Ultratech, Inc. v. Ensure NanoTech (Beijing), Inc.

108 F. Supp. 3d 816, 2015 U.S. Dist. LEXIS 73287, 2015 WL 3547322
CourtDistrict Court, N.D. California
DecidedJune 5, 2015
DocketNo. C 14-05361 WHA
StatusPublished
Cited by10 cases

This text of 108 F. Supp. 3d 816 (Ultratech, Inc. v. Ensure NanoTech (Beijing), 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
Ultratech, Inc. v. Ensure NanoTech (Beijing), Inc., 108 F. Supp. 3d 816, 2015 U.S. Dist. LEXIS 73287, 2015 WL 3547322 (N.D. Cal. 2015).

Opinion

ORDER DENYING DEFENDANT DONGJUN WANG’S MOTION TO DISMISS

WILLIAM ALSUP, UNITED STATES DISTRICT JUDGE

INTRODUCTION

In this action for misappropriation of intellectual property, one defendant moves to dismiss all claims against him in his individual capacity for lack of personal jurisdiction and failure to state a claim. For the reasons stated below, the motion is Denied.

STATEMENT

Cambridge NanoTech, Inc., was a Massachusetts company engaged in the manufacture and sale of atomic-layer deposition systems, which are used in the manufacture of semiconductor devices (First Amd. Compl. ¶¶1, 5, 39, Exh. A). In 2008, [820]*820Cambridge NanoTech entered into a sales-agency agreement- with Start Science (Beijing) Co., Ltd. (id. ¶ 39). That agreement provided that Start Science would serve as a sales agent for Cambridge Na-noTech in Taiwan. The agreement included a forum-selection clause and a clause providing that the agreement would inure to the benefits of the successors of the parties to the agreement (id. Exh. A Sections 5.2, 5.9).

Defendant Dongjun Wang, a citizen and resident of China, signed that agreement as president of Start Science (id. ¶¶ 8, 39). Wang and Start Science were then given access to Cambridge NanoTech’s marketing and sales information, including design drawings, manuals, operating software, price lists, parts lists, vendor information, and competition analyses (id. ¶ 43).

While Start Science was still acting as a sales agent for Cambridge NanoTech, Wang formed Ensure NanoTech (Beijing), Inc., and Ensure NanoTech LLC'(collec-tively “Ensure NanoTech defendants”), as corporations organized in China and Ohio, respectively (id. ¶¶ 6, 7, 4, 48). Ensure NanoTech defendants engaged in the manufacture and sale of ALD equipment in competition with Cambridge NanoTech (id. ¶¶ 49-50). Some of Ensure Nano-Tech’s digital manuals included metadata listing Cambridge NanoTech model numbers and identifying Cambridge NanoTech as the author of those files (id. ¶¶ 52, 56). In 2011, Cambridge NanoTech terminated its sales agency relationship with Start Science (id. ¶ 45).

Our plaintiff, Ultratech, Inc., acquired Cambridge NanoTech in 2012 (id. ¶ 26). Ultratech is the owner of U.S. Patent No. 8,202,575 (“the ’575 patent”), which covers ALD technology (id. ¶ 32). Ultratech is a Delaware corporation with its principal place of business in San Jose (id. ¶ 5).

Ultratech’s amended complaint includes claims against Wang and Ensure Nano-Tech defendants- for patent infringement, trade secret misappropriation, unfair competition, and copyright infringement, as well as a claim against Wang for breach of the sales-agency agreement.

Wang now moves to dismiss all claims against him individually for lack of personal jurisdiction and failure to state a claim. This order follows full briefing and oral argument.

ANALYSIS

1. Wang’s Rule 12(b)(2) Motion.

Wang argues that he is not subject to personal jurisdiction in this forum because he has not purposefully directed any activities at the forum. Ultratech argues that Wang is subject to the forum-selection clause in the sales-agency agreement between Ultratech’s predecessor-in-interest, Cambridge NanoTech, and Wang’s company, Start Science.

The forum-selection clause in the sales-agency agreement between Cambridge NanoTech and Start Science states (First Amd. Compl. Exh A, Section 5.9):

Any litigation arising under or related to this Agreement shall be brought in the United States District Court or the state trial court for the division and county in which Client’s corporate headquarters are located at the time the litigation is initiated. Agent hereby submits to the personal jurisdiction of these courts and waives all objections to placing venue before them.

In order to reach Wang, the forum-selection clause must apply across three degrees of separation. First, the forum-selection clause must inure to Ultratech as a result of its acquisition of Cambridge NanoTech. Second, the forum-selection clause must apply to Wang, even though he signed the sales-agency agreement on behalf of Start Science. Third, the tort [821]*821claims against Wang must relate to the contractual relationship between Cambridge NanoTech and Start Science. This order finds that all three conditions are met for the breach-of-contract, trade secret, and unfair competition claims, and that Wang is subject to personal jurisdiction in this forum pursuant to the discretionary exercise of pendent personal jurisdiction for the remaining claims.

A. Inuring to Ultratech.

The forum-selection clause specified the location of the client’s headquarters in that agreement “at the time litigation is initiated” (First Amd. Compl. Exh. A, Section 5.9). Ultratech argues that the forum-selection clause in the sales-agency agreement designated the district court for the current location of its headquarters as the forum for litigation arising out of the agreement, which is this district. Wang, by contrast, argues the forum-selection clause designated the location of Cambridge NanoTech’s headquarters at the time the agreement was executed, which was Massachusetts. The sales-agency agreement further provided the agreement would inure to the benefit of “the parties, and their respective successors, successors in title, and assigns” (id. Exh. A, Section 5.2). That provision does not specifically call out the forum-selection clause, but rather refers to the agreement as a whole.

Neither our court of appeals nor any district court in our circuit has addressed the enforceability of a forum-selection clause that designates the forum for litigation arising out of the contract to which it applies as the location of the headquarters of a party to the agreement at the time litigation is initiated. In the closest decisions on point, several district courts in our circuit have permitted a successor-in-interest to enforce a forum-selection clause without any specific provision detailing its enforceability in that circumstance. Ambler v. BT Americas Inc., 964 F.Supp.2d 1169, 1173 (N.D.Cal.2013) (Judge Edward Davila); South County Professional Park, Ltd. v. Orchard Supply Company LLC, Docket Nos. 14-civ-02348, 2014 WL 3706825, at *3 (N.D.Cal. July 21, 2014) (Judge Paul Grewal); Comerica Bank v. Whitehall Specialties, Inc., 352 F.Supp.2d 1077, 1080 (C.D.Cal.2004) (Judge Robert Timlin). No district court in our circuit has declined to permit a successor-in-interest to enforce a forum-selection clause.

Wang’s only dispute relating to Ultra-tech’s right to enforce the forum-selection clause relies on the claim that the clause designated the district in which “Cambridge NanoTech was then headquartered” (Def. Mot. at 8). He cites no source of authority in support of this claim.

In the absence of controlling authority, and with the benefit of persuasive holdings by sister district courts, this order holds that the reach of the provision in question is a matter of contract interpretation. At least at the pleading stage, our district is a proper venue for certain of the claims alleged in light of the fact that Ultratech is a successor-in-interest to Cambridge Nano-Tech.

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108 F. Supp. 3d 816, 2015 U.S. Dist. LEXIS 73287, 2015 WL 3547322, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ultratech-inc-v-ensure-nanotech-beijing-inc-cand-2015.