Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_16-cv-00253/USCOURTS-cand-3_16-cv-00253-1/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 28:1338 Copyright Infringement

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

OPENWAVE MESSAGING, INC.,

Plaintiff,

v.

OPEN-XCHANGE, INC.,

Defendant.

Case No. 16-cv-00253-WHO 

ORDER GRANTING MOTION TO 

DISMISS IN PART

Re: Dkt. Nos. 18, 30

This lawsuit stems from the disintegration of the business relationship between plaintiff 

Openwave Messaging, Inc. (Openwave) and defendant Open-Xchange, Inc. (OX). Openwave 

asserts eleven claims, including copyright infringement, false advertising, breach of contract and 

numerous business torts, as a result of OX’s conduct. Openwave’s federal claims are not 

adequately pleaded – it has not sufficiently alleged infringement of its copyright in the United 

States, and the few misstatements it identifies do not amount to a plausible Lanham Act violation 

without more specificity about the market. Because Rule 9(b) applies to the misrepresentation 

allegations, more specificity is necessary for the Lanham Act claim and for the business torts, but 

only to the extent Openwave intends to rely on public statements to prove those torts (Openwave 

has adequately alleged the direct client misrepresentations).. While OX strenuously argues that the 

majority of Openwave’s claims should be dismissed because the alleged wrongdoing occurred 

overseas and all the related evidence is maintained by its parent or sibling companies in Europe, 

Openwave and OX’s relationship was governed by the OEM Agreement these United States’ 

corporations signed. The claims asserted by Openwave fall within the OEM Agreement’s forumselection clause, so this case is appropriately brought in this Court. I GRANT OX’s motion to 

dismiss in part with LEAVE TO AMEND. 

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BACKGROUND

Openwave is a Delaware corporation with its principal place of business in San Mateo, 

California. It provides software and services for commercial email platforms, and has developed a 

unique expertise in the design and implementation of email platforms for large companies, 

including some of the largest telecommunication companies in the world. Id. ¶¶ 3, 15, 21. OX is 

a Delaware corporation, which plaintiff alleges has a principal place of business in Nuremberg 

Germany and an office located in Palo Alto, California. Id. ¶ 16. Plaintiff alleges that OX 

develops, markets, and sells web-based communication, collaboration, and office productivity 

software, enabling the integration of email, documents, scheduling, and social media. Id. ¶ 24. 

In 2010, Openwave and OX began discussions to package OX’s email interface with 

Openwave’s system. Id. ¶ 23. The parties first entered into a “Mutual Confidentiality 

Agreement” in March 2011. Id. ¶ 26. In June 2011, the parties entered into a contract allowing

use of OX’s email user interface as an element of the email system on certain of Openwave 

customer projects (the “OEM Agreement”). Id. ¶¶ 4, 27. The OEM Agreement was amended 

eight times between August 2011 and June 2014, to modify and supplement the terms of the OEM 

Agreement with respect to particular client projects. Id. ¶ 27. The OEM was signed for OX by 

Rafael Laguna, CEO of OX. Declaration of Monika Schroeder (Dkt. No. 18-2), Ex. A, Dkt. 

No.18-3 at pg 2. Amendments 1-3 and 5-7, were signed by Monika Schroeder as CFO of OX. Id., 

Ex. A Dkt. No. 18-3 pgs. 50, 54, 56, 68, 70, 75.1

Part of the OEM that was of particular “value” to Openwave was the solutions software 

“OX Hosting Edition,” which was to be jointly developed by Openwave and OX. Id. ¶ 29. The 

 

1 According to a State of Delaware Franchise Tax Report, of which I take judicial notice, Monika 

Schroeder is listed as the CFO of OX and as an officer and a director. Donohoe Decl, Ex. E. 

Rafael Laguna is listed as a director only. Id. The parties also signed a number of Statements of 

Work (or SOWs), which are governed by the OEM. SOWs 4, 34, 35s were signed on behalf of 

OX by Monika Schroeder. Declaration of Joseph S. Campbell (Dkt. No. 23), Exs. A – D. The 

OEM, amendments to the OEM, and SOWs are expressly or implicitly incorporated into the 

Complaint and subject to judicial notice. Knievel v. ESPN, 393 F.3d 1068, 1076-77 (9th Cir. 

2005) (incorporation by reference doctrine extends “to situations in which the plaintiff’s claim 

depends on the contents of a document, the defendant attaches the document to its motion to 

dismiss, and the parties do not dispute the authenticity of the document, even though the plaintiff 

does not explicitly allege the contents of that document in the complaint”).

