Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_11-cv-05452/USCOURTS-cand-3_11-cv-05452-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court 

For the Northern District of California 

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IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

LOGTALE, LTD., 

 

 Plaintiff, 

 

 v. 

IKOR, INC., et al., 

 Defendants. 

________________________________ 

AND RELATED COUNTERCLAIMS AND 

THIRD-PARTY CLAIMS 

________________________________/ 

No. C 11-5452 CW 

ORDER GRANTING IN 

PART AND DENYING 

IN PART MOTION TO 

DISMISS 

COUNTERCLAIMS; 

DENYING MOTION TO 

STRIKE; SETTING 

INITIAL CASE 

MANAGEMENT 

CONFERENCE 

 Plaintiff and Counterdefendant Logtale, Ltd. moves to dismiss 

the counterclaims of Defendant and Counterclaimant IKOR, Inc. 

pursuant to Federal Rule of Civil Procedure 12(b)(6), and moves to 

strike portions of the counter-complaint pursuant to Rule 12(f). 

Defendants oppose the motion except as to dismissal of IKOR’s 

unfair competition claim. The matter is fully briefed and the 

Court finds the matter suitable for decision without oral 

argument. Having considered the relevant legal authority and the 

papers filed by the parties, the Court grants the motion to 

dismiss and grants leave to amend, as more fully set forth below. 

BACKGROUND 

 The following facts are admitted or alleged in the first 

amended answer and counterclaim (1AA) to the first amended 

complaint (1AC). 

 Defendant IKOR, Inc. is a South Dakota corporation in the 

business of developing bovine-derived oxygen therapeutics and 

related technologies and is the owner of three U.S. patents 

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related to tetrameric hemoglobin. 1AC ¶¶ 4, 15. Defendants 

Canton and Tye are officers and directors of IKOR. 1AC ¶¶ 5-6. 

 On or about October 20, 2006, Logtale and IKOR entered into a 

Series A Preferred Stock Purchase Agreement (SPA), pursuant to 

which IKOR sold and issued 1,999,840 shares of its Series A 

Convertible Stock to Logtale at a purchase price of $2.5002 per 

share. 1AC ¶ 17 and Ex. 1. As a result of this five million 

dollar purchase, Logtale became the majority shareholder of 

preferred stock in IKOR. 1AC ¶ 17. 

 On or about October 20, 2006, IKOR issued Amended and 

Restated Articles of Incorporation, pursuant to which Logtale, as 

the majority shareholder of preferred stock in IKOR, had the right 

to elect, and did elect, Dr. Norman Wai to serve as a director on 

the IKOR Board. 1AC ¶¶ 18-19 and Ex. 2. IKOR’s first amended 

third-party complaint names Dr. Wai as a third-party defendant, 

but IKOR has not filed proof that he has been served. 

 Also on or about October 20, 2006, Logtale and Defendants 

IKOR, Ross and Tye entered into an Investors’ Rights Agreement. 

1AC ¶ 20 and Ex. 3. One of the stated purposes of the Investors’ 

Rights Agreement was to induce Logtale to purchase Series A 

Preferred Stock and invest funds in IKOR pursuant to the Purchase 

Agreement, as well as to govern Logtale’s rights as an investor in 

IKOR. Id. Defendants allege that the negotiations leading to the 

Investors’ Rights Agreement were made between IKOR and New World 

Mobile Holdings Ltd. (New World Mobile), a company incorporated in 

the Cayman Islands and a subsidiary of New World Development 

Company Limited (New World Development), a Hong Kong corporation. 

1AA ¶ 20. Defendants allege that, at a relatively late stage in 

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the negotiations, New World Mobile requested that Logtale be 

substituted for New World Mobile as the investor. Logtale was a 

“shelf-corporation” registered in the British Virgin Islands with 

no operational existence or significant capital at the time of 

substitution. 1AA ¶ 20. The investors explained that 

substitution by Logtale was necessary because the proposed 

investment in IKOR would cause disclosure difficulties for New 

World Mobile and New World Development. 1AA ¶ 20. IKOR names New 

World Mobile as a third-party defendant but has not filed proof 

that it has been served. 

