Beco Dairy Automation, Inc. v. Global Tech Systems, Inc.

104 F. Supp. 3d 1023, 2015 U.S. Dist. LEXIS 60799, 2015 WL 2185121
CourtDistrict Court, E.D. California
DecidedMay 8, 2015
DocketNo. 1:12-cv-01310 LJO SMS
StatusPublished
Cited by2 cases

This text of 104 F. Supp. 3d 1023 (Beco Dairy Automation, Inc. v. Global Tech Systems, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beco Dairy Automation, Inc. v. Global Tech Systems, Inc., 104 F. Supp. 3d 1023, 2015 U.S. Dist. LEXIS 60799, 2015 WL 2185121 (E.D. Cal. 2015).

Opinion

MEMORANDUM DECISION AND ORDER RE: DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S FOURTH AMENDED COMPLAINT (Doc. 67)

LAWRENCE J. O’NEILL, District Judge.

I. INTRODUCTION

This litigation involves a contract dispute between Beco Dairy Inc. (“BECO”) and Global Tech Systems, Inc. (“GTS”) concerning the development and licensing of dairy technology.

II. PROCEDURAL HISTORY

This litigation was initiated by BECO in Kings County Superior Court on July 10, 2012. BECO alleged breach of contract, fraud, and interference, and requested declaratory relief of its contractual rights related to its use of certain dairy automation products and technology. GTS removed this action to this Court. On August 17, 2012, GTS responded to the Complaint with a Motion to Dismiss for Failure to State a Claim and Motion to Strike; BECO was granted leave to amend its Complaint to make its fraud claims more specific. On September 27, 2012, BECO filed its First Amended Complaint. In response, GTS answered and counterclaimed against BECO, alleging breach of contract, interference, and misappropriation of intellectual property, and requesting declaratory relief, related to the same dairy automation products and technology. On March 11, 2013, BECO filed for stipulated leave to amend its Complaint to remove claims for breach of a joint venture and leave was granted on March 25, 2013.

Before BECO filed its amended Complaint, GTS filed for bankruptcy, and on April 23, 2013, an automatic stay issued. On October 28, 2013, the bankruptcy proceeding was dismissed. In accordance with the earlier order granting leave to amend, BECO filed its Second Amended Complaint (removing claims for joint venture breach) on November 12, 2013. GTS answered and counterclaimed on November 27, 2013. GTS Answer and Counterclaim (“GTS Counterclaim”), Doc. 16.

On October 17, 2013 (before the dismissal for the bankruptcy was entered), GTS filed a Complaint in the United States District Court for the District of New Mexico against BECO, Global Tech Systems, Inc. v. Beco Dairy Automation, et al. Case No. 1:13-cv-01006-JAP-KBM (“GTS Complaint”). While the GTS Complaint and Counterclaim were similar, the GTS Complaint included new claims that BECO infringed on eight patents GTS held. In response to the GTS Complaint, on November 12, 2013, BECO filed its answer and a Motion to Dismiss or Transfer. Ultimately, the New Mexico Court transferred the case to the Eastern District of California, where it was renumbered as l:14-ev-00865 — SKO (“Case 865”). Shortly thereafter, BECO petitioned to consolidate this (above-captioned) case with Case 865 and requested leave to amend its own Complaint. On December 9, 2014, the Court consolidated the matters into this case. Consolidation Order, Doc 57. The Court granted BECO leave to amend and closed Case 865.

BECO filed its third amended complaint (“TAC”) December 18, 2014. Doc. 59. The TAC added an additional interference claim and seven claims related to the ownership and validity of the patents at issue in the GTS Complaint. Id. GTS moved to [1029]*1029dismiss six of BECO’s seven patent claims. Doc. 60. The Court granted this motion in part, and dismissed several of Plaintiffs causes of action, granting Plaintiff leave to amend most of the dismissed claims. Mem. Decision and Order (“March 3 Order”), Doc. 60 at 16-17.

