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Nanoexa Corporation v. the University of Chicago and Uchicago

April 13, 2011

NANOEXA CORPORATION, PLAINTIFF,
v.
THE UNIVERSITY OF CHICAGO AND UCHICAGO ARGONNE, LLC, DEFENDANTS.



The opinion of the court was delivered by: Judge Feinerman

MEMORANDUM OPINION AND ORDER

Plaintiff NanoeXa Corporation brought this diversity action against The University of Chicago and UChicago Argonne, LLC (together, "Argonne"), alleging breach of contract, tortious interference with business relations, and defamation. Argonne has moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and 12(b)(7). The motion is granted in part, denied in part, and reserved in part.

Background

The facts alleged in the complaint are assumed true on a Rule 12(b)(6) motion. See Reger Dev., LLC v. Nat'l City Bank, 592 F.3d 759, 763 (7th Cir. 2010). Also pertinent at this stage are exhibits attached to the complaint, see Fed. R. Civ. P. 10(c); Witzke v. Femal, 376 F.3d 744, 749 (7th Cir. 2004), and documents "referred to" in the complaint and "central to [NanoeXa's] claim" that are attached as exhibits to Defendants' motion to dismiss, Wright v. Associated Ins. Cos. Inc., 29 F.3d 1244, 1248 (7th Cir. 1994). To the extent an exhibit contradicts the complaint's allegations, the exhibit takes precedence. See Forrest v. Universal Sav. Bank, F.A., 507 F.3d 540, 542 (7th Cir. 2007). In addition, orders entered and filings made in this and other courts are properly subject to judicial notice. See United States v. Stevens, 500 F.3d 625, 628 n.4 (7th Cir. 2007).

NanoeXa is a "technology R&D enterprise" that commercializes scientific research related to, among other things, batteries. Doc. 1 at ¶ 3. Argonne is a scientific laboratory that developed and patented certain lithium-ion technologies used in batteries, cell phones, and other technological products.

On June 1, 2006, NanoeXa and Argonne entered into a Patent Option and License Agreement (Doc. 1-1) that granted NanoeXa nonexclusive rights to Argonne's lithium-ion technologies. Article 3.2 provides that Argonne grants NanoeXa "a nonexclusive right and license to make, have made, use, sell, and offer for sale Licensed Products and Licensed Services in the Field of Use in the Territory, with no right to sublicense." The agreement defines "Field of Use" as "Lithium Ion Batteries"; defines "Licensed Products" as "any and all products produced using Licensed Methods and/or any and all products made, used or sold within the scope of any claim of Licensed Patents"; defines "Licensed Services" as "any service offered or performed by [NanoeXa] wherein any Licensed Methods are used or practiced other than to produce a Licensed Product"; and provides that a "Sale" "occur[s] when Licensed Products or Licensed Services are provided to a third party for other than evaluation purposes." Agreement, art. 2.1, 2.5, 2.6, 2.7. Article 15 provides that Argonne "may immediately terminate this Agreement upon any attempt by [NanoeXa] to transfer its interest, in whole or in part, in this Agreement to any other party without the written permission of [Argonne]." Article 14.2 provides that either party may terminate the agreement if the other defaults or breaches.

Using Argonne's licensed technology, NanoeXa proceeded to develop and market lithium-ion electrode material, a component of lithium-ion batteries. In June 2009, Argonne informed NanoeXa that its rights under the agreement were limited to manufacturing and selling actual lithium-ion batteries, and did not allow for the marketing or sale of lithium-ion electrode material. Doc. 1 at ¶ 29. At roughly the same time, Argonne contacted NanoeXa's prospective customers and told them "that NanoeXa did not have the right to sell the materials-related inventions described in detail in [Argonne's] Patents" and that NanoeXa lacked "a 'full license' to sell lithium-ion electrode material in the lithium-ion battery industry." Id. at ¶ 35. As a result, NanoeXa's relationships with prospective customers and distributors were severely damaged.

Id. at ¶¶ 38, 40.

NanoeXa originally filed suit against Argonne in federal court in California. NanoeXa v. Univ. of Chicago, No. 10-CV-2631-LHK (N.D. Cal.). On August 2, 2010, while that suit was pending, Argonne terminated the agreement for what it perceived to be NanoeXa's improper transfer of its rights under the agreement to its joint venture partner, LICO Technology, and their joint venture, EnerQuest Corporation. NanoeXa v. Univ. of Chicago, 2010 WL 3398532, at *3 (N.D. Cal. Aug. 27, 2010); Doc. 1 at ¶ 25. The suit then was dismissed for lack of personal jurisdiction. NanoeXa v. Univ. of Chicago, 2010 WL 4236855 (N.D. Cal. Oct. 21, 2010).

NanoeXa filed the present action on November 5, 2010, two weeks after the California suit was dismissed. The complaint has four counts: (1) a request for a declaration that the license agreement grants NanoeXa the right to design, develop, improve, make, and sell lithiumion electrode material, and not simply lithium ion batteries; (2) breach of contract; (3) tortious interference with business relations; and (4) defamation. Doc. 1 at ¶¶ 41-57. NanoeXa seeks a declaration, compensatory and punitive damages, fees, costs, and a permanent injunction barring Argonne from claiming that NanoeXa does not have the ability to develop and sell lithium-ion electrode material. Id. at 14-15.

Discussion

Argonne seeks to dismiss the complaint under Rule 12(b)(6) for failure to state a claim and under Rule 12(b)(7) for failure to join necessary and indispensable parties.

I. Rule 12(b)(6) Motion

To survive a Rule 12(b)(6) motion to dismiss, a complaint must overcome "two easy-to-clear hurdles": (1) it "must describe the claim in sufficient detail to give the defendant fair notice of what the claim is and the grounds on which it rests"; and (2) "its allegations must plausibly suggest that the plaintiff has the right to relief, raising that possibility above a speculative level." Tamayo v. Blagojevich, 526 F.3d 1074, 1084 (7th Cir. 2008) (internal quotation marks omitted). Where the well-pleaded facts "do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not shown-that the pleader is entitled to relief." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009) (internal quotation marks omitted). The court must ...


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