ORDER – No. 17-cv-00898-LB

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 

United States District Court 

Northern District of California 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

San Francisco Division 

JONATHAN WANG and GOLFBESTBUY, 

INC., 

Plaintiffs, 

v. 

GOLF TAILOR, LLC, and TIM OYLER, 

Defendants. 

Case No. 17-cv-00898-LB 

ORDER DISMISSING COPYRIGHT 

AND TRADE-SECRETS COUNTER 

CLAIMS AND STRIKING 

AFFIRMATIVE DEFENSES OTHER 

THAN THOSE BASED ON UNCLEAN 

HANDS 

Re: ECF No. 60 

INTRODUCTION 

This case and the three cases consolidated with it generally involve competing claims of 

design-patent theft related to a golf club — the XE1 — and a golf training aid — the Speed Whip.1

The plaintiffs (Jonathan Wang and Golf BestBuy) and the defendants (Timothy Oyler and Golf 

Tailor) both claim to have designed the golf club and training aid; both claim the other stole their 

designs. In this case, the plaintiffs seek relief under U.S. copyright statutes (17 U.S.C. § 101 et 

seq.), among other laws, arguing that the defendants used copies of the plaintiffs’ designs to 

counterfeit the golf club and golf aid.2

 The defendants countersued the plaintiffs with six claims 

 

1

 First Amend. Compl. (“FAC”) – ECF No. 70. Record citations refer to materials in the Electronic 

Case File (“ECF”); pinpoint citations are to the ECF-generated page numbers at the top of documents. 

2

 FAC – ECF No. 70 at 18–26. 
ORDER – No. 17-cv-00898-LB 2

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 

United States District Court 

Northern District of California 

for declaratory relief regarding the copyright-infringement claims (based on inequitable conduct in 

the form of the plaintiffs’ theft of the defendants’ trade secrets) and one claim of trade-secrets theft 

in violation of the California Uniform Trade Secrets Act (“CUTSA”), Cal. Civ. Code §§ 3426–

2426.11.3 

The plaintiffs move to (1) dismiss the copyright counterclaims under Rule 12(b)(6) on the 

ground that the defendants do not adequately plead inequitable conduct as an affirmative defense, 

(2) strike the second affirmative defense of “Patent Damages Barred;” and (3) dismiss the 

defendants’ trade-secrets counterclaim under Rule 12(b)(6) for failure to plausibly plead facts 

showing trade-secrets theft.4 The court strikes the affirmative defense of “Patent Damages 

Barred,” strikes the inequitable-conduct defense to the extent that the defense is predicated on a 

theory of an implied license or permission, and denies the motion to strike the unclean-hands 

defense. The court grants the motion to dismiss the counterclaims, primarily because Mr. Wang’s 

alleged bad acts happened after Golf Tailor publicly disclosed its trade secrets through product 

sales and also because the allegations of conspiracy are conclusory. 

STATEMENT5

This case involves the design rights embodied in two products. The first is a golf club and the 

second is a golf “training aid.” The plaintiffs call the club the “Wang Golf Club,” which defendant 

Golf Tailor has manufactured and sold (originally under a legitimate contract) as its own “XE1 

Wedge.”6

 The plaintiffs claim that Golf Tailor sold a “CSi Wedge” as an unauthorized derivative 

of the XE1.7 The training aid is called the “Speed Whip.”8 The parties’ competing claims are the 

 

3

 Second Amend. Answer, Affirmative Defenses, Counterclaims, and Third-Party Complaint 

(“SAAC”) – ECF No. 52 at 20–24. 

4

 Motion – ECF No. 60 at 8. 

5

 The facts in this Statement generally are from the SAAC, judicially noticed public records showing 

the dates of the copyright and patent applications, and Golf Tailor’s admissions. 

6

 FAC – ECF No. 70 at 6–7 (¶¶ 24, 30, 34) 

7 Id. at 10 (¶ 50). 

8 Id. at 17 (¶¶ 87, 89). 
ORDER – No. 17-cv-00898-LB 3

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 

United States District Court 

Northern District of California 

same for both products. The plaintiffs and the defendants claim that the other party stole their 

designs, produced and sold knockoffs, and thus misappropriated their intellectual property in the 

XE1 and Speed Whip. 

