ORDER GRANTING IN PART AND DENYING IN PART PARTIAL MOTION FOR SUMMARY JUDGMENT, [Doc. No. 188], AND GRANTING EX PARTE APPLICATION, [Doc. No. 249], AND GRANTING REQUEST FOR JUDICIAL NOTICE, [Doc. No. 188-54]

ANTHONY J. BATTAGLIA, District Judge.

Defendants filed a partial motion for summary judgment, [Doc. No. 188-1], arguing Plaintiffs' Eighth Claim for Misappropriation of Trade Secrets and Second Claim for Breach of Contract set forth in the Fourth Amended Complaint ("FAC"), [Doc. No. 53], are barred by the statute of limitations. Plaintiffs' filed an opposition, [Doc. No. 218], and Defendants filed a reply, [Doc. No. 221]. Plaintiffs' subsequently filed an ex parte application for leave to further supplement the record, [Doc. No. 249]. The Defendants also filed a request for judicial notice, [Doc. No. 188-54], which was unopposed by Plaintiffs. The hearing on the summary judgment motion was set for February 24, 2012, however, the Court found this motion appropriate for submission on the papers without oral argument pursuant to Civil Local Rule 7.1.d.1 and vacated the hearing date. Based upon the parties moving papers and for the reasons set forth below, the Defendants' partial motion for summary judgment, [Doc. No. 188], is GRANTED IN PART and DENIED IN PART; Defendants' request for judicial notice,1 [Doc. No. 188-54] is GRANTED; and the Plaintiffs ex parte application to further supplement the record, [Doc. No. 249], is GRANTED.

Background

This action arises out of events related to technology licenses and joint ventures between Plaintiffs and their predecessor in interest, and Defendants, commencing in 1998. The facts as set forth below are taken from the FAC and parties moving papers. Plaintiff Gabriel Technologies Corporation ("Gabriel") is a publicly-traded corporation focused on technologies related to asset tracking and physical security. FAC at ¶ 12. Gabriel is organized pursuant to the laws of Delaware, with its principal place of business in Omaha, Nebraska. Id. at ¶ 5. Gabriel and Loc8.net a/k/a Locate Networks, Inc. ("Locate"),2 a predecessor-in-interest to Gabriel, created Trace Technologies as a joint venture. Id. at ¶¶ 2, 14. Trace is a wholly-owned subsidiary of Gabriel, and is a limited liability company organized under the laws of Nevada. Id. at ¶ 6.

In late 1998, the founders of Locate, Richard Crowson and William Clise, started discussing joint development projects with Defendants Norman Krasner and SnapTrack. Id. at ¶ 15. Locate focused on location determining devices and location-based services; SnapTrack developed broadband network and assisted Global Positioning System ("aGPS") technology. Id. at ¶¶ 12, 19. On August 20, 1999, SnapTrack and Locate entered into a license agreement ("1999 Agreement"). FAC at ¶ 23. The 1999 Agreement set forth the terms under which Locate obtained a license to use SnapTrack's aGPS software in exchange for paying SnapTrack licensing and royalty fees. Id. at ¶ 25. The parties also agreed to jointly own "Program Technology," defined as work product carried out by the parties in connection with the 1999 Agreement, and identified as Program Technology in the agreement. Id. at ¶¶ 23, 28. Plaintiffs allege that SnapTrack and Krasner used the relationship created by the 1999 Agreement to obtain millions of dollars from Locate to keep SnapTrack afloat while negotiating a billion dollar buyout of SnapTrack. Id. at ¶ 2.

In March 2000, Qualcomm acquired SnapTrack for $1 billion, stating in its press release that "SnapTrack's patents are necessary for the commercial viability of any Wireless Assisted GPS System." Id. at ¶ 46. Qualcomm is a Delaware corporation, with its principal place of business in California. Id. ¶ 7.

In 2004, Locate sold its assets to Trace, transferred its interest in Trace to Gabriel, and went out of business. FAC at ¶ 14. Defendants then presented Trace, the successor in interest to Locate's assets, with a proposed amended license agreement. Id. at ¶ 110. Defendants claimed that no joint program technology existed under the 1999 agreement. Id. at ¶ 11. The proposed amended license agreement deleted the Program Technology section of the 1999 agreement which stated that "all Program Technology was jointly owned by the parties." Id. at ¶ 112. On January 16, 2006, Trace and Defendants entered into the amended license agreement ("2006 license agreement"). Id. at ¶ 123. Plaintiffs state that at the time, Trace was not aware that SnapTrack had misappropriated Locate's intellectual property and technology. Id.

