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Allergia, Inc. v. Bouboulis

United States District Court, S.D. California

June 13, 2017

ALLERGIA, INC., a California corporation, Plaintiff,
v.
DENIS BOUBOULIS, an individual; and DOES 1 THROUGH 5, inclusive, Defendants.

          ORDER ON MOTIONS FOR SUMMARY JUDGMENT (ECF NOS. 77, 80)

          Hon. Janis L. Sammartino United States District Judge.

         Presently before the Court is Plaintiff Allergia, Inc.'s Motion for Summary Judgment of Estoppel Regarding Ownership of Certain Patent Applications, (“Pl.'s MSJ, ” ECF No. 77), as well as Defendant Denis Bouboulis's Response in Opposition to, (“Pl.'s MSJ Opp'n, ” ECF No. 91), and Plaintiff's Reply in Support of, (“Pl.'s MSJ Reply, ” ECF No. 107), Plaintiff's MSJ. Also before the Court is Defendant's Motion for Partial Summary Judgment, (“Def.'s MSJ, ” ECF No. 80), as well as Plaintiff's Response in Opposition to, (“Def.'s MSJ Opp'n, ” ECF No. 97), and Defendant's Reply in Support of, (“Def.'s MSJ Reply, ” ECF No. 100), Defendant's MSJ. After considering the parties' arguments and the law, the Court rules as follows.

         BACKGROUND

         Defendant Bouboulis is a medical doctor specializing in allergy and immunology. (Pl.'s Statement of Undisputed Facts (“Pl.'s SOF”) ¶ 3, ECF No. 86-1.[1]) Plaintiff Allergia's predecessor was a company called CLRS, Inc. (“CLRS”). (Id. ¶ 1.) CLRS initially developed and sold an acne treatment device called CLARO, which used light to treat acne. (Id. ¶ 2.) In 2006, Defendant was asked and agreed to become an advisor to CLRS. (Id. ¶ 8.) CLRS did not pay Defendant a salary, but in January and June 2007 CLRS gave Defendant a total of 116, 111 shares in CLRS for his efforts. (Id. ¶ 9.)

         Around November 2007, Defendant communicated an idea to the CEO of CLRS, Richard Oberreiter. (Id. ¶ 16.) Defendant's idea was to use the CLARO light treatment technology to treat seasonal allergies (the “Allergy Device”). (Id. ¶¶ 16, 17.) The Allergy Device concept included modifying an existing CLRS CLARO device by putting a fiberoptic piece onto the end of the CLARO device to transmit the CLARO's light into a patient's nasal cavity. (Id. ¶ 20.) Oberreiter responded with interest and told Defendant that this idea “may be very important” for the financial future of CLRS. (Id. ¶ 18.) Oberreiter also suggested that if the Allergy Device was promising, he wanted to apply for patent protection. (Id. ¶ 19.) In April 2008 Oberreiter retained a patent attorney on behalf of CLRS to assist in applying for patent protection. (Id. ¶ 24.) Among other things, Defendant helped with the patent application by reviewing prior art and preparing an FDA proposal for the Allergy Device. (Id. ¶¶ 25, 26.)

         In October 2008 Defendant asked Oberreiter for compensation from CLRS for the work he had done and would continue to do for CLRS. (Id. ¶ 27.) Oberreiter sent Defendant a proposed royalty agreement which, among other things, stated that as between CLRS and Defendant “all patent rights, copyrights, trade secrets, trademarks and other proprietary rights concerning the [allergy technology] would remain the exclusive property of CLRS, and [Defendant] will not acquire any rights therein except [f]or the limited right to any use specified in” the proposed agreement. (Id. ¶ 30.) Despite some discussion between the parties, Defendant never signed the royalty agreement. (Id. ¶ 33.) Nevertheless, Defendant continued to help develop the allergy technology. (Id.)