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effect of the Agreements, according to Openwave, was to integrate and bundle software developed 

and modified under the OEM into Openwave’s proprietary software and services that were then 

licensed to Openwave customers. Section 12 of the OEM Agreement served to protect 

Openwave’s trade secrets and other confidential business information from misappropriation. Id. 

¶¶ 31-33.

Openwave alleges that in negotiating its role in developing a user interface for Openwave’s 

email product, OX continuously assured Openwave that it intended to serve as a willing and 

beneficial partner to Openwave in providing quality products and services to Openwave’s 

customers. Id. ¶ 36. However, Openwave asserts that it recently discovered that OX was 

misrepresenting its actions and intentions, taking unfair advantage of Openwave’s trust and candor 

by: (i) surreptitiously meeting with Openwave’s clients in an effort to undermine Openwave’s 

business relationships with its clients, and in order to disguise technical problems with the OX 

technology by blaming Openwave’s back end solution (id. ¶ 38-39); (ii) merging with another 

company to compete head-to-head with Openwave, while taking advantage of Openwave’s 

intellectual property and proprietary information to undermine customer confidence in Openwave, 

interfere with contracts, and steal customers (id. ¶¶ 40-45);and (iii) creating a “new” OX interface 

product that was in reality an updated version of “OX Hosting Edition” covered by the OEM 

Agreement (id. ¶ 46). Openwave specifically identifies “wrongful” conduct by OX with respect to 

Virgin Media (id. ¶¶ 47-61), an unidentified “Customer A, a UAE-based telecommunications 

provider,” (id. ¶ 62-65), an unidentified “Customer B” “a leading provider of telecommunications 

services in Europe,” (id. ¶¶ 66-71), and an unidentified “Customer C” “an Asia-Pacific 

headquartered cloud email security and cloud messaging platform provider.” Id. ¶¶ 72-75. 

Openwave also alleges that while OX was interfering with Openwave’s actual and 

potential customers, OX was engaged in fraudulent proposed merger talks with Openwave. Id. ¶ 

76. OX’s concealed purpose for these talks was to secure additional confidential information from 

Openwave regarding business, marketing and sales strategies, corporate structure, and personnel,

in order to use that information to instead compete with Openwave and pursue Openwave’s 

employees. Id. ¶¶ 76-85.

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Openwave asserts eleven claims: copyright infringement, false advertising under the 

Lanham Act, misappropriate of trade secrets, breach of contract and breach of the implied 

covenant, tortious interference with contract and prospective business relationships, false 

advertising and unfair business practices under California’s Unfair Competition Law, common 

law unfair competition, and fraud. Complaint (Dkt. 1). OX moves to dismiss the Copyright and 

Lanham Act claims for failure to state a claim and failure to plead facts establishing jurisdiction. 

It seeks dismissal of the business tort claims based on the doctrine of forum non-conveniens, 

arguing that Italy is the appropriate venue for resolution of those claims. And it moves to dismiss 

the “fraud-based” claims for failure to meet Rule 9(b)’s heightened pleading standard.2 Openwave 

responds that it has sufficiently pleaded each of its claims, and that the forum non-conveniens 

argument is foreclosed by the forum-selection clause in the OEM Agreement and the undisputed 

convenience of this forum to plaintiff. I heard argument on May 4, 2016. 

LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint 

if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to 

dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its 

face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). A claim is facially plausible when 

the plaintiff pleads facts that “allow the court to draw the reasonable inference that the defendant 

is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation 

omitted). There must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. 

While courts do not require “heightened fact pleading of specifics,” a plaintiff must allege facts 

sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 570. 

“Because they involve allegations of fraud, qui tam actions under the FCA must meet not 

only the requirement of Rule 8, but also the particularity requirements of Rule 9.” United States 

ex rel. Lee v. Corinthian Colls., 655 F.3d 984, 992 (9th Cir. 2011). Under Federal Rule of Civil 

Procedure 9(b), a party must “state with particularity the circumstances constituting fraud or 

mistake,” including “the who, what, when, where, and how of the misconduct charged.” Vess v. 

 

2 OX does not move to dismiss the breach of contract and breach of the implied covenant claims.

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Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (internal quotation marks omitted). 

However, “Rule 9(b) requires only that the circumstances of fraud be stated with particularity; 

other facts may be pleaded generally, or in accordance with Rule 8.” United States ex rel. Lee v. 

Corinthian Colls., 655 F.3d at 992.

