SARAH EVANS BARKER, District Judge.
This cause is once again before the Court, this time for resolution of two Motions to Dismiss Tecnomatic, S.P.A.'s ("Tecnomatic's") Third Amended Complaint ("TAC"). Defendant Odawara Automatation, Inc. ("Odawara") seeks the dismissal of the claims against it for misappropriation of trade secrets (Count IV) and copyright infringement under United States and Italian law (Counts VII and VIII). [Docket No. 614]. For the reasons detailed below, Odawara's Motion is
Other Defendants have filed a joint Partial Motion to Dismiss [Docket No. 616], which is
Remy Inc., Remy International, Inc. and Delco Remy Mexico S.R.L. de C.V. ("Remy") seek the dismissal of the claims against it for conversion (Count VI), copyright infringement pursuant to Italian law (part of Counts VII and all of Count VIII), and correction of patent inventorship (Count X). As discussed below, the claim for conversion will be
Tecnomatic is an Italian corporation that invents, develops, and creates stators and stator winding in electric motors, most notably those utilized by the automotive industry in hybrid electric vehicles. Tecnomatic also develops equipment used in the manufacture of stators. According to the TAC, through a feigned interest in a "joint venture" with Tecnomatic, Remy induced Tecnomatic to enter into two confidentiality agreements which allowed it to obtain certain confidential information from Tecnomatic. Remy employees, several of whom are defendants in this litigation, shared this information with Odawara
Each Individual Defendant (Van Sickle, Stephenson, Young, and Perry) was an employee of Remy,
Remy is accused of having retained Eagle to create a "twister" and providing Eagle with access to Tecnomatic's "manufacturing equipment and various physical components of Tecnomatic's equipment and tooling and Tecnomatic's manuals, drawing, and software." Defendants Stephenson and Young allegedly provided Eagle with "access to Tecnomatic's information" and "worked with Eagle on the copied twister." TAC ¶ 17.
Remy is also accused of having engaged Defendant Odawara to provide a "slot liner, welder and swedger machine." Defendants Stephenson and Young along with other Remy employees not currently named as defendants allegedly provided Odawara with two discs of "Tecnomatic drawings, manuals, videos, and other information." TAC ¶ 19. After Tecnomatic discovered that Odawara had possession of these two discs in 2012, Odawara has refused to return these discs to Tecnomatic despite requests to do so. TAC ¶ 37-39.
At all times relevant to this litigation, the automotive industry was projected to move increasingly toward the use of hybrid motors in which "stators" are a key component. Based on these predictions, Remy sought to offer hybrid technology in order to maintain a product presence in the future. By 2002, however, Remy had still been "unable to develop sufficient complex stator technology using its own resources, and/or could not do so in a manner timely enough for potential customer demand, or ahead of competitor activity." TAC ¶ 90. Thus, Remy's strategy was to establish itself in the hybrid automotive industry where it could effectively block its competitors. TAC ¶ 90.
In early 2002, knowing of Tecnomatic's established reputation in the stator and stator winding industries including their technology for manufacturing such stators, Remy approached Tecnomatic to make a presentation to Tecnomatic regarding its stator technology and capabilities. TAC ¶ 96. Tecnomatic refused to provide Remy access to its "know-how" or other proprietary information without contractual assurances from Remy to protect that confidential information. TAC ¶ 98.
By 2003, Remy had developed an interest in a "possible joint venture" with Tecnomatic, which Tecnomatic refers to as the "Hybrid Motor Project." TAC ¶ 99. At that time, Tecnomatic was the "only known source" for the "hairpin twist application." Unbeknownst to Tecnomatic, however, Remy "had no intention to enter into a joint venture," instead "intend[ing] to gain access to and learn about Tecnomatic's know-how and proprietary information relating to stators and stator winding technology, as well as the manufacture of lines to build the same." TAC ¶¶ 103-04.
Based on Remy's representations, Tecnomatic executed the Mutual Confidentiality Agreement ("MCA") in May 2003, agreeing to facilitate the exchange of certain confidential information between the companies between May 2003 and May 2005. Thereafter, Tecnomatic collaborated with Remy on technology relating to complex stators and productions lines for the stators. TAC ¶ 116. Remy designated Defendants Kevin Young and Stuart Perry as well as nondefendants Terry Oaf and Jim Spellman to have access to the confidential information from Tecnomatic.
In August 2004, Remy continued to maintain an interest in entering into a joint venture with Tecnomatic. In that regard, Remy and Tecnomatic extended the MCA until May 2007 through the Extension Confidentiality Agreement ("ECA"). TAC ¶¶ 128-138.
