Florey Institute of Neuroscience & Mental Health v. Kleiner Perkins Caufield & Byers
31 F. Supp. 3d 1034
N.D. Cal.2014Background
- Plaintiff Florey Institute sued multiple defendants in a motion-to-dismiss posture.
- Two sets of defendants—Original Defendants and New Defendants—are addressed; Wiggans filed separate MTDs.
- The FAC describes a 1982 collaboration/licensing with Genentech, CNCT, Corthera, and later Novartis through a merger and asset transfers.
- The 1998 Agreement and 2003 Amendment set royalty structures; Corthera's merger and assignment alleged to affect Plaintiff's rights.
- Plaintiff asserts four claims: conversion of IP, conversion of proceeds, misappropriation, and unjust enrichment; Defendants challenge under Rule 8 and IP law preemption.
- The Court grants the motions to dismiss with prejudice, finds issues with assignment theories, and discusses parol evidence and equitable relief limits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Rule 8 sufficiency for New Defendants and Wiggans | Plaintiff asserts roles of New Defendants and Wiggans justify liability | Defendants contend claims lack specificity under Rule 8 | Dismissed with prejudice for New Defendants and Wiggans |
| Conversion of intellectual property ownership | Plaintiff alleges assignment by implication from Corthera to Novartis | Assignment by merger/transfer not supported; no valid assignment | Dismissed with prejudice; assignment theory rejected |
| Conversion of proceeds owed | Promises to preserve payment percentages create a lien-like right | No identifiable sum; parol evidence and integration bar claims | Dismissed with prejudice; no equitable lien or money had and received viable |
| Parol evidence rule applicability | Promises outside the written agreements should be admissible | Contracts are integrated; extrinsic promises collide with terms | Parol evidence barred; promises cannot modify integrated agreements |
| Unjust enrichment claim viability | Equitable relief should be available for misappropriation of payments | Claims arise from contracts; equity not warranted against parties to the agreements | Dismissed with prejudice; no unjust enrichment here |
Key Cases Cited
- Weiss v. Marcus, 51 Cal.App.3d 590 (Cal.Ct.App.1975) (ownership/right to possession suffices for conversion)
- PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP, 150 Cal.App.4th 384 (Cal.Ct.App.2007) (money can be subject to conversion only if a specific sum is involved)
- Zerin v. Farmers Ins. Exch., 53 Cal.App.4th 445 (Cal.Ct.App.1997) (equitable liens may arise from contract; consideration of detriment/uncertainty)
- McKesson HBOC, Inc. v. N.Y. State Common Ret. Fund, Inc., 339 F.3d 1087 (9th Cir.2003) (unjust enrichment and equity against non-contracting parties)
- Lectrodryer v. Seoulbank, 77 Cal.App.4th 723 (Cal.Ct.App.2000) (unjust enrichment when funds designated for plaintiff were diverted)
- Seitz v. Brewers’ Refrigerating Machine Co., 141 U.S. 510 (U.S.1904) (parol evidence when contract integrated; extrinsic promises barred)
- Paracor Fin., Inc. v. Gen. Elec. Capital Corp., 96 F.3d 1151 (9th Cir.1996) (unjust enrichment vs. contract terms; equity limits)
- Thomson v. Canyon, 198 Cal.App.4th 594 (Cal.Ct.App.2011) (parol evidence rule applicability in contract interpretation)