Select Research Ltd. v. Amazon.com, Inc. et al.

Background

Select Research Ltd. sued Amazon.com, Inc. and Amazon.com Services, LLC over technology involving three-dimensional body scanning and a body-volume health indicator. Select Research alleged that the defendants used its confidential information and ideas in Amazon-related products and in patents issued to Amazon Technologies, Inc. Its amended complaint asserted claims for trade-secret misappropriation under federal and New York law, idea misappropriation, breach of two nondisclosure agreements, fraud, unjust enrichment, tortious interference with business relations, and conversion.

The defendants moved to dismiss under Rule 12(b)(6), which permits dismissal when a complaint does not allege enough facts to support a legally plausible claim. In deciding that motion, the court treated the complaint’s factual allegations as true and viewed reasonable inferences in Select Research’s favor.

Trade-secret misappropriation

The court assumed, without deciding, that Select Research plausibly alleged that it possessed one or more trade secrets. It nevertheless dismissed the federal and New York trade-secret claims because the complaint did not plausibly allege misappropriation. The complaint repeatedly stated that Amazon-related patents contained Select Research’s trade secrets but did not clearly identify the alleged secrets or explain how the patents disclosed them. The court also held that the claims were untimely under the three-year limitations periods because Select Research’s allegations and public patent information showed that it knew, or should have known, of the alleged misuse more than three years before filing this case. The court noted that Select Research had made earlier allegations stating that it discovered the alleged misappropriation in October 2020.

Idea misappropriation

The court dismissed the New York idea-misappropriation claim because the complaint did not identify a specific idea or plausibly allege that it was sufficiently specific, uncommon, unique, and unavailable in the marketplace. The court also held that the claim was untimely because Select Research sought monetary relief and discovered the alleged misuse more than three years before filing suit.

Breach of contract

The court dismissed the claims alleging breach of the first and second nondisclosure agreements. For the first agreement, the complaint did not adequately describe the confidential information allegedly disclosed or explain how the defendants breached the agreement during the relevant period. For the second agreement, the court held that none of the defendants in this case was a party to the agreement. The agreement was between Select Research and Amazon EU S.A.R.L.; allegations that Amazon.com was bound because of its relationship with Amazon EU were too conclusory, and Select Research made no comparable allegations against Amazon.com Services, LLC.

Fraud

The court dismissed the fraud claim because Select Research did not explain why the statements it identified were fraudulent, as required by the heightened pleading rule for fraud claims. The court also found that Select Research did not adequately allege reasonable reliance or damages. Select Research had dismissed its earlier patent case without prejudice and later filed two more lawsuits against the defendants, which undermined its allegation that the earlier statements caused the claimed harm.

Other claims

The court dismissed the unjust-enrichment claim because it duplicated Select Research’s other claims and could not cure their defects. It dismissed the tortious-interference claim because the complaint did not identify a specific business relationship with which the defendants interfered. The court declined to consider a different theory raised for the first time in Select Research’s opposition brief. Finally, it dismissed the conversion claim because the complaint relied on alleged conversion of patent rights and other intangible interests. The court stated that copying trade secrets, even if characterized as copying tangible scans, did not support conversion under New York law.

Disposition

The court granted the defendants’ motion to dismiss and dismissed the complaint in its entirety. It declined to grant Select Research leave to amend. The court cited the substantive problems with the claims, Select Research’s failure to request amendment or identify facts that would cure the defects, and its prior opportunity to amend after an earlier dismissal motion. The Clerk was directed to enter judgment for the defendants and close the case.