Opinion
8:20-cv-02400-JLS-KES
04-26-2024
MICROVENTION, INC., a Delaware corporation, Plaintiff, v. BALT USA, LLC, a Delaware Limited Liability Company; DAVID FERRERA; NGUYEN “JAKE” LE; YOSHITAKA KATAYAMA; STEPHANIE GONG; AND MICHELLE TRAN, Defendant.
CONSENT JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT DAVID FERRERA, NGYUEN “JAKE” LE, AND MICHELLE TRAN
HON. JOSEPHINE L. STATON, UNITED STATES DISTRICT JUDGE
Pursuant to the Stipulation for Entry of Consent Judgment and Permanent Injunction (Doc. 813) filed by Plaintiff MicroVention, Inc. (“MicroVention”), on the one hand, and Defendant David Ferrera (“Ferrera”), Nguyen “Jake” Le (“Le”), Michelle Tran (“Tran”) (collectively, “Individual Defendants”) on the other, the Court hereby ORDERS, ADJUDICATES and DECREES that judgment and a permanent injunction shall be and hereby is entered on the Second Amended Complaint in this action in favor of MicroVention and against Individual Defendants as follows:
FINDINGS OF FACT
1. MicroVention is a corporation organized under the laws of Delaware, with its principal place of business at 35 Enterprise, Aliso Viejo, California, 92656. MicroVention is a medical device company that develops, manufactures, and sells, among other products, embolic coils and related components and ancillary devices, and catheters, catheter systems and related components and ancillary devices used to deliver embolic coils to the treatment site within the human body.
2. MicroVention is the owner of the following confidential and proprietary information that constitutes, individually and collectively, MicroVention trade secrets within the meaning of the California Uniform Trade Secrets Act, Cal. Civil Code § 3426.1, and the federal Defend Trade Secrets Act, 18 USC § 1839:
a. MicroVention's library of confidential documents detailing the design, development, manufacture, and commercialization of MicroVention's medical device products.
b. MicroVention's confidential marketing specifications, design specifications, equipment specifications, risk assessment plans, part drawings (including Computer Assisted Design (CAD) drawings and SolidWorks files), equipment and tool drawings, quality specifications and quality assurance procedures, test methods, test data and test reports, regulatory strategy documentation, build records, receiving specifications, approved supplier lists and Scorecards for MicroVention's catheter products.
c. MicroVention's confidential marketing specifications, design specifications, part drawings (including Computer Assisted Design (CAD) drawings and SolidWorks files), test methods, test protocols and test reports, regulatory strategy documentation, build records, receiving specifications, essential requirements checklists, design and development project plans, risk analyses, approved supplier lists, and cost and performance data for MicroVention's Traxcess guidewire product.
d. MicroVention's confidential marketing specifications, design specifications, equipment specifications, risk assessment plans, part drawings (including Computer Assisted Design (CAD) drawings and SolidWorks files), equipment and tool drawings, manufacturing procedures, quality specifications and quality assurance procedures, test methods, test data and test reports, regulatory strategy documentation, build records, receiving specifications, and approved supplier lists for MicroVention's embolic coil products.
e. MicroVention's confidential V-Grip technical documents.
f. MicroVention's confidential K-Value Spreadsheet for computing the k-value (or stiffness) for different microcoil configurations.
3. The trade secrets identified in the preceding paragraph are referred to herein as “MicroVention Trade Secrets.”
4. Individual Defendants acknowledge that the MicroVention Trade Secrets are trade secrets within the meaning of the California Uniform Trade Secrets Act, Cal. Civil Code § 3426.1, and the federal Defend Trade Secrets Act, 18 USC § 1839.
5. Ferrera was employed by MicroVention from July 1999 until August 2007, first as its Senior Research and Development Manager and later as its Director of Clinical Research. While employed by MicroVention, Ferrera had access to a broad range of highly confidential and proprietary information belonging to MicroVention, including but not limited to MicroVention Trade Secrets.
6. Le was employed by MicroVention from approximately May 2008 until November 2, 2011, first as a Manufacturing Engineer II and later as a Senior Research and Development Engineer. Le was heavily involved in the research and development of MicroVention medical device products, specifically embolic coils and related systems and components, including the design, manufacturing, and testing of such devices and the equipment and tools used in connection with the same.
