Sanas.AI Inc. v. Krisp Technologies, Inc.

Summary

The order resolves cross-motions to dismiss in a dispute between Sanas.AI Inc. and Krisp Technologies, Inc., competing developers of voice communication software. The court denied Krisp’s motion to dismiss Sanas’s trade-secret misappropriation, co-inventorship and co-ownership, and false-advertising claims. The court granted in part and denied in part Sanas’s motion to dismiss Krisp’s counterclaims, dismissing the California Unfair Practices Act claim based on alleged below-cost sales under California Business and Professions Code section 17044 while allowing other state-law counterclaims to proceed.

Holdings

1. Sanas adequately pleaded trade-secret claims under both the DTSA and CUTSA by alleging protectable information, reasonable efforts to maintain secrecy, misappropriation, and resulting harm.
2. Sanas adequately pleaded co-inventorship and related co-ownership claims by alleging a more-than-insignificant contribution to the conception of at least one patent claim and joint conduct with the named inventors.
3. Sanas adequately pleaded false-advertising claims under section 43(a) of the Lanham Act and California's False Advertising Law.
4. Krisp failed to state a section 17044 claim because that provision does not apply when the defendant provides a service free of charge and no sale is involved.
5. Krisp adequately pleaded a section 17043 claim based on allegations that Sanas gave away its product for free with the purpose of injuring Krisp or destroying competition.
6. Krisp's adequately pleaded section 17043 claim supplied an unlawful predicate for its UCL counterclaim, so dismissal of the UCL counterclaim was unwarranted.

Questions Presented

1. Whether Sanas adequately pleaded trade-secret misappropriation under the Defend Trade Secrets Act and California's Uniform Trade Secrets Act.
2. Whether Sanas adequately pleaded co-inventorship and co-ownership claims based on alleged contributions to Krisp's patents.
3. Whether Sanas adequately pleaded false-advertising claims under the Lanham Act and California's False Advertising Law.
4. Whether Krisp adequately pleaded a claim under California Business and Professions Code section 17044 based on Sanas's alleged free distribution of noise-cancellation software.
5. Whether Krisp adequately pleaded a claim under California Business and Professions Code section 17043 based on the alleged free distribution of the software for the purpose of injuring competitors or destroying competition.
6. Whether Krisp's adequately pleaded section 17043 claim supplied an unlawful predicate for its California Unfair Competition Law counterclaim.

Disposition

other