Dynamics Inc. v. Samsung Electronics Co., Ltd.

Background

Dynamics sued Samsung Electronics Co., Ltd. (SEC), Samsung Electronics America, Inc. (SEA), and Samsung Research America, Inc. (SRA) for patent infringement and breach of contract. The contract claim concerned a nondisclosure agreement (NDA) that Dynamics and SRA executed on January 10, 2012. Dynamics alleged that it disclosed magnetic-emulation technology under the NDA and that SRA shared the confidential information with the other Samsung defendants and with LoopPay, which Dynamics described as a direct competitor. Dynamics also alleged that LoopPay used the information in Samsung devices.

The defendants moved under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim, to dismiss Counts II through V of Dynamics’s First Amended Complaint. Dynamics stipulated that it no longer sought relief on Counts II through IV, which were patent claims based on three invalidated patents. The court therefore addressed Count V, the breach-of-contract claim.

Rulings

The court granted the motion as to SEC and SEA because neither entity signed the NDA or was mentioned in it. The court rejected the argument that Samsung’s acquisition of LoopPay made LoopPay no longer a third party under the NDA, reasoning that any entity other than Dynamics and SRA was a third party under the agreement.

The court nevertheless concluded that the claim against SRA was untimely. Applying New York’s borrowing rule, the court used Pennsylvania’s four-year limitations period because Dynamics alleged that its principal place of business was in Pennsylvania and Pennsylvania’s period was shorter than New York’s six-year period. The alleged disclosures occurred no later than May 2015, while Dynamics filed its original complaint on July 12, 2019.

The court also rejected Dynamics’s arguments for extending the filing deadline through continuing breaches, the discovery rule, fraudulent concealment, or equitable estoppel. The court found that Dynamics had not pleaded facts showing a violation after May 2015, delayed discovery despite reasonable diligence, an affirmative act concealing the breach, or inducement and justified reliance. It therefore dismissed the breach-of-contract claim.

Disposition

The conclusion states that the defendants’ motion to dismiss Counts I] through V was GRANTED and that those claims were dismissed with prejudice. The Clerk of Court was directed to close the motion. Judge J. PAUL OETKEN signed the order on April 5, 2024.