7. Tran was employed by MicroVention from June 2006 until April 27, 2017, first as a Senior Manufacturing Engineer and later as a Senior Project Manager, Research and Development. While employed at MicroVention, Tran worked extensively on MicroVention's catheter and access medical device products, and related systems and components, including on the research, design, development, manufacture, and testing of such products.
8. As a condition of their employment with MicroVention, Individual Defendants signed an Employee Invention and Confidential Information Agreement (“Confidentiality Agreement”), whereby they agreed to keep confidential and to not disclose, reproduce, deliver or make use of, except for the benefit of MicroVention, either during or after their employment, any trade secrets, confidential information, knowledge, or other information relating to MicroVention products, processes, knowhow, designs, formulas, data, inventions, customers lists, business plans, marketing plans and strategies, pricing strategies or other matters pertaining to the business of MicroVention. The Confidentiality Agreement also required Individual Defendants to return to MicroVention all MicroVention information and materials upon termination of their employment.
9. When Ferrera left his employment with MicroVention in August 2007, he took with him more than 38,000 MicroVention files consisting of confidential, proprietary, and trade secret information, including confidential manufacturing procedures, technical drawings, test methods, test reports, build records and other confidential documents relating to MicroVention's products and business.
10. At the time of his departure from MicroVention, Ferrera failed to return to the company all of its confidential and proprietary information.
11. In October 2011, Ferrera founded Blockade Medical, LLC (“Blockade”). Balt International acquired Blockade in September 2016, and renamed the company Balt USA (“Balt”). Ferrera was employed by Blockade/Balt from October 2011 until May 29, 2020, and served as the company's President, Chief Operating Officer, and Chief Technology Officer.
12. Following his departure from MicroVention, Ferrera accessed and disclosed to others at Balt, confidential MicroVention documents in his possession.
13. Ferrera hired Le in November 2011 to work at Blockade as its Manager of Research and Development. Ferrera knew that Le was employed by MicroVention at the time he hired him, and that Le had confidentiality obligations to MicroVention.
14. At the time of his departure from MicroVention, Le signed a Separation Checklist wherein he certified that he had returned to MicroVention all proprietary information, files, memoranda, documents, and records belonging to the company. That certification was not true.
15. Shortly after joining Blockade/Balt, Le transferred the confidential and proprietary information he took from MicroVention, including MicroVention Trade Secrets, from his personal hard drives to his Balt-owned employee laptop. Le did not return the confidential and proprietary information he took from MicroVention, including MicroVention Trade Secrets.
16. During Le's employment by Balt, Ferrera became aware of and condoned Le's possession and use of MicroVention confidential and proprietary information.
17. In June 2021, approximately eighteen (18) months after this lawsuit was filed and while Le was under an obligation to preserve electronic evidence, Le mass-deleted the confidential and proprietary MicroVention information he took from MicroVention when he left the company, including MicroVention Trade Secrets, from his personal hard drives.
18. In addition, while this lawsuit was pending and Le was under an obligation to preserve electronic evidence, Le failed to preserve personal computers that contained information relevant to the claims and defenses at issue in this case.
19. At least as early as January 2017, Le began recruiting Tran to work at Balt. Ferrera and Le knew that Tran was employed by MicroVention at the time. Ferrera hired Tran as Balt's Director of Research and Development, Access Technologies. Tran began her employment with Balt on May 1, 2017 and left Balt in February 2021.
20. When Tran left her employment with MicroVention, she took with her more than 20,000 MicroVention files containing confidential and proprietary MicroVention information, including MicroVention Trade Secrets, without MicroVention's knowledge, permission, or consent.
21. At the time of her departure from MicroVention, Tran signed a Separation Checklist wherein she certified that she had returned to MicroVention all proprietary information, files, memoranda, documents, and records belonging to the company.
22. Contrary to her certification to MicroVention, Tran took, disclosed, and did not return confidential and proprietary MicroVention information, including MicroVention Trade Secrets.
