1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ABBVIE INC., a Delaware corporation, Case No.: 23-CV-2290 TWR (DEB)

12 Plaintiff,

ORDER (1) DENYING MOTION

13 v. TO COMPEL ARBITRATION, (2) DENYING AS MOOT 14 ADCENTRX THERAPEUTICS INC.,

MOTIONS TO STAY, AND

a Delaware corporation; DONG JUN 15 (3) DENYING MOTIONS TO (Danny) LEE, an individual; and DOES

DISMISS

16 1–10,

17 Defendants. (ECF Nos. 32, 33) 18

19 Presently before the Court are the Motion to Stay Pending Arbitration of Claims 20 Against Dr. Lee, or Alternative Motion to Dismiss (“Adcentrx Mot.,” ECF No. 32) filed 21 by Defendant Adcentrx Therapeutics Inc. (“Adcentrx”) and Motion to Compel Arbitration 22 and Stay Proceedings or, in the Alternative, to Dismiss the First Amended Complaint (“Lee 23 Mot.,” ECF No. 33) (together, the “Mots.”) filed by Defendant Dong Jun (Danny) Lee, as 24 well as the Opposition (“Opp’n,” ECF No. 35) filed by Plaintiff AbbVie, Inc. (“AbbVie”) 25 and Defendants’ joint Reply (“Reply,” ECF No. 36). The Court held a hearing on 26 December 19, 2024. (See generally ECF No. 37; see also ECF No. 38 (“Tr.”).) Upon 27 consideration of the Parties’ arguments, Plaintiff’s First Amended Complaint (“FAC,” ECF 28 No. 29), the record, and the applicable law, the Court DENIES Dr. Lee’s Motion to compel 1 AbbVie to arbitration, DENIES AS MOOT Dr. Lee’s and Adcentrx’s Motions to stay 2 pending arbitration of AbbVie’s claims against Dr. Lee, and DENIES Dr. Lee’s and 3 Adcentrx’s Motions to dismiss. 4 BACKGROUND 5 I. Factual Background1 6 A. AbbVie 7 “AbbVie is a global biopharmaceutical company headquartered in North Chicago, 8 Illinois.” (FAC ¶ 28.) “AbbVie was formed as an independent company in 2013, following 9 its separation from Abbott Laboratories.” (Id.) 10 “In 2015, AbbVie began the MTi (microtubule inhibitor) [antibody drug conjugate 11 (“ADC”)] program [(the “MTi ADC program”)], which focused on developing new ADCs 12 that incorporated microtubule inhibitors (“MTi”) as anti-cancer payloads/linker-drugs.” 13 (Id. ¶ 31.) “Unlike conventional chemotherapy, ADCs are targeted medicines that 14 selectively deliver anti-cancer payloads directly to cancer cells.” (Id. ¶ 30.) “ADCs 15 comprise (i) a monoclonal antibody that binds to a specific target (antigen) on the surface 16 of a cancer cell, plus (ii) an anti-cancer payload which is attached (conjugated) to the 17 antibody through (iii) a chemical linker.” (Id.) “The combination of the anti-cancer 18 payload and the linker is typically referred to as a ‘linker-drug.’” (Id. ¶ 2.) 19 “AbbVie’s MTi ADC program aimed to improve upon clinical stage and FDA- 20 approved MTi ADC products such as ADCETRIS®.” (Id. ¶ 31.) “These clinical stage and 21 FDA-approved products were predominantly based on the monomethyl auristatin E 22

23 1 For purposes of Defendants’ motions to dismiss, the Court “must accept as true all material 24 allegations in the complaint, as well as any reasonable inferences to be drawn from them,” and construe 25 AbbVie’s First Amended Complaint “in the light most favorable to the plaintiff.” See Broam v. Bogan, 320 F.3d 1023, 1028 (9th Cir. 2003). In resolving Dr. Lee’s motion to compel arbitration, however, 26 “district courts rely on the summary judgment standard of Rule 56 of the Federal Rules of Civil Procedure.” See Hansen v. LMB Mortg. Servs., Inc., 1 F.4th 667, 670 (9th Cir. 2021). Accordingly, “the 27 Court will consider the substance of evidence that would be admissible at trial.” See S.S. ex rel. Stern v. Peloton Interactive, Inc., 566 F. Supp. 3d 1019, 1044 (S.D. Cal. 2021) (citing Dinkins v. Schinzel, 362 F. 28 1 (“MMAE”) platform developed by Seattle Genetics (“SeaGen”).” (Id.) “AbbVie’s MTi 2 ADC program sought to develop novel payload designs and novel linker-drug designs not 3 based on the MMAE platform, to create highly effective, novel MTi ADCs.” (Id.) 4 In May 2015, AbbVie acquired Pharmacyclics, Inc., thereby becoming 5 Pharmacyclics LLC (“PCYC”), a wholly owned subsidiary of AbbVie. (See ECF No. 32- 6 1 (“Lee Decl.”) ¶ 5; ECF No. 32-2 (“Ex. 1”).) 7 B. Dr. Lee’s Employment with AbbVie 8 “AbbVie hired Lee as an ADC Chemist/Senior Scientist in February of 2015.” (FAC 9 ¶ 32). “As a condition of his employment with AbbVie, on February 2, 2015, Lee and 10 AbbVie executed an Employment Agreement.” (Id. ¶ 146; see also generally ECF No. 29- 11 5 (“Ex. E”).) This Employment Agreement included certain Inventions Assignment 12 Provisions providing that AbbVie owned all of Dr. Lee’s inventions during his employment 13 with AbbVie, (see FAC ¶¶ 149–51, 153, 204, 205; Ex. E ¶¶ 3–5), and Confidentiality 14 Provisions prohibiting Dr. Lee from disclosing or using AbbVie’s confidential information 15 for any purposes outside his employment with AbbVie. (See FAC ¶¶ 149, 152, 154, 215, 16 216; Ex. E ¶¶ 2, 3, 8.) 17 “Beginning in or around the fall of 2015, Lee worked on a team of chemists who 18 designed and synthesized payloads that were part of AbbVie’s MTi ADC program.” (FAC 19 ¶ 32.) “Thereafter, Lee quickly established himself as one of the key scientists in AbbVie’s 20 MTi ADC program, where Lee dedicated the bulk of his time from late 2015 until he left 21 for PCYC in January 2019.” (Id.) 22 Dr. “Lee’s role in AbbVie’s MTi ADC program was primarily to design, synthesize, 23 and evaluate AbbVie proprietary payload and linker-drug designs.” (Id. ¶ 33.) Dr. “Lee 24 tracked the payloads he designed and synthesized by using his initials: DJL (for Dong Jun 25 Lee),” i.e., Dr. “Lee designated the first payload he designed and synthesized while 26 employed at AbbVie as DJL-1, the second as DJL-2, and so on.” (See id. (emphasis in 27 original).) 