Plaintiff Jonathan Wang designs golfing equipment, including clubs and “training aids.”9 He is 

the founder of plaintiff GolfBestBuy, Inc.10 Mr. Wang claims to have filed three copyright 

applications related to the Wang Golf Club: (1) U.S. Copyright Office Case No. 1-4461451449 

(the “’449 Drawing”); (2) No. 4461451644 (the “’644 Drawing”); and (3) No. 4459918566 (the 

“’566 CAD Drawing”).11 He claims to have seven copyright applications on a line of related clubs: 

(4) Nos. 1-4459919064, 1-4461451494, and 1-4461451569 (collectively, the “’569 Drawing”); 

and (5) Nos. 1-4461451689, 1-4461451744, and 1-4461451779 (the “’799 Drawing”).12 Finally, in 

addition to these “technical drawings,” Mr. Wang claims to have “created prototypes” of the Wang 

Golf Club; photographs of these prototypes are also in dispute here.13 Mr. Wang registered his 

copyrights in February 2017.14

According to the plaintiffs: “Defendants acquired copies of Mr. Wang’s six designs — 

including the ’449 and ’644 Drawings — from [Golf Gifts & Gallery], a distributor of golf 

merchandise that regularly sells products designed by Mr. Wang.”15 Mr. Wang provided Golf Gifts 

& Gallery with two prototype golf clubs and photographs of the prototypes because the defendants 

expressed interest in buying the clubs from Golf Gifts & Gallery.16 The defendants acquired the 

prototypes and photographs from Golf Gifts & Gallery.17 Golf Tailor proceeded to buy the subject 

 

9 Id. at 6 (¶ 24). 

10 Id. at 3 (¶ 6). 

11 Id. at 6 (¶ 24). 

12 Id. 

13 For all these allegations, see id. at 7 (¶¶ 25, 29 ) and the attendant exhibits. 

14 Certificates of Registration, Exs. F–K, Supp. Dyer Decl. – ECF Nos. 69-2 to 69-6 and 95. 

15 SAAC – ECF No. 52 at 7 (¶ 28). 

16 Id. (¶ 29). 

17 Id. 
ORDER – No. 17-cv-00898-LB 4

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 

United States District Court 

Northern District of California 

clubs for about a year and then started counterfeiting them.18 Once it had a source manufacturing 

the counterfeits, Golf Tailor stopped buying the authorized clubs.19 The plaintiffs sold the XE1-

branded inventory that had been earmarked for Golf Tailor.20 When the plaintiffs did this, Golf 

Tailor sued them (in Washington federal court) for unfair competition and false designation of 

origin.21

The defendants tell a different story. In April 2015, Golf Tailor’s CEO Tim Oyler asked Golf 

Gifts & Gallery to manufacture the Speed Whip (“designed through instruction and direction by 

Mr. Oyler . . . with Mr. Oyler directing all design modifications”) for Golf Tailor to sell to 

distributers and consumers.22 “Around July 2014, and concurrently with the manufacture of the 

Speed Whip,” Golf Tailor hired Golf Gifts & Gallery to “prepare CAD drawings based on Mr. 

Oyler’s design for a new golf club,” the XEI, again for Golf Tailor to sell to end users.23 “As with 

the Speed Whip, [Golf Tailor and Mr. Oyler disclosed] the confidential XE1 information” to Golf 

Gifts & Gallery.24 

Golf Tailor specifies its “confidential design information” as “emails, texts, and conversations 

containing proprietary information about the design and manufacture of the XE1 and Speed Whip 

products. This information is referred to herein as the “Golf Tailor Trade Secrets.”25 It alleges that 

it took reasonable steps to maintain the secrecy of the trade secrets — in part by telling Golf Gifts 

& Gallery that the information was confidential and agreeing with Golf Gifts that information 

would be disclosed only to manufacture the products — in order to maintain its competitive 

advantage for its first-to-market products.26 

 