 IKOR alleges that, on or about October 20, 2006, it entered 

into an Option and License and Manufacturing Agreement (License 

Agreement) with Logtale. 1AA, First Counterclaim ¶ 1 and Ex. A. 

The License Agreement granted Logtale a limited exclusive right to 

manufacture, sell and distribute certain IKOR biopharmaceuticals 

in designated territories, essentially Asia, Australia, and New 

Zealand. Id. IKOR alleges that, although a more complete 

agreement was initially contemplated, it was never executed, and 

IKOR and Logtale have been operating under the terms of the 

License Agreement since 2006. Id. The drugs licensed to Logtale 

under the alleged License Agreement are known as Oxygen 

Therapeutics and related hemoglobin-based biopharmaceuticals. 

1AA, First Counterclaim ¶ 4. 

 IKOR alleges that Logtale created a Hong Kong corporation, 

New A-IKOR, whose name was later changed to New A Innovation Ltd. 

1AA, First Counterclaim ¶ 3. New A Innovation allegedly 

manufactures and sells the licensed biopharmaceutical products 

under the license granted to Logtale by IKOR. Id. New A 

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Innovation is named by IKOR as a third-party defendant but IKOR 

has not filed proof that it has been served. 

 IKOR cancelled the Logtale licenses in 2010, after having 

given notice that Logtale was in default for uncured breaches of 

the License Agreement, including, but not limited to, the 

marketing and manufacturing of IKOR’s Oxygen Therapeutics and 

related pharmaceuticals. 1AA, First Counterclaim ¶ 10. 

 IKOR alleges that Logtale, as well as New A Innovation, New 

World Mobile and New World Development acting through Logtale, 

have breached the License Agreement by, among other things, 

withholding royalties, failing to comply with auditing and 

inspection requirements, and misusing IKOR’s proprietary 

information. 1AA, First Counterclaim ¶ 14. 

 Logtale filed this action on November 9, 2011, and filed an 

amended complaint on February 13, 2012. The operative complaint 

seeks injunctive relief and alleges claims against Defendants for 

breach of contract, breach of fiduciary duties and breach of the 

implied covenant of good faith and fair dealing. 

 Defendants filed an answer and counterclaim to the 1AC and 

third-party complaint on March 23, 2012, then filed the 1AA on May 

21, 2012. In its most recent pleading, IKOR alleges the following 

counterclaims against Logtale: (1) breach of the License 

Agreement, including failure to supply financial and manufacturing 

information required by the agreement; (2) theft of intellectual 

property under California’s Uniform Trade Secrets Act; (3) unfair 

competition by copying IKOR’s drugs without paying royalties; and 

(4) interference with prospective business opportunity by 

thwarting IKOR’s efforts to obtain additional financing, in order 

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to drive IKOR into bankruptcy and acquire rights in IKOR’s 

technology as a preferred shareholder in IKOR’s liquidation. 

 Logtale moves to dismiss IKOR’s counterclaims and to strike 

certain allegations. IKOR concedes that the third counterclaim 

for unfair competition fails to state a claim for relief, but 

otherwise opposes Logtale’s motion to dismiss and motion to 

strike. 

LEGAL STANDARD 

I. Motion to Dismiss 

 A complaint must contain a “short and plain statement of the 

claim showing that the pleader is entitled to relief.” Fed. R. 

Civ. P. 8(a). On a motion under Rule 12(b)(6) for failure to 

state a claim, dismissal is appropriate only when the complaint 

does not give the defendant fair notice of a legally cognizable 

claim and the grounds on which it rests. Bell Atl. Corp. v. 

Twombly, 550 U.S. 544, 555 (2007). In considering whether the 

complaint is sufficient to state a claim, the court will take all 

material allegations as true and construe them in the light most 

favorable to the plaintiff. NL Indus., Inc. v. Kaplan, 792 F.2d 

896, 898 (9th Cir. 1986). However, this principle is inapplicable 

to legal conclusions; “threadbare recitals of the elements of a 

cause of action, supported by mere conclusory statements,” are not 

taken as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 

(citing Twombly, 550 U.S. at 555). 

