Murj, Inc. v. Rhythm Management Group, Inc.

CourtDistrict Court, N.D. California
DecidedNovember 24, 2021
Docket5:21-cv-00072
StatusUnknown

This text of Murj, Inc. v. Rhythm Management Group, Inc. (Murj, Inc. v. Rhythm Management Group, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Murj, Inc. v. Rhythm Management Group, Inc., (N.D. Cal. 2021).

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 MURJ, INC., Case No. 5:21-cv-00072-EJD

9 Plaintiff, ORDER GRANTING MOTION TO DISMISS AMENDED COMPLAINT 10 v.

11 RHYTHM MANAGEMENT GROUP, Re: Dkt. No. 26 PLLC, 12 Defendant.

13 14 Plaintiff Murj, Inc. (“Murj”) brings this action against Defendant Rhythm Management 15 Group, PLLC (“Rhythm”), asserting three claims related to an alleged contractual relationship 16 between the parties. Before the Court is Rhythm’s motion to dismiss Murj’s amended complaint 17 in its entirety under Federal Rule of Civil Procedure 12(b)(6). Def.’s. Corrected Mot. to Dismiss 18 All Claims in Pl.’s Compl. (“Mot.”), Dkt. No. 26. The Court finds the motion appropriate for 19 decision without oral argument pursuant to Civil Local Rule 7-1(b). For the reasons described 20 below, the Court GRANTS the motion with leave to amend. 21 I. BACKGROUND 22 Plaintiff Murj is the creator of a proprietary cardiac device data management software 23 program (“the Murj Platform”) which allows medical providers to monitor and manage data from 24 a variety of implantable cardiac devices. Am. Compl., Dkt. No. 5 ¶¶ 8-10. Defendant Rhythm 25 provides clinical diagnostic services in the form of monitoring patient data to medical providers. 26 Id. ¶ 12. In particular, Rhythm assists medical providers with tracking and managing data 27 collected from patients’ implanted cardiac devices. Mot. at 2. 1 In August 2018 and January 2019, Murj and Rhythm executed two License Agreements 2 and associated Sales Orders, as well as an agreement that Rhythm would abide by the Murj Inc. 3 License Agreement and Terms & Conditions (“Terms & Conditions”). See Dkt. Nos. 5-1, 5-2, 5- 4 3, 5-4, 5-5. Under the License Agreements, Sales Orders, and associated Terms & Conditions 5 (collectively, “the Agreement”), Rhythm was authorized to use the Murj Platform for its “internal 6 business purposes, which includes the internal business purposes of any subsidiaries that Customer 7 controls either directly or indirectly.” Dkt. No. 5-2 at Section 3.1. 8 The Terms & Conditions include provisions concerning Rhythm’s use of the Murj 9 Platform. Both parties agreed to “hold each other’s Confidential Information in confidence and 10 not to disclose such information in any form to any third party without the express written consent 11 of the disclosing party” for the term of the Agreement and for at least five years following the 12 Agreement’s expiration. Id. at Section 6.2 (“the confidentiality clause”). “Confidential 13 Information” is defined as including, among other things, the “Application” and “any Products, 14 related documentation, [and] specifications.” Id. at Section 6.1. “Application” is defined as “the 15 software Application developed and delivered by Murj as described on a Sales Order, the related 16 Documentation and updates and enhancements made to the foregoing, if and when made available 17 by Murj.” Id. at Section 1.2. Murj thus asserts the Murj Platform is “specifically defined as 18 ‘Confidential Information’ under the Agreement.” Am. Compl. ¶ 22. Additionally, the Terms & 19 Conditions require Rhythm to not “cause or permit the reverse engineering, disassembly, or 20 decomplication of any portion of” the Murj Platform or “distribute, sell, sublicense, rent, lease or 21 use the [Murj Platform] (or any portion thereof) for time sharing, hosting, service provider or 22 similar purposes.” Id. at Section 3.4 (“the reverse engineering clause”). 23 Rhythm subsequently used the Murj Platform to enable its medical provider customers to 24 monitor and manage data from implantable cardiac devices. Am. Compl. ¶ 23. 25 In mid-2020, Murj discovered that Rhythm had developed its own cardiac monitoring 26 platform (“the Rhythm Platform”). Id. ¶ 24. In a phone call with Murj CEO Todd Butka, Rhythm 27 CEO Rhonda Bray denied that Rhythm was using the Rhythm Platform. Id. ¶ 25. Around this 1 time, Murj assisted Rhythm in selling Rhythm’s services to a customer by demonstrating the Murj 2 Platform for Rhythm to integrate into its sales pitch. Id. ¶ 26. Rhythm’s pitch was successful, but 3 Murj later discovered that Rhythm had provided the customer its own Rhythm Platform instead of 4 the Murj Platform. Id. 5 Murj alleges multiple similarities between its own platform and the Rhythm Platform. 6 Both are capable of “daily monitoring and triaging of customizable alerts,” reviewing and 7 processing multiple transmissions easily, and allowing customers to “customers to collect revenue 8 from remote professional fees without the headache of having to setup and manage remote 9 monitoring themselves.” Id. ¶¶ 28-33. Murj also claims that the Rhythm Platform uses certain 10 design and interface elements taken from the Murj Platform. Id. ¶ 34. Murj says “the user 11 interface, the wording on its website, the layout, the design, and the phrases” as well as the overall 12 appearance of the Rhythm Platform’s “My Agenda” screen are “copies of the Murj Platform.” Id. 13 ¶¶ 34-35. Some of the specific elements Murj alleges Rhythm copied include the use of red, 14 yellow, and green “alert signals” and similar or identical naming conventions for data columns. 15 Id. ¶¶ 36-37. The Murj Platform, for example, organizes patients into “backlog,” “compose,” 16 “needs approval,” and “cleared” categories, while the Rhythm Platform uses “to be done,” “in 17 progress,” “needs approval,” and “cleared” categories arranged in a similar fashion. Id. ¶ 37. 18 Other claimed similarities include “timeline layout, custom color severity, archived transmission 19 indicator, transmission number and colors, workflow layout, transmission count, remote report, 20 needs approval status screen, cancel button, and download button.” Id. ¶ 39. 21 Murj filed this action on January 6, 2021. Dkt. No. 1. Rhythm filed the motion to dismiss 22 now before the Court on March 20, 2021. Dkt. No. 26. 23 II. LEGAL STANDARD 24 Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim with enough 25 specificity to “give the defendant fair notice of what the . . . claim is and the grounds upon which 26 it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). A 27 complaint which falls short of the Rule 8(a) standard may therefore be dismissed if it fails to state 1 a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). “Dismissal under Rule 2 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts 3 to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 4 1104 (9th Cir. 2008). When deciding whether to grant a motion to dismiss, the Court must accept 5 as true all “well pleaded factual allegations” and determine whether the allegations “plausibly give 6 rise to an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). The Court must also 7 construe the alleged facts in the light most favorable to the plaintiff. Love v. United States, 915 8 F.2d 1242, 1245 (9th Cir. 1989). While a complaint need not contain detailed factual allegations, 9 it “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is 10 plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp., 550 U.S. at 570).

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Murj, Inc. v. Rhythm Management Group, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/murj-inc-v-rhythm-management-group-inc-cand-2021.