United States Court of Appeals 

for the Federal Circuit 

__________________________ 

FRANK T. SHUM, 

Plaintiff-Appellant, 

v. 

INTEL CORPORATION, LIGHTLOGIC, INC., 

AND JEAN-MARC VERDIELL, 

Defendants-Cross Appellants. 

__________________________ 

2009-1385, -1419 

__________________________ 

Appeal from the United States District Court for the 

Northern District of California in case no. 02-CV-3262, 

Senior Judge D. Lowell Jensen. 

__________________________ 

Decided: December 22, 2010 

__________________________ 

PAUL F. KIRSCH, Shopoff & Cavallo LLP, of San Francisco, California, argued for plaintiff-appellant. Of counsel on the brief was ROBERT A. MCFARLANE, Townsend 

and Townsend and Crew LLP, of San Francisco, California. 

WILLIAM F. LEE, Wilmer Cutler Pickering Hale and 

Dorr LLP, of Boston, Massachusetts, argued for defen-
SHUM v. INTEL CORPORATION 2

dants-appellees. With him on the brief were RICHARD W.

O’NEILL, MARK C. FLEMING; SETH P.WAXMAN, BRIAN M.

BOYNTON, MARY K. GARDNER, and GREGORY H. LANTIER of 

Washington, DC. Of counsel on the brief was STEPHEN E.

TAYLOR, Taylor & Company Law Offices, LLP of San 

Francisco, California. 

__________________________ 

Before NEWMAN, LOURIE, and PROST, Circuit Judges. 

Opinion for the court filed by Circuit Judge PROST. 

Dissenting opinion filed by Circuit Judge NEWMAN. 

PROST, Circuit Judge. 

In part, this case is about inventorship. Mostly, however, this case is about various claims arising under 

California law. While the theories as to each state law 

claim differ slightly, all are essentially grounded in fraud. 

The ones at issue on appeal include breach of fiduciary 

duty, fraudulent concealment, unjust enrichment, breach 

of contract, and intentional misrepresentation. This 

appeal also challenges the district court’s findings regarding the inventorship of certain claims for two of the patents-in-suit. 

This case was filed by an optical engineer named 

Frank Shum (“Shum”). Shum’s amended complaint 

sought correction of inventorship for seven patents that 

listed his former business partner, Jean-Marc Verdiell 

(“Verdiell”), as the sole inventor. Shum contended that he 

should be named as a co-inventor, if not the sole inventor, 

of these patents. 

Shum’s state law claims all stem from the sale of Verdiell’s company LightLogic, Inc. (“LightLogic”) to Intel 

Corporation (“Intel”). Before Verdiell formed and later 
3 SHUM v. INTEL CORPORATION

sold LightLogic, Verdiell and Shum had been equal 

shareholders and co-officers of a company called Radiance 

Design, Inc. (“Radiance”). A mere nine months after its 

formation, however, Shum and Verdiell dissolved Radiance pursuant to a detailed Plan of Liquidation (“POL”). 

The POL gave them equal rights to exploit Radiance’s 

intellectual property. While Shum shortly thereafter 

returned to a salaried position at an established company, 

Verdiell chose to form and continue his own company, 

LightLogic. Pursuant to his state law claims, Shum seeks 

to recover some of the $409 million Intel paid for LightLogic. 

Shum’s claims were decided at various stages of the 

proceedings below. On remand from an earlier appeal to 

this court, the district court granted defendants’ summary 

judgment on Shum’s breach of fiduciary duty and fraudulent concealment claims. A jury subsequently heard 

Shum’s claims for correction of inventorship, intentional 

misrepresentation, breach of contract, and unjust enrichment. The jury found that Shum was a co-inventor of 

some claims in five of the six patents still in dispute at 

trial.1 More importantly for our purposes, the jury was 

unable to reach a verdict on any of the state law claims. 

It also deadlocked on correction of inventorship for claim 

5 of U.S. Patent No. 6,227,724 (“’724 patent”) and claim 1 

of U.S. Patent No. 6,585,427 (“’427 patent”). The district 

court declared a mistrial on these claims. After trial, 

defendants Verdiell, Intel, and LightLogic renewed their 

motion for judgment as a matter of law (“JMOL”) on the 

unresolved state law and inventorship claims. The dis-

 1 Before the close of evidence, Shum withdrew his 

correction of inventorship claim as to U.S. Patent No. 

6,252,726. 
SHUM v. INTEL CORPORATION 4

trict court granted defendants’ motion, concluding that a 

reasonable jury would not have had a legally sufficient 

basis to find for Shum. Shum timely appealed. 

On appeal, Shum argues that there are genuine issues of material fact entitling him to proceed to trial on 

his breach of fiduciary duty and fraudulent concealment 

claims. As for the claims on which the district court 

granted post-verdict JMOL, Shum argues that he presented sufficient evidence such that a reasonable jury 

could find for him, thus entitling him to a new trial. In 

support of his request for a new trial, Shum argues that 

various evidentiary and discovery rulings by the district 

court were erroneous. 

We disagree and now affirm the district court’s judgment.2 Under California law, Verdiell did not owe Shum 

a fiduciary duty; as for any fiduciary duty that Verdiell 

owed Radiance, their jointly owned and now-defunct 

corporation, Shum lacks standing to sue. Further, because Verdiell owed Shum no fiduciary duty and there is 

no evidence Verdiell knew or actively concealed material 

facts Shum did not know or could not have reasonably 

discover, Verdiell is not liable for fraudulent concealment. 

Shum’s claim for intentional misrepresentation similarly fails because there is no evidence that defendants 

made a false statement or that Shum suffered any actual 

monetary loss as a result of the alleged misrepresentation. As for Shum’s breach of contract claim, there is 

again a dearth of evidence that Shum was harmed as a 

 2 Because we conclude that Shum is not entitled to 

a new trial, we do not reach defendants’ conditional crossappeal, which sought to retry the correction of inventorship claims in the event a new trial was granted as to any 

claim. 
5 SHUM v. INTEL CORPORATION

result of defendants’ alleged breach. The unjust enrichment claim suffers a similar fate: no evidence supports 

Shum’s assertion that defendants’ alleged wrongful acts 

caused them to obtain a benefit at Shum’s expense. 

Finally, we agree with the district court that the evidence 

Shum offered at trial was not sufficient for a reasonable 

jury to find that Shum made an inventive contribution to 

claim 5 of the ’724 patent or claim 1 of the ’427 patent. 

BACKGROUND

The facts below resulted in two separate appeals to 

this court, both of which arose from the same trial and 

post-trial proceedings. We combined the appeals for the 

purpose of oral argument, but address the discrete issues 

each raises in separate opinions. Here, we address the 

merits. Shum separately appealed the district court’s 

award of costs pursuant to Federal Rule of Civil Procedure 54(d)(1). That appeal is the subject of a companion 

opinion, Shum v. Intel Corp., No. 2010-1109. 

Shum’s claims for inventorship and violations of state 

law are intimately bound up in his brief business venture 

with Verdiell, as well as Verdiell’s business activities 

after the two parted company. That history is set forth 

below. 

Shum and Verdiell met while working at Spectra Diode Laboratories (“SDL”). Both are engineers in the 

optoelectronics field. In 1996, Shum left SDL and formed 

his own company. Verdiell continued to work at SDL, 

though he helped Shum prepare grant proposals for 

various optoelectronic packaging products. In March 

1997, Verdiell resigned from SDL. Shortly thereafter, in 

April 1997, Shum and Verdiell incorporated Radiance as 

equal shareholders and co-officers: Verdiell was Presi-
SHUM v. INTEL CORPORATION 6

dent and Treasurer; Shum, Vice President and Secretary. 

