Uni-Sys., LLC v. U.S. Tennis Ass'n, Inc.
This text of 350 F. Supp. 3d 143 (Uni-Sys., LLC v. U.S. Tennis Ass'n, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
KIYO A. MATSUMOTO, United States District Judge *153Plaintiff Uni-Systems, LLC, a Minnesota limited liability company ("Uni-Systems") commenced this action on January 11, 2017 against defendants United States Tennis Association, Inc., a not-for-profit incorporated in New York ("USTA"); Rossetti Inc., a Michigan Corporation, ("Rossetti"); Hunt Construction Group, Inc., and Indiana corporation, ("Hunt"); Hardesty & Hanover, LLC, a Delaware limited liability corporation; Hardesty & Hanover, LLP, a New York limited liability corporation (together, "Hardesty & Hanover"); Morgan Engineering Systems, Inc. ("Morgan"), and Ohio Corporation; and Geiger Engineers, P.C. ("Geiger"), a New York professional corporation (collectively, "Defendants"). (See ECF No. 1, Complaint ("Compl.").) The Complaint alleged infringement by all defendants of two Uni-Systems patents,
On October 20, 2017, Plaintiff moved to amend the complaint. (See ECF No. 151, Motion to Amend the Complaint; 151-2, First Amended Complaint ("Amended Complaint" or "FAC").) The Amended *154Complaint alleges eight separate causes of action against the named defendants except where stated: Count I - infringement of the Retention Mechanism patent at Arthur Ashe Stadium; Count II - Infringement of the Lateral Release patent at Arthur Ashe Stadium; Count III - infringement of the Lateral Release patent at Louis Armstrong Stadium, against USTA, Hunt, Rossetti, Morgan and Geiger; Count IV - federal misappropriation of trade secrets under
The Amended Complaint pleads three additional claims for relief based on the additional facts discovered by plaintiff during discovery:
(1) a claim for patent infringement of the Lateral Release patent at the new Louis Armstrong Stadium, (see FAC ¶¶ 152-169); (2) a claim for breach of the Subcontract Agreement between Hunt and Uni-Systems at Cardinals Stadium, (see FAC ¶¶ 205-214); and (3) a claim for breach of the Confidentiality Agreement governing Hardesty & Hanover's peer review of the Marlins Ballpark retractable roof, (see FAC ¶¶ 215-223).
(ECF No. 151-1, Pl. Mem. Supp. Mot. to Amend Compl. at 10.) The Amended Complaint also adds three new parties: Matthew L. Rossetti Architect, P.C. ("Matthew Rossetti P.C."), a New York professional corporation and an entity related to existing Defendant Rossetti, Inc., as well as Morgan Kinetic Structures, Inc. ("Morgan Kinetic") and Morgan Automation, Inc. ("Morgan Automation"), both Ohio corporations and divisions of Defendant Morgan. (See FAC ¶¶ 3, 6.)
On October 24, 2018, the court held a pre-motion conference where the parties agreed that plaintiff's Motion to Amend the Complaint would be evaluated using the Fed. R. Civ. P. 12(b)(6) standard for a motion to dismiss. On November 17, 2017, defendants opposed plaintiff's Motion to Amend and moved to dismiss the existing and proposed First Amended Complaint ("Amended Complaint" or "FAC"). Briefing on plaintiff's motion to amend and defendants' motions to dismiss was completed on January 19, 2018.
BACKGROUND
The well-pleaded factual allegations in the proposed First Amended Complaint are taken as true for purposes of deciding defendants' motions pursuant to Fed. R. Civ. P. 12(b)(6), and determining whether plaintiff, Uni-Systems, shall be granted leave to amend the Complaint. See Roth v. Jennings ,
Uni-Systems describes itself as the, "leading designer of retractable roof systems in the United States" and has designed and implemented retractable roof systems for major stadiums including Minute Maid Ballpark and Reliant Stadium in Houston, Texas; Marlins Ballpark in Miami, Florida; Lucas Oil Stadium in Indianapolis, Indiana; Cowboys Stadium near Dallas, Texas; and University of Phoenix (Cardinals) Stadium in Glendale, Arizona. (FAC ¶ 12).
In connection with its retractable roof designs, Uni-Systems developed valuable intellectual property including " U.S. Patent Nos. 6,789,360 ("the Retention Mechanism patent") and *1557,594,360 ("the Lateral Release patent"), and trade secrets in at least nine categories that were incorporated in the Arthur Ashe and Louis Armstrong retractable roofs. (See FAC ¶¶ 13-30.) Uni-Systems made a significant investment of money and time for the research, development and testing of systems for the retractable roofs. (Id. ¶¶ 11-12.)
In January 2015, Hunt retained Uni-Systems to "design, fabricate, and install" the retractable roof at the Arizona Cardinals Stadium, and the Arizona Cardinals retained Uni-Systems to maintain and repair the retractable roof, once it was installed. (Id. ¶ 57.) For the duration of the project, Uni-Systems took careful measures to protect the confidentiality of its "software, mechanization design principles and criteria, methods for implementing the same using engineered solutions, and other information." (Id.
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KIYO A. MATSUMOTO, United States District Judge *153Plaintiff Uni-Systems, LLC, a Minnesota limited liability company ("Uni-Systems") commenced this action on January 11, 2017 against defendants United States Tennis Association, Inc., a not-for-profit incorporated in New York ("USTA"); Rossetti Inc., a Michigan Corporation, ("Rossetti"); Hunt Construction Group, Inc., and Indiana corporation, ("Hunt"); Hardesty & Hanover, LLC, a Delaware limited liability corporation; Hardesty & Hanover, LLP, a New York limited liability corporation (together, "Hardesty & Hanover"); Morgan Engineering Systems, Inc. ("Morgan"), and Ohio Corporation; and Geiger Engineers, P.C. ("Geiger"), a New York professional corporation (collectively, "Defendants"). (See ECF No. 1, Complaint ("Compl.").) The Complaint alleged infringement by all defendants of two Uni-Systems patents,
On October 20, 2017, Plaintiff moved to amend the complaint. (See ECF No. 151, Motion to Amend the Complaint; 151-2, First Amended Complaint ("Amended Complaint" or "FAC").) The Amended *154Complaint alleges eight separate causes of action against the named defendants except where stated: Count I - infringement of the Retention Mechanism patent at Arthur Ashe Stadium; Count II - Infringement of the Lateral Release patent at Arthur Ashe Stadium; Count III - infringement of the Lateral Release patent at Louis Armstrong Stadium, against USTA, Hunt, Rossetti, Morgan and Geiger; Count IV - federal misappropriation of trade secrets under
The Amended Complaint pleads three additional claims for relief based on the additional facts discovered by plaintiff during discovery:
(1) a claim for patent infringement of the Lateral Release patent at the new Louis Armstrong Stadium, (see FAC ¶¶ 152-169); (2) a claim for breach of the Subcontract Agreement between Hunt and Uni-Systems at Cardinals Stadium, (see FAC ¶¶ 205-214); and (3) a claim for breach of the Confidentiality Agreement governing Hardesty & Hanover's peer review of the Marlins Ballpark retractable roof, (see FAC ¶¶ 215-223).
(ECF No. 151-1, Pl. Mem. Supp. Mot. to Amend Compl. at 10.) The Amended Complaint also adds three new parties: Matthew L. Rossetti Architect, P.C. ("Matthew Rossetti P.C."), a New York professional corporation and an entity related to existing Defendant Rossetti, Inc., as well as Morgan Kinetic Structures, Inc. ("Morgan Kinetic") and Morgan Automation, Inc. ("Morgan Automation"), both Ohio corporations and divisions of Defendant Morgan. (See FAC ¶¶ 3, 6.)