Plaintiffs allege that during 1999-2006 time period Krasner misappropriated Plaintiffs' trade secrets and other confidential information. Plaintiffs assert that Krasner secretly filed and obtained numerous patents based on Locate's technology, which he was able to access when the parties entered into the 1999 license agreement. FAC at ¶ 111. Once Qualcomm acquired SnapTrack, Plaintiffs assert that Qualcomm continued filing patents based on Locate's technology. Id. at ¶¶ 111, 120. Plaintiffs allege that at least (92) ninety-two U.S. and foreign patents and patent applications filed by Krasner and Qualcomm should list Locate employees as the sole inventors, or at least joint inventors. Id. at ¶ 62. By filing these patent applications and obtaining these patents, Plaintiffs allege that Defendants obtained valuable technology without paying for it. Id. at ¶ 66. According to Plaintiffs, the procurement of these patents allowed Snap-Track and Qualcomm to create barriers of entry to third-party competition in the GPS market. Id. Qualcomm benefits from the patents by licensing them to industry leaders as part of its patent portfolio and business model. Id.

Over time, as the patents became publicly available, Plaintiffs discovered certain patents that incorporate Locate's pre-existing technology and jointly owned program technology.3 FAC at ¶ 126. Plaintiffs contend that they approached Qualcomm with these claims in June 2007, and were ignored by Qualcomm's Board of Directors. Id. at ¶ 128. Upon continuing investigation, Plaintiffs filed this lawsuit, which initially contained eleven (11) causes of action against Defendants, including: (1) breach of the 1999 license agreement; (2) breach of the 2006 license agreement; (3) fraud/fraudulent inducement; (4) tortious interference with contract; (5) correction of inventorship; (6) declaration of ownership; (7) equitable patent infringement; (8) misappropriation of trade secrets pursuant to California's Uniform Trade Secrets Act; (9) conversion; (10) unfair competition pursuant to Cal. Bus. & Prof.Code section 17200; and (11) unjust enrichment. Plaintiffs seek over $1 billion in damages.

On September 3, 2009, 2009 WL 3326631, [Doc. No. 35], the Court granted in part and denied in part the Defendants' motion to dismiss, and ordered Plaintiffs to file an amended complaint by September 14, 2009.4 On September 14, 2009, Plaintiffs filed a Second Amended Complaint, which contained an amended fraud and fraudulent inducement claim and incorrectly re-alleged claims that had been dismissed with prejudice. [Doc. No. 36.] The Court held a telephonic status conference with the parties on October 8, 2009 and granted Plaintiffs leave to file a Third Amended Complaint that did not include the claims previously dismissed with prejudice. [Doc. No. 39.] Plaintiffs filed their Third Amended Complaint on October 9, 2009, which included the amended fraud and fraudulent inducement claims. [Doc. No. 40.] Defendants again moved to dismiss Plaintiffs' fraud claim. [Doc. No. 41.] On December 14, 2009, the Court granted Defendants' motion and dismissed Plaintiffs' fraud and fraudulent inducement claim with prejudice. [Doc. No. 48.] On January 11, 2010, Plaintiffs filed their Fourth Amended Complaint ("FAC"), which did not contain any causes of action for fraud. [Doc. No. 53.] Defendants answered on January 29, 2010. [Doc. No. 54.]

The FAC, [Doc. No. 53], filed January 11, 2010, sets forth the Plaintiffs' four remaining claims as follows: (1) Breach of the Amended and Restated License Agreement (COUNT TWO); (2) Correction of Inventorship (pursuant to 35 U.S.C. § 256) (COUNT FIVE); (3) Declaratory Judgment of Ownership Interest in the Patents (pursuant to 28 U.S.C. § 2201) (COUNT SIX); and (4) Misappropriation (pursuant to Cal. Uniform Trade Secrets Act) (COUNT EIGHT). On August 13, 2010, 2010 WL 3259739, the Court denied Plaintiffs' motion for leave to file a fifth amended complaint, which sought to add a fraudulent concealment claim. [Doc. No. 104.] On September 27, 2011, Defendants filed a partial motion for summary judgment, [Doc. No. 188], with regard to the Plaintiffs' claims for misappropriation of trade secrets and breach of contract arguing these claims are barred by the statute of limitations.

Legal Standard

Summary judgment is appropriate where the record, when read in the light most favorable to the nonmoving party, demonstrates that "there is no genuine issue as to any material fact and ... the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Pursuant to Rule 56(c), the movant bears the initial burden of demonstrating the absence of a genuine issue of material fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party satisfies this burden, the non-moving party must set forth, by affidavit or as otherwise provided by Rule 56, "specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987). All reasonable inferences that can be drawn from the evidence "must be drawn in favor of the non-movant," John v. City of El Monte, 515 F.3d 936, 941 (9th Cir.2008), but only admissible evidence is considered. Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cir.2002).

Discussion

Defendants seek partial summary judgment on Plaintiffs' Eighth Claim for Misappropriation of Trade Secrets and Second Claim for Breach of Contract on the grounds that both claims are barred by the statute of limitations.

