Fernando Cwilich Gil, Individually and on Behalf of Ruse Laboratories v. Benjamin Paul Gleitzman, Replicant Solutions, Inc.

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
FERNANDO CWILICH GIL, )
individually and on behalf of RUSE )
LABORATORIES CORP., )
)
Plaintiff,
)
v. ) C.A. No. 2022-0173-BWD
)
BENJAMIN PAUL GLEITZMAN,
)
REPLICANT SOLUTIONS, INC.,
)
Defendants, )
)
and
)
RUSE LABORATORIES CORP., )
)
Nominal Defendant.
)
FINAL REPORT
Final Report: March 4, 2024
Date Submitted: February 2, 2024
Andrew S. Dupre, Brian R. Lemon, and Stephanie H. Dallaire, MCCARTER &
ENGLISH, LLP, Wilmington, Delaware; Attorneys for Plaintiff Fernando Cwilich
Gil and Nominal Defendant Ruse Laboratories Corp.
Michael A. Weidinger and Megan Ix Brison, PINCKNEY, WEIDINGER, URBAN
& JOYCE, LLC, Wilmington, Delaware; OF COUNSEL: Elizabeth Sandza,
SANDZA LAW, PLLC, Washington, D.C.; Attorneys for Defendant Benjamin Paul
Gleitzman.
Elena C. Norman, Daniel M. Baker, and Alex B. Haims, YOUNG CONAWAY
STARGATT & TAYLOR, LLP, Wilmington, Delaware; OF COUNSEL: Ben Au,
ORRICK, HERRINGTON & SUTCLIFFE LLP, Santa Monica, California; Ariel
Winawer, ORRICK, HERRINGTON & SUTCLIFFE LLP, San Francisco,
California; Sarah Shyy, ORRICK, HERRINGTON & SUTCLIFFE LLP, Irvine,
California; Attorneys for Defendant Replicant Solutions, Inc.
DAVID, M.
Plaintiff Fernando Cwilich Gil (“Plaintiff”) and defendant Benjamin
Gleitzman are the co-founders and sole directors, officers, and stockholders of
nominal defendant Ruse Laboratories Corp. (“Ruse” or the “Company”). In
February 2022, Plaintiff initiated this action, asserting claims against Gleitzman for
breach of fiduciary duty; seeking a declaration that a certificate of dissolution filed
on behalf of Ruse is void or invalid; and requesting the appointment of a receiver for
the Company.
In June 2023, Plaintiff filed a second amended complaint. The amended
pleading adds a claim against Gleitzman for breach of an assignment agreement
under which Gleitzman assigned his rights in “Company Inventions” to Ruse; a
claim against a new defendant, Replicant Solutions, Inc. (“Replicant”), for tortious
interference with that assignment agreement; and a request for declaratory relief
arising from those claims.
This final report resolves Gleitzman and Replicant’s (“Defendants”) motions
to dismiss those newly added claims as time-barred under the applicable statutes of
limitations. For the reasons explained below, I recommend that the Court dismiss
the tortious interference claim and otherwise deny the motions to dismiss.
1
I. BACKGROUND 1
A. Plaintiff and Gleitzman Assign Their Rights In Company
Inventions To Ruse.
In 2014, Plaintiff Fernando Cwilich Gil and defendant Benjamin Paul
Gleitzman co-founded Ruse, a Delaware corporation, “to develop various
technology-based projects.” SAC ¶ 13. Plaintiff, “an artist and creative director
working with technology,” and Gleitzman, “a software engineer and manager,” are
each fifty percent stockholders of Ruse. Id. ¶¶ 15-16. Plaintiff serves as Ruse’s
CEO and President, and Gleitzman serves as Ruse’s Secretary. Id. ¶¶ 1, 26-27.
On April 6, 2014, Plaintiff and Gleitzman each executed a Confidential
Information and Invention Assignment Agreement (the “Assignment Agreement”)
in which they agreed that, while employed by the Company, they would disclose and
assign all rights in any patents to Ruse:
Assignment of Company Inventions. I agree that I will promptly make
full written disclosure to the Company, will hold in trust for the sole
right and benefit of the Company, and hereby assign to the Company,
or its designee, all my right, title and interest throughout the world in
1
The following facts are taken from the Corrected Verified Second Amended Complaint
(the “Second Amended Complaint”) and the documents incorporated by reference therein.
Corrected Verified Second Am. Compl. [hereinafter, “SAC”], Dkt. 67. See Freedman v.
Adams, 2012 WL 1345638, at *5 (Del. Ch. Mar. 30, 2012) (“When a plaintiff expressly
refers to and heavily relies upon documents in her complaint, these documents are
considered to be incorporated by reference into the complaint[.]” (citation omitted)).
2
and to any and all Company Inventions 2 and all patent, copyright,
trademark, trade secret and other intellectual property rights therein.
SAC, Ex. A [hereinafter, “Assign. Agt.”] § 4(d) (emphasis added). The Assignment
Agreement is governed by California law. Id. § 12(a).
B. Gleitzman Invents Technology While Working For Atomic and
Replicant.
The Complaint alleges that “in 2014 and 2015, Ruse did work for Atomic, a
venture capital fund and technology incubator, and its CEO Jack Abraham.” SAC
¶ 37. “In mid-2017, Gleitzman began exploring the possibility of Ruse again
working with Atomic on an outgoing robocalling technology project.” Id. ¶ 38.
“After seeking and obtaining [Plaintiff]’s consent, Gleitzman and Ruse began
2
The Assignment Agreement defines “Inventions” to include:
discoveries, developments, concepts, designs, ideas, know how,
improvements, inventions, trade secrets and/or original works of authorship,
whether or not patentable, copyrightable or otherwise legally protectable[]
[which] . . . includes, but is not limited to, any new product, machine, article
of manufacture, biological material, method, procedure, process, technique,
use, equipment, device, apparatus, system, compound, formulation,
composition of matter, design or configuration of any kind, or any
improvement thereon.
Assign. Agt. § 4(c). “Company Inventions” are defined to include “any and all Inventions
that [Gil or Gleitzman, respectively,] may solely or jointly author, discover, develop,
conceive, or reduce to practice during the period of the Relationship, except as otherwise
provided in Section 4(g) below.” Id. “Relationship” is defined as “[a]ny such employment
or consulting relationship between the parties hereto, whether commenced prior to, upon
or after the date of this Agreement . . . .” Id. § 1.
3
working on an Atomic company known as ‘Replicant.’” Id. ¶ 39. According to the
Complaint,
Gleitzman was not able to exploit the opportunity in Replicant alone,
but rather required the use of Ruse’s resources, assets and frequent
collaborators to help him develop Replicant’s code, design, content,
product and brand. Ruse’s work for Atomic on Replicant was typical.