         Around early 2010 Oberreiter told Defendant that CLRS was experiencing financial difficulties and that CLRS was negotiating to be acquired by a third-party company, Solta Medical (“Solta”). (Id. ¶ 35.) Defendant suggested spinning off the allergy technology into a separate company so that the Allergy Device and related intellectual property would not be acquired by Solta, and so that the team could continue to develop and market the device. (Id.) Near the end of June 2010, Oberreiter told Defendant that negotiations with Solta would soon begin and that he wanted to get the provisional patent application filed for the Allergy Device so that those patent rights could be more clearly carved out of the Solta merger. (Id. ¶ 38.)

         On August 5, 2010, CLRS filed U.S. Provisional Application Serial No. 61/371, 172 (the first of the Allergia patent applications covering the Allergy Device). (Id. ¶ 42.) The application named three inventors: Defendant, Oberreiter, and Jan Enemaerke. (Id.) On June 30, 2010, CLRS's patent attorney sent Defendant and the other two inventors several documents relating to the patent application, including an assignment document. (Id. ¶ 41.) On July 8, 2010, August 3, 2010, September 30, 2010, and October 1, 2010, Oberreiter again sent the assignment document to Defendant, but Defendant did not execute that assignment document. (Id.) At some point after those five attempts, Defendant called Oberreiter and Oberreiter again encouraged Defendant to sign the assignment documents, but to no avail. (Id.)

         Before the merger with Solta, CLRS created a spin-off company, Plaintiff Allergia, Inc., to further develop the allergy-treatment technology and business. (Id. ¶ 44.) Defendant and the other CLRS shareholders were made shareholders in Allergia with the same number of shares they held in CLRS. (Id. ¶ 45.) On October 5, 2010, Defendant asked for additional ownership equity in the new company and “made clear to [Oberreiter] that Defendant was not going to sign the patent assignment documents . . . .” (Id. ¶ 45.) Nevertheless, sometime around October 12, 2010 Oberreiter asked Defendant to serve as Allergia's interim president. (Id. ¶ 48.) The board agreed and elected Defendant interim president of Allergia.

         To formally transfer the Allergy Device patent application and related technology and rights from CLRS to the newly formed Allergia, two documents were prepared: (1) an “Assignment and Assumption Agreement” and (2) a “License Agreement” (together, the “CLRS Assignment Agreements”). (Id. ¶ 49.) On October 12, 2010, Defendant reviewed and signed these documents in his capacity as president of Allergia. (Id. ¶ 50.) Among other things, the documents included the statement that CLRS owned all of the Allergia Patents.[2] (Id. ¶ 53.)

         Defendant continued to serve as interim president, wherein he further developed the allergy technology through work with FDA consultants and attorneys to market the product. (Id. ¶ 55.) Allergia did not compensate Defendant while he served as its president. (Id. ¶ 56.) Defendant scheduled a conference call with the other directors of Allergia for December 18, 2010. (Id. ¶ 57.) During that call, Defendant expressed concerns about the financial viability of the company, and proposed that, in exchange for majority ownership of the company, he would invest his own money in the company's efforts in order to further develop the Allergy Device. (Id. ¶ 59.) The other directors responded with silence. (Id. ¶ 60.) On January 23, 2011, director Lawrence Johnson wrote to Defendant and told him that Allergia had been restructured and that Defendant was no longer its president; instead, he had been made its chief medical officer. (Id. ¶ 63.) But after some discussion, on February 9, 2011, Richard Clement, a director and officer of Allergia, emailed Defendant, “on behalf of the shareholders and the other prospective members of the board of directors” that Allergia would “be proceeding without” Defendant and asked him to return “all of the corporate documents belonging to the company.” (Def.'s Statement of Undisputed Facts (“Def.'s SOF”) ¶ 88, ECF No. 87-1.)

         Allergia prepared materials for a second related patent filing, including a formal assignment to reflect that the three inventors had assigned their rights to Allergia. (Pl.'s SOF ¶ 65.) Defendant refused to sign the formal assignment document. (Id.) In addition, Defendant retained his own patent attorney to prepare a separate handheld allergy technology patent application, naming only Defendant as an inventor. (Id.) Defendant filed that separate application on August 5, 2011, around the same time Allergia filed its second patent application. (Id.) Defendant's refusal to sign assignment agreements has precluded Plaintiff from pursuing certain business opportunities. (Id. ¶ 66.)

