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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
`
`ENREACH TECHNOLOGY, INC., a Delaware
`corporation,
`Plaintiff,
`
`v.
`EMBEDDED INTERNET SOLUTIONS, INC.;
`SHENZHEN ZHUOZHUANG NETWORK
`TECHNOLOGY, INC.; GUOHONG XU; JING
`WU; EMBEDDED INTERNET SOLUTIONS
`HOLDINGS LTD.; ZHAOHENG HOLDINGS
`LTD.; GUOSHENG XU; ALPHASMART, INC.;
`CHANGHONG ELECTRONICS, LTD.; CIRRUS
`LOGIC, INC.; INVENTEC CORPORATION;
`KYOCERA WIRELESS CORPORATION; OPENTV
`CORPORATION; PHILIPS SEMICONDUCTOR
`INC.; and XOCECO LTD.,
`Defendants.
` /
`
`No. C 04-1255 CW
`ORDER DENYING
`PLAINTIFF'S
`MOTION FOR
`SUMMARY JUDGMENT,
`GRANTING IN PART
`AND DENYING IN
`PART THE EIS
`DEFENDANTS'
`MOTION FOR
`SUMMARY JUDGMENT,
`AND GRANTING IN
`PART AND STAYING
`IN PART THE
`CUSTOMER
`DEFENDANTS'
`MOTIONS FOR
`SUMMARY JUDGMENT
`
`Plaintiff Enreach Technology, Inc., has moved for summary
`adjudication of the first, second, sixth, seventh, eighth and tenth
`causes of action in its fourth amended complaint (FAC) against
`Defendants Embedded Internet Solutions, Inc. (EIS), ShenZhen
`ZhuoZhuang Network Technology, Inc., GuoHong Xu and Jing Wu (EIS
`Defendants). The EIS Defendants oppose the motion and cross-move
`for summary adjudication of the second, third, seventh, eighth,
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`Case4:04-cv-01255-CW Document269 Filed09/22/05 Page2 of 23
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`ninth and tenth causes of action in the FAC.1 In addition,
`Defendants Cirrus Logic, Inc. and AlphaSmart, Inc. jointly move for
`summary adjudication of the second, seventh, eighth and tenth
`causes of action in the FAC, and Cirrus Logic moves separately for
`summary adjudication of the seventh, eighth and tenth causes of
`action. Enreach opposes these motions. The matters were heard on
`August 12, 2005. Having considered the parties' papers, the
`evidence cited therein and oral argument on the motions, the Court
`DENIES Enreach's motion for summary judgment, GRANTS in part and
`DENIES in part the EIS Defendants' cross-motion for summary
`judgment, GRANTS in part and STAYS in part the motion for summary
`judgment filed jointly by Cirrus and AlphaSmart, and GRANTS in part
`and STAYS in part the motion for summary judgment filed by Cirrus.
`BACKGROUND
`Enreach develops and markets embedded software products,
`including interactive television services. Embedded software is a
`software program for microprocessors that are embedded in a variety
`of electronic products such as televisions and cellular telephones.
`Enreach's products are built around a common software platform
`called the MicroBrowser, or eBrowser. In late 1997, Xu and Wu
`began full-time employment at Enreach as software engineers. In
`1998, Xu was promoted to chief software architect. It is not
`disputed that at the time Xu and Wu began working for Enreach they
`signed an employee confidentiality and proprietary information
`agreement. That agreement stated, among other things, as follows:
`
`1 The EIS Defendants' motion for leave to file an amended
`cross-motion for summary judgment (Docket No. 195) is GRANTED.
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`I agree at all times during the term of my employment and
`during the two year period thereafter to hold in strictest
`confidence, and not to use, except for the benefit of the
`Company, or to divulge or disclose, directly or indirectly, to
`any person, corporation or other entity without written
`authorization of the Board of Directors of the Company, any
`non-published trade secrets, confidential knowledge, data or
`other proprietary information (collectively referred to as
`"Confidential Information") obtained by me during my
`employment with the Company relating to products, processes,
`know-how, designs, formulas, developmental or experimental
`work, computer programs, data bases, other original works of
`authorship, customer lists, business plans, financial
`information or other subject matter pertaining to any business
`of the Company. . . . I agree that I will promptly make full
`written disclosure to the Company, will hold in trust for the
`sole right and benefit of the Company, and will assign to the
`Company all my right, title, and interest in and to any and
`all inventions, discoveries, developments, improvements,
`technology, trade secrets, computer programs, know-how,
`designs, formulas, original works of authorship, or any other
`confidential materials, data, information or instructions,
`technical or otherwise and whether or not patentable or
`copyrightable and whether or not reduced to practice relating
`to the Company's business (collectively referred to as
`"Inventions") which I may solely or jointly conceive or
`develop or reduce to practice, or cause to be conceived or
`reduced to practice, during the period of time I am in the
`employ of the Company.
