Ultratech, Inc. v. Ensure NanoTech (Beijing), Inc.
108 F. Supp. 3d 816
N.D. Cal.2015Background
- Ultratech acquired Cambridge NanoTech (seller) in 2012 and owns U.S. Patent No. 8,202,575 covering ALD technology. Cambridge had earlier contracted with Start Science (Beijing) under a 2008 sales-agency agreement that included a forum-selection clause and a successors/inures clause.
- Dongjun Wang, a Chinese citizen, signed the sales-agency agreement as president of Start Science and received Cambridge NanoTech’s confidential marketing, design, and software materials.
- While Start Science was agent, Wang formed Ensure NanoTech entities (China and Ohio) that competed with Cambridge/Ultratech; some Ensure manuals contained Cambridge metadata and authorship information.
- Ultratech sued Wang and Ensure entities for patent infringement, trade secret misappropriation, unfair competition, copyright infringement, and breach of the sales-agency agreement; Wang moved to dismiss for lack of personal jurisdiction and for failure to state claims against him personally.
- The district court held (1) Ultratech, as successor-in-interest, may enforce the forum-selection clause in the sales-agency agreement; (2) the clause can bind Wang individually (a signatory officer/nonparty) for claims tied to the agreement; and (3) Ultratech’s complaints state plausible claims against Wang personally (patent direct/indirect, trade secret, unfair competition, breach, copyright).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction via forum-selection clause | Clause in agency agreement inures to Ultratech as successor and binds Wang individually | Clause fixed venue to Cambridge’s HQ at execution; Wang not personally bound and lacks forum contacts | Clause inures to Ultratech; binds Wang for claims related to the agreement; pendent jurisdiction covers related claims; 12(b)(2) denied |
| Applicability of forum clause to an officer/nonparty | Wang signed the agreement as Start Science president and subverted it, so clause binds him | Non-party/officer not bound unless agreed to be personally bound or is alter ego | Court applies Manetti-Farrow line: nonparty officer/signatory can be bound where claims relate to contractual relationship; clause applied |
| Patent infringement (direct, induced, contributory) | Complaints allege making/selling of infringing devices and Wang’s active participation and knowledge/willful blindness | Wang says alleged acts were corporate (employment) acts, shielding him; asserts lack of knowledge pleaded | Direct claim meets Form 18; allegations support active assistance/participation and knowledge/willful blindness — induced/contributory claims survive 12(b)(6) |
| Breach of contract / alter ego | Wang negotiated/signed agreement, controlled Start Science, used confidential materials — alter ego and personal breach plausible | Officer not personally liable on corporate contract unless he bound himself or is alter ego | Court finds sufficient alter-ego allegations (unity of interest; inequitable result) to state breach against Wang |
Key Cases Cited
- Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509 (9th Cir.) (forum-selection clauses can bind nonparty transaction participants, including officers)
- Action Embroidery Corp. v. Atlantic Embroidery, Inc., 368 F.3d 1174 (9th Cir.) (pendent personal jurisdiction doctrine — common nucleus of operative facts)
- Holland America Line Inc. v. Wartsila North America, Inc., 485 F.3d 450 (9th Cir.) (application of forum clauses to related non-signatory entities)
- TAAG Linhas Aereas de Angola v. Transamerica Airlines, Inc., 915 F.2d 1351 (9th Cir.) (citing Manetti-Farrow affirming reach of forum clauses)
- Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (U.S.) (knowledge standard for induced patent infringement)
- Wordtech Systems, Inc. v. Integrated Networks Solutions, Inc., 609 F.3d 1308 (Fed. Cir.) (officer liability for inducement/contributory patent infringement where personally involved)
- In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323 (Fed. Cir.) (Form 18 suffices for a direct patent-infringement pleading)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S.) (plausibility standard for Rule 12(b)(6))
- Vasquez v. Trojan Metals, 176 F.3d 486 (9th Cir.) (officers not personally liable on contracts signed for corporation absent personal undertaking)
- Automotriz Del Golfo de California S.A. de C.V. v. Resnick, 47 Cal.2d 792 (Cal.) (alter ego test: unity of interest and inequitable result)
- CytoDyn of N.M., Inc. v. Amerimmune Pharm., Inc., 160 Cal.App.4th 288 (Cal. App.) (elements of trade secret misappropriation under CUTSA)