The opinion of the court was delivered by: Oliver W. Wanger United States District Judge
MEMORANDUM DECISION REGARDING PLAINTIFF'S MOTION TO FOR PRELIMINARY INJUNCTION (Docs. 15, 16)
A. Plaintiff's Allegations
Plaintiff General Electric Company("Plaintiff") brings this action against Defendant Thomas Wilkins ("Defendant") for damages and injunctive relief. According to Plaintiff's complaint, Plaintiff is a developer of energy technologies and the holder of U.S. Patent Nos. 6,921,985 ("'985 Patent") and 6,924,565, ("the'565 patent").*fn1 Defendant is listed as one of seven inventors of the '565 patent and asserts that he is an unnamed co-inventor of the '985 patent. Defendant asserts an ownership interest in both patents.
Defendant was employed as an electrical engineer by Enron Wind Corp. ("Enron"), Plaintiff's predecessor in interest, intermittently from approximately April 1998 to May 2002. Defendant's job responsibilities while employed by Enron included the design, development, installation and testing of wind turbine generators. Enron filed for bankruptcy protection in 2002. In May 2002, Plaintiff purchased Enron's assets, including its intellectual property.
Defendant became Plaintiff's employee in May of 2002. Defendant served as Plaintiff's lead power systems electrical engineer in California, and his job was to develop new designs for wind turbine equipment. On May 31, 2002, Defendant first conceived the invention underlying the '565 patent. Plaintiff does not allege when the invention underlying the '985 was first thought of, or who first thought of it. Defendant voluntarily resigned from Plaintiff in December 2002.
Plaintiff applied for the '565 and '985 patents after Defendant terminated his employment with Plaintiff. In February 2004, Plaintiff requested that Defendant sign documents in connection with Plaintiff's application for the '565 patent, but Defendant refused. Defendant has never signed an assignment expressly assigning the '565 patent to Plaintiff, despite Plaintiff's requests that he do so. Plaintiff did not seek an assignment from Defendant in connection with the '985 patent.
In 2009, Defendant purported to license the '985 patent to one of Plaintiff's competitors.*fn2 In May 2010, Defendant informed Plaintiff that he was offering to license the '565 patent to others. Defendant refused Plaintiff's request to cease and desist such conduct.
Plaintiff filed a motion for preliminary injunction on July 9, 2010. (Docs. 15, 16). On July 12, 2010, Plaintiff filed an ex parte application requesting that the court advance the hearing on its motion for preliminary injunction to August 16, 2010. (Doc.
Defendant filed a motion to dismiss Plaintiff's original complaint on July 15, 2010; the hearing on the motion was set for September 27, 2010. (Doc. 26). On July 20, 2010, Defendant filed an ex parte motion seeking to "suspend briefing on the Motion for Preliminary Injunction" until after the hearing on Defendant's motion to dismiss. (Doc. 27).*fn4 Defendant's ex parte motion expressed Defendant's hope that resolution of the motion to dismiss would moot Plaintiff's motion for preliminary injunction. (Doc. 27 at 2).
On July 21, 2010, the court issued a minute order setting a scheduling conference for July 22, 2010 in order to discuss resolution of the parties' respective ex parte requests. (Doc. 28). After conducting the July 22 scheduling conference, the court issued a minute order that directed Plaintiff to file a motion for a temporary restraining order ("TRO") by July 26, 2010 and set a hearing for Plaintiff's motion for August 6, 2010. (Doc. 29). The minute order also directed the parties to complete limited reciprocal depositions, "preferably" by August 3, 2010. (Id.).
On July 26, 2010, Plaintiff filed a motion seeking a TRO and supporting documents. (Docs. 30, 31, 32, 33). On July 30, 2010, the parties submitted a stipulation pursuant to which Plaintiff agreed to withdraw its TRO application and cooperate with Defendant on various scheduling matters in exchange for Defendant's agreement to refrain from certain conduct. (Doc. 37). The court signed the stipulation on July 20, 2010 ("Stipulation"). (Doc. 38). The parties' Stipulation provided, in pertinent part:
1. GE's motion for a temporary restraining order is denied as moot;
2. The hearing date for GE's motion for preliminary injunction is taken off calendar pending the hearing on Wilkins' motion to dismiss;
3. The hearing date for Wilkins' motion to dismiss shall be set on a date agreeable to the Court at the earliest practicable opportunity, and the briefing schedule shall be pursuant to the local rules; and
4. The Court will set a hearing date on briefing schedule for GE's motion for a preliminary injunction at the hearing on Wilkins' motion to dismiss. The parties request that the hearing on GE's motion for a preliminary injunction be set within 35 days of the hearing on Wilkins' motion to dismiss.
THEREFORE, the parties stipulate and agree that pending GE's hearing on the motion for a preliminary injunction that neither Wilkins, nor any person or entity acting in concert with Wilkins, shall:
1. Take any steps to license, purport to license, grant, or purport to grant rights to third parties in GE's Patent Nos. 6,924,565 and 6,921,985 (the ""565 and "985 Patents"); or
2. Modify or extend the license agreement with Mitsubishi Heavy Industries, Ltd. and/or related entities related to GE's '565 and '985 Patents; or
3. Engage in any conduct that would convey or tend to convey to third parties that Wilkins is licensing or will license any ownership interest in the "565 or "985 Patents; or
4. Represent on his website or otherwise, unless under oath in judicially required or requested testimony, that he believes he has an ownership interest in the '565 and '985 Patents, or that he believes he has the lawful right to license under the '565 and '985 Patents. (Doc. 38 at 3-4).
On September 2, 2010, Plaintiff filed an ex parte application to
continue the hearing date on Defendant's motion to dismiss due to a
scheduling conflict. (Doc. 40). Defendant filed vehement opposition to
Plaintiff's request for continuance on September 7, 2010.*fn5
(Doc. 41). Defendant's opposition argued that Defendant only
agreed to the Stipulation based on the assumption that his motion to
dismiss would be heard on September 27. (Doc. 41 at 2). Defendant's
opposition threatened noncompliance with the Stipulation if the
hearing on Defendant's motion to dismiss was not held on September 27.
(Doc. 41 at 4).
The court conducted a hearing on Plaintiff's ex parte request to continue the hearing on the motion to dismiss on September 16, 2010. In an attempt to effect a compromise solution to the parties' contentious dispute, the court issued a minute order that granted Plaintiff's request for continuance but also stated that the Stipulation would expire on September 27, 2010. (Doc. 45). On September 17, Plaintiff's counsel emailed the court and stated that Plaintiff would proceed with the September 27 hearing date for the motion to dismiss in order to preserve the terms of Stipulation, pursuant to which the Stipulation was to remain in place until the preliminary injunction hearing. (Doc. 46). The court issued a minute order on September 17 which provided:
In view of the Plaintiff electing to proceed to hearing on 9/27/2010, Stipulated [TRO] and Scheduling Order shall remain in full force and effect according to its original terms.
The court heard Defendant's motion to dismiss on September 27, 2010. During the hearing, the court announced its tentative decision to dismiss the contract cause of action pled in the complaint with leave to amend. The court expressed its belief that although Plaintiff's complaint was not technically deficient under federal pleading standards, amendment of the complaint would be beneficial during later stages of the litigation:
The Court: [D]o you agree that you should, in effect, separately state the [distinct breach of contract] claims you have?
Mr. Hanlon: Your Honor, I think the claims are sufficiently alleged in the four causes of action that are stated. I don't believe there's a requirement under federal procedural law that each separate contractual breach be separately alleged as a separate cause of action. We could certainly do that if it's ...