In deciding whether the plaintiff has stated a claim upon which relief can be granted, the 

Court accepts the plaintiff’s allegations as true and draws all reasonable inferences in favor of the 

plaintiff. Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the court is 

not required to accept as true “allegations that are merely conclusory, unwarranted deductions of 

fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 

2008).

DISCUSSION

I. COPYRIGHT ACT

OX moves to dismiss the copyright infringement claim because Openwave fails to allege 

any facts allowing the inference that OX infringed the copyright in the United States. As the 

Ninth Circuit has recognized, “wholly extraterritorial acts of infringement cannot support a claim 

under the Copyright Act.” Subafilms, Ltd. v. MGM-Pathe Commc'ns Co., 24 F.3d 1088, 1095 (9th 

Cir. 1994). 

Openwave relies on paragraph 46 of its complaint that “OX’s misconduct has negatively 

impacted a number of Openwave’s existing clients across the globe,” as support for “infringement 

in the United States.” Openwave Opposition to Motion to Dismiss (Dkt. No. 21) at 5. However, 

in that section of its Complaint, Openwave details examples of OX’s alleged bad acts with 

customers based in the United Kingdom, the UAE, Europe, and Asia. Complaint ¶¶ 46-75. There 

is no express allegation and no factual examples supporting an assertion of infringement within 

the United States. Openwave also cites paragraph 16 – alleging that Open-Xchange, Inc. is 

incorporated in Delaware and has an office in Palo Alto – as well as paragraphs 86-95 –

containing Openwave’s general copyright infringement allegations. Id. But these paragraphs do 

not specifically allege or allow the reasonable inference that copyright infringement has occurred 

in the United States.

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In Opposition to OX’s motion to dismiss, Openwave asserts that OX “solicits business 

through its website located at www.open-exchange.com which is accessible in the U.S., and sells 

its technology in California.” Id. Those allegations are likewise not included in the Complaint, 

and even if they were – standing alone, without factual assertions that OX has sold or allowed the 

use of infringing technology in the United States—they would be insufficient to allege copyright 

infringement in the United States. Openwave’s Opposition also relies on a new, unalleged theory 

of infringement based on evidence outside of the complaint; that Virgin Media email accounts 

(which plaintiff alleges in its Opposition contain infringing software) can be accessed in the 

United States and that doing so places OX’s infringing code on computers in the United States. In 

reply, OX disputes this evidence based on its own evidence, and in a Sur-Reply declaration 

Openwave attempts to rebut OX’s evidentiary showing. See Ex. A to Declaration of Cathleen 

Donohoe (Dkt. No. 22) & Openwave RJN (Dkt. No 24); OX, Inc. Reply (Dkt. No. 26) 2-5; 

Declaration of Jennifer L. Kelly (Dkt. No. 2-3), Exs. D&E; Declaration of Ian Gilliott (Dkt. No. 

30-1). None of this evidence is appropriately reviewed on a motion to dismiss or subject to 

judicial notice and I will not consider it.3

Openwave fails to allege any facts to support an inference that copyright infringement 

occurred in the United States. Its Copyright Act claim is DISMISSED with leave to amend. 

II. LANHAM ACT

OX moves to dismiss Openwave’s Lanham Act claim on two grounds: first, similar to the 

Copyright Act claim, Openwave fails to allege a sufficient nexus and impact on commerce in the 

United States; and, second, Openwave fails to allege facts plausibly showing that alleged 

misstatements were made in “commercial advertising or promotion” as required.

A. Affecting Commerce in the United States

OX argues that the Lanham Act conduct at issue – the misrepresentations OX allegedly 

made about Openwave – all occurred outside the United States. In the Ninth Circuit, courts must 

 

3 Openwave asks for leave to file the Sur-Reply declaration of Ian Gilliott if I am inclined to 

consider the new Reply evidence of Jennifer L. Kelley. See Dkt. Nos. 30, 30-1. Because I will 

not consider any of the evidence regarding access to Virgin Mobile email accounts, I DENY 

Openwave’s motion for leave. Dkt. No. 30.

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find three factors in order to apply the Lanham Act to “extraterritorial” conduct. First, there must 

be some effect on American foreign commerce. Second, the effect must be sufficiently great to 

present a cognizable injury to plaintiffs under the federal statute. Third, the interests of and links 

to American foreign commerce must be sufficiently strong in relation to those of other nations to 

justify an assertion of extraterritorial authority. See Reebok Int’l, Ltd. v. Marnatech Enterprises, 

Inc., 970 F.2d 552, 554 (9th Cir. 1992) (adopting the “Timberline” test). 