18 Id. at 8–9 (¶¶ 30, 34–35, 41–42). 

19 Id. at 9 (¶ 43). 

20 Id. at 10, 20 (¶¶ 50, 107). 

21 Id. at 15–16 (¶¶ 71, 76). 

22 Id. at 16 (¶¶ 18–21). 

23 Id. at 16 (¶¶ 22–23). 

24 Id. (¶ 22). 

25 Id. at 17 (¶ 26). 

26 Id. at 17–18 (¶¶ 27–31). 
ORDER – No. 17-cv-00898-LB 5

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 

United States District Court 

Northern District of California 

According to the defendants, Golf Gifts & Gallery told Golf Tailor that it would manufacture 

the Speed Whip and XE1 at its own facility in China.27 Instead, it contracted with third-party 

manufacturer Kingstar to manufacture the products.28 Mr. Wang is the president of Kingstar and 

obtained a Chinese design patent for the XE1design; he later used this patent to obtain the patent 

that issued as U.S. Patent D766,388.29 He also obtained a Chinese design patent for the Speed 

Whip, used it to file an expedited patent application in the U.S., and obtained the patent that issued 

as U.S. Patent D769,390.30 The patents are the subject of the related patent cases.31 The relevant 

dates for the patent applications are undisputed and are as follows: (1) XE1: application for 

Chinese Patent No. 2015304 filed October 24, 2015, and application for U.S. Patent No. D766,388 

filed March 16, 2016; and (2) Speed Whip: application for Chinese Patent No.201620118508 filed 

April 11, 2016, and application for U.S. Patent No. D769,390 filed July 14, 2016.32

Golf Tailor began selling the XE1 “on or about June 24, 2015” and began selling the Speed 

Whip “on or about March 2016.”33 

The overall timeline relevant to the litigation thus is this: 

Timeline for XE1 

Date Event 

June 24, 2015 Golf Tailor begins publicly selling XE1 golf club 

October 24, 2015 Mr. Wang files Chinese Patent No. 20153041454 

March 16, 2016 Mr. Wang files U.S. Patent No. D766,388 

February 22, 2017 Mr. Wang registers copyrights 

 

27 Id. at 18 (¶ 33). 

28 Id. 

29 Id. (¶ 35). 

30 Id. at 19 (¶ 38). 

31 Id. at 18–19 (¶¶ 35, 40). 

32 Patent Applications, Exs. C–E, Dyer Decl. – ECF Nos. 60-4 to 60-6. 

33 Golf Tailors’ Responses to GolfBestBuy’s First Set of Requests for Admission Nos. 2 and 4, Ex. B. 

to Dyer Decl. – ECF No. 60-3 at 3–4; see SAAC – ECF No. 42 at 16 (¶¶ 24–25) (Golf Tailor approved 

the final samples of the XEI in March 2015 and placed an order with Golf Gift & Gallery for 2,700 

wedges; “at about this time,” it approved the final samples of the Speed Whip and placed an order for 

15,000 units.). 
ORDER – No. 17-cv-00898-LB 6

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 

United States District Court 

Northern District of California 

Timeline for Speed Whip 

Date Event 

March 2016 Golf Tailor begins publicly selling Speed Whip 

April 11, 2016 Mr. Wang files Chinese Patent No. 201630118508 

July 14, 2016 Mr. Wang files U.S. Patent No. D769,390 

February 22, 2017 Mr. Wang registers copyrights 

Golf Tailor brings six counterclaims for a “Declaratory Judgment of Non-Infringement” based 

on the defendants’ inequitable conduct, implied permission, or acquiescence for six drawings: (1) 

the ’499 Drawing; (2) the ’644 Drawing; (3) the prototype photographs; (4) the ’566 CAD 

Drawing; (5) the ’569 Drawing; and (6) the ’644 Drawing.34 In its seventh counterclaim, it charges 

theft of trade secrets involving the XE1 and the Speed Whip, in violation of CUTSA (Cal. Civ. 

Code §§ 3426–2426.11).35 

The plaintiffs then moved to dismiss the defendants’ counterclaims and to strike the second 

and third affirmative defenses: “Patent Damages Barred” and “Inequitable 

Conduct/Estoppel/Unclean Hands.”36 

The court notes this procedural context. When the plaintiffs filed their motion, the operative 

complaint was the initial complaint.37 The defendants’ defenses and counterclaims were in the 

Second Amended Answer, Affirmative Defenses, Counterclaims, and Third-Party Complaint.38

The plaintiffs answered it and filed their motion.39 The parties briefed the motion fully.40 The 

plaintiffs then filed an amended complaint, the defendants filed a superseding responsive pleading 

and counterclaims, and the plaintiffs answered.41 The pending motion thus is directed at a pleading 

 