Shum and Verdiell also executed agreements assigning all 

of their rights in any inventions to Radiance. 

The day after Radiance was incorporated, a patent 

agent named Marek Alboszta (“Alboszta”) filed U.S. 

Patent Application No. 08/838,022 on behalf of Radiance 

(“’022 patent application” or “Radiance patent application”). It covered optoelectronic assemblies and methods 

for making them. Although Verdiell undisputedly made 

inventive contributions to the application, Shum was 

named as the sole inventor. At trial, the evidence showed 

that Shum and Verdiell decided to omit Verdiell’s name 

from the application because some of the matter was 

conceived by Verdiell while he was still working for SDL 

and they wished to avoid disputes regarding ownership of 

the invention. 

While the Radiance patent application was pending, 

Verdiell told patent agent Alboszta that he, not just 

Shum, was an inventor of the claimed subject matter. 

Based on this information, Alboszta concluded that the 

Radiance patent application was invalid and had to be 

withdrawn. Both Alboszta and Verdiell subsequently told 

Shum that the application would have to be withdrawn. 

Shum agreed; the Radiance patent application was withdrawn in November 1997. 

By the time the Radiance patent application had been 

withdrawn, the relationship between Shum and Verdiell 

had deteriorated. Both had begun to separately prepare 

business plans and seek financing for new companies 

based on Radiance’s technology. Both also hired attorneys. After buy out talks for Radiance broke down, negotiations turned to dissolving Radiance and drafting a 

satisfactory POL. The final version of the POL was 
7 SHUM v. INTEL CORPORATION

agreed to and executed on January 5, 1998. Pursuant to 

the POL, Shum and Verdiell 

acknowledge[d] and agree[d] that, after approval 

of this Plan, each of them shall be entitled, without any liability or duty to account to the Corporation or to the other, to pursue any and all such 

other business activities as they shall desire, even 

if such activities are in competition with the business of the Corporation [Radiance] and even if 

they take, or attempt to take, a business opportunity that the Corporation could itself have pursued. 

The day after the POL took effect and Radiance was 

formally dissolved, patent agent Alboszta filed a new 

patent application on Verdiell’s behalf. This first patent 

application related to the same subject matter as the 

withdrawn Radiance patent application, with Verdiell 

even using the Radiance patent application as a starting 

point and then editing it to remove portions he viewed as 

Shum’s contribution. The application Alboszta filed in 

January 1998 named Verdiell as the sole inventor. Verdiell subsequently assigned his rights in the application to 

his new company, LightLogic. Verdiell formed LightLogic 

a day before Radiance withdrew its patent application. At 

no time before or after dissolution of Radiance did Verdiell tell Shum about his plans to form LightLogic or to file 

a new patent application covering the same subject matter as the Radiance application. The application filed in 

Verdiell’s name issued in November 1999 as U.S. Patent 

No. 5,977,567 (“’567 patent”). 

From the time Verdiell filed his first patent application in January 1998 until Intel acquired LightLogic in 

2001, LightLogic grew from a single-person corporation 
SHUM v. INTEL CORPORATION 8

operating out of a small laboratory in Verdiell’s bedroom 

to a company with approximately seventy-five employees 

that had attracted tens of millions of dollars in financing 

from venture capitalists and companies like Cisco. These 

investors in LightLogic were given copies of the Radiance 

POL. Moreover, closing documents for each round of 

financing stated that “[p]ursuant to the Radiance Design, 

Inc. Plan of Liquidation [POL], Frank Shum and JeanMarc Verdiell have equal rights to independently exploit 

the intellectual property developed by Radiance Design, 

Inc.” 

In addition to expanding, LightLogic also began to 

shift its focus from optical modules to a fully-integrated 

optoelectronic telecommunications subsystem called a 

transponder. Transponders allow two-way communication between computers or other telecommunication 

devices and an optical fiber network. They work by 

combining multiple streams of electronic data, such as 

telephone calls, into a single, high-speed electronic data 

stream which is then converted into light and sent over a 

fiber-optic network. In addition to sending information, 

transponders also receive an incoming stream of optical 

data. The incoming stream is converted into an electronic 

data stream, which is further disaggregated, or “demultiplexed,” into multiple separate data streams. One of the 

challenges of designing and building transponders is 

preserving signal quality at high data transmission 

speeds. 

LightLogic successfully built and demonstrated a 

10Gb/sec transponder at a trade show in March 2000. As 

the only company to have a working prototype at that 

speed, LightLogic was able to obtain more financing. By 

September 2000, LightLogic had begun shipping produc-
9 SHUM v. INTEL CORPORATION

tion models of its transponder, with demand soon exceeding supply. 

By that time, LightLogic had also filed six additional 

patent applications that would issue as U.S. Patent Nos. 

6,376,268 (“’268 patent”); 6,207,950 (“’950 patent”); 

6,586,726 (“’6726 patent”); 6,227,724 (“’724 patent”); 

6,585,427 (“’427 patent”); and 6,252,726 (“’2726 patent”) 

(collectively, along with the ’567 patent, known as the 

“LightLogic patents”). With the exception of the ’427 

patent, all of these patents named Verdiell as the sole 

inventor. The ’427 patent named Verdiell and four coinventors. Shum was not listed as an inventor on any of 

the patents. 

LightLogic’s patents covered roughly three different 

areas of optoelectronic technology, though all were directed to producing less expensive, high-speed optoelectronic modules suitable for automated manufacture. The 

first, known as “dual enclosure” technology, is the subject 

of the ’2726 patent. The ’2726 patent claims an optoelectronic package composed of two separate enclosures 

designed to cost-effectively regulate temperature in the 

packages. The second area is “directed bonded copper” or 

“step” technology, which sought to provide a material that 

could endure high temperatures without expanding, thus 

making a better optoelectronic package. The ’567 and 

’268 patents relate to this area. Both disclose an optoelectronic package with a substrate made of an insulating 

ceramic material and a layer of bonded copper. The third 

area is “flexure” technology, which was meant to help the 

industry transition from the existing, labor-intensive 

process of aligning, attaching, and checking components 

by hand, to automated production. The remaining four 

patents, the ’950, ’724, ’427 and ’6726, relate to this area. 

All address how to align a laser diode and optical fiber 
SHUM v. INTEL CORPORATION 10

during an automated assembly process and keep the 

components aligned during use. 

In June 2001, Intel acquired LightLogic for $409 million, with Verdiell personally receiving $58.4 million. 

Pursuant to this stock-for-stock exchange, Intel acquired 

LightLogic’s physical assets, personnel, and rights to its 

seven patents. During negotiations to acquire LightLogic, 

Intel received a copy of the Radiance POL. In its preacquisition disclosures to Intel, LightLogic stated that 

Jean-Marc Verdiell and Frank Shum founded a 

company called Radiance Design, Inc. (“Radiance”). Pursuant to the Radiance Design, Inc. 

Plan of Liquidation [POL] . . . Frank Shum and 

Jean-Marc Verdiell were given equal rights to independently exploit the intellectual property developed by Radiance Design, Inc., Including the 

rights to U.S. Patent No. 5,977,567. To the Company’s knowledge, Mr. Shum is not presently engaged in any business directly competitive with 

the Company and has not made any efforts to exploit or to permit others to exploit the rights under that patent. 