[Plaintiff] focused mostly on the creative and product side, such as
experimenting with how the technology could be used while refining
its concept and design; Gleitzman worked primarily on code
development and financial management. Gleitzman and [Plaintiff] also
organized and recruited freelance coders to assist Gleitzman in code
development for Replicant.
Id. ¶¶ 40-41. Plaintiff alleges that Ruse completed its work for Replicant without
executing a contract with Atomic or Replicant, expecting that “Gleitzman would
negotiate the best possible equity deal for Ruse.” Id. ¶¶ 42-43. But instead,
“Gleitzman secured a personal equity interest in Replicant in exchange for the work
performed by Ruse and accepted a salaried position as [Replicant’s] Chief Technical
Officer.” Id. ¶ 44.
In June and August 2017, Atomic filed with the United States Patent and
Trademark Office (“USPTO”) two provisional patent applications (the “Provisional
Applications”) based on technology developed in collaboration with Gleitzman (the
“‘038 Technology”). See SAC, Exs. C, D. Although Gleitzman developed the ‘038
4
Technology with Replicant, the Provisional Applications listed only Abraham as the
inventor and Atomic as assignee. Id. ¶¶ 48-49; see also id., Exs. C, D. 3
On June 22, 2018, Atomic filed a non-provisional patent application (the
“‘453 Application”) based on the Provisional Applications and the ‘038 Technology,
again identifying only Abraham as the inventor. SAC ¶ 50; see also id., Ex. E at 1.
Although the ‘453 Application did not include Gleitzman as an inventor, on
February 27, 2020, Gleitzman and Replicant recorded an assignment agreement
through which Gleitzman purported to assign his rights under the ‘453 Application
to Replicant (the “Replicant Assignment Agreement”). SAC, Ex. G. Then, on
March 5, 2020, Replicant filed a request with the USPTO to update the ‘453
Application (the “2020 Update”), seeking to “correct[] . . . the inventorship of the
above referenced application to add inventor Benjamin Gleitzman” and “update the
Applicant and Assignee information” to identify Replicant, instead of Atomic, as the
applicant and assignee. SAC ¶ 51; see also id., Ex. F at 1.
3
On February 14, 2018, Plaintiff caused Ruse to enter into an Independent Contractor
Agreement with Atomic (the “ICA”). SAC ¶ 58; see also id., Ex. H. Under the ICA, Ruse
agreed that, for one year, “work product . . . developed by [Ruse] in connection with [its]
Services . . . shall . . . remain the sole and exclusive property of [Atomic].” SAC, Ex. H
¶ 7(b). The Complaint alleges that Plaintiff was “fraudulently induced” into executing the
ICA “without disclosure that Gleitzman invented the technology underlying the ‘038 Patent
. . . .” SAC ¶ 58.
5
On June 23, 2020, the USPTO issued Patent ‘038, based on the ‘038
Technology as reflected in the Provisional Applications and the ‘453 Application, to
Replicant (the “‘038 Patent”). SAC ¶ 52.
C. Replicant Files And Then Abandons The ‘314 Application.
On June 24, 2020, Replicant filed another patent application (the “‘314
Application”), listing six inventors, including Gleitzman. SAC, Ex. I; see also id.
¶¶ 59, 62. The ‘314 Application is not based on the ‘038 Technology, but other
“technology that was invented, in part, by Ruse.” SAC ¶¶ 60-61. According to the
Complaint, “Replicant recently abandoned the ‘314 Application,” “rob[bing] Ruse
of its ability to protect exclusivity in the intellectual property identified in the ‘314
Application . . . .” Id. ¶ 64.
On November 10, 2020, Gleitzman filed a certificate of dissolution for Ruse.
Id. ¶¶ 106-108.
D. Procedural History
On February 22, 2022, Plaintiff initiated this action through the filing of a
Verified Complaint for Breach of Fiduciary Duties (the “Initial Complaint”).
Verified Compl. for Breach of Fiduciary Duties [hereinafter, “Initial Compl.”], Dkt.
1. The Initial Complaint named only Gleitzman as a defendant and alleged six
counts, asserted derivatively on behalf of Ruse:
6
• Count One sought a declaratory judgment that the dissolution of Ruse was
void or invalid;
• Count Two alleged that Gleitzman breached his fiduciary duties by taking a
salary and equity interest in Replicant that belonged to Ruse;
• Count Three alleged that Gleitzman was unjustly enriched by keeping the
salary and equity interest for himself;
• Count Four alleged that Gleitzman breached his fiduciary duties by canceling
potential contracts for Ruse;
• Count Five alleged that Gleitzman breached his fiduciary duties by shutting
down Ruse; and
• Count Six sought the appointment of a trustee or custodian.
On March 14, 2022, Plaintiff filed a Verified Amended Complaint (the “First
Amended Complaint”). Dkt. 16. On March 28, 2022, Gleitzman moved to dismiss
the First Amended Complaint and filed an Answer and Counterclaims (the
“Counterclaims”). Dkts. 20-21. On May 16, 2022, Plaintiff answered and moved
to dismiss Count One of the Counterclaims. Dkts. 33-34. On September 26, 2020,
Vice Chancellor Glasscock, to whom this action was assigned, denied the parties’
motions to dismiss. Dkt. 57.
7
On June 22, 2023, with leave of Court, Plaintiff filed a Verified Second
Amended Complaint (the “Second Amended Complaint”). 4 Dkt. 63. The Second
Amended Complaint adds Replicant as a defendant and alleges three new counts,
asserted derivatively on behalf of Ruse:
• new Count Six seeks a declaratory judgment that Ruse is an assignee of the
‘038 Patent and an order of specific performance directing Defendants to take
steps necessary to list Ruse as an assignee on the ‘038 Patent;
• Count Seven alleges that Gleitzman breached the Assignment Agreement by
(1) failing to assign the ‘038 Patent to Ruse and (2) failing to disclose the ‘038
Patent and the ‘314 Patent Application to Ruse; and
• Count Eight alleges that Replicant tortiously interfered with the Assignment
Agreement.
E. The Motions to Dismiss
On July 24, 2023, Replicant and Gleitzman moved to dismiss Counts Six,
Seven, and Eight of the Second Amended Complaint (the “Motions to Dismiss”).
Dkts. 74, 77.5 The Court heard oral argument on February 2, 2024. Dkt. 101.
4
On July 10, 2023, Plaintiff filed a Corrected Verified Second Amended Complaint, which
is the operative complaint. Dkt. 67.