         Plaintiff brings three claims against Defendant for: (1) declaratory judgment of patent application ownership and/or other patent and intellectual property rights; (2) breaches of fiduciary duty and/or implied contract; and (3) fraud. (See Second Am. Compl. (“SAC”), ECF No. 53.) Defendant brings several counterclaims against Plaintiff for: (1) declaratory judgment of patent application ownership; (2) breach of contract; (3) breach of implied contract; (4) failure to pay minimum wage in violation of the California Labor Code; (5) promissory estoppel; (6) fraud; and (7) quantum meruit. (See Def.'s Answer to SAC (“Answer”), ECF No. 57.)

         The parties now move for summary judgment on several of these claims and counterclaims. / / / / / /

         LEGAL STANDARD

         Under Federal Rule of Civil Procedure 56(a), a party may move for summary judgment as to a claim or defense or part of a claim or defense. Summary judgment is appropriate where the Court is satisfied that there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Material facts are those that may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine dispute of material fact exists only if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. When the Court considers the evidence presented by the parties, “[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255.

         The initial burden of establishing the absence of a genuine issue of material fact falls on the moving party. Celotex, 477 U.S. at 323. The moving party may meet this burden by identifying the “portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, '” that show an absence of dispute regarding a material fact. Id. When a party seeks summary judgment as to an element for which it bears the burden of proof, “it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.” See C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (quoting Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992)).

         Once the moving party satisfies this initial burden, the nonmoving party must identify specific facts showing that there is a genuine dispute for trial. Celotex, 477 U.S. at 324. This requires “more than simply show[ing] that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, to survive summary judgment, the nonmoving party must “by her own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file, ' designate ‘specific facts'” that would allow a reasonable fact finder to return a verdict for the non-moving party. Celotex, 477 U.S. at 324; Anderson, 477 U.S. at 248. The non- moving party cannot oppose a properly supported summary judgment motion by “rest[ing] on mere allegations or denials of his pleadings.” Anderson, 477 U.S. at 256.

         ANALYSIS

         I. Plaintiff's Motion for Summary Judgment on Estoppel

         Plaintiff moves for summary judgment that Defendant is estopped from denying that Allergia owns all rights and interest in the Allergia Patents, and, consequently, Defendant has no claim to ownership or other rights or interest in the Allergia Patents (except through its ownership of shares in Allergia). (Pl.'s MSJ Mem. 5, [3] ECF No. 86.) Defendant argues that Plaintiff's MSJ on promissory estoppel is (1) barred because this is the first time Plaintiff has raised the issue (i.e., the claim does not appear in its pleadings), (2) even if it is not barred, Plaintiff's claim fails because of its unclean hands, and (3) Plaintiff fails to satisfy the elements of promissory estoppel. (See generally Pl.'s MSJ Opp'n, ECF No. 92.)

         The Court agrees with Defendant's first and third arguments.[4] First, Plaintiff has not pled a claim for promissory estoppel in the operative complaint, which explicitly lists claims for (1) declaratory judgment of patent application ownership and/or other patent rights; (2) breach of fiduciary duty and/or implied contract; and (3) fraud. (See SAC.) Nor does a claim for promissory estoppel appear in any other earlier Complaint. (See ECF Nos. 1, 30.) In its reply brief, Plaintiff argues that it properly pled its promissory estoppel claim because it included the term “estopped” when describing its fraud cause of action and in its prayer for relief. (Pl.'s MSJ Reply 10-11, ECF No. 107.) Thus, Plaintiff argues that it gave Defendant fair notice of its promissory estoppel claim under the liberal “notice pleading” of the Federal Rules. (Id. at 11 (citing Leatherman v. Tarrant Cty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 168 (1993)).)