`The agreement also incorporated California Labor Code section 2870,
`which states as follows:
`Any provision in an employment agreement which provides that
`an employee shall assign, or offer to assign, any of his or
`her rights in an invention to his or her employer shall not
`apply to an invention that the employee developed entirely on
`his or her own without using the employer's equipment,
`supplies, facilities, or trade secret information except for
`those inventions that either: (1) Relate at the time of
`conception or reduction to practice of the invention to the
`employer's business, or actual or demonstrably anticipated
`research or development of the employer. (2) Result from any
`work performed by the employee for the employer.
`The parties do not dispute that, in late 1998 or early 1999,
`Xu began working on Enreach's MicroBrowser project. The EIS
`Defendants submit evidence which Enreach does not dispute that Xu
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`was never involved in the core design of the MicroBrowser source
`code.
`
`It is not disputed that, in January, 1999, Xu and Wu formed an
`Internet-based company called CyberAnts. It is also not disputed
`that shortly after Xu and Wu formed CyberAnts, and while Xu was
`still employed by Enreach, they began to develop and write source
`code for Internet browser applications. In his sworn declaration,
`Xu states that these browser applications were related to a web-
`based fitting room that would allow customers to order custom-
`tailored clothes online. Enreach does not dispute that it did not
`at the time develop any similar web-based applications. Also in
`his sworn declaration, Xu states that he initially developed the
`source code for these applications by downloading and then
`experimenting with public domain source code relating to the basic
`functionality of web-based applications and utility functions. He
`further states that he did not use the MicroBrowser source code in
`writing the generic source code for CyberAnts. The EIS Defendants
`submit evidence, which Enreach does not dispute, that Xu developed
`this source code during his personal time and using his personal
`computer equipment.
`Enreach proffers undisputed evidence that, on August 1, 1999,
`Xu and Wu changed the name of CyberAnts to EIS. Enreach also
`submits undisputed evidence that, on September 4, 1999, EIS
`completed an investment brochure which stated, among other things,
`that the company planned to become a leader in the market for
`embedded Internet browser products. The brochure also described in
`general terms several functions and features of EIS's browser; it
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`is not disputed that MicroBrowser contained functions and features
`similar to those described in EIS's brochure.
`On September 17, 1999, Xu left Enreach. It is not disputed
`that, when he left Enreach, Xu had a copy of the MicroBrowser
`source code on his personal laptop. The EIS Defendants submit
`undisputed evidence that Xu had copied the source code onto his
`laptop with Enreach's knowledge before he took a business trip to
`Germany on behalf of the company. On November 11, 1999, Wu left
`Enreach.
`According to Xu's declaration, he began to write source code
`for the EIS embedded Internet browser, called iPanel, only after he
`left Enreach, and EIS did not complete a working model of iPanel
`until June, 2000. It is not disputed that EIS received copyright
`registrations for nine modules of source code relating to iPanel in
`July, 2000. The EIS Defendants acknowledge that Xu had begun to
`write the source code contained in six of those modules prior to
`leaving Enreach, but Xu states that this source code was "extremely
`basic and performed only standard, utility functions found in any
`Internet program."
`Enreach submits evidence of similarities between iPanel and
`MicroBrowser; its expert, Yan Feng, states that iPanel has, among
`other things, similar modular structure, a similar method of flow
`control, and uses the same freeware vendors as does MicroBrowser.
`The EIS Defendants submit evidence through their expert Robert
`Wedig that only three files in the current EIS source code are
`"questionably similar" to files in the Enreach code, and this
`represents less than one-one hundredth of one percent of the number
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`of files in the EIS code and less than one-tenth of one percent of
`the number of files in the Enreach code.
`In early 2001, Enreach contacted the Santa Clara County
`District Attorney's Office seeking a criminal investigation of EIS
`and Xu. In June, 2001, an investigator from the District
`Attorney's Office interviewed Xu and several other EIS employees.
`During his interview, Xu stated that he had not used Enreach source
`code in creating source code for EIS and that he did not begin
`writing source code specifically for iPanel until after he left
`Enreach. The District Attorney's Office did not pursue criminal
`charges against Xu or EIS.
