Quintara Biosciences, Inc. v. Ruifeng Biztech Inc.

Background

Quintara Biosciences, Inc. moved to amend its complaint to address four matters: the relief sought under Section 17200, dates relevant to notice requirements under the Defend Trade Secrets Act, a proposed claim for intentional interference with contractual relations, and its fraud claim.

Rulings

The court granted the request to correct the Section 17200 claim. A prior order had dismissed that claim because Quintara sought damages rather than restitution. The court concluded that the underlying conversion and duty-of-loyalty claims could support restitution and an injunction, so the Section 17200 claim could proceed.

The court also allowed Quintara to seek exemplary damages and attorney’s fees under the Defend Trade Secrets Act against former employees Alex Wong, Alan Li, and Rui Shao. Quintara alleged that Wong entered his operative nondisclosure agreement in December 2009, Shao in February 2011, and Li in April 2013. Because each agreement preceded the Act’s enactment and the statutory notice provision did not apply to those agreements, the court allowed those remedies at this stage.

The court allowed Quintara to add its intentional-interference claim. The defendants argued that the complaint did not identify the contracts involved, but the court found that the alleged interference with Quintara’s sales was tied to alleged conversion, disloyalty, and misappropriation. The court also rejected the defendants’ undue-delay argument because they identified no prejudice and this was Quintara’s first amendment as of right.

The court rejected the renewed fraud claim. Quintara alleged that Gangyou Wang induced it to enter arrangements represented as necessary for a visa application, while allegedly using them to take over the business. The court held that Quintara’s reliance was not justified because the amended allegations showed that Quintara suspected the arrangements were improper, knew Wang had misled immigration officials, and did not consult counsel until after Wang’s alleged takeover effort. The court also stated that Quintara itself—not its individual founders—was the plaintiff whose reliance had to be justified.

Disposition

The court granted the motion to amend in part. Quintara’s claims for trade-secret exemplary damages and attorney’s fees against Wong, Li, and Shao, restitution and an injunction under Section 17200, and intentional interference with contractual relations may proceed. Quintara’s fraud claim still fails. The court vacated the December 17 hearing and stated that the amended answer was due December 22.