         The Court disagrees. Plaintiff had several opportunities to amend its complaint to include a claim for promissory estoppel. It did not. Instead, it chose to assert this claim for the first time in its motion for summary judgment.[5] While the term “estopped” does appear in its SAC, Plaintiff uses that term in the context of its fraud cause of action. This does not give Defendant fair notice that Plaintiff is asserting a separate cause of action for estoppel, much less the more specific cause of action for promissory estoppel. And Plaintiff has demonstrated its ability to assert distinct causes of action as evidenced by the three causes of action it explicitly pleaded in its SAC. (See generally SAC.) Thus, Plaintiff's promissory estoppel claim is not properly before the Court. See, e.g., Stallcop v. Kaiser Found. Hosps., 820 F.2d 1044, 1050 n.5 (9th Cir. 1987) (“Stallcop alleges that Kaiser, the Union, and the NLRB violated her due process rights by not notifying her about the statute of limitations. She raised this claim in the district court in her response to Kaiser's motion for summary judgment, but never raised it as a cause of action. Therefore, it is inappropriate for us to consider this claim.”); Burrell v. Cty. of Santa Clara, No. 11-CV-04569-LHK, 2013 WL 2156374, at *11 (N.D. Cal. May 17, 2013) (“Plaintiffs' Opposition to the Motion for Summary Judgment alleges numerous facts and causes of action that were not included in the Amended Complaint. The Court will not consider claims raised for the first time at summary judgment which Plaintiffs did not raise in their pleadings.” (citing, e.g., Pickern v. Pier 1 Imports (U.S.), Inc., 457 F.3d 963, 968 (9th Cir. 2006) (noting that plaintiff could not raise new factual allegations at summary judgment because allegations not included in the complaint failed to “give the defendant fair notice of what the plaintiff's claim[s] [were] and the grounds upon which [they] rest[ed], ” as required by Rule 8(a)(2) of the Federal / / / Rules of Civil Procedure))). Accordingly, the Court DENIES Plaintiff's Motion for Summary Judgment on this ground alone.[6]

         Even if Plaintiff's claim were not barred by its failure to raise the claim in its pleadings, Plaintiff fails to satisfy the required elements of promissory estoppel. Promissory estoppel will bind a promisor “‘when he should reasonably expect a substantial change of position, either by act or forbearance, in reliance on his promise, if injustice can be avoided only by its enforcement.'” Raedeke v. Gibraltar Sav. & Loan Ass'n, 10 Cal.3d 665, 672 n.1 (1974) (quoting Youngman v. Nev. Irrigation Dist., 70 Cal. 2d 240, 249 (1969)). “Cases have characterized promissory estoppel claims as being basically the same as contract actions, but only missing the consideration element . . . .” US Ecology, Inc. v. California, 129 Cal.App.4th 887, 903 (2005). Courts have broken down this doctrine into four elements: “(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” Aceves v. U.S. Bank, N.A., 192 Cal.App.4th 218, 225 (2011), as modified (Feb. 9, 2011) (internal quotation marks omitted).

         Plaintiff's promissory estoppel claim fails at the very start because it provides no evidence of a “clear and unambiguous promise.” In California, “[a] promise is an indispensable element of the doctrine of promissory estoppel.” Id. at 226 (citing Garcia v. World Savings, FSB, 183 Cal.App.4th 1031, 1044 (2010)). The cases discussing promissory estoppel “are uniform in holding that this doctrine cannot be invoked and must be held inapplicable in the absence of a showing that a promise had been made upon which the complaining party relied to his prejudice.” Id. Additionally, the promise must be “clear and unambiguous in its terms, ” id., which means “definite enough that a court can determine the scope of the duty[, ] and the limits of performance must be sufficiently defined to provide a rational basis for the assessment of damages, ” id. Thus it “follows that if extrinsic evidence is needed to interpret a promise, then obviously the promise is not clear and unambiguous.” Garcia, 183 Cal.App.4th at 1045.

