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Nicolo v. Patterson Belknap Webb & Tyler, LLP

United States District Court, W.D. Pennsylvania

March 26, 2014

DR. ENRICO NICOLO, an individual resident of Allegheny County, Plaintiff,
PATTERSON BELKNAP WEBB & TYLER, LLP, a Limited Partnership of New York; ETHICON ENDO-SURGERY, INC., a corporation of Ohio; and KEVIN N. MALEK, an individual resident of New York, Defendants.



Dr. Enrico Nicolo ("Plaintiff") commenced this action seeking redress for alleged misappropriation of trade secrets in violation of the Pennsylvania Uniform Trade Secrets Act. Presently before the court are defendants Patterson Belknap Webb & Tyler LLP ("Patterson") and Kevin Malek's ("Malek") (collectively "defendants") motions to dismiss for failure to state a claim upon which relief can be granted. For the reasons set forth below, the motions will be denied.

It is well-settled that in reviewing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) "[t]he applicable standard of review requires the court to accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non-moving party." Rocks v. City of Philadelphia , 868 F.2d 644, 645 (3d Cir. 1989). Under the Supreme Court's decision in Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 561 (2007), dismissal of a complaint pursuant to Rule 12(b)(6) is proper only where the averments of the complaint plausibly fail to raise directly or inferentially the material elements necessary to obtain relief under a viable legal theory of recovery. Id. at 544. In other words, the allegations of the complaint must be grounded in enough of a factual basis to move the claim from the realm of mere possibility to one that shows entitlement by presenting "a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 663 129 S.Ct. 1937, 1949 (2009) (quoting Twombly , 550 U.S. at 570).

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id . In contrast, pleading facts that only offer "labels or conclusions' or a formulaic recitation of the elements of a cause of action will not do, '" nor will advancing only factual allegations that are merely consistent with a defendant's liability. Id . Similarly, tendering only "naked assertions" that are devoid of "further factual enhancement" falls short of presenting sufficient factual content to permit an inference that what has been presented is more than a mere possibility of misconduct. Id. at 1949-50; see also Twombly , 550 U.S. at 563 n. 8 (A complaint states a claim where its factual averments sufficiently raise a "reasonably founded hope that the [discovery] process will reveal relevant evidence' to support the claim.") (quoting Dura Pharmaceuticals, Inc. v. Broudo , 544 U.S. 336, 347 (2005) & Blue Chip Stamps v. Manor Drug Stores , 421 U.S. 723, 741 (1975)); accord Morse v. Lower Merion School Dist. , 132 F.3d 902, 906 (3d Cir. 1997) (a court need not credit "bald assertions" or "legal conclusions" in assessing a motion to dismiss) (citing with approval Charles Alan Wright & Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE § 1357 (2d ed.1997) ("courts, when examining 12(b)(6) motions, have rejected legal conclusions, ' unsupported conclusions, ' unwarranted inferences, ' unwarranted deductions, ' footless conclusions of law, ' or sweeping legal conclusions cast in the form of factual allegations.'").

This is not to be understood as imposing a probability standard at the pleading stage. Iqbal, 129 S.Ct. at 1949 ("The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully."); Phillips v. County of Allegheny , 515 F.3d 224, 235 (3d Cir. 2008) (same). Instead, "[t]he Supreme Court's Twombly formulation of the pleading standard can be summed up thus: stating... a claim requires a complaint with enough factual matter (taken as true) to suggest the required element... [and provides] enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element.'" Phillips , 515 F.3d at 235; see also Wilkerson v. New Media Technology Charter School Inc. , 522 F.3d 315, 321 (3d Cir. 2008) ("The complaint must state enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element.'") (quoting Phillips , 515 F.3d at 235) (citations omitted). "Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Twombly , 550 U.S. at 563.