Between late 2005 and early 2006, Remy instituted a change in management and undertook significant cost cutting and budgetary reductions. TAC ¶¶ 145, 148. As a part of these curtailments, unbeknownst to Tecnomatic, the decision was made by Remy to cut Tecnomatic out of the Hybrid Motor Project. Remy also sought to disparage Tecnomatic's reputation in an effort to block Tecnomatic's participation in "the United States complex stator, stator winding and manufacturing systems for stators for hybrid motors marketplace." TAC ¶¶ 152-53. However, it became clear that Remy required access to Tecnomatic's information "related to complex stators, stator winding technology, and stator manufacturing technology without jeopardizing the Remy Defendant's business objectives going forward." TAC ¶¶ 156, 159-160. Thus, Remy devised a disingenuous "negotiation strategy" whereby Remy would mislead Tecnomatic with regard to the potential of future business between them in order to secure continued cooperation from Tecnomatic. TAC ¶ 162.
Around 2006, Remy began to demand access to Tecnomatic's technical drawings and manuals. TAC ¶¶ 172, 249-253. Remy employees allegedly knew that Remy had no intention of conducting further business with Tecnomatic; their only purpose in making these demands was to secure an opportunity to copy the otherwise proprietary and privileged information contained in them. TAC ¶¶ 175, 253. On July 17, 2006, Tecnomatic President Guiseppe Ranalli sent a letter to Defendant Van Sickle reluctantly agreeing to provide Remy with the requested drawings. TAC ¶ 178. At some point thereafter, Remy modified its own internal drawings relating to stators to incorporate Tecnomatic's confidential information. TAC ¶ 158. In August 2006, Remy employees discussed via email the possibility of using Eagle and Odawara instead of Tecnomatic to supply equipment based on cost concerns relating to reliance on Tecnomatic for multiple systems. TAC ¶ 247. Remy executives and employees including Van Sickle, Perry, Stephenson, and Oaf also sought access to Tecnomatic drawings and began "systematically" transferring such drawings, manuals, and other information to Eagle and Odawara. TAC ¶¶ 213, 215, 255. By knowing the details from Tecnomatic's drawings, Eagle and Odawara were able to "shorten development, research and development, engineering and manufacturing time and to sell stator equipment to Remy." TAC ¶ 216.
Part of Remy's negotiation strategy was to convince Tecnomatic to lease and have delivered a line of equipment to Remy's facility in Mexico that would allow Remy a strategic leverage over Tecnomatic.
The leased equipment was installed in Remy's facility in Mexico between December 2006 and January 2007.
Remy contacted Eagle and Odawara in January 2007 to enlist them in the process of mirroring, duplicating and/or otherwise copying the Tecnomatic equipment. TAC ¶ 189. Between February and March 2007, after concealing their identities from Tecnomatic, employees of Remy, Eagle, and Odawara traveled to the Remy facility in Mexico to photograph and "otherwise access Tecnomatic's proprietary and confidential information" for purposes of copying Tecnomatic's equipment. TAC ¶¶ 191, 200. Tecnomatic alleges that all these individuals "knew that such information was being improperly accessed and that Remy had a duty to maintain the information as confidential."
On March 26, 2007, counsel for Tecnomatic sent a letter to Muir, Van Sickle, and Kirby, stating as follows:
TAC, Ex. E.
On May 9, 2007, Remy's counsel, JJ Shives, responded to Tecnomatic's March 26, 2007 letter, as follows:
Compl. Ex. F. It is alleged that at least one former Remy employee has admitted that Shives's statement regarding Remy's lack of intention to replicate Tecnomatic's equipment was false. TAC ¶ 206.
Tecnomatic maintains that over the course of early 2007, Remy transferred various videos, manuals, photographs, drawings, discs, etc. containing its confidential information to both Eagle and Odawara.
Tecnomatic further alleges that "upon information and belief" Remy prepared and filed patent applications on Tecnomatic's inventions despite having knowledge that Tecnomatic was the actual owner of that intellectual property. TAC ¶¶ 218-19. No Tecnomatic employees were listed as inventors of this technology on these patent applications filed between 2006 and 2009. TAC ¶ 222. The patent issued as United States Patent No. 8,327,677 ("the `677 patent") on December 11, 2012 and lists Remy Technologies, LLC as the "Assignee." TAC ¶ 222.
On May 12, 2008, Remy terminated its relationship with Tecnomatic, including the lease of Tecnomatic's equipment, and sought a refund of amounts it had paid to Tecnomatic over the term of the lease. In September 2008, Remy also revoked certain purchase orders. TAC ¶ 226.