I. Plaintiffs' Eighth Claim for Misappropriation of Trade Secrets

In the FAC, Plaintiffs claim Defendants misappropriated Locate's confidential and proprietary information as well as Program Technology by (1) acquiring the information by improper means and (2) disclosing or using the information without Locate's consent. See FAC at ¶ 152. For the purposes of this claim, Plaintiffs define their trade secrets and other proprietary confidential information as including Program Technology, enabling technology that was incorporated into patent filings by defendants, and Locate's experience and expertise in the field of narrowband, including solutions to problems in the telecommunication industry. Id. at ¶ 154.

Defendants seek partial summary judgment on Plaintiffs' Eighth Claim for Misappropriation of Trade Secrets on the grounds that this claim is barred by the statute of limitations. Under the California Uniform Trade Secret Act ("CUTSA"), "[a]n action for misappropriation must be brought within three years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered." Cal. Civ.Code § 3426.6. Under California's discovery rule, suspicion of wrongdoing will trigger the statute of limitations.5 Consequently, "[w]hen there is reason to suspect that a trade secret has been misappropriated, and a reasonable investigation would produce facts sufficient to confirm this suspicion (and justify bringing suit), the limitations period begins, even though the plaintiff has not conducted such an investigation."6 Indeed, the law is clear that "once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, she must decide whether to file suit or sit on her rights. So long as a suspicion exists, it is clear that the plaintiff must go find the facts; she cannot wait for the facts to find her." Jolly v. Eli Lilly & Co., 44 Cal.3d 1103, 1111, 245 Cal.Rptr. 658, 751 P.2d 923 (1988).

Plaintiffs' trade secrets claim is based on the disclosure by Locate of its allegedly proprietary technology to Snap-Track when both parties were working on developing Locate's product pursuant to the 1999 Agreement. (FAC, ¶¶ 53-108.) Under the California Trade Secret Act, "a continuing misappropriation constitutes a single claim." Cal. Civ.Code § 3426.6; see also Forcier v. Microsoft Corp., 123 F.Supp.2d 520, 527-8 (N.D.Cal.2000) (interpreting this provision to mean that the statute of limitations for the misappropriation of all trade secrets shared with a defendant in connection with the same relationship and concerning the same matter begins to run as soon as plaintiff suspect the misappropriation of only one of the trade secrets). Here, all of Plaintiffs' purported trade secrets were allegedly shared in the same time period and in connection with the same relationship. As a result, suspicion of the first act of alleged misappropriation triggered the statute of limitations for Plaintiffs' entire claim, even as to later acts of misappropriation.

Since it is undisputed that the alleged misappropriation of trade secrets took place outside the limitations period, Plaintiffs "have the burden of proving the facts necessary to toll the statute." Alamar Biosciences, Inc., 40 U.S.P.Q.2d at 1440. To delay the start of the statute of limitations period, plaintiffs must "show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence." Fox, 35 Cal.4th at 808, 27 Cal.Rptr.3d 661, 110 P.3d 914. Defendants contend that Plaintiffs are unable to make such a showing. See, e.g., Alamar Biosciences, Inc., 40 U.S.P.Q.2d at 1441 (where plaintiff suspected misappropriation but decided to take no further action, it could not show that it took "the steps a reasonably diligent plaintiff would take in investigating its claims"); see also Memry Corp., 2007 WL 2746736, at *11.

The Defendants argue that Plaintiffs' misappropriation of trade secrets claim, is barred by the statute of limitations, because there are two separate undisputed examples demonstrating that Plaintiffs suspected that their trade secret had been misappropriated more than three years before filing suit. Plaintiffs filed this lawsuit on October 24, 2008. Taking into account the parties' tolling agreements, the misappropriation claim is time barred if Plaintiffs suspected wrongdoing on or before December 17, 2004.7

Defendants argue that the evidence shows that on two separate instances, one in January of 2003 and the other in summer to fall time frame of 2004, the Plaintiffs suspected Qualcomm and SnapTrack of misappropriating trade secrets, both before December 17, 2004. The First instance cited by Defendants occurred in January 2003, when Locate's Chief Technology Officer "CTO", William Clise, concluded that SnapTrack had committed a "direct rip-off" of Locate's trade secret. The second instance relied upon by Defendants occurred when Plaintiffs' Chief Financial Officer "CFO", Maurice Shanley, became suspicious that Qualcomm was attempting to take intellectual property belonging to Locate when it proposed in the Summer of 2004 to delete the "proprietary rights" paragraph from the 1999 License Agreement.

