AngioScore, Inc. v. TriReme Med., LLC

70 F.Supp.3d 951

AngioScore, Inc., Plaintiff

v.TriReme Medical, LLC, et al., Defendants.

Case No.: 12–CV–3393 YGR

United States District Court, N.D. California.

Signed September 9, 2014

Robert P. Feldman, Diane M. Doolittle, Kimball Dean Parker, Quinn, Emanuel, Urquhart & Sullivan, LLP, Redwood Shores, CA, Allan William Jansen, Charles August Kertell, Ehab Monsef Samuel, Dickstein Shapiro LLP, Irvine, CA, Andre De La Cruz, James W. Geriak, Steven Mark Hanle, Sheppard, Mullin, Richter & Hampton, LLP, Costa Mesa, CA, Mark Farber, Farber LLC, Shelton, CT, Peter J. Armenio, Quinn, Emanuel, Urquahart & Sullivan, LLP, New York, NY, Rebecca Ann Bers, Quinn Emanuel, San Francisco, CA, for Plaintiff.

Dylan James Liddiard, Brian Danitz, Daniel Wagner Turbow, Edmundo Clay Marquez, Thomas James Martin, Wilson, Sonsini, Goodrich & Rosati, Palo Alto, CA, Brandon D. Baum, David Adam Caine, Agility IP Law, LLP, Menlo Park, CA, Charlene Koski, Wilson, Sonsini, Goodrich, Rosati, Seattle, WA, John Stuart Claassen, Claassen, Professional Corporation, Oakland, CA, Joseph Robert Re, Joshua Jan Stowell, Sheila Neha Swaroop, William Gerard Von Hoffmann, III, Knobbe, Martens, Olson & Bear, LLP, Irvine, CA, for Defendants.

Order Granting in Part and Denying in Part Defendants' Motion to Dismiss Certain Claims in Plaintiff's Fourth Amended Complaint

YVONNE GONZALEZ ROGERS, UNITED STATES DISTRICT COURT JUDGE

I. INTRODUCTION

Now before the Court is defendants' motion to dismiss certain claims in the Fourth Amended Complaint (Dkt. No. 244 (“4AC”) of plaintiff AngioScore, Inc. (“AngioScore”) pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. No. 262 (“Motion”).) The Motion is fully briefed. (Dkt. Nos. 264 (“Opp'n”), 279 (“Reply”).) Pursuant to Civil Local Rule 7–1(b), the Court deems the Motion suitable for decision without oral argument and therefore has vacated the hearing set for September 9, 2014. (Dkt. No. 287.) As set forth below, the Motion is Granted in Part and Denied in Part.

II. BACKGROUND

AngioScore is a corporation organized under Delaware law with its corporate headquarters and principal place of business in Fremont, California. (¶ 2.)¹ AngioScore is a maker of balloon angioplasty devices whose principal product is called AngioSculpt. (¶ 46.) AngioScore's 4AC names as defendants one natural person and three business entities: (1) Dr. Eitan Konstantino; (2) TriReme Medical, LLC (f/k/a TriReme Medical, Inc.) (“TriReme”); (3) Quattro Vascular Pte Ltd. (f/k/a Proteus Vascular Systems) (“Quattro”); and (4) QT Vascular Ltd. (f/k/a QT Vascular Pte. Ltd.) (“QT”). TriReme allegedly is a Delaware limited liability company with its principal place of business in California, while Quattro and QT allegedly are Singaporean corporations. (¶¶ 3–4, 7.) QT allegedly is the parent company of both TriReme and Quattro and operates in the United States through at least one business location in Pleasanton, California. (See ¶¶ 8, 36.) QT allegedly was formed by the merger of TriReme and Quattro, announced via press release in July 2013, and is the sole member of the TriReme LLC. (¶ 36.) As alleged in the 4AC, Konstantino is the founder of TriReme, Quattro, and QT, and the principal decision maker with regard to what products they have sold or will sell. (¶¶ 6, 9.) TriReme, Quattro, and QT sell an angioplasty balloon catheter sold under the name “Chocolate,” which competes directly with AngioSculpt. (¶¶ 22, 30.)

Konstantino and AngioScore share a history which goes beyond that of mere competitors, however. Before he founded TriReme, Quattro, or QT, Konstantino “was a founder of AngioScore in about March of 2003 and served as its first president, a position he held until about November 10, 2005 when he became Executive Vice President and Chief Scientific Officer of AngioScore.” (¶ 16.) Konstantino stepped down from his position as an executive officer of AngioScore on October 17, 2006, and scaled back his employment to part-time. (¶ 17.) About six months later, on March 31, 2007, Konstantino finally terminated his employment with AngioScore. (¶ 17.) However, Konstantino remained on AngioScore's board until February 5, 2010. (¶ 18.)