`It is not disputed that, in September, 2001, EIS released
`iPanel. Along with the nine copyright registrations, the iPanel
`core code is also the subject of several pending patent
`applications. Defendant ShenZhen ZhuoZhuang makes and sells iPanel
`products. AlphaSmart and Cirrus have licensed iPanel from EIS.
`Enreach filed its initial complaint against the EIS Defendants
`on March 30, 2004. In the FAC, which it filed on January 28, 2005,
`Enreach added AlphaSmart, Cirrus and several other Defendants which
`it alleges have licensed iPanel source code. The FAC alleges the
`following causes of action: (1) breach of contract (against Xu and
`Wu), (2) declaratory judgment that Enreach is the owner of the
`iPanel registrations (against all Defendants), (3) declaratory
`judgment that Enreach is the owner of the pending iPanel patent
`applications (against the EIS Defendants), (4) fraudulent
`concealment of inventions (against Xu and Wu), (5) breach of
`covenant of good faith and fair dealing (against Xu and Wu),
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`(6) breach of fiduciary duty (against Xu and Wu), (7) unjust
`enrichment (against all Defendants), (8) copyright infringement
`(against all Defendants), (9) unfair competition (against the EIS
`Defendants), and (10) unfair competition (against all Defendants).
`On February 18, 2005, Enreach filed its motion for summary
`judgment. On March 8, 2005, the Court granted a motion to continue
`the summary judgment hearing filed by the EIS Defendants and denied
`without prejudice as premature Enreach's summary judgment motion.
`At a case management conference on April 8, 2005, the Court
`reinstated Enreach's summary judgment motion and scheduled
`briefing. The Court also set November 18, 2005 as the fact
`discovery cut-off for the Defendants, including Cirrus and
`AlphaSmart, that were added in the FAC. On June 17, 2005, Cirrus
`and AlphaSmart filed their joint motion for summary judgment, and
`Cirrus filed its summary judgment motion.
`LEGAL STANDARD
`Summary judgment is properly granted when no genuine and
`disputed issues of material fact remain, and when, viewing the
`evidence most favorably to the non-moving party, the movant is
`clearly entitled to prevail as a matter of law. Fed. R. Civ. P.
`56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986);
`Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir.
`1987).
`The moving party bears the burden of showing that there is no
`material factual dispute. Therefore, the court must regard as true
`the opposing party's evidence, if supported by affidavits or other
`evidentiary material. Celotex, 477 U.S. at 324; Eisenberg, 815
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`F.2d at 1289. The court must draw all reasonable inferences in
`favor of the party against whom summary judgment is sought.
`Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
`587 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d
`1551, 1558 (9th Cir. 1991).
`Material facts which would preclude entry of summary judgment
`are those which, under applicable substantive law, may affect the
`outcome of the case. The substantive law will identify which facts
`are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
`(1986).
`Where the moving party does not bear the burden of proof on an
`issue at trial, the moving party may discharge its burden of
`showing that no genuine issue of material fact remains by
`demonstrating that "there is an absence of evidence to support the
`nonmoving party's case." Celotex, 477 U.S. at 325. The moving
`party is not required to produce evidence showing the absence of a
`material fact on such issues, nor must the moving party support its
`motion with evidence negating the non-moving party's claim. Id.;
`see also Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 885 (1990);
`Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991),
`cert. denied, 502 U.S. 994 (1991). If the moving party shows an
`absence of evidence to support the non-moving party's case, the
`burden then shifts to the opposing party to produce "specific
`evidence, through affidavits or admissible discovery material, to
`show that the dispute exists." Bhan, 929 F.2d at 1409. A complete
`failure of proof concerning an essential element of the non-moving
`party's case necessarily renders all other facts immaterial.
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`Celotex, 477 U.S. at 323.
`Where the moving party bears the burden of proof on an issue
`at trial, it must, in order to discharge its burden of showing that
`no genuine issue of material fact remains, make a prima facie
`showing in support of its position on that issue. See UA Local 343
`v. Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1471 (9th Cir. 1994).
`That is, the moving party must present evidence that, if
`uncontroverted at trial, would entitle it to prevail on that issue.
`See id.; see also Int’l Shortstop, Inc. v. Rally's, Inc., 939 F.2d
`1257, 1264-65 (5th Cir. 1991). Once it has done so, the non-moving
`party must set forth specific facts controverting the moving
`party's prima facie case. See UA Local 343, 48 F.3d at 1471. The
`non-moving party's "burden of contradicting [the moving party's]
`evidence is not negligible." Id. This standard does not change
`merely because resolution of the relevant issue is "highly fact
`specific." See id.