28 / / / 1 Of particular significance to the instant action are payload designs DLJ-43 (also 2 ||referred to as ABBV-1), which Dr. Lee synthesized on November 8, 2016, and DLJ-51, 3 || which Dr. Lee synthesized no later than January 4, 2017. (See id. 4948, 49.) The structural 4 formulas of DJL-43/ABBV-1 and DLJ-51/ABBV-2 are depicted below: 5 ne ~ 6 ABBV - 1 - 4 OL Peps ry 9 □□ se || ABBV-2 hy A vt a Oo. Oo oO oO 12 13 id. 9 45.) “ABBV-1 has (4) an ortho-oriented anilino moiety at the C-terminus [green 14 || box], and (11) a tertiary amine-based hydrophilic moiety at the N-terminus [blue box].” (/d. 15 46.) “ABBV-2 has a (i) meta-oriented anilino moiety at the C-terminus [orange box], 16 |/and (ii) a tertiary amine-based hydrophilic moiety at the N-terminus [blue box].” (/d.) 17 ||“These compounds and their designs—including the orientation of the structural 18 ||components at the C- and N-terminus—are among the AbbVie payload trade secret 19 ||information.” (/d. 47.) “Documents created by Lee describing his work on DJL-43 and 20 || DJL-51 characterize these MTi-ADC payloads as ‘novel.’” (Ud. 4 50.) 21 C. Dr. Lee’s Employment with Pharmacyclics LLC 22 “In the second half of 2018, [Dr. Lee] became interested in potentially moving to 23 || California.” (Lee Decl. § 8.) Dr. Lee therefore explored the option of transferring from 24 || AbbVie, in Chicago, to PCYC, in Sunnyvale, (see id. J 9), and “communicated [his] desire 25 || to relocate [to California] via an internal transfer to [his] mentor Dr. Anthony Haight and 26 || to [his] manager Dr. Dennie Welch at AbbVie.” (See id. § 11.) 27 “On or around September 25, 2018, Dr. Jeff Zablocki, the recently appointed head 28 ||of medicinal chemistry at PCYC, visited the AbbVie Lake County facility . . . for an

1 || oncology portfolio review.” (See id. § 10.) Dr. Lee “met with Dr. Zablocki and told him 2 ||that [he] was interested in a potential transfer to the PCYC Sunnyvale office, and 3 || Dr. Zablocki communicated to [Dr. Lee] that he was amenable to that idea and that he 4 || would look into it further.” (See id.) 5 On October 2, 2018, Dr. Lee received an email regarding his “interviews for the 6 || Senior Scientist IT position scheduled for Thursday, October 11[,] beginning at 09:00 AM” 7 ||from Lavanya Dinesh Kumar, a “Talent Acquisition Coordinator” for “Pharmacyclics 8 || LLC, An AbbVie Company.” (See ECF No. 33-5 (“Ex. 4”) at 4.) On October 19, 2018, 9 || Dr. Lee received an email from Scott Richter, the “Principal Recruitor” for PCYC, with 10 ||“‘great news!,” namely, that he was “beginning to work on putting together an offer for 11 Lee] to joint Pharmacyclics,” and asking to set up a “brief discussion around 12 ||relocation.” (See id. at 1.) 13 Mr. Richter emailed Dr. Lee an “offer to join Pharmacyclics, an AbbVie Company,” 14 October 25, 2018. (See ECF No. 33-6 (“Ex. 5”); see also Lee Decl. 4 13.) The email 15 transmitted several attachments, including a transfer offer letter, (see ECF No. 33-7 (“Ex. 16 ||6”); a copy of the “AbbVie Relocation Handbook HC Plan 1,” dated January 2018, (see 17 || ECF No. 33-8 (“Ex. 7”)); a document entitled “Fact Sheet: Transitioning to AbbVie’s 18 || Retirement Benefits,” (see ECF No. 33-9 (“Ex. 8”’)); a document entitled “AbbVie — total 19 ||rewards highlights: an overview of benefits, compensation and well-being resources for 20 ||employees of Pharmacyclics, an AbbVie Company,” (see ECF No. 33-10 (“Ex. 9”)); and 21 |}a “Mutual Arbitration Agreement,” (see ECF No. 33-11 (“Ex. 10” or “Arbitration 22 || Agreement”’)). (See Lee Decl. 4] 13-18.) 23 The Arbitration Agreement was printed on letterhead displaying the following image 24 the upper righthand corner of each page: 25 * @ pharmacyclics 27 A An AbbVie Company 28 || (See generally Ex. 10.) In relevant part, the Arbitration Agreement provides:

1 In consideration of the binding mutual agreement to arbitrate claims as set forth herein (“Arbitration Agreement”), the mutual waiver of rights set forth 2 herein, the undersigned Employee’s (“Employee”) employment (if not 3 currently employed), or Employee’s continued employment (if Employee is currently employed), Employee and Employer agree that, except as otherwise 4 provided in this Arbitration Agreement, any existing, currently pending and/or 5 future claim (except a claim that by law is non-arbitrable) that has arisen or arises between Employee, any third-party for which Employee pursues a 6 claim, including but not limited to an individual, entity, and/or a state or 7 federal agency (“Employee Parties”), and the Company, its past, present, and future: parent(s), subsidiaries, affiliates, and/or their respective past, present, 8 and future: officers, directors and/or employees (“Employer Parties”), 9 including but not limited to claims arising from and/or relating in any way to Employee’s hiring, Employee’s employment with, and/or the severance of 10 Employee’s employment with the Company, shall be resolved by final and 11 binding arbitration before a single, neutral arbitrator as the exclusive remedy, to the full extent permitted by law. Employee hereby covenants not to file a 12 lawsuit against Employer Parties and Employer hereby covenants not to file a 13 lawsuit against Employee Parties in contravention of this Arbitration Agreement. 14