5
On August 23 and 24, 2023, Defendants filed opening briefs in support of the Motions to
Dismiss. See Def. Replicant Solutions, Inc.’s Op. Br. In Supp. Of Mot. To Dismiss Pl.’s
8
II. ANALYSIS
A. Standard of Review
Defendants move to dismiss Counts Six (declaratory judgment), Seven
(breach of the Assignment Agreement), and Eight (tortious interference with the
Assignment Agreement) of the Second Amended Complaint as time-barred under
the applicable statutes of limitations.
When reviewing a motion to dismiss under Court of Chancery Rule 12(b)(6),
Delaware courts “(1) accept all well pleaded factual allegations as true, (2) accept
even vague allegations as ‘well-pleaded’ if they give the opposing party notice of
the claim; [and] (3) draw all reasonable inferences in favor of the non-moving party
. . . .” Cent. Mortg. Co. v. Morgan Stanley Mortg. Cap. Hldgs. LLC, 27 A.3d 531,
Corrected Verified Second Am. Compl. [hereinafter, “ROB”], Dkt. 84; Def. Benjamin
Gleitzman’s Mot. To Dismiss Count Seven And Joinder In Replicant Solutions, Inc.’s Op.
Br. In Supp. Of Its Mot. To Dismiss Count Six Of Pl.’s Corrected Verified Second Am.
Compl. [hereinafter, “GOB”], Dkt. 86. On October 6, 2023, Plaintiff filed a Combined
Opposition to Defendants’ Opening Briefs in Support of Motions to Dismiss Counts VI,
VII, and VIII of Verified Second Amended Complaint. Pl.’s Combined Opp’n To Defs.’
Op. Brs. In Supp. Of Mots. To Dismiss Counts VI, VII, And VIII Of Verified Second Am.
Compl. [hereinafter, “AB”], Dkt. 90. On October 23, 2023, Replicant and Gleitzman filed
reply briefs in further support of the Motions to Dismiss. See Def. Replicant Solutions,
Inc.’s Reply Br. In Supp. Of Mot. To Dismiss Pl.’s Corrected Verified Second Am. Compl.
[hereinafter, “RRB”], Dkt. 95; Reply Br. In Supp. Of Def. Benjamin Gleitzman’s Mot. To
Dismiss Count Seven And Joinder In Replicant Solutions, Inc.’s Reply Br. In Supp. Of Its
Mot. To Dismiss Count Six of Pl.’s Corrected Verified Second Am. Compl. [hereinafter,
“GRB”], Dkt. 96.
This action was reassigned to me on August 8, 2023. Dkt. 83.
9
535 (Del. 2011). “[T]he governing pleading standard in Delaware to survive a
motion to dismiss is reasonable ‘conceivability.’” Id. at 537.
Dismissal under Rule 12(b)(6) is appropriate when it is clear from the face of
the complaint that the claims are barred by the applicable statute of limitations. See
Pomeranz v. Museum P’rs, L.P., 2005 WL 217039, at *2 (Del. Ch. Jan. 24, 2005)
(“When it is clear from the face of the [c]omplaint . . . that plaintiffs’ tolling theories
fail even to raise a legitimate doubt about the time the claims accrued, dismissal is
appropriate if the claims were filed after the applicable limitations period expired.”
(alterations in original) (internal citation and quotation marks omitted)); In re Dean
Witter P’ship Litig., 1998 WL 442456, at *3 (Del. Ch. July 17, 1998) (“[I]t is well
settled that where the complaint itself alleges facts that show that the complaint is
filed too late, the matter may be raised by [a] motion to dismiss.” (internal citation
omitted), aff’d, 725 A.2d 441 (Del. 1999)).
“Statutes of limitations exist at law and serve to bar claims brought after the
limitations period set forth in the statute has expired.” Kraft v. WisdomTree Invs.,
Inc., 145 A.3d 969, 974-75 (Del. Ch. 2016). “Statutes of limitations traditionally do
not apply directly to actions in equity, although courts of equity may apply them by
analogy in determining whether a plaintiff should be time-barred under the equitable
doctrine of laches.” Id. at 975.
10
Counts Seven (breach of the Assignment Agreement) and Eight (tortious
interference with the Assignment Agreement) assert legal claims for which Plaintiff
seeks both legal and equitable relief. Where a plaintiff brings a legal claim seeking
legal relief in the Court of Chancery, the statute of limitations applies. Id. at 983.6
Where a plaintiff brings a legal claim seeking equitable relief, the Court will apply
the statute of limitations by analogy “with at least as much and perhaps more
presumptive force given its quasi-legal status and will bar claims outside the
limitations period absent tolling or extraordinary circumstances.” Id. at 984. The
parties here agree that resolution of the Motions to Dismiss turns on application of
the applicable statutes of limitations and tolling doctrines.
B. The Motion To Dismiss Count Seven For Breach Of The
Assignment Agreement Is Denied.
In Count Seven, Plaintiff alleges that Gleitzman breached the Assignment
Agreement by (1) purporting to assign his rights in the ‘038 Patent to Replicant
instead of Ruse and (2) failing to promptly disclose his rights relating to the ‘038
Patent and the ‘314 Patent Application.
6
This Court has acknowledged that “extraordinary circumstances may provide an
exception to the strict application of statutes of limitations for purely legal matters, separate
and apart from the application of tolling doctrines,” but the parties have not argued any
such “extraordinary circumstances” exist in this case. Kraft, 145 A.3d at 983.
11
As explained below, the Court cannot conclude from the pleadings that claims
premised on either theory of breach are time-barred.
1. Breach Of The Assignment Agreement For Failure to Assign
a. What Is The Presumptive Limitations Period?
Plaintiff’s contract claims arise under California law. See Assign. Agt.
§ 12(a). “At common law, the law of the forum supplies the limitations period.”
CHC Invs. LLC v. FirstSun Cap. Bancorp, 2020 WL 1480857, at *4 (Del. Ch. Mar.
23, 2020), aff’d, 241 A.3d 221 (Del.). To prevent a plaintiff from shopping for a
forum with the longest limitations period, however, Delaware has modified the
common law by adopting a “Borrowing Statute,” which provides:
Where a cause of action arises outside of [Delaware], an action cannot
be brought in a court of [Delaware] to enforce such cause of action after
the expiration of whichever is shorter, the time limited by the law of
[Delaware], or the time limited by the law of the state or country where
the cause of action arose, for bringing an action upon such cause of
action.