A. The January 23, 2003 E-mail

On January 23, 2003, Locate's Co-Founder and Chief Technology Officer ("CTO"), William Clise, sent an e-mail to another Locate engineer, Phil DeCarlo, discussing a SnapTrack presentation.8 In that e-mail, Clise said "[b]y the way did you notice `Broadcast Mode' for GSM a direct rip-off of our work with Glenayre." Clise subsequently testified that he did nothing to investigate his suspicion because he "didn't think it was important." (Karr Dec., Ex. 35, 8/26/11 Clise Tr. at 35:8-37:25.) In Clise's sworn deposition testimony, Clise was asked specifically whether, in January 2003, he thought Defendants had "rip[ped] off" the trade secret from Locate. Clise responded "[y]eah, I did." (Karr Decl., Ex. 35, 8/26/11 Clise Dep. 36:7-16.) Clise then admitted, in direct contradiction to his sworn affidavit submitted in support of Plaintiffs opposition, that he did nothing to follow up on that suspicion. (Karr Decl., Ex. 35, 8/26/11 Clise Dep. 37:9-13.) When asked why, he said:

(Karr Decl., Ex. 35, 8/26/11 Clise Dep. 37:14-20.) Clise's sworn testimony at deposition, unfiltered by the lawyers representing Plaintiffs, demonstrates that Clise suspected Defendants of misappropriation of a Locate trade secret in January 2003 and did absolutely nothing to investigate that suspicion.

Plaintiffs opposition to Defendants motion argues that presentation referenced by Clise in the email does not disclose the broadcasting of acquisition assistance ("AA") data. To support this argument, the Plaintiffs submitted the affidavits of Phil DeCarlo,9 William Clise,10 and Allan Angus.11 Defendants argue that these witnesses do not testify as to their state of mind in January 2003, but rather they testify as to what they believe the presentation shows today. Defendants also argue that these affidavits directly contradict the testimony and declaration of Dr. Anant Sahai, which Plaintiffs' submitted in January 2011 in support of their fifth trade secret designation.12 Defendants argue that Dr. Sahai's statements generally defining AA data directly contradict Plaintiffs arguments and affidavits that the presentation does not disclose the broadcasting of AA data, because the presentation discloses the broadcast of some AA data such as reference time and differential GPS corrections. The Court finds Plaintiffs arguments that the presentation was not relevant unpersuasive in light of the Plaintiffs repeated assertions that their trade secret is the general concept, not the specific implementation.

The Court finds the Plaintiffs' arguments that Locate's failure to do anything to investigate its suspicion in 2003 is excused because, nine years later and facing summary judgment, DeCarlo, Clise, and Angus contend that Clise's suspicion set forth in the January 23, 2003 email was mistaken. (See Opp. at 18-21.) The Plaintiffs contention that if Clise had undertaken an investigation in 2003, that investigation would likely have entailed simply re-reading the presentation, and Clise might have concluded that he was mistaken at the time, thus negating the need to investigate further. The Court finds these arguments unsupported and unpersuasive and directly contradicted by Clise's own deposition testimony.

Furthermore, the cases that Plaintiffs cite to support their arguments are easily distinguishable, because in each of these cases the plaintiff conducted an investigation and either the information necessary to discover the claim was not available or, in one case, a second expert informed the plaintiff that no wrongdoing had occurred. Fox v. Ethicon Endo-Surgery, Inc., 35 Cal.4th 797, 814-15, 27 Cal.Rptr.3d 661, 110 P.3d 914 (Cal.2005); Intermedics, Inc. v. Ventritex, Inc., 804 F.Supp. 35 (N.D.Cal. 1992); Kitzig v. Nordquist, 81 Cal.App.4th 1384, 97 Cal.Rptr.2d 762 (2000). The Court finds the instant case most closely resembles that of Alamar Biosciences, Inc., where the court held that the plaintiff "failed to take the steps a reasonably diligent plaintiff would take in investigating its claims," and that its "failure either to proceed against [alleged misappropriator] based on the information known to it or to undertake readily available means of confirming [the] use of [its technology] was so unreasonable that summary judgment is appropriate." Alamar Biosciences, Inc. v. Difco Labs., Inc., 40 U.S.P.Q.2d 1437, 1440 (E.D.Cal.1996). The court in Alamar found "no question" that plaintiff was suspicious that its former employee and his new employer had misappropriated its trade secrets. The fact not known to plaintiff (what specific technology was being used) was "readily available to the public" in the form of a published PCT patent application. Id. at 1441. As in Alamar, Clise was well aware, through various presentations and marketing materials, that SnapTrack was filing multiple patent applications13 covering aGPS technology. (Defs.' Mem. ISO Partial Summary Judgment at 5-7.) Some of the applications and issued patents that allegedly contained Locate's trade secrets were publicly available in January 2003.14

