Prolacta Bioscience, Inc. v. Ni-Q, Llc

NOTICE OF MOTION AND MOTION to Dismiss Case

C.D. Cal.July 6, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 DEFENDANT’S NOTICE OF MOTION AND MOTION TO DISMISS 2:17-CV-04071-SJO-E CHRISTINA VON DER AHE RAYBURN (SBN 255467) cvonderahe@orrick.com ORRICK, HERRINGTON & SUTCLIFFE LLP 2050 Main Street, Suite 1100 Irvine, CA 92614-8255 Telephone: 949.567.6700 Facsimile: 949.567.6710 BRENNA K. LEGAARD (Pro Hac Vice Pending) blegaard@schwabe.com ANGELA E. ADDAE (Pro Hac Vice Pending) aaddae@schwabe.com SCHWABE, WILLIAMSON & WYATT, P.C. 1211 SW 5th Ave., Suite 1900 Portland, OR 97204 Telephone: 503.222.9981 Facsimile: 503.796.2900 Attorneys for Defendant Ni-Q, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION PROLACTA BIOSCIENCE, INC., a Delaware corporation, Plaintiff, v. NI-Q, LLC, an Oregon limited liability company, and DOES 1-10, inclusive, Defendant. Case No.: 2:17-cv-04071-SJO-E DEFENDANT’S NOTICE OF MOTION AND MOTION TO DISMISS Honorable S. James Otero Ctrm: 10C Date: August 7, 2017 Time: 10:00 a.m. Date Action Filed: May 31, 2017 Trial Date: N/A Case 2:17-cv-04071-SJO-E Document 20 Filed 07/06/17 Page 1 of 3 Page ID #:119 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 DEFENDANT’S NOTICE OF MOTION AND MOTION TO DISMISS 2:17-CV-04071-SJO-E NOTICE OF MOTION TO THE HONORABLE COURT AND TO ALL PARTIES: PLEASE TAKE NOTICE that on August 7, 2017, at 10:00 a.m., or as soon thereafter as this matter may be heard in the above-entitled Court located at the United States Courthouse, 350 West 1st Street, Los Angeles, California 90012- 4701, Courtroom 10C, Defendant Ni-Q, LLC (“Ni-Q”) will and hereby does move this Court to enter an Order pursuant to Fed. R. Civ. P. 12(b)(2), 12(b)(3), and 12(b)(6) dismissing Plaintiff’s Complaint (Doc. 1) in its entirety. This motion is made following the telephonic conferences of counsel pursuant to L.R. 7-3 and Paragraph 23(a) of the Standing Order for Civil Cases Assigned to Judge S. James Otero, which took place on June 29, 2017. The parties made a good faith attempt to resolve this dispute and were unable to do so. (Declaration of Brenna K. Legaard in Support of Defendant’s Motion to Dismiss, ¶¶ 2-5). This motion is based on the following documents: • Motion and Memorandum in Support of Defendant’s Motion to Dismiss; • Declaration of Bill Pfost in Support of Defendant’s Motion to Dismiss; • Declaration of Brenna K. Legaard in Support of Defendant’s Motion to Dismiss; • And the complete files and records in this action, and upon such oral and documentary evidence as may be allowed at the hearing of this motion. Case 2:17-cv-04071-SJO-E Document 20 Filed 07/06/17 Page 2 of 3 Page ID #:120 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 DEFENDANT’S NOTICE OF MOTION AND MOTION TO DISMISS 2:17-CV-04071-SJO-E Dated: July 6, 2017 CHRISTINA VON DER AHE RAYBURN Orrick, Herrington & Sutcliffe LLP By: /s/ Christina Von der Ahe Rayburn CHRISTINA VON DER AHE RAYBURN Attorneys for Defendant NI-Q, LLC Case 2:17-cv-04071-SJO-E Document 20 Filed 07/06/17 Page 3 of 3 Page ID #:121 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E CHRISTINA VON DER AHE RAYBURN (SBN 255467) cvonderahe@orrick.com ORRICK, HERRINGTON & SUTCLIFFE LLP 2050 Main Street, Suite 1100 Irvine, CA 92614-8255 Telephone: 949.567.6700 Facsimile: 949.567.6710 BRENNA K. LEGAARD (Pro Hac Vice Pending) blegaard@schwabe.com ANGELA E. ADDAE (Pro Hac Vice Pending) aaddae@schwabe.com SCHWABE, WILLIAMSON & WYATT, P.C. 1211 SW 5th Ave., Suite 1900 Portland, OR 97204 Telephone: 503.222.9981 Facsimile: 503.796.2900 Attorneys for Defendant Ni-Q, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION PROLACTA BIOSCIENCE, INC., a Delaware corporation, Plaintiff, v. NI-Q, LLC, an Oregon limited liability company, and DOES 1-10, inclusive, Defendant. Case No.: 2:17-cv-04071-SJO-E MEMORANDUM IN SUPPORT OF DEFENDANT NI-Q, LLC’S MOTION TO DISMISS Honorable S. James Otero Ctrm: 10C Date: August 7, 2017 Time: 10:00 a.m. Date Action Filed: May 31, 2017 Trial Date: N/A Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 1 of 19 Page ID #:122 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E Table of Contents Page I. INTRODUCTION ........................................................................................... 1 II. ARGUMENT................................................................................................... 2 A. Ni-Q Is Not Subject To Personal Jurisdiction In This Forum, Warranting Dismissal Pursuant to FRCP 12(b)(2). .............................. 2 1. Legal Standard ............................................................................ 2 2. No Basis Exists to Exercise General Jurisdiction Over Ni-Q. ... 3 3. There Is No Basis to Exercise Specific Jurisdiction Over Ni- Q. ................................................................................................. 4 B. Venue Is Improper In The Central District of California, Warranting Dismissal Pursuant to FRCP 12(b)(3). .............................. 7 1. Legal Standard ............................................................................ 7 2. Ni-Q Has Committed No Acts of Alleged Infringement in California and Maintains No Regular and Established Place of Business in California. ........................................................... 8 C. Prolacta’s Complaint Fails to State a Claim Upon Which Relief Can Be Granted, Warranting Dismissal Pursuant to FRCP 12(b)(6). .. 9 1. Legal Standard ............................................................................ 9 2. Plaintiff’s Complaint Fails to Comply with the Twombly/Iqbal Pleading Standard ............................................ 11 III. CONCLUSION ............................................................................................. 13 Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 2 of 19 Page ID #:123 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E TABLE OF AUTHORITIES Page(s) Cases Anza Tech., Inc. v. Novatel Wireless, Inc., 2016 U.S. Dist. LEXIS 155046 (S.D. Cal. Nov. 4, 2016) ....................................... 10 Apollo Fin., LLC v. Cisco Sys., 190 F. Supp.3d 939 (C.D. Cal. June 7, 2016).................................................... 