10 Del. C. § 8121. The Borrowing Statute minimizes forum shopping incentives
“‘by instructing a Delaware court to compare the limitations period that would apply
under Delaware law and the law of the foreign jurisdiction[,]’ and apply the shorter
of the two.” CHC Invs., 2020 WL 1480857, at *4.
In Saudi Basic Industry Corporation v. Mobil Tanbu Petrochemical
Company, the Delaware Supreme Court crafted an exception to the Borrowing
Statute. 866 A.2d 1 (Del. 2005). The plaintiff in that case, a Saudi Arabian
12
corporation, filed a declaratory judgment action against its joint venture partners in
Delaware Superior Court, and one of the defendants responded with counterclaims.
The plaintiff moved to dismiss the counterclaims as time-barred, arguing that the
Borrowing Statute required application of Delaware’s three-year limitations period
rather than Saudi Arabia’s “eternal” limitations period. Id. at 14-16. The Superior
Court denied the motion, and the Supreme Court affirmed, explaining that the
Borrowing Statute does not apply where its application would “subvert[] the
statute’s fundamental purpose, by enabling [the plaintiff] to prevail on a limitations
defense that would never have been available to it . . . in the jurisdiction where the
cause of action arose.” Id. at 17-18.
After Saudi Basic, there remains some “‘uncertainty as to when [the]
[B]orrowing [S]tatue applies,’” and “Delaware courts applying its holding have
adopted different approaches resulting in inconsistent outcomes.” CHC Invs., 2020
WL 1480857, at *5 (footnote omitted) (quoting TrustCo v. Mathews, 2015 WL
295373, at *7 (Del. Ch. Jan. 22, 2015)). One approach interprets Saudi Basic as
holding that the Borrowing Statute does not apply whenever the Delaware
limitations period is shorter than the limitations period of the foreign jurisdiction
where the claim arose. See, e.g., Bear Stearns Mortg. Funding Tr. 2006-SL1 v. EMC
Mortg. LLC, 2015 WL 139731, at *8 (Del. Ch. Jan. 12, 2015) (declining “to apply
the Borrowing Statute when its operation would bar a claim that would be timely
13
under the law governing the claim”). A narrower approach “interprets Saudi Basic
to hold that the plain language of the borrowing statute governs unless the party
asserting the underlying claim was forced into a Delaware forum.” CHC Invs., 2020
WL 1480857, at *8 (adopting “a narrow interpretation of Saudi Basic” under which
“the court first applies the plain language of [the] borrowing statute[]”; “[i]f
Delaware’s limitations period applies, the court next determines whether the party
asserting the underlying claim was forced to file in Delaware[,]” and if so, “then the
court applies the foreign limitations period”).
The statute of limitations for a breach of contract claim is three years in
Delaware, or four years in California. See 10 Del. C. § 8106(a); Cal. Civ. Proc. Code
§ 337(a). The parties’ briefing did not identify Saudi Basic, or advocate for a broad
or narrow reading of that authority under the facts alleged. Instead, the parties
assume the Borrowing Statute applies and Delaware’s shorter, three-year statute of
limitations governs. As discussed below, the result is the same either way.
b. When Did The Claim Accrue?
Count Seven alleges that Gleitzman breached the Assignment Agreement by
failing to assign the ‘038 Patent to Ruse. Plaintiff contends that claim accrued on
June 23, 2020, when the USPTO issued the ‘038 Patent. Gleitzman argues, instead,
that the claim accrued on June 22, 2018, when Atomic filed the 453 Application
14
based on the ‘038 Technology, or, at the latest, on December 27, 2018, when the 453
Application was published. Plaintiff has the better argument.
A claim accrues on the date of the wrongful act. Under Delaware or California
law, 7 “[f]or breach of contract claims, the wrongful act is the breach, and the cause
of action accrues at the time of breach.” Meso Scale Diagnostics, LLC v. Roche
Diagnostics GmbH, 62 A.3d 62, 77 (Del. Ch. 2013) (citation and internal quotation
marks omitted); see also Bd. of Trustees of Leland Stanford Junior Univ. v. Roche
Molecular Sys., Inc., 583 F.3d 832, 846 (Fed. Cir. 2009) (“‘A contract cause of
action does not accrue until the contract has been breached.’” (quoting Spear v.
California State Auto. Ass’n, 831 P.2d 821 (Cal. 1992), aff’d, 563 U.S. 776 (2011))).
“Breach is defined as a ‘[f]ailure, without legal excuse, to perform any promise
which forms the whole or part of a contract.’ To determine the accrual date,
7
The limitations analysis is governed by whichever law applies under the Borrowing
Statute. See Bear Stearns, 2015 WL 139731, at *12 (“Assuming that the Borrowing
Statute called for applying Delaware’s shorter statute of limitations period, then
Delaware’s rules about the operation of that shorter period, including when claims accrue,
also applied.”); see also Frombach v. Gilbert Assocs., Inc., 236 A.2d 363, 366 (Del. 1967)
(“[T]he borrowed statute [of limitations] is accepted with all its accoutrements . . . .”); de
Adler v. Upper N.Y. Inv. Co., 2013 WL 5874645, at *13 n.149 (Del. Ch. Oct. 31, 2013)
(explaining that “‘accoutrements,’ such as claim accrual and tolling doctrines,” are
accepted with the borrowed statute of limitations); Delargy v. Hartford Accident and
Indemnity Co., 1986 WL 11562, at *2 (Del. Super. Oct. 8, 1986) (same). Again, the result
here is the same under either Delaware or California law.
15
therefore, courts must examine the language of the contract.” Meso, 62 A.3d at 77(alteration in original) (internal citation and footnote omitted).
Here, Gleitzman promised in the Assignment Agreement to “assign to the
Company . . . all [his] right, title and interest . . . in and to any and all Company
Inventions and all patent . . . rights therein.” Assign. Agt. § 4(d). He could not have
breached his contractual obligation to assign the ‘038 Patent to Ruse before the
patent was issued. See Meso, 62 A.3d at 78 (holding that a claim for breach of an
anti-assignment provision in a global consent agreement did not accrue when the
alleged breacher entered into a binding merger agreement, but when the assignment
actually occurred at the merger closing); see also Int’l Bus. Machs. Corp. v.
Zachariades, 70 F.3d 1278, 1995 WL 697210, at *2 (9th Cir. 1995) (TABLE)
(holding that “the limitations period for failure to assign [a patent under an
employment agreement] commenced on the date that [the assignee] first could have
demanded assignment,” i.e., “the dates that the patents were issued”). Thus, the
earliest date this claim could have accrued is June 23, 2020, when the ‘038 Patent
was issued.