34 SAAC – ECF No. 52 at 20–24 (Counts I through VI). 

35 Id. at 24 (¶¶ 68–78). 

36 Motion – ECF No. 60. 

37 Compl. – ECF No. 1. 

38 SAAC – ECF No. 52. 

39 Answer – ECF No. 63; Motion – ECF No. 60. 

40 Motion – ECF No. 60; Opposition – ECF No. 67; Reply – ECF No. 70. 

41 FAC – ECF No. 70; Answer, Affirmative Defenses, Counterclaims, and Third-Party Claims – ECF 

No. 85; Answer – ECF No. 89. 
ORDER – No. 17-cv-00898-LB 7

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 

United States District Court 

Northern District of California 

replaced by an amended pleading. In all relevant respects, the two pleadings are the same. The 

court thus cites the Second Amended Answer, Affirmative Defenses, Counterclaims, and ThirdParty Complaint42 because the parties cite it in their papers, the outcome is the same, and a 

different approach would unnecessarily burden the parties, who would have to update their papers. 

The court held a hearing on November 2, 2017.43

GOVERNING LAW 

The plaintiffs move to dismiss the counterclaims under Federal Rule of Civil Procedure 

12(b)(6) for failure to state a claim and move to strike the second and third affirmative defenses 

under Rule 12(f). 

A Rule 12(b)(6) motion to dismiss for failure to state a claim tests the legal sufficiency of a 

complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A claim will normally survive a 

motion to dismiss if it offers a “short and plain statement . . . showing that the pleader is entitled to 

relief.” See Fed. R. Civ. P. 8(a)(2). This statement “must contain sufficient factual matter, accepted 

as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “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.” Iqbal, 556 U.S. at 678. “The 

plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a mere 

possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). “Where 

a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of 

the line between possibility and plausibility of ‘entitlement to relief.’’” Iqbal, 556 U.S. at 678 

(quoting Twombly, 550 U.S. at 557). 

When considering a Rule 12(b)(6) motion, the court must accept as true all factual allegations 

in the complaint as well as all reasonable inferences that may be drawn from such 

allegations. LSO, Ltd. v. Stroh, 205 F.3d 1146, 1150 n. 2 (9th Cir. 2000). Such allegations must be 

 

42 SAAC – ECF No. 52. 

43 Minute Order – ECF No. 96. 
ORDER – No. 17-cv-00898-LB 8

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 

United States District Court 

Northern District of California 

construed in the light most favorable to the nonmoving party. Shwarz v. United States, 234 F.3d 

428, 435 (9th Cir. 2000). “[W]hen a written instrument contradicts allegations in the complaint to 

which it is attached,” however, “the exhibit trumps the allegations.” Gamble v. GMAC Mortg. 

Corp., 2009 WL 400359, *3 (N.D. Cal. Feb. 18, 2009) (quoting N. Ind. Gun & Outdoor v. City of 

South Bend, 163 F.3d 449, 454 (7th Cir. 1998)). 

The pleading standards of Iqbal and Twombly apply as well to counterclaims and affirmative 

defenses. See Barnes v. AT&T Pension Ben. Plan-Nonbargained Program, 718 F. Supp. 2d 1167, 

1170–71 (N.D. Cal. 2010). “The key to determining the sufficiency of pleading an affirmative 

defense is whether it gives plaintiff fair notice of the defense.” Id. at 1171 (quoting Wyshak v. City 

Nat’l Bank, 607 F.2d 824, 827 (9th Cir. 1979)). Affirmative defenses that do not meet these 

standards may be struck under Rule 12(f). See id. at 1170–71; see also MIC Prop. and Cas. Corp. 

v. Kennolyn Camps, Inc., No. 5:15-cv-00589-EJD, 2015 WL 4624119, at *2 (N.D. Cal. Aug. 3, 

2015) (“In this district at least, a defendant provides ‘fair notice” of an affirmative defense by 

meeting the pleading standard articulated in Federal Rule of Civil Procedure 8, as further refined 

by” Twombly and Iqbal.). 

The court may strike from a pleading an insufficient defense or any redundant, immaterial, 

impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). “The function of a [Rule 12(f)] motion to 

strike is to avoid the unnecessary expenditures that arise throughout litigation by dispensing of any 

spurious issues prior to trial.” Rosales v. FitFlop USA, LLC, 882 F. Supp. 2d 1168, 1178 (S.D. Cal. 