Openwave contends that because the parties here are both incorporated in and doing 

business in the United States – and their relationship was governed by a series of contracts signed 

by the parties – it has plausibly alleged effect on United States commerce and harm in the United 

States. It asserts that because the misstatements were made on behalf of a United States 

corporation to help that corporation’s business and to hurt Openwave here in the United States, it 

did not matter that the misstatements occurred in foreign locations, and the Court need look no 

further to find Lanham Act jurisdiction. 

Openwave also argues it can easily meet the first two prongs of the Timberline test: 

sufficiently great effect on American foreign commerce presenting a cognizable injury to plaintiff 

because of its allegations that: (1) it lost a $20 million contract with Virgin Media; and (2) it has 

suffered other monetary and non-monetary damages including loss of goodwill and reputational 

damage, including “exposure” to monetary penalties from Customer A. 

OX responds that the allegations concerning the $20 million lost Virgin Mobile contract

are insufficient because Openwave admits in its Complaint that Virgin Media’s new system was in 

place months after OX termination with Openwave. Oppo. at 16. However, the actual allegations 

of the Complaint regarding the Virgin Media loss do not support the gloss OX attempts to put on 

them and, at most, raise a dispute of fact that is inappropriate to resolve on a motion to dismiss. 

OX does not address any of Openwave’s other damages or goodwill arguments.

With respect to the third Timberline factor, courts balance the following: (i) the degree of 

conflict with foreign law or policy; (ii) the nationality or allegiance of the parties and the locations 

or principal places of business of corporations; (iii) the extent to which enforcement by either state 

can be expected to achieve compliance; (iv) the relative significance of effects on the United 

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States as compared with those elsewhere; (v) the extent to which there is explicit purpose to harm 

or affect American commerce; (vi) the foreseeability of such effect; (vii) and the relative 

importance to the violations charged of conduct within the United States as compared with 

conduct abroad. Reebok Int'l, 970 F.2d at 555. These factors all weigh in favor of Openwave 

based on its plausible allegations. It is a corporation based in the United States, operating with 

OX under a contract (and related agreements) entered between two United States’ corporations, 

and the target of hostile anti-competitive conduct by OX directed to the United States. While OX 

argues (based on evidence outside of the Complaint that I cannot consider when determining 

whether to dismiss the Lanham Act claim) that much of the alleged wrongdoing occurred outside 

the United States and between foreign parent or sibling corporations of both Openwave and OX, 

that argument does not undermine the plausibility of the conduct, harm, and impact on the 

commerce of the United States as pleaded by Openwave.4

B. Misstatements Made in Commercial Advertising or Promotion

OX also argues that the Lanham Act claim is defective because the Act only protects 

against false or misleading statements made in “commercial advertising or promotion” and none

of Openwave’s allegations plausibly allege statements made in that manner.5 Four factors 

determine whether a statement meets the definition of “commercial advertising or promotion.” 

The statements must be: (i) commercial speech; (ii) by a defendant who is in commercial 

competition with plaintiff; (iii) for the purpose of influencing consumers to buy defendant’s goods 

or services; and (iv) while the representations need not be made in a “classic advertising 

campaign” and may consist instead of more informal types of “promotion,” the representations 

 

4 OX’s main case PINKBERRY, Inc. v. JEC Int'l Corp., No. CV 11-6540 PSG (PJWx), 2011 U.S. 

Dist. LEXIS 140669 (C.D. Cal. Dec. 7, 2011) is inapposite. That case dealt with sale of product in 

one foreign jurisdiction and very little connection to the United States. Id. at *17-18 (“any sale of 

frozen yogurt to consumers in Japan, even by a corporation based in the United States, has a 

greater effect on Japanese commerce than on U.S. foreign commerce.”).

5

The relevant portion of the Act prohibits: “(1) Any person who, on or in connection with any 

goods or services, . . . uses in commerce . . . [any] false or misleading description of fact, or false 

or misleading representation of fact, which . . . (B) in commercial advertising or promotion, 

misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another 

person's goods, services, or commercial activities.” 15 U.S.C. § 1125.

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must be disseminated sufficiently to the relevant purchasing public to constitute “advertising” or 

“promotion” within that industry. Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F.3d 

725, 735 (9th Cir. 1999). 

OX asserts Openwave has not and cannot plausibly allege facts supporting the fourth factor 

because at most Openwave has alleged that OX made isolated statements to a few of Openwave’s 

actual or potential customers solely in the context of business discussions with those few 

customers. OX relies on Openwave’s express allegations in the Complaint that there is a large and 

expansive relevant purchasing public, including telecommunications providers worldwide. 