On October 24, 2018, the court held a pre-motion conference where the parties agreed that plaintiff's Motion to Amend the Complaint would be evaluated using the Fed. R. Civ. P. 12(b)(6) standard for a motion to dismiss. On November 17, 2017, defendants opposed plaintiff's Motion to Amend and moved to dismiss the existing and proposed First Amended Complaint ("Amended Complaint" or "FAC"). Briefing on plaintiff's motion to amend and defendants' motions to dismiss was completed on January 19, 2018.
BACKGROUND
The well-pleaded factual allegations in the proposed First Amended Complaint are taken as true for purposes of deciding defendants' motions pursuant to Fed. R. Civ. P. 12(b)(6), and determining whether plaintiff, Uni-Systems, shall be granted leave to amend the Complaint. See Roth v. Jennings ,
Uni-Systems describes itself as the, "leading designer of retractable roof systems in the United States" and has designed and implemented retractable roof systems for major stadiums including Minute Maid Ballpark and Reliant Stadium in Houston, Texas; Marlins Ballpark in Miami, Florida; Lucas Oil Stadium in Indianapolis, Indiana; Cowboys Stadium near Dallas, Texas; and University of Phoenix (Cardinals) Stadium in Glendale, Arizona. (FAC ¶ 12).
In connection with its retractable roof designs, Uni-Systems developed valuable intellectual property including " U.S. Patent Nos. 6,789,360 ("the Retention Mechanism patent") and *1557,594,360 ("the Lateral Release patent"), and trade secrets in at least nine categories that were incorporated in the Arthur Ashe and Louis Armstrong retractable roofs. (See FAC ¶¶ 13-30.) Uni-Systems made a significant investment of money and time for the research, development and testing of systems for the retractable roofs. (Id. ¶¶ 11-12.)
In January 2015, Hunt retained Uni-Systems to "design, fabricate, and install" the retractable roof at the Arizona Cardinals Stadium, and the Arizona Cardinals retained Uni-Systems to maintain and repair the retractable roof, once it was installed. (Id. ¶ 57.) For the duration of the project, Uni-Systems took careful measures to protect the confidentiality of its "software, mechanization design principles and criteria, methods for implementing the same using engineered solutions, and other information." (Id. ¶ 198.) Uni-Systems did this by limiting access to confidential information and requiring its customers and clients to sign confidentiality agreements that prohibited "unauthorized access, use, and disclosure" of the confidential information. (Id. )
Hunt was the general contractor on a number of projects Uni-Systems worked on as the "sole supplier of retractable roof services," but after years of working together, Hunt informed Uni-Systems that it was seeking to establish a second supplier. (Id. ¶¶ 31-34, 52-55.) In order to establish Hardesty & Hanover as a viable competitor with Uni-Systems, beginning in or around 2009, Hardesty & Hanover allegedly conspired with Hunt to misappropriate Uni-Systems' "trade secret and confidential and proprietary software, mechanization design principles and criteria." Hardesty & Hanover was retained to conduct a peer review for the Florida Marlins Ballpark roof, and to provide maintenance services for the Cardinals Retractable Roof, in order to obtain plaintiff's highly valuable trade secrets and proprietary information in violation of state and federal law. (Id. ¶¶ 32-71, 170-204.) Hardesty & Hanover was inexperienced in designing retractable roofs for stadiums at the time. (Id. ¶ 32.) Hunt and Hardesty & Hanover's misappropriation also constituted breaches of their respective contracts with Uni-Systems. (FAC ¶¶ 205-23.)
In or around 2011, Uni-Systems discovered that USTA intended to construct a retractable roof for Arthur Ashe Stadium and had hired Hunt to serve as the designer-builder. (Id. ¶¶ 72-73.) Hunt contracted with Matthew Rossetti P.C., for the design and to serve as the official project architect for the Ashe Retractable Roof. Hunt also contracted with Morgan Kinetic to supply roof mechanization design and construction services for the Ashe Retractable Roof. (Id. ¶¶ 72-75.) Morgan Kinetic was a division of Morgan Engineering, and Morgan Engineering also worked as a Hunt subcontractor, "provid[ing] design build services to engineer and fabricate the Ashe Retractable Roof." (Id. ¶ 75.) Geiger was the mechanization engineer for Matthew Rossetti P.C., a role in which it assisted with the engineering development, prepared performance criteria for the retractable roof panels, and developed documentation, drawings, and specifications for use in the bidding process for the Ashe Retractable Roof. (Id. ¶ 76.) In 2012, USTA, Hunt, and Rossetti provided a specification for the Ashe Retractable Roof to Uni-Systems and requested an initial design proposal from competitors, including Hardesty & Hanover and Uni-Systems. (Id. ¶ 79.) Uni-Systems delivered a proposed a design and a price, and defendants asked Uni-Systems to complete the design, but for a fraction of Uni-Systems' typical fee. (Id. )
Hunt and Hardesty & Hanover misappropriated Uni-Systems trade secrets and *156infringed Uni-Systems patents to facilitate the design and building of the Ashe Retractable Roof, which was completed in August 2016, months after Uni-Systems had first notified the defendants of its intellectual property claims. (FAC ¶¶ 82-90, 125, 166.) Uni-Systems alleges, "the Ashe Retractable Roof infringes Uni-Systems' Retention Mechanism patent and its Lateral Release patent, and each of the defendants has committed infringing acts related to the Ashe Retractable Roof." (ECF No. 192-1, Uni-Systems Sealed Omnibus Reply at 181 ("Omnibus Reply") (citing FAC ¶¶ 86-90, 106-51).)
In addition to the Ashe Retractable Roof, a retractable roof was built on the Louis Armstrong Stadium on the USTA campus with the participation of the named defendants except for Hardesty & Hanover. (FAC ¶¶ 91-97.) Plaintiff alleges that the Armstrong Retractable Roof also infringes plaintiff's Lateral Release patent and utilizes misappropriated trade secrets.2 (Id. ¶¶ 98-105, 152-69.)
DISCUSSION
I. UNI-SYSTEMS HAS NOT ESTABLISHED THAT VENUE IS PROPER FOR THE MORGAN CORPORATIONS AND ROSSETTI, Inc.
As a preliminary matter, the court addresses whether venue is proper as to four of the named defendants.
A. Legal Standard
As prescribed by
B. The Morgan Corporations and Rossetti, Inc. Have Not Waived Their Venue Objections
Plaintiff has insufficiently pleaded that venue is proper in this district pursuant to
On May 22, 2017, the United States Supreme Court held that a domestic corporation defendant is a resident in its state of incorporation. TC Heartland LLC v. Kraft Foods Grp. Brands LLC , --- U.S. ----,
The Federal Circuit has held that the venue defense asserted by defendants in the instant case was not available prior to the Supreme Court's decision in TC Heartland and, therefore, waiver of the defense under Federal Rule of Civil Procedure 12(g)(2) and (h)(1)(A) is precluded. In re Micron Tech., Inc. ,
A party waives any defense listed in Rule 12(b)(2)-(5) by:
(A) omitting it from a motion in the circumstances described in Rule 12(g)(2) ; or
(B) failing to either:
(i) make it by motion under this rule; or
(ii) include it in a responsive pleading or in an amendment allowed by Rule 15(a)(1) as a matter of course.
Based on the foregoing, the court finds that there was no undue delay, and thus no waiver, of their venue defenses by Morgan Engineering and Rossetti Inc. in their answers to the original Complaint, prior to the change in law resulting from TC Heartland.3 See *158Dietz v. Bouldin, Inc. , --- U.S. ----,
When a defense or objection is futile in the sense that the law bars the district court from adopting it to dismiss [a complaint], to require the assertion of the defense or objection in an initial motion to dismiss, on pain of waiver, would generally be to require the waste of resources, contrary to [Fed. R. Civ. P.] Rule 1.