 When granting a motion to dismiss, the court is generally 

required to grant the plaintiff leave to amend, even if no request 

to amend the pleading was made, unless amendment would be futile. 

Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 

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F.2d 242, 246-47 (9th Cir. 1990). In determining whether 

amendment would be futile, the court examines whether the 

complaint could be amended to cure the defect requiring dismissal 

“without contradicting any of the allegations of [the] original 

complaint.” Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th 

Cir. 1990). 

II. Motion to Strike 

 Pursuant to Federal Rule of Civil Procedure 12(f), the court 

may strike from a pleading “any redundant, immaterial, impertinent 

or scandalous matter.” The purpose of a Rule 12(f) motion is to 

avoid spending time and money litigating spurious issues. 

Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), 

rev’d on other grounds, 510 U.S. 517 (1994). Matter is immaterial 

if it has no essential or important relationship to the claim for 

relief plead. Id. Matter is impertinent if it does not pertain 

and is not necessary to the issues in question in the case. Id. 

“Superfluous historical allegations are a proper subject of a 

motion to strike.” Id. Motions to strike are disfavored because 

they are often used as delaying tactics and because of the limited 

importance of pleadings in federal practice. Bureerong v. Uvawas, 

922 F. Supp. 1450, 1478 (C.D. Cal. 1996). They should not be 

granted unless it is clear that the matter to be stricken could 

have no possible bearing on the subject matter of the litigation. 

Colaprico v. Sun Microsystems, Inc., 758 F. Supp. 1335, 1339 (N.D. 

Cal. 1991). 

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DISCUSSION 

I. Breach of Contract 

 The first counterclaim for breach of contract alleges that on 

or about October 20, 2006, “IKOR and Logtale entered into a[n] 

Option and Licensing and Manufacturing Agreement,” and that 

“[a]lthough a more complete agreement was initially contemplated, 

it was never executed, and thus both IKOR and Logtale have been 

operating under the terms of the Licensing Agreement since 2006.” 

1AA, First Counterclaim ¶ 1. Logtale contends that IKOR fails to 

allege the existence of a valid License Agreement in support of 

its breach of contract claim. As currently plead, the allegations 

are not sufficient to state a claim for breach of contract, but 

IKOR is granted leave to amend the allegations. 

 Courts apply general principles of contract interpretation 

when interpreting the terms and scope of a licensing agreement. 

Miller v. Glenn Miller Productions, Inc., 454 F.3d 975, 989 (9th 

Cir. 2006) (citing Mendler v. Winterland Production, Ltd., 207 

F.3d 1119, 1121 (9th Cir. 2000)). “‘The fundamental goal of 

contract interpretation is to give effect to the mutual intent of 

the parties as it existed at the time of contracting.’” Id. 

(quoting United States Cellular Invest. Co. of Los Angeles v. GTE 

Mobilnet, Inc., 281 F.3d 929, 934 (9th Cir. 2002)). 

 The Option Agreement entered by IKOR (referred to as the 

Company) and Logtale (referred to as the Grantee) on October 20, 

2006, states as follows: 

1. GRANT OF OPTION. 

 1.1 In consideration of the sum of HK$1.00 now 

paid by the Grantee to the Company (receipt of 

which the Company hereby acknowledges), the Company 

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hereby irrevocably and unconditionally grants to 

the Grantee the option (the “Option”) to require 

the Company to enter into a license and 

manufacturing agreement (the “License and 

Manufacturing Agreement”) with the Grantee or any 

company as the Grantee may direct, on the principal 

terms set out in the Schedule hereto. 

 1.2 The Option may be exercised by the Grantee 

at any time during the period commencing from the 

date of this Agreement to the first anniversary 

hereof by serving an option notice in the form 

attached hereto as Exhibit A (the “Option Notice”) 

on the Company upon which the Option shall be 

deemed exercised. 

 1.3 Immediately after the service of the 

Option Notice, the Company and the Grantee shall 

negotiate diligently and in good faith, and use 

their best efforts to enter into the License and 

Manufacturing Agreement on the principal terms and 

conditions set out in the Schedule attached hereto 

within thirty (30) days after such service. 

1AA, Ex. A (Docket No. 26-1) at 1. 

