Align Technology, Inc. v. Tran

179 Cal. App. 4th 949, 102 Cal. Rptr. 3d 343 (2009)

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Align Technology, Inc. v. Tran

California Court of Appeal
179 Cal. App. 4th 949, 102 Cal. Rptr. 3d 343 (2009)

JL

Facts

Bao Tran (defendant) worked as an intellectual-property attorney for Align Technology (Align) (plaintiff), including drafting and prosecuting patent applications. Align fired Tran for using Align’s confidential information to help a competitor. In 2005, Align sued Tran and several others connected to the competitor for: (1) unfair competition, (2) trade-secret misappropriation, (3) breach of contract, (4) conversion, and (5) breach of loyalty. Tran filed a cross-claim against Align for: (1) wrongful termination and (2) breach of contract. These claims were all settled in 2006. Align also discovered that, between 2004 and 2005, Tran operated a law firm as a side business, filing roughly 10 times as many patent applications for his firm as he filed for Align. One of Tran’s side-business applications even used the exact language from an Align application. In 2008, Align sued Tran for this side-business activity, alleging: (1) breach of contract, (2) violation of fiduciary duties and duties of loyalty, and (3) conversion of corporate property. Tran demurred on the ground that Align had failed to bring these claims as compulsory counterclaims in the 2005 litigation. The trial court dismissed the claims without leave to amend. Align appealed to the California Court of Appeal.

Rule of Law

Issue

Holding and Reasoning (Duffy, J.)

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