Based upon the January 2003 email and Clise's sworn deposition testimony, the Court finds that Defendants have established that Clise had a suspicion of wrong doing which triggered the statute of limitations. As Such, the Court finds that Defendants have satisfied their burden of demonstrating an absence of a genuine issue of material fact, thereby shifting the burden to Plaintiffs to demonstrate, by affidavit or otherwise, specific facts showing that there is a genuine issue of fact for trial.15 The Court finds that Plaintiffs have failed to meet their burden. The Court finds the affidavits of DeCarlo and Angus to be speculative, unsupported and contradictory to the email, Clise's sworn deposition testimony regarding the email, and Plaintiffs' previously submitted declaration of Dr. Sahai. The Court finds that the affidavit submitted by Clise directly and inexplicably contradicts his prior sworn deposition testimony warranting its exclusion under the sham affidavit rule.16 The Court also notes that it appears that both Angus and Clise have a contingent interest in the outcome of this litigation,17 which in combination with the unsupported and contradictory nature of their testimony as employees and/or officers of Plaintiffs, further undermines the credibility of these affidavits. Based upon the foregoing, the Court finds that Defendants have demonstrated that there is no genuine issue of material fact that Plaintiffs had a suspicion of wrongdoing in January of 2003, which was more than three years before they filed the claim, thereby making this claim barred by the statute of limitations.18

B. Renegotiations of the License Agreement in June of 2004

The Defendants contend that Plaintiffs' CFO, Maurice Shanley, became suspicious that Qualcomm was attempting to take intellectual property belonging to Locate when it proposed in the Summer of 2004 to delete the "proprietary rights" paragraph from the 1999 License Agreement. Defendants contend that other Gabriel employees also openly questioned "what" Qualcomm was "after with the inventions paragraph" and suggested that Gabriel obtain advice from counsel. (Karr Dec., Ex. 12, 7/9/04 e-mail from Mike May re proposed amendment.)

In September 2004, Shanley met with Gabriel's original lead trial counsel in this case, William Munck. (Karr Dec., Ex. 27, 12/1/09 e-mail to J. Hall re Status Report.) At the time, Shanley thought it was important to meet with a patent attorney who was familiar with wireless and GPS technology and an attorney who had litigated against Qualcomm. (Id.; Karr Dec., Ex. 33, 6/2/11 Shanley Tr. at 89:10-90:7.) In an e-mail sent by Shanley to Munck on October 27, 2008, three days after this lawsuit was filed, Shanley admitted that the purpose of the September 2004 meeting with Munck was "to determine if there was any merit to Trace's claim against QCOM." (Karr Dec., Ex. 26, 10/27/08 e-mail to Munck re Mshanley offer to help.) When asked what he meant by "Trace's claim against QCOM," Shanley confirmed during his deposition that he was referring to the claims asserted in this litigation. (Karr Dec., Ex. 33, 6/2/11 Shanley Tr. at 103:2-104:6.)

Shanley also testified during his deposition that Qualcomm's insistence in mid-2004 that he agree to delete the "proprietary rights" paragraph from the original license agreement made him suspicious that Qualcomm may have taken Locate technology:

(Karr Decl., Ex. 33, 6/2/11 Shanley Dep. 151:12-153:1.) Shanley also testified that as a result of "Fries' aggressive position," he decided to "do a little search on Qualcomm" and allegedly:

(Karr Decl., Ex. 33, 6/2/11 Shanley Dep. 16:17-17:14.)

Defendants argue that Shanley's testimony19 and corroborating documentary evidence establishes that Plaintiffs actually considered its potential claims against Qualcomm well before December 17, 2004. Defendants also point to additional corroborative evidence. For example, months before the October 27, 2008 e-mail, Shanley sent another email to Munck. In that January 7, 2008 e-mail, which is titled "another year gone by," Shanley complains about the lack of progress on the "QC matter" and the toll it is taking on the investors in the lawsuit:

(Karr Dec., Ex. 25, 1/7/08 e-mail to Munck re Another year gone by.) Another example is a set of Trace items for discussion that Shanley circulated on November 30, 2004, a few months after his first meeting with Munck in September 2004. Listed among the topics for discussion is: "Co-Ownership of Technology Trace vs Snap-Track." (Karr Dec., Ex. 14, 11/30/04 Trace Technologies Status Memo.)

Defendants argue that Plaintiffs would not have met with lead trial counsel and "started on this scavenger hunt" or discussed "co-ownership of technology" in terms of "Trace vs SnapTrack" if they did not suspect any alleged wrongdoing by Qualcomm.

