Becton, Dickinson and Company v. Cytek Biosciences Inc.

Background

Becton, Dickinson and Company (BD) manufactures and sells medical supplies, devices, laboratory equipment, and diagnostic products, including flow cytometers. Cytek Biosciences Inc. services and customizes BD flow cytometers and began selling its own flow-cytometer products in March 2017.

BD alleged that Cytek used BD’s confidential, proprietary, and trade-secret information to develop and market flow-cytometry systems. In its Second Amended Complaint, BD added a fifth claim for breach of contract and an eighth claim for copyright infringement. The contract claim concerned license agreements for four BD software works. BD alleged that Cytek made unauthorized copies of the software or used it beyond the licenses’ scope while developing and promoting its own products. BD also alleged that Cytek copied, distributed, and created derivative works based on BD’s software and six manuals, including copies altered to replace BD logos and product names with Cytek or Cytoville names and artwork.

Cytek moved under Rule 12(b)(6), which allows dismissal when a complaint does not adequately state a legally recognized claim or does not allege enough facts to make the claim plausible.

Breach-of-Contract Claim

The court held that BD adequately alleged the terms of the FACSDiva Version 8.0 license, but not the terms or legal effect of the licenses for FACStation Version 6.0.4, FACSDiva Version 6.1.3, and FACSDiva Version 7.0. BD had used the FACSDiva Version 8.0 agreement as an example but did not allege that the other agreements had identical terms.

The court also held that BD did not adequately describe how Cytek breached any of the licenses. BD’s allegation that Cytek made unauthorized copies or used the software beyond the licenses’ scope was too vague and conclusory. BD did not identify the specific challenged conduct, the particular contractual provision allegedly violated, or when the alleged breaches occurred. The court further held that BD’s allegations that it had “suffered harm” and was entitled to compensatory damages did not adequately plead actual damages. The court therefore found that BD had failed to adequately plead the contract terms or legal effect, breach, and damages.

Copyright-Infringement Claim

The court recognized that BD owned valid copyrights in the works at issue. But because BD had not adequately pleaded the terms or legal effect of three software licenses or a breach of the FACSDiva Version 8.0 license, it had not adequately alleged that Cytek exceeded the scope of its licenses in a way that could support copyright infringement.

The court separately held that BD had not pleaded enough non-speculative facts about what Cytek infringed, how it did so, or when the infringement occurred. BD’s allegations, made on information and belief, that Cytek copied, distributed, or created derivative works were essentially a formulaic statement of the elements of copyright infringement. The court said BD did not need to identify every alleged infringement at the pleading stage, but it needed to provide at least a representative example identifying copied portions of a manual or software and the Cytek document or software where the copying appeared.

The court also found that BD had not adequately pleaded entitlement to statutory damages or attorney’s fees because it did not allege when the alleged infringement began. It found that BD had not adequately pleaded entitlement to Cytek’s profits because BD alleged no facts connecting Cytek’s profits to the alleged infringement. The court did not meaningfully decide at that stage what allegations might support injunctive relief because it had found that BD had not adequately pleaded copyright infringement.

Disposition

Judge Maxine M. Chesney granted Cytek’s motion. The court dismissed BD’s fifth and eighth claims for relief with leave to amend to cure the identified deficiencies. The court ordered that any Third Amended Complaint be filed no later than May 6, 2020.