Complaint ¶¶ 3 (Openwave “developed a unique expertise in the design and implementation of 

email platforms for large companies, including some of the largest telecommunication companies 

in the world, many of which have been loyal customers of Openwave for decades”), 21 (“Of the 

more than four billion email accounts in the world today, approximately 15% run on Openwave’s 

email platform”). Therefore, the few isolated comments made with respect to a few customers in 

this “wide and expensive” market cannot plausibly allege sufficient dissemination to the 

purchasing public.

In Opposition, Openwave attempts to explain its existing allegations in the Complaint, 

noting that while millions use its products, its customers and potential customers are limited to the 

relatively few large telecommunications providers. In that vein, Openwave relies on a line of 

cases that have recognized, “[w]here the potential purchasers in the market are relatively limited in 

number, even a single promotional presentation to an individual purchaser may be enough to 

trigger the protections of the Act.” Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379, 1386 (5th Cir. 

1996); see also Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F.3d 725, 735 (9th Cir. 

1999) (relying on Seven-Up and concluding that where there were only two or three entities 

involved in the market, a comment to one could constitute a dissemination to a sufficient segment 

of the relevant purchasing public). 

The problem remains that Openwave has failed to allege facts identifying the relevant 

group of purchasers so that I can weigh whether those facts support an inference at this juncture 

that the “potential purchasers in the market are relatively limited” or so expansive that the specific 

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misstatements identified by Openwave tend more towards “isolated” comments made in an 

otherwise expansive market. See, e.g., Oracle Am., Inc. v. Terix Computer Co., Inc., No. 5:13-CV03385-PSG, 2014 WL 5847532, at *10 (N.D. Cal. Nov. 7, 2014 (“Absent some facts showing who 

makes up the relevant group of customers, and how Oracle widely spread its misstatements to that 

group, Defendants’ broader allegations are not plausible.”).6 Openwave’s Lanham Act claim is

dismissed with leave to amend.7

III. FORUM NON-CONVENIENS

Open-Xchange moves to dismiss Openwave’s business tort claims on the basis of forum 

non-conveniens.

8

 OX contends that Italy provides an adequate and more convenient forum for 

these claims. Openwave opposes arguing, first, that these claims are governed by the parties’ 

forum selection clause in the OEM, and second, that its choice of forum in the Northern District of 

California outweighs any inconvenience arguments raised by OX.

A. The Forum Selection Clause

The OEM Agreement contains both a choice of law and forum-selection clause providing 

 

6

The other cases relied on by defendant are inapposite as they address one instance of a 

misstatement made to one customer (Crossfit, Inc. v. Alvies, No. 13-3771 SC, 2014 U.S. Dist. 

LEXIS 7930, at *13 (N.D. Cal. Jan. 22, 2014); Garland Co. v. Ecology Roof Sys. Corp., 895 F. 

Supp. 274, 279 (D. Kan. 1995)) or find insufficient proof at summary judgment. Walker & 

Zanger, Inc. v. Paragon Indus., Inc., 549 F. Supp. 2d 1168, 1182 (N.D. Cal. 2007) (concluding on 

summary judgment that plaintiffs proof of misstatements was deficient, and holding that a 

“handful of statements to customers does not trigger protection from the Lanham Act unless ‘the 

potential purchasers in the market are relatively limited in number’”). 

7

The Lanham Act claim – based on false advertising and promotion – must meet the Rule 9(b)

particularity pleading requirements discussed below. See Stahl Law Firm v. Judicate W., No. 

C13-1668 TEH, 2013 WL 4873065, at *7 (N.D. Cal. Sept. 12, 2013) (applying 9(b) to Lanham 

Act claim); see also SKEDKO, Inc. v. ARC Products, LLC, No. 3:13-CV-00696-HA, 2014 WL 

585379, at *3 (D. Or. Feb. 13, 2014) (same). In paragraph 98 of the Complaint, Openwave alleges 

that OX has made representations in “press releases, interviews, in presentations to investors, in 

communications with customers and potential customers, and otherwise.” Similar to my 

conclusion below, Openwave has alleged sufficient facts regarding communications with clients

and potential clients, but Openwave should plead additional facts within its knowledge about 

public statements it contends are actionable, whether made by press release or in investment calls, 

etc. 