In response these arguments, Plaintiffs refer to the affidavits of Maurice Shanley and Allan Angus. In Shanley's affidavit Plaintiffs attempt to explain Shanley's prior deposition testimony by saying that it was just a typical business suspicion and nothing more. Given the unsupported and contradictory nature of Shanley's affidavit and his contingent interest in the outcome of this litigation, the Court finds his affidavit appropriate for exclusion pursuant to the sham affidavit rule.20

In Angus' affidavit, he repeatedly tries to interpret certain documents relied upon by Defendants.21 Angus also attempts to contradict Shanley's sworn deposition testimony, but lacks the personal knowledge to do so.22 The Court finds that Angus lacks personal knowledge to testify as to what these documents mean or what inferences the Court should draw from them and the questionable nature of his affidavit is further compounded by the contradictory nature of his testimony and the contingent interest he holds in the outcome of this litigation. As such, the Court finds Angus' affidavit warrants exclusion pursuant to the sham affidavit rule.23

Based upon the foregoing, the Court finds Defendants have demonstrated that there is no dispute of material fact that Plaintiffs became suspicious of misappropriation by Qualcomm well before December 17, 2004. As such, the Defendants motion for summary judgment on Plaintiffs Eighth Cause of Action for misappropriation of trade secrets is GRANTED because the claim is barred by the statute of limitations.

II. Plaintiffs Second Claim for Breach of Contract

Plaintiffs breach of contract claim alleges that SnapTrack breached the Amended and Restated License Agreement when it, among other things, (1) took ownership of Locate's patents, trade secrets, copyrights, and other Intellectual Property Rights; (2) took and destroyed Locate's joint ownership interest in Program Technology; (3) failed to maintain the confidentiality of Locate's trade secrets and other confidential and proprietary information; (4) failed to establish a process for identifying all Program Technology Intellectual Property Rights; (5) failed to establish a process for determining which intellectual property filings to make with respect to such Program Technology; and (6) filed patent applications and patents without listing Locate as an assignee or Locate personnel as inventors.24 Plaintiffs also contend that Snap-Track breached the Amended and Restated License Agreement in secret by, among other things, not disclosing its patent filings relating to both Locate's technology and Program Technology. The Plaintiffs contend that the harm flowing from SnapTrack's breaches was not reasonably discovered by Gabriel until a future time.

The Defendants move for summary judgment on the Plaintiffs' Second Claim for Breach of Contract on two independent grounds, first that the claim is barred by the statute of limitations and second that the Plaintiffs did not meet their contractual obligations and therefore cannot bring suit.

A. The Breach of Contract Claim is Barred By the Statute of Limitations

The Defendants argue that the Plaintiffs second cause of action for breach of contract is barred by the statute of limitations. California's statute of limitations for a written contract is four years. Cal.Code Civ. Proc. § 337. Generally, a cause of action for breach of contract "accrues at the time of the breach" and the statute begins to run "regardless of whether any damage is apparent or whether the injured party is aware of their right to sue." Perez-Encinas v. Amerus Life Ins. Co., 468 F.Supp.2d 1127, 1134 (N.D.Cal. 2006).

The more lenient "discovery rule" is applied in select cases where (1) "[t]he injury or the act causing the injury, or both, have been difficult for the plaintiff to detect"; (2) "the defendant has been in a far superior position to comprehend the act and the injury"; and (3) "the defendant had reason to believe the plaintiff remained ignorant he had been wronged." Id. at 1134. Under the "discovery rule," a breach of contract claim accrues when the plaintiff "discovers or could have discovered, through the exercise of reasonable diligence, all of the facts essential to his cause of action." Id. Defendants argue that the discovery rule should not apply in this case, but even if it does, Defendants contend that Plaintiffs' breach of contract claim is time-barred. Taking into account the parties series of tolling agreements, Defendants argue that the breach of contract claim is untimely if Plaintiffs suspected or had reason to suspect the alleged breach on or before December 17, 2003.25

Plaintiffs claim that Qualcomm and SnapTrack breached the contract by failing to protect their proprietary rights.26 As set forth above, Clise suspected in January 2003 that SnapTrack technology was "a direct rip-off" of Locate's work but "didn't think it was important" at a time when Locate's "focus was trying to get our product to market and build a service."27 Defendants argue that as a party to the 1999 Agreement, Locate was certainly aware of the contents of that contract, including the provisions concerning Program Technology that Qualcomm is now accused of breaching. (Karr Dec., Ex. 1, 1999 Agreement at ¶¶ 1, 8.) Defendants argue that the undisputed evidence shows that Plaintiffs, through their predecessors-in-interest, had reason to suspect and investigate the alleged claim for breach of contract as early as January 2003, well before December 17, 2003, thereby rendering the Plaintiffs' breach of contract barred by the statute of limitations.28

Plaintiffs' argue that the supposition in the Clise e-mail was incorrect and could not lead to a determination of misappropriation and therefore also cannot be the predicate to trigger the limitations period for their breach of contract claim. However, the Court has already rejected Plaintiffs' attempt to re-evaluate the presentation discussed by Clise is his 2003 email as a mistake and the Court finds the Leaf v. City of San Mateo case relied upon by the Plaintiff to be distinguishable because, as set forth above, Plaintiffs suspected Defendants of misappropriation. 104 Cal.App.3d 398, 163 Cal.Rptr. 711, 716 (1980); Perez-Encinas v. AmerUs Life Ins. Co., 468 F.Supp.2d 1127, 1134-35 (N.D.Cal.2006).

