standards; it denied the motion without prejudice on Counts Two and Three and on striking the constructive-trust remedy, finding factual issues and choice-of-law questions premature at pleading stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Choice of law for Count Three (breach of confidential relationship) | Italian law applies to Count Three; under Italian law the claim is cognizable | Rhode Island law should govern (because Count Two invokes RIUTSA), and under RI law Count Three is preempted or fails | Court refused to decide choice-of-law on Rule 12(b)(6) motion. Denied dismissal of Count Three as premature; depecage permits issue-specific choice-of-law analysis to be developed later. |
| 2. Whether Count Three fails because alleged conduct occurred after Frappa left Sire | Plaintiffs argue facts permit inference of confidential relationship/duty despite post-employment conduct | Defendants say claim rests on post-employment conduct and thus cannot ground breach of confidential relationship | Court declined to dismiss Count Three now because choice-of-law unresolved and facts do not clearly favor Defendants at pleading stage. |
| 3. Sufficiency of Count Two (trade secrets and misappropriation under RIUTSA) | Plaintiffs identify specific trade-secret categories, allege secrecy measures, fiduciary duty, rapid use by Alcor and timing supporting inference of misappropriation | Defendants argue secrets were public via later patent, marking alone insufficient to show reasonable secrecy efforts, no specific improper means or knowledge by Alcor | Court held pleading adequate: alleged secrecy, marking, fiduciary duty, short turnaround and subsequent Alcor product/patent permit reasonable inference of misappropriation; dismissal denied. |
| 4. Request to strike constructive trust in Alcor’s patent | Plaintiffs seek constructive trust in patent as equitable remedy for unjust enrichment arising from alleged misuse of confidential information | Defendants argue no authority justifies imposing a constructive trust in a patent here; motion to strike warranted | Court denied motion to strike without prejudice, citing analogous authority (Bausch & Lomb) and concluding the issue is better addressed on a developed record. |
Key Cases Cited
- Putnam Res. v. Pateman, 958 F.2d 448 (1st Cir. 1991) (endorsing depecage and issue-specific choice-of-law)
- La Plante v. Am. Honda Motor Co., 27 F.3d 731 (1st Cir. 1994) (choice-of-law and tort conflict principles)
- Oyola v. Burgos, 864 A.2d 624 (R.I. 2005) (conflict-of-laws questions are issue-specific)
- Harodite Indus., Inc. v. Warren Elec. Corp., 24 A.3d 514 (R.I. 2011) (Rhode Island interest-weighing factors and tort-specific contacts)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard: plausible entitlement to relief)
- T.G. Plastics Trading Co. v. Toray Plastics (Am.), Inc., 958 F. Supp. 2d 315 (D.R.I. 2013) (elements of fiduciary/confidential relationships under RI law)
- Astro-Med, Inc. v. Nihon Kohden Am., Inc., 591 F.3d 1 (1st Cir. 2009) (inference that competitor hiring a valued employee may use inside information)
- Bausch & Lomb, Inc. v. Alcon Labs., Inc., 64 F. Supp. 2d 233 (W.D.N.Y. 1999) (denying summary judgment on constructive-trust claim based on alleged use of former employer’s confidential information)
- Connor v. Schlemmer, 996 A.2d 98 (R.I. 2010) (elements and purpose of constructive trust under Rhode Island law)