 Logtale contends that on the face of the Option Agreement, 

the parties expressed their intent that the attached License 

Agreement was a contingent, draft document, and further contends 

that IKOR has not alleged that the parties ever signed or entered 

into a written License Agreement. IKOR responds that the parties 

treated the License Agreement as binding on them and intended the 

writing to reflect their agreement. 

 If there is a manifest intention that the agreement is not 

binding until reduced to a formal writing that is executed by both 

parties, there is no binding contract until this occurs. Rennick 

v. OPTION Care, Inc., 77 F.3d 309, 316 (9th Cir. 1996). On the 

other hand, “[w]hen parties intend that an agreement be binding, 

the fact that a more formal agreement must be prepared and 

executed does not alter the validity of the agreement.” Blix St. 

Records, Inc. v. Cassidy, 191 Cal. App. 4th 39, 48 (2010). 

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“‘Whether a writing constitutes a final agreement or merely an 

agreement to make an agreement depends primarily upon the 

intention of the parties. In the absence of ambiguity this must 

be determined by a construction of the instrument taken as a 

whole.’” Beck v. American Health Group Intl., Inc., 211 Cal. App. 

3d 1555, 1562 (1989) (quoting Smissaert v. Chiodo, 163 Cal. App. 

2d 827, 830 (1958)). 

 In support of its contention that the parties’ agreement to 

negotiate and execute a license agreement is not a binding 

contract, Logtale cites Beck, where the court held that a letter 

drafting “the outline of our future agreement” was “merely an 

‘agreement to agree’ which cannot be made the basis of a cause of 

action.” 211 Cal. App. 3d at 1562-63. There, the court 

considered the writing to determine the parties’ intention, and 

held that the language of the letter indicated an intent to 

forward the letter outlining the terms of the proposed agreement 

to corporate counsel “for the drafting of a contract,” and to 

discuss the draft further. Beck, 211 Cal. App. 3d at 1563. The 

court in Beck found that the letter contemplated further 

negotiations and that no binding agreement would result until a 

formal contract was drafted by an attorney. Id. Although Logtale 

and IKOR outlined the proposed “terms and conditions” of their 

contemplated agreement in greater detail than did the parties in 

Beck, they nevertheless failed to memorialize their final 

agreement in writing. 1AA, Ex. A. The Option Agreement, on its 

face, evidences the parties’ intent to enter into a written 

license agreement only after engaging in further negotiations. 

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 The Schedule attached to the Option Agreement is entitled 

“Term Sheet - License and Manufacturing Agreement,” and sets out 

the principal terms and conditions of the License Agreement. 1AA, 

Ex. A at 6. The Option Agreement provides that the option to 

enter into a license and manufacturing agreement “may be 

exercised” by Logtale by serving notice in the form attached to 

the Option Agreement, after which the parties would “use their 

best efforts to enter into the License and Manufacturing Agreement 

on the principal terms and conditions set out in the Schedule.” 

Id. at 1. As currently plead, the first counterclaim does not 

allege that Logtale exercised the option or otherwise consented to 

the terms of the written licensing agreement. The allegation that 

the parties “have been operating under the terms of the Licensing 

Agreement since 2006” is insufficient to show the existence of a 

valid license agreement. However, additional factual allegations 

may demonstrate that the parties’ actions evidence an agreement. 

“‘Words are frequently but an imperfect medium to convey thought 

and intention. When the parties to a contract perform under it 

and demonstrate by their conduct that they knew what they were 

talking about the courts should enforce that intent.’” 1 Witkin, 

Summary of Cal. Law (10th ed. 2005) Contracts § 749, p. 838. 

 IKOR seeks leave to amend its counterclaim, contending that 

the parties’ correspondence demonstrates that they acted as if 

there was a licensing agreement between them. They refer to a 

letter from Dr. Wai on behalf of Logtale dated August 21, 2009, 

which acknowledges the validity of the terms of the License 

Agreement set forth in the schedule to the Option Agreement. Opp. 

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at 14. Because amendment may not be futile, the breach of 

contract claim is dismissed with leave to amend. 

