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Wang v. Palo Alto Networks, Inc.

United States District Court, Ninth Circuit

August 7, 2013

QIANG WANG, an individual, Plaintiff,
v.
PALO ALTO NETWORKS, INC., a corporation, NIR ZUK, an individual, and FENGMIN GONG, an individual, Defendants.

ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR LEAVE TO FILE AMENDED COMPLAINT

WILLIAM ALSUP, District Judge.

INTRODUCTION

In this trade-secret action involving alleged misappropriation of computer firewall technology, plaintiff moves for leave to file an amended complaint. For the reasons stated below, plaintiff's motion is GRANTED IN PART and DENIED IN PART.

STATEMENT

The main question is whether plaintiff should be allowed leave to amend based on documents produced in discovery. The facts have been set forth in a previous order ( see Dkt. No. 41). Briefly, plaintiff Qiang Wang invented several computer firewall technologies. The crux of the present action is an allegation that defendants misappropriated plaintiff's trade secrets following the termination of plaintiff's business relationship with defendant Fengmin Gong. The considerable commercial success of defendant Palo Alto Networks, Inc. is allegedly due in large part to plaintiff's misappropriated trade secrets.

A prior order, dated January 31, 2013, denied defendants' motion to dismiss as to plaintiff's trade secret misappropriation claim. Discovery went forward as to that claim and revealed documents suggesting that defendants infringe plaintiff's patent, United States Patent No. 7, 454, 418, entitled "Fast Signature Scan." One document in particular describes Palo Alto Networks' algorithm in detail. Plaintiff now moves for leave to amend to add a patent infringement claim to the complaint, as well as a breach-of-contract claim based on a non-disclosure agreement relating to that patent.

This order follows full briefing and oral argument.

ANALYSIS

1. LEGAL STANDARD.

The case management order listed March 31 as the deadline for filing amendments. Rule 16(b)(4) stipulates that after the amendment deadline passes, a scheduling order may be modified only for good cause. Our court of appeals has held:

The pretrial schedule may be modified if it cannot reasonably be met despite the diligence of the party seeking the extension. If the party seeking the modification was not diligent, the inquiry should end and the motion to modify should not be granted.

Zivkovic v. Southern California Edison Co., 302 F.3d 1080, 1087 (9th Cir. 2002) (internal citations omitted).

2. THE BREACH OF CONTRACT CLAIM.

Plaintiff also requests leave to add a claim for breach of a non-disclosure agreement. This is an agreement between plaintiff and defendant Gong (Patchen Decl. Exh. 4). Plaintiff contends that his potential patent claim also establishes a claim for breach of this agreement and ...


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