23. MicroVention filed its original Complaint in this action on December 22, 2020, asserting claims against Individual Defendants (and other defendants who were later dismissed from this action) for: (1) misappropriation of trade secrets under the federal Defend Trade Secrets Act, 18 U.S.C. § 1836, et seq.; and (2) misappropriation of trade secrets under the California Uniform Trade Secrets Act, Cal. Civ. Code § 3426, et seq.
24. On March 5, 2021, MicroVention filed a First Amended Complaint asserting additional claims for breach of contract against Ferrera and Le.
25. On September 29, 2021, MicroVention filed a Second Amended Complaint adding Tran as a defendant and asserting claims for misappropriation of trade secrets under the federal Defend Trade Secrets Act and under the California Uniform Trade Secrets Act and asserting breach of contract claims.
26. On October 29, 2021, Ferrera and Le filed an Answer to MicroVention's Second Amended Complaint.
27. On November 17, 2021, Tran filed an Answer to MicroVention's Second Amended Complaint.
CONCLUSIONS OF LAW
28. This Court has jurisdiction over the subject matter of this action under 28 U.S.C. §§ 1331, 1332 and 1367(a), 1338(a), and the Defend Trade Secrets Act of 2016 (“DTSA”), 18 U.S.C. § 1836, et seq. This Court has personal jurisdiction over Ferrera.
29. Venue is proper in this Court pursuant to 28 U.S.C. §§ 1391(b) and 1400(b).
30. MicroVention is the owner of all right, title, and interest in and to the MicroVention Trade Secrets.
31. The MicroVention Trade Secrets are trade secrets within the meaning of the California Uniform Trade Secrets Act, Cal. Civil Code § 3426.1, and the federal Defend Trade Secrets Act, 18 USC § 1839.
32. Ferrera misappropriated MicroVention Trade Secrets as defined by California Uniform Trade Secrets Act, Cal. Civil Code § 3426.1.
33. Ferrera misappropriated MicroVention Trade Secrets as defined by the federal Defend Trade Secrets Act, 18 USC § 1839.
34. Ferrera, Le and Tran have entered into a separate settlement agreement with MicroVention in which they have agreed to additional terms.
35. Individual Defendants breached their Confidentiality Agreement with MicroVention by failing to return to the company, upon termination of their employment, all MicroVention confidential information, and by accessing and disclosing that information to others in violation of their Agreement with MicroVention.
36. Based on the foregoing, MicroVention is entitled to recover from Ferrera a substantial monetary payment, as reflected in a separate settlement agreement.
37. Based on the foregoing, MicroVention is entitled to recover from Le a substantial monetary payment, as reflected in a separate settlement agreement.
38. Based on the foregoing, MicroVention is entitled to recover from Tran a substantial monetary payment, as reflected in a separate settlement agreement.
39. As a consequence of the foregoing, Individual Defendants further agree, for a period of 3 years from the date of this Consent Judgment, to provide MicroVention's designated in-house counsel with written notice of their involvement with any company, entity or person involved in the design, development, manufacture or sale of medical device products or services, in the neuro and/or peripheral endovascular field. The written notice provided must not contain any confidential information, and must include the employer or affiliates with whom Individual Defendants are working on the medical device product.
PERMANENT INJUNCTION
It is hereby ORDERED, pursuant to Federal Rule of Civil Procedure 65, that Ferrera, Le and Tran and their affiliates, business partners, officers, agents, servants and employees, and all others acting in concert or participation with them, be enjoined and restrained from:
40. Possessing, disclosing, distributing, relying upon, or otherwise using for any purpose whatsoever any and all MicroVention Trade Secrets.
41. Possessing, disclosing, distributing, relying upon, or otherwise using for any purpose whatsoever any other MicroVention confidential information including, but not limited to, any and all MicroVention information or knowledge relating to MicroVention products, processes, know-how, designs, formulas, data, inventions, customers lists, business plans, marketing plans and strategies, pricing strategies or other matters pertaining to the business of MicroVention.