15 (See id. § I.) In their briefing, the Parties distinguish between the first sentence as the 16 “Arbitration Clause” and the second as the “Covenant Not to Sue.” (See generally 17 Adcentrx Mot.; Lee Mot.; Opp’n; Reply.) 18 Dr. Lee signed the offer letter on October 26, 2018, (see ECF No. 33-12 (“Ex. 11”)), 19 and the Relocation Handbook and Arbitration Agreement on October 29, 2018, (see ECF 20 Nos. 33-13 (“Ex. 12”) and 33-14 (“Ex. 13”), respectively). (See Lee Decl. ¶¶ 19–21.) 21 On January 8, 2019, Dr. Lee filled out an “Application for Employment” with 22 “Pharmacyclics, An AbbVie Company.” (See ECF No. 33-15 (“Ex. 14”); see also Lee 23 Decl. ¶ 24.) Dr. Lee listed his “Most Recent Employer” as “AbbVie” and, under “Reason 24 For Leaving,” wrote “[i]nternal transfer.” (See Ex. 14 at 2.) Consistent with the offer 25 letter, which informed Dr. Lee that he “w[ould] remain on AbbVie payroll and benefits 26 programs until such time that AbbVie and PCYC payroll and benefits administration 27 systems are integrated,” (see Ex. 6 at 1), Dr. Lee’s 2019 W-2 indicated that his employer 28 was “AbbVie, Inc.” (See ECF No. 33-16 (“Ex. 15”).) 1 D. Dr. Lee’s Employment with Adcentrx 2 In April 2021, while still employed by PCYC, Dr. Lee accepted a position with 3 Defendant Adcentrx, which had been founded five months earlier. (FAC ¶¶ 3, 99, 100.) 4 Dr. “Lee stayed on at PCYC for an additional two months, until June 2021, planning for 5 his departure to Adcentrx.” (Id. ¶ 99.) Dr. “Lee resigned from PCYC in June 2021.” (Id.) 6 “Upon joining Adcentrx, Lee used and disclosed AbbVie’s trade secret and 7 confidential information, including but not limited to AbbVie’s payload trade secret 8 designs ABBV-1, ABBV-2, AbbVie’s linker-drug trade secret design, AbbVie’s ADC 9 trade secrets, and AbbVie’s method and scientific information trade secrets to his new 10 employer.” (Id. ¶ 101.) “Within approximately four months of Lee joining a five-month- 11 old company, Adcentrx began filing a series of patent applications, naming Lee as an 12 inventor, disclosing AbbVie’s trade secrets and confidential information, an impossibly 13 fast timeframe for independent invention of the subject matter.” (Id. ¶ 102.) 14 II. Procedural Background 15 AbbVie initiated this action on December 15, 2023, alleging four causes of action 16 for (1) misappropriation of trade secrets under the Defend Trade Secrets Act of 2016 17 (“DTSA”), 18 U.S.C. § 1836, against both Adcentrx and Dr. Lee; (2) declaratory judgment 18 against Adcentrx and Dr. Lee; (3) breach of the Inventions Assignment Provisions of the 19 Employment Agreement against Dr. Lee; and (4) breach of the Confidentiality Provisions 20 of the Employment Agreement against Dr. Lee. (See generally ECF No. 1.) 21 On January 22, 2024, Dr. Lee moved to compel AbbVie’s claims against him to 22 arbitration and stay these proceedings pending arbitration or, alternatively, to dismiss 23 AbbVie’s initial complaint, (see generally ECF No. 14), and Adcentrx moved to stay 24 pending arbitration of AbbVie’s claims against Dr. Lee or, alternatively, to dismiss. (See 25 generally ECF No. 15.) The Honorable Roger T. Benitez took the motions under 26 submission without oral argument, (see ECF No. 26), and, on July 29, 2024, granted in part 27 and denied in part the motions. (See generally ECF No. 27 (the “Prior Order”).) 28 Specifically, Judge Benitez denied Dr. Lee’s motion to compel arbitration, denied as moot 1 Dr. Lee’s and Adcentrx’s motions to stay, and granted Defendants’ motions to dismiss. 2 (See generally id.) 3 After this action was transferred to the undersigned on August 1, 2024, (see ECF 4 No. 28), AbbVie filed the operative First Amended Complaint. (See generally ECF No. 5 29.) The instant Motions followed on September 10, 2024. (See generally ECF Nos. 32 6 & 33.) 7 DR. LEE’S MOTION TO COMPEL ARBITRATION 8 I. Legal Standard 9 The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1–16, governs arbitration 10 agreements in any contract affecting interstate commerce, including those found in 11 employment contracts. See Cir. City Stores, Inc. v. Adams, 532 U.S. 105, 119, (2001); see 12 also 9 U.S.C. § 2. The FAA “provides that ‘an agreement in writing to submit to arbitration 13 an existing controversy arising out of such a contract, transaction, or refusal shall be valid, 14 irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the 15 revocation of any contract.’” Fli-Lo Falcon, LLC v. Amazon.com, Inc., 97 F.4th 1190, 16 1193 (9th Cir. 2024) (quoting AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 17 (2011)). 18 Courts review arbitration agreements in light of the “liberal federal policy favoring 19 arbitration agreements.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 20 1, 24–25 (1983); Soto v. Am. Honda Motor Co., 946 F. Supp. 2d 949, 953–54 (N.D. Cal. 21 2012). “If a party ignores its agreement to arbitrate, the other party may ask a court to issue 22 ‘an order directing that such arbitration proceed in the manner provided for in such 23 agreement.’” Fli-Lo Falcon, 97 F.4th 1190 at 1194 (quoting 9 U.S.C. § 4). Further, “[i]f 24 an agreement exists, the FAA ‘leaves no place for the exercise of discretion by a district 25 court, but instead mandates that [it] shall direct the parties to proceed to arbitration.’” Id. 26 at 1193 (quoting Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985)). 27 / / / 28 / / / 1 II. Analysis 2 Dr. Lee seeks to compel to arbitration AbbVie’s claims against him under the 3 arbitration agreement he signed with PCYC. (See generally Lee Mot.) “Generally, in 4 deciding whether to compel arbitration, a court must determine two ‘gateway’ issues: 5 (1) whether there is an agreement to arbitrate between the parties; and (2) whether the 6 agreement covers the dispute.” Brennan 796 F.3d at 1130 (citing Howsam v. Dean Witter 7 Reynolds, Inc., 537 U.S. 79, 84 (2002)). Dr. Lee “bears the burden of showing each of 8 these elements by a preponderance of the evidence.” See Hansen v. Rock Holdings, Inc., 9 434 F. Supp. 3d 818, 824 (E.D. Cal. 2020) (citing BG Grp., PLC v. Republic of Argentina, 10 572 U.S. 25, 60 (2014); Ashbey v. Archstone Prop. Mgmt., Inc., 785 F.3d 1320, 1323 (9th 11 Cir. 2015); Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 565 (9th Cir. 2014)), rev’d on 12 other grounds, 1 F.4th 667 (9th Cir. 2021). 