In re Micron Tech ,
Given plaintiff's Motion to Amend, in which it argues that any amendment will not prejudice defendants due to the early stage of the case, the court declines to find that plaintiff would be prejudiced by filing its claims against Morgan Engineering and Rossetti in the proper venues. (See ECF No. 151-1, Pl. Mem. Supp. Mot. to Amend Compl., at 10.) The court finds plaintiff's other arguments in support of finding waiver or forfeiture unavailing.
C. Additional Evidence is Needed to Determine Whether Venue Is Improper As to the Morgan and Rossetti, Inc. Defendants Under § 1400(b)
In any event, plaintiff has not met its burden to establish that venue in this district is proper as to defendants the Morgan Corporations and Rossetti Inc. See Cold Spring,
Plaintiff failed to plausibly allege any facts that the defendants have established places of business in New York.
Courts should ... be careful not to conflate showings that may be sufficient for other purposes, e.g. , personal jurisdiction or the general venue statute, with the necessary showing to establish proper venue in patent cases. As the district court correctly stated, "the regular and established place of business standard requires more than the minimum contacts necessary for establishing personal jurisdiction or for satisfying the doing business standard of the general venue provision,28 U.S.C. § 1391 (c)."
In re Cray Inc. ,
Plaintiff's conclusory allegations that "[d]efendants maintained a regular and established place of business in this judicial district, [d]efendants have purposefully directed business to this judicial district for at least several years, and [d]efendants have committed acts of infringement in this judicial district" are insufficient *159to establish venue. (FAC ¶ 10.) Rather, plaintiff must show that each defendant that is incorporated outside of New York and thus entitled to challenge venue possesses (1) a physical place of business in the district; (2) that is regular and established; and (3) belongs to [each] defendant. See In re ZTE (USA) Inc. , 890 F.3d at 1014-15 (citing In re Cray Inc. ,
In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(3) for improper venue, a court may consider evidence outside the pleadings, regarding proper venue. See Allied Dynamics Corp. v. Kennametal, Inc. ,
The Federal Circuit provided the following three factors for considering whether a corporation incorporated outside of a state has a regular and established place of business in the forum district: "(1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant. If any statutory requirement is not satisfied, venue is improper under § 1400(b)." In re Cray ,
Plaintiff has failed to meet its burden to plausibly allege facts establishing that venue is proper as to Morgan Engineering, Morgan Kinetic Structures, Inc., Morgan Automation, Inc., and Rossetti Inc. However, as plaintiff has requested the opportunity to conduct limited venue-specific discovery and seeks an evidentiary hearing on venue, the court grants plaintiff limited discovery as to whether these defendants have an established place of business in the Eastern District of New York under the supervision of the magistrate judge assigned to this case. Allied Dynamics Corp. ,
II. PATENT INFRINGEMENT, MISAPPROPRIATION OF TRADE SECRETS AND BREACH OF CONTRACT CLAIMS IN THE AMENDED COMPLAINT
1. Leave to Amend
Leave to amend a pleading is typically "freely given" pursuant to Fed. R. Civ. P. 15(a), however, "the trial court [is] required to take into account any prejudice that might result to the party opposing the amendment." Ansam Assocs., Inc. v. Cola Petroleum, Ltd. ,
2. Motion to Dismiss
In assessing whether the proposed amendments would be futile, this Court will apply a Rule 12(b)(6) standard in adjudicating the defendants' arguments in opposition to plaintiff's Motion to Amend, and in support of defendants' motions to dismiss the original complaint and the proposed First Amended Complaint, submitted with plaintiff's Motion to Amend. At a conference on October 24, 2017, the parties agreed that the court would simultaneously decide the plaintiff's motion to amend, defendants' opposition to the amendment, and their motion to dismiss the underlying complaint. (See Oct. 24, 2017 Tr. at 15:9-22.; Motion to Amend; FAC.)
In determining whether a motion to amend should be granted, the court may consider the same standards as those governing the adequacy of a filed pleading. See Ricciuti v. N.Y.C. Transit Auth. ,
"To survive a motion to dismiss pursuant to Rule 12(b)(6), a complaint must contain sufficient facts that if accepted as true 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal ,
A motion to dismiss "does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence [to prove a claim]."
B. The Patent Infringement Claims
1. Counts I and II Against All Defendants Regarding Arthur Ashe Stadium and Count III Against USTA, Hunt, Rossetti, Morgan and Geiger Regarding Armstrong Stadium
Subsection (a) of
Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.
Commil USA, LLC v. Cisco Sys., Inc. , --- U.S. ----,
The Federal Circuit has acknowledged that a complaint pleading facts supporting the following five factors contained in Form 18, a model patent complaint located in the Appendix to the Federal Rules of Civil Procedure, is likely to fulfill the plausibility requirements, though not all five are required to state a claim for relief:
(1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that defendant has been infringing the patent 'by making, selling, and using [the device] embodying the patent'; (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5) a demand for an injunction and damages.
In re Bill of Lading Transmission & Processing Sys. Patent Litig.,
Rossetti, Inc. and Rossetti PC, the Morgan Corporations,4 Geiger, Hunt, and Hardesty *162& Hanover argue that the patent infringement claims in Counts I-III of the First Amended Complaint fail because they rely on bare legal conclusions rather than alleging sufficient facts in support of Uni-Systems' claims of infringement. Accepting as true all of Uni-Systems' factual allegations, and considering them in the light most favorable to Uni-Systems, Uni-Systems' pleadings of direct patent infringement are sufficient, with regard to certain defendants, to state a claim upon which relief may be granted and place the parties "on notice of what activity ... is being accused of infringement." Lifetime Indus., Inc. v. Trim-Lok, Inc. ,
As the Amended Complaint fulfills factors 1,5 2,6 47 and 58 in the In re Bill of Lading test with regards to Claims I, II and III, the analyses of the infringement claims against the individual defendants will focus on whether the Amended Complaint plausibly alleges facts regarding "(3) [ ] that defendant has been infringing the patent by making, selling, and using [the device] embodying the patent." In re Bill of Lading ,
a. Rossetti9
Uni-Systems plausibly alleges that Rossetti, PC and Rossetti Inc. (collectively "Rossetti") infringed the Retention Mechanism patent at Arthur Ashe Stadium (Count I), infringed the Lateral Release patent at Arthur Ashe Stadium (Count II), and infringed the Lateral Release patent at Louis Armstrong Stadium (Count III). Rossetti argues that the Amended Complaint consist of legal conclusions and limited factual allegations that are insufficient to state a claim upon which relief can be granted.
Uni-Systems alleges that Rossetti P.C., was the lead designer and official project architect and worked with Rossetti Inc. to provide design and architectural services for the Ashe Stadium Retractable Roof *163and Louis Armstrong Stadium Retractable Roof. (See FAC ¶¶ 74, 77, 93, 135, 156.) Uni-Systems alleges that Rossetti and Geiger "reviewed and approved" the roof mechanization work for the Arthur Ashe Stadium that was completed by another defendant. (Id. ¶¶ 77, 86-88.)
Uni-Systems further alleges that despite being on notice of their alleged infringement, (Id. ¶¶ 102, 125-27, 148, 150, 166, 168), the Rossetti defendants continued to infringe the Retention Mechanism Patent by "making and using the Ashe Retractable Roof and/or controlling or directing one or more Defendants or third parties to make or use the Ashe Retractable Roof, which was completed, operational, and put into service as of August 2016," and thereafter constructed the Armstrong Retractable Roof using the infringing design. (Id. ¶¶ 112, 169.)