8

Specifically, OX moves to dismiss on this ground Claim 3 for trade secret misappropriation; 

Claim 6 for tortious interference with contract; Claim 7 for tortious interference with prospective 

business advantage; Claim 8 for false advertising; Claim 9 for unfair competition under Cal. Bus. 

& Prof. Code § 17200; Claim 10 for unfair competition under common law; and Claim 11 for 

fraud. 

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that the OEM will be construed under California law and that “[a]ny legal action or proceeding 

with respect to this Agreement will be brought in the United States District Court for the Northern 

District of California.” Schroeder Decl., Ex. A § 15.2. Forum-selection clauses should “be given 

controlling weight in all but the most exceptional cases.” Atlantic Marine Const. Co., Inc. v. U.S. 

Dist. Court for W. Dist. Of Tex., 134 S. Ct. 568, 579 (2013) (internal quotation omitted). “A 

forum selection clause is presumptively valid; the party seeking to avoid a forum selection clause 

bears a ‘heavy burden’ to establish a ground upon which [the court] will conclude the clause is 

unenforceable.’” Doe 1 v. AOL LLC, 552 F.3d 1077, 1083 (9th Cir. 2009) (quoting M/S Bremen v. 

Zapata Off-Shore Co., 407 U.S. 1, 17 (1972)).

OX does not dispute that the breach of contract and breach of the implied covenant claims 

must be litigated here, but argues that the business tort claims fall outside the forum-selection 

clause because they are not “with respect” or sufficiently related to the OEM Agreement and other 

contracts entered into by the parties. OX also contends that application of the forum-selection 

clause to these tort claims is not appropriate because the tort disputes are really disputes between 

the parties’ foreign affiliates. Reply 11-13. It relies on evidence outside of the Complaint that the 

real wrongdoers (if any) are OX employees working for OX’s foreign parent or sibling companies 

and none of the wrongdoing alleged (or that could be alleged) was done by the U.S. company and 

defendant here OX, Inc. Id. 

Generally “forum selection clauses can be equally applicable to contractual and tort causes 

of action. . . . Whether a forum selection clause applies to tort claims depends on whether 

resolution of the claims relates to interpretation of the contract.” Manetti-Farrow, Inc. v. Gucci 

Am., Inc., 858 F.2d 509, 514 (9th Cir. 1988) (internal citations omitted); Zako v. Hamilton Co., 

No. 5:15-CV-03162-EJD, 2016 WL 344883, at *3 (N.D. Cal. Jan. 28, 2016) (“a forum-selection 

clause will apply to claims that arise from or relate to the contract containing the clause”).

OX disputes whether the “with respect” to language of the forum-selection clause is as 

broad as “relating to,” as Openwave contends. Under either the narrower approach of OX or the 

broader approach of Openwave, I conclude that each of the tort claims will – to some extent – rely 

on an interpretation of the OEM and its amendments. For example, the misappropriation of trade 

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secrets claim (Claim 3) asserts that OX secured Openwave trade secrets through 

misrepresentations, “including representations made in connection with confidentiality and 

nondisclosure obligations in the Agreements.” Complaint ¶ 112. Claims 6 and 7 for tortious 

interference with contract and prospective business relationships also rest in express part on OX’s 

knowledge of Openwave’s contracts “based on” OX’s knowledge of the contents of the OEM and 

“the course of their business dealings pursuant to nondisclosure and confidentiality agreements.” 

Id. ¶¶ 138, 145. Claim 10 for common law unfair competition is likewise based in part on 

obtaining and misuse of confidential information. Id. ¶ 169. Claim 11 for fraud relies on false 

representations that OX would abide by the terms of the Agreements, as well as abide by the 

parties’ confidentiality and nondisclosure agreements. Id. ¶ 178. 

Moreover, section 3.5 of the OEM (which contains the forum-selection clause) requires 

each party to “(b) avoid deceptive, misleading or unethical practices; and (c) conducts its business 

in a manner that does not disparage the other party, its products, goodwill and reputation.” OEM 

Agreement § 3.5 (Ex. A to Schroeder Decl). As such, the business torts at issue are inherently 

intertwined with the Agreements entered into by the parties and subject to interpretation of those 

Agreements. The fact that the business torts may also cover conduct unrelated to the OEM does 

not alter the conclusion that significant portions of the alleged business torts arise “with respect 

to” the OEM and related Agreements. 9

B. Forum Non-Conveniens 

OX argues that because the forum selection clause does not govern the business tort 

 

9 OX spends a great deal of time creating an evidentiary record to support its position that the 

“wrongdoing” alleged was not carried out by OX, Inc. employees and did not emanate from the 

