CelLink Corp. v. Manaflex LLC

Background

CelLink alleged that Manaflex infringed CelLink patents and misappropriated trade secrets under the Defend Trade Secrets Act. In an amended complaint, CelLink added Robert Lane and Augusto Barton as defendants to the trade-secret claims and asserted claims against Manaflex to correct the listed inventors on three patents. The court had previously dismissed those trade-secret claims against Lane and Barton and the inventorship claims against Manaflex. CelLink then filed a second amended complaint adding further allegations.

The defendants moved to dismiss Counts IV and VII through IX. Count IV alleged trade-secret misappropriation against Lane and Barton. Counts VII through IX sought correction of inventorship for patents assigned to Manaflex. The defendants argued that the new allegations still did not state legally sufficient claims.

Judicial Notice

The defendants asked the court to take judicial notice of 11 exhibits. The court treated two exhibits—a mutual nondisclosure agreement and an email—as incorporated into CelLink’s complaint because CelLink repeatedly referred to them and relied on them for its trade-secret claim.

For Exhibits 3 through 8, which were patents and patent-application publications, the court took judicial notice only that the documents were publicly available. It declined to accept the factual conclusions the defendants wanted to draw from their contents. For Exhibits 9 through 11, which were publicly accessible web pages and articles, the court likewise took judicial notice only that they were in the public realm, not that the articles’ contents were true. The court therefore granted in part and denied in part the defendants’ request for judicial notice.

Motions to Seal

The parties sought to seal or redact portions of briefs, declarations, and exhibits containing CelLink’s confidential information. Applying the standards governing access to judicial records, the court found compelling reasons to seal Exhibits 1 and 2 and most of the identified portions that referred to those exhibits.

The court granted in part and denied in part the defendants’ motion to seal. It granted the request for specified portions of the defendants’ motion, the Maurer Declaration, and the defendants’ reply, but denied the request for lines 1:13–15 of the Maurer Declaration. The court granted CelLink’s motion to seal specified portions of its opposition. It also granted the defendants’ separate motion to seal the specified portions identified in the order.

Motion to Dismiss

A Rule 12(b)(6) motion tests whether a complaint states a plausible legal claim. At this stage, the court accepts well-pleaded factual allegations as true and views them in the light most favorable to the party asserting the claim. The court does not resolve disputed factual issues by relying on outside materials that would require treating the motion as one for summary judgment.

Correction of Inventorship

For a correction-of-inventorship claim, CelLink had to allege facts plausibly showing that its alleged inventors made more than an insignificant contribution to at least one patent claim and that there was some joint behavior, such as collaboration or work under common direction.

The court found that the second amended complaint identified specific patent claims to which Kevin Michael Coakley and Malcolm Brown allegedly contributed. It also alleged that Lane obtained access to CelLink’s confidential manufacturing information through contacts involving CelLink and Tesla, including a May 9, 2016 meeting. The court rejected Manaflex’s effort to use the patent and publication exhibits to establish at the pleading stage that the alleged contributions were already known or were not inventive. It concluded that CelLink plausibly alleged both contributions to the claimed inventions and an element of joint behavior.

The court therefore denied the defendants’ motion to dismiss the correction-of-inventorship claims against Manaflex.

Trade-Secret Misappropriation

To state a claim under the Defend Trade Secrets Act, CelLink had to allege that it possessed a trade secret, that the defendants misappropriated it, and that the misappropriation caused or threatened harm.

As to Barton, the court found that the second amended complaint added allegations that Barton observed CelLink’s confidential manufacturing processes during a factory tour, advised Lane about them, and that Manaflex was using the same or substantially similar technology. The court concluded that these allegations made misappropriation plausible and denied the motion to dismiss CelLink’s claim against Barton.

As to Lane, the court found that CelLink added allegations that Lane repeatedly sought technical information about CelLink’s manufacturing process, was identified as part of a core group involved in the relationship between CelLink and Tesla, and either attended or gained access to information disclosed at the May 9, 2016 meeting. CelLink also alleged that the information later appeared in patents filed by Lane. The court held that these allegations plausibly supported Lane’s knowledge of CelLink’s alleged trade secrets and denied the motion to dismiss the claim against Lane.

Disposition

The court denied the defendants’ motion to dismiss. It granted in part and denied in part the defendants’ request for judicial notice. It granted in part and denied in part the defendants’ motion to file under seal, and granted CelLink’s and the defendants’ motions to file under seal. The order addressed whether the claims were adequately pleaded; it did not determine ultimate liability or whether CelLink will win the case.