         Plaintiff provides a list of fifteen events that purportedly constitute Defendant's “clear and unambiguous promise” that Plaintiff owned the Allergia Patents. (Pl.'s MSJ Mem. 14-16.) Specifically, this list recounts instances where Defendant failed to “[tell] anyone that he thought he owned any rights in the allergy technology.” (Id. at 14-15.) Notably missing, however, is any evidence that Defendant actually promised Plaintiff that it owned the Allergia Patents. To be sure, a party's conduct might in some cases support a claim for promissory estoppel. See, e.g., Garcia, 183 Cal.App.4th at 1041 (“‘The vital principle is that he who by his language or conduct leads another to do what he would not otherwise have done shall not subject such person to loss or injury by disappointing the expectations upon which he acted.'” (emphasis added) (quoting Wilson v. Bailey, 8 Cal. 2d 416, 423 (1937))). But none of these events demonstrate conduct evincing a “clear and unambiguous promise” that Defendant believed Plaintiff owned the Allergia Patents, or even a promise to cede ownership of his patent rights to Plaintiff at a later date. To the contrary, Plaintiff's cited evidence undermines its position because it describes at least two instances wherein Defendant declined to assign his patent rights to Plaintiff.[7] (See Pl.'s MSJ Mem. 12, ¶¶ 8-10 (noting that Defendant did not sign a royalty agreement that would have given him royalties on sales of the Allergia Device in exchange for his acknowledgement that all patent rights would remain the exclusive property of CLRS); id. ¶ 11 (“Defendant refused to sign a formal assignment document for filing with the U.S. Patent Office.”).) Because Plaintiff fails to establish the existence of a “clear and unambiguous promise, ” the burden does not shift to Defendant to refute Plaintiff's evidence.[8] Accordingly, for this and the other reasons stated above, the Court DENIES Plaintiff's Motion for Summary Judgment on promissory estoppel.

         II. Defendant's Motion for Summary Judgment

         Defendant moves for summary judgment on a number of claims. Specifically, Defendant argues that he is entitled to summary judgment on (A) all of Plaintiff's claims because of its unclean hands; (B) Plaintiff's declaratory judgment claim that it is the sole owner of the Allergy Device; (C) Plaintiff's breach of fiduciary duty claim; (D) Plaintiff's implied contract claim; (E) Plaintiff's fraud claim; and (F) his own counterclaims for (1) unjust enrichment, (2) quantum meruit, and (3) violations of the California labor laws. (See generally Def.'s MSJ Mem., ECF No. 87.) The Court considers each in turn.

         A. Unclean Hands

         As a threshold matter, Defendant argues that he is entitled to summary judgment on all of Plaintiff's claims because of Plaintiff's unclean hands. “Generally, the equitable doctrine of unclean hands applies when a plaintiff has acted unconscionably, in bad faith, or inequitably in the matter in which the plaintiff seeks relief.” Salas v. Sierra Chem. Co., 59 Cal.4th 407, 432 (2014). “‘The misconduct which brings the clean hands doctrine into operation must relate directly to the transaction concerning which the complaint is made, i.e., it must pertain to the very subject matter involved and affect the equitable relations between the litigants.'” Id. (citing Camp v. Jeffer, Mangels, Butler & Marmaro, 35 Cal.App.4th 620, 638-39 (1995)). “If the required showing is made, unclean hands may be a complete defense to legal as well as equitable causes of action.” Id. (citing Mendoza v. Ruesga, 169 Cal.App.4th 270, 279 (2008)).

         Defendant argues that Plaintiff's “complete failure to pay Dr. Bouboulis even one penny for his work renders Allergia's hands unclean, ” thus barring all of Plaintiff's claims against Defendant. (Def.'s MSJ Mem. 15.) As President, Defendant “organized the first meeting of Allergia's board of directors (taking place on December 18, 2010), met with the prospective FDA consultant, handled administrative actions such as hiring an accountant and set up a corporate bank account, developed an FDA study protocol, and created a detailed action plan for moving forward with clinical trials of the Allergy Device.” (Id. at 16.)