11, 13 Asghari-Kamrani v. United Servs. Auto Assn., 2016 U.S. Dist. LEXIS 48012 (E.D. Va. Mar. 22, 2016)........................................ 11 Ashcroft v. Iqbal, 556 U.S. 662 (2009)............................................................................... 10, 11, 12, 13 Atlas IP LLC v. Pacific Gas and Electric Co., 2016 U.S. Dist. LEXIS 60211 (N.D. Cal. Mar. 9, 2016) ........................................ 11 Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324 (Fed. Cir. 2008) ................................................................................. 5 Balistreri v. Pacifica Police Dept., 901 F.2d 696 (9th Cir. 1990) ................................................................................... 10 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)..................................................................................... 10, 11, 13 e.Digital Corp. v. iBaby Labs, Inc., 2016 U.S. Dist. LEXIS 111689 (N.D. Cal. Aug. 22, 2016) .................................... 11 FastCap, LLC v. Snake River Tool Co., LLC, 2015 U.S. Dist. LEXIS 151190 (N.D. Cal. Nov. 6, 2015) ........................................ 8 Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011)................................................................................................... 3 Hamilton Beach Brands, Inc. v. Sunbeam Prods., 726 F.3d 1370 (Fed. Cir. 2013) ................................................................................. 6 Hologram U.S. Inc. v. Arena3d Indus. Illusions LLC, 2014 U.S. Dist. LEXIS 196236 (C.D. Cal. July 23, 2014) ........................... 2, 3, 4, 6 Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 3 of 19 Page ID #:124 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E Kandefer v. Digitized Audio Communs., 1994 U.S. Dist. LEXIS 6647 (N.D. Cal. Mar. 23, 1994) .......................................... 8 L.A. Gem & Jewelry Design, Inc. v. Ecommerce Innovations, LLC, 2017 U.S. Dist. LEXIS 64115 (C.D. Cal. Apr. 27, 2017) ................................ passim Medsquire LLC v. Spring Med. Sys., 2011 U.S. Dist. LEXIS 107416 (C.D. Cal. Aug. 31, 2011) .................................... 13 Parnell Pharms., Inc. v. Parnell, Inc., 2015 U.S. Dist. LEXIS 134344 (N.D. Cal. Sept. 30, 2015) ...................................... 7 Proxyconn Inc. v. Microsoft Corp., 2012 U.S. Dist. LEXIS 70614 (C.D. Cal. May 16, 2012) ....................................... 13 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th Cir. 2004) ................................................................................. 2, 4 TC Heartland LLC v. Kraft Foods Group Brands LLC, 581 U.S. __ (2017) (slip. op. ) ................................................................................... 8 Thermolife Intl., LLC v. F3 Nutrition, LLC, 2:13-cv-06883-RGK-PLA, Dkt. 24 (C.D. Cal. Dec. 9, 2013)............................... 7, 9 Walden v. Fiore, 134 S. Ct. 1115 (2014) ............................................................................................... 4 World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980)................................................................................................... 2 Statutes 28 U.S.C. §1400(b) ..................................................................................................... 1, 8 28 U.S.C. § 1406 ............................................................................................................. 7 Cal. Code Civ. Proc. § 410.10 ........................................................................................ 2 Other Authorities Fed. R. Civ. P. 8(a) ............................................................................................. 9, 10, 11 Fed. R. Civ. P. 12(b)(2) .................................................................................................. 2 Fed. R. Civ. P. 12(b)(3) .............................................................................................. 2, 7 Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 4 of 19 Page ID #:125 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E Fed. R. Civ. P. 12(b)(6) .................................................................................. 2, 9, 10, 12 Rule 12 ............................................................................................................................ 1 Rule 84 .......................................................................................................................... 11 U.S. Patent No. 8,628,921 ............................................................................ 1, 11, 12, 13 Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 5 of 19 Page ID #:126 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E I. INTRODUCTION Prolacta and Ni-Q both make breast milk-based nutritional products for very small premature infants, which they sell to hospitals and clinics. Prolacta is an established company; Ni-Q is a new market entrant. Prolacta has sued Ni-Q for infringing U.S. Patent No. 8,628,921 (“’921 patent”). The ’921 patent covers a method for processing human mammary fluid by using DNA testing to match it to its donor and processing it so that it contains a certain nutritional profile. Ni-Q is an Oregon limited liability company, which maintains its principal place of business in Wilsonville, Oregon. Its contacts with California are minimal. It does not sell products in California, and does not process milk there. In order to maintain its action before this Court, Prolacta must establish that Ni- Q has committed acts that allegedly constitute patent infringement within this judicial district. Otherwise, Prolacta cannot show that this district is a proper venue for its claims or that this district has personal jurisdiction over Ni-Q. To establish jurisdiction and venue, Prolacta’s Complaint relies on a conclusory allegation “upon information and belief” that Ni-Q “does business in” this District and has “committed acts of infringement in California.” (Compl. ¶¶ 4, 6). But Prolacta does not identify a single California customer, sale, or otherwise infringing act. It does not