United States. In Reply, OX argues that further support for its extra-territorial contentions is 

found in Openwave’s document preservation letter, which identifies 24 employees who may have 

relevant information and 19 of those are employed by OX, Inc.’s foreign parent or sibling 

corporations. Reply 10-11. There is also some support for OX’s argument in the Complaint itself, 

which outlines actions taken by unspecified OX employees with respect to Openwave’s potential 

clients in the United Kingdom, the UAW, Europe, and Asia. In the end, OX may prevail at 

summary judgment or trial if, indeed, Openwave has sued the wrong defendants or lacks standing 

to pursue some of its employee-misappropriation claims. However, these arguments are not well 

taken on a motion to dismiss, other than providing background to the “private interest” factors of 

the forum-non conveniens test that, as discussed below, are not relevant in light of the valid forumselection clause.

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claims--or even if it does--these claims should be dismissed in favor of a more convenient forum 

in Italy. “The doctrine of forum non conveniens is a drastic exercise of the court’s ‘inherent 

power’ because, unlike a mere transfer of venue, it results in the dismissal of a plaintiff’s case. . . . 

Therefore, we have treated forum non conveniens as ‘an exceptional tool to be employed 

sparingly,’ and not a ‘doctrine that compels plaintiffs to choose the optimal forum for their 

claim.’” Carijano v. Occidental Petroleum Corp., 643 F.3d 1216, 1224 (9th Cir. 2011) (quoting 

Dole Food Co. v. Watts, 303 F.3d 1104, 1118 (9th Cir.2002)). The “mere fact that a case involves 

conduct or plaintiffs from overseas is not enough for dismissal.” Id. “To prevail on a motion to 

dismiss based upon forum non conveniens, a defendant bears the burden of demonstrating an 

adequate alternative forum, and that the balance of private and public interest factors favors 

dismissal.” Id. 

Where there is a valid forum-selection law, as here, the “forum-selection clause [should 

be] given controlling weight in all but the most exceptional cases.” Atl. Marine Const. Co. v. U.S. 

Dist. Court for W. Dist. of Texas, 134 S. Ct. 568, 581 (2013) (internal citation omitted). “Only 

under extraordinary circumstances unrelated to the convenience of the parties” should a court 

decline to enforce a valid forum selection clause.” Id. “When parties agree to a forum-selection 

clause, they waive the right to challenge the preselected forum as inconvenient or less convenient 

for themselves or their witnesses, or for their pursuit of the litigation.” Id. at 582. As a 

consequence, a district court may only “consider arguments about public-interest factors only. 

Because those factors will rarely defeat a transfer motion, the practical result is that forumselection clauses should control except in unusual cases.” Id. The public-interest factors include: 

the administrative difficulties flowing from court congestion; the local interest in having localized 

controversies decided at home; the interest in having the trial of a diversity case in a forum that is 

at home with the law; and, the deference to the plaintiffs’ choice of forum. Id. at 581 n. 6.

The public-interest factors all weigh in favor of denying the motion. Great weight is given 

to Openwave’s choice of forum, the Northern District of California, which is also the forum 

specified by the forum-selection clause and where Openwave has its principal place of business. 

This forum is also “at home” with the law, given that the Complaint alleges only federal and 

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California law causes of action. The local interest factor is more neutral, assuming OX is correct 

and the “wrongdoing” alleged all occurred overseas. But the contracts at issue that governed the 

parties’ business relationship and its termination were signed by United States’ corporations that 

each have offices in this District. There is a sufficient and legitimate “local” connection alleged in 

this case. While OX has submitted a declaration explaining how the business tort claims might 

proceed in an Italian court, there is no argument that “congestion” in the Northern District weighs 

heavily in favor of Italy.

In sum, OX does not demonstrate that this case presents exceptional circumstances that 

would lead me to ignore the forum-selection clause and the public interest factors weigh in favor 

of denying the motion to dismiss for forum-non conveniens.

IV. PARTICULARITY UNDER RULE 9(B)

Open-Xchange also moves to dismiss the following claims for failure to meet the 

particularity requirement of Rule 9(b): Claim 8 for false advertising under § 17500 of the 

California Business & Professions Code; Claim 9 for illegal, unfair, or fraudulent conduct under § 

17200 of the California Business & Professions Code; Claim 10 for common law unfair 

competition; and Claim 11 for “fraud.” 

