the Development Contract provides that "Crystal [Dynamics] will make, in its sole discretion, all decisions concerning the production, distribution, and marketing of the Work." Likewise, the November 1996 Amendments discharged Crystal Dynamics from any and all claims, actions, or causes of action which the Developer might have ... based upon the claim or contention that Crystal was not authorized under the [Kain Development] Agreement or otherwise to enter the arrangement with Activision." Moving, p. 6.
Relying solely upon the rest of the claims in the complaint, Plaintiff asserts that "the Complaint does contain an abundance of factual detail regarding the conduct of the Individual Defendants, and any assertion that the Complaint does not allege any "wrongful" or "unlawful" conduct within the meaning of Cal.Bus.& Prof. Code § 17200 is patently defeated by any reading of the Complaint." (Opposition, p. 10.)
A plaintiff alleging unfair business practices under the unfair competition statutes "must state with reasonable particularity the facts supporting the statutory elements of the violation." Khoury v. Maly's of California, 14 Cal. App. 4th 612, 619, 17 Cal. Rptr. 2d 708, 712 (1993). Since most of Plaintiff's causes of action fail to state claims for relief against Individual Defendants, there is no underlying basis for the unfair competition claims as alleged against these Defendants. Moreover, allegations based upon misappropriation of trade secrets fail to identify the "fraudulent circumstances under which these trade secrets where disclosed" or how Crystal Dynamics' possession or use of source code, game engines and "other source materials" is wrongful when the Development Agreement grants to Crystal Dynamics all rights in the ownership and derivative works.
Therefore, Defendants' motion to dismiss the Third and Fourth Claims for Unfair Competition is GRANTED with leave to amend.
For the reasons set forth above, Individual Defendants' motion to dismiss Plaintiffs' complaint is GRANTED IN PART AND DENIED IN PART as follows:
1. The complaint's allegations that Individual Defendants' directed the alleged wrongful acts is sufficient to assert liability of the Individual Defendants under Rule 8(a)(2), F.R.Civ.P., general pleading requirements, but is not sufficient to assert liability against individual defendants for the fraud and negligent misrepresentation claims, which are subject to a heightened pleading requirement pursuant to Rule 9(b).
2. Individual Defendants' motion to dismiss the Fifth Claim for Interference with Contractual Relations as to Silicon Knights' former employees is DENIED.
3. Individual Defendants' motion to dismiss the Third and Fourth Claims for Statutory and Common Law Unfair Competition, Seventh Claim for Interference with Prospective Economic Advantage with Activision, Eighth Claim for Interference with Prospective Economic Advantage with other third parties, Ninth Claim for Negligent Interference with Prospective Economic Advantage, Tenth Claim for Defamation and Commercial Disparagement, Thirteenth Claim for Fraud, and Fourteenth Claim for Negligent Misrepresentation is GRANTED with leave to amend.
Plaintiff may file and serve an amended complaint within 30 days.
IT IS SO ORDERED.
EDWARD A. INFANTE
United States Magistrate Judge