name a single institution in California at which Ni-Q’s products are allegedly available. It does not allege that Ni-Q processes milk in California. Consequently, venue in this Court is improper, and this Court lacks personal jurisdiction over Ni-Q. Additionally, Prolacta’s conclusory allegation that Ni-Q’s chief executive officer’s personal residence is Ni-Q’s regular and established place of business fails to satisfy the second prong of the patent venue statute, 28 U.S.C. §1400(b), presenting an independent basis for dismissal for lack of venue. And finally, Prolacta’s failure to plead factual content that would allow this Court to draw the reasonable inference that Ni-Q is liable for the misconduct alleged provides a third, independent reason Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 6 of 19 Page ID #:127 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E dismissal under Rule 12 is appropriate. II. ARGUMENT Ni-Q moves the Court to dismiss Prolacta’s Complaint [Dkt. 1] for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2) and for improper venue pursuant to Fed. R. Civ. P. 12(b)(3). Ni-Q also moves to dismiss Prolacta’s Complaint because it fails to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6). A. Ni-Q Is Not Subject To Personal Jurisdiction In This Forum, Warranting Dismissal Pursuant to FRCP 12(b)(2). 1. Legal Standard Under Federal Rule of Civil Procedure 12(b)(2), a defendant may move to dismiss a claim for lack of personal jurisdiction. In determining if a court may exercise personal jurisdiction over a defendant in a patent infringement action, courts consider (1) “whether an applicable state rule or statute permits service of process on the defendant,” and (2) “whether the assertion of personal jurisdiction comports with constitutional due process principles.” Hologram U.S. Inc. v. Arena3d Indus. Illusions LLC, 2014 U.S. Dist. LEXIS 196236, *3-4 (C.D. Cal. July 23, 2014) (citations omitted). Through its long-arm statute, California authorizes jurisdiction within the limits of constitutional due process. See Cal. Code Civ. Proc. § 410.10; see also Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). To comply with due process, the defendant must have “such ‘minimum contacts’ with the forum state that ‘maintenance of the suit does not offend traditional notions of fair play and substantial justice.’” L.A. Gem & Jewelry Design, Inc. v. Ecommerce Innovations, LLC, 2017 U.S. Dist. LEXIS 64115, *4 (C.D. Cal. Apr. 27, 2017) (quoting Int’l Shoe v. Washington, 326 U.S. 310, 316 (1945)). The defendant should have minimum contacts with the forum “such that [it] could reasonably anticipate being haled into court there.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 7 of 19 Page ID #:128 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E To survive a motion to dismiss, a plaintiff must demonstrate that the court can properly exercise personal jurisdiction. L.A. Gem & Jewelry Design, 2017 U.S. Dist. LEXIS 64115 at *3. Courts may exercise either general or specific personal jurisdiction only if a nonresident defendant has sufficient minimum contacts with a forum state. For general jurisdiction to apply, the defendant’s contacts with the forum state must be “continuous and systematic.” Hologram U.S., 2014 U.S. Dist. LEXIS 196236 at *4. Courts may exercise specific jurisdiction where “the defendant has purposefully directed his activities at residents of the forum and the litigation results from alleged injuries that arise out of or relate to those activities.” Id. at *5 (internal citations omitted) (emphasis added). 2. No Basis Exists to Exercise General Jurisdiction Over Ni-Q. General personal jurisdiction requires that a defendant’s contacts with the forum be so “continuous and systematic” that the defendant is “essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). “The paradigm all-purpose forums for general jurisdiction are a corporation’s place of incorporation and principal place of business.” Hologram U.S., 2014 U.S. Dist. LEXIS 196236 at *5 (internal citations omitted). In the instant case, Ni-Q is not subject to general jurisdiction in California. Ni- Q is an Oregon limited liability company, and Ni-Q’s principal place of business is in Wilsonville, Oregon (Decl. of Bill Pfost in Support of Ni-Q’s Motion to Dismiss (“Pfost Decl.”) ¶ 2). The production and administrative components of Ni-Q’s business occur in Oregon. Id. Under no circumstances would Ni-Q be considered “at home” in California. Ni-Q has “no offices, facilities . . . [or] real property” in the state. Hologram U.S., 2014 U.S. Dist. LEXIS 196236 at *9; (Pfost Decl. ¶ 6). Prolacta’s Complaint relies on a conclusory allegation that “[t]his Court has personal jurisdiction over Ni-Q at least because . . . Ni-Q conducts business in the State of California.” (Compl. ¶ 4). However, the Complaint does not describe what business Ni-Q allegedly conducts in California. The smattering of contacts specifically alleged in the Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 8 of 19 Page ID #:129 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E Complaint-the personal LinkedIn profile of Bill Pfost, Ni-Q’s CEO, which describes his location as San Clemente, California; Ni-Q’s registration to do business in California as a foreign LLC; and a reference to California mothers on Ni-Q’s Facebook page-are the very definition of occasional, sporadic, de minimis contacts. (Compl. ¶¶ 6-7, 9). In order to establish general jurisdiction, Prolacta must show that Ni-Q’s activities in California are so continuous and substantial that Ni-Q is “essentially at home” in California. L.A. Gem & Jewelry Design, 2017 U.S. Dist. LEXIS 64115 at *10. Prolacta’s allegations fall well short. 