The authority on which Defendants rely does not support an earlier accrual
date. In Board of Trustees of Leland Stanford Junior University v. Roche Molecular
Systems, Inc., for instance, the United States Court of Appeals for the Federal Circuit
concluded that, where a plaintiff had notice of claims arising from the issuance of
16
one patent, it also had notice of claims arising from “continuation patents” that were
issued thereafter. 583 F.3d at 842. In so holding, the court rejected the plaintiff’s
position that its claims under the later-filed patents could not have accrued until those
patents were issued. But, critically, “[i]n Stanford, the plaintiff had actual notice of
the [first] issued patent, as well as of defendants’ claim of ownership over related
patents that ‘may issue.’” Regents of Univ. of Cal. v. Chen, 2017 WL 3215356, at
*6 (N.D. Cal. July 26, 2017) (distinguishing Stanford). Here, there is no allegation
that Plaintiff’s breach of contract claim accrued upon the issuance of a prior-issued
patent, and Stanford is therefore inapposite.8
8
Defendants cite numerous cases analyzing accrual of claims other than breach of contract
claims—see, e.g., Miller v. Bechtel Corp., 663 P.2d 177 (Cal. 1983) (fraud); Bernson v.
Browning-Ferris Indus., 873 P.2d 613 (Cal. 1994) (defamation); Fox v. Ethicon Endo-
Surgery, Inc., 110 P.3d 914 (Cal. 2005) (malpractice); Wang v. Palo Alto Networks, Inc.,
2014 WL 1410346 (N.D. Cal. Apr. 11, 2014) (misappropriation); Cmty. Cause v.
Boatwright, 177 Cal. Rptr. 657 (Ct. App. 1981) (violation of a statute); Nguyen v. W.
Digital Corp., 177 Cal. Rptr. 3d 897 (Ct. App. 2014) (malpractice)—or analyzing accrual
under the law of other jurisdictions. See, e.g., Ferris Mfg. Corp. v. Carr, 2015 WL 279355(N.D. Ill. Jan. 21, 2015); Wise v. Hubbard, 769 F.2d 1 (1st Cir. 1985); BroadStar Wind
Sys. Gp. Ltd. Liab. Co. v. Stephens, 459 Fed. Appx. 351 (5th Cir. 2012); Univ. Patents, Inc.
v. Kligman, 1991 WL 64652 (E.D. Pa. Apr. 22, 1991); Fed. Express Corp. v. Accu-Sort
Sys., Inc., 2005 WL 8156707 (W.D. Tenn. Mar. 30, 2005); OrbusNeich Med. Co., Ltd.,
BVI v. Boston Sci. Corp., 694 F. Supp. 2d 106 (D. Mass. 2010) WesternGeco v. Ion
Geophysical Corp., 2009 WL 3497123 (S.D. Tex. Oct. 28, 2009); Informatics Applications
Gp., Inc. v. Shkolnikov, 836 F. Supp. 2d 400 (E.D. Va. 2011); MV Circuit Design, Inc. v.
Omnicell, Inc., 2015 WL 1321743 (N.D. Ohio Mar. 24, 2015); M & T Chems., Inc. v. Int’l
Bus. Machs. Corp., 403 F. Supp. 1145 (S.D.N.Y. 1975), aff’d, 542 F.2d 1165 (2d Cir.
1976). That authority does not apply or control here.
17
Accordingly, Plaintiff’s claim for breach of the Assignment Agreement
premised on the failure to assign the ‘038 Patent accrued no earlier than June 23,
2020, when the ‘038 Patent was issued. 9
c. When Did The Statute Of Limitations Run?
Using June 23, 2020 as the earliest accrual date, Plaintiff was within the three-
or four-year limitations period when he filed the Second Amended Complaint on
June 22, 2023. Accordingly, I recommend that the Court deny the motion to dismiss
Count Seven to the extent it asserts a claim for breach of the Assignment Agreement
premised on Gleitzman’s alleged failure to assign the ‘038 Patent.
2. Breach Of The Assignment Agreement For Failure to
Disclose
a. What Is The Presumptive Limitations Period?
Count Seven also alleges that Gleitzman breached the Assignment Agreement
by failing to “promptly” disclose his rights relating to the ‘038 Patent and the ‘314
Patent Application. As with Plaintiff’s other theory of breach, Plaintiff’s breach of
9
Defendants do not argue that the Replicant Assignment Agreement was a repudiation of
the Assignment Agreement. Even if they did, I could not “find as a matter of undisputed
fact that [Plaintiff] objectively manifested an intent to treat the repudiation as a breach”
such that an earlier accrual date would apply. Meso, 62 A.3d at 79. Additionally, to the
extent Gleitzman breached the Assignment Agreement by failing to assign some other right
predating issuance of the patent (such as a right to the patent application), it is not clear
from the Assignment Agreement when the duty to assign any such rights would have
arisen, and additional fact development would be needed to identify an accrual date.
18
contract claims based on the failure to disclose are governed either by Delaware’s
three-year or California’s four-year statute of limitations.
b. When Did The Claims Accrue?
Plaintiff alleges that Gleitzman breached the Assignment Agreement by
failing to promptly disclose his rights relating to the ‘038 Patent and the ‘314
Application to Ruse. For the ‘038 Patent, Plaintiff says the claim accrued on June
23, 2020, when the ‘038 Patent was issued. For the ‘314 Application, Plaintiff
contends his claim arose on December 24, 2020, when the ‘314 Application was
published, or at the earliest, on June 24, 2020, when the ‘314 Application was filed.
Gleitzman, on the other hand, argues that these claims accrued in mid-2017 when
Gleitzman first began developing intellectual property for Atomic and Replicant.
Again, “[f]or breach of contract claims, the wrongful act is the breach, and the
cause of action accrues at the time of breach.” Meso, 62 A.3d at 77; see also
Stanford, 583 F.3d at 846. To determine when the breach allegedly occurred, the
Court must look to the language of the contract.
Gleitzman promised in the Assignment Agreement to “promptly make full
written disclosure to the Company . . . [of] all [his] right, title and interest throughout
the world in and to any and all Company Inventions and all patent, copyright,
trademark, trade secret and other intellectual property rights therein.” Assign. Agt.
19
§4(d).10 It is not clear from the face of the agreement when, under the facts alleged,
Gleitzman’s duty to disclose was triggered—upon efforts to develop new
technology, the filing or approval of a patent application, the issuance of a patent, or
some other event. The Court therefore cannot determine when these claims accrued,
and if they are barred by the statute of limitations, without further factual
development. See, e.g., Kim v. Coupang, LLC, 2021 WL 3671136, at *6 (Del. Ch.