As alleged in the 4AC, Konstantino's work with AngioScore was not his only activity in the angioplasty device business. In “about mid–2005,” during his affiliation with AngioScore, Konstantino founded TriReme. (¶ 20.) Konstantino offered AngioScore the opportunity to participate in the TriReme business opportunity. (Id. ) AngioScore, however, declined: TriReme was represented as intending to pursue a line of business AngioScore did not wish to enter, namely, the commercialization of “endovascular bifurcation stents and delivery systems for bifurcation stents.” (See id. ) AngioScore's board “authorized Konstantino to pursue the [TriReme] business opportunity on a restricted basis with respect to developing proprietary information for ‘bifurcation applications.’ ” (Id. )

AngioScore alleges that no later than October 2009, Konstantino, notwithstanding the limited scope of his permission from AngioScore's board to develop only “bifurcation applications” with TriReme, “secretly conceived of and began development of the Chocolate device,” which “competed directly with AngioScore's primary product” and “is not an endovascular bifurcation stent.” (¶¶ 22, 30.) By January 2010 Konstantino and his co-inventor, Tanhum Feld, had made substantial progress toward bringing Chocolate to market, having designed and produced prototypes, engaged in animal testing, and created a business model and begun obtaining financing. (¶¶ 23–26.) AngioScore alleges that Konstantino never disclosed either the creation of the Quattro company or the Chocolate device, and that Konstantino in fact actively concealed their existence by directly denying, on three different, specifically alleged occasions, having developed any products that competed with those of AngioScore. (¶ 27.)

In January 2011, Quattro announced that it had received clearance from European regulatory bodies to bring Chocolate to market in Europe. (¶ 33.) In December 2011, TriReme received clearance as to the United States from the U.S. Food and Drug Administration. (¶ 34.) No later than 2012, TriReme and Quattro had begun selling the Chocolate device. (See ¶ 45.)

On June 29, 2012, AngioScore filed the instant lawsuit, asserting a single claim of patent infringement against Konstantino, TriReme, and Quattro. (Dkt. No. 1.) Substantial litigation in the patent case followed. A new wrinkle developed, however, when, on July 11, 2013, a press release announced that Quattro and TriReme had merged to form QT. (¶ 36.) Also around this time, original defendant TriReme Medical, Inc. became current defendant TriReme Medical, LLC. (Id. ) On November 13, 2013, the Court entered an order which, among other things, permitted AngioScore to file a Supplemental and Second Amended Complaint naming the newly formed QT as a defendant and reflecting TriReme's reorganization as an LLC. (Dkt. No. 121; see also Dkt. No. 118 (Supplemental and Second Amended Complaint).)

On December 9, 2013, TriReme and Konstantino filed a narrowly tailored motion for summary judgment of non-infringement. (Dkt. No. 131.) During the pendency of that motion, discovery continued. Further, and of note, on April 28, 2014, QT “closed an initial public offering of its stock in Singapore generating gross proceeds in the amount of $(US)44,000,000.00.” (¶ 45.)

On May 6, 2014, AngioScore sought leave to file a Third Amended Complaint which, for the first time, asserted state-law business-tort claims against defendants. (Dkt. No. 202.) On June 25, 2014, the Court issued orders granting in part and denying in part defendants' summary judgment motion (Dkt. No. 218) and granting in part and denying in part AngioScore's motion for leave to file its Third Amended Complaint (Dkt. No. 219). In sum, AngioScore's patent infringement claim survived, though certain arguments were closed off to it, and AngioScore was permitted to assert all but one of its proposed state-law business-tort claims.

On July 7, 2014, defendants moved to dismiss certain of AngioScore's business-tort claims pursuant to Rule 12(b)(6). (Dkt. No. 230.) On July 15, 2014, AngioScore amended its complaint as of right pursuant to Rule 15, filing the operative 4AC. The Court denied the pending motion to dismiss as moot. (Dkt. No. 253.) The 4AC names Konstantino, TriReme, Quattro, and QT as defendants, and asserts the following claims: (1) patent infringement, against all defendants; (2) breach of fiduciary duty under California law, against Konstantino; (3) breach of fiduciary duty under Delaware law, against Konstantino; (4) aiding and abetting a breach of fiduciary duty, against TriReme, Quattro, and QT; and (5) violation of California's Unfair Competition Law, California Business and Professions Code Section 17200 et seq. (“UCL”), against all defendants.

On July 31, 2014, defendants filed the motion now at bar, which seeks dismissal only of the 4AC's aiding and abetting and UCL claims.

III. LEGAL STANDARD

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the claims for relief alleged in the complaint. Ileto v. Glock, Inc., 349 F.3d 1191, 1199–1200 (9th Cir.2003). Either “the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory” will justify dismissal. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.1990). As to the sufficiency of facts, the Court must regard all allegations of material fact as true and construe them in the light most favorable to the plaintiff. Johnson v. Lucent Techs., Inc., 653 F.3d 1000, 1010 (9th Cir.2011). Thus construed, the facts must “ ‘state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). So long as the...