Rossetti argues that the allegations regarding "making" and "using" the Arthur Ashe and Louis Armstrong stadium roofs are legal conclusions, that allegations regarding defendant's titles and roles are not factual or entitled to a presumption of truth, and that "designing or drawing a device that ... might infringe a patent does not itself constitute infringement." (See ECF No. 187, Rossetti Opposition to the Motion to Amend ("Rossetti Opp'n") at 12 (citations omitted).10 )
An allegation of a defendant's roles, supported by sufficient facts, can place a defendant on notice of a claim and even be probative of a defendant's specific intent with regard to a finding of inducement. See Crypto Research ,
Here, however, the allegations of Rossetti's continuing involvement in its role *164not only as an architect and designer, but also as a reviewer and approver or inspector of the mechanization work at Arthur Ashe and designer of the Louis Armstrong Stadium, combined with the detailed allegations regarding Rossetti's knowledge of infringement adequately state claims against the Rossetti defendants. See Waymark Corp. v. Porta Sys. Corp. ,
Further, the bare repetition of the elements provided in
b. The Morgan Corporations
Uni-Systems again alleges barely sufficient facts to plausibly state a claim for patent infringement against the Morgan Corporations as to Counts I, II, and III of the FAC. The Morgan Corporations contested venue, but did not substantively dispute the claims brought in the Amended Complaint. In the FAC, Uni-Systems alleges, inter alia , that, "as designer and builder of the Ashe Retractable Roof, Morgan has infringed the Lateral Release and Retention Mechanism patents under
Taken together, these facts satisfy prongs three and four of the In re Bill of Lading test, "(3) [ ] that defendant has been infringing the patent 'by making, selling, and using [the device] embodying the patent,' " and, "(4) [ ] that the plaintiff has given the defendant notice of its infringement."
c. Geiger
Uni-Systems has alleged sufficient facts to state a claim for patent infringement against Geiger as to Counts I, II and III of the Amended Complaint. Uni-Systems alleges that Geiger, "served as mechanization engineer consultant and structural engineer, prepared performance criteria, developed documentation, *165drawings, and specifications, and reviewed fabrication and construction of the Ashe Retractable Roof.... [and] [was] an engineer of the Armstrong Retractable Roof." (Omnibus Reply at 42 (citing FAC ¶¶ 76, 95, 164).) In that role, Geiger "reviewed and approved" of the mechanization work for the Arthur Ashe Stadium that was conducted by Morgan, another defendant. In its role as an engineer for the Arthur Ashe Retractable Roof, Geiger allegedly "infringed and continues to infringe" the Retention Mechanism patent and the Lateral Release patent "by, among other things, making and using the Ashe Retractable Roof and/or controlling or directing one or more Defendants or third parties to make or use the Ashe Retractable Roof." (FAC ¶¶ 123, 146, 147.) Geiger is further alleged to have engineered the Armstrong Retractable Roof that infringed the Lateral Release patent in the Armstrong Retractable Roof, even after receiving notice of its infringing characteristic. (FAC ¶¶ 165-66, 168.)
Geiger argues that the Amended Complaint fails to set forth any plausible claim of infringement at Arthur Ashe or Louis Armstrong Stadium and that dismissal is proper, because plaintiff's factual allegations are either naked assertions or legal conclusions and not entitled to an assumption truth. (ECF No. 189, Geiger Opposition to the Motion to Amend ("Geiger Opp'n") at 9-10.) Geiger's arguments regarding titles and labels are unavailing, when combined with plaintiff's other factual allegations regarding Geiger's actions, including Geiger's role in designing and periodically reviewing the fabrication and construction of the allegedly infringing roof mechanisms. Geiger relies on Raffaele v. City of New York ,
Geiger also argues that none of Geiger's alleged acts support claims that Geiger "engineered" the Ashe Retractable Roof. (Geiger Opp'n at 15). The allegations that Geiger was responsible for preparing "performance criteria for the proposed retractable roof panels and mechanisms, as well as documentation illustrative of a retractable roof design that would comply with the performance criteria" that Geiger developed dramatization, drawing, and specifications for use in the bidding process, was involved in the bidding, reviewed the fabrication and construction of the roof mechanism, and "assisted in the engineering development" for the Ashe Retractable Roof more than plausibly allege that Geiger "engineered" the roof." (See FAC ¶ 76; Omnibus Reply at 51.) Although Geiger describes the pleadings as speculative and conclusory, the allegations sufficiently put the defendants on notice of the infringement claim. (Id. )
*166Geiger also argues that its design as built does not infringe the Lateral Release Pattern because it has different mechanisms and that a substantive change to the roof design of the Armstrong Stadium precludes finding of infringement. (ECF No. 191, Geiger Surreply to the Motion to Amend ("Geiger Surreply"), at 14.) The court declines to adjudicate material factual disputes.11 Geiger's submissions are not as focused on the sufficiency of the pleadings, as they are on the substance and merits of plaintiff's factual allegations - which is improper on a motion to dismiss. See YETI Coolers, LLC v. RTIC Coolers, LLC , No. 16-CV-264-RP,
d. Hunt
In addition to arguments in support of its motion to dismiss claims against Hunt, in its memorandum of law, "Hunt adopts the arguments of Defendant Geiger Engineers, P.C. ("Geiger") with respect to the ... patent infringement claims (Counts I-II)12 asserted by Uni-Systems." (ECF No. 195, Hunt Opposition to the Motion to Amend ("Hunt Opp'n"), at 9.) The court finds Hunt's arguments unavailing to the extent they mirror Geiger's for the same reasons that it denied Geiger's motion to dismiss. Plaintiff sufficiently alleged that Geiger, "has been infringing the patent 'by making, selling, and using [the device] embodying the patent,' " and, "that the plaintiff has given the defendant notice of its infringement." In re Bill of Lading ,
Plaintiff alleges that, as lead builder of the Arthur Ashe Retractable Roof, Hunt made and used the Ashe Retractable Roof, "and/or controll[ed] or direct[ed] one or more Defendants or third parties to make or use the Ashe Retractable Roof, which was completed, operational, and put into service as of August 2016." (FAC ¶ 114.) Hunt further infringed the Lateral Release patent under
Taken together, the facts alleged regarding Hunt's infringement state a plausible claim for direct patent infringement. Hunt's motion to dismiss the allegations of direct infringement in Counts I, II and III is, therefore, denied.
*167e. Hardesty & Hanover
Plaintiff alleges that,
[a]s designer and builder of the Ashe Retractable Roof, Hardesty & Hanover has infringed and continues to infringe the Retention Mechanism patent [and the under35 U.S.C. § 271 (a) by, among other things, offering for sale and selling a design to USTA, Hunt, and Rossetti that practices one or more claims of the Retention Mechanism patent. Hardesty & Hanover has also infringed and continues to infringe the Retention Mechanism patent by making and using the Ashe Retractable Roof and/or controlling or directing one or more Defendants or third parties to make or use the Ashe Retractable Roof, which was completed ... as of August 2016.
(FAC ¶ 117); see also FieldTurf Int'l, Inc. v. Sprinturf, Inc. ,
2. Plaintiff's Claims for Induced and Contributory Infringement Are Dismissed in Part
"To state a claim for induced infringement, a plaintiff must plausibly allege that the defendant: (1) had knowledge of the patent-in-suit; (2) knew the induced acts were infringing; and (3) specifically intended to encourage another's infringement." Carson Optical ,
As to factor one, knowledge of the patents-in-suit, "[t]he filing of a federal complaint identifying the patents-in-suit satisfies the requirement that a plaintiff plead a defendant's knowledge of the patents-in-suit." Carson Optical ,
*168In evaluating specific intent, the third factor, "direct evidence is not required; rather, circumstantial evidence may suffice." Carson Optical ,
"Evidence of active steps taken to encourage direct infringement, such as advertising an infringing use or instructing how to engage in an infringing use , show an affirmative intent that the product be used to infringe." (Omnibus reply at 54 (citing MEMC Elec. ,
To establish contributory infringement, plaintiff must allege sufficient facts to show that a party sold or offered to sell, "a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use." See
a. Rossetti
Plaintiff alleges that "As lead designer and architect of the Ashe Retractable Roof, Rossetti has induced infringement.... Rossetti knew that the Ashe Retractable Roof it designed infringed the Retention Mechanism patent, and [ ] specifically intended to encourage other Defendants' infringement through their making and using of the Ashe Retractable Roof." (FAC ¶ 113.) Plaintiff makes similar allegations regarding the Lateral Release patent used in the Arthur Ashe Retractable Roof and Armstrong Retractable Roof. (Id. ¶¶ 135, 157.) However, Uni-Systems fails to plead any additional specific factual allegations beyond Rossetti's knowledge of the patent and notice of infringement of the Lateral Release patents used in the Arthur Ashe Retractable Roof and Armstrong Retractable Roof to support the claim of inducement. (Id. ¶¶ 112-113, 135-136, 156-157.)