13 AbbVie challenges only the first prong, arguing that Dr. Lee cannot enforce the 14 arbitration agreement against it as a non-signatory. (See generally Opp’n at 9–19.) As 15 Judge Benitez previously noted, (see Prior Order at 5 (citing Comer v. Micor, Inc., 436 16 F.3d 1098, 1101 (9th Cir. 2006)), “[u]nder California law, a party seeking to compel 17 arbitration against a non-signatory to the agreement must show that one of the following 18 exceptions applies: (1) incorporation by reference; (2) assumption; (3) agency; (4) piercing 19 the corporate veil or alter ego; (5) estoppel; and (6) third party beneficiary.” Dr. Lee argues 20 that his claims should be compelled to arbitration because (1) the Arbitration Clause 21 expressly applies to AbbVie, (see Lee Mot. at 10); (2) AbbVie provided PCYC ostensible 22 agency to bind AbbVie, (see id. at 10–13); and (3) AbbVie is a third-party beneficiary of 23 the Arbitration Agreement, (see Lee Mot. at 13–19). 24 A. Plain Language 25 In support of its argument that the plain language of the Arbitration Agreement 26 encompasses claims between Dr. Lee and AbbVie, Dr. Lee relies on the Arbitration Clause: 27 “Employee and Employer agree that . . . any . . . future claim (except a claim that by law 28 is non-arbitrable) that has arisen or arises between . . . []Employee Parties[], and . . . 1 []Employer Parties[] . . . shall be resolved by final and binding arbitration,” (see Arb. 2 Agrmt. § I (emphasis added)), because “Employer Parties” is defined to include PCYC and 3 “its past, present, and future: parent(s),” (see id.), namely, AbbVie. (See Lee Mot. at 10.) 4 AbbVie, on the other hand, relies on the following Covenant Not to Sue, which provides 5 that “Employee hereby covenants not to file a lawsuit against Employer Parties and 6 Employer hereby covenants not to file a lawsuit against Employee Parties,” (see Arb. 7 Agrmt. § I), noting that it was only PCYC—and not “Employer Parties”—who covenanted 8 not to sue Dr. Lee. (See Opp’n at 9–10.) At the hearing, AbbVie also argued that the 9 Arbitration Clause was explicitly an agreement between “Employee and Employer,” i.e., 10 Dr. Lee and PCYC, not AbbVie. (See Tr. at 13:7–20.) 11 Although the Arbitration Clause encompasses claims arising out of disputes between 12 Dr. Lee and “Employer Parties,” including AbbVie, the Arbitration Agreement itself is 13 explicitly entered into only between “Employee and Employer,” i.e., Dr. Lee and PCYC. 14 Accordingly, the Arbitration Clause Dr. Lee invokes would likely be definitive of the 15 second “gateway” inquiry the court must make, namely, whether the Arbitration 16 Agreement covers the instant dispute, but Dr. Lee still must demonstrate that he is entitled 17 to enforce the Arbitration Agreement against AbbVie, which remains a non-party and non- 18 signatory to the Arbitration Agreement. 19 B. Ostensible Agency 20 Dr. Lee next argues that “AbbVie provide[d] the employee who sent Dr. Lee the 21 Arbitration Agreement ostensible authority to bind AbbVie to the Arbitration 22 Agreement[.]” (See Lee Mot. at 10.) “Courts look to traditional principles of contract and 23 agency law to determine whether a nonsignatory is bound by an arbitration agreement 24 signed by its principal or agent.” Cohen v. TNP 2008 Participating Notes Program, LLC, 25 31 Cal. App. 5th 840, 860 (2019). Under California law, “[a]n agency is either actual or 26 ostensible.” Cal. Civ. Code § 2298. “An agency is ostensible when the principal 27 intentionally, or by want of care, causes a third person to believe another to be his agent 28 who is not really employed by him.” Cal. Civ. Code § 2300; see also Cal Civ. Code § 2317 1 (“Ostensible authority is such as a principal, intentionally or by want of ordinary care, 2 causes or allows a third person to believe the agent to possess.”). “A principal is bound by 3 acts of his agent, under a merely ostensible authority, to those persons only who have in 4 good faith, and without want of ordinary care, incurred a liability or parted with value, 5 upon the faith thereof.” Cal. Civ. Code § 2334. 6 “An agent’s authority may be implied from the circumstances of a particular case 7 and may be proved by circumstantial evidence.” C.A.R. Transp. Brokerage Co. v. Darden 8 Rests., Inc., 213 F.3d 474, 479–80 (9th Cir. 2000) (citing Kelley v. R.F. Jones Co., 272 Cal. 9 App. 2d 113, 120 (1969)). “While it is true that the ostensible authority of an agent cannot 10 be based solely upon the agent’s conduct, it is not true that the principal must make explicit 11 representations regarding the agent’s authority to the third party before ostensible authority 12 can be found.” Id. at 480 (citing Kaplan v. Coldwell Banker Residential Affiliates, Inc., 59 13 Cal. App. 4th 741, 747 (1997)). “For example, ostensible authority may be proven through 14 evidence of the principal transacting business solely through the agent, the principal 15 knowing that the agent holds himself out as clothed with certain authority but remaining 16 silent, the principal’s representations to the public in general, and the customs and usages 17 of the particular trade in question.” Id. (first citing Kelley, 272 Cal. App. 2d at 120; then 18 citing Am. Cas. Co. v. Krieger, 181 F.3d 1113, 1121 (9th Cir. 1999); then citing Kaplan, 19 59 Cal. App. 4th at 747; then citing Correa v. Quality Motor Co., 118 Cal. App. 2d 246, 20 251 (1953); Auto Auction, Inc. v. Riding Motors, 187 Cal. App. 2d 693, 696–97 (1960)). 