Aug. 19, 2021) (“Because the accrual date is not ‘ascertainable from the face of the
complaint,’ . . . the Court is not able to adjudicate that defense on this motion to
dismiss.” (quoting Cent. Mortg. Co., 2012 WL 3201139 at *16)); Intermec IP Corp.
v. TransCore, LP, 2021 WL 3620435, at *22-23 (Del. Super. Aug. 16, 2021)
(deferring judgment on a statute of limitations defense where the relevant contractual
provision was ambiguous, creating a disputed fact); Smith v. Mattia, 2010 WL
412030, at *4 (Del. Ch. Feb. 1, 2010) (denying motion to dismiss premised on statute
10
The Assignment Agreement is governed by California law. Assign. Agt. § 12(a). “Under
California law, ‘[t]he language of a contract is to govern its interpretation, if the language
is clear and explicit, and does not involve an absurdity.’” Centene Corp. v. Accellion, Inc.,
2022 WL 898206, at *6 (Del. Ch. Mar. 28, 2022) (alteration in original) (quoting Cal. Civ.
Code § 1638). “[E]xtrinsic evidence may be used to explain the meaning of a contract even
if the contract appears unambiguous on its face.” Id. “The logic behind the California
approach is that the meaning of a contract ‘can only be found by interpretation in light of
all the circumstances that reveal the sense in which the writer used the words.’” CA, Inc.
v. Ingres Corp., 2009 WL 4575009, at *29 (Del. Ch. Dec. 7, 2009) (citation omitted), aff’d,
8 A.3d 1143 (Del. 2010).
20
of limitations where “the Court [could not] yet say when the cause of action on th[e]
claim accrued”).
Because it is not clear from the face of the Second Amended Complaint when
Plaintiff’s claim for breach of the Assignment Agreement premised on the failure to
disclose accrued, I recommend that the Court deny the motion to dismiss Count
Seven.
C. The Motion To Dismiss Count Eight For Tortious Interference
With The Assignment Agreement Is Granted.
In Count Eight, Plaintiff alleges that Replicant tortiously interfered with the
Assignment Agreement by “falsely concealing Gleitzman’s status as an inventor” in
the Provisional Applications and the ‘453 Application, and by entering into the
Replicant Assignment Agreement with Gleitzman “in defiance of Gleitzman’s pre-
existing assignment obligations to Ruse.” SAC ¶ 174.
As set forth below, Count Eight should be dismissed as time-barred.
1. What Is The Presumptive Limitations Period?
The parties agree that Plaintiff’s claim for tortious interference with contract
arises under California law. ROB at 8; AB at 21. In Delaware, the statute of
limitations governing a claim for tortious interference with contractual relations is
three years. 10 Del. C. § 8106(a). “The statute of limitations for tortious interference
with contract in California is two years.” DC Comics v. Pac. Pictures Corp., 938 F.
Supp. 2d 941, 948 (C.D. Cal. 2013); Cal. Civ. Proc. Code § 339(1). Under the
21
Borrowing Statute, California’s shorter, two-year limitations period applies. See 10
Del. C. § 8121.
2. When Did The Claim Accrue?
“A tortious-interference claim typically accrues ‘at the date of the wrongful
act.”’ DC Comics, 938 F. Supp. 2d at 948 (citation omitted). “[I]n no event does a
claim accrue ‘later than the actual breach of contract by the party who was
wrongfully induced to breach,’ because the breach is the culmination of the alleged
wrong.” Id. (citation omitted); see also Redisegno.com, S.A. de C.V. v. Barracuda
Networks, Inc., 2020 WL 3971622, at *2-3 (N.D. Cal. July 14, 2020) (“Under
California law, the two-year statute of limitations begins to run no later than the date
of the breach or termination of the underlying contract.” (citing Forcier v. Microsoft
Corp., 123 F. Supp. 2d 520, 530 (N.D. Cal. 2000))); Lynwood Invs. CY Ltd. v.
Konovalov, 2022 WL 3370795, at *6 (N.D. Cal. Aug. 16, 2022) (same). 11 Therefore,
at the latest,12 the tortious interference claim accrued on June 23, 2020, when the
11
The same is true under Delaware law. See Pomeranz, 2005 WL 217039, at *8 (finding
“the plaintiffs’ claims accrued on . . . the date that the allegedly wrongful Withdrawal
Agreement was executed” where the plaintiff alleged that a limited partner tortiously
interfered with a limited partnership agreement by entering into a withdrawal agreement
with the limited partner in breach of the partnership agreement).
12
Replicant contends the tortious interference claim accrued earlier, either on December
27, 2018, when Replicant allegedly “induced . . . Gleitzman’s breaches . . . by . . .
concealing Gleitzman’s status as an inventor” of the ‘038 Patent, or on February 27, 2020,
when “Gleitzman . . . assign[ed] all of his rights in the ‘038 Patent to Replicant.” SAC
¶¶ 157, 174.
22
‘038 Patent was issued and Plaintiff’s breach of contract claim for failure to assign
accrued. See pp. 14-18, supra.
Assuming a June 23, 2020 accrual date, the statute of limitations
presumptively ran for Count Eight two years later, on June 23, 2022—four months
after the filing of the Initial Complaint on February 22, 2022, but more than a year
before the filing of the Second Amended Complaint on June 22, 2023. Therefore,
Count Eight is time-barred unless tolling applies or Count Eight relates back to the
filing of the Initial Complaint.
3. Does Tolling Apply?
Plaintiff contends that under California’s “discovery rule,” the two-year
statute of limitations governing the tortious interference claim was tolled until
sometime in 2023, when Plaintiff discovered the factual basis for his claim during
discovery in this action. Replicant counters that Plaintiff was on constructive or
inquiry notice of the claim by June 23, 2020.
Under California law, a claim for tortious interference with a contract “shall
not be deemed to have accrued until the discovery of the loss or damage suffered by
the aggrieved party thereunder.” Cal. Civ. Proc. Code § 339(1).
This so-called “discovery rule” “postpones accrual of a cause of action
until the plaintiff discovers, or has reason to discover, the cause of
action.” A plaintiff “discovers” the cause of action the moment “he at
least suspects a factual basis, as opposed to a legal theory,” for the
elements of the claim—in other words, when plaintiff suspects “that
someone has done something wrong to him.” . . . “[T]he discovery
23
rule postpones accrual of a cause of action until plaintiff discovers the
facts underlying its claims.” But a plaintiff need not suspect facts
“supporting each specific legal element of a particular cause of action”
to have discovered that cause of action; rather, California courts “look
to whether the plaintiffs have reason to at least suspect that a type of
wrongdoing has injured them.” “So long as a suspicion exists, it is clear
that the plaintiff must go find the facts; she cannot wait for the facts to
find her.”