Plaintiff urges an interpretation and inference that, "as architect and engineer at the Louis Armstrong Stadium, it is more than plausible that Rossetti and Geiger have provided designs and instructions for making and using the retractable roof" during the time between the May 2016 notification and the completion of the Arthur Ashe Stadium in August 2016. (Omnibus Reply at 51.) Plaintiff cites to Baut v. Pethick Const. Co. ,
Accordingly, the Rossetti defendants' motion to dismiss plaintiff's claim of induced infringement is granted, with leave for plaintiff to replead additional facts to state a claim for inducement that show, by direct or circumstantial evidence, that the Rossetti defendants specifically induced another to infringe plaintiff's patents. See Superior Indus., LLC v. Thor Global Enters. Ltd. ,
Plaintiff alleged sufficient facts to support its claim that the Morgan Corporations contributed to the infringement of plaintiff's Retention Mechanism patent and Lateral Release patent. Specifically, plaintiff alleged that Morgan offered to sell and sold designs and component parts of the Armstrong Retractable Roof and continued participation in the design and construction of the Armstrong Retractable Roof after being placed on notice that the roof's design infringed plaintiff's patent, as is required under
However, plaintiff has failed to allege sufficient facts to state a claim that the Morgan defendants induced infringement of the relevant patents. (See
Plaintiff fails to plead sufficient facts to state a claim that Geiger induced others to infringe the Retention Mechanism and Lateral Release patents. With regards to induced infringement, plaintiff pleads in Paragraphs 124, 147, and 165 of the Amended Complaint that, "[a]s engineer" Geiger "induced infringement and continues to induce infringement" of the Retention Mechanism patent and Lateral Release patents and alleges that Geiger "specifically intended to encourage other Defendants' infringement through their making and using" of the Ashe Retractable Roof and Armstrong Retractable roof. (Id. )
Plaintiff's conclusory statements that Geiger "induced infringement" and "specifically intended to induce infringement" are insufficient to state a claim for induced infringement. Plaintiff argues that "[e]vidence of active steps taken to encourage direct infringement, such as advertising an infringing use or instructing how to engage in an infringing use , show an affirmative intent that the product be used to infringe." (Omnibus Reply at 54 (citing MEMC Elec. ,
Plaintiff sufficiently alleged that Hunt induced and contributed to infringement of plaintiff's Retention Mechanism and Lateral Release patent. (See FAC ¶¶ 115-16, 138-39, 159-60.) Hunt's specific intent is found in plaintiff's allegations that Hunt conspired with Hardesty & Hanover to utilize plaintiff's patented and trade secret roof technology, (see id. ¶¶ 65, 71, 75, 85), Hunt's leadership role in recruiting Rossetti P.C. and Morgan Kinetic and Hunt's role in selecting Morgan Engineering as a subcontractor to work on the Ashe Retractable Roof, (see id. ¶¶ 74-75), and Hunt's provision of the specifications for the Ashe Retractable Roof and request for an initial design proposal from Uni-Systems. (See id. ¶ 79)
Plaintiff's allegations that Hunt sold components of the Ashe Retractable Roof and Armstrong Retractable Roof that constituted material parts of the Lateral Release patent, and components of the Ashe Retractable Roof that constituted material parts of the Retention Mechanism patent after being placed on notice that the designs infringed plaintiff's patents are sufficient to state a claim for contributing to infringement under
e. Hardesty & Hanover
Plaintiff has failed to state sufficient facts to support its claim that Hardesty & Hanover induced infringement of the Retention Mechanism and Lateral Release patents. Plaintiff's sole allegations regarding specific intent are statements that Hardesty & Hanover specifically intended to encourage other defendants' infringement in their making and using of the Ashe Retractable Roof. (See FAC ¶¶ 118, 141.) Standing alone, these conclusory allegations are insufficient to state the specific intent required to adequately plead a claim for induced infringement. Hardesty & Hanover's motion to dismiss the allegations of induced infringement is granted; plaintiff is granted leave to replead facts supporting specific intent and active steps taken to induce infringement. See Superior Indus. ,
Plaintiff's allegations that Hardesty & Hanover sold components of the Ashe Retractable Roof constituting a material part of the Retention Mechanism and Lateral Release patents knowing that the components were specially adapted to infringe plaintiff's patents and "lacked a substantial non-infringing use" are sufficient to state a claim for contributory infringement given Hardesty & Hanover's role and alleged history with Hunt and plaintiff. (See FAC ¶¶ 119, 142.) Hardesty and Hanover's Motion to Dismiss plaintiff's claims of contributory infringement in Counts I and II is therefore denied.
C. Plaintiff Sufficiently Pleads Misappropriation of Trade Secrets Under Federal and State Law
1. Legal Standard
Trade Secrets are defined under the Defending Trade Secrets Act("DTSA") as:
*171[A]ll forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if-
(A) the owner thereof has taken reasonable measures to keep such information secret; and
(B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information;
(i) used improper means to acquire knowledge of the trade secret;
(ii) at the time of disclosure or use, knew or had reason to know that the knowledge of the trade secret was--
(I) derived from or through a person who had used improper means to acquire the trade secret; or
(II) acquired under circumstances giving rise to a duty to maintain the secrecy of the trade secret or limit the use of the trade secret; or
(III) derived from or through a person who owed a duty to the person seeking relief to maintain the secrecy of the trade secret or limit the use of the trade secret ...
To state a claim for misappropriation of a trade secret under New York law, a plaintiff must plead, "(1) it possessed a trade secret, and (2) defendant is using that trade secret in breach of an agreement, confidence, or duty, or as a result of discovery by improper means." Integrated Cash Mgmt. Servs., Inc. v. Digital Transactions, Inc. ,
2. Trade Secret Misappropriation
Plaintiff alleges that beginning in or around 2009, Hardesty & Hanover conspired *172with Hunt to misappropriate Uni-Systems' trade secrets while contracted as a peer reviewer for the Florida Marlins Ballpark roof and as a maintenance provider for the Cardinals Retractable Roof. (FAC ¶¶ 32-71, 170-204.) These misappropriations breached Hardesty & Hanover's and Hunt's respective contracts with Uni-Systems at the Arizona Cardinals and Florida Marlins stadiums. (FAC ¶¶ 205-223.) "Separate and apart from the improper acquisition of these trade secrets, Hardesty & Hanover and Hunt ... improperly disclosed and used ... Uni-Systems' trade secrets for projects for USTA, including the Arthur Ashe Stadium project, which was not completed until August 2016, and the new Louis Armstrong Stadium project...." (Id. ¶ 178.) Plaintiff alleges that the disclosures associated with the construction of the stadiums were "new and separate uses of Uni-Systems' trade secrets" that occurred after May 11, 2016. (Id. ¶ 179.)
To determine whether information constitutes a trade secret, New York courts typically consider the following factors, though parties are not required to plead each factor:
(1) the extent to which the information is known outside of the business; (2) the extent to which it is known by employees and others involved in the business; (3) the extent of measures taken by the business to guard the secrecy of the information; (4) the value of the information to the business and its competitors; (5) the amount of effort or money expended by the business in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.