II. Theft of Intellectual Property 

 Logtale seeks dismissal of the second counterclaim for theft 

of intellectual property. That counterclaim alleges that Logtale 

entered into the License Agreement to obtain rights to IKOR’s 

trade secrets, has failed to pay royalties or otherwise comply 

with the License Agreement, and has misappropriated IKOR’s 

technology and trade secrets with the intent to market IKOR’s 

biopharmaceuticals in markets that IKOR owns, namely the United 

States and the European Union. 1AA, Second Counterclaim ¶¶ 17, 

21. IKOR alleges, “At this point, it looks like theft.” Id. 

¶ 17. IKOR contends that Logtale continued to use IKOR’s 

technology even after IKOR cancelled the alleged License 

Agreement, and that if Logtale prevails on its argument that there 

was never a licensing agreement, then Logtale’s use of IKOR’s 

technology was theft from the very beginning. IKOR further 

alleges that Logtale has plotted with the Chinese government and 

the Chinese military to acquire IKOR’s trade secrets and patents 

for commercial and military use and competition with IKOR. 1AA, 

Second Counterclaim ¶ 22. 

IKOR seeks relief under the Uniform Trade Secrets Act (UTSA), 

as adopted in California, Cal. Civ. Code § 3426 et seq. The UTSA 

defines a trade secret as 

information, including a formula, pattern, 

compilation, program, device, method, technique, or 

process, that: 

(1) Derives independent economic value, actual 

or potential, from not being generally known to the 

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public or to other persons who can obtain economic 

value from its disclosure or use; and 

(2) Is the subject of efforts that are 

reasonable under the circumstances to maintain its 

secrecy. 

Cal. Civ. Code § 3426.1(d). “Actual or threatened 

misappropriation may be enjoined” under this statute. Cal. Civ. 

Code § 3426.2(a). 

In Bayer Corp. v. Roche Molecular Sys., Inc., the court 

recognized, 

A corporation misappropriates a trade secret when 

(1) it discloses or uses the trade secret of 

another without express or implied consent, and 

(2) at the time of the disclosure or use, it knew 

or had reason to know that its knowledge of the 

trade secret was derived from a person who owed a 

duty to the entity seeking relief to maintain the 

trade secret’s secrecy or limit its use. Cal. Civ. 

Code § 3426.1(b)(2)(B)(iii). The Court may order 

affirmative acts to protect a trade secret in 

appropriate circumstances. Cal. Civ. Code 

§ 3426.2(c). 

Bayer Corp. v. Roche Molecular Sys., Inc., 72 F. Supp. 2d 1111, 

1117 (N.D. Cal. 1999). 

 Logtale contends that IKOR has failed to identify with 

reasonable particularity how its intangible proprietary 

information is a property interest capable of being converted or 

stolen. To identify the trade secrets at issue, IKOR refer to its 

patent rights, defined in the alleged License Agreement as “[a]ll 

patents and patent applications of any kind anywhere in the world 

owned or controlled by IKOR during the term of the Agreement,” and 

IKOR Know-How, defined as “[a]ny proprietary information, trade 

secrets, techniques, materials and data owned or controlled by 

IKOR.” Opp. at 15; 1AA, Ex. A at 7. IKOR also refers to an 

application by third-party defendant New A Innovation for approval 

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to market an IKOR drug in Europe after IKOR terminated the License 

Agreement with Logtale, but does not sufficiently identify the 

drug or IKOR’s ownership interest in it. 

 A claimant seeking relief for misappropriation of trade 

secrets “must identify the trade secrets and carry the burden of 

showing that they exist.” MAI Sys. Corp. v. Peak Computer, Inc., 

991 F.2d 511, 522 (9th Cir. 1993). “The plaintiff ‘should 

describe the subject matter of the trade secret with sufficient 

particularity to separate it from matters of general knowledge in 

the trade or of special knowledge of those persons . . . skilled 

in the trade.’” Imax Corp. v. Cinema Technologies, Inc., 152 F.3d 

1161, 1164-65 (9th Cir. 1998) (quoting Universal Analytics v. 

MacNeal-Schwendler Corp., 707 F. Supp. 1170, 1177 (C.D. Cal. 

