SalesBrain, Inc. v. AngelVision Techs.

SALESBRAIN, INC., et al., Plaintiffs

v.ANGELVISION TECHNOLOGIES, et al., Defendants.

No. C 12-05026 LB

UNITED STATES DISTRICT COURT Northern District of California San Francisco Division

Dated: March 21, 2013

ORDER (1) DISMISSING MR. MORIN

AND MR. RENVOISE AS

PLAINTIFFS, (2) GRANTING MR.

OTIS'S MOTION TO DISMISS, AND

(3) GRANTING ANGELVISION'S

MOTION TO DISMISS

[Re: ECF No. 16, 19]

INTRODUCTION

Salesbrain, LLC ("SalesBrain"), Patrick Renvoise, and Christophe Morin (collectively, "Plaintiffs") sued AngelVision Technologies, Inc. ("AngelVision") and Jeff Otis for claims arising out of a prior business relationship between Salesbrain and AngelVision and actions taken after that relationship ended. See First Amended Complaint ("FAC"), ECF No. 10.¹ Two motions to dismiss have been filed. First, AngelVision moves to dismiss Plaintiffs' third, fourth, and fifth claims for failure to state claims upon which relief can be granted and to dismiss Mr. Renvoise and Mr. Morin for lack of standing. Second, Mr. Otis moves to dismiss Plaintiffs' first and second claims for lack of personal jurisdiction and for failure to state claims upon which relief may be granted. Otis Motion, ECF No. 19. For the reasons stated below, the court DISMISSES Mr. Morin and Mr.Renvoise as plaintiffs to this action, GRANTS Mr. Otis's motion to dismiss for lack of personal jurisdiction, and GRANTS AngelVision's motion to dismiss for failure to state a claim upon which relief may be granted.²

STATEMENT

According to Plaintiffs' First Amended Complaint, since at least 2002, SalesBrain "has been engaged in the business of providing sales and marketing training and creative marketing materials for others." First Amended Complaint ("FAC"), ECF No. 10 ¶ 9. Its "seminars and marketing materials are based on four neuromarketing principles uniquely developed by [it]: 'Diagnose the pain, Differentiate your claims, Demonstrate the gain, and Deliver to the Old Brain." Id. Mr. Renvoise and Mr. Morin authored materials—"Selling IQ: Methodology, Processes, Models, Metrix and Templates"—and a book—Selling to the Old Brain—that included the four principles. Id. ¶ 10-11. Mr. Renvoise and Mr. Morin registered these materials and this book (the "Copyrighted Works") with the U.S. Copyright Office in 2002 and 2003, respectively. Id. Mr. Renvoise and Mr. Morin assigned the Copyrighted Works to SalesBrain in 2003 and 2007, respectively, and thus "SalesBrain is the owner of all rights in the [Copyrighted] Works." Id. ¶¶ 10-12, 27.

Since at least 2005, SalesBrain has provided select partners with a license "to use its model in sales training and the creation of marketing for others in exchange for a percentage of the business gained through use of the" Copyrighted Works. Id. ¶ 13. Thus, "in or about 2008, SalesBrain entered into a confidentiality and non-disclosure agreement ('NDA') with AngelVision for the purpose of purs[u]ing a business agreement," whereby "SalesBrain disclosed to AngelVision its proprietary neuromarketing principles and how to use them in sales and in the creation of marketing materials for others." Id. ¶¶ 14-15; see Otis Declaration, Exh. A (executed NDA), ECF No. 18-1.³ Paragraph 2 of the NDA, titled "Proprietary Information," provides in full:

As used in this Agreement, the term "Proprietary Information" shall mean all trade secrets and confidential or proprietary information (of whatever type and for whatever purpose, including but not limited to business and technical information, customer information, financial information, and software code) of the Disclosing Party designated as such by the Disclosing Party, whether by letter, the use of an appropriate stamp or legend, or orally that the Disclosing Party discloses to the Recipient, and all such information that the Disclosing Party discloses to the Recipient which the Recipient reasonably should expect to be or contain such trade secret and confidential or proprietary information of the Disclosing Party. The term "Proprietary Information" shall also include the nature and existence of the discussions and negotiations between Company and SALESBRAIN contemplated by this Agreement, as well as all memoranda, notes, reports, documents, and other media containing Proprietary Information, as well as any copies and extracts of Proprietary Information and any studies and data containing Proprietary Information prepared by or for the benefit of the Recipient.

