Genasys Inc. v. Vector Acoustics, LLC

Genasys Inc. v. Vector Acoustics, LLC

Opinion

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTIONS TO DISMISS

(ECF Nos. 10, 11)

Presently before the Court is Defendant Marcel Naujok's Motion to Dismiss ("Naujok MTD," ECF No. 10) and Defendants Vector Acoustics, LLC and Hernan Frederick Lopez's Motion to Dismiss. ("Vector Lopez MTD," ECF No. 11.) Plaintiff Genasys Inc. ("Genasys") filed an Opposition to each Motion to Dismiss (ECF Nos. 14 ("Naujok Opp'n,"), 15 ("Vector Lopez Opp'n")), and Defendants Naujok ("Naujok Reply," ECF No. 17) and Vector Lopez ("Vector Lopez [*2]  Reply," ECF No. 16) filed Replies. In response to a Supplemental Request for Judicial Notice, (see ECF No. 16-1), Plaintiff filed a response. ("Response," ECF No. 18.) The Court held a hearing on May 19, 2022. (See ECF No. 19.) Having carefully considered the parties' arguments, the law, and the pleadings, the Court GRANTS IN PART AND DENIES IN PART both Naujok's and Vector Lopez's Motions to Dismiss.

BACKGROUND¹

Genasys is a "leader in the Acoustic Hailing Device Industry" (the "AHD Industry"). (ECF No. 1 ("Compl.") ¶ 9.) Plaintiff "develops and manufactures large-scale communication systems," for example, "emergency warning systems and public safety mass notification systems that are used by various governmental and commercial organizations." (Id.) Engineers and business development employees "regularly hold confidential product development meetings" to discuss design improvements to Genasys products. (Id. ¶ 13.)

Genasys "requires both its engineering employees and its business development employees to sign a Proprietary and Inventions Agreement and other employment agreements." (Id. ¶ 14.) The employment agreements require employees to promptly disclose complete information concerning [*3]  each and every invention (including a new contribution, concept, idea, development, formula, composition, technique, machine and improvement thereof, or know-how related thereto), discovery, improvement, device, design, apparatus, practice, process, method or product made, developed, perfected, devised, conceived or first reduced to practice by them, either solely or in collaboration with others, during the period of their employment by Genasys, and up to and including a period of one (1) year after termination of employment that relates to the business, produces, practice or techniques of Genasys, or to Genasys' actual or demonstrably anticipated research or development, or resulting from any work performed by them for Genasys. (Id.) The employment agreements further require employees to agree that any and all Inventions made, developed, perfected, devised, conceived or reduced to practice by the employee during the period of employment and any other Inventions made, developed, perfected, devised, conceived or reduced to practice by them during the period of one (1) year after termination of their employment, relating directly or indirectly to the business, products, practices or [*4]  techniques of Genasys or Genasys' actual or demonstrably anticipated research or development, or resulting from any work performed by them for Genasys, are the sole property of Genasys, and they assigned any and all right title and interest in and to any and all such Inventions to Genasys. (Id. ¶ 15.) The employment agreements "provide for the recovery of attorneys' fees and costs incurred in any controversy or claim arising out of or relating to the Agreements or breach thereof." (Id. ¶ 16.)

In connection with the use of Genasys products, Genasys receives confidential information from clients, which provides a competitive edge in the industry. (Id. ¶¶ 18-19, 21.) Genasys limits access to the confidential information and, through the employment agreements, requires its employees to "hold 'customer information' and information relating to 'the business, products, practices and techniques' of its clients in the strictest confidence and not to use, publish, or disclose such information without Genasys' Board of Directors written authorization." (Id. ¶ 22.)

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