127 F. Supp. 3d 1071
N.D. Cal.2015Background
- MPS sues Silergy and Chen for breach of a nondisclosure provision from a settlement resolving prior litigation; the provision bars use or disclosure of documents containing MPS confidential information.
- MPS alleges Silergy and Chen used information from stolen MPS documents in Silergy’s flip chip package products.
- Silergy and Chen move to dismiss the breach claim citing release language that allegedly covers actions before the effective date; they argue continued use may be released.
- Court declines to dismiss the breach claim, noting ambiguity may exist but denial is appropriate where contract terms are unclear.
- Willful infringement claims are brought against Silergy for three patents; the court grants dismissal of willful-infringement claims with leave to amend for some patents and defers others.
- MPS seeks pre-suit knowledge allegations; the court concludes Silergy had pre-suit knowledge only for the '048 patent, not for the '758 or '899 patents.
- The court discusses post-suit willfulness standards, rejecting a per se rule tied to seeking a preliminary injunction and adopting a flexible pleading standard.
- Induced and contributory infringement claims are treated; the court denies induced/contributory infringement for the '048 patent but grants in part for pre-suit periods on the '758 and '899 patents, and denies post-suit theory for those as to knowledge.
- MPS seeks service on Chen; the court finds service through Michael Grimm appropriate under Rule 4(f)(3) and allows it.
- Motion to stay is denied without prejudice to refile if PTAB institutes inter partes review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of NDA viability | MPS argues continued use of stolen documents violates NDA. | Silergy/Chen contend release covers pre-effective-date actions. | Breach claim not dismissed (ambiguity persists) |
| Willful infringement viability for patents | MPS contends post-suit willfulness supported by knowledge. | Silergy argues lack of pre-suit knowledge for two patents and insufficient willfulness. | Willful infringement claim dismissed for all patents; limited leave to amend |
| Pre-suit knowledge sufficiency | Chen knew about the patents via MPS pipeline. | Knowledge presumed only for certain patents given timing. | Pre-suit knowledge found for the '048 patent only |
| Post-filing willfulness pleading standard | Plaintiff may plead post-filing willfulness without injunction. | Seagate rule requiring injunction to sustain post-suit willfulness claims. | A plaintiff may plead post-filing willfulness with specific facts; injunction timing addressed later |
| Induced/contributory infringement evidence | MPS alleges knowledge and ongoing acts | Requires pre-suit knowledge for induced/contributory claims | Denied for pre-suit on '758/'899; denied post-suit for '758/'899; denied for '048 |
| Service on Chen | Service attempted via Chen's agent at mediation | Service proper under Rule 4(f)(3) via Michael Grimm |
Key Cases Cited
- Westlands Water Dist. v. U.S. Dep’t of Interior, 850 F.Supp. 1388 (E.D.Cal.1994) (ambiguous contract interpretation precludes dismissal)
- Consul Ltd. v. Solide Enters., Inc., 802 F.2d 1143 (9th Cir.1986) (ambiguous contract language not resolvable on motion to dismiss)
- Hervey v. Mercury Cas. Co., 185 Cal.App.4th 954 (Cal. Ct. App. 2010) (California case on evidence of ambiguity and contract interpretation)
- Seagate, 497 F.3d 1360 (Fed.Cir.2007) (discussion of willfulness and injunction relevance; dictum cited regarding post-suit conduct)
- i4i Ltd. P’Ship v. Microsoft Corp., 598 F.3d 831 (Fed.Cir.2010) (willful infringement standard; objective high risk and knowledge)
- Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011) (knowledge and inducement for infringement; standard for induced infringement)
- Westlands Water Dist. v. U.S. Dep’t of Interior, 850 F.Supp. 1388 (E.D.Cal.1994) (contract ambiguity and enforceability in presence of settlement terms)