869 F. Supp. 2d 1176
S.D. Cal.2012Background
- SkinMedica acquired ATS assets related to NouriCel, including related IP and patents, via an Asset Purchase Agreement after ATS’s bankruptcy.
- Histogen, co-founded by former ATS executive Gail Naughton, pursued hair-growth and conditioned-medium research that overlapped with SkinMedica’s NouriCel technology.
- SkinMedica filed suit alleging misappropriation of trade secrets, breach of contract, constructive trust, and unfair competition; Histogen counterclaimed for noninfringement and unfair competition.
- The court previously granted Histogen partial summary judgment of noninfringement on the ’494 and ’746 patents; remaining claims include trade secrets, breach of contract, and unfair competition.
- Cross-motions for summary judgment were filed: SkinMedica sought SJ on Histogen’s UCL damages and Histogen’s common-law unfair competition; Histogen sought SJ on SkinMedica’s trade-secret claims and related relief.
- The court’s ruling: partial SJ for SkinMedica on Histogen’s UCL damages (nonrestitutionary disgorgement) denied; Histogen’s common-law unfair competition claim survives; SJ on SkinMedica’s remaining UCL issues denied; Histogen’s SJ on SkinMedica’s trade secrets denied; final judgment and attorney-fee requests addressed later.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can UCL damages be awarded as nonrestitutionary disgorgement? | Histogen argues damages are recoverable as lost value under 17200. | SkinMedica contends only restitution is available under UCL. | UCL damages limited to restitution; nonrestitutionary disgorgement not available. |
| Does Histogen’s common law unfair competition survive with/without 'passing off' elements? | Histogen asserts common-law unfair competition includes more than passing off. | SkinMedica contends it is limited to passing off or analogous conduct. | Histogen’s common-law unfair competition claim survives; SkinMedica’s motion on this theory denied. |
| Are SkinMedica’s trade-secret claims entitled to summary judgment on ownership, protectability, and misappropriation? | SkinMedica asserts ownership via APA and that trade secrets were misappropriated. | Histogen challenges ownership scope, secrecy, and value of trade secrets, and argues lack of misappropriation. | Issues of ownership, secrecy, and misappropriation genuine; summary judgment denied. |
| Is SkinMedica’s breach-of-contract claim time-barred by statute of limitations? | SkinMedica argues discovery rule tolled limitations due to secrecy; earliest disclosure occurred with patent filings. | Histogen contends timely discovery rules do not save the claim. | Genuine issue of material fact exists; breach-of-contract claim survives summary judgment. |
Key Cases Cited
- Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134 (Cal. 2003) (UCL restitution vs disgorgement framework)
- Bank of the West v. Superior Court, 2 Cal.4th 1254 (Cal. 1992) (common law unfair competition scope; passing off)
- Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137 (9th Cir. 2008) (limits common-law unfair competition to passing off or analogous acts)
- Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163 (Cal. 1999) (unfair competition scope; deceptive conduct at heart)