DC Comics, 938 F. Supp. 2d at 951 (citations omitted).13 “By expressly providing
for the common-law discovery rule and no other common-law tolling principles,
section 339 appears to reflect the legislature’s clear and unequivocal intent to
preclude application of common-law tolling mechanisms other than the discovery
rule.” Id. at 950.
13
See also Vera v. REL-BC, LLC, 281 Cal. Rptr. 3d 45, 54, 69 (Ct. App. 2021) (“The courts
interpret discovery in this context to mean not when the plaintiff became aware of the
specific wrong alleged, but when the plaintiff suspected or should have suspected that an
injury was caused by wrongdoing.”); Fox, 110 P.3d at 920 (“[P]laintiffs are required to
conduct a reasonable investigation after becoming aware of an injury, and are charged with
knowledge of the information that would have been revealed by such an investigation.”);
Norgart v. Upjohn Co., 981 P.2d 79, 88-89 (Cal. 1999) (same); Jolly v. Eli Lilly & Co.,
751 P.2d 923, 927-28 (Cal. 1988) (same).
California’s approach is consistent with Delaware law. See Pomeranz, 2005 WL 217039,
at *3 (“Inquiry notice does not require full knowledge of the material facts; rather, plaintiffs
are on inquiry notice when they have sufficient knowledge to raise their suspicions to the
point where persons of ordinary intelligence and prudence would commence an
investigation that, if pursued would lead to the discovery of the injury.”); Merck & Co. v.
SmithKline Beecham Pharms. Co., 1999 WL 669354, at *42 (Del. Ch. Aug. 5, 1999)
(“Even when tolled, the statute of limitations is suspended only until a plaintiff discovers
his rights or, by exercising reasonable diligence, should have discovered such rights.”),
aff’d, 746 A.2d 277 (Del. 2000), and aff’d, 766 A.2d 442 (Del.).
24
At the latest, 14 Plaintiff had constructive notice of the facts underlying his
tortious interference claim by June 23, 2020, when the ‘038 Patent was issued.
“[I]ssuance of a patent and recordation in the Patent Office constitute notice to the
world of its existence.” Gen. Bedding Corp. v. Echevarria, 947 F.2d 1395, 1397-98
(9th Cir. 1991) (quoting Wine Ry. Appliance Co. v. Enter. Ry. Equip. Co., 297 U.S.
387 (1936)). “The issuance of a patent gives a plaintiff constructive notice of its
claims if the patent reveals information sufficient to alert a reasonable person of the
need to inquire further.” Int’l Bus. Machines Corp. v. Zachariades, 1993 WL
443409, at *2 (N.D. Cal. Oct. 27, 1993), aff’d in part, rev’d in part on other grounds,
70 F.3d 1278.
Plaintiff asserts that he was not on constructive notice of the ‘038 Patent
because he “had no reason or duty to scour the patent records.” AB at 20. As support
for that position, he looks to General Electric Co. v. Wilkins, in which the United
States District Court for the Eastern District of California found that an engineer
claiming an ownership interest in a patent was not on constructive notice of his
claims solely because a publicly issued patent failed to include him as an inventor.
14
Replicant asserts that, in fact, Plaintiff had constructive notice of his tortious interference
claim eighteen months earlier, in December 2018, when the ‘038 Application was
published. See ROB at 19 (“Ruse had ‘reason to at least suspect’ that it had a claim against
Replicant at the time the ‘038 Patent application listing only Abraham as an inventor was
published on December 27, 2018.”).
25
2011 WL 3163348 (E.D. Cal. July 26, 2011). The court recognized that the engineer
“had constructive notice of the existence of the . . . Patent upon its issuance,” but
explained that “knowledge of a patent’s existence is not the same as knowledge of a
cause of action based on conduct underlying issuance of the patent.” Id. at *5. The
court concluded that the plaintiff “ha[d] not carried its burden of establishing that
[the engineer] had reason to know of his claims concerning the . . . Patent by virtue
of its issuance,” where no other facts put him on notice of his claims and he “would
have had to scour the Patent Office’s records for all patents issued to Plaintiff each
year and then review the substance of each patent to determine whether he should
have been named as an inventor.” Id.
Notably, other decisions under California law have declined to limit
constructive notice of patents to individuals actively working in the patent field or
who otherwise are under a duty to investigate the patent docket. See, e.g., Klang v.
Pflueger, 2014 WL 12587028, at *5 (C.D. Cal. Oct. 2, 2014) (acknowledging
authority that “limit[s] a finding of constructive notice,” but explaining that “[t]his
approach . . . is not controlling law” and “the broader rule . . . controls the outcome
here” (quoting Wang, 2014 WL 1410346, at *6-7)).
Under either approach, the result here is the same, because the Second
Amended Complaint alleges additional facts that, taken as true, demonstrate Plaintiff
was under a duty to investigate the patent record. The Second Amended Complaint
26
alleges that Plaintiff knew (1) Gleitzman began working with Replicant in mid-2017
to develop its “code, design, content, product and brand”;15 (2) by 2018, that
relationship had generated “work product,” which Ruse agreed through the ICA
would remain the “sole and exclusive property” of Atomic for one year;16 and (3) in
2020, Gleitzman and Replicant wanted Ruse to relinquish its “ownership rights to
the technology underlying the ‘038 Patent” through a similar agreement.17 Those
pled facts should have given rise to at least a suspicion “that [Ruse’s] business
relation was being tampered with,” creating a duty to consult the patent records. DC
Comics, 938 F. Supp. 2d at 951.18 Had Plaintiff done so, he would have discovered
the ‘038 Patent, putting him on notice of the wrongdoing underlying his claims—
15
SAC ¶¶ 39-41.
16
Id. ¶¶ 10, 58.
17
Id. ¶ 10.
18
Plaintiff asserts that “Ruse had no reason to go looking for patent or patent applications
based on the course of dealing between the parties, and in light of Gleitzman’s fiduciary
obligations to Ruse.” AB at 23. But once Plaintiff became aware of facts that would cause
suspicion in a reasonably prudent person, he could no longer rely on Gleitzman’s
representations (or lack thereof) as a fiduciary. See In re Tyson Foods, Inc., 919 A.2d 563,
600 (Del. Ch. 2007) (“Where plaintiffs have relied upon a fiduciary’s statements . . . they
are not on inquiry notice of the harm done to them unless they had some reason to suspect
that the information upon which they relied was inaccurate.” (emphasis added)); see also
Regents, 2017 WL 3215356, at *5 (explaining that where the plaintiff “was on both actual
and constructive notice of its potential claims,” it could not “be heard to complain . . . that
any actions on [the defendant’s] part prevented it from filing suit”).