Tecnomatic alleges that Remy now holds itself out as the inventor of "a new stator winding design that uses rectangular wire . . . with windings that are arranged in multiple layers," i.e. "hairpin stator technology," (TAC ¶ 230) and that Remy publicizes this technology is being incorporated into its motors. TAC ¶ 233.
Tecnomatic also cites the fact that Remy recently obtained a federal grant for at least $60,000,000 from the Department of Energy as evidence of and a consequence of its misrepresentations to the DOE relating to the development of the technology at issue. TAC ¶ 242.
The Defendants have filed motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'"
A party moving to dismiss nonetheless bears a weighty burden. "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint."
As noted above, the two motions to dismiss currently before the Court attack claims against various defendants or groups of defendants. We address each of these motions in turn below.
Odawara asserts that Tecnomatic has failed to include all the essential elements of its trade secret misappropriation claim against it.
IND. CODE § 24-2-3-2.
Odawara argues that Tecnomatic has failed to allege facts that, if proven, would establish that Odawara "used improper means to acquire knowledge of the trade secret" or that Odawara acquired a trade secret when it "kn[ew] or ha[d] reason to know that the trade secret was acquired by improper means." "Improper means" is defined by the IUTSA as "theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means." IND. CODE § 24-2-3-2.
The TAC alleges that sometime during February or March 2007, "one or more of the Remy Defendants and Eagle and Odawara employees and/or management entered the Remy facility in Mexico, concealing their true identities from Tecnomatic, and began to photograph and otherwise access Tecnomatic's proprietary and confidential information in violation of the MCA and ECA." TAC ¶ 191. These individuals allegedly "knew that such information was being improperly accessed and that Remy had a duty to maintain the information as confidential" and were accessing the information "in order to copy Tecnomatic's equipment, and improperly access and use Tecnomatic confidential information to jumpstart their duplication of the Tecnomatic equipment." TAC ¶¶ 198, 200. If true, these allegations would establish that Odawara acquired Tecnomatic's trade secrets with knowledge that that information was being acquired improperly. Thus, the trade secret misappropriation claim against Odawara is not subject to dismissal.
Odawara also argues that Tecnomatic has failed to allege facts establishing that Odawara wrongfully disclosed or used the alleged trade secrets by incorporating them into Odawara machines. Specifically, Odawara argues that the TAC fails to "allege what trade secrets Odawara misappropriated, how those trade secrets were incorporated into the Odawara machines, or even what aspects of the Tecnomatic and Odawara machines are alike." Tecnomatic rejoins, and we agree, that it is not required to plead facts that would disclose its trade secrets or provide highly specific facts relating to improper trade secret use that would only become known to Tecnomatic during discovery. Tecnomatic alleges that Odawara was engaged by Remy to "provide a slot liner, welder and swedger machine" and for that purpose Remy provided Odawara with two discs containing "Tecnomatic drawings, manuals, videos, and other information." TAC ¶¶ 19, 37. Odawara is accused of having been able to "shorten development, researched and development, engineering and manufacturing time and to sell stator equipment to Remy that is a copy of and/or the result of the benefits or improper accessing and using of Tecnomatic confidential information." TAC ¶ 216. The TAC further alleges that Odawara copied Tecnomatic's "existing tooling" and, thus, saved time and engineering resources. TAC ¶¶ 272-73, 283, 299. These allegations provide sufficient notice to Odawara of Tecnomatic's claims against it. Odawara's motion to dismiss the claim is
Odawara again faults the TAC for its failure to state a claim for copyright infringement under federal statutes. Odawara advanced this argument previously in opposition to Tecnomatic's Motion for Leave to Amend its Complaint and the Magistrate Judge rejected it, finding that Tecnomatic had alleged sufficient facts to support each of the elements of its copyright infringement claim. Dkt. No. 403 at 56-57. We adopt the same reasoning as articulated by the Magistrate Judge, and hold that Odawara's requested dismissal of this claim must be
Odawara next contends that Counts VII and VIII must be dismissed against it because they invoke Italian law, which is inapplicable here.
In
Tecnomatic's prematurity argument asks that we entertain the possibility of future claims that are not included within the current allegations set out in the TAC. Our review of the TAC reveals that there is no reference to any act of infringement that occurred in Italy. Indeed, the TAC lacks any specificity as to the place where the alleged infringement occurred. We agree with Odawara and Remy that it is fair to assume that these allegations refer to activities within the United States, given that these companies are located in the United States and no reference is made to infringing activity having occurred in any other specified country. If Tecnomatic's prediction comes true — that discovery may reveal infringing activities taking place in Italy or elsewhere — it can seek to amend its pleading to include such a claim at that time.