A. Applicability of Rule 9(b)

Under Federal Rule of Civil Procedure 9(b), a party must “state with particularity the 

circumstances constituting fraud or mistake,” including “the who, what, when, where, and how of 

the misconduct charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) 

(internal quotation marks omitted). However, “Rule 9(b) requires only that the circumstances of 

fraud be stated with particularity; other facts may be pleaded generally, or in accordance with Rule 

8.” United States ex rel. Lee v. Corinthian Colls., 655 F.3d 984, 992 (9th Cir. 2011). The purpose 

of Rule 9(b)’s heightened specificity requirement is “to give defendants notice of the particular 

misconduct which is alleged to constitute the fraud charged so that they can defend against the 

charge and not just deny that they have done anything wrong.” Swartz v. KPMG LLP, 476 F.3d 

756, 764 (9th Cir. 2007) (citation omitted). 

Openwave does not dispute that its fraud claim is subject to Rule 9(b), but challenges its 

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application to the other tort claims. The question is whether some components of Claims 8

through 10 either expressly allege “fraud” or allege facts that necessarily constitute fraud. Vess, 

317 F.3d at 1105. Reviewing Claims 8 through 10, Openwave repeatedly alleges that OX made 

false or misleading statements to Openwave itself or Openwave’s potential or actual customers. 

See, e.g., Claim 8, ¶¶ 151 – 154 (making false and misleading statements representations which 

deceived or were likely to deceive); Claim 9 ¶¶ 161-162, 166 (making false statements that 

constitute “unlawful, unfair, and/or fraudulent business acts and practices”); Claim 10 ¶¶ 169-172 

(false statements and using false pretenses). These claims sound in fraud and require Openwave to 

meet Rule 9(b)’s heightened pleading standard with respect to the misrepresentations. Elsewhere 

in the Complaint, Openwave repeatedly characterizes OX’s conduct as “fraudulent” with respect 

to misrepresentations to Openwave as part of the merger discussions. Complaint ¶¶ 5, 6, 76-79. 

Each of the claims – to the extent they rely on misrepresentations – are “fraud-based” and must be 

pleaded with particularly under Rule 9(b).

B. Sufficiency of Allegations

In order to meet the Rule 9(b) standard “a plaintiff must identify ‘the time, place, and 

content of [the] alleged misrepresentation[s],’ as well as the ‘circumstances indicating falseness’ 

or ‘manner in which the representations at issue were false and misleading.’” Frenzel v. 

AliphCom, 76 F. Supp. 3d 999, 1005 (N.D. Cal. 2014) (quoting In re GlenFed, Inc. Sec. Litig., 42 

F.3d 1541, 1547–48 (9th Cir.1994)). Openwave contends that it has met Rule 9(b)’s standard,

identifying the specific type of misleading statements made to specific clients (Complaint ¶¶ 47-

75) and the specific type of misleading statements OX made to plaintiff regarding the “fraudulent 

proposed merger.” Id. ¶¶ 76-79. Therefore, Openwave has satisfied the “who” and “what” and 

generally the “when” required under Vess. Openwave argues that it cannot – at this juncture –

provide more specific information without discovery because it has had to “piece together” 

defendants’ fraud from information secured from current and prospective clients and former 

employees. Oppo. 24. 

I agree. The purpose behind Rule 9(b) has been satisfied here. OX has been given 

sufficient information on what the “client misrepresentations” were and who they were given to. 

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Because the client misrepresentations alleged were made to specific third parties, Openwave

cannot be expected to plead more facts regarding them at this juncture (e.g., which specific OX 

employee made the representations, when they were made, how they were made may be out of 

reach for Openwave to know precisely). OX’s request that Openwave be forced to identify, for 

example, which departing employees provided information as part of the misrepresentations 

complained of in the Complaint, is too granular and not required as a matter of pleading even 

under 9(b). 

In sum, while I agree with OX that Rule 9(b) applies to the business torts at issue, 

Openwave has alleged the client misrepresentations at issue with enough specificity at this 

juncture.10 

CONCLUSION

Openwave’s Copyright and Lanham Act claims are DISMISSED with leave to amend. 

OX’s motion to dismiss is DENIED in all other respects. Openwave shall have twenty days to 

amend.

IT IS SO ORDERED.

Dated: May 9, 2016

______________________________________

WILLIAM H. ORRICK

United States District Judge

 

10 However, if Openwave intends to rely on misrepresentations made to the general public to prove 

its business tort claims (as it does for its Lanham Act claim), Openwave shall add specificity to its 

allegations regarding press releases, interviews, and public presentations to investors.

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