21 Judge Benitez rejected Dr. Lee’s prior argument regarding agency based on the fact 22 that PCYC is a subsidiary of AbbVie, concluding that Dr. Lee had not introduced “facts 23 demonstrat[ing] Plaintiff exercised such a degree of control over PCYC that PCYC is ‘a 24 mere instrumentality’ of Plaintiff.” (See Prior Order at 8.) Although Judge Benitez did not 25 explicitly address Dr. Lee’s ostensible agency argument in his Prior Order, (see generally 26 Prior Order; see also Lee Mot. at 12 n.5; Lee Opp’n at 13; Lee Reply at 9), Judge Benitez’s 27 “refusal to discuss an argument constitutes an implicit rejection of those arguments,” see 28 Roy v. Cnty. of Los Angeles, No. CV1209012ABFFMX, 2018 WL 3439168, at *4 (C.D. 1 Cal. July 11, 2018) (citing Clemons v. Mississippi, 494 U.S. 738, 747 n.3 (1990); Savage 2 v. Hadlock, 296 F.2d 417, 419 (D.C. Cir. 1961)) While “[a]ll rulings of a trial court are 3 subject to revision at any time before the entry of judgment,” United States v. Smith, 389 4 F.3d 944, 949 (9th Cir. 2004) (emphasis in original) (quoting City of Los Angeles v. Santa 5 Monica Baykeeper, 254 F.3d 882, 888 (9th Cir. 2001)), the Court is mindful of the Ninth 6 Circuit’s recent admonition that “judges who sit in the same court should not attempt to 7 overrule the decisions of each other.” See Zeyen v. Bonneville Jt. Dist. # 93, 114 F.4th 8 1129, 1138 (9th Cir. 2024) (quoting Castner v. First Nat’l Bank of Anchorage, 278 F.2d 9 376, 379 (9th Cir. 1960)). Indeed, the Ninth Circuit recently clarified that “[a] second 10 district judge should not reconsider the ruling of a predecessor unless: ‘(1) the decision is 11 clearly erroneous and its enforcement would work a manifest injustice, (2) intervening 12 controlling authority makes reconsideration appropriate, or (3) substantially different 13 evidence was adduced at a subsequent trial.’” Id. at 1138 (quoting Delta Sav. Bank v. 14 United States, 265 F.3d 1017, 1027 (9th Cir. 2001)). 15 That said, the Court recognizes that Judge Benitez explicitly denied Dr. Lee’s prior 16 motion “without prejudice,” (see Prior Order at 8, 13), and defense counsel represented at 17 oral argument that they would have filed a second motion to compel arbitration whether or 18 not the case had been reassigned. (See Tr. at 11:20–22.) Although Dr. Lee relies in the 19 instant second attempt to compel AbbVie to arbitration on much of the same evidence that 20 he introduced in his prior reply, (compare ECF Nos. 24-1–15, with ECF Nos. 32-1–26), he 21 has included some additional evidence, including several press releases, (see ECF Nos. 22 33-2 (“Ex. 1”), 33-3 (“Ex. 2”), 33-4 (“Ex. 3”)); AbbVie’s 2018 Responsible Action Report, 23 (see ECF No. 33-19 (“Ex. 17”)); and AbbVie’s Form 10-Q dated August 7, 2018, (see ECF 24 No. 33-20 (“Ex. 18”)). The Court concludes, however, that only two of these new exhibits 25 are relevant to what Dr. Lee reasonably believed when he signed the Arbitration 26 Agreement on October 29, 2018. (Compare Ex. 13 at 5, with Exs. 1–3, 17, 18); see also 27 Pereda v. Atos Jiu Jitsu LLC, 85 Cal. App. 5th 759, 771 (2022) (“Because ostensible 28 agency focuses on what a reasonable person knowing what plaintiff knew would have 1 believed, we necessarily focus on what plaintiff knew at the time of [signing the arbitration 2 agreement].” (emphasis in original) (citing A.C. Label Co. v. Transam. Ins. Co., 48 Cal. 3 App. 4th 1188, 1194 (1996))). The first, a press release dated May 16, 2015—more than 4 three years before Dr. Lee even began exploring his transfer to PCYC—heralds AbbVie’s 5 acquisition of PCYC, boasting that, “[t]ogether with its wholly-owned subsidiary, 6 Pharmacyclics, AbbVie employs more than 28,000 people worldwide and markets 7 medicines in more than 170 countries.” (See Ex. 1 at 2.) The second, dated December 11, 8 2017, is a press release from “Pharmacyclics, An AbbVie Company” regarding clinical 9 results from a trial of its drug IMBRUVICA®. (See generally Ex. 3.) Admittedly, despite 10 appearing on PCYC’s website, the December 2017 press release reads in many ways as 11 though it were an AbbVie press release, opening “AbbVie (NYSE: ABBV), a global 12 biopharmaceutical company, today announced new data on the biologic and cellular 13 mechanisms of IMBRUVICA® (ibrutinib),” (see id. at 1), and providing information 14 “About AbbVie” but not PCYC, (see id. at 4). Even accepting that Dr. Lee reviewed these 15 press releases and was aware at the time he was presented with the Arbitration Agreement 16 that AbbVie included PCYC employees in its headcount and had issued a press release 17 concerning one of the drugs developed by PCYC, however, these representations by 18 AbbVie could not give rise to a “reasonable” belief that AbbVie had authorized PCYC to 19 bind it to arbitration. 20 Dr. Lee’s previously submitted exhibits also fail to establish that PCYC was acting 21 as AbbVie’s ostensible agent when it presented the Arbitration Agreement to Dr. Lee. It 22 is clear that Dr. Lee received several documents throughout the “transfer” process that 23 prominently displayed the name AbbVie, including an “AbbVie Relocation Handbook,” 24 (see ECF Nos. 33-8 (“Ex. 7”), 33-13 (“Ex. 12”)), and “AbbVie Total Rewards Highlights: 25 An Overview of benefits, compensation and well-being resources for employees of 26 Pharmacyclics, an AbbVie company.” (See ECF No. 33-10 (“Ex. 9”).) Dr. Lee also attests 27 that he “remember[s] looking up the online presence of Mr. Richter and also Ms. Lavanya 28 Dinesh Kumar, a copy on th[e] email[s he exchanged during the transfer process], and 1 understanding them to be both AbbVie employees working at PCYC.” (Lee Decl. ¶ 13.) 2 All of the individuals with whom Dr. Lee corresponded, however, had “@pcyc.com” email 3 addresses, (see generally Exs. 4, 5), and Dr. Lee fails to indicate what sources he viewed 4 led him to understand that they were “AbbVie employees working at PCYC.” (See 5 generally Lee Decl.) Even assuming that Dr. Lee assessed the employees’ “online 6 presence” through their LinkedIn profiles,2 ostensible authority cannot be based solely on 7 PCYC’s conduct. See C.A.R. Transp. Brokerage, 213 F.3d at 480. 