N.Atl. Instruments, Inc. v. Haber ,
By alleging facts regarding factors three through six, plaintiff adequately pleads that the information misappropriated by Hardesty & Hanover and Hunt at the Arizona Cardinals Stadium and Florida Marlins Stadium constituted trade secrets. Uni-Systems alleges that it owned the trade secrets and that they were made up of confidential and proprietary, "software, mechanization design principles and criteria, and methods for implementing the same using engineered solutions, which include compilations, methods, techniques, processes, procedures, programs, and codes, and which constitute Uni-Systems' trade secret." (FAC ¶¶ 172, 200.) Uni-Systems alleges that the trade secrets were developed "through great effort and expense in terms of manpower, time, and costs" and were a "product or service used in, or intended for use in, interstate commerce, as they are used in connection with Uni-Systems' products and services, which are offered and used across the country." (Id. ¶ 173-74.) Further, the trade secrets provided, "commercial and business advantage to Uni-Systems by aiding Uni-Systems in offering reliable, long-lasting, and competitively priced stadium retractable roofs," making them extremely valuable to Uni-Systems. (Id. ¶ 197.) Uni-Systems alleges that the trade secrets are critical to Uni-Systems' operation, and if the trade secrets are available to others, they would enable other parties to unfairly compete with Uni-Systems and harm Uni-Systems' business. (Id. ) Moreover, Uni-Systems alleges that it took reasonable steps to protect the trade secret information by limiting access to the information and requiring customers and clients to sign strict confidentiality agreements that prohibited unauthorized *173"access, use and disclosure." (Id. ¶¶ 175, 198.)
Plaintiff alleges that Hunt and Hardesty & Hanover wrongfully acquired the trade secret information acquired at the Arizona Cardinals' and Florida Marlins' stadiums and participated in unauthorized use of the trade secrets in bad faith, including using the information to bid against Uni-Systems for projects. (FAC ¶¶ 22, 49, 178, 192-204.) Specifically, the defendants used Uni-System's trade secrets and infringed its patents to design other retractable roofs, including at the Arthur Ashe Stadium and Louis Armstrong Stadium. (Id. ¶¶ 22, 82, 178.) Taken together these allegations are sufficient to state a claim for misappropriation of trade secrets.
Defendants Hardesty & Hanover and Hunt move to dismiss plaintiff's trade secret claims on four grounds. First, defendants argue that plaintiff's alleged trade secrets are not secret because they were disclosed without sufficient protections to preserve their secrecy. (Hunt Opp'n at 12; ECF No. 204-1, Hardesty & Hanover Opposition to the Motion to Amend ("Hardesty Opp'n") at 20-25.) Second, they argue that the alleged trade secrets are not secret because they can be derived from a review of the plans, the as-built roof, or by reverse engineering. (Hunt Opp'n at 12.) Third, they allege that trade secrets claims are not pleaded with sufficient specificity and the Amended Complaint does not plead sufficient facts for misappropriation. (Hunt Opp'n at 12; Hardesty Opp'n at 17.) Finally, they claim that the misappropriation claim is time-barred. (Hunt Opp'n at 28; Hardesty & Hanover Surreply to the Motion to Amend ("Hardesty Surreply") at 14-15.)
a. Plaintiff Sufficiently Pleads Secrecy of the Alleged Trade Secrets
Hunt argues that Uni-Systems' free disclosure of the allegedly misappropriated drawings and specifications to third parties without protection negated any secrecy. (Hunt Opp'n at 12-14.) To the extent the information was not included in the drawings and specifications, Hunt argues that Uni-Systems licensed Hunt to use the information - negating any impropriety. (See Subcontract at § 35.10.) Hunt also argues that the Subcontract warranted that "[t]itle to all parts supplied by [Uni-Systems] will transfer ownership to Hunt upon receipt of full payment by [Uni-Systems]," which included title to "the PC based operator interface hardware and software." (See
Hardesty & Hanover similarly argues that the Arizona Cardinals Stadium roof and software are not Uni-Systems' trade secrets, and that their claim is precluded as a matter of law due to, "the unambiguous terms of the Subcontract under which Uni-Systems sold that roof and software to the Arizona Cardinals." (Hardesty Opp'n at 8-10.) Hardesty & Hanover argues that because the subcontract gives the Arizona Cardinals full control of the roof and software, "[t]hey can [and do] disclose or sell, and/or hire anyone to maintain, modify, or even just look at, the roof and software as they wish, at any time." (Id. at 8.) Further, Hunt argues that Uni-Systems gave Hardesty & Hanover access to the "trade secret" information during Hardesty & Hanover's peer review of the Marlins Retractable Roof for *174months before executing a confidentiality agreement. (Hunt Opp'n at 21 (citing FAC ¶¶ 40-50).)
Both Hardesty & Hanover and Hunt ask the court to review the terms of the relevant Subcontract governing the peer review of the Arizona Cardinals stadium roof to ascertain whether plaintiff protected its trade secrets sufficiently to state a claim that the trade secrets were, in fact, secret. The court finds that it is proper to consider the Subcontract13 as plaintiff relies on it in the Amended Complaint, which incorporates it by reference at paragraphs 206-214, and neither party objects to the authenticity of the cited portions of the Subcontract. See Chambers v. Time Warner, Inc. ,
The plain language of the Subcontract contradicts defendants' claims that free access was provided to the Cardinals Retractable Roof and Uni-Systems' trade secrets.
Section 35.10 of the subcontract provides, in relevant part:
35.10 Ownership of Documents: Drawings, specifications and other documents and electronic data furnished by [Uni-Systems] in connection with this Subcontract, including the detailed drawings and as-built drawings to be prepared by [Uni-Systems] hereunder are instruments of service. [Uni-Systems] shall retain all common law, statutory and other reserved rights, including copyright in those instruments of service furnished by [Uni-Systems]. Drawings, specifications, other documents and electronic data are furnished by [Uni-Systems] for use solely with respect to the Project. Hunt and Owner shall be permitted to retain copies, including reproducible copies, of the drawings, specifications and all other documents including electronic data furnished by [Uni-Systems] for information and reference in connection with the Project. All drawings, specifications and other documents, including working papers, prepared or developed by [Uni-Systems] under this Subcontract are considered to be the 'Project Documents'. [Uni-Systems] hereby conveys and assigns to Hunt and Owner a non-exclusive license in such 'Project Documents' not only for the completion of the Project, but also with respect to any maintenance, repair, reconstruction, replacement, extension or modification of the Project; provided, however, Hunt and Owner shall indemnify, defend and hold [Uni-Systems] harmless from and against any and all loss, claim, damage, injury, suit or expense, including reasonable attorney fees, that arise out of or relate to any such use of such Project Documents. Notwithstanding the foregoing, Hunt and Owner shall not use any of the Project Documents on any other projects. This Section 35.10 shall survive the completion, suspension or termination of this Subcontract.
*175(ECF No. 135-1 at 49, Sealed Subcontract § 35.10 (emphasis added).) As explained below, the quoted language, which restricts the use of "All drawings, specifications and other documents, including working papers, prepared or developed by [Uni-Systems ]" for use only on the project establishes the limitations on the use of and protection of plaintiff's trade secrets, and directly contradicts defendants' arguments that the above quoted section authorizes unrestricted use of Uni-Systems' trade secrets as it restricts the use of the information to the Cardinal's retractable roof. (Hardesty Opp. at 21-24.) Although defendants emphasize that the provision does not mandate absolute secrecy, (id. ), only "sufficient secrecy" is necessary, such that, "except by use of improper means, there would be difficulty in acquiring the information." Telerate Sys., Inc. v. Caro ,
Further, plaintiff has adequately alleged that it took reasonable steps to protect its confidential and trade-secret information at the Marlins' stadium. (FAC ¶¶ 46-51 (alleging plaintiff's efforts to protect its trade secrets and Hardesty & Hanover's attempts to evade confidentiality provisions and eventual agreement).) Plaintiff alleged that Hardesty & Hanover agreed to the following confidentiality provisions governing its use and treatment of Proprietary Information disclosed as party of the peer review process:
(a) Hardesty & Hanover recognized and acknowledged the competitive value and confidential nature of the Proprietary Information, as well as the irreparable injury that Uni-Systems would suffer if any Proprietary Information was disclosed to or used by Hardesty & Hanover or anyone else. Hardesty & Hanover further acknowledged that Uni-Systems would not have disclosed any Proprietary Information to it nor agreed to participate in the peer review unless Hardesty & Hanover agreed to the terms and conditions in the Confidentiality Agreement.