`
`DISCUSSION
`
`I.
`
`EIS Defendants
`A.
`Breach of Contract Claim
`Enreach argues that there is undisputed evidence that Xu and
`Wu conceived iPanel and reduced it to practice while they were
`employed at Enreach, thereby breaching the confidentiality and
`assignment provisions of the employment agreement that they each
`signed when they began working for the company. As evidence,
`Enreach cites (1) the brochure that EIS had completed by September
`4, 1999 which described in general terms the planned embedded
`browser that would become iPanel, and (2) the source code contained
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`in six of the nine modules for which EIS has copyright
`registrations that the EIS Defendants acknowledge Xu worked on
`while still employed at Enreach. Enreach also cites the
`similarities between the MicroBrowser and iPanel source code that
`were identified by its expert.
`Opposing Enreach's motion for summary adjudication of this
`claim, the EIS Defendants argue that the iPanel source code was not
`subject to the Enreach employment agreements. Xu states in his
`declaration that the source code he developed while still employed
`at Enreach related to low-level utilities and the basic
`functionality necessary for any web-based application, and that he
`derived it from public domain source code. Xu also states that he
`originally developed this initial source code for the purpose of
`using it for an online clothes-shopping and custom-fitting web
`site, and that he wrote the code on his personal time and using his
`own computer equipment. He states that he did not begin writing
`source code specifically for iPanel until after he left Enreach and
`that he did not use any MicroBrowser code in doing so; the EIS
`Defendants note that it is not disputed that EIS did not have a
`working model of iPanel until June, 2000, nine months after Xu left
`Enreach, and seven months after Wu left.
`Thus, there is a material factual dispute whether the iPanel
`source code identified by Enreach falls within the exception
`described in California Labor Code section 2870. Enreach's motion
`for summary adjudication of its first cause of action for breach of
`contract is denied.
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`B.
`
`Claims for Declaratory Judgment that Enreach is Owner of
`EIS's Intellectual Property
`The parties cross-move for summary adjudication of Enreach's
`second and third causes of action for declaratory judgment that it
`has ownership rights in the nine copyright registrations of iPanel
`source code and the pending iPanel-related patent applications.
`These claims arise out of Enreach's allegations and evidence that
`Xu and Wu conceived of and created iPanel while still employed at
`Enreach, and thus were contractually obliged to assign to Enreach
`the iPanel copyrights and patent applications. Enreach again cites
`the September, 1999 brochure, which described an EIS embedded
`browser, and the undisputed evidence that Xu developed part of six
`of the nine copyrighted modules while still employed at Enreach.
`However, as discussed above, there is a material dispute
`(1) whether Xu and Wu breached their employment contracts with
`Enreach and (2) regarding the extent to which Xu developed iPanel-
`specific source code while still employed at Enreach.
`The EIS Defendants argue that they are entitled to summary
`judgment on these claims because even if Enreach could prove that
`Xu and Wu did breach their employment contracts, Enreach would not
`have an ownership interest in EIS's intellectual property. The EIS
`Defendants cite Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d
`1574, 1580-81 (Fed. Cir. 1991), in which the court ruled that an
`agreement to assign future inventions not yet developed could not
`serve as the basis for transfer of legal title to those inventions.
`However, the Arachnid court held that such promises to assign "may
`vest the promisee in equitable rights in those inventions once
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`made." Id. (emphasis in original). In its second and third causes
`of action, Enreach alleges that EIS's registrations are the
`intellectual property of Enreach that Xu and Wu hold in trust for
`the sole right and benefit of Enreach. Thus, Enreach is seeking
`equitable remedies under these claims, which the Arachnid court
`held it may do.
`For the foregoing reasons, the parties' cross-motions for
`summary adjudication of the second and third causes of action for
`declaratory judgment are denied.
`C.
`Breach of Fiduciary Duty Claim
`Enreach moves for summary adjudication of the FAC's sixth
`cause of action, against Xu and Wu, for breach of fiduciary duty.
`In California, a fiduciary of a corporation is defined as "an
`officer who participates in management of the corporation,
`exercising some discretionary authority." GAB Bus. Servs., Inc. v.
`Lindsey & Newsom Claim Servs., Inc., 83 Cal. App. 4th 409, 420-21
`(2000), overruled on other grounds by Reeves v. Hanlon, 33 Cal. 4th
`1140 (2004).
