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MICREL INC. v. MONOLITHIC POWER SYSTEMS

December 9, 2005.

MICREL INC., a California corporation, Plaintiff,
v.
MONOLITHIC POWER SYSTEMS, INC., a Delaware corporation, MICHAEL R. HSING, JAMES C. MOYER, and DOES 1-20 inclusive, Defendants.



The opinion of the court was delivered by: JEFFREY WHITE, District Judge

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS STATE LAW CLAIMS IN SECOND AMENDED COMPLAINT
I. INTRODUCTION
This matter comes before the Court upon consideration of the motion to dismiss filed by defendants Monolithic Power Systems, Inc. ("MPS"), Michael R. Hsing ("Hsing"), and James C. Moyer ("Moyer") (collectively "Defendants"). Having considered the parties' pleadings, the relevant legal authority, and having had the benefit of oral argument, the Court GRANTS IN PART AND DENIES IN PART Defendants' motion.

II. PROCEDURAL BACKGROUND

  On November 10, 2004, Micrel filed a complaint against MPS alleging infringement of two of Micrel's patents. On November 29, 2004, Micrel filed a First Amended Complaint ("FAC"), again alleging two counts of patent infringement, adding Hsing and Moyer as defendants, and adding claims for misappropriation of trade secrets pursuant to California's Uniform Trade Secrets Act, Civil Code §§ 3426 et seq. (hereinafter "CUTSA"), common law misappropriation, breach of confidentiality agreements, and violations of California Business and Professions Code Section 17200 ("Section 17200").

  Defendants initially moved to dismiss each of the state law causes of action in the FAC on the ground that each of those claims was barred by the applicable statutes of limitations. The Court granted Defendants' motion on this ground, but provided Micrel leave to amend to allege facts demonstrating that the discovery rule applied.

  Micrel filed a Second Amended Complaint ("SAC") on May 2, 2005 and Defendants now move again to dismiss Micrel's state law claims based on statute of limitations grounds.

  III. FACTUAL BACKGROUND

  In the SAC, as in the FAC, Micrel alleges that Moyer was a design engineer and Hsing was a process development engineer at Micrel. (SAC ¶¶ 18, 30.) While working at Micrel, Hsing and Moyer co-invented a structure that was patented in United States Patent No. 5,571,046 (the "'046 Patent"). (Id., ¶¶ 23, 33.) Hsing also co-invented a process that is the subject of United States Patent No. 5,556,796 (the "'796 Patent"). (Id., ¶ 24.)

  When Hsing and Moyer joined Micrel, both signed proprietary invention and confidentiality agreements with Micrel, stating that each agreed to preserve Micrel's trade secrets and research during and after employment with Micrel. (Id., ¶¶ 21-22, 31-32.) Upon leaving Micrel, both Hsing and Moyer signed termination certificates stating that each agreed to continue to comply with the confidentiality agreements and preserve Micrel's trade secrets, confidential data, and research. (Id., ¶¶ 25-26, 36-37.)

  Micrel alleges that Moyer and Hsing left Micrel under false pretenses in 1997 and formed MPS. (Id., ¶¶ 18-19, 28-29, 35, 39-40.) While at Micrel, Moyer researched electro-luminescent lamp drivers ("ELLDs"). (Id., ¶¶ 45-47.) Moyer shared the information on ELLDs with MPS, helping to develop MPS's line of cold cathode fluorescent lamp ("CCFL") driver devices. (Id., ¶¶ 48-50.) Moyer's work on ELLDs is incorporated in the invention claimed in United States Patent No. 6,114,814 (the "'814 Patent"). (Id., ¶ 50.) Both ELLDs and CCFLs are DC to AC inverters that perform similar functions in providing backlighting for portable displays. (Id., ¶ 49.) Hsing worked on developing "spacers" for use with lateral double diffused metal oxide semiconductor ("LDMOS") transistors while at Micrel. (Id.) Micrel alleges that Hsing shared the information he developed on spacers with MPS, and that the spacer information was incorporated in the invention claimed in United States Patent No. 6,252,278 (the "'278 Patent"). (Id., ¶¶ 51-53.)

  Micrel alleges that Moyer's daughter, Cynthia Moyer ("Ms. Moyer"), brought Micrel's confidential information home with her during the last six months of her employment with Micrel. (Id., ¶¶ 54, 58.) During the time that Ms. Moyer brought confidential information home with her, Moyer was already working at MPS. (Id., ¶ 59.) Ms. Moyer left Micrel to work at MPS in January 1999. (Id., ¶ 60.) Moyer and MPS gained knowledge of Micrel's development efforts through the proprietary information that Ms. Moyer worked on at home. (Id., ¶ 61.)

  Micrel alleges it first learned of the '814 and '278 Patents on or about May 13, 2003, when a Micrel employee, Martin Garnett, was deposed in the case O2 Micro Int'l Ltd. v. Monolithic Power System Inc., No. CV-00-4071 and CV-01-3995 (the "O2 Micro Action"). (Id., ¶¶ 62-64.) In the O2 Micro Action, MPS asserts that O2 Micro Int'l Ltd. ("O2 Micro") infringed the '814 Patent. (Id., ¶ 62.) Micrel is not a party to the O2 Micro Action. (Id.)

  In February 2004, O2 Micro indicated that Moyer may have conceived of the inventions claimed in the '814 Patent while working at Micrel. (Id.) O2 Micro repeated this suggestion to Micrel in August 2004 and requested a license under Micrel's rights in the '814 Patent. (Id.) Based on O2 Micro's suggestions, Micrel began to review Moyer's files, files that had been placed in storage when Moyer left Micrel in 1997. (Id., ¶ 66.)

  Micrel alleges it did not learn of the alleged misappropriations by Defendants until late October or early November 2004, when Micrel discovered documents that indicated that Moyer conceived the inventions contained within the '814 Patent while working at Micrel. (Id., ¶¶ 1, 67.) Micrel alleges that after it discovered Moyer's alleged misappropriation, Micrel uncovered additional ...


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