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Luxul Tech., Inc. v. Nectarlux, LLC

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

January 26, 2015

LUXUL TECHNOLOGY INC., Plaintiff,
v.
NECTARLUX, LLC, et al., Defendants

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For Luxul Technology Inc., Plaintiff: Melinda Mae Morton, LEAD ATTORNEY, Megan Elizabeth McCarthy, Procopio Cory Hargraves and Savitch LLP, Menlo Park, CA; James Thomas Erickson, John Louis Mlnarik, The Mlnarik Law Group, Inc., Santa Clara, CA.

For Nectarlux, LLC, a New York limited liability company, Defendant: Todd Michael Schneider, LEAD ATTORNEY, Schneider Wallace Cottrell Konecky LLP, San Francisco, CA; Kyle Geoffrey Bates, Schneider Wallace Cottrell Konecky Wotkyns LLP, San Francisco, CA; Michael C McKay, PRO HAC VICE, Schneider Wallace Cottrell Konecky Wotkyns LLP, Scottsdale, AZ.

For JKeeney Consulting, Inc., a Florida corporation, James Keeney, an individual, Defendant: Todd Michael Schneider, LEAD ATTORNEY, Schneider Wallace Cottrell Konecky LLP, San Francisco, CA; Michael C McKay, PRO HAC VICE, Schneider Wallace Cottrell Konecky Wotkyns LLP, Scottsdale, AZ.

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ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

Re: Dkt. No. 21

LUCY H. KOH, United States District Judge.

Plaintiff Luxul Technology Inc. (" Plaintiff" or " Luxul" ) brings this action against Defendants Nectarlux, LLC, JKeeney Consulting, Inc., and James Keeney (collectively, " Defendants" ). Before the Court is Defendants' motion to dismiss. ECF No. 21. Plaintiff filed an opposition. ECF No. 22. Defendants filed a reply. ECF No. 23. Having considered the submissions of the parties, the record in this case, and the relevant law, and for good cause shown, the Court hereby grants in part and denies in part Defendants' motion.

I. BACKGROUND

A. Factual Background

Plaintiff Luxul Technology Inc. is a California corporation with a principal place of business in Santa Clara, California. First Am. Compl. (" FAC" ), ECF No. 19, ¶ 1. Defendant NectarLux, LLC (" NectarLux" ) is a New York limited liability company with a principal place of business in Syracuse, New York. Id. ¶ 2. Defendant JKeeney Consulting, Inc. (" JKeeney Consulting" ) is a Florida corporation with a principal place of business in Philadelphia, Pennsylvania. Id. ¶ 3. Defendant James Keeney (" Keeney" ) is an individual and a resident of Pennsylvania. Id. ¶ 4.

Luxul is a producer of energy efficient light emitting diode (" LED" ) products. Id. ¶ 9. Luxul's patented LED tube lamps, " EazyLux" are " true retrofit replacements" for fluorescent tube lamps because Luxul's products do not require re-wiring as part of installation. Id. ¶ 11.

On April 6, 2014, Luxul entered into a written " Sales Representation and Marketing Consulting Agreement" (" Agreement" ) with Defendant NectarLux. Id. ¶ 13.; see Declaration of Adam Lilien submitted in support of Defendants' motion to dismiss, ECF No. 21, Exh. A.[1] Under the

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Agreement, NectarLux served as Luxul's " exclusive, independent representative for the sale of Luxul products" in certain regions, for certain customers. Id. Plaintiff was responsible for maintaining manufacturing quality and a positive brand presence, working with NectarLux to identify sales opportunities, delivering products to meet sales commitments, and managing partner agreements. Id. ¶ 14; Agreement ¶ 1.a. As a general matter, Defendant NectarLux was responsible for soliciting sales of Luxul products and managing sales accounts. Agreement ¶ 1. More specifically, NectarLux was obligated to make good faith efforts to meet its sales commitments, work with Luxul to accelerate sales, understand " deal flow," and establish factory and distribution channels on the east coast. Id. ¶ 15; Agreement ¶ 1.a. NectarLux and Luxul were jointly obligated to " work together to ensure that Sales Commitments" were achieved and to meet regularly. Agreement ¶ 1.a.