42. Creating, producing, making, providing, using, revealing, communicating or otherwise transferring to any person, in any manner, any document, drawing, design plan, proposal, note, file, data, memorandum, photograph, or other tangible recordable, digital, video, or other decipherable information that contains MicroVention Trade Secrets, and any and all MicroVention confidential information or knowledge relating to MicroVention products, processes, know-how, designs, formulas, data, inventions, customers lists, business plans, marketing plans and strategies, pricing strategies or other matters pertaining to the business of MicroVention.
It is further hereby ORDERED that:
43. Individual Defendants shall, within 30 (thirty) days of the entry of this Consent Judgment and Permanent Injunction, transfer to MicroVention any and all documents, drawings, designs, plans, proposals, notes, files, memoranda, and other recordings of information however recorded in tangible, readable, or other decipherable form, including electronic, digital, written, photographic, or other medium, including cloud-based accounts and other forms of off-site data storage, that contain MicroVention Trade Secrets, or any other MicroVention confidential information or knowledge relating to MicroVention products, processes, know-how, designs, formulas, data, inventions, customers lists, business plans, marketing plans and strategies, pricing strategies or other matters pertaining to the business of MicroVention. Individual Defendants shall retain no copies of any of the foregoing items, regardless of form or format or medium, including without limitation, paper, electronic, or digital copies.
44. Individual Defendants shall, within 30 (thirty) days of the entry of this Consent Judgment and Permanent Injunction, to the best of their knowledge, identify and notify all third parties to whom they have provided, directed others to provide, or whom they know are in possession of (a) MicroVention Trade Secrets, or (b) any other MicroVention confidential information or knowledge relating to MicroVention products, processes, know-how, designs, formulas, data, inventions, customers lists, business plans, marketing plans and strategies, pricing strategies or other matters pertaining to the business of MicroVention, that all such information must be promptly destroyed and cannot be used for any purpose. Individual Defendants shall provide written notice to such third parties to cease and desist from using such information, and request that the third party destroy the information and provide written certification of destruction. Individual Defendants shall promptly serve on MicroVention's counsel a copy of each written notice sent and each certificate of destruction received.
45. Individual Defendants shall, within 30 (thirty) days of the entry of this Consent Judgment and Permanent Injunction, provide to MicroVention an Affidavit signed under penalty of perjury listing (a) all companies, except for Balt, with which they have been employed or affiliated (including but not limited to consulting arrangements) since leaving MicroVention up through the present day, and (b) all MicroVention Trade Secrets that Individual Defendants or their affiliates, business partners, officers, agents, servants and employees, and all others acting in concert or participation with them shared, possessed, disclosed or used while employed by or affiliated with such companies and the nature and purpose for sharing, disclosing, using or possessing such information.
46. Individual Defendants shall, within 30 (thirty) days of the entry of this Consent Judgment and Permanent Injunction, provide an Affidavit signed under penalty of perjury (a) identifying all third parties, but not Balt or MicroVention, by name and last known address, who were provided or are otherwise known to be in possession of MicroVention Trade Secrets, or any other MicroVention confidential information, and (b) identifying with specificity the steps undertaken to notify such third parties to promptly destroy the MicroVention Trade Secrets and other confidential MicroVention information in their possession and that such cannot be used for any purpose.
47. Individual Defendants shall make all of their electronic devices (including those identified in Exhibit 1), data storage devices and cloud storage accounts available to Berkely Research Group (“BRG”), MicroVention's forensic consultant, within thirty (30) days of the entry of this Order. The Individual Defendants agree to provide all passwords and logins necessary to access the information on the electronic devices, data storage devices and in the cloud storage accounts. BRG shall create a full forensic image of each such device or account before making any changes thereto, and provide a copy of each image (including any full forensic image of respective Individual Defendant's devices or accounts created by BRG during the pendency of this litigation) to Individual Defendants' respective counsel of record for purposes of, inter alia, compliance with document preservation obligations arising in connection with the lawsuit, Balt USA, LLC v. Treadstone Medical LLC, Case No. 30-2021-01237081-CU-BT-CXC, filed in the Superior Court of the State of California, County of Orange. Should discovery in that case seek the production of any MicroVention information located on the electronic devices, electronic storage devices, and/or in the cloud storage accounts referenced herein and identified in Exhibit 1, counsel for the Individual Defendants agree to provide MicroVention with reasonable notice and an opportunity to object to the production of the same. Should any MicroVention information ultimately be produced in connection with discovery in the aforementioned litigation, it must be pursuant to a Court-issued Protective Order and designated CONFIDENTIAL-ATTORNEYS' EYES ONLY. Moreover, within ninety (90) days of the conclusion of the aforementioned litigation, Individual Defendants' counsel shall destroy the forensic images and shall notify counsel for MicroVention, in writing, that they have been destroyed. At no point, including at the termination of representation, shall Individual Defendants' counsel transfer to or share the images, or any MicroVention information contained in the images, with the Individual Defendants.