8 Rather, the burden is on Dr. Lee to prove that AbbVie took some action that would 9 lead him reasonably to believe that PCYC had the authority to bind AbbVie to arbitration. 10 See, e.g., Knapke v. PeopleConnect, Inc., 38 F.4th 824, 832 (9th Cir. 2022) (“[T]he party 11 seeking to compel arbitration[] must prove the existence of a valid agreement by a 12 preponderance of the evidence.” (citing Wilson v. Huuuge, Inc., 944 F.3d 1212, 1219 (9th 13 Cir. 2019))); Rogers v. Roseville SH, LLC, 75 Cal. App. 5th 1065, 1074–75 (2022) (“The 14 burden of proving that a purported agent had the authority to act for the purported principal 15 in a particular circumstance lies with the persons dealing with the agent.”); see also Comer 16 v. Micor, Inc., 436 F.3d 1098, 1104 n.11 (9th Cir. 2006) (noting “the liberal federal policy 17 regarding the scope of arbitrable issues is inapposite” where, as here, “[t]he question . . . is 18 not whether a particular issue is arbitrable, but whether a particular party is bound by the 19 arbitration agreement” (emphasis in original) (citing Fleetwood Enters., Inc. v. Gaskamp, 20 280 F.3d 1069, 1073 (5th Cir. 2002))); Three Valleys Mun. Water Dist. v. E.F. Hutton & 21 Co., 925 F.2d 1136, 1141 (9th Cir. 1991) (“The district court, when considering a motion 22 to compel arbitration which is opposed on the ground that no agreement to arbitrate had 23 been made between the parties, should give to the opposing party the benefit of all 24 25 2 The LinkedIn profiles are only relevant if they were viewed by Dr. Lee before he signed the 26 Arbitration Agreement. See Pereda, 85 Cal. App. 5th at 771. Not only does Dr. Lee not attest that he viewed the LinkedIn profiles, (see generally Lee Decl.), which are instead introduced through a 27 declaration from counsel, (see ECF No. 33-17 (“Elihu Decl.”) ¶¶ 3, 6–11), but there is no indication that the September 9, 2024 versions of the LinkedIn profiles fairly represent what was displayed six years 28 1 reasonable doubts and inferences that may arise.”). Here, the only relevant information 2 from AbbVie that Dr. Lee has identified are the two press releases discussed above, see 3 supra page 13, which are insufficient to cause Dr. Lee to reasonably believe that PCYC 4 had ostensible authority to bind AbbVie to arbitration. See, e.g., Pereda, 85 Cal. App. 5th 5 at 771–73 (affirming that injured student’s belief that national jiujitsu association had 6 control over local affiliate studio’s sparring activities based on affiliate’s display of 7 association’s banner in its studio and association’s listing of affiliate on its website was not 8 reasonable as a matter of law); Hughes v. Farmers Ins. Exch., 107 Cal. App. 5th 73, as 9 modified (Dec. 3, 2024) (affirming summary adjudication of claim brought by homeowner 10 against national insurance company based on fire loss because homeowner’s belief that 11 broker was acting as national insurance company’s agent in procuring fire loss plan under 12 California FAIR Plan based on use of national insurance company’s logo in 13 communications and endorsement was not reasonable as a matter of law); see also Markow 14 v. Rosner, 3 Cal. App. 5th 1027, 1045 (2016) (“[W]hether [the plaintiff]’s purported 15 conclusion that [the defendant doctor] was [the defendant hospital]’s agent was reasonable 16 . . . is a question of law.”). 17 C. Third-Party Beneficiary 18 Finally, Dr. Lee contends that AbbVie is bound by the Arbitration Agreement as a 19 third-party beneficiary. (See Lee Mot. at 13–15.) “A third[-]party beneficiary is someone 20 who may enforce a contract because the contract is made expressly for his benefit.” Pillar 21 Project AG v. Payward Ventures, Inc., 64 Cal. App. 5th 671, 677 (2021) (internal quotation 22 marks omitted) (quoting Jensen v. U-Haul Co. of Cal., 18 Cal. App. 5th 295, 301 (2017)). 23 “The test for determining whether a contract was made for the benefit of a third person is 24 whether an intent to benefit a third person appears from the terms of the contract.” Id. 25 (internal quotation marks omitted) (quoting Jensen, 18 Cal. App. 5th at 301). “[T]he mere 26 fact that a contract results in benefits to a third party does not render that party a “third 27 party beneficiary.” Id. (alteration in original & internal quotation marks omitted) (quoting 28 Jensen, 18 Cal. App. 5th at 302). 1 Judge Benitez denied Dr. Lee’s prior motion on the grounds that “[t]he Court cannot 2 conclude that Plaintiff’s arguable inclusion in the definition of the term ‘Employer Parties’ 3 is sufficient to show the Arbitration Agreement was made expressly for Plaintiff’s benefit.” 4 (See Prior Order at 6.) Ultimately, Dr. Lee introduces no new evidence or arguments that 5 would merit revisiting Judge Benitez’s denial of Dr. Lee’s prior request on this ground. 6 III. Conclusion 7 In light of the foregoing, the Court concludes that Dr. Lee has failed to demonstrate 8 that there exists a valid arbitration agreement that binds AbbVie. Accordingly, the Court 9 DENIES Dr. Lee’s Motion to the extent it seeks to compel AbbVie to arbitration. 10 MOTIONS TO STAY 11 Because the Court DENIES Dr. Lee’s Motion to compel AbbVie to arbitration, see 12 supra, the Court also DENIES AS MOOT Dr. Lee’s and Adcentrx’s Motions to the extent 13 they request that the Court stay this action pending arbitration of AbbVie’s claims against 14 Dr. Lee. (See Lee Mot. at 16–17; Adcentrx Mot. at 3–6.) 15 MOTIONS TO DISMISS 16 Alternatively, both Dr. Lee and Adcentrx seek to dismiss with prejudice AbbVie’s 17 First Amended Complaint in its entirety. (See generally Lee Mot. at 17–25; Adcentrx Mot. 18 at 6–15.) 