(b) Hardesty & Hanover agreed that the Proprietary Information would be used solely for the purpose of conducting the peer review and for no other purpose. Hardesty & Hanover further promised never to use or disclose any Proprietary Information for any other purpose without Uni-Systems' prior written consent.
(c) On completion of the peer review, Hardesty & Hanover would redeliver to the Florida Marlins all documents containing Proprietary Information and destroy all analyses, compilations, studies and other material prepared by Hardesty & Hanover that were based on or that contained Uni-Systems' Propriety Information.
(d) Hardesty & Hanover agreed that money damages would not be a sufficient remedy for breach of the Confidentiality Agreement and that, in addition to all other remedies, Uni-Systems would be entitled to specific performance, injunctive relief, or other equitable relief. Hardesty & Hanover further agreed to reimburse Uni-Systems for all *176costs and expenses, including reasonable attorneys' fees, incurred in enforcing the Confidentiality Agreement.
(Id. ¶ 51.)
b. Uni-System's Sale of the Cardinals Retractable Roof Does Not Preclude Its Claim for Misappropriation of Trade Secrets
Defendants' arguments regarding the sale of the roof are similarly unavailing. Nowhere in the Amended Complaint does Uni-Systems allege that it sold its confidential information regarding the entire roof to the Arizona Cardinals or that it sold its full portfolio of trade secrets with the roof. Even if the roof and accompanying trade secrets were sold to the Arizona Cardinals, plaintiff's claims for misappropriation of trade secrets would not be dismissed. (See Hardesty Surreply at 7-8.) Plaintiff cites Lehman v. Dow Jones & Co. ,
The proposition that sale of an item invalidates all trade secrets used in its development and operation is unsupported, unless the item itself is the embodiment of the trade secret. See, e.g., Q-Co. Indus., Inc. v. Hoffman ,
Defendants' argument that the trade secret information is visible to the public and could be reversed-engineered is also unavailing and is premature in deciding defendants' motions to dismiss. Although the Cardinals Retractable Roof and Marlins Retractable Roof, which incorporate elements of the Retention Mechanism patent and Lateral Release patent may be visible to the public, plaintiff alleges the trade secrets, which involve methods, techniques, and specifications, are not. Further, reverse engineering is a defense to misappropriation, whereby defendants would bear the burden of proving reverse engineering. See
Hardesty & Hanover further argues that the Amended Complaint concedes that plaintiff's claimed trade secrets can be reverse engineered by selectively and misleadingly quoting from the Amended Complaint. (See Hardesty Opp. at 5-6(citing FAC ¶ 68 (emphasis added) ("Indeed, the FAC itself alleges that Hardesty acquired *177Uni-Systems' trade secrets through an "inspection of the retractable roof mechanization and electrical systems.").) This argument mischaracterizes the plain language of the Amended Complaint, which states at Paragraph 68:
On information and belief, during the period in which Hardesty & Hanover handled the maintenance of the Cardinals Retractable Roof, Hardesty & Hanover accessed Uni-Systems' confidential information and improperly and unlawfully exploited this information to develop offerings substantially similar to Uni-Systems' products and services. Indeed, the service agreement between Manager and Hardesty & Hanover was not for maintenance per se, but rather for a self-serving inspection of the retractable roof mechanization and electrical systems.
(FAC ¶ 68.) Plaintiff alleges that Hardesty & Hanover accessed confidential information and nowhere does the FAC state that an inspection of the retractable roof mechanisms and electrical systems stopped at a visual inspection of the roof itself.
c. Plaintiff Sufficiently Pleads Allegations of Misappropriation of Trade Secrets Against Hunt
Hunt also moves to dismiss on the grounds that plaintiff failed to make "any allegations of misappropriation by Hunt" or allege plausible facts supporting an agreement between Hunt and Hardesty & Hanover. (Hunt Opp'n At 9.) The FAC alleges that Hunt "orchestrated" and "encouraged and facilitated" the acquisition of the trade secrets without Uni-Systems consent and alleges that both Hardesty & Hanover and Hunt have disclosed and used Uni-Systems trade secrets for the Arthur Ashe Stadium project and the Louis Armstrong stadium project. (See FAC ¶¶ 85, 177-179.) These allegations are more than sufficient to allege that Hunt was a participant, if not the leader in a coordinated effort to misappropriate plaintiff's trade secrets.
d. Plaintiff Sufficiently Pleads That Its Trade Secrets Were Obtained by Improper Means
Hunt argues that Uni-Systems failed to allege that the trade secrets were obtained by improper means, (Hunt Opp'n at 12), and both Hunt and Hardesty & Hanover assert that the Amended Complaint is overly speculative and states insufficient facts to support a claim for trade secret misappropriation. As explained above, the court finds that Uni-Systems adequately pleaded that it owned trade secrets where it alleged ownership of software, mechanization principles and implementation methods, although it did not provide a description of the specific trade secrets at issue. See Sorias ,
3. Uni-Systems' Trade Secret Claims Are Not Time Barred By the DTSA or New York Statute of Limitations
"Dismissal at the pleading stage on statute-of-limitations grounds ordinarily is improper unless it is 'apparent from the face of the complaint that the claim is time-barred.' "
*178ABB Turbo Sys. AG v. Turbousa, Inc. ,
Under the DTSA, a civil action must be brought no later than three years after the misappropriation "is discovered or by the exercise of reasonable diligence should have been discovered."
Under New York law, a claim for misappropriation of trade secrets is also subject to a three-year statute of limitations. See N.Y. C.P.L.R. 214(4) ; see also CSFB HOLT LLC v. Collins Stewart Ltd. , No. 02 CIV. 3069(LBS),
[w]hen a trade secret misappropriation claim accrues depends on what the party alleged to have committed the misappropriation did with the information. If a party misappropriates and publicly discloses a trade secret, the claim accrues upon disclosure. If, however, the party keeps the secret confidential yet makes use of it to his own commercial advantage, each successive use constitutes a new actionable tort for purposes of the statute of limitations.