While Verdiell was forming and fostering LightLogic, 

Shum also briefly attempted to pursue Radiance’s technology and business on his own. After Radiance’s dissolution, Shum formed a company called Luminance and 

attempted to obtain financing. These efforts were not 

successful. Less than six months later, Shum accepted a 

job at Ditech Communications and ceased work on Luminance. It is undisputed that nothing Verdiell or LightLogic did between 1998 and 2000 had any effect on 

Shum’s decision to not pursue Radiance’s technology or 

business. Indeed, until Shum learned of LightLogic’s 
11 SHUM v. INTEL CORPORATION

acquisition by Intel in 2001, Shum did not even know 

what Verdiell had been doing since Radiance’s dissolution. 

In 2001, Shum filed the original complaint in this action in California state court. The complaint alleged 

numerous violations of state law, all of which were essentially grounded in fraud surrounding the dissolution of 

Radiance and much later sale of LightLogic to Intel. After 

the case was removed to federal court, Shum amended his 

complaint, adding claims for correction of inventorship 

with respect to all seven of the LightLogic patents. 

The procedural history preceding this latest appeal is 

long and tortuous; only the relevant parts are set out 

below. After the case was removed to federal court, the 

district court dismissed Shum’s claim for unjust enrichment and granted defendants’ motion to bifurcate the 

inventorship and state law claims. A bench trial on the 

inventorship claims followed, after which the district 

court found that Shum had not shown by clear and convincing evidence that he was an inventor of any claims in 

the disputed LightLogic patents. The district court then 

granted defendants’ motion for summary judgment on 

Shum’s remaining state law claims. Shum filed his first 

appeal with this court. We vacated the judgment, reversed the dismissal of the unjust enrichment claim, and 

remanded for further proceedings. Shum v. Intel Corp., 

499 F.3d 1272, 1275 (Fed. Cir. 2007). We held that on 

remand Shum was entitled to a jury trial on his state law 

claims prior to any determination of his inventorship 

claims because his inventorship claims and state law 

claims shared common factual issues. We also reinstated 

Shum’s unjust enrichment claim because it was not 

duplicative or dependent on his fraudulent concealment 

claim. Id. at 1279-80. 
SHUM v. INTEL CORPORATION 12

Before the case was tried to a jury on remand, defendants again moved for summary judgment on Shum’s 

inventorship claims and some of his state law claims. The 

district court granted defendants’ motion with respect to 

Shum’s breach of fiduciary and fraudulent concealment 

claims. At trial, Shum withdrew his correction of inventorship claims with respect to the ’2726 patent before the 

close of evidence and limited his claims with respect to 

the remaining six patents to co-inventorship, thus abandoning his prior, alternative claim for sole inventorship. 

The jury heard testimony and saw extensive documentary 

evidence regarding these remaining inventorship claims 

and the state law claims for intentional misrepresentation, breach of contract, and unjust enrichment. 

The jury found that Shum was the co-inventor of some 

claims in five of the six contested patents.3 For the ’427 

patent, the jury found that Shum was not the co-inventor 

of all claims except claim 1, as to which it deadlocked. 

The jury also failed to reach a verdict as to claim 5 of the 

’724 patent and Shum’s state law claims for intentional 

misrepresentation, breach of contract, and unjust enrichment. 

The district court declared a mistrial for the claims on 

which the jury failed to reach a verdict. After declaring a 

mistrial, the district court entertained defendants’ motion 

 3 For the ’567 patent, the jury found Shum was the 

co-inventor of claims 1, 6, 7, 8, 11, and 18. For the ’268 

patent, the jury found Shum was the co-inventor of claims 

1, 4, 12, 13, and 26. For the ’950 patent, Shum was found 

to be the co-inventor of claims 1, 2, 14, and 29. For the 

’726 patent, Shum was found to be the co-inventor of 

claims 1, 2, 5, and 8. For the ’724 patent, the jury found 

Shum was the co-inventor of claims 1, 7, 14, and 16. 
13 SHUM v. INTEL CORPORATION

for judgment as a matter of law. It then entered judgment for Shum on his co-inventorship claims for the five 

patents on which the jury reached a verdict. On the 

remaining claims, the court entered judgment for defendants. In support of its grant of post-verdict JMOL, the 

district court concluded that a reasonable jury could not 

find for Shum on these state law claims or the remaining 

co-inventorship claims as to the ’427 and ’724 patents. 

Shum now appeals. We have jurisdiction pursuant to 

28 U.S.C. § 1295(a)(1).4

ANALYSIS

We review grants of summary judgment and postverdict JMOL on state law claims under the law of the 

regional circuit, since they present procedural issues not 

unique to patent law. Koninklijke Philips Elects. N.V. v. 

Cardiac Sci. Operating Co., 590 F.3d 1326, 1332 (Fed. Cir. 

2010). Here, Ninth Circuit law applies. 

Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and 

 4 Here, as in his companion appeal, Shum asserts 

that there is a significant question as to whether subject 

matter jurisdiction is lacking under this court’s decision 

in Larson v. Correct Craft, Inc., 569 F.3d 1319 (Fed. Cir. 

2009). In both instances, Shum’s argument lacks merit 

for the same reason: because his state law claims necessarily involve a substantial question of federal patent law, 

inventorship, the district court had subject matter jurisdiction. See Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 808-09 (1988). Further, Shum has not 

assigned away all of his financial interest in the patents, 

making him unlike the plaintiff in Larson, where the 

correction of inventorship claims were the sole basis for 

the district court’s subject matter jurisdiction. 
SHUM v. INTEL CORPORATION 14

any affidavits show that there is no genuine issue as to 

any material fact and that the movant is entitled to 

judgment as a matter of law.” Fed. R. Civ. P. 56(c). A 

“material” fact is one that is relevant to an element of a 

claim or defense and whose existence might affect the 

outcome of the suit. T.W. Elec. Serv., Inc. v. Pac. Elec. 

Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987). If 

the moving party meets its burden of establishing that 

there is no genuine issue of material fact and is entitled to 

judgment as a matter of law, then the burden shifts to the 

nonmoving party to set forth specific facts showing that 

there is a genuine issue for trial. Id.

Judgment as a matter of law is proper “[i]f a party has 

been fully heard on an issue during a jury trial and the 

court finds that a reasonable jury would not have a legally 

sufficient evidentiary basis to find for the party on that 

issue.” Fed. R. Civ. P. 50(a). The court may “grant a 

motion for judgment as a matter of law against the party 

on a claim or defense that, under the controlling law, can 

be maintained or defeated only with a favorable finding 

on that issue.” Id. A jury’s inability to reach a verdict 

does not necessarily preclude a judgment as a matter of 

law. Headwaters Forest Def. v. Cnty. of Humboldt, 240 

F.3d 1185, 1197 (9th Cir. 2000). The question is 

“‘whether the evidence, construed in the light most favorable to the non-moving party, permits only one reasonable 

conclusion.’” White v. Ford Motor Co., 312 F.3d 998, 1010 

(9th Cir. 2002). 

On appeal Shum challenges the district court’s grant 

of summary judgment on his breach of fiduciary duty and 

fraudulent concealment claims, as well as its grant of 

post-verdict JMOL on his claims for intentional misrepresentation, breach of contract, unjust enrichment, and coinventorship of the ’427 and ’724 patents. In support of 
15 SHUM v. INTEL CORPORATION

his request for a new trial, Shum argues that various 

evidentiary rulings were erroneous and prejudicial. 

We address each of these issues in turn. 