3. There Is No Basis to Exercise Specific Jurisdiction Over Ni- Q. Ni-Q is not subject to specific personal jurisdiction in California, either. In order for there to be specific personal jurisdiction over Ni-Q, (1) Ni-Q must have purposefully directed its activities at residents of the forum, (2) Prolacta’s claim must have arisen out of or related to Ni-Q’s activities with the forum, and (3) assertion of personal jurisdiction must be reasonable and fair. Hologram U.S., 2014 U.S. Dist. LEXIS 196236 at *11. If the plaintiff proves the first two prongs, the burden shifts to the defendant to show that jurisdiction is not reasonable. Schwarzenegger, 374 F.3d at 802. a. Prolacta’s Claims Do Not Arise Out of or Relate to Activities Ni-Q Purposefully Aimed at California. Courts require that a nonresident defendant purposefully avails or purposefully directs its activities to the forum, protecting the defendant from being haled into local courts solely as the result of “random, fortuitous, or attenuated” contacts over which it had no control. Walden v. Fiore, 134 S. Ct. 1115, 1123 (2014). The Ninth Circuit applies a three-part test to determine whether a defendant purposefully directs its activities at the forum. L.A. Gem & Jewelry Design, 2017 U.S. Dist. LEXIS 64115 at *19 (citing Calder v. Jones, 465 U.S. 783 (1984)). Under the Ninth Circuit standard, Prolacta must show that Ni-Q purposefully directed conduct at California because it Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 9 of 19 Page ID #:130 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E has (1) committed an intentional act (2) that was expressly aimed at California (3) causing harm that Ni-Q understands is likely to be felt in California. Id. Further, in order for there to be specific jurisdiction, Prolacta’s claims must arise out of or relate to acts that Ni-Q purposefully directed at this forum. In a patent infringement suit, “the claim asserted by the patentee plaintiff is that some act of making, using, offering to sell, selling, or importing products or services by the defendant constitutes an infringement of the presumptively valid patent named in suit.” Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324, 1332 (Fed. Cir. 2008). For purposes of the specific jurisdiction analysis, “the claim both ‘arises out of’ and ‘relates to’ the defendant’s alleged manufacturing, using, or selling of the claimed invention.” Id. In the absence of general jurisdiction, Prolacta cannot show that this Court has personal jurisdiction over Ni-Q unless it shows that Ni-Q committed acts that Prolacta alleges to be patent infringement within this judicial district. Prolacta’s Complaint relies on an unsupported allegation that “Ni-Q has committed acts of infringement in the Central District of California.” (Compl. ¶¶ 4, 7). But the Complaint does not specify what those acts are. It does not identify any alleged act of milk processing that occurs in this judicial district. It does not identify a single alleged Ni-Q customer or a single offer for sale made to any California customer. It does not identify a single hospital or clinic at which Ni-Q products are used or available. In California, breast milk is considered human tissue for regulatory purposes, and sellers of breast milk are required to be licensed as tissue banks. (Pfost Decl. ¶ 3). Ni-Q does not have a tissue bank license. Id. Consequently, it legally cannot sell its products or offer its products for sale in California, and it has not done so. Id. When informed of this fact during conferral, counsel for Prolacta suggested that they intend to rely on advertising materials Ni-Q allegedly sent into California to establish personal jurisdiction and venue, but when they were asked to provide those Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 10 of 19 Page ID #:131 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E materials to counsel for Ni-Q, they refused to do so. (Legaard Decl. ¶ 3). Ni-Q’s website is available everywhere, including California, and California entities have from time to time accessed the website. On a few occasions, California entities have asked Ni-Q for information about its products. Ni-Q has responded to individual solicitations for product information by sending promotional materials to potential customers, including entities located in California. (Pfost Decl. ¶ 4). In order to comply with California law, each and every time Ni-Q has sent information into California, it has included an explanation that Ni-Q cannot sell its products in California at this time because it does not have a tissue license. (Id.). Further, even without that explanation, advertising is not an act of patent infringement, and sending promotional materials into California cannot constitute infringement or give rise to personal jurisdiction unless those materials constitute an offer for sale. A commercial offer for sale is “one which the other party could make into a binding contract by simple acceptance.” Hamilton Beach Brands, Inc. v. Sunbeam Prods., 726 F.3d 1370, 1376 (Fed. Cir. 2013) (emphasis in original). Thus, Ni-Q’s advertising materials cannot constitute an offer for sale unless they contained terms such as price or quantity. Because Ni-Q has not committed any act that constitutes alleged patent infringement in California, “[n]o facts giving rise to Plaintiff’s direct patent infringement claim occurred in California-let alone a substantial part of the events.” Hologram U.S., 2014 U.S. Dist. LEXIS 196236 at *14 (internal quotations omitted). Prolacta cannot demonstrate that this Court has personal jurisdiction over Ni-Q, and its Complaint must be dismissed. The remaining allegations in the Complaint regarding California contacts are irrelevant because they do not create general jurisdiction and Prolacta’s claims for patent infringement do not arise from or relate to them. Moreover, they are the very definition of random, attenuated contacts. Prolacta identifies a Facebook post that made reference to breastfeeding in California, but as this Court has informed, “a Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 11 of 19 Page ID #:132 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E passive website does little more than make information available to those who are interested in it, which does not support the exercise of personal jurisdiction over its operators.” Thermolife Intl., LLC v. F3 Nutrition, LLC, 2:13-cv-06883-RGK-PLA, Dkt. 24, at 4 (C.D. Cal. Dec. 9, 2013) (internal quotations and citations omitted); see also L.A. Gem & Jewelry Design, 2017 U.S. Dist. LEXIS 64115 at *21 (“One