2012) (citing Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983)). Striking is 

appropriate if it “will make trial less complicated or eliminate serious risks of prejudice to the 

moving party, delay, or confusion of the issues.” Sliger v. Prospect Mortg., 789 F. Supp. 2d 1212, 

1216 (E.D. Cal. 2011). 

 “Immateriality” under Rule 12(f) speaks to the relevance of challenged allegations. 

“‘Immaterial’ matter is that which has no essential or important relationship to the claim for relief 

or the defenses being pleaded.” Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), 

rev’d on other grounds, 510 U.S. 517 (1994) (quotation omitted). Where a movant challenges 

allegations as immaterial, “[a] court must deny the motion to strike if there is any doubt whether 
ORDER – No. 17-cv-00898-LB 9

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 

United States District Court 

Northern District of California 

the allegations in the pleadings might be relevant in the action.” Oracle Am., Inc. v. Micron Tech., 

Inc., 817 F. Supp. 2d 1128, 1132 (N.D. Cal. 2011). “[G]enerally,” then, courts grant such a motion 

“only where ‘it is clear that the matter to be stricken could have no possible bearing on the subject 

matter of the litigation.’” Rosales, 882 F. Supp. 2d at 1179 (quoting Walters v. Fid. Mortg. of 

Cal., 730 F. Supp. 2d 1185, 1196 (E.D. Cal. 2010) (citing in turn Lilley v. Charren, 936 F. Supp. 

708, 713 (N.D. Cal. 1996)). 

 “As a rule, motions to strike are regarded with disfavor because striking is such a drastic 

remedy; as a result, such motions are infrequently granted.” Amini Innovations Corp. v. McFerran 

Home Furnishings, Inc., 301 F.R.D. 487, 489-90 (C.D. Cal. 2014) (citing Freeman v. ABC Legal 

Servs., Inc., 877 F. Supp. 2d 919, 923 (N.D. Cal. 2012) (citing in turn Stanbury Law Firm v. IRS,

221 F.3d 1059, 1063 (8th Cir. 2000)). “[W]hen ruling on a motion to strike,” the court accepts the 

challenged allegations as true and “must liberally construe” those allegations “in the light most 

favorable” to the non-moving pleader. Stearns v. Select Comfort Retail Corp., 763 F. Supp. 2d 

1128, 1140 (N.D. Cal. 2010); see, e.g., Multimedia Patent Trust v. Microsoft Corp., 525 F. Supp. 

2d 1200, 1211 (S.D. Cal. 2007) (“In determining a motion to strike, a district court must view the 

pleadings in the light most favorable to the pleader.”). 

ANALYSIS 

1. California Uniform Trade Secrets Act 

The court previously dismissed the defendants’ trade-secrets counterclaim claim under the 

federal Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836. The DTSA applies only to 

misappropriations that occur on or after May 11, 2016, the DTSA’s date of enactment. Cave 

Consulting Grp., Inc. v. Truven Health Analytics Inc., No. 15-CV-2177-SI, 2017 WL 1436044, *3 

(N.D. Cal. Apr. 24, 2017); accord, e.g., Avago Techs. U.S. Inc. v. Nanoprecision Prods., Inc., No. 

16-CV-3737-JCS, 2017 WL 412524, * 8 (N.D. Cal. Jan. 31, 2017). The court held that to the 

extent that product sales preceded DTSA’s enactment, the date-of-enactment issue precluded a 
ORDER – No. 17-cv-00898-LB 10

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 

United States District Court 

Northern District of California 

DTSA claim.44 The dismissal was without prejudice to the defendants’ raising a California tradesecrets claim.45 

To state a claim for trade-secrets theft under CUTSA, a defendant must plead the existence of 

a trade secret, and the misappropriation of it. Cal. Civ. Code § 3426.1(b); see AccuImage 

Diagnostics Corp. v. Terarecon, Inc., 260 F. Supp. 2d 941, 950 (N.D. Cal. 2003). The defendants 

plausibly plead the existence of their trade secrets in the form of their proprietary and secret 

designs, their efforts to retain secrecy, and their communication of confidentiality to Golf Gifts & 

Gallery. As the court held, the allegations “are at least minimally sound under Rule 8(a)(2) and 