1989), aff’d, 914 F.2d 1256 (9th Cir. 1990)). As currently plead, 

the allegations supporting the second counterclaim fail to 

identify the alleged trade secrets with sufficient particularity. 

 Under California law, when information “is generally known in 

the trade and already used by good faith competitors, it is not a 

protectable trade secret and injunction should not issue.” Am. 

Paper & Packaging Prods., Inc. v. Kirgan, 183 Cal. App. 3d 1318, 

1326 (1986). Thus, Defendants may not assert trade secret 

protection for patented IKOR technology. See Henry Hope X-Ray 

Prods., Inc. v. Marron Carrel, Inc., 674 F.2d 1336, 1342 (9th Cir. 

1982) (“Matters disclosed in a patent publication destroy any 

trade secret contained therein.”) (applying Pennsylvania trade 

secret law). Logtale argues that Defendants initially alleged a 

counterclaim for patent infringement but abandoned that claim in 

the amended answer and counterclaim, and may not revive the trade 

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secret claim as one for patent infringement. IKOR fails to 

address this argument or demonstrate that amendment would not be 

futile as to its published patents. The counterclaim for theft of 

IKOR patent rights is therefore dismissed without leave to amend. 

Because amendment may not be futile with respect to protectable 

trade secrets that are not in the public domain, the counterclaim 

is dismissed with leave to amend to allege that. 

III. Interference with Prospective Business Opportunity 

 IKOR’s fourth counterclaim for relief alleges interference 

with prospective business opportunity. Under California law, the 

elements of a tort claim for intentional interference with 

prospective economic advantage are (1) an economic relationship 

between the plaintiff and some third party, with the probability 

of future economic benefit to the plaintiff; (2) the defendant’s 

knowledge of the relationship; (3) intentional acts on the part of 

the defendant designed to disrupt the relationship; (4) actual 

disruption of the relationship; and (5) economic harm to the 

plaintiff proximately caused by the acts of the defendant. Korea 

Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1153 

(2003). To meet the third element, intentional acts, a plaintiff 

must plead intentional acts by the defendant that are wrongful 

apart from the interference itself, and are designed to disrupt 

the relationship. Id. at 1154. This requires a showing that the 

defendant “engaged in conduct that was wrongful by some legal 

measure other than the fact of interference itself” such as 

“conduct that is recognized as anticompetitive under established 

state and federal positive law.” Della Penna v. Toyota Motor 

Sales, U.S.A., Inc., 11 Cal. 4th 376, 393 (1995). 

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 The fourth counterclaim alleges that IKOR secured a contract 

with the United States Army and with Northwestern University to 

conduct research in the area of wound healing, and that Logtale 

tried to interfere and obstruct IKOR’s business. 1AA, Fourth 

Counterclaim ¶ 39. Logtale contends that the counterclaim for 

intentional interference with prospective economic advantage fails 

to allege that Logtale did anything to interfere with the Army 

contract. IKOR responds that Logtale and the third-party 

defendants have obtained equipment subject to export controls by 

misrepresenting to the United States Department of Commerce that 

they have rights to distribute IKOR’s biopharmaceuticals and have 

thereby jeopardized IKOR’s reputation as a defense contractor. 

Because IKOR fails to allege actual disruption of a contractual 

relationship or economic harm that is proximately caused by 

Logtale, the claim for intentional interference with prospective 

business opportunity with the Army and Northwestern University is 

dismissed. Leave to amend is granted only to cure the deficient 

elements of the claim; IKOR may not amend the counterclaim to 

assert new grounds for relief. 

 IKOR also contends that Logtale has withheld information 

necessary for IKOR to meet the Food and Drug Administration’s 

strict requirements for reporting findings from clinical tests or 

studies, and has precluded IKOR from making new drug applications 

in the United States and in Europe. 1AA, Fourth Counterclaim 

¶¶ 40, 43; Opp. at 17. These allegations fail to claim the 

existence of an economic relationship between IKOR and a third 

party, intentional acts by Logtale designed to disrupt that 

relationship, actual disruption of the relationship, or economic 

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harm proximately caused by the intentional acts. In response to 

the motion to dismiss, IKOR fails to address any of the specific 

elements of a claim for intentional interference of prospective 

business advantage. Because amendment appears to be futile, this 

claim is dismissed with prejudice as to the allegations of 

interference with IKOR’s new drug applications in the United 

States and in Europe. 

