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Profil Institut fur Stoffwechselforschung GmbH v. Prosciento, Inc.

United States District Court, S.D. California

March 31, 2017

PROFIL INSTITUT FUR STOFFWECHSELFORSCHUNG GMBH, Plaintiff,
v.
PROSCIENTO, INC., Defendant.

          ORDER DISCHARGING ORDER TO SHOW CAUSE; AND ORDER GRANTING IN PART AND DENYING MOTION TO DISMISS [DOCKET NUMBER 17.]

          Honorable Larry Alan Burns United States District Judge.

         This is one of two related cases involving intellectual property disputes between these parties. Both cases concern the "Profil" trademark; this case also alleges misappropriation of trade secrets. In case 16cv1549, Plaintiff Profil Institut für Stoffwechselforschung GmbH ("Profil") is suing its onetime subsidiary ProSciento, Inc. (formerly known as Profil Institute for Clinical Research, Inc.) for trademark infringement. ProSciento recently filed a counterclaim. There are two "Profil" marks at issue, one a U.S. mark and one an EU mark, but the briefing suggests that use of each mark is not limited to the place of its registration, and that there is some spillover into the other mark's territory.

         Partial Mootness

         The Court is obligated to address jurisdictional issues even if the parties do not raise them. See Mt. Healthy City School Dist. Bd. of Ed. v. Doyle, 429 U.S. 274, 278 (1977). At a hearing in the related case, 16cv2762, Profil Institut für Stoffwechselforschung GmbH v. Prosciento, Inc., the Court held a hearing on Profil's motion for a preliminary injunction involving alleged trademark infringement in the EU. At that hearing, Defendant's counsel announced that the company was changing its name to ProSciento. The Court accepted this representation and concluded that, going forward, ProSciento would be unlikely to use the "Profil" trademark in the EU and would be abandoning further use of the trademark. In light of this, the Court ordered the parties to show cause why claims for injunctive relief concerning use of the trademark were not moot. (Docket no. 32.)

         Before either party filed briefing, ProSciento filed a motion for a preliminary injunction, claiming that it owns the trademark and asking the Court to enjoin Profil from using it. The Court denied the motion without prejudice, noting that ProSciento had no counterclaim pending, and that mootness had not yet been addressed. The parties filed responses to the Court's order to show cause, saying that ownership of the mark is still being actively disputed and that ProSciento intends to keep using it in the U.S. This change in position causes concern; a party should not benefit from contradictory factual assertions. But the circumstances do not suggest an intent to mislead the Court. The Court accepts that the parties both intend to use the mark in the United States, and its ownership is actively contested. The order to show cause is therefore DISCHARGED.

         Motion to Dismiss

         ProSciento filed a motion under Fed.R.Civ.P. 12(b)(6) (Docket no. 17) to dismiss the amended complaint (the "FAC"). Three agreements which were mentioned in the amended complaint are attached as exhibits were attached to the motion. (Docket no. 17-2.) Profil does not dispute these documents' authenticity or object to the Court's considering them in connection with the motion; in fact, its own briefing refers to these documents and relies on them.

         Judicial Notice

         The motion was accompanied by requests for judicial notice under Fed.R.Evid. 201. Most of the documents (Exhibits A through I) are journal articles. Profil objects to the Court's taking notice of those, and points out they are not authenticated. Profil does not object to the Court's taking notice of Exhibits J or K, which are records from the U.S. Patent and Trademark Office (USPTO).

         The journal articles are offered to show that certain alleged trade secrets are not in fact secret, and that the information has been made public through articles like these. "Courts may take judicial notice of publications introduced to indicate what was in the public realm at the time . . . ." Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 960 (9th Cir. 2010). Profil is correct that these articles have not been authenticated. See Madeja v. Olympic Packers, LLC, 310 F.3d 628, 639 (9th Cir. 2002) (district court was not required to take notice of unauthenticated documents). Profil also argues that while the articles cover generally the same subject matter as the trade secrets, the trade secrets include information not in the articles. Assuming this is true, the articles would not be helpful at this stage of litigation. The request for judicial notice of Exhibits A through I is therefore DENIED. But Exhibits J and K meet the standards for notice under Fed.R.Evid. 201, and the unobjected-to request for judicial notice of those exhibits is GRANTED.

         Legal Standards for Motion to Dismiss

         A Rule12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Under Fed.R.Civ.P. 8(a)(2), only "a short and plain statement of the claim showing that the pleader is entitled to relief, " is required, in order to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 554-55 (2007). The well-pleaded facts must do more than permit the Court to infer "the mere possibility of conduct"; they must show that the pleader is entitled to relief. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).

         When determining whether a complaint states a claim, the Court accepts all allegations of material fact in the complaint as true and construes them in the light most favorable to the non-moving party. Cedars-Sinai Medical Center v. National League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007) (citation omitted). At the pleading stage, the Court may consider not only the complaint itself, but also documents it refers to, whose authenticity is not questioned, and matters judicially noticed. Zucco Partners LLC v. Digimarc Corp., 552 F.3d 981, 990 (9th Cir. 2009).

         ProSciento raises the statute of limitations as a defense. A claim may be dismissed as untimely on a Rule 12(b)(6) motion only when the running of the statute of limitations is apparent on the face of the complaint. United States ex rel. Air Control Techs., Inc. v. Pre Con Indus., Inc., 720 F.3d 1174, 1178 (9th Cir. 2013).

         If a motion to dismiss is granted, leave to amend is ordinarily granted unless amendment would be futile. Lopez v. Smith, 203 F.3d 1122, 1130-31 (9th Cir.2000) (en banc).

         Factual Background

         Profil, a German entity, was ProSciento's parent corporation. The two companies are in the business of medical research. In 2003, Profil created ProSciento (then Profil Institute for Clinical Research) as a subsidiary. In 2008, the companies formally separated, but worked together under a Cooperation Agreement that terminated in 2012. The Cooperation Agreement is attached to ProSciento's motion to dismiss as Exhibit A. One of the agreement's provisions was that the companies' work would be coordinated, and that they would each use a similar logo that incorporated the word "Profil". Profil alleges it owned the "Profil" mark at this time, and was granting ProSciento a license to use it.

         In 2009, ProSciento filed an application to register the "Profil" mark in the United States. Also in 2009, the two companies entered into a Lease Agreement for devices known as Biostators. The Lease Agreement is attached to the motion to dismiss as Exhibit B. Profil says it developed and owned trade secrets regarding use of Biostators and related technology and procedures, and that both the Cooperation Agreement and the Lease Agreement included provisions intended to protect trade secrets. (FAC, ¶ 26.)

         After the Cooperation Agreement terminated, the parties entered into a Non-Disclosure Agreement ("NDA"). The NDA is attached as Exhibit C to the motion to dismiss. It included a provision concerning the protection of Profil's interest in trademarks and trade secrets.

         Profil alleges that ProSciento fraudulently registered the "Profil" mark with the USPTO by falsely claiming it had used the mark first, when in fact Profil had. Profil alleges ProSciento falsely claimed its first use of the mark occurred on December 31, 1999, before ProSciento was even formed. Profil alleges other false statements regarding the first use of that mark. (FAC, ¶¶ 46-52.) ProSciento did not tell Profil it was attempting to register the mark, and Profil first discovered ...


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