         The Court disagrees that the doctrine of unclean hands bars Plaintiff's causes of action. Drawing all reasonable inferences in Plaintiff's favor, Defendant has not demonstrated that Plaintiff's failure to pay Defendant for his work as Allergia president was inequitable or otherwise done in bad faith. As Plaintiff explains, Defendant can point to no evidence that Defendant ever asked for a salary or other compensation while serving as Allergia's president. (Pl.'s MSJ Reply 7.) Nor did Defendant ask for compensation for his services in the months after being “ousted” by Allergia. (Id. at 8.) This is especially telling given that after being removed as president Defendant twice communicated with Plaintiff, through an attorney, advising Plaintiff that he retained some ownership rights in the Allergy Device and underlying intellectual property, but never once mentioning compensation. (Id. (citing Johnson Suppl. Decl. ¶¶ 12-14, ECF No. 102-2).) To be sure, while serving as Allergia president, Defendant eventually asked the board of directors for a larger ownership interest in the company. But even Defendant admits that this request was “in exchange for the efforts he would have to expend” on future work for Allergia. (Def.'s MSJ Mem. 12; see also Johnson Suppl. Decl. ¶ 8 (citing Defendant's proposed compensation plan, sent to the board, for the “financial investment and financial risk involved in furthering to develop the Allergia apparatus through FDA approval” (emphasis added)).) Additionally, even if Defendant's request was meant to compensate him for his previous work, Defendant does not demonstrate that the board's rejection of his proposal was unreasonable, much less inequitable or otherwise done in bad faith. To the contrary, the board arguably reasonably rejected Defendant's proposal since at least two board members “were still reeling from their losses of hundreds of thousands of dollars on CLRS and the Claro device” and “did not want to give up substantial equity to [Defendant], who had not held any significant investments in CLRS.” (Def.'s MSJ Mem. 12 (citing Def.'s SOF ¶¶ 82, 83).) And Defendant presents no authority suggesting that a board's refusal to grant an officer greater ownership of the company, reasonable or otherwise, would thereafter bar the company from bringing suit against that officer under the doctrine of unclean hands.

         Furthermore, it does not appear that Plaintiff's failure to pay Defendant for his services as president is directly related to the core of Plaintiff's claims-which is to determine who owns the intellectual property underlying the Allergy Device. Plaintiff believed that Defendant had already assigned his rights in the Allergy Device and related intellectual property to CLRS when, among other things, Defendant (1) served as a CLRS consultant and (2) signed the CLRS Assignment Agreements as Allergia's president, both of which occurred before Plaintiff had any alleged duty to pay Defendant for his work as its president. (See Def.'s MSJ Opp'n 14-15 (citing, e.g., Oberreiter's testimony that he remembers Defendant signing a consulting agreement with a patent assignment clause); see also Pl.'s MSJ Reply 8 (collecting evidence)).) While much of this evidence is insufficient to demonstrate that Defendant actually assigned or promised to assign his rights to Plaintiff or another entity, see infra Sections II.B, D, it is sufficient to evince Plaintiff's belief that Defendant had already assigned his rights in the technology for purposes of Defendant's defense of unclean hands at the summary judgment stage. Accordingly, the Court DENIES Defendant's Motion for Summary Judgment that Plaintiff's claims are barred under the doctrine of unclean hands.

         B. Declaratory Judgment

         Plaintiff seeks declaratory judgment that it “is the owner of 100% of Plaintiff's '172 and '672 patent applications, and the technology and inventions underlying and disclosed therein. Other than by virtue of any ownership that Defendant may have in the stock of Allergia, Defendant does not own any of those patent applications.” (SAC ¶ 46.) Defendant argues that he is entitled to summary judgment on Plaintiff's declaratory judgment claim that it is the sole owner of the Allergy Device and its related intellectual property. (Def.'s MSJ Mem. 17-23.) Specifically, Defendant argues that Plaintiff has failed to produce a written, executed assignment agreement in which Defendant relinquished his rights in the Allergy Device or its related intellectual property to either CLRS or Allergia. (Id. at 18.) Thus, Defendant argues that he remains a partial owner of the intellectual property consistent with his status as a listed inventor. (Id.)