The Court notes that Plaintiffs' breach of contract claim sets forth six separate grounds for breach. The 2003 Clise e-mail is only directly relevant to the third ground cited by Plaintiffs, namely that Defendants failed to maintain the confidentiality of Locate's trade secrets and other confidential and proprietary information. Since Defendants have clearly established that Plaintiffs were aware of this breach in January of 2003, well before December 17, 2003, the Court finds that Defendants are entitled to summary judgment pursuant to their statute of limitations argument on the first ground with respect to Plaintiffs trade secrets only and the third ground only. Defendants have not demonstrated that the statute of limitations would be triggered on the remaining intellectual property set forth in ground one or grounds two, and four through six,29 and as such, Defendants motion for summary judgment as to these claims based on the statute of limitations is DENIED.

B. Plaintiffs Did Not Meet Their Contractual Obligations

Defendants argue that Plaintiffs have failed to demonstrate that they fully performed their contractual obligations in opposing this motion.30 Defendants contend that Plaintiffs' full performance is an essential element of their breach of contract claim,31 because in bilateral contracts such as the 2006 Amendment, California law construes each party's obligation as dependent upon the performance of the other party such that if one party fails to perform, the other party's duty to perform is discharged. See, e.g., Rubin v. Fuchs, 1 Cal.3d 50, 54, 81 Cal.Rptr. 373, 459 P.2d 925 (1969) (noting that "whenever possible the courts will construe promises in a bilateral contract as mutually dependent and concurrent" and that "neither party can place the other in default unless he is fully able to perform or make a tender of the promised performance"). Consequently, to sue for breach of contract a plaintiff must "prove that he was able and offered to fulfill all obligations imposed upon him by the contract." Kane v. Sklar, 122 Cal.App.2d 480, 482, 265 P.2d 29 (1954). Defendants contend that the Plaintiffs cannot meet this requirement because Plaintiffs' failed to: (1) identify and protect program language; and (2) pay royalties.

1. Plaintiffs Failed to Identify and Protect Program Technology

Defendants argue that Plaintiffs cannot claim breach of contract based on Qualcomm's alleged failure to establish processes to identify and protect Program Technology for two reasons. First, no Program Technology exists by the clear terms of the agreements. Second, Plaintiffs concede that they also failed to meet their own contractual obligations with regard to the identification and protection of Program Technology.

The parties defined Program Technology as "those items of work carried out by the parties in connection with this Agreement that are identified as Program Technology in the Project Plan."32 (Karr Dec., Ex. 1, 1999 Agreement at ¶ 1; Ex. 19, 2006 Amendment at ¶ 8(a) (incorporating by reference Program Technology provisions of 1999 Agreement).) The Project Plan "means the project plan, set forth in Exhibit B hereto ..." (Karr Dec., Ex. 1, 1999 Agreement at ¶ 1 and Exhibit B.) The agreements do not state that Program Technology exists. Rather, the agreements expressly provide and anticipate that if Program Technology comes into existence, the parties have a joint obligation to identify it in Exhibit B.33

Defendants argue that Plaintiff's failed to comply with section 8 of the licensing agreement by failing to identify Program Technology or establish a process to protect Program Technology, which were joint obligations of the parties.34 The Plaintiffs argue that Locate did comply with the obligation to identify Program Technology. (Opp. at 23.) Specifically, Plaintiffs argue that because the Project Plan expressly states what is not Program Technology, all other work in the Plan "by implication" is Program Technology. (Opp. at 23.) The Court finds this argument unpersuasive as it directly contradicts the express language of the License Agreement, which requires that Program Technology be "identified as Program Technology in the Project Plan." (See Karr Decl., Ex. 1, 1999 Agreement at ¶ 1.)

Plaintiffs also contend that their breach of the Program Technology provision does not bar a claim for breach of the confidentiality provision of the recital that states that each party shall retain ownership of their solely owned intellectual property rights. (Opp. at 23.) Defendants argue that the argument fails, however, because Plaintiffs have not provided any evidence establishing that the parties intended the various obligations in sections 8 and 9 of the License Agreement to be divisible.35

Defendants argue that the Plaintiffs cannot recover based on non-existent Program Technology, and a mutually dependent contractual obligation that it never fulfilled, or even offered to fulfill. See Kane, 122 Cal.App.2d at 482, 265 P.2d 29. The Court has already held as much. In its order on Qualcomm's motion for bond, the Court held: "Section 8(b) of the 1999 Agreement imposes a duty on the parties, not just Qualcomm, to `establish a process for identifying all Program Technology Intellectual Property Rights.'" [Doc. No. 110, Bond Order at p. 11, fn. 7.] The Court went on to hold that because the 1999 Agreement never identified any Program Technology, Qualcomm could not be liable for breach of contract for failing to protect such Program Technology:

[Doc. No. 110, at p. 12.]