I. Breach of Fiduciary Duty 

A necessary predicate for claiming breach of a fiduciary duty is showing that such a duty exists. Under California law, moreover, fiduciary duties do not arise or exist 

untethered from particular relationships or special factual circumstances. 

A fiduciary duty exists in certain technical, legal relationships. Particular relationships giving rise to the duty 

include attorney-client, trustee-beneficiary, guardianward, or principal-agent. Richelle L. v. Roman Catholic 

Archbishop, 106 Cal. App. 4th 257, 271 (2003). Outside of 

these long-recognized categories, California state courts 

have largely declined to find that a fiduciary duty exists. 

Oakland Raiders v. Nat’l Football League, 131 Cal. App. 

4th 621, 633 (2005). For example, a fiduciary duty does 

not arise between equal shareholders in a corporation 

merely by virtue of their legal relationship as shareholders. There is similarly no duty even if they also serve as 

directors or officers of the corporation. Persson v. Smart 

Inventions, Inc., 125 Cal. App. 4th 1141, 1156-59 (2005). 

Outside of “technical, legal relationships,” certain factual circumstances surrounding a “confidential relationship” may give rise to a fiduciary relationship, with 

attendant fiduciary duties. Id. at 1159-62. A confidential 

relationship may arise when one party reposes trust and 

confidence in another who is aware of that fact. In order 

for that confidential relationship to also qualify as a 

fiduciary relationship, four additional requirements must 
SHUM v. INTEL CORPORATION 16

be met. First, one party must be vulnerable. Second, that 

vulnerability must result in the empowerment of the 

stronger party by the weaker. Third, that empowerment 

must have been solicited or accepted by the stronger 

party. Fourth, the empowerment must prevent the 

weaker party from effectively protecting itself. Id. at 

1161; see also City of Hope Nat’l Med. Ctr. v. Genentech, 

Inc., 43 Cal. 4th 375, 388 (2008). 

On appeal, Shum argues that the district court erred 

in granting summary judgment for defendants with 

respect to his breach of fiduciary duty claim. As he did 

below, on appeal Shum argues that Verdiell breached the 

fiduciary duty that Verdiell owed to Radiance as an officer 

of the corporation, as well as the fiduciary duty Verdiell 

owed to Shum as a joint collaborator and equal shareholder in Radiance. 

The district court rejected both of Shum’s theories. 

Assuming that Shum would have standing to sue for any 

breach of fiduciary duty that Verdiell owed to Radiance, 

the district court nevertheless noted that Verdiell’s conduct in obtaining the LightLogic patents occurred after 

Radiance’s formal dissolution, at a time when Radiance 

no longer existed (and thus was no longer owed a duty by 

Verdiell). 

Further, the district court noted that the POL expressly permitted both Verdiell and Shum to engage in 

activities “in competition with the business of the Corporation [Radiance].” Shum v. Intel Corp., 630 F. Supp. 2d 

1063, 1070 (N.D. Cal. 2009). As for Verdiell’s activities 

before Radiance’s dissolution, the district court found that 

under California law “plans and activities to dissolve and 

compete with an existing business . . . do not, of themselves, constitute a breach of any fiduciary duty.” Shum 
17 SHUM v. INTEL CORPORATION

v. Intel Corp., No. 02-03262, slip op. at 9 (N.D. Cal. Sept. 

26, 2008). 

The district court similarly found that Verdiell did not 

owe any fiduciary duty to Shum. Citing the California 

Court of Appeal’s decision in Persson, the district court 

concluded that Shum and Verdiell’s legal relationship as 

shareholders and co-officers of Radiance did not give rise 

to any fiduciary duty to each other. Id. Further, the 

district court found that the factual circumstances surrounding Shum and Verdiell’s relationship as joint collaborators did not establish a confidential relationship 

with attendant fiduciary duties. At minimum, the district 

court noted that Shum had produced no evidence of 

vulnerability or incapacity that might give rise to such a 

duty. Id. at 8. 

We agree that, under either theory, Shum’s claim for 

breach of fiduciary duty fails as a matter of law. 

Shum is correct that Verdiell owed a duty to Radiance 

as an officer of the corporation. Assuming, without deciding, that Verdiell did breach his fiduciary duty to Radiance, Shum still cannot maintain his claim because he 

lacks standing. Simply put, California law prohibits 

Shum from bringing an action in his personal capacity or 

capacity as a shareholder for a breach of duties owed to 

Radiance, a corporation. See Nelson v. Anderson, 84 Cal. 

Rptr. 2d 753, 762-63 (Ct. App. 1999); see also Cal. Corp. 

Code § 800; Anderson v. Derrick, 220 Cal. 770, 773 (1934). 

Here, the harms Shum alleges are the dissolution of 

Radiance and diminished value of Radiance’s intellectual 

property. Both of these are injuries to the corporation, 

not to Shum in his individual capacity as a shareholder. 

See Nelson, 84 Cal. Rptr. 2d at 761. Any damage to Shum 

is merely incidental to Radiance’s injury. See id.; see also
SHUM v. INTEL CORPORATION 18

Bader v. Anderson, 101 Cal. Rptr. 3d 821, 840-42 (Ct. 

App. 2009). To bring a claim on behalf of Radiance, Shum 

would have had to plead and satisfy California’s statutory 

requirements for a derivative action. Id. at 763-64. It is 

undisputed that Shum has not met these requirements. 

Accordingly, he has no standing to sue with regards to 

any duty that Verdiell owed to Radiance as an officer of 

the corporation. 

As for Shum’s second theory, Shum cannot establish 

that Verdiell owes him a fiduciary duty based on either a 

legal relationship or the factual circumstances of their 

joint collaboration while with Radiance. We agree with 

the district court that Verdiell and Shum are like the 

shareholders and co-officers in Persson. In Persson, the 

California Court of Appeal rejected Persson’s claim that 

the other shareholder and co-officer owed him a fiduciary 

duty. 125 Cal. App. 4th at 1159-62. We do the same here. 

The undisputed facts similarly fail to show the existence of a confidential relationship between Shum and 

Verdiell. Simply put, there is no evidence that their 

relationship while working together at Radiance was 

characterized by the type of vulnerability that might give 

rise to a fiduciary duty. Cf. Richelle L., 130 Cal. Rptr. 2d 

at 611. Shum is not elderly, underage, lacking education, 

or displaying a weakness of mind, grief, or sickness that 

might support an inference of vulnerability. Id. To the 

contrary, the record shows that Shum is highly educated, 

intimately familiar with the technology in question, and 

was represented by counsel at all relevant times. 

For these reasons, the district court properly granted 

summary judgment in favor of defendants on Shum’s 

breach of fiduciary duty claim. 
19 SHUM v. INTEL CORPORATION

II. Fraudulent Concealment 

Fraudulent concealment involves the “suppression of 

a fact, by one who is bound to disclose it, or who gives 

information of other facts which is likely to mislead by 

want of communication of that fact.” Cal. Civ. Code § 

1710(3); see also Rogers v. Warden, 20 Cal. 2d 286, 289 

(1942). Typically, a duty to disclose only arises when 

there is a fiduciary or confidential relationship between 

the parties. Warner Const. Corp. v. Los Angeles, 2 Cal. 3d 

285, 294 (1970). A duty may also arise, however, if the 

defendant (1) has exclusive knowledge of material facts 

that are not reasonably discoverable by the plaintiff, (2) 

actively conceals a material fact from the plaintiff, or (3) 

makes partial representations but suppresses other 

material facts, rendering the partial disclosure likely to 

mislead. Id.; see also LiMandri v. Judkins, 52 Cal. App. 

4th 326, 336-37 (1997). 