Otis Declaration, Exh. A, ECF No. 18-1 at 2. Paragraph 3 of the NDA, title "Treatment of Proprietary Information," provides in relevant part:

The Recipient shall hold in strict confidence, and shall not disclose to any person either inside or outside of its organization (if the Recipient is an organization and except as otherwise provided for in this Agreement) any Proprietary Information. The Recipient shall use such Proprietary Information only for the purposes contemplated by this Agreement and shall not use or exploit such Proprietary Information, either directly or indirectly, for its own benefit, for the benefit of another, or to compete with the Disclosing Party without the prior written consent of the Disclosing Party. . . . The foregoing shall not apply to Proprietary Information which is (a) in the public domain through no fault of the receiving party, (b) rightfully known to the receiving partywithout any limitation on use or disclosure prior to its receipt from the disclosing party, (c) independently developed by the receiving party. . . .

Id. And Paragraph 6(e) of the NDA provides: "The confidentiality, non-use, and non-disclosure obligations set forth in this Agreement shall survive with respect to each item of the Proprietary Information for two years from the date of this Agreement." Id. at 3. The NDA was signed by AngelVision's representative (not Mr. Otis) on March 24, 2008, and it signed by Mr. Renvoise on behalf of SalesBrain on April 8, 2008. Id.

Sales Brain alleges that, "[i]n or about 2011/2012, through the receipt of a direct solicitation from AngelVision, SalesBrain became aware of AngelVision's use of its four neuromarketing principles." FAC, ECF No. 10 ¶ 17. "Upon information and belief," SalesBrain alleges that AngelVision, "an Oregon corporation with its principal place of business located in" Oregon that "sells its services and products in interstate commerce," "uses," without SalesBrain's permission, "SalesBrain's [Copyrighted] Works, or portions thereof, at least in its marketing video to solicit customers, including, but not limited to, its webinars [titled] 'Coffee with AngelVision.'" Id. ¶¶ 7, 18-19, 24; see id., Exh. C. In support of this allegation, SalesBrain attached to its First Amended Complaint screenshots of AngelVision's "Coffee with AngelVision" webinar that contain SalesBrain's four neuromarketing principals. See id., Exh. C. Below the four marketing principals the following is stated: "Source: SalesBrain." See id.

SalesBrain also alleges that, "[u]pon information and belief, AngelVision's copying of SalesBrain's [Copyrighted] Works was performed by, at the direction of, or under the supervision of," AngelVision's president, Mr. Otis. Id. ¶ 20. SalesBrain also alleges, "[o]n information and belief," that Mr. Otis "is an officer and principal shareholder of AngelVision." Id. ¶ 8. SalesBrain further alleges that Mr. Otis resides in Portland, Oregon and "has the right to and ability to supervise AngelVision's copying of SalesBrain's [Copyrighted] Works" and has a "financial interest in AngelVision's infringing activity" and in "the exploitation of SalesBrain's [Copyrighted] Works." Id. ¶¶ 8, 31-33.

In addition, SalesBrain also alleges that since at least 2003 it has used its neuromarketing principles—"Diagnose the pain, Differentiate your claims, Demonstrate the gain, and Deliver to theOld Brain"—"or a variation thereof," as a tag line "in connection with its marking and consulting services." Id. ¶ 21. SalesBrain alleges that it "has expended a great amount of time, effort and money in connection with the promotion and advertisement of its goods and services which are sold or offered for sale in relation to the tag line and that the tag line "has become an asset of substantial value as a symbol of SalesBrain, its quality products and its [goodwill]." Id. ¶ 22. SalesBrain further alleges that prior to AngelVision's alleged use of the tag line, "SalesBrain has continuously, extensively and widely promoted, advertised and/or sold its services" using the tag line "in various states and foreign countries and has widely used" the tag line "to identify its goods and distinguish them from the goods of others." Id. ¶ 23. Finally, SalesBrain alleges that AngelVision, "with at least constructive notice" of SalesBrain's rights with respect to the tag line, "adopted and used" the tag line in preparing sales and marketing materials to others, and that this use "is likely to cause confusion, mistake, or to deceive as to origin, affiliation, connection, sponsorship, or association of AngelVision with SalesBrain, or as to the origin, sponsorship, or approval of AngelVision's use of" the tagline by SalesBrain. Id. ¶¶ 24, 45.

Based on these allegations, Plaintiffs filed the instant action against Defendants. See Original Complaint, ECF No. 1. In their First Amended Complaint, which they filed as a matter of right, Plaintiffs assert the following five claims: (1) copyright infringement (against both AngelVision and Mr. Otis); (2) vicarious liability for copyright infringement (against Mr. Otis only); (3) breach of contract (against AngelVision only); (4) breach of the implied covenant of good faith and fair dealing (against AngelVision only); and trademark infringement under the Lanham Act, 15 U.S.C. § 1125(a) (against AngelVision only). See id. ¶¶ 26-47. SalesBrain alleges that Mr. Otis "acted in concert [with AngelVision] and directly participated in the acts complained of [in the First Amended Complaint] and is jointly and severally...