rule, however, is clear: A defendant has not purposefully availed himself of the privilege of conducting activities in a forum state merely because he operates a website which can be accessed there.”). Thus, “the Court cannot say that through a passing reference to California, … Defendants expressly aimed their intentionally infringing acts at California.” L.A. Gem & Jewelry Design, 2017 U.S. Dist. LEXIS 64115 at *23. Though Ni-Q is registered as a business with the California Secretary of State, “[r]egistering with the Secretary of State is a passive act that is not expressly aimed at California and [does not cause] harm that [defendant] knows is likely to be suffered in California.” Parnell Pharms., Inc. v. Parnell, Inc., 2015 U.S. Dist. LEXIS 134344, *12 (N.D. Cal. Sept. 30, 2015). Likewise, employment of a CEO who maintains a private residence in California can hardly be said to be an act aimed at California likely to cause harm there. Plaintiff’s claims do not arise from or relate to any act purposefully directed at California, and the specific jurisdiction test remains unsatisfied. The Complaint must be dismissed. B. Venue Is Improper In The Central District of California, Warranting Dismissal Pursuant to FRCP 12(b)(3). 1. Legal Standard Federal Rule of Civil Procedure 12(b)(3) governs dismissal based on improper venue. “The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss [the case]….” 28 U.S.C. § 1406. For patent infringement claims, venue is proper in (1) any judicial district where the defendant resides, or (2) any judicial district where the defendant has committed acts of Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 12 of 19 Page ID #:133 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E infringement and has a regular and established place of business. 28 U.S.C. § 1400(b). The Supreme Court recently affirmed that “a domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statute.” TC Heartland LLC v. Kraft Foods Group Brands LLC, 581 U.S. __ (2017) (slip. op. at 2); affirming Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957). 2. Ni-Q Has Committed No Acts of Alleged Infringement in California and Maintains No Regular and Established Place of Business in California. Ni-Q is not organized in California; therefore, Ni-Q does not “reside” in California for venue purposes under § 1400(b). Thus, Prolacta must establish both that Ni-Q has committed acts of infringement in California and that Ni-Q has a regular and established place of business in California. Because Ni-Q has committed no acts of alleged infringement in California and maintains no place of business in California, the Complaint should be dismissed. As established above, Ni-Q has committed no acts of alleged infringement in California. That fact is dispositive as to both personal jurisdiction and venue. Nor does Ni-Q have a regular and established place of business in California, a fact that is independently dispositive as to venue. Ni-Q engages in no business operations in California, it leases or owns no office space in California, and it maintains no public presence in California. (Pfost Decl. ¶6). A defendant has a regular and established place of business if that defendant “does business in the district through a permanent and continuous presence there.” FastCap, LLC v. Snake River Tool Co., LLC, 2015 U.S. Dist. LEXIS 151190, *10 (N.D. Cal. Nov. 6, 2015); See also Kandefer v. Digitized Audio Communs., 1994 U.S. Dist. LEXIS 6647, *10 (N.D. Cal. Mar. 23, 1994) (“the defendant must be doing business in the district through a permanent and continuous presence and be regularly engaged in carrying on a substantial part of his ordinary business on a permanent basis.”) (internal citations and quotations omitted). Prolacta’s Complaint supports its allegation that Ni-Q has a regular and Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 13 of 19 Page ID #:134 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E established place of business in California by pointing to the personal LinkedIn profile of Ni-Q’s chief executive officer, Bill Pfost, which lists San Clemente, California, under Mr. Pfost’s name and current position. When told that this page referred to Mr. Pfost’s private residence during conferral, Prolacta’s counsel argued that Mr. Pfost’s private residence is Ni-Q’s permanent and established place of business not because Prolacta can identify any business operations performed in Mr. Pfost’s private home, but apparently simply because its CEO lives there. (Legaard Decl. ¶ 4). Prolacta’s argument is specious. Mr. Pfost lives in a private residence with his wife and children. Ni-Q does not own or lease Mr. Pfost’s residence. (Pfost Decl. ¶ 7). Ni-Q does not hold Mr. Pfost’s house out to be a corporate office, and does not conduct any business activity out of Mr. Pfost’s house. (Pfost Decl. ¶¶ 6-7). Mr. Pfost commutes to Oregon, where he works at Ni-Q’s corporate headquarters. (Pfost Decl. ¶ 8). Ni-Q does not maintain an office for him in California or anywhere other than at its corporate headquarters. (Id.). If Mr. Pfost were to leave his employment at Ni-Q, he and his family would continue to live in his house, as they did before he joined Ni-Q. (Id. at ¶¶7-8). For the aforementioned reasons, including those regarding the lack of personal jurisdiction, venue is improper in the Central District of California. See, e.g., Thermolife Intl., LLC, 2:13-cv-06883-RGK-PLA, Dkt. 24 (finding defendant’s lack of residency and small number of Internet sales insufficient to establish proper venue in the Central District of California). This action must be dismissed for improper venue because Ni-Q does not reside in California and because Ni-Q neither has committed acts of infringement in California nor has a regular and established place of business in California. C. Prolacta’s Complaint Fails to State a Claim Upon Which Relief Can Be Granted, Warranting Dismissal Pursuant to FRCP 12(b)(6). 1. Legal Standard Federal Rule of Civil Procedure 8(a) requires that a complaint allege enough Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 14 of 19 Page ID #:135 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E factual matter that, taken as true, would entitle the plaintiff to relief. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Demanding “more than an unadorned, the defendant-unlawfully-harmed-me accusation,” Rule 8(a) requires “a short and plain statement of the claim showing that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Fed. R. Civ. P. 8(a)(2). Mere “labels and conclusions” are insufficient to give fair notice and “a formulaic recitation of the elements of a cause of action will not do.” Iqbal, 556 U.S. at 678. When a complaint falls short of the Rule 8(a) requirement, Federal Rule of Civil Procedure 12(b)(6) permits dismissal for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). For example, where the complaint lacks sufficient facts to support a cognizable legal theory, dismissal under Rule 12(b)(6) is appropriate. See Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990) (as amended) (recognizing that a complaint should be dismissed where there is an “absence of sufficient facts alleged under a cognizable legal theory.”). To survive a motion to dismiss, a complaint must contain enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible “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. The plausibility requirement demands more than “a sheer possibility that a defendant has acted unlawfully.” Id. Thus, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. A complaint’s allegations are entitled to the presumption of truth only when it contains “sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Anza Tech., Inc. v. Novatel Wireless, Inc., 2016 U.S. Dist. LEXIS 155046, *10 (S.D. Cal. Nov. 4, 2016) (citing Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011)). But “the tenant that a court must accept a complaint’s allegations as true is inapplicable to threadbare recitals of a cause of Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 15 of 19 Page ID #:136 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E action’s elements, supported by mere conclusory statements.” Iqbal, 556 U.S. at 663. A complaint does not survive a motion to dismiss “if it tenders naked assertion[s]” devoid of “further factual enhancement.” Id at 678. After the 2015 Amendments to the Federal Rules abrogated Rule 84 and Form 18, courts have applied the Twombly/Iqbal pleading standards to patent infringement cases. e.Digital Corp. v. iBaby Labs, Inc., 2016 U.S. Dist. LEXIS 111689, *6 (N.D. Cal. Aug. 22, 2016) (concluding that former Form 18 no longer controls and that ‘allegations of direct infringement are now subject to the pleading standards established by Twombly and Iqbal”); see also Atlas IP LLC v. Pacific Gas and Electric Co., 2016 U.S. Dist. LEXIS 60211 (N.D. Cal. Mar. 9, 2016); Apollo Fin., LLC v. Cisco Sys., 190 F. Supp.3d 939 (C.D. Cal. June 7, 2016); Asghari-Kamrani v. United Servs. Auto Assn., 2016 U.S. Dist. LEXIS 48012, *9 (E.D. Va. Mar. 22, 2016) (granting motion to dismiss under the Rule 8(a) standard where “Plaintiffs fail to specify which features of [defendant’s] website correspond to the [claimed] Central- and External-Entities that their patent identifies”). 2. Plaintiff’s Complaint Fails to Comply with the Twombly/Iqbal Pleading Standard Prolacta’s Complaint, which fails to meet the pleading standard set forth in Twombly and Iqbal, should be dismissed for failure to state a claim upon which relief can be granted. The Complaint’s threadbare allegations do not provide Ni-Q with the “fair notice” required by the Federal Rules of Civil Procedure. Twombly, 550 U.S. at 555. Instead, Prolacta merely alleges that Ni-Q’s products “infringe the ’921 patent by making human milk-based [products] using the methods of the ’921 patent and using, selling, offering for sale or importing the human-milk based products using the methods of the ‘921 patent.” (Compl. ¶ 20). Plaintiff’s Complaint does not identify how the Defendant’s products allegedly infringe the ’921 patent. Claim 1 of the ’921 patent is exemplary, and is reproduced below: Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 16 of 19 Page ID #:137 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E 1. A method for determining whether a donated mammary fluid was obtained from a specific subject, the method comprising: (a) testing a donated biological sample from the specific subject to obtain at least one reference identity marker profile for at least one marker; (b) testing a sample of the donated mammary fluid to obtain at least one identity marker profile for the at least one marker in step (a); (c) comparing the identity marker profiles, wherein a match between the identity marker profiles indicates that the mammary fluid was obtained from the specific subject; and (d) processing the donated mammary fluid whose identity marker profile has been matched with a reference identity marker profile, wherein the processed donated mammary fluid comprises a human protein constituent of 11-20 mg/mL; a human fat constituent of 35-55 mg/mL; and a human carbohydrate constituent of 70-120 mg/L. Prolacta’s patent is for testing and processing milk, yet the Complaint alleges no specific facts describing how Ni-Q’s products are tested, manufactured, or processed. Further, the claims in the ’921 patent are bound by composition requirements, but Prolacta’s Complaint includes no factual allegations regarding the composition of Ni-Q’s products or Ni-Q’s processing methods. It merely repeats the language of the claim itself along with a conclusory assertion that Ni-Q’s products infringe. Because Prolacta’s Complaint fails to provide the Court with any alleged facts regarding the protein, carbohydrate, and fat content of Ni-Q’s accused product, the Court cannot draw a reasonable inference that Ni-Q’s products infringe the claims of the ’921 patent. See Iqbal, 556 U.S. at 678 (“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.”). This Court has granted a Rule 12(b)(6) dismissal for a patent infringement action where, as here, the “allegation contains nothing more than a threadbare recital Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 17 of 19 Page ID #:138 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E