Before the district court, Shum’s fraudulent concealment claim was based on Verdiell’s failure to disclose that 

Verdiell was forming LightLogic, a corporation that would 

compete with Radiance. The district court granted summary judgment in favor of defendants, finding that Verdiell had no duty to disclose this fact, or any other 

potentially harmful facts, to Shum. In support of this 

conclusion, the district court emphasized that Verdiell 

owed Shum no fiduciary duty and no equivalent duty was 

created by the POL. 

On appeal, Shum continues to argue that Verdiell 

owed him a fiduciary duty because Shum was a shareholder of Radiance and Verdiell was an officer. In the 

alternative, Shum argues that Verdiell had exclusive 

knowledge of material facts which he actively concealed, 

giving rise to actionable fraud. Shum also appears to 
SHUM v. INTEL CORPORATION 20

argue that Verdiell made partial representations while 

suppressing other material facts, thus committing further 

fraud. 

We agree with the district court that Shum has not 

made out an actionable claim of fraudulent concealment. 

As explained above, Verdiell owed no fiduciary duty to 

Shum, and thus had no duty to disclose his plans to form 

LightLogic or compete with Radiance. As for Verdiell’s 

statement that Shum would have “equal rights” to exploit 

Radiance’s technology, that statement was true. Indeed, 

the plain language of the POL says exactly that. Similarly, the record does not support Shum’s contention that 

Verdiell had exclusive knowledge of how much Radiance 

or its technology was worth. It is undisputed that Shum 

was also talking to potential investors and had received 

valuation estimates; at minimum, Verdiell had access to 

no information that Shum could not have reasonably 

obtained, including estimates by the same venture capitalists. Shum has accordingly failed to meet his burden of 

showing what “other” material facts were actively suppressed or exclusively known by Verdiell. 

III. Unjust Enrichment 

Under California law, an unjust enrichment claim requires showing (1) receipt of a benefit (2) that is unjustly 

retained at the expense of another. Peterson v. Cellco 

P’ship, 164 Cal. App. 4th 1583, 1593 (2008). In other 

words, merely receiving a benefit from another is not 

enough; retention of that benefit must also be unjust due 

to some wrongful conduct by the receiving party. Cnty. of 

San Bernardino v. Walsh, 158 Cal. App. 4th 533, 542-43 

(2007). 
21 SHUM v. INTEL CORPORATION

In this case, Shum’s theory of unjust enrichment can 

be loosely summarized as follows: According to Shum, 

Verdiell and LightLogic engaged in wrongful conduct by 

falsely claiming exclusive ownership of the Radiance 

technology; these false claims of exclusivity were what 

induced (caused) Intel to buy LightLogic, resulting in the 

unjust enrichment of Verdiell and LightLogic at the 

expense of Shum and his rights in the technology. In this 

view, Verdiell and LightLogic were unjustly enriched by 

some, if not all, of the $409 million Intel paid for LightLogic, since Shum maintains that the sale would not have 

occurred but for Verdiell and LightLogic falsely claiming 

to have exclusive rights in the Radiance technology. 

Shum’s theory was presented to the jury, who could 

not reach a verdict on this claim. The district court 

subsequently granted post-verdict JMOL in favor of 

defendants. In support of this conclusion, the district 

court explained that Shum had failed to offer sufficient 

evidence to prove any element of his unjust enrichment 

claim. Specifically, the district court found that the 

record did not show that Verdiell or LightLogic engaged 

in any wrongful conduct, or that any alleged claims of 

exclusive rights were what caused Intel to buy LightLogic. 

On appeal, Shum renews the arguments he made below. In doing so, he places special emphasis on the premerger documents and analysis in which Intel emphasized LightLogic’s “ownership,” “proprietary” product, and 

“patent-pending” technology. 

We hold that post-verdict JMOL in favor of defendants was proper on Shum’s claim for unjust enrichment. 

Assuming, without deciding, that Verdiell and LightLogic 

engaged in “wrongful conduct” by making false statements claiming exclusive rights in the LightLogic patents, 
SHUM v. INTEL CORPORATION 22

no reasonable jury could find that these wrongful acts 

caused defendants to receive a benefit at Shum’s expense. 

See Peterson, 80 Cal. Rptr. 3d at 323. 

Causation is lacking because the record does not support Shum’s assertion that Intel purchased LightLogic 

because it was promised sole or exclusive rights in the 

Radiance technology. To the contrary, the Intel acquisition documents themselves acknowledge that the Radiance POL gave Verdiell and Shum “equal rights to 

independently exploit the intellectual property developed 

by Radiance Design, Inc., including the rights under the 

[’567 patent].” Intel also received a copy of the Radiance 

POL. Nothing in these documents suggests that Shum’s 

rights were limited to the ’567 patent; to the contrary, the 

Intel documents construe his rights as broadly and 

vaguely as the “intellectual property developed by [Radiance].” While the statements Shum cites concerning 

LightLogic’s “ownership,” “proprietary” product, and 

“patent-pending” technology suggest that Intel did want 

to assure that LightLogic had, and would continue to 

have, a right to use its technology, there is no mention 

that the sale was contingent on Verdiell and LightLogic 

having exclusive rights. Testimony by defendants’ witnesses similarly suggests that Intel was concerned with 

buying the right to use the LightLogic patents and technology, not exclusivity. The record thus refutes Shum’s 

contention that the promise of exclusive rights is what 

lured Intel to the bargaining table and ultimately caused 

it to purchase LightLogic; rather, the evidence shows that 

Intel knew it was purchasing LightLogic and LightLogic’s 

intellectual property subject to whatever rights Shum 

might also have in the Radiance technology. 

An additional, and equally fatal, flaw in Shum’s theory is the absence of evidence showing that defendants 
23 SHUM v. INTEL CORPORATION

received a benefit at Shum’s expense. While the evidence 

does show that LightLogic and Verdiell received $409 

million from Intel, there is no evidence that defendants 

received any benefit directly from Shum. Nor is there 

evidence that defendants received the $409 million from 

Intel at the expense of Shum’s right to independently 

exploit the Radiance technology or at any other cost to 

Shum. Indeed, Shum was not a party to the IntelLightLogic deal, nor is there any evidence that Shum 

suffered any tangible loss as a result of Verdiell and 

LightLogic’s alleged wrongful acts. Shum’s apparent 

“injuries”—diminished bargaining power due to his laterestablished inventorship and inability to participate in 

the Intel-LightLogic deal—are speculative. Shum has not 

shown that he would have been a party to the deal or 

even had other negotiations fall through as a result of the 

alleged wrongful acts. While Verdiell and LightLogic 

certainly benefited from the Intel-LightLogic deal, there is 

no evidence they did so at Shum’s expense. Cf. MajorBlakeney Corp. v. Jenkins, 263 P.2d 655, 664 (Cal. Ct. 

App. 1953). 

For these reasons, post-verdict JMOL was proper. 

IV. Breach of Contract 

Under California law, a breach of contract claim requires showing four things: (1) a contract existed; (2) the 

plaintiff performed his duties under the contract or was 

excused from nonperformance; (3) the defendant breached 

the contract; (4) the plaintiff suffered damages as a result 

of defendant’s breach. Wall St. Network, Ltd. v. N.Y. 

Times Co., 164 Cal. App. 4th 1171, 1178 (2008). 
SHUM v. INTEL CORPORATION 24

Prior to its grant of post-verdict JMOL on this claim, 

the district court interpreted various sections of the 

Radiance POL. Two of these provisions are relevant here. 