Based upon the foregoing, the Court finds that the Plaintiffs failure to identify program Technology is fatal to their breach of contract claim for grounds two, four and five, which all rely on Program Technology having been defined. As such, Defendants motion for summary judgment on grounds two, four and five is GRANTED.

2. Plaintiffs Failed To Pay Royalties On Devices That Were Sold

The Defendants also contend that Plaintiffs made material misrepresentation and breached the 2006 License Agreement by failing to pay royalties on devices that were sold. The 2006 License Agreement requires Plaintiffs to pay royalties to Qualcomm. (Karr Dec., Ex. 19, 2006 Amendment, Ex. F at ¶ 3.) The Defendants argue that the evidence demonstrates that Plaintiffs breached the 2006 Amendment by rigging monthly reports that Trace was required to provide in an effort to avoid conditions precedent that would have triggered its obligation to pay Qualcomm royalties. (Karr Dec., Ex. 19, 2006 Amendment at ¶ 5(f); Ex. F at ¶ 3.) Defendants contend that Shanley testified to that effect:

(Karr Dec., Ex. 33, 6/2/11 Shanley Tr. at 125:15-21.) As Trace CTO Allan Angus testified during his deposition, Trace had indeed actually gone commercial by selling hundreds of its Onyx devices to the United States Department of Energy in the summer of 2006. (Karr Dec., Ex. 36, 9/8/11 Angus Tr. at 15:25-16:13.)

Defendants argue that a series of November 2006 emails between Trace management corroborates the conclusion that can be drawn from Shanley's and Angus' testimony, namely that Trace misrepresented that it was "non-commercial" in order to avoid its obligation to pay royalties under the 2006 Amendment. (Karr Dec., Ex. 20, 11/16/06 internal Trace e-mails re SnapTrack Report ("We need to look at the report and pare it down to devices, actually in test, including the ones with Nevada. If they are all activated on USA Mobility, used on a daily basis, so as to make our claim of non-commercial weaker, we are looking at making-royalty payments").) Moreover, as a June 29, 2007 e-mail from Angus shows, Gabriel's Directors knew that Trace was "close to a breach of its license agreement with Snap-Track, having failed to pay royalty fees owed on operational devices." (Karr Dec., Ex. 21, 6/29/07 e-mail from Angus to Gabriel Directors re Next steps, if any.) Defendants claims that to date, Qualcomm has not received the royalties that Trace was obligated to pay under the 2006 Agreement once the commercial sales of its devices began. (Dec. of Daniel Albosta, ¶¶ 1-6.)

In response to Defendants arguments, Plaintiffs claim that no royalties were due, because they only sold test devices, not commercial devices, and had no "subscribers." (Angus Aff. ¶ 27.) However, Angus testified unambiguously that Plaintiffs sold devices "commercially" in 2006. (Karr Celc., Ex. 36, 9/8/11 Angus Dep. 15:9-16:15.) However, as set forth above, the Court finds the Angus affidavit's unsupported and contradictory nature warrants exclusion pursuant to sham affidavit rule.

Plaintiffs also argue that if any royalties are due, which Plaintiffs dispute, the amount due would be $450.30 which would be de minimis. However, Defendants contend that because Plaintiffs made material misrepresentations to avoid paying royalties,36 whether the amount owed is de minimis or not is irrelevant. See Posner v. Grunwald-Marx, Inc., 56 Cal.2d 169, 187, 14 Cal.Rptr. 297, 363 P.2d 313 (1961). Based upon the foregoing, the Court finds that a genuine dispute of material fact remains regarding Plaintiffs payment of royalties under the 2006 License Agreement. The court finds that Defendants have failed to demonstrate that the Plaintiffs failure to pay these royalties amounts to a material breach that would precluded any claim for breach by the Plaintiff and as such, Defendants' summary judgment arguments in this regard are DENIED.

Conclusion

For the reasons set forth above, the Defendants' partial motion for summary judgment, [Doc. No. 188], is GRANTED IN PART as to:

(1) Plaintiffs' Eighth Claim for Misappropriation of Trade Secrets;

(2) Plaintiffs' Second Claim for Breach of Contract on Ground One as to Trade Secrets only and grounds Two, Three, Four and Five; and DENIED IN PART as to:

(1) Plaintiffs' Second Claim for Breach of Contract on the remaining intellectual property claims in Ground One and Ground Six.

Defendants' request for judicial notice, [Doc. No. 188-54], is GRANTED and the Plaintiffs ex parte application to further supplement the record, [Doc. No. 249], is GRANTED.

IT IS SO ORDERED.