12(b)(6).”46 But the defendants did not plead the misappropriation of the trade secrets. The 

timeline in the Statement demonstrates that the defendants’ alleged use of the trade secrets 

happened after Golf Tailor publicly disclosed the trade secrets through its product sales. There can 

be no unlawful misappropriation after public disclosure of the secret. In re Providian Credit Card 

Cases, 96 Cal. App. 4th 292, 304 (2002) (“[p]ublic disclosure, that is the absence of secrecy, is 

fatal to the existence of a trade secret”); Kavanagh v. Tuller, No. 16-CV-01937-H (BGS), 2017 

WL 1496436, at *4 (S.D. Cal. Apr. 26, 2017) (dismissing with prejudice trade secret claim because 

claimant admitted she publically disclosed her product through marketing and sales); Hosp. Mktg. 

Concepts LLC v. Six Continents Hotels, Inc., No. 15- SACV-01791 JVS (DFMx), 2016 WL 

9045853, at *5 (C.D. Cal. May 2, 2016) (“Hospitality Marketing alleges that it voluntarily 

disclosed its trade secrets...[it] therefore fails to allege all of the requisite elements of a trade 

secret claim...The Court dismisses the claim for misappropriation of trade secrets with 

prejudice.”). 

Golf Tailor counters that the copyright and patent applications, and the resulting lawsuits, were 

“one result of Wang’s misappropriation, they were also a part of a course of conduct that began 

with the misappropriation of Golf Tailor’s designs before the public sale: ‘Among other things, 

 

44 Id.

45 Id.

46 Order – ECF No. 39 at 9. 
ORDER – No. 17-cv-00898-LB 11

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 

United States District Court 

Northern District of California 

[Plaintiffs’] misappropriation and conspiracy to misappropriate has led to other parties’ 

manufacturing of counterfeit Golf Tailor products and other products that compete with Golf 

Tailor’s products, to Wang’s improper filing of patents in the U.S. and China on designs created 

and owned by Golf Tailor, to Wang’s improper filing of copyrights in the U.S. based on designs 

created and owned by Golf Tailor, and to lawsuits against Golf Tailor based on its own intellectual 

property.’”47

This does not allege any misappropriation of trade secrets that happened before the trade 

secrets became public. The only factual allegations about Mr. Wang’s bad acts are his copyright 

and patent applications. Those came after the products were sold. The previous paragraph is too 

conclusory to allow the inference that, for example, that he or anyone else sold counterfeit goods 

before Golf Tailor’s products went to market. 

The allegations that Mr. Wang acquired the trade secrets by improper means are insufficient 

for similar reasons. 

Under CUTSA, “‘[i]mproper means includes theft, bribery, misrepresentation, breach or 

inducement of a duty to maintain secrecy, or espionage through electronic or other means.” Cal. 

Code Civ. P. § 3426.1(a). There are no allegations regarding improper means except the SAAC’s 

conclusory allegations that Mr. Wang conspired with Dean Chudy of Golf Gifts & Gallery to 

misappropriate the trade secrets.48 The allegations can be summarized as follows. Golf Tailor 

disclosed its trade secrets to Golf Gifts and worked with it to design the golf products. Golf Tailor 

told Golf Gifts that the trade secrets were secret and needed to be kept secret. Mr. Chudy said that 

Golf Gifts had its own manufacturing facility in China, and Golf Tailor relied on this 

representation. In fact, Golf Gifts contracted with Mr. Wang’s company Kingstar to manufacture 

the products. Mr. Chudy and Mr. Wang colluded, are co-conspirators, and are liable.49

This does not plausibly plead an unlawful agreement or an act in furtherance of the agreement. 

 

47 Opposition – ECF No. 7 (quoting SAAC – ECF No. 52 at 25 (¶ 5). 

48 SAAC – ECF No. 52 at 15 (¶ 12). 

49 Id. at 16–20 (¶¶ 18–43). 
ORDER – No. 17-cv-00898-LB 12

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 

United States District Court 

Northern District of California 

See Athena Feminine Techs. Inc., v. Wilkes, No. C 10-04868 SBA, 2011 WL 4079927, at * 7 (N.D. 

Cal. Sept. 13, 2011). Again, Mr. Wang’s alleged bad acts are after Golf Tailor sold its products and 

therefore are not plausibly unlawful. 