The section titled “Business Activities of the Officers 

and Directors” states: 

Shum and Verdiell acknowledge and agree that, 

after the approval of this Plan [POL], each shall 

be entitled, without any liability or duty to account to [Radiance] or to the other, to pursue any 

and all such other business activities as they shall 

desire, even if such activities are in competition 

with the business of [Radiance] and even if they 

take, or attempt to take, a business opportunity 

that [Radiance] could have itself pursued. 

The district court construed this provision of the POL as 

eliminating any liability between Shum and Verdiell 

based on the “business activities” by either Shum or 

Verdiell in any commercial exploitation of the Radiance 

technology. It also concluded that the provision allowed 

Shum and Verdiell to compete with each other without 

giving notice or accounting for profits. The district court 

further held that the POL eliminated any liability between Shum and Verdiell based on either party obtaining 

a lawful patent related to the intellectual property developed at Radiance. 

The district court also interpreted a section of the Radiance POL titled “Distribution of Property.” It provides 

that “Verdiell and Shum shall have equal rights to independently exploit the intellectual property developed by 

[Radiance].” The district court construed this provision as 

entitling Shum and Verdiell to lawfully patent any of 
25 SHUM v. INTEL CORPORATION

their own inventions in the intellectual property belonging to Radiance. 

Both before the district court and on appeal, Shum 

argues that Verdiell (and LightLogic) breached the express terms of the POL. According to Shum, defendants 

also breached the attendant implied duty of good faith 

and fair dealing by applying for and obtaining the LightLogic patents without listing Shum as a co-inventor. 

Shum set out this theory at trial in arguing that defendants breached the POL. After the jury deadlocked on 

the breach of contract claim, the district court granted 

post-verdict JMOL in favor of defendants. Based on its 

interpretation of the POL, the district court found that 

Shum failed to prove this claim as a matter of law. 

Based on its conclusion that the POL gave Shum and 

Verdiell the right to lawfully patent any Radiance technology that belonged to them individually, the district 

court reasoned that Verdiell could only breach the POL if 

Verdiell unlawfully obtained a patent. According to the 

district court, because Verdiell was at least the undisputed co-inventor of all the LightLogic patents, Verdiell’s 

conduct in obtaining the patents could only have been 

unlawful if Verdiell knew that Shum was a co-inventor 

and omitted Shum’s name with the intent to mislead the 

United States Patent and Trademark Office (“PTO”) as to 

the true inventor of the patent. 

The district court also found that Shum’s breach of 

contract claim failed for the separate, independent reason 

that Shum presented no evidence that he was harmed as 

the result of the alleged breach of the POL. Noting that 

California law requires a showing of damages in a breach 

of contract case to be actionable, the district court con-
SHUM v. INTEL CORPORATION 26

cluded that Shum’s asserted harm—failure to have his 

rights bought out by Verdiell or LightLogic—was too 

speculative, given that Verdiell had no duty to buy any 

rights from Shum. 

We agree that defendants were entitled to postverdict JMOL on Shum’s breach of contract claims because, at minimum, Shum has offered no evidence that 

Verdiell’s alleged breach caused any harm. The record 

shows that Shum abandoned efforts to exploit the Radiance technology in 1998, long before the LightLogic patents issued and before most had even been filed. 

Moreover, there is no evidence that Shum suffered financial harm by being omitted from the patents as a coinventor. Shum’s inclusion would not have entitled him 

to proceeds from the Intel-LightLogic deal, since Verdiell 

was allowed to sell his rights without any duty to account 

to Shum. 35 U.S.C. § 262. Nor did Verdiell have any 

duty under the POL to buy out Shum before forming 

LightLogic or inking the Intel-LightLogic transaction. 

Finally, there is no evidence that Shum tried to acquire 

patents covering the same subject matter or sought to 

exploit the covered technology in any way that was impeded or prevented by his omission from the patents. 

V. Intentional Misrepresentation 

A party is liable for intentional misrepresentation if 

(1) the defendant represented to plaintiff that an important fact was true; (2) that representation was false; (3) 

the defendant knew the representation was false when 

the defendant made it, or made it recklessly and without 

regard for its truth; (4) the defendant intended the plaintiff to rely on the representation; (5) the plaintiff did 

reasonably rely on the representation; (6) the plaintiff 
27 SHUM v. INTEL CORPORATION

was harmed; (7) the plaintiff’s reliance on defendant’s 

representation was a substantial factor in causing the 

harm to the plaintiff. Manderville v. PCG & S Grp., Inc., 

146 Cal. App. 4th 1496, 1498 (2007); see also Cal. Civ. 

Code §§ 1709, 1710; Lazar v. Superior Court, 12 Cal. 4th 

631, 638 (1996).

At trial, Shum’s intentional misrepresentation claim 

was based on Verdiell’s statement to Shum in 1997 that 

the Radiance patent application was invalid and had to be 

withdrawn.5 Shum presented this theory, and only this 

theory, at trial. As with Shum’s other state law claims, 

 5 Shum argues on appeal that the district court 

“improperly eviscerated” his intentional misrepresentation claim by limiting it to Verdiell’s 1997 statement. We 

disagree. 

The district court did not abuse its discretion by requiring Shum to state with particularity which statements this cause of action rested upon. As with any other 

claim alleging fraud, Shum was subject to a heightened 

pleading standard under both state and federal law. Fed. 

R. Civ. P. 9(b); see also Conrad v. Bank of Am., 45 Cal. 

App. 4th 133, 156 (1996) (“In order to establish a cause of 

action for fraud a plaintiff must plead and prove in full, 

factually and specifically, all of the elements of the cause 

of action. General and conclusory claims of fraud will not 

suffice.”) 

As relevant here, Rule 9 requires a plaintiff to state 

with particularity the basis for his claims. In this case, 

the record shows that it was Shum’s attorney, not the 

district court, who limited Shum’s intentional misrepresentation claim at trial to Verdiell’s 1997 statement. 

While Shum may now be suffering buyer’s remorse for 

choosing only this statement, we can discern no error on 

the district court’s part. In light of the particularity 

requirement for claims grounded in fraud, Shum was 

required to disclose the factual basis for his intentional 

misrepresentation claim; he could not lie in the weeds, 

obfuscate until a jury was empanelled, then pounce. 
SHUM v. INTEL CORPORATION 28

the jury was unable to reach a verdict. The district court 

then granted post-verdict JMOL in favor of defendants. It 

found that the intentional misrepresentation claim failed 

as a matter of law because Shum had not shown that 

Verdiell’s statement was false or that Shum was harmed 

as a result of the alleged misrepresentation. 

We agree with the district court that post-verdict 

JMOL on this claim was proper because Shum has not 

shown that he suffered any monetary loss as a result of 

Verdiell’s alleged misrepresentation, a necessary element 

under California law. Cal. Civ. Code § 3333; Strebel v. 

Brenlar Invs., Inc., 135 Cal. App. 4th 740, 749 (2006). 

IV. Correction of Inventorship for the ’427 and ’724 

Patents 

Inventorship is a question of law we review without 

deference. Ethicon Inc. v. U.S. Surgical Corp., 135 F.3d 

1456, 1460 (Fed. Cir. 1998). Because the inventors named 

on the issued patent are presumed to be correct, a person 

seeking to add his name “must meet the heavy burden of 

proving its case by clear and convincing evidence.” Eli 

Lilly & Co. v. Aradigm Corp., 376 F.3d 1352, 1358 (Fed. 