19 I. Standard of Review 20 “A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to 21 state a claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’” 22 Conservation Force v. Salazar, 646 F.3d 1240, 1241–42 (9th Cir. 2011) (quoting Navarro 23 v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). “A district court’s dismissal for failure to 24 state a claim under Federal Rule of Civil Procedure 12(b)(6) is proper if there is a ‘lack of 25 a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal 26 theory.’” Id. at 1242 (quoting Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th 27 Cir. 1988)). 28 / / / 1 “Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a ‘short and 2 plain statement of the claim showing that the pleader is entitled to relief.’” Ashcroft v. 3 Iqbal, 556 U.S. 662, 677–78 (2009) (quoting Fed. R. Civ. P. 8(a)(2)). “[T]he pleading 4 standard Rule 8 announces does not require ‘detailed factual allegations,’ but it demands 5 more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. at 678 6 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, “[a] 7 pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a 8 cause of action will not do.’” Id. (quoting Twombly, 550 U.S. at 555). 9 “To survive a motion to dismiss, a complaint must contain sufficient factual matter, 10 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id. (quoting 11 Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads 12 factual content that allows the court to draw the reasonable inference that the defendant is 13 liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “[W]here the 14 well-pleaded facts do not permit the court to infer more than the mere possibility of 15 misconduct, the complaint has alleged—but it has not ‘show[n]’— ‘that the pleader is 16 entitled to relief.’” Id. at 679 (second alteration in original) (quoting Fed. R. Civ. P. 17 8(a)(2)). 18 “If a complaint is dismissed for failure to state a claim, leave to amend should be 19 granted ‘unless the court determines that the allegation of other facts consistent with the 20 challenged pleading could not possibly cure the deficiency.’” DeSoto v. Yellow Freight 21 Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well 22 Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). “A district court does not err in 23 denying leave to amend where the amendment would be futile.” Id. (citing Reddy v. Litton 24 Indus., 912 F.2d 291, 296 (9th Cir. 1990), cert. denied, 502 U.S. 921 (1991)). 25 II. Analysis 26 Because both Dr. Lee and Adcentrx seek to dismiss AbbVie’s First Amended 27 Complaint in its entirety, (see generally Lee Mot. at 17–25; Adcentrx Mot. at 6–15), the 28 Court addresses each of AbbVie’s four causes of action in turn. 1 A. First Cause of Action: Misappropriation of Trade Secrets 2 AbbVie’s first cause of action is for misappropriation of trade secrets under the 3 DTSA against Adcentrx and Dr. Lee. (FAC ¶¶ 164–89.) “To state a claim for 4 misappropriation of trade secrets, a plaintiff must allege: (1) existence and ownership of a 5 trade secret; (2) misappropriation thereof; and (3) damages.” (Prior Order at 9 (citing 6 AlterG, Inc. v. Boost Treadmills LLC, 388 F. Supp. 3d 1133, 1144 (N.D. Cal. 2019)). Judge 7 Benitez previously determined that AbbVie had failed to state a claim under both the first 8 and second prongs, (see generally id. at 9–12), and Defendants again move to dismiss on 9 these same grounds. (See generally Adcentrx Mot. at 6–14; Lee Mot. at 17–24.) 10 1. Existence of Trade Secrets 11 Under the DTSA, “[a] ‘trade secret’ has three elements: (1) it must be the right type 12 of information (i.e., financial, scientific, technical, etc.); (2) the owner has taken reasonable 13 measures to keep secret; and (3) the information derives independent economic value from 14 its secrecy.” (Prior Order at 9 (citing 18 U.S.C. § 1839(3); Kimera Labs Inc. v 15 Jayashankar, No. 21-cv-2137-MMA-DDL, 2022 WL 11965058 at *7 (S.D. Cal. Oct. 20, 16 2022)).) In its First Amended Complaint, AbbVie identifies several specific categories of 17 trade secrets—the “Payload Trade Secrets,” (see FAC ¶¶ 44–51); the “Linker-Drug Design 18 Trade Secrets,” (see id. ¶¶ 52–58); the “ADC Trade Secrets,” (see id. ¶¶ 59–62); and the 19 “Methods and Scientific Information Trade Secrets,” (see id. ¶¶ 62–65)—each of which 20 Defendants contend are insufficiently pleaded. (See Adcentrx Mot. at 7–12; Lee Mot. at 21 17–22.) 22 a. AbbVie’s Payload Trade Secrets 23 AbbVie defines its “Payload Trade Secrets” as DLJ-43 (also referred to as ABBV- 24 1), which Dr. Lee synthesized on November 8, 2016, and DLJ-51, which Dr. Lee 25 synthesized no later than January 4, 2017. (See FAC ¶¶ 48, 49.) Defendants argue that 26 AbbVie fails adequately to allege that these compounds were kept secret and had 27 / / / 28 / / / 1 independent economic value. (See Adcentrx Mot. at 7–12; Lee Mot. at 18–19.) AbbVie 2 responds that it “repeatedly pled that all of its trade secrets were unknown to anyone 3 without a secrecy obligation to AbbVie prior to Lee’s and Adcentrx’s misappropriation,” 4 (see Opp’n at 26 (citing FAC ¶¶ 43, 51, 55, 57, 61, 64)), and that “the FAC details the 5 economic value of the trade secrets to a biopharmaceutical company, the efforts AbbVie 6 takes to maintain their secrecy, and the value Adcentrx placed on them by using them in 7 its competing clinical drug program. (See id. at 28 (citing FAC ¶¶ 66–93).) 8 The Court concludes that AbbVie’s allegations that it “maintained the secrecy of its 9 proprietary MTi ADC payload designs, including but not limited to DJL-43 and DJL-51,” 10 (see FAC ¶ 51), are sufficient. Among other things, AbbVie alleges that it designated 11 documents concerning its Payload Trade Secrets confidential, (see FAC ¶ 51); allowed 12 access to such documents only through “computer controls, limitations on data access, IT 13 disaster recovery, network security, user setup procedures, password administration and 14 management, data backup, security audits, security breach investigations, and mobile 15 device security,” (see id. ¶ 82; see also id. ¶¶ 83–86); and required third parties to sign 16 nondisclosure agreements, (see id. ¶ 89), and employees sign confidentiality agreements. 