 IKOR also alleges that Logtale has obstructed its attempts to 

obtain additional financing for research to complete the testing 

necessary for new drug applications. 1AA, Fourth Counterclaim 

¶ 39; Opp. at 18. As currently plead, the counterclaim fails to 

identify a particular economic relationship between IKOR and some 

third party, which would probably provide future economic benefit 

to IKOR. See Westside Center Associates v. Safeway Stores 23, 

Inc., 42 Cal. App. 4th 507, 522 (1996) (“The law precludes 

recovery for overly speculative expectancies by initially 

requiring proof the business relationship contained ‘the 

probability of future economic benefit to the plaintiff.’”)). 

IKOR suggests that Logtale and the third-party defendants have 

been attempting to “drive IKOR into bankruptcy or damage the 

company,” but fails to plead intentional or unlawful acts designed 

to disrupt an economic relationship with some third party. See 

LiMandri v. Judkins, 52 Cal. App. 4th 326, 340 (1997) (“‘a 

plaintiff seeking to recover for an alleged interference with 

prospective contractual or economic relations must plead and prove 

as part of its case-in-chief that the defendant not only knowingly 

interfered with the plaintiff’s expectancy, but engaged in conduct 

that was wrongful by some legal measure other than the fact of 

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interference itself.’” (quoting Della Penna v. Toyota Motor 

Sales, U.S.A., Inc., 11 Cal. 4th 376, 393 (1995)) (emphasis in 

original). The allegations also fail to demonstrate actual 

disruption of the relationship, or economic harm proximately 

caused by the intentional acts. Because amendment may not be 

futile, the claim is dismissed with leave to amend to cure these 

defects with respect to the alleged interference with IKOR’s 

prospective financing. 

IV. Counterclaim for Injunctive Relief 

 Logtale further seeks dismissal of IKOR’s counterclaim for 

injunctive relief. IKOR has not alleged an independent 

counterclaim for injunctive relief.1

 Instead, it simply seeks 

equitable relief on its other counterclaims. Because those 

counterclaims are dismissed with leave to amend, Logtale’s motion 

to dismiss the prayer for injunctive relief is granted with leave 

to re-allege it if any of the counterclaims are successfully 

amended. 

V. Motion to Strike 

 Logtale moves to strike allegations that it contends are 

immaterial to the dispute. IKOR seeks leave to amend the 

allegations to demonstrate their relevance to the counterclaims, 

with the exception of the allegations related to the abandoned 

counterclaim for unfair competition, 1AA at 30:24-27. Because 

that counterclaim is dismissed, the motion to strike the 

allegation at page 30, paragraph 34, is denied as moot. Because 

 1 IKOR alleges a third-party claim for injunctive relief, 

but the third-party complaint is not presently before the Court. 

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IKOR is granted leave to amend the counterclaims within the 

limited scope discussed above, Logtale’s motion to strike is 

denied. 

CONCLUSION 

 For the foregoing reasons, Logtale’s Motion to Dismiss the 

Counterclaims is GRANTED, WITH LEAVE TO AMEND as to the first, 

second and fourth counterclaims for relief. (Docket No. 27.) The 

motion to dismiss the third counterclaim for unfair competition is 

unopposed and granted with prejudice. Logtale’s motion to dismiss 

the counterclaim for injunctive relief is GRANTED with leave to 

amend and its motion to strike is DENIED. 

 IKOR may file an amended counter-complaint within twenty-one 

days of the date of this order. Logtale must answer or otherwise 

respond to the amended counter-complaint twenty-one days 

thereafter. IKOR must also file proof of timely service of its 

third-party complaint upon third-party defendants Dr. Wai, New 

World Mobile, and A Innovation pursuant to Federal Rule of Civil 

Procedure 4(l) within three days of this Order. 

 The initial case management conference will be held on 

January 16, 2013. The parties must file a revised joint case 

management statement by January 9, 2013. 

IT IS SO ORDERED. 

Dated: 

CLAUDIA WILKEN 

United States District Judge 

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