of the elements of direct patent infringement.” Medsquire LLC v. Spring Med. Sys., 2011 U.S. Dist. LEXIS 107416, *6-7 (C.D. Cal. Aug. 31, 2011) (internal quotations omitted). This Court reasoned: “Once these conclusory recitals are removed from consideration, the complaint is devoid of any factual allegation to support a claim for relief. . . . Merely naming a product and providing a conclusory statement that it infringes a patent is insufficient to meet the ‘plausibility’ standard set forth in Twombly and Iqbal.” Id. at *7. Here, just as in Medsquire, Prolacta asserts bare allegations without specifying how or why Ni-Q’s products allegedly infringe the ’921 patent. Applying Twombly and Iqbal, this Court has repeatedly found that complaints lacking factual support and specificity simply do not pass muster. See, e.g., Apollo Fin. LLC v. Cisco Sys., 190 F. Supp.3d 939 (C.D. Cal. June 7, 2016); Proxyconn Inc. v. Microsoft Corp., 2012 U.S. Dist. LEXIS 70614 (C.D. Cal. May 16, 2012). For example, in Apollo Finance, this Court granted the defendant’s motion to dismiss, noting that “most courts have, in the wake of Twombly and Iqbal, required some level of specificity beyond recitation of a patent infringement claim’s elements.” Apollo Fin., 190 F. Supp.3d at 943. In the instant case, Prolacta’s failure to provide factual support regarding Ni-Q’s products may be “indicative that Plaintiff is not clear on … how, if at all, they may be infringing on the [patent].” Id. Indeed, Ni-Q has never infringed the ‘921 patent. (Pfost Decl. ¶ 9) Prolacta’s claims will not survive summary judgment. Before it is permitted to subject Ni-Q to the expense and disruption necessary to get to the summary judgment stage, Prolacta should be required to produce a pleading that complies with Twombly and Iqbal. III. CONCLUSION For the foregoing reasons, Defendant Ni-Q’s Motion to Dismiss should be granted, and the Defendant respectfully requests that the Court dismiss all claims alleged in the Complaint. Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 18 of 19 Page ID #:139 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2:17-cv-04071-SJO-E Dated: July 6, 2017 CHRISTINA VON DER AHE RAYBURN Orrick, Herrington & Sutcliffe LLP By: /s/ Christina Von der Ahe Rayburn CHRISTINA VON DER AHE RAYBURN Attorneys for Defendant NI-Q, LLC Case 2:17-cv-04071-SJO-E Document 20-1 Filed 07/06/17 Page 19 of 19 Page ID #:140 CHRISTINA VON DER AHE RAYBURN (SBN 255467) cvonderahe@orrick.com ORRICK, HERRINGTON & SUTCLIFFE LLP 2050 Main Street, Suite 1100 Irvine, CA 92614-8255 Telephone: 949.567.6700 Facsimile: 949.567.6710 BRENNA K. LEGAARD (Pro Hac Vice Pending) blegaard@schwabe.com ANGELA E. ADDAE (Pro Hac Vice Pending) aaddae@schwabe.com SCHWABE, WILLIA1V1SON WYATT, P.C. 1211 SW 5th Ave., Suite 1900 Portland, OR 97204 Telephone: 503.222.9981 Facsimile: 503.796.2900 Attorneys for Defendant Ni-Q, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION PROLACTA BIOSCIENCE, INC., a Delaware corporation, Plaintiff, v. NI-Q, LLC, an Oregon limited liability company, and DOES 1-10, inclusive, Defendant. I, Brenna K. Legaard, declare as follows: 1. I am one of the attorneys for Defendant Ni-Q, LLC ("Ni-Q") in the DECLARATION OF BRENNA K. LEGAARD ISO DEFENDANT'S MOTION TO DISMISS 2 : 17-CV-04071-SJO-E 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No.: 2:17-cv-04071-SJO-E DECLARATION OF BRENNA K. LEGAARD IN SUPPORT OF DEFENDANT'S MOTION TO DISMISS Judge: Honorable S. James Otero Courtroom: 10C Date: August 7, 2017 Time: 10:00 a.m. Date Action Filed: May 31, 2017 Trial Date: N/A Case 2:17-cv-04071-SJO-E Document 20-2 Filed 07/06/17 Page 1 of 2 Page ID #:141 above-captioned case. I make this declaration based upon my personal knowledge in support of Defendant Ni-Q's Motion to Dismiss, and if called as a witness could and would testify competently thereto. 2. On June 29, 2017, I had a telephonic conference with counsel for plaintiff. We discussed Ni-Q's intent to file a motion to dismiss on the bases that this Court lacks personal jurisdiction over Ni-Q, and is an improper venue, and that the complaint fails to state a claim upon which relief can be granted. We also discussed a motion for Rule 11 sanctions that I served upon plaintiff's counsel on June 20, 2017. 3. I explained that Ni-Q has never sold or processed milk in California. Counsel for plaintiff suggested that they intend to rely upon advertising materials that Ni-Q allegedly sent into California to establish personal jurisdiction and venue. As these alleged facts are not included in the complaint, I asked counsel to send me those advertising materials, and they declined to do so. 4. I explained to counsel for plaintiff that the reference to San Clemente, California in Ni-Q's chief executive officer's Linkedln profile was to his private residence. In response, counsel for plaintiff maintained their position that this residence constitutes Ni-Q's regular and established place of business, but did not identify any business operation that they contend occurs there. 5. Despite our good faith effort, we were unable to resolve our dispute regarding personal jurisdiction, venue, and the sufficiency of plaintiff's pleading. I swear under penalty of perjury that the foregoing is true and correct. Executed on July 6, 2017, in Portland, Oregon. 