27
i.e., that Gleitzman invented the ‘038 Technology but assigned it to Replicant instead
of Ruse.
Accordingly, the statute of limitations was not tolled under the discovery rule
and Count Eight is time-barred unless it relates back to the Initial Complaint.
4. Does The Claim Relate Back To The Initial Complaint?
“Notwithstanding the general liberal policy toward amendments imparted by
Rule 15, a motion to add or substitute a party after the statute of limitations has run
must be denied if it fails to satisfy the requirements of Rule 15(c).” Shulman v.
Kolomoisky, 2023 WL 1453658, at *3 (Del. Ch. Feb. 1, 2023) (quoting Mullen v.
Alarmguard of Delmarva, Inc., 625 A.2d 258, 263 (Del. 1993)). Under Court of
Chancery Rule 15(c),
An amendment of a pleading relates back to the date of the original
pleading when
(1) relation back is permitted by the laws that provide the statute
of limitations applicable to the action, or
(2) the claim or defense asserted in the amended pleading arose
out of the conduct, transaction or occurrence set forth or
attempted to be set forth in the original pleading, or
(3) the amendment changes the party or the name of the party
against whom a claim is asserted if the foregoing provisions of
subdivision (2) of this paragraph are satisfied and, within 120
days of the filing of the complaint, or such additional time the
Court allows for good cause shown, the party to be brought in by
amendment
28
(A) has received such notice of the institution of the action
that the party will not be prejudiced in maintaining a
defense on the merits; and
(B) knew or should have known that, but for a mistake
concerning the identity of the proper party, the action
would have been brought against the party.
Ct. Ch. R. 15(c).
The parties have not argued that relation back is permitted under California
law. See Ct. Ch. R. 15(c)(1). The relation-back analysis is therefore governed by
Court of Chancery Rule 15(c)(3), which “establishes the ‘relation back’ doctrine’
applicable” when an amendment adds a claim against a party that was not named in
the original pleading—here, Replicant. Shulman, 2023 WL 1453658, at *3 (quoting
Allmaras v. Bd. Of Adj. of Sussex Cnty., 238 A.3d 142, 2020 WL 4669008 at *2 (Del.
2020) (TABLE)). Under that subsection,
If the amending party seeks to add a new party to the action after the
running of the applicable statute of limitations, that party must, first,
show that the amendment arises out of the same conduct, transaction,
or occurrence as timely set forth in the original pleading. Next, the
amending party must show that the new party “has received such notice
of the institution of the action that the party will not be prejudiced in
maintaining a defense on the merits . . . .” Finally, the amending party
must also show that the new party “knew or should have known that,
but for a mistake concerning the identity of the proper party, the action
would have been brought against the [new] party.”
Ciabattoni v. Teamsters Loc. 326, 2017 WL 3175617, at *2 (Del. Super. July 25,
2017) (alteration and second ellipsis in original) (citing Ct. Ch. R. 15(c)).
29
Here, the Second Amended Complaint does not allege (and Plaintiff does not
argue) that Plaintiff was mistaken about the identity of the proper defendant for his
tortious interference claim. Instead, Plaintiff argues for a construction of Rule 15(c)
that eliminates the “mistaken identity” requirement. That construction is
inconsistent with both the plain language of the Rule and with case law interpreting
it. See Shulman, 2023 WL 1453658, at *3 (“[A] party seeking relief under Rule
15(c) must still show that it was mistaken as to the identity of the proper defendant.”
(quoting Allmaras, 2020 WL 4669008 at *2)); CCS Invs., LLC v. Brown, 977 A.2d
301, 313 (Del. 2009) (“The courts generally decline to find a mistake when the
plaintiff cannot demonstrate an intent to include the unnamed party before the
limitations period expired . . . .”).
Because Plaintiff has not shown he was mistaken about Replicant’s identity,
Count Eight does not relate back to the Initial Complaint. Plaintiff filed the Second
Amended Complaint on June 22, 2023—more than two years after the tortious
interference claim accrued, at the latest, on June 23, 2020. As a result, Count Eight
should be dismissed as time-barred.19
19
Dismissal should be with prejudice pursuant to Court of Chancery Rule 15(aaa). To
argue dismissal should be without prejudice, Plaintiff points to In re Mindbody, Inc.,
Stockholder Litigation, 2020 WL 5870084, at *34 & n.309 (Del. Ch. Oct. 2, 2020), and In
re Dell Technologies Inc. Class V Stockholders Litigation, 2020 WL 3096748, at *43 (Del.
30
D. The Motion To Dismiss Count Six Seeking A Declaratory
Judgment That Ruse Is An Assignee Of The ‘038 Patent Is Denied.
In Count Six, Plaintiff seeks a declaration that Ruse is an assignee of the ‘038
Patent. The parties debate whether Count Six sounds in contract or tort and is subject
to a two-, three-, or four-year statute of limitations under Delaware or California law.
In my view, Plaintiff’s declaratory judgment claim could be viewed as requesting
relief to remedy the harm alleged in either Count Seven or Count Eight. But, in any
event, the Court plainly has the power to decide whether Ruse is an assignee of the
‘038 Patent as a consequence of resolving Plaintiff’s contract claims. Therefore, to
the extent Count Six is a separate “claim,” it survives alongside Count Seven.20
Ch. June 11, 2020), in which the Court dismissed claims without prejudice where discovery
might uncover a compelling reason to revisit dismissal. Because Plaintiff was on
constructive notice of the ‘038 Patent, factual development cannot save the tortious
interference claim, and dismissal should be with prejudice.
20
Replicant remains a necessary party given the relief Plaintiff seeks. See Meso, 2011 WL
1348438, at *18 (declining to dismiss non-parties to a contract where “questions of law
and fact abound with regard to whether those entities also may be subject to injunction or
other relief that might be granted to Plaintiffs in this action” and the Court therefore could
not “rule out the possibility that certain equitable relief granted by this Court would include
relief against” those parties) (citing Ct. Ch. R. 19(a)).
31
III. CONCLUSION
For the reasons explained above, I recommend that the Court deny the
Motions to Dismiss as to Counts Six and Seven and grant the Motions to Dismiss as
to Count Eight. This is a final report under Court of Chancery Rule 144. Exceptions
to this final report are stayed in accordance with the Chancellor’s August 8, 2023
assignment letter.
32