Cir. 2004). A joint inventor “must contribute in some 

significant manner to the conception or reduction to 

practice of the invention [and] make a contribution to the 

claimed invention that is not insignificant in quality, 

when that contribution is measured against the dimension of the full invention.” Narton Corp. v. Schukra 

U.S.A. Inc., 558 F.3d 1352, 1356 (Fed. Cir. 2009); see also

Fina Oil & Chem. Co. v. Ewen, 123 F.3d 1466, 1473 (Fed. 

Cir. 1997). 

Here, Shum’s correction of inventorship claims for 

both patents turn on the question of Shum’s contribution 
29 SHUM v. INTEL CORPORATION

to the idea of adding a second pair of legs to the flexure 

described in other claims of those respective patents. We 

agree with the district court that the evidence Shum cites 

from March 1997 does not show a second pair of legs, 

while the later drawings and evidence from June 1997 are 

past the point of conception. The district court correctly 

granted post-verdict JMOL with respect to claim 1 of the 

’724 patent and claim 5 of the ’427 patent. 

VII. Evidentiary Rulings 

In support of his request for a new trial, Shum argues 

that various rulings by the district court before and 

during trial were erroneous and prejudicial. 

Our review of the record does not show that the district court abused its wide discretion in limiting the use of 

Intel’s interrogatory answers to only Intel, the party that 

provided them. Similarly, the district court properly 

admitted the testimony of defendants’ experts regarding 

the effect of PTO assignments. Shum’s quarrel with the 

opinions goes to the weight the opinions warranted, not 

their admissibility. To the extent language in the assignments themselves contradicted the experts’ opinions, 

Shum was free, as he did, to bring out such contradictions 

on cross examination. Nor was it unreasonable for the 

district court to limit the scope of discovery when reopening the record on remand, particularly given that there 

had already been ample opportunity to develop the record. 

Finally, we reject Shum’s general challenge to the jury 

instructions, which lacked detail both as to the nature of 

the error and resulting prejudice. 

CONCLUSION

Because Shum has not identified any genuine issues 
SHUM v. INTEL CORPORATION 30

of material fact with respect to his breach of fiduciary 

duty or fraudulent concealment claims, we affirm the 

district court’s grant of summary judgment as to them. 

We also affirm the district court’s grant of post-verdict 

JMOL on Shum’s claims for unjust enrichment, breach of 

contract, intentional misrepresentation, and correction of 

inventorship for the ’472 and ’724 patents. Shum has not 

presented sufficient evidence that would allow a reasonable jury to find for him on those claims. 

AFFIRMED 
United States Court of Appeals 

for the Federal Circuit 

__________________________ 

FRANK T. SHUM, 

Plaintiff-Appellant, 

v. 

INTEL CORPORATION, LIGHTLOGIC, INC., 

AND JEAN-MARC VERDIELL, 

Defendants-Cross Appellants. 

__________________________ 

2009-1385,-1419 

__________________________ 

Appeal from the United States District Court for the 

Northern District of California in Case No. 02-CV-3262, 

Senior Judge D. Lowell Jensen. 

__________________________ 

NEWMAN, Circuit Judge, dissenting. 

The jury verdict was that Frank T. Shum is the joint 

inventor, and thus owner in common, of five of the six 

patents presented to the jury. The jury was deadlocked as 

to the award of damages on the counts that related to 

issues of fraud, misrepresentation, unjust enrichment, 

and breach of fiduciary duty. The district court entered 

judgment as to Shum’s joint inventorship, and granted 

judgment as a matter of law as to all of the deadlocked 

counts. It cannot be said that no reasonable jury could 

have found any of the liability issues in favor of Shum, for 

some jurors did find in his favor, although not unanimously. It is relevant that the jury had already found 
SHUM v. INTEL CORPORATION 2

unanimously in favor of Shum as to joint inventorship, 

which was the foundation of the issues related to damages. In these circumstances, it was improper for the 

district court, and now this court, to make their own 

findings of disputed material fact on traditional jury 

questions. That a jury is deadlocked does not convert fact 

into law, and the constitutional right is not negated when 

the jury is deadlocked. See Union Pac. R.R. Co. v. Bridal 

Veil Lumber Co., 219 F.2d 825, 832 (9th Cir. 1955) (“To do 

other than send the case back for a new trial when a 

decision on a vital issue by the jury is missing would 

deprive the parties of the jury trial to which they are 

entitled constitutionally.”). From my colleagues’ endorsement of and participation in this improper procedure, I respectfully dissent. 

A 

THE PRETRIAL SUMMARY JUDGMENTS

Before the jury trial, and thus before the verdict of 

joint inventorship, the district court granted summary 

judgments as to the counts of breach of fiduciary duties 

and fraudulent concealment. 

Breach of Fiduciary Duties 

This summary judgment was predicated on the duties 

that Verdiell owed to Radiance and to Shum, who was the 

only other owner of Radiance. Shum’s position was that 

Verdiell violated his fiduciary duties when he appropriated Shum’s inventions as his own and patented their 

joint technology as his sole and exclusive property. Shum 

points out that Verdiell filed his first patent application, 

in his sole name, one day after the Plan of Liquidation of 

Radiance was executed. The district court held, on summary judgment, that there was no fiduciary obligation as 
3 SHUM v. INTEL CORPORATION

a matter of law, citing Persson v. Smart Inventions, Inc., 

125 Cal. App. 4th 1141 (2005). 

The ruling in Persson was misapplied. Persson involved two equal shareholders who parted ways, and then 

one went on to exploit an opportunity he had not revealed 

when he bought out the other. The court ruled that no 

fiduciary duties were owed. Id. at 1156-59. Shum argues 

that there is a significant factual difference, for Verdiell 

didn’t simply exploit an opportunity on which he had 

remained silent, but did so by patenting Shum’s inventions as his own. The district court held that Verdiell’s 

activities were permitted by the Plan of Liquidation, 

which gave both him and Shum the right to use the 

Radiance technology. 

Shum argues that the Plan of Liquidation did not authorize Verdiell to appropriate the sole and exclusive right 

to Shum’s inventions. Shum states that under California 

law, former officers of a company continue to owe duties of 

fair dealing, citing ViChip Corp. v. Lee, 438 F. Supp. 2d 

1087, 1100 (N.D. Cal. 2006) (duty violated when an officer 

who had been asked to step down destroyed certain 

documents), and Fox v. Abrams, 163 Cal. App. 3d 610, 617 

(1985) (recognizing post-dissolution fiduciary obligations). 

Shum stresses that Verdiell’s breaching conduct was not 

that he continued the Radiance business, but that he 

patented Shum’s inventive contributions as his sole 

invention and exclusive property. 

Breach of fiduciary duty is a question of fact. See City 

of Hope Nat’l Med. Ctr. v. Genentech, Inc., 43 Cal. 4th 375, 

391 (2008) (the existence of a fiduciary duty depends on 

the facts and circumstances of each case). Summary 

judgment of disputed factual questions is proper only if 

the evidence, construed in the light most favorable to the 

non-movant, nonetheless requires that the movant must 
SHUM v. INTEL CORPORATION 4

prevail. Ybarra v. Reno Thunderbird Mobile Home Vill., 

723 F.2d 675, 677 (9th Cir. 1984); see also, Anderson v. 

Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (on motion 

for summary judgment “the evidence of the nonmovant is 

to be believed, and all justifiable inferences are to be 

drawn in his favor”). This summary judgment motion 

was decided before the jury had found that Shum was a 

joint inventor, a finding material to this aspect of fiduciary duty. A reasonable jury could have found this issue in 

favor of Shum; thus summary judgment was improperly 

granted, and is incorrectly sustained by the panel majority. 