Plaintiff is a retired general surgeon. Complaint at ¶ 7. During the course of his career he invented a number of medical devises and secured patents for some of them, including ones patenting certain surgical stapler technology. Id. at ¶ 7-9, 19. He entered into arrangements with developing and marketing industry leader/defendant Ethicon to commercialize and market some of his patented devices. Id. at ¶ ¶ 10-11, 14, 21, 24. He had similar business dealings with Ethicon which were unsuccessful. In one instance Plaintiff sued Ethicon claiming it had infringed one of his patents. This lawsuit was settled. Id. at ¶¶ 16-17. These transactions and dealings led Plaintiff to become highly cautious when exploring or considering business arrangements with Ethicon. Id. at ¶ ¶ 16-17, 24-25.

Patterson is a law firm that among other things provides legal services in the area of intellectual property, including services to those who need assistance in protecting against the improper use of such property. Complaint at ¶4, 28. Malek was employed as an associate attorney at Patterson during the time in question. Id. at ¶29.

In March of 2010, Malek contacted Plaintiff by telephone, advised that he was an attorney, and proposed a personal meeting with Plaintiff in Pittsburgh, Pennsylvania to discuss some of plaintiff's patents relating to surgical staplers. Id. at ¶ 34. Following the telephone conversation Malek and Plaintiff exchanged several emails in an effort to schedule the meeting. Id. at ¶ 36. Malek indicated in one of the emails that he and "his firm" could assist Plaintiff with regard to the patents. Id . Malek's emails were not sent under Patterson letterhead.

Malek met with Plaintiff in Pittsburgh in late March, 2010 ("the Pittsburgh meeting"). At the meeting Malek gave Plaintiff a business card identifying himself as an associate lawyer of Patterson. Id. at ¶¶ 40-41. Malek informed Plaintiff that he was aware of potential infringers of Plaintiff's patents. Id. at ¶ 41. He specifically informed Plaintiff that companies known as Watson Pharmaceuticals and Covedien had potential infringing developments and stated that he and Patterson would like to investigate Plaintiff's patents in conjunction with a potential representation of plaintiff in these perceived patent infringement matters. Id. at ¶42.

Plaintiff maintains a body of information relating to each of his patents that he regards to be trade secrets. This information encompasses confidential proprietary information regarding negotiations, licenses, development plans, agreement details, burgeoning developments in particular areas, technological developments, infringing and potentially infringing products, understandings of the prior art and related literature and so forth. Id. at ¶ 39. During the course of the Pittsburgh meeting Malek inquired about and plaintiff conveyed certain of this proprietary information relating to his surgical stapler patents. Id. at ¶¶ 46-53. Included within this exchange was information about plaintiff's knowledge about the relevant coverage of his patents and the strengths and weaknesses he perceived as to certain patents, including the scope and strengths and weaknesses of one of his surgical stapler patents. Id. at ¶ 53.

During the course of the communications and the Pittsburgh meeting Malek never advised Plaintiff that Patterson also represented Ethicon, which is an industry leader developing and marketing surgical staplers. Id. at ¶ 35. After the Pittsburgh meeting Malek did not follow up with plaintiff regarding the representation and pursuit of the potential infringement claim(s). Id. at ¶ 54.

In June of 2010, Plaintiff reviewed details of the Pittsburgh meeting with separate counsel who was handling an unrelated matter for Plaintiff. Id. at ¶ 55. That counsel informed Plaintiff that Patterson represented Ethicon for a number of years in legal matters relating to intellectual property and surgical staplers. Id . Prior to this Plaintiff had no knowledge or reason to believe that Malek or Patterson represented Ethicon. Id.

Plaintiff avers that Malek's purpose in scheduling the Pittsburgh Meeting was to obtain confidential information regarding Plaintiff's patents for the benefit of Patterson's client, Ethicon. Id. at ¶ 38. His acts were done intentionally or at least with reckless indifference and a conscious awareness of the consequences. Id. at ¶ 57.

Plaintiff further avers that two forms of harm flowed from Malik's acquisition of the confidential information. First, defendants (including Ethicon) were "unjustly enriched" by gaining corporate intelligence regarding competitors and competitors' potential developments relating to plaintiff's surgical stapler patents and an unfair advantage in dealing plaintiff regarding the same, including deciding not to deal with plaintiff. Id. at ¶ 58. Second, the gained confidential information was used to prevent plaintiff from (1) dealing at arm's length with Ethicon with regard to the surgical ...

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