We also reject Tecnomatic's attenuated argument that Remy (acting in either the United States or Mexico) in allegedly downloading electronic copies of manuals from a secured File Transfer Protocol ("FTP") server that was located in Italy thereby committed acts of infringement in Italy. The TAC states: Remy "asked for electronic copies of the copyrighted manuals and of other Copyrighted Works," which materials were made available to Remy via the FTP server for a "single, authorized use," and Remy exceeded that authorization when it distributed the information to third parties or engaged in other conduct constituting infringement. TAC ¶¶ 482-483. No other allegation ties Remy's infringing conduct in Italy.
We hold that in its current form, the TAC does not invoke or otherwise implicate issues arising under Italian copyright law. Thus, Count VIII and the portion of Count VII referencing Italian law will be
The Individual Defendants (Vansickle, Stephenson, Young, and Perry) contend that they are not parties to the MCA or the ECA and thus cannot be sued for breaching those agreements. Under Indiana law, "[a] person typically cannot be held liable for breach of contract unless it is shown that she was a party to the contract."
TAC Ex. C (emphasis in Tecnomatic's Response). This provision does not create a contract with anyone who is not otherwise a party to the contract, even if the person is a "Representative" in receipt of the Confidential Information referenced therein. This interpretation is bolstered, as the Individual Defendants point out, by other language in the MCA, which provides that "[E]ach party shall be responsible for any breach of this Agreement by its Representatives," e.g. employees.
Tecnomatic also asserts that the Individual Defendants assented to the terms of the MCA or ECA and thus ratified those contracts, directing the Court specifically to Paragraphs 118 and 130 in support of this argument. Clearly, an individual can assent to the terms of a contract. Resp. at 5 (citing
Finally, Tecnomatic claims that it is entitled to secure enforcement of certain provisions of the MCA and ECA or injunctive relief from the Individual Defendants. In support, Tecnomatic invokes Federal Rule of Civil Procedure 65, which provides that a "parties' officers, agents, servants, employees, and attorneys" may be bound by an order granting an injunction. As the Individual Defendants note, however, this Rule lists those against whom an injunction may be enforced. It does not authorize Tecnomatic's breach of contract claim against the Individual Defendants.
In summary, because the Individual Defendants are not parties either to the MCA or ECA, Tecnomatic's claims against them for breach of those agreements are not sustainable. Those claims against the Individual Defendants are thus
Remy and Individual Defendants Perry and Stephenson seek dismissal of Tecnomatic's conversion claim (Count VI) contending that it is preempted by the Indiana Uniform Trade Secret Act ("IUTSA"), which provides that the IUTSA "displaces all conflicting law of this state pertaining to the misappropriation of trade secrets, except contract law and criminal law." IND. CODE § 24-2-3-1(c). In support, Defendants cite to
Tecnomatic correctly notes that conversion claims based on a claimant's rights with respect to material or tangible objects are not preempted by the IUTSA. In
The property upon which Tecnomatic's conversion claims are based is software allegedly located within equipment that Tecnomatic had built and leased to Remy. According to the TAC, Defendant Perry made copies of the software and transmitted that software via zip file to Eagle and Defendant Stephenson. The zip file containing the software was allegedly removed from the laptop of a Tecnomatic technician. TAC ¶ 329. We agree with Defendants' argument that this property has little or no value apart from the intangible information contained therein. At least, Tecnomatic has not claimed that it has intrinsic value. Thus, we hold that this claim duplicates Tecnomatic's trade secret misappropriation claim and the conversion claims are preempted by the IUTSA. They shall be
The Remy Defendants and Remy Technologies, LLC assert that Tecnomatic has failed to adequately state a claim for correction of patent inventorship, pursuant to 35 U.S.C. § 256 making dismissal of that claim necessary. Section 256 provides, "Whenever through error a person is named in an issued patent as the inventor, or through error an inventor is not named in an issued patent, the Director may, on application of all the parties and assignees, with proof of the facts and such other requirements as may be imposed, issue a certificate correcting such error." The TAC avers that "Tecnomatic individuals, including but not limited to Sante Guercioni, are the true inventors or, at a minimum, joint inventors" of an invention covered by United States Patent No. 8,327,677 ("the '677 Patent"). Remy Technologies, LLC is listed as the "Assignee" of the `677 Patent.
Tecnomatic has not identified which of the seven claims covered by the `677 Patent are implicated by the activities of Tecnomatic's employees. However, we are not convinced that such specificity is required. As noted above, the TAC contains allegations that individuals not named in Patent `677 are in fact inventors. These allegations suffice to put Defendants on notice of the claims against them. Dismissal of Tecnomatic's correction of inventorship claim is therefore
For the reasons explicated above, the Motions to Dismiss [Dkt Nos. 614 and 616] are
IT IS SO ORDERED.