Judge Burke issued an R&R today on two things we don't see very often: a successful motion for judgment on the pleadings, and preemption of state law claims by federal patent law.
The case, Bear Box LLC v. Lancium LLC, C.A. No. 21-534-MN-CJB (D. Del.), involves a patent on more-energy-efficient cryptocurrency mining systems. One of the plaintiffs claims to have met one of the defendants at a conference and, later, confidentially disclosed his ideas for improved cryptocurrency mining. Then, he says, the defendants patented his ideas.
According to the Court, plaintiffs brought two correction-of-inventorship claims, plus three state law claims:
- Conversion ("theft of inventions")
- Unjust enrichment (claiming inventorship of plaintiff's invention)
- Negligent misrepresentation (
Judge Burke recommended granting judgment on the pleadings on all three claims. He held that federal patent law preempted plaintiffs' conversion claim, because it was essentially a determination of patent ownership. Likewise, plaintiffs' unjust enrichment claim was preempted by federal patent law because it seeks patent-like protection of plaintiffs' ideas.
Finally, the Court held that plaintiffs' negligent misrepresentation claim failed because the individual defendant had no duty to the individual plaintiff. According to the Court, pleading that you met another person at a conference, had dinner with them, and confidentially shared an idea is—not surprisingly!—insufficient to give rise to a duty sufficient to support a claim of negligent misrepresentation under the relevant state law.
Judge Burke recommended dismissing the negligent misrepresentation claim with prejudice, because he saw no way that the plaintiff could allege the requisite duty. He did recommend granting leave to amend the remaining claims within 14 days, but cautioned that plaintiffs will probably only get one shot at this:
If Plaintiffs are given the opportunity to replead, they should be mindful of Defendants’ other arguments for dismissal of these Counts, . . . and should address those arguments in the new pleading to the extent they need to, as it is not likely that Plaintiffs would be given a further chance to replead thereafter.
Plaintiff's negligent misrepresentation claim actually sounds like promissory estoppel, in that they claim they relied to their detriment a defendant's promises to keep their disclosure confidential. I'm curious why they didn't plead it that way. It may be because the case is governed by Louisiana law, which has some quirks.
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