Patel Burica & Associates, Inc. v. Lin

          Present: The Honorable CHRISTINA A. SNYDER

          CIVIL MINUTES - GENERAL

         Proceedings: (IN CHAMBERS) - DEFENDANTS' MOTION TO DISMISS (ECF No. 16-1, filed on November 12, 2019)

         I. INTRODUCTION AND BACKGROUND

         This case concerns the alleged infringement of a structural engineering firm's copyrighted designs, as well as the alleged misappropriation of that firm's other noncopyrighted trade secrets, by a former employee.

         For the purpose of this motion, and unless stated otherwise, the Court assumes the truth of the following allegations. Plaintiff Patel Burica & Associates, Inc. ("PBA") is a structural engineering firm based in Irvine, California. ECF No. 1 ("Compl.") ¶ 2. Defendant Jason Lin ("Lin") is a structural engineer who was employed by PBA in 2006 as an intern, and between 2011 and 2014 as a staff engineer. Id. ¶ 3. After leaving PBA, Lin joined a competing engineering firm in Irvine and also formed a new entity based in Arcadia, California-defendant JKL Structural Engineering, Inc. ("JKL")-to provide private structural engineering services to clients. Id. ¶¶ 4, 7.

         PBA filed this action on September 25, 2019. Id. PBA claims that it "created numerous copyright-protected design details" for use in its structural plans, and "registered the copyrights." Id. ¶ 5. PBA refers to these unidentified design details as the "Copyrighted Material," but does not explain what these details comprise, what they relate to, or how they are used. Id. PBA does not attach images of its allegedly copyrighted designs, the copyright registrations, or even the corresponding registration numbers. PBA also claims that it separately, and at great cost, "developed various trade-secret materials for use in its design work," including "CAD files" that "contain proprietary design details and embedded algorithms to automate the design process," as well as coded "spreadsheets used to conduct structural load calculations." Id. PBA alleges that the trade secrets "give PBA a competitive advantage in the field," and are accordingly stored in secured and access-restricted computer systems. Id. As an added layer of precaution, PBA requires its employees to protect the confidentiality of PBA's trade secrets as a term of their employment agreement. Id.

         PBA alleges that Lin had access, including remote access, to the PBA computer systems where the alleged copyrighted and trade secret materials are stored. Id. ¶ 7. At some point in 2019, PBA claims that it "discovered plans that Lin/JKL had prepared for the construction of a new private home in Arcadia." Id. ¶ 8. The discovered plans are not described, or attached, to PBA's complaint. However, according to PBA, the "detail drawings on the plans are identical" to the copyrighted material that Lin had access to while he was employed by PBA. Id. On this basis, PBA alleges that Lin "took PBA's Copyrighted Material and Trade Secrets prior to the end of his employment with PBA in 2014," "us[ed] PBA's property for his own professional and financial gain," and "intends to continue doing so in the future." Id. ¶ 9. PBA claims that Lin's and JKL's conduct unlawfully infringes on its copyrights pursuant to 17 U.S.C. §§ 101 et seq., id *f¶ 10-12, and violates anti-misappropriation provisions of the California Uniform Trade Secrets Act (Cal. Civil Code §§ 3426 et seq.) ("CUTSA"), id ¶¶ 13-15.

         Defendants Lin and XKL filed the instant motion to dismiss on November 12, 2019. See ECF No. 16-1 ("MTD"). PBA filed an opposition on December 2, 2019. See ECF No. 19 ("Opp."). Defendants filed their reply on December 9, 2019. See ECF No. 21 ("Reply").

         Having carefully considered the parties' arguments, the Court finds and concludes as follows.

         II. LEGAL STANDARD

         A motion pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in a complaint. Under this Rule, a district court properly dismisses a claim if "there is a 'lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.'" Conservation Force v. Salazar. 646 F.3d 1240, 1242 (9th Cir. 2011) (quoting Bahsten v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988)). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the 'grounds' of his 'entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twomblv, 550 U.S. 544, 555 (2007) (internal citations omitted). "Factual allegations must be enough to raise a right to relief above the speculative level." Id. (internal citations omitted).

         In considering a motion pursuant to Rule 12(b)(6), a court must accept as true all material allegations in the complaint, as well as all reasonable inferences to be drawn from them. Pareto v. FDIC. 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be read in the light most favorable to the nonmoving party. Sprewell v. Golden State Warriors. 266 F.3d 979, 988 (9th Cir. 2001). However, "a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009); see Moss v. United States Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) ("[F]or a complaint to survive a motion to dismiss, the non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief."). Ultimately, "[determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal. 556 U.S. at 679.

         As a general rule, leave to amend a complaint which has been dismissed should be freely granted. Fed. R. Civ. Proc. 15(a). However, leave to amend may be denied when "the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986); see also Eminence Capital LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (holding dismissal with prejudice is appropriate only when the complaint could not be saved by amendment).

         III. ...