`Here, Enreach submits no argument or evidence that Wu was ever
`an officer with any discretionary authority at Enreach. Enreach
`does argue that Xu, as chief software architect, meets the standard
`for a fiduciary; it submits evidence in the form of a declaration
`by its chief executive officer Bo Wu that Xu managed a team of
`twenty software engineers. However, this does not amount to
`evidence that Xu was an officer at Enreach or that he participated
`in the management of the corporation. And, in opposition to
`Enreach's motion for summary adjudication of this claim, the EIS
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`Defendants submit undisputed evidence that, while Xu did manage the
`projects and schedules of the software engineers, they reported
`directly to Bo Wu and not to Xu.
`For the foregoing reasons, Enreach's motion for summary
`adjudication of its sixth cause of action for breach of fiduciary
`duty is denied.
`D.
`Unjust Enrichment Claim
`The parties cross-move for summary adjudication of the FAC's
`seventh cause of action for unjust enrichment. As the EIS
`Defendants note, unjust enrichment is not a valid cause of action
`in California. See McBride v. Boughton, 106 Cal. App. 4th 379, 387
`(2004) ("Unjust enrichment is not a cause of action, or even a
`remedy, but rather a general principle, underlying various legal
`doctrines and remedies.").
`Enreach cites no case law holding that a party may plead a
`cause of action for unjust enrichment. Instead, Enreach appears to
`argue that its unjust enrichment claim is based upon a theory of
`constructive trust: if Wu and Xu breached the employment contract,
`a constructive trust should be imposed upon EIS covering the iPanel
`source code. Enreach does request in its second and third causes
`of action that the Court impose a constructive trust on the iPanel-
`related intellectual property.
`The Court has denied the parties' cross-motions for summary
`adjudication of the second and third causes of action, and Enreach
`may pursue a constructive trust remedy on those claims. However,
`because unjust enrichment is not a valid cause of action in
`California, the EIS Defendants are entitled to summary adjudication
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`of the FAC's seventh cause of action for unjust enrichment.
`E.
`Copyright Infringement Claim
`The parties cross-move for summary adjudication of the FAC's
`eighth cause of action for copyright infringement. "In order to
`establish infringement, two elements must be proven: (1) ownership
`of a valid copyright, and (2) copying of constituent elements of
`the work that are original." Rice v. Fox Broadcasting Co., 330
`F.3d 1170, 1174 (9th Cir. 2002). However, "even where the fact of
`copying is conceded, no legal consequences will follow from that
`fact unless the copying is substantial. . . . In addition to
`copying, it must be shown that this has been done to an unfair
`extent." Newton v. Diamond, 388 F.3d 1189, 1193 (9th Cir. 2004)
`(internal citations omitted). Where there is no evidence of direct
`copying, a plaintiff may establish copying by showing that the
`defendant had access to the work in question and that the two works
`are "substantially similar" in idea and expression. Smith v.
`Jackson, 84 F.3d 1213, 1218 (9th Cir. 1996).
`Enreach argues first that it is the rightful owner of the nine
`EIS copyright registrations relating to iPanel. Second, Enreach
`argues that EIS directly copied Enreach's MicroBrowser source code,
`and it submits evidence through its expert Mr. Feng of several
`similarities in the source code of iPanel and MicroBrowser,
`including between the browsers' modular structures, methods of flow
`control, and freeware vendors. And, Enreach argues that the direct
`copying is not de minimis.
`With respect to Enreach's first theory, as discussed above,
`there is a material factual dispute whether Enreach has any
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`equitable rights to EIS's copyright registrations.
`With respect to Enreach's second theory, the EIS Defendants'
`expert Dr. Wedig states that there is minimal evidence of direct
`code copying; the similar code amounts to a fraction of a percent
`of the source code comprising the two companies' browsers. Dr.
`Wedig also states that the similarities between the source codes in
`the companies' browsers encompass only unprotectable expression
`because they involve basic and standard methods used by those
`versed in the arts of computer programming and code writing.
`The parties have submitted competing evidence through their
`experts relating to whether there is sufficient evidence of direct
`copying and whether the iPanel code is substantially similar in
`idea and expression to the MicroBrowser code. Thus, the parties'
`cross-motions for summary adjudication of the FAC's eighth cause of
`action for copyright infringement are denied.
`F.