Fraudulent Concealment

The district court also granted summary judgment 

that there was no fraudulent concealment, again before 

the jury found the joint inventorship of these five patents 

on the Radiance technology, and even though the question 

of inventorship was at the core of the asserted fraudulent 

concealment. 

Under California law, fraudulent concealment requires “the suppression of a fact, by one who is bound to 

disclose it, or who gives information of other facts which 

are likely to mislead for want of communication of that 

fact.” Cal. Civ. Code §1710(3). Shum’s fraudulent concealment claim focused on Verdiell’s concealment of 

Shum’s inventive contributions and thereby patenting of 

the joint technology as Verdiell’s exclusive property. The 

Plan of Liquidation cannot be construed as intending to 

authorize Verdiell to curtail Shum’s equal rights in the 

Radiance technology, by falsely claiming exclusive patent 

rights in the technology. Disputed factual questions could 

not be resolved adversely to Shum on summary judgment, 

by the district court and this court. See Matsushita Elec. 

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) 
5 SHUM v. INTEL CORPORATION

(on motion for summary judgment the court must view 

the facts in the light most favorable to the non-moving 

party and give it the benefit of all reasonable inferences to 

be drawn from those facts). 

B 

THE DEADLOCK AT TRIAL

The jury was unable to reach a verdict on the questions of liability and damages. The district court then 

granted judgment as a matter of law on all of the issues of 

liability and damages. Shum states that he is entitled to 

a new trial on these issues, and points out that he was 

denied discovery on some aspects on which the district 

court later criticized the absence of evidence. 

Shum presented several theories of liability, as were 

discussed by the district court in its grant of JMOL. 

Unjust Enrichment 

Under California law, unjust enrichment requires unjust receipt of a benefit and its wrongful retention. Peterson v. Cellco P’ship, 164 Cal. App. 4th 1583, 1593 (2008); 

Lectrodryer v. Seoulbank, 77 Cal. App. 4th 723, 726 (2000) 

(confirming right to jury trial on unjust enrichment 

claim). After the jury deadlocked, the district court 

decided this issue adversely to Shum “as a matter of law.” 

Shum states that there was substantial evidence 

whereby a reasonable jury could have found that Verdiell 

was unjustly enriched based on Verdiell’s false claims of 

sole inventorship. Shum points to Verdiell’s assertions of 

exclusive patent rights, starting with the patent applications where Verdiell declared his sole inventorship when 

filing the applications, followed by Verdiell’s representations on assigning the patent applications to LightLogic in 

which he averred that “[a]ssignor is the sole and lawful 
SHUM v. INTEL CORPORATION 6

owner of the entire right, title, and interest in and to said 

inventions.” LightLogic in turn described itself as the 

“sole and exclusive owner” of these patents, and duly 

assigned this purported entire and exclusive right to 

Intel. Shum also pointed to other acquisition documents 

that referred to LightLogic’s ownership, proprietary 

products, and patented technology. 

A reasonable jury could have found that Verdiell obtained and retained an unjust benefit from these misrepresentations. See County of Solano v. Vallejo Redev. 

Agency, 75 Cal. App. 4th 1262, 1278 (1999) (the term 

“benefit” for unjust enrichment “denotes any form of 

advantage”). My colleagues on this panel hold that Shum 

was required to prove that “the promise of exclusive 

rights is what lured Intel to the bargaining table and 

ultimately caused it to purchase LightLogic.” Maj. Op. at 

22. That is incorrect; Shum need not prove that but for 

the falsehood there would have been no transaction at all. 

My colleagues’ argument that “there is no mention that 

the sale was contingent on Verdiell and LightLogic having 

exclusive rights” does not control whether Verdiell and 

LightLogic were unjustly enriched by the misrepresentations of exclusivity. Shum points to the trial court’s 

statement, in colloquy with counsel, that for the defendants to argue that Intel did not value the patent ownership would be “crazy.” Transcript of Proceedings held on 

December 1, 2008 at 2193 ln.18, Shum v. Intel Corp., No. 

C 02-3262 (N.D. Cal. April 29, 2009). 

The district court, and now my colleagues, err in deciding the question of unjust enrichment adversely to 

Shum “as a matter of law.” The question of whether these 

patents were of value in the transaction is factual, and 

was deemed material by both the district court and my 

colleagues; however, Intel declined to produce, and the 

district court refused to compel, Intel documents poten-
7 SHUM v. INTEL CORPORATION

tially relevant to this question. A reasonable jury could 

have found that patent exclusivity was valued, and that 

Verdiell and LightLogic were unjustly enriched. When 

the jury could not reach a verdict, the appropriate step 

was a new trial. See Wahpeton Canvas Co. v. Frontier, 

Inc., 870 F.2d 1546, 1555 (Fed. Cir. 1989) (vacating judgment and remanding for a new trial where the jury did 

not return answers on vital issues). 

Breach of Contract

Shum argues that Verdiell breached the Plan of Liquidation, and its implied duty of good faith and fair dealing between contracting parties, by obtaining exclusive 

rights to the Radiance technology in which Shum was 

intended to have equal rights. The district court held that 

“as a matter of law” there could be no breach of contract 

unless the false inventorship claims were made with 

deceptive intent. That is not the law. It is hornbook law 

that a contract may be breached whether or not there was 

deceptive intent. See New York Life Ins. Co. v. Viglas, 297 

U.S. 672, 678 (1936); Trauma Service Group v. U.S., 104 

F.3d 1321, 1325 (Fed. Cir. 1997) (“a breach of contract is a 

failure to perform a contractual duty when it is due”). 

My colleagues reason that there was no breach because Shum did not “suffer[] financial harm by being 

omitted from the patents as a co-inventor.” Maj. Op. at 

26. That too is not the law of contracts. See Restatement 

2d of Contracts §235(2) (1981) (“When performance of a 

duty under a contract is due any non-performance is a 

breach.”); 11-55 Corbin on Contracts §55.10 (2010) (“a 

breach of contract that causes no injury is still a wrong to 

the other contracting party”); 23 Williston on Contracts 

§63:1 (4th ed. 2010) (“a breach of contract is a failure, 

without legal excuse, to perform any promise that forms 

the whole or part of a contract”). The availability or 
SHUM v. INTEL CORPORATION 8

nature of remedy does not decide whether the contract 

was breached. Restatement, supra, at §236, cmt. a (“Even 

if the injured party sustains no pecuniary loss or is unable 

to show such loss with sufficient certainty, he has at least 

a claim for nominal damages.”). 

Shum argues that while the Plan of Liquidation authorized both Shum and Verdiell to use the Radiance 

technology, the filing of patents by which Verdiell exclusively appropriated the Radiance technology was a breach 

of the Plan. A reasonable jury could have so found. On 

deadlock of the jury, it was improper for the district court, 

and again for this court on appeal, to decide these disputed factual questions “as a matter of law.” See Cal. v. 

Altus Fin. S.A., 540 F.3d 992, 1008-09 (9th Cir. 2008) 

(remanding for a new trial where the jury deadlocked on 

vital issues). 

Conclusion

The jury was presented with a complex of legal theories derived from the California Civil Code, not all of 

which are here discussed. The district court inappropriately terminated the proceedings “as a matter of law,” for 

there was sufficient evidence on which a jury could have 

found in favor of Shum on one or more liability theories. 

Shum is entitled to a retrial. From my colleagues’ improper elimination of this constitutional right, I respectfully dissent.