BECO timely filed its fourth amended complaint, which includes four causes of action sounding in patent law. Fourth Am. Compl. (“FAC”), Doc. 65. Now before the Court is GTS’s motion to dismiss two of these causes pursuant to Rule 12(b)(6) or 12(b)(1). Mem. of P. & A. in Supp. of Def.’s Mot. to Dismiss (“MTD”), Doc. 67. Plaintiff responded on April 21, 2015. Mem. of P. & A. in Opp’n (“Opposition”), Doc. 75. Defendant filed its reply on April 28, 2015. Reply to PL’s Opp’n (“Reply”), Doc. 78. The Court deemed these matters suitable for decision without oral argument pursuant to Local Rule 230(g).

III. FACTUAL BACKGROUND

BECO is in the business of producing automated dairy technology. FAC ¶ 9. Around 1996, BECO conceived of developing an electronic “no moving parts” milk meter (the “Meter”). Id. at ¶ 10.

At some point prior to February 13, 2000, BECO began selling milk flow meters, as well as sensors that could detect the health of a dairy cow. Id. at ¶ 11. Around this time, BECO had an employee, Monte Lininger (“Lininger”) who was tasked with researching the no-moving parts milk meter concept. Id. at ¶ 12. Lininger advised BECO that such a system could be developed by adding a third metal ring to BECO’s existing flow meter. Id. BECO then realized it needed to collaborate with someone who had circuitry expertise to develop the Meter further. Id.

BECO’s marketing director, Bob Borc-hert (“Borchert”), met with Victor Viesca (“Viesca”), the owner of a company in Mexico that manufactured parts for BECO. Id. at ¶ 13. Viesca introduced Borchert to Antonio Fematt (“Feipatt”), a graduate student who had been working for Viesca, whom he thought could help develop the Meter. Id. Borchert introduced Fematt to BECO president Stan Brown in September 1997. Id. at ¶ 14. Beginning in “late 1997,” BECO began paying Fematt $2,500 a month to work on the Meter. Id. at ¶ 16.

In March 2000, Borchert, Brown, Viesca, and Fematt began working with patent attorney, Dan Meanie, to start a patent application for the Meter technology. Id. at 62.1 Two patent applications were filed on February 13, 2001 for products related to the Meter. Id. These applications matured into four U.S. patents. Id. Later, Meanie filed patent applications on the Pulsation System, which would also mature into four patents. Id.

On February 20, 2001 Borchert, Brown, Viesca and Fematt founded Defendant GTS, a New Mexico-based corporation. Id. at ¶ 25. Fematt acted as the president of GTS, though he did not become a GTS employee until December 2007. Id. at ¶ 26. In May 2001, Fematt moved back to California to work more closely with BECO. Id. at ¶ 28. BECO hired Fematt, and, in October 2001, sponsored his H1B visa. Id. at ¶ 29.

While at BECO, Fematt began development of a pulsation monitoring system (“Pulsation System”), a “head’s up” standalone automatic take-off system (“Take[1030]*1030Off System”) and software that integrated these systems (“Parlor Scan”). Id. at ¶ 31. Along with the Meter, these products made up a complete product line (“Product Line”). Id. Fematt also helped BECO develop a cow identification system (“Cow ID system”) while he was their employee. Id. at ¶ 33. Around the end of 2002, Jorge Míreles, an engineer contracted by GTS moved to Hanford to help design software integrating the Product Line with the Cow ID System. Id. at ¶ 35.

Between 2003 and 2005, BECO began to purchase Product Line components from GTS’ and GTS began to repay BECÓ for its investment in the Product Line. Id. at ¶¶ 37-40. In 2003,- GTS opened its own facility in downtown Hanford. Id. at ¶ 38.

In April 2005, BECO and GTS entered into an agreement wherein GTS agreed to “take on” development of the Cow Identification system so long as BECO continued to pay Fematt’s salary and expenses.2 Id. at ¶ 41.

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Bluebook (online)
104 F. Supp. 3d 1023, 2015 U.S. Dist. LEXIS 60799, 2015 WL 2185121, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beco-dairy-automation-inc-v-global-tech-systems-inc-caed-2015.