`Unfair Competition Law Claims
`The parties cross-move for summary adjudication of the FAC's
`ninth and tenth causes of action for unfair competition. The ninth
`cause of action, asserted against only the EIS Defendants, is based
`in part upon Enreach's allegations of copyright infringement and in
`part upon Xu and Wu's alleged failure to assign their work relating
`to iPanel in accordance with their employment agreements. The
`tenth cause of action, against all Defendants, is based upon
`Enreach's remaining allegations of, among other things, copyright
`infringement and breach of the covenant of good faith and fair
`dealing.
`The unfair competition law “embraces anything that can
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`properly be called a business practice and that at the same time is
`forbidden by law.” Korea Supply Co. v. Lockheed Martin Corp., 29
`Cal. 4th 1134, 1135 (Cal. 2003). In other words, section 17200 et
`seq. “borrows” violations from other laws and makes them
`independently actionable as unfair business practices. Id.
`To the extent that the ninth cause of action for unfair
`competition is based upon allegations of copyright infringement, it
`is preempted by federal law. The Copyright Act states that it
`exclusively governs "all legal or equitable rights that are
`equivalent to any of the exclusive rights within the general scope"
`of the Act and states further that "no person is entitled to any
`such right or equivalent right in any such work under the common
`law or statutes of any State." 17 U.S.C. § 301(a). In Kodadek v.
`MTV Networks, Inc., 152 F.3d 1209, 1212 (9th Cir. 1998), the Ninth
`Circuit ruled that the plaintiff's unfair competition law claim,
`which was based solely upon its claim for copyright infringement,
`was preempted.
`As the EIS Defendants note, the FAC's first cause of action
`for breach of contract, the only other allegation upon which the
`ninth cause of action is based, is asserted against only Xu and Wu.
`Thus, the Court grants the EIS Defendants' motion for summary
`adjudication of the ninth cause of action against EIS and ShenZhen
`ZhuoZhuang, but denies it with respect to the ninth cause of action
`against Xu and Wu arising out of Enreach's breach of contract
`claim.
`The FAC's tenth cause of action for unfair competition is
`based upon "misappropriation of trade secrets, fraud, breach of
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`contract, breach of fiduciary duty, breach of covenant of good
`faith and fair dealing, unjust enrichment, and/or copyright
`infringement." Enreach's claims for fraud and trade secret
`misappropriation were dismissed as time-barred, without leave to
`amend, by the State court. Moreover, a common law cause of action
`based upon allegations of trade secret misappropriation is
`preempted by the Uniform Trade Secrets Act. See Digital Envoy,
`Inc. v. Google, Inc., 370 F. Supp. 2d 1025, 1035 (N.D. Cal. 2005).
`And, the Court has granted the EIS Defendants' motion for summary
`adjudication of Enreach's claims for unjust enrichment and has
`ruled that an unfair competition law claim based upon alleged
`copyright infringement is preempted. Enreach's remaining causes of
`action upon which this claim is based -- breach of contract, breach
`of covenant of good faith and fair dealing and breach of fiduciary
`duty -- are asserted against only Xu and Wu.
`The Court denies Enreach's motion for summary adjudication of
`its tenth cause of action, and grants the EIS Defendants' motion
`with respect to EIS and ShenZhen ZhuoZhuang. The Court denies the
`EIS Defendants' motion for summary adjudication of the tenth cause
`of action against Xu and Wu arising out of the FAC's claims for
`breach of contract, breach of the covenant of good faith and fair
`dealing and breach of fiduciary duty.
`II. Customer Defendants
`Cirrus and AlphaSmart move jointly for summary adjudication of
`the second, seventh, eighth and tenth causes of action in the FAC,
`and Cirrus moves separately for summary adjudication of the
`seventh, eighth and tenth causes of action.
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`A.
`
`Claims for Declaratory Judgment that Enreach has
`Ownership Rights in EIS's Copyright Registrations
`Cirrus and AlphaSmart argue that there is no actual
`controversy to support Enreach's second cause of action as against
`them. A copyright action for declaratory judgment "presents a
`justiciable case or controversy if the defendant's actions have
`caused the declaratory judgment plaintiff to harbor a real and
`reasonable apprehension that he will be subject to liability if he
`continues to manufacture his product." Xerox Corp. v. Apple
`Computer, Inc., 734 F. Supp. 1542, 1546 (N.D. Cal. 1990), citing
`Hal Roach Studios v. Richard Feiner & Co., 883 F.2d 1429 (9th Cir.
`1989).
`Here, Cirrus and AlphaSmart submit evidence that they have
`claimed no ownership interest in the iPanel copyri