United States District Court, N.D. California
ORDER DENYING COUNTER-DEFENDANTS' MOTION TO
DISMISS, RE: DKT. NO. 48
PHYLLIS J. HAMILTON UNITED STATES DISTRICT JUDGE
the court is counter-defendants Intellisoft, Ltd and Bruce
Bierman's motion to dismiss defendants and
counter-plaintiffs Acer America Corp. and Acer Inc.'s
(together, “Acer”) counterclaim for declaratory
relief under the Declaratory Judgment Act. The matter is
fully briefed and suitable for decision without oral
argument. Having read the parties' papers and carefully
considered their arguments and the relevant legal authority,
and good cause appearing, the court hereby DENIES
counter-defendants' motion as follows.
March 21, 2014, Bierman and Intellisoft filed this action in
the Superior Court of the State of California for the County
of Marin against Acer. Bierman later voluntarily dismissed
himself from the case and assigned his interest to
Intellisoft. In brief, Intellisoft alleges that Bierman
invented certain trade secrets related to computer power
management. Fourth Amended Complaint (“4thAC”),
¶¶ 41-65. Intellisoft further alleges that in the
early 1990s, Bierman shared those purported trade secrets
with Acer pursuant to a non-disclosure agreement, that Acer
stole those trade secrets, and that Acer obtained a series of
patents (the “'713 patents” or the
“patents”) based on those trade secrets without
Bierman's knowledge. Id. ¶¶ 27-65. On
September 25, 2015, Intellisoft filed its fifth pleading, the
4thAC, asserting causes of action for: (1) misappropriation
of trade secrets, (2) intentional misrepresentation and
concealment, (3) breach of contract- non disclosure
agreement, and (4) accounting. Id. ¶¶
October 30, 2017, Acer removed the matter to this court after
Intellisoft revealed through last-minute expert discovery
that, according to Acer, Intellisoft's case rested on
patent theories of inventorship, infringement, and
infringement-based royalty damages. Notice of Removal, Dkt.
1. On November 20, 2017, Acer filed an amended counterclaim
against Bierman and Intellisoft seeking a declaratory
judgment that Bierman did not contribute to the invention of
the ideas in the '713 patents and was properly not named
as an inventor of those patents. Dkt. 20 ¶ 7.
January 22, 2018, the court denied Intellisoft's motion
to remand, holding that the court had federal subject-matter
jurisdiction on two independent grounds. See
generally Dkt. 35 (the “Remand Order”).
First, Acer's Declaratory Judgment Act counterclaim
provided a basis for removal under 28 U.S.C. § 1454 and
35 U.S.C. § 256. Id. at 16-22. Second,
jurisdiction existed under §§ 1338 & 1441
because Intellisoft's state law claims necessarily raised
questions of patent law. Id. at 11-16.
now move to dismiss Acer's Declaratory Judgment Act
counterclaim because, according to counter-defendants, there
is no case or controversy and because Acer lacks standing as
it has not alleged an injury. The court's Remand Order
specifically addressed the justiciability of Acer's
counterclaim under Medimmune, Inc. v. Genentech,
Inc., 549 U.S. 118, 127 (2007). Id. at 20-22.
Nevertheless, counter-defendants argue that the present
motion demands a different result because of two
newly-submitted pieces of evidence: (i) declarations from
Bierman and Andrew Spielberger, counter-defendants'
counsel, that contain “covenants not to sue” and
(ii) a declaration from Intellisoft's expert Irving
Rappaport attesting that he will not offer testimony that
Bierman or Intellisoft should have been named as inventors on
any of the '713 Patents.
discussed below, the court finds that these two
“new” facts do not extinguish the controversy
supporting Acer's declaratory judgment counterclaim.
motion to dismiss under Rule 12(b)(6) tests for the legal
sufficiency of the claims alleged in the complaint. Ileto
v. Glock, 349 F.3d 1191, 1199-1200 (9th Cir. 2003).
Under the minimal notice pleading requirements of Federal
Rule of Civil Procedure 8, which requires that a complaint
include a “short and plain statement of the claim
showing that the pleader is entitled to relief, ”
Fed.R.Civ.P. 8(a)(2), a complaint may be dismissed under Rule
12(b)(6) if the plaintiff fails to state a cognizable legal
theory, or has not alleged sufficient facts to support a
cognizable legal theory. Somers v. Apple, Inc., 729
F.3d 953, 959 (9th Cir. 2013).
the court must accept as true all the factual allegations in
the complaint, legally conclusory statements, not supported
by actual factual allegations, need not be accepted.
Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). The
complaint must proffer sufficient facts to state a claim for
relief that is plausible on its face. Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 555, 558-59 (2007).
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.” Iqbal, 556 U.S. at 678 (citation
omitted). “[W]here the well-pleaded facts do not permit
the court to infer more than the mere possibility of
misconduct, the complaint has alleged-but it has not
‘show[n]'-‘that the pleader is entitled to
relief.' ” Id. at 679. Where dismissal is
warranted, it is generally without prejudice, unless it is
clear the complaint cannot be saved by any amendment.
Sparling v. Daou, 411 F.3d 1006, 1013 (9th Cir.
motion to dismiss pursuant to Rule 12(b)(1), the applicable
standard turns on the nature of the jurisdictional challenge.
A defendant may either challenge jurisdiction on the face of
the complaint or provide extrinsic evidence demonstrating
lack of jurisdiction on the facts of the case. White v.
Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). Where, as
here, the party makes a factual challenge, the party
“rel[ies] on affidavits or any other evidence properly
before the court to contest the truth of the complaint's
allegations.” Courthouse News Service v.
Planet, 750 F.3d 776, 780 (9th. Cir. 2014) (internal
quotation marks omitted, alteration in original). “When
the defendant raises a factual attack, the plaintiff must
support her jurisdictional allegations with ‘competent
proof, ' under the same evidentiary standard that governs
in the summary judgment context.” Leite v. Crane
Co., 749 F.3d 1117, 1121 (9th Cir. 2014) (internal
citation omitted). The burden of establishing that a cause of
action lies within the court's limited jurisdiction rests
upon the party asserting jurisdiction. Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).
Ninth Circuit has explained:
As required by Article III, courts may adjudicate only actual
cases or controversies. U.S. Const. art. III, § 2, cl.1.
When presented with a claim for a declaratory judgment,
therefore, federal courts must take care to ensure the
presence of an actual case or controversy, such that the
judgment does not become an unconstitutional advisory
opinion. Absent a true case or controversy, a complaint