The Agreement also provided for Luxul to disclose certain confidential information to NectarLux, including information relating to building science technologies, trade secrets, product design, manufacturing, pricing, marketing, distribution, business opportunities and relationships, industry experts, legal entities, and individuals. Id. ¶ 16. Under Section 3 of the Agreement, NectarLux agreed that Luxul was " the owner of all right, title, and interest in the Confidential information, including all tangible copies and . . . electronic versions thereof." Id. ¶ 17. NectarLux agreed that it would not disclose confidential information unless necessary to satisfy its obligations under the Agreement. Id. ¶ 4.

In April 2014, Dr. James Pan, Luxul's chief executive officer, and Adam Lilien, NectarLux's Managing Director of Nectar Energy, met with a potential manufacturer in New York. Id. ¶ 27. Luxul continued to negotiate directly with the New York manufacturer. Id. Luxul alleges that in July 2014, Lilien and Keeney contacted the same New York manufacturer to discuss alternative proposals and set up meetings with competing LED companies. Id. ¶ 28. Luxul further alleges that NectarLux and Keeney " made and continue to make false representations to actual and potential customers," regarding alleged legal problems faced by Luxul. Id. ¶ 29.

In June 2014, Lawrence Bisagni, Director of Marketing and Public Relations for Luxul, visited the LinkedIn profiles of Defendants Keeney and JKeeney Consulting. Id. ¶ 19. Bisagni observed that a document titled " NectarLux - HOA Whitepaper AG" was posted on JKeeney Consulting's profile, and that the document used several images that Luxul " uses to represent and promote its technology." Id. ¶ 20. Some of those images, including the " Easy 4-step Installation" graphic, are images copyrighted by Luxul Taiwan Inc., the parent company of Plaintiff. Id. ¶ 25. The documents also contained a statement by Pan about the LED technology. Id. ¶ 23. Plaintiff alleges that Defendants' use of Pan's image and quotation is misleading as to whether NectarLux is responsible for the technological innovation behind the " EasyLux" LED tube lamps. Id. Bisangi also observed that products and images identical to those on Luxul's website appeared on NectarLux's website, but the " Luxul" brand name had been replaced with " Nectar." Id. ¶ 21.

On August 12, 2014, Luxul terminated the Agreement with NectarLux.

B. Procedural Background

Plaintiff filed its original Complaint on August 12, 2014. ECF No. 1. Defendants filed a motion to dismiss on September 26, 2014. ECF No. 15. Plaintiff filed a First Amended Complaint (" FAC" ) pursuant to stipulation on October 31, 2014. ECF No.

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19. Defendants filed an amended motion to dismiss on November 21, 2014. ECF No. 21. Plaintiff filed its opposition on December 5, 2014, ECF No. 22. Defendants filed their reply on December 12, 2014. ECF No. 23.

II. LEGAL STANDARD

A. Rule 12(b)(1)

A defendant may move to dismiss an action for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). A motion to dismiss for lack of subject matter jurisdiction will be granted if the complaint on its face fails to allege facts sufficient to establish subject matter jurisdiction. See Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003). If the plaintiff lacks standing under Article III of the U.S. Constitution, then the court lacks subject matter jurisdiction, and the case must be dismissed. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 101-02, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). In considering a Rule 12(b)(1) motion, the Court " is not restricted to the face of the pleadings, but may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction." McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988). Once a party has moved to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the opposing party bears the burden of establishing the court's jurisdiction, see Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010), by putting forth " the manner and degree of evidence required" by whatever stage of the litigation the case has reached, Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); see also Barnum Timber Co. v. Envtl. Prot. Agency, 633 F.3d 894, 899 (9th Cir. 2011) (at the motion to dismiss stage, Article III standing is adequately demonstrated through allegations of " specific facts plausibly explaining" why the standing requirements are met).

B. Rule 12(b)(2)

Where a defendant moves to dismiss a suit for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of establishing that jurisdiction is proper. Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008). Where, as here, the defendant's motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts to withstand a motion to dismiss for lack of personal jurisdiction. Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) (citing Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1127 (9th Cir. 2010)). At this stage of the proceeding, " uncontroverted allegations in plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in plaintiff's favor." Brayton Purcell, 606 F.3d at 1127 (internal quotation marks, citations, and alterations omitted).

C. Rule 12(b)(6)

Pursuant to Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss an action for failure to allege " enough facts to state a claim to relief that is plausible on its face." Bell A. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). " A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully."

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Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal citations omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court " accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the non-moving party." Manzarek v. ...


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