         The Court agrees with Defendant. To begin, it is undisputed that Defendant is one of the three listed inventors of the patents underlying the Allergy Device. Consequently, Defendant is a one-third owner of those patents absent an assignment agreement. See, e.g., SiRF Tech, Inc. v. Int'l Trade Comm'n, 601 F.3d 1319, 1327 n.5 (Fed. Cir. 2010) (“‘The inventor is presumed to be the owner of a patent application, and [any] patent that may issue therefrom, unless there is an assignment.'” (quoting 37 C.F.R. § 3.73(a))); GE Elec. Co. v. Wilkins, No. 1:10-CV-00674 LJO, 2012 WL 4747211, at *3 (E.D. Cal. Oct. 4, 2012) (“It is a basic tenant in patent law that ‘the rights in an invention belong to the inventor.'” (quoting Bd. of Trs. of the Leland Stanford Junior Univ. v. Roche Molecular Sys., 131 S.Ct. 2188, 2192 (2011))).

         An assignment of patent rights must be in writing. 35 U.S.C. § 261 (“Applications for patent, patents, or any interest therein, shall be assignable in law by an instrument in writing.” (emphasis added)); United States v. Solomon, 825 F.2d 1292, 1296 (9th Cir. 1987) (“A patent is a creature of federal statute and may be transferred only according to the terms of the patent statutes. The rules governing the transfer and assignment of patent rights clearly envision a scheme of written assignment by providing that patents ‘shall be assignable in law by an instrument in writing.'” (quoting 35 U.S.C. § 261)). While “no particular form of words is required, the instrument of transfer must be unambiguous and show a clear and unmistakable intent to part with the patent; it must express intention to transfer ownership.” Solomon, 825 F.2d at 1296 (quoting 5 Ernest Bainbridge Lipscomb, Lipscomb's Walker on Patents, Title § 19:7 (3d ed. 1986)).

         Plaintiff has not produced any writing executed by Defendant assigning his patent rights to Plaintiff. Rather, Plaintiff offers circumstantial evidence that it argues raises genuine issues of material fact that a written assignment does exist, thus precluding summary judgment on this point. (Def.'s MSJ Opp'n 14-15.) Specifically, Plaintiff relies on Oberreiter's testimony that Defendant signed a “consulting agreement” with CLRS when he became a medical advisor to that entity in 2007. (Id. (citing Def.'s SOF ¶ 43).) Oberreiter testified that the agreement “had a provision in it that [stated] his consulting work [would be performed] as a work for hire . . . [and] assigned all rights including intellectual property rights, to CLRS.” (Id. (citing Def.'s SOF ¶ 44).) Dr. Richard Clement, the majority investor in CLRS and then Allergia, testified that he was also aware of this written consulting agreement, (id. (citing Def.'s SOF ¶ 51); see also Clement Suppl. Decl. ¶ 17, ECF No. 96-2), and that Defendant's agreement was the same as an employment agreement signed by co-inventor Enemaerke, (Def.'s MSJ Opp'n 15 (citing Def.'s SOF ¶ 55)).

         This evidence fails for a number of reasons. First, and most importantly, both Plaintiff and Oberreiter have admitted that they do not have this consulting agreement and cannot provide it. The best evidence rule requires that “in proving the terms of a writing, where the terms are material, the original writing must be produced unless it is shown to be unavailable for some reason other than the serious fault of the proponent.” Seiler v. Lucasfilm, Ltd., 808 F.2d 1316, 1319 (9th Cir. 1987) (quoting McCormick on Evidence § 230, p. 704 (Edward Cleary ed., 3d ed. 1984)); see also Fed. R. Evid. 1002 (“An original writing . . . is required in order to prove its content unless these rules or a federal statute provides otherwise.”). Rule 1004(a) provides an exception where the original is lost or destroyed “and not by the proponent acting in bad faith.” However, “[t]he burden of proving loss or destruction under Rule 1004 is on the proponent of the evidence, ” and the court must find it “more probable than not that the originals . . . were lost or destroyed without bad faith.” Seiler v. Lucasfilm, Ltd., 613 F.Supp. 1253, 1260, 1262 (N.D. Cal. 1984), aff'd, Lucasfilm, 808 F.2d 1316. Additionally, where, as here, “the missing original writing in dispute is the very foundation of the claim . . . more strictness of proof is required than where the writings are only involved collaterally.” Medina v. Multaler, Inc., No. CV0600107MMMAJWX, 2007 WL 5124009, at *5 (C.D. Cal. Feb. 7, 2007) (internal quotation ...


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