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Medina v. Microsoft Corporation

United States District Court, N.D. California, San Francisco Division

August 26, 2014

ANTONIO MEDINA, Plaintiff,
v.
MICROSOFT CORPORATION, et al., Defendants.

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND AND CONTINUING CASE MANAGEMENT CONFERENCE

RICHARD SEEBORG, District Judge.

I. INTRODUCTION

In this dispute between a California three-dimensional camera inventor and various technology companies, pro se plaintiff Antonio Medina alleges in his Second Amended Complaint that Defendants Microsoft Corporation, Microsoft Corporation as Successor of Canesta, Inc. and 3DV Systems, Inc., and Microsoft employee Cyrus Bamji (i) infringed his patent, (ii) engaged in unfairly competitive business practices, and (iii) sold their camera below cost to destroy the commercial prospects of Medina's company, Multivision Research. Defendants move to dismiss Medina's latter two claims, both of which arise under state law. For the reasons set forth below, the challenged claims fail to state a claim upon which relief can be granted. The second claim is dismissed with prejudice, while the third claim is dismissed with leave to amend. Pursuant to Local Rule 7-1(b), this matter is suitable for disposition without oral argument.

II. BACKGROUND[1]

The facts of this case were recounted in this Court's prior order granting the defendants' motion to dismiss with leave to amend. ( See ECF No. 46). In brief, Antonio Medina obtained in 1992 a patent for the invention of a "three dimensional camera and range finder."[2] (SAC ¶ D1). Medina also founded Multivision Research, a company involved in the development, manufacture, and sale of a three-dimensional camera and range finder embodying his patented invention. (SAC ¶ D7).

Medina contends that from January 2008, defendants began making, using, selling, offering for sale, and/or importing devices that allegedly infringed his patent. (SAC ¶ D3). Prior to January 2008, Medina contacted representatives of defendant 3DV to inform it that 3DV's "cameras and chips" were infringing his patent. As a result, Medina and 3DV held numerous meetings to discuss a potential licensing and/or employment contract; these negotiations never resulted in any final agreement. (SAC ¶ E2).

Medina also discovered in 2008 that defendant Canesta was selling certain cameras and sensors allegedly infringing his patent. (SAC ¶ E3). Medina asserts that both Canesta and 3DV sold their infringing products to Microsoft, which used those devices in certain projects and development activities beginning in January 2008. After the patent's January 2009 expiration, Microsoft allegedly purchased 3DV and Canesta.

Medina alleges that 3DV, Canesta, and Microsoft all misled him. He avers that "the real purpose of 3DV's negotiations [with him] was delay" while 3DV "consummated their deal with Microsoft for several millions of dollars, of which Dr. Medina received nothing." (SAC ¶¶ E2, E22). Medina also avers that despite Canesta's reply to his letter concerning the company's alleged infringement of his patent, which stated that the company "ordered the file history for USP 5081530 and will get back to you, " Medina never received any further communications from Canesta. (SAC ¶ E18). In February 2010, after discovering that Microsoft was allegedly infringing his patent, Medina contacted Microsoft CEO Steve Ballmer. The company replied on March 4, 2010 that "the technology does not fit within our current business needs." (SAC ¶ E19). Later that year, Medina met with defendant Cyrus Bamji, CTO of Canesta, to discuss Canesta's technology and witness a demonstration of its 3D camera. Again, Medina informed Canesta that the company was infringing his patent.

In September 2013, the SAC avers, Microsoft sold its 3D camera "at a subsidized, below cost price" and "destroyed Multivision's competition and impeded commercialization and sale of Dr. Medina's 3D camera." Defendants allegedly agreed to raise the price once Microsoft acquired a dominant share in the 3D camera market. (SAC ¶ E14). Medina avers that, as a result, he "lost his business, sales and profits." (SAC ¶ E25).

III. LEGAL STANDARD

A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). While "detailed factual allegations are not required, " a complaint must have sufficient factual allegations to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible "when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. This standard asks for "more than a sheer possibility that a defendant acted unlawfully." Id. The determination is a context-specific task requiring the court "to draw on its judicial experience and common sense." Id. at 679.

Additionally, Rule 9(b) of the Federal Rules of Civil Procedure requires that "[i]n allegations of fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." To satisfy the rule, a plaintiff must allege the "who, what, where, when, and how" of the charged misconduct. Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997). In other words, "the circumstances constituting the alleged fraud must be specific enough to give defendants notice of the particular misconduct so that they can defend against the charge and not just deny that they have done anything wrong." Vess v. Ciba-Geigy Corp. U.S.A., 317 F.3d 1097, 1106 (9th Cir. 2003).

A motion to dismiss a complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the claims alleged in the complaint. See Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Dismissal under Rule 12(b)(6) may be based on either the "lack of a cognizable legal theory" or on "the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). When evaluating such a motion, the court must accept all material allegations in the complaint as true, even if doubtful, and construe them in the light most favorable to the non-moving party. Twombly, 550 U.S. at 570. "[C]onclusory allegations of law and unwarranted inferences, " however, "are insufficient to defeat a motion to dismiss for failure to state a claim." Epstein v. ...


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