48. In addition, each Individual Defendant shall allow BRG to review, analyze, search and remove all documents and information from their electronic devices, data storage devices and cloud accounts as set forth in Paragraph 47, that indicate on their face, or by reasonable implication, that they originate from MicroVention (“MicroVention Information”). The removed documents shall be permanently deleted from the original device/account but shall be provided by BRG to Individual Defendants' respective counsel of record on separate media. Moreover, within sixty (60) days of receiving the removed documents, Individual Defendants' counsel shall destroy the copies of the removed documents and shall notify counsel for MicroVention, in writing, that they have been destroyed.
49. BRG shall also provide to the Individual Defendants' respective counsel of record, a full listing of file names with file path information (“File Listing”) from their respective electronic devices, data storage devices and cloud accounts. Individual Defendants' counsel may share the corresponding File Listing with their respective client to allow them to review the corresponding File Listing and identify their personal documents and information (e.g., family photos) which are not MicroVention Information (“Personal Files”) stored on these devices and in these accounts. The Individual Defendants, under the supervision of their respective counsel, must permanently delete the File Listing upon completion of the identification process. Individual Defendants may identify files containing Individual Defendants' Personal Files that he/she would like returned within sixty (60) days of receiving the File Listing. MicroVention's counsel of record and/or BRG may review the files identified as Personal Files and object to the return of any files that contain MicroVention Information within sixty (60) days of receiving the list of Personal Files that the Individual Defendant would like returned. BRG shall return to counsel for the Individual Defendants (and counsel for an Individual Defendant may provide to that Individual Defendant) all non-objected to Personal Files belonging to the respective Individual Defendant on separate media.
50. As to electronic devices and data storage devices that were produced in connection with this litigation as identified in the expert reports of Mike Bandemer, including but not limited to those identified in Exhibit 1, Individual Defendants shall allow BRG to wipe all such devices after the forensic image is made and any nonobjected to Personal Files returned. Once these devices are wiped they will be returned to the respective counsel for the Individual Defendants. Should BRG identify additional undisclosed electronic devices, data storage devices or cloud storage accounts that may contain MicroVention's information in connection with its review and analysis as set forth in this Consent Judgment, Individual Defendants will cooperate with BRG to provide BRG with access to such other devices and accounts and associated password and log in information within seven (7) days of notice of the same. Individual Defendants shall allow BRG to perform the above remediation steps as to any such newly identified devices or accounts. The costs associated with the forensic analysis and other steps set forth in this paragraph will be paid by MicroVention as long as there is timely and full compliance by the Individual Defendants.
NO APPEALS AND CONTINUING JURISDICTION
51. No appeals shall be taken from this Consent Judgment and Permanent Injunction, and the parties waive all rights to appeal. This Court expressly retains jurisdiction over this matter to enforce the terms of this Consent Judgment and Permanent Injunction and any related agreement between the parties regarding the resolution of this dispute, including but not limited to the execution and/or enforcement of the Consent Judgment and Permanent Injunction.
52. In any action to enforce the terms of this Consent Judgment and Permanent Injunction, and the Settlement Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees and costs associated with bringing such action.
53. Individual Defendants further acknowledge that if any of them are found to be in contempt of, or otherwise to have materially violated this Consent Judgment and Permanent Injunction, MicroVention will suffer irreparable harm. In addition to the equitable remedies available for contempt or material violation of this Consent Judgment and Permanent Injunction, MicroVention shall also be entitled to any damages caused by each of Individual Defendant's contempt or violation of this Consent Judgment and Permanent Injunction.
IT IS SO ORDERED.