2 DECLARATION OF BRENNA K. LEGAARD ISO 2:17-CV-04071-SJO-E DEFENDANT'S MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case 2:17-cv-04071-SJO-E Document 20-2 Filed 07/06/17 Page 2 of 2 Page ID #:142 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF BILL PFOST IN SUPPORT OF 2:17-CV-04071-SJO-E DEFENDANT’S MOTION TO DISMISS CHRISTINA VON DER AHE RAYBURN (SBN 255467) cvonderahe@orrick.com ORRICK, HERRINGTON & SUTCLIFFE LLP 2050 Main Street, Suite 1100 Irvine, CA 92614-8255 Telephone: 949.567.6700 Facsimile: 949.567.6710 BRENNA K. LEGAARD (Pro Hac Vice Pending) blegaard@schwabe.com ANGELA E. ADDAE (Pro Hac Vice Pending) aaddae@schwabe.com SCHWABE, WILLIAMSON & WYATT, P.C. 1211 SW 5th Ave., Suite 1900 Portland, OR 97204 Telephone: 503.222.9981 Facsimile: 503.796.2900 Attorneys for Defendant Ni-Q, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION PROLACTA BIOSCIENCE, INC., a Delaware corporation, Plaintiff, v. NI-Q, LLC, an Oregon limited liability company, and DOES 1-10, inclusive, Defendant. Case No.: 2:17-cv-04071-SJO-E DECLARATION OF BILL PFOST IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS Honorable S. James Otero Ctrm: 10C Date: August 7, 2017 Time: 10:00 a.m. Date Action Filed: May 31, 2017 Trial Date: N/A I, Bill Pfost, declare as follows: 1. I am the Chief Executive Officer of Defendant Ni-Q, LLC (“Ni-Q”) in the above-captioned case. I make this declaration based upon my personal knowledge in support of Defendant Ni-Q’s Motion to Dismiss, and if called as a witness could and would testify competently thereto. Case 2:17-cv-04071-SJO-E Document 20-3 Filed 07/06/17 Page 1 of 3 Page ID #:143 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 DECLARATION OF BILL PFOST IN SUPPORT OF 2:17-CV-04071-SJO-E DEFENDANT’S MOTION TO DISMISS 2. Ni-Q is an Oregon limited liability company. Its primary place of business, and only permanent place of business, is at 28050 SW Boberg Road, Wilsonville, Oregon. It conducts business at that location. Personnel such as sales and administrative staff maintain offices and work in that location. Ni-Q also processes milk in Eugene, Oregon. 3. I understand that breast milk is regulated as human tissue in California, and a tissue bank license is required to sell breast milk in California. Ni-Q does not presently have a tissue bank license in California. Without that license, Ni-Q cannot legally sell breast milk in California, and accordingly, to date it has neither sold product in California nor offered to sell any product in California. 4. Ni-Q advertises its products generally on its website, www.ni-q.com. From time to time, hospitals in California have contacted Ni-Q and asked for information about its products. Ni-Q has from time to time provided some information in response to those inquiries. However, in order to ensure that we comply with California law, we have always explained to entities in California that Ni-Q’s products are not presently available for sale to California customers, and will not be until Ni-Q obtains a tissue bank license. 5. Ni-Q has never processed milk in California. 6. Ni-Q does not operate a regular and established place of business in California. It does not own or lease any real estate in California, it does not have a California telephone number, it does not occupy any offices or other location in which it transacts business in California, and it does not hold itself out as having a California location. 7. I live in a private residence in San Clemente, California, along with my wife and children. This home is my own; I own it, I lived in it before I joined Ni-Q, and if I were to leave Ni-Q, I would continue to live in it. Ni-Q has no right, contractual or otherwise, to operate its business out of my home. Ni-Q does not conduct business out of my home. Ni-Q does not process milk or store products in my home, nor does Case 2:17-cv-04071-SJO-E Document 20-3 Filed 07/06/17 Page 2 of 3 Page ID #:144 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 DECLARATION OF BILL PFOST IN SUPPORT OF 2:17-CV-04071-SJO-E DEFENDANT’S MOTION TO DISMISS it sell products out of my home. 8. I commute to Oregon, where I work primarily out of the office Ni-Q maintains for me at Ni-Q’s corporate headquarters. Ni-Q does not maintain any other office space for me. 9. To date, the only product Ni-Q sells is called HDM-Plus. Ni-Q does not currently use DNA or any other testing to identify the donor of milk it processes to make HDM-Plus. HDM-Plus does not contain and has never contained a human protein constituent of 11-20 mg/mL, a human fat constituent of 35-55 mg/mL, or a human carbohydrate constituent of 70-120 mg/mL. I swear under penalty of perjury that the foregoing is true and correct. Executed on July 6, 2017, in California. Bill Pfost Case 2:17-cv-04071-SJO-E Document 20-3 Filed 07/06/17 Page 3 of 3 Page ID #:145 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 [PROPOSED] ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 2:17-CV-04071-SJO-E CHRISTINA VON DER AHE RAYBURN (SBN 255467) cvonderahe@orrick.com ORRICK, HERRINGTON & SUTCLIFFE LLP 2050 Main Street, Suite 1100 Irvine, CA 92614-8255 Telephone: 949.567.6700 Facsimile: 949.567.6710 BRENNA K. LEGAARD (Pro Hac Vice Pending) blegaard@schwabe.com ANGELA E. ADDAE (Pro Hac Vice Pending) aaddae@schwabe.com SCHWABE, WILLIAMSON & WYATT, P.C. 1211 SW 5th Ave., Suite 1900 Portland, OR 97204 Telephone: 503.222.9981 Facsimile: 503.796.2900 Attorneys for Defendant Ni-Q, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION PROLACTA BIOSCIENCE, INC., a Delaware corporation, Plaintiff, v. NI-Q, LLC, an Oregon limited liability company, and DOES 1-10, inclusive, Defendant. Case No.: 2:17-cv-04071-SJO-E [PROPOSED] ORDER GRANTING DEFENDANT’S MOTION TO DISMISS Honorable S. James Otero Ctrm: 10C Date: August 7, 2017 Time: 10:00 a.m. Date Action Filed: May 31, 2017 Trial Date: N/A Case 2:17-cv-04071-SJO-E Document 20-4 Filed 07/06/17 Page 1 of 2 Page ID #:146 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 [PROPOSED] ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 2:17-CV-04071-SJO-E [PROPOSED] ORDER This matter came before the Honorable S. James Otero, United States Judge, upon Defendant, Ni-Q, LLC’s Motion to Dismiss. Being fully advised and having reviewed the briefing of the parties, materials submitted in support, and relevant portions of the record before it, this Court concludes that Defendant Ni-Q, LLC (“Ni- Q) is not subject to personal jurisdiction in this forum, venue is not proper in this District, and Plaintiff Prolacta Bioscience, Inc. (“Prolacta”) has failed to state a claim upon which relief can be granted. Good cause appearing therefore, Defendant’s Motion to Dismiss under Fed. R. Civ. P. 12(b)(2), 12(b)(3), and 12(b)(6) is GRANTED. Prolacta’s Complaint is ordered DISMISSED in its entirety without leave to amend. IT IS HEREBY ORDERED: Defendant Ni-Q, LLC’s Motion to Dismiss is granted. Dated: HONORABLE S. JAMES OTERO Case 2:17-cv-04071-SJO-E Document 20-4 Filed 07/06/17 Page 2 of 2 Page ID #:147