 

2. Copyright Claims and Parallel Affirmative Defense of Unclean Hands 

The defendants raise the affirmative defenses of inequitable conduct, implied permission, or 

acquiescence for the plaintiffs’ copyright claims for the disputed drawings, and they also bring six 

counterclaims for a “Declaratory Judgment of Non-Infringement” for the six drawings based on 

the affirmative defenses. They clarify in their opposition that they plead inequitable conduct as 

part of the unclean-hands doctrine.50

“[A] defendant asserting that a plaintiff’s claim is barred by unclean hands must show that the 

plaintiff acted unfairly or fraudulently respecting the matter in controversy.” Ample Bright Dev., 

Ltd. v. Comis Int’l, 913 F. Supp. 2d 925, 940 (C.D. Cal. 2012). “To establish unclean hands, a 

defendant must demonstrate (1) inequitable conduct by the plaintiff; (2) that the plaintiff’s conduct 

directly relates to the claim which it has asserted against the defendant; and (3) plaintiff’s conduct 

injured the defendant.” Oracle Am. v. Hewlett Packard Enter. Co., No. 16-CV-1393-JST, 2017 

WL 2311296, at *2 (May 26, 2017) (quotation omitted). “In the Ninth Circuit, unclean hands is a 

defense to copyright infringement when the plaintiff’s transgression is of serious proportions and 

relates directly to the subject matter of the infringement action.” Id. (quoting Dream Games of 

Ariz., Inc. v. PC Onsite, 561 F.3d 983, 990–91 (9th Cir. 2009)) (internal citations and footnotes 

omitted). 

The defendants’ allegations of unclean hands sufficiently support their affirmative defense of 

unclean hands at the pleadings stage. The court lets the estoppel theory stand too (to the extent that 

it is based on the unclean-hands defense). Striking is a drastic remedy. Freeman, 877 F. Supp. 2d 

at 923 (citation omitted). The court cannot say that “it is clear that the matter to be stricken could 

 

50 Opposition – ECF No. 67 at 3. 
ORDER – No. 17-cv-00898-LB 13

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 

United States District Court 

Northern District of California 

have no possible bearing on the subject matter of the litigation.” Walters, 730 F. Supp. 2d at 1196 

(citing Lilley, 936 F. Supp. at 713). 

The court cannot discern any facts supporting a theory of an implied license, implied 

permission, or acquiescence.51 

A non-exclusive license to use or distribute copyrighted work may be implied by conduct. See 

Foad Consulting Grp. v. Azzalino, 270 F.3d 821, 835 (9th Cir. 2001). The Ninth Circuit has 

recognized the existence of an implied license when a plaintiff created a copyrighted work at the 

request of a defendant, delivered it to the defendant, and intended that the defendant use or 

distribute the work. Asset Mktg. Sys. v. Gagnon, 542 F.3d 748, 754–55 (9th Cir. 2008).

The defendants allege only facts about theft of trade secrets and not facts about an implied 

license, permission, or acquiescence. The court strikes the third affirmative defense to the extent 

that it is grounded on this theory. The court strikes it with leave to amend but suggests that — 

given the court’s relatively liberal date to amend the pleadings to allow parties to conform 

pleadings to the evidence — that the defendants defer any amendment. 

The issue then is whether the defendants fairly raise the defenses in the form of counterclaims. 

The court holds that they do not. The court recognizes the tension in allowing the affirmative 

defense to stand and the claims to fall. But there is a reason that striking is a disfavored remedy: if 

the defense possibly bears on the case, see Walters, 730 F. Supp. 2d at 1196, then the court ought 

not to cabin the litigation to eliminate that possible defense. By contrast, consider again the 

allegations of unfair conduct: the plaintiffs concealed their role in the design and manufacturing 

process, their wrongful misappropriation and use of trade secrets in registering the claimed 

copyrights, and their conspiracy with Mr. Chudy and Golf Gifts & Gallery to steal trade secrets.52

The conspiracy allegations are too conclusory to support stand-alone claims. The defendants’ 

competing view of the copyright claims is more appropriately addressed through its unclean-hand 

defense to the plaintiffs’ claims for copyright infringement. Cf. Smith v. Metropolitan Prop. & 

 

51 SAAC – ECF No. 52 at 12. 

52 Id. at 13.