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Vaughan Company v. Global Bio-Fuels Technology

November 15, 2012

VAUGHAN COMPANY, PLAINTIFF,
v.
GLOBAL BIO-FUELS TECHNOLOGY, LLC AND RICHARD BEHNKE, DEFENDANTS.



The opinion of the court was delivered by: David N. Hurd United States District Judge

MEMORANDUM--DECISION and ORDER

I. INTRODUCTION

Plaintiff Vaughan Company ("plaintiff" or "Vaughan") brings this action against defendants Global Bio-Fuels Technology, LLC ("Global") and Richard Behnke ("Behnke") (collectively "defendants"). Plaintiff asserts a total of nine causes of action-four patent infringement claims brought pursuant to 35 U.S.C. § 271 as well as state law claims for misappropriation of trade secrets, unfair competition, tortious interference with business relationships, conversion, and breach of fiduciary duty.

Defendants have filed a motion to dismiss the complaint in its entirety pursuant to Federal Rule of Civil Procedure 12(b)(6) and 12(b)(2). Defendants argue that all of plaintiff's causes of action fail to state a claim upon which relief can be granted, and personal jurisdiction over Behnke is lacking. Plaintiff has responded, and defendants replied. Oral argument was heard on November 7, 2012, in Utica, New York. Decision was reserved.

II. FACTUAL BACKGROUND

The following facts, taken from the complaint and documents attached thereto or incorporated by reference therein, are assumed true for purposes of this motion to dismiss. Vaughan, a company with its principal place of business in Washington state, designs and manufactures specialized pumps used in wastewater treatment facilities. Behnke, a Minnesota resident, began working for Vaughan in 2000.*fn1 Through his employment Behnke had access to a wide range of Vaughan's internal company information, including product design, manufacturing techniques, customer lists, and marketing strategies. While on business trips to Europe in May 2008 and February 2010, Behnke took three photographs to use in Vaughan marketing ads. A different Vaughan employee took three additional photographs for Vaughan in Italy in 2011.

In June 2010-while still employed by Vaughan-Behnke formed Global, a Minnesota company specializing in the design and manufacture of pump mixing systems similar to those of Vaughan. Behnke did not notify Vaughan about the formation of Global. Defendants have used all six of the aforementioned photographs in a marketing brochure, on Global's website, and in an August 2011 trademark application. Vaughan did not consent to the use of these photographs, which are the subject of a pending copyright application that Vaughan submitted in August 2012.

While conducting business for Vaughan, Behnke told Vaughan customers and consulting engineers that Vaughan was not properly implementing its pump systems. He also sold Global products to Vaughan customers while on business trips. Behnke resigned from Vaughan on November 10, 2011, and remains the owner and president of Global. Since his resignation, Behnke has refused to return his Vaughan laptop computer, which contains confidential company information. He has used this information to outbid Vaughan on projects in Indiana and Rensselaer County, New York. The Rensselaer project specifically requires the use of four equipment components that have been patented by Vaughan.

Defendants are currently using Vaughan contacts and internal company information to prepare bids for projects in Ohio and Cooperstown, New York. They have also been approved to submit bids for future projects in South Dakota. All of these project proposals utilize designs unique to Vaughan and system components patented by Vaughan.

III. DISCUSSION

Defendants assert that the complaint must be dismissed in its entirety because all of plaintiff's causes of action fail to state a claim upon which relief can be granted. Defendants also argue that personal jurisdiction over Behnke is lacking.

A. Motion to Dismiss-Legal Standard

To survive a Rule 12(b)(6) motion to dismiss, the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1965 (2007). A complaint need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). However, more than mere conclusions are required. Indeed, "[w]hile legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S. Ct. 1937, 1950 (2009). Dismissal is appropriate only where plaintiff has failed to provide some basis for the allegations that support the elements of his or her claims. See Twombly, 550 U.S. at 570, 127 S. Ct. at 1974 (requiring "only enough facts to state a claim to relief that is plausible on its face").

When considering a motion to dismiss, the complaint is to be construed liberally, and all reasonable inferences must be drawn in the plaintiff's favor. Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002). A district court may consider documents attached to the complaint as exhibits or incorporated by reference therein. DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010). As plaintiff specifically references and quotes from the request ...


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