Plaintiff pleaded that it discovered the trade secrets were misappropriated in 2015, when it received drawings for the Arthur Ashe Stadium Retractable Roof that incorporated plaintiff's trade secret information. (FAC ¶ 82.) Defendants' argument that plaintiff should have known the trade secrets would be acquired in 2009, when Hardesty & Hanover began maintaining the Arizona Cardinals Retractable Roof is unavailing. (See Hunt Opp. at 30 (citing FAC at ¶¶ 68-69 ("[D]uring the period in which Hardesty & Hanover handled the maintenance of the Cardinals Retractable Roof, Hardesty & Hanover accessed Uni-Systems' confidential information and improperly and unlawfully exploited this information to develop offerings substantially similar to Uni-Systems' products and services") ).) Plaintiff has alleged sufficient plausible facts that Hardest & Hanover, a contractor tasked with maintaining plaintiff's retractable roof, and charged with keeping plaintiff's trade secrets confidential had disregarded its contractual obligations limiting use of those trade secrets and retained the information for future improper use until said improper use occurred. Plaintiff also alleged that it discovered that its trade secrets had been obtained and used in violation of the law in the summer of 2015 when plaintiff first reviewed plans or the Arthur Ashe Retractable Roof. (FAC ¶ 82.) As such, plaintiff's claim is timely both under the DTSA and state law. See ABB Turbo Sys. AG ,
The court has considered all of the defendants' arguments supporting dismissal of Count IV and V, which rely on prematurely raised factual disputes and distinguishable or nonbinding authority. Consequently, *179defendants' contentions regarding statute of limitations are rejected. Sorias ,
D. Uni-Systems Has Not Stated an Independent Claim for Unfair Competition
Plaintiff's unfair competition claim fails to state a cause of action as it fails to allege tortious conduct separate from its claim of misappropriation of trade secrets. A claim for unfair competition based on the same allegations as a claim for misappropriation of trade secrets is treated as a single cause of action. See Abernathy-Thomas Eng'g Co. v. Pall Corp. ,
Uni-Systems' claim for unfair competition is premised on the same allegations as its misappropriation of trade secrets claim and fails to plead any additional conduct. (FAC ¶¶ 196-204.) As such plaintiff's claim is duplicative and is dismissed without prejudice. (Id. )
E. The Breach of Contract Claims Are Sufficiently Pleaded
1. The Amended Complaint States a Claim for Breach of the Cardinals Retractable Roof Subcontract Between Hunt and Uni-Systems
Under Arizona law, "[a] breach of contract claim contains three elements: (1) the existence of a contract, (2) its breach, and (3) resulting damages."14 Danial v. Langenbach , No. 12 CV 2983,
Hunt and Hardesty & Hanover do not contest the validity of the agreements on which the breach of contract claims in the First Amended Complaint are premised. They argue, however, that, "Uni-Systems cannot plead that Hunt breached the Subcontract because it has not satisfied the preconditions required under the contract, nor has it alleged any factual basis for this claim" and that "Uni-Systems' trade secret, breach of contract, and unfair competition claims are all time-barred." (Hunt Opp'n At 9.)
a. Plaintiff's Breach of Contract Claims Are Not Precluded by the Preconditions in § 34.2 of the Subcontract
Hunt cites to § 34.2 of the Subcontract to establish that "as a condition precedent to initiating any court proceeding," Uni-Systems was obligated to submit a claim to Hunt in writing if a dispute arose in relation to the Subcontract. (See Hunt Br. at 27-28 (citing ECF No. 135-1 at 49, Subcontract § 34.2). Hunt's reliance on § 34.2 is misplaced. The Subcontract does not mandate post-completion survival of contractual terms without explicit survival provisions, except where both parties desire to be bound or where enforcement of the provision is a necessity. (See ECF No. 135-1 at 45, Subcontract § 35.13 ("35.13 Survivability: It is the intent of the parties that all such sections which expressly state or, by necessity or by the parties' intent, should be so, shall survive termination of this Subcontract.").) Unlike other provisions intended to survive completion of the contract, (See Subcontract § 35.10), § 34.2 of the Subcontract contains no expressly stated survivability provision. By virtue of filing the Complaint and Amended Complaint without subjecting itself to the process established in § 34.2 of the Subcontract, Uni-Systems has evinced an intent not to be bound by the provision, and Hunt has made no arguments as to the necessity of the provision's survival to the execution or enforcement of the contract. As such, § 34.2 of the Subcontract does not preclude the plaintiff's breach of contract claim.
b. Plaintiff Sufficiently Pleads a Factual Basis for the Alleged Breach of Contract
Hunt argues that plaintiff failed to allege a factual basis for the alleged breach of contract. Plaintiff's allegations are not, as Hunt argues, that Hunt breached the contract by revealing information regarding the Cardinals Retractable Roof to Hardesty & Hanover to maintain the roof. (Hunt Opp'n at 28.) Rather, plaintiff argues Hunt breached the parties' express agreement to maintain the confidentiality of the terms of the Subcontract and the express provision of the Subcontract by revealing to or sharing the terms or conditions of the subcontract with Hardesty & Hanover and/or other third parties and by revealing confidential information "including but not limited to the confidential design parameters for the Cardinals Retractable Roof and other drawings, specifications, working papers, and documents prepared or developed by Uni-Systems in connection with the Subcontract.... for use in connection with other stadium retractable roof projects, including the Ashe Retractable Roof and the Armstrong Retractable Roof." (See FAC ¶¶ 207-212.) This sufficiently pleads the two elements of a breach of contract claim under Arizona law as it alleges "(1) the existence of a contract, (2) its breach, and (3) resulting damages." Danial ,
c. The Breach of Contract Action is Not Time-Barred
Hunt argues that Uni-Systems' breach of contract claim is time-barred *181under Arizona's eight-year statute of repose for "[a]ctions involving development of real property design, engineering and construction of improvements." See
Arizona's general limitations provision A.R.S. § 12-550, which the court finds applicable here, provides that "[a]ctions other than for recovery of real property for which no limitation is otherwise prescribed shall be brought within four years after the cause of action accrues, and not afterward."
2. Breach of Contract Based on Hardesty & Hanover's Alleged Breach of the Confidentiality Agreement for the Florida Marlins Ballpark Peer Review
In Count VIII of the proposed Amended Complaint, Uni-Systems alleges that Hardesty & Hanover breached a confidentiality agreement signed in February of 2010 (the "Confidentiality Agreement"), in connection with the Florida Marlins Ballpark peer review by using, disclosing and/or failing to redeliver or destroy documents containing allegedly "Proprietary Information." (See FAC ¶¶ 40-51, 215-223.)
d. Plaintiff Pleads Sufficient Facts to State a Claim for Breach of Contract Under Florida Law
"Under Florida law, the elements of a breach of contract action are: (1) a valid contract; (2) a material breach; and (3) damages." Anwar v. Fairfield Greenwich Ltd. ,
e. Plaintiff's Breach of Contract Claim in Connection With the Florida Marlins Ballpark Peer Review Is Not Time-Barred
Under Florida law, an action for breach of contract must be brought within five years. See Fla. Stat. Ann. 95.11(2)(b). Hardesty & Hanover argues that the breach of contract claim in Count VIII is barred by Florida's five-year statute of limitations as defendant could have improperly acquired the relevant proprietary information in 2010.
Under Florida law, a cause of action for breach of contract accrues when the party bringing the action suffers damages. See Grove Isle Ass'n, Inc. v. Grove Isle Assocs., LLLP ,
Hardesty & Hanover's arguments that plaintiff's claims in connection with the Confidentiality Agreement are time barred ignore the continuing nature of its contractual obligation to not disclose Uni-System's proprietary information. City of Quincy v. Womack ,
Plaintiff alleges it first discovered the disclosure in connection with the Ashe Retractable Roof in the summer of 2015. (See FAC ¶ 82.) Plaintiff also alleges that Uni-Systems discovered USTA's plans to construct the Armstrong Retractable Roof in 2016 when Hunt and USTA issued a request for a proposal relating to the planned Armstrong Retractable Roof that included drawings that allegedly depicted a design that would infringe the Lateral Release Patent if constructed. (See FAC ¶¶ 98, 99.) As nothing on the face of the Amended Complaint indicates that Uni-Systems suffered damages prior to the disclosures in connection with the Ashe Retractable Roof and Armstrong Retractable Roof, plaintiff's claim is timely on its face and dismissal is not warranted. ABB Turbo Sys. AG ,
CONCLUSION
For the foregoing reasons, Plaintiff's Motion to Amend the Complaint is granted with additional facts to be added if consistent with Rule 11, and Defendants' motions to dismiss the Amended Complaint are granted in part and denied in part. Plaintiff shall file the Amended Complaint no later than October 11, 2018.
SO ORDERED.
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