17 (See id. ¶ 90.) 18 As for whether AbbVie sufficiently alleges that the Payload Trade Secrets have 19 independent economic value, as AbbVie notes, (see Opp’n at 27), “[t]he standard to show 20 that trade secrets derive economic value is not a high standard.” See Calendar Rsch. LLC 21 v. StubHub, Inc., No. 2:17-CV-04062-SVW-SS, 2017 WL 10378336, at *4 (C.D. Cal. 22 Aug. 16, 2017). AbbVie alleges, among other things, that it “spent at least five years and 23 many millions of dollars developing its MTi ADC technology,” (see FAC ¶ 72), and that 24 “[t]he worldwide market for ADCs generates billions of dollars in revenue annually, and it 25 26 27 3 To the extent Defendants argue in their Reply that the Payload Trade Secrets are insufficiently pleaded, (see Reply at 13), this argument is untimely, and the Court concludes that AbbVie’s allegations 28 1 is growing.” (See id. ¶ 74.) Indeed, “the ADC market is highly competitive and projected 2 to grow from $9.7 billion in 2023 to $10.9 billion by 2028,” meaning “AbbVie’s trade 3 secrets are valuable innovations in this market that could potentially generate significant 4 revenue in commercialization.” (See id. ¶ 75.) Consequently, AbbVie’s trade secrets “have 5 independent economic value from not being generally known to others who can obtain 6 economic value from the unconsented disclosure or use of the information and who could 7 use such information to save significant time and resources in developing ADCs to compete 8 against AbbVie in the market.” (See id. ¶ 72.) The Court concludes that these allegations 9 suffice to allow the Parties to proceed to discovery. 10 b. AbbVie’s Linker-Drug Design Trade Secrets 11 AbbVie alleges that its “Linker-Drug Design Trade Secrets” “include novel designs 12 and structural formulas for linker-drugs that Lee designed and synthesized while at 13 AbbVie,” (see FAC ¶ 52), which are comprised of a C-terminal conjugation, dipeptide 14 linker devoid of a p-aminobenzyloxycarbamate (“PABC”) spacer, and stable antibody 15 attachment group. (See id. ¶ 53.) As with Payload Trade Secrets, see supra Section 16 II.A.1.a, Defendants contend that AbbVie “fails to allege the linker-drug was still generally 17 unknown at the time of the alleged misappropriation or has any independent economic 18 value.” (See Adcentrx Mot. at 9–10; Lee Mot. at 19–20.) For the same reasons the Court 19 concludes that AbbVie adequately alleges that the Payload Trade Secrets were kept secret 20 and had independent economic value, see supra Section II.A.1.a, the Court concludes that 21 AbbVie adequately alleges the Linker-Drug Design Trade Secrets. 22 c. AbbVie’s ADC Trade Secrets 23 AbbVie alleges that its trade secrets include “designs for antibody-drug conjugates 24 (ADCs) incorporating AbbVie’s proprietary payloads and linker-drugs,” (see FAC ¶ 59), 25 which “comprise: (1) an antibody conjugated (attached) to an MTi linker-drug through a 26 stable antibody attachment; having (2) a Drug Antibody Ratio (“DAR”) of 8; and 27 (3) possessing hydrophilic shifts compared to the generally known SeaGen’s MMAE 28 ADC.” (See id. ¶ 60.) In addition to arguing that AbbVie fails adequately to allege that 1 the ADC Trade Secrets were kept secret and derived independent economic value, (see 2 Adcentrx Mot. at 11; Lee Mot. at 21), Defendants argue that the “broad, categorical 3 language” used to describe the ADC Trade Secrets is too vague to allege a trade secret. 4 (See Adcentrx Mot. at 10–11; Lee Mot. at 20–21.) Specifically, Defendants fault AbbVie 5 for failing to “describ[e] of what the [stable antibody attachment] actually consists,” 6 include “specific information on how to achieve . . . a [DAR of 8] or what it encompasses,” 7 and “describ[e] what specific ‘hydrophilic shifts’ . . . are its trade secrets.” (See Adcentrx 8 Mot. at 11 (emphasis in original); Lee Mot. at 21 (emphasis in original).) 9 Claims under the DTSA are not subject to a heightened pleading standard. See, e.g., 10 Cedars Sinai Med. Ctr. v. Quest Diagnostic Inc., No. CV 17-5169-GW(FFMX), 2018 WL 11 2558385, at *3–4 (C.D. Cal. Feb. 12, 2018); see also Coldwell Solar, Inc. v. ACIP Energy 12 LLC, No. 220CV00768TLNCKD, 2021 WL 3857981, at *11 (E.D. Cal. Aug. 30, 2021) 13 (“[T]here is no heightened standard of pleading in claims for misappropriation of trade 14 secrets.” (alteration in original) (quoting Hirel Connectors, Inc. v. United States, No. CV 15 01-11069 DSF (VBKx), 2004 WL 5639770, at *22 (C.D. Cal. Jan 23, 2004))). Indeed, 16 “[c]ase law indicates that the level of detail required in trade secret pleadings is not high.” 17 Cedars Sinai Med. Ctr., 2018 WL 2558385, at *5. All that is required is that AbbVie 18 provide “enough detail for [Defendants] ‘to prepare a defense and for the court to craft 19 limits on discovery.’” Id. at *6 (quoting Gatan, Inc. v. Nion Co., No. 15-cv-01862=PJH, 20 2017 WL 1196819, at *6 (N.D. Cal. Mar. 31, 2017)). Although it is understandable that 21 Defendants would desire additional detail, the Court concludes that AbbVie’s allegations 22 suffice to meet the requisite standard. Additionally, for the same reasons discussed above, 23 see supra Sections II.A.1.a–b, the Court concludes that AbbVie sufficiently alleges that the 24 ADC Trade Secrets were kept secret and derived independent economic value. 25 d. AbbVie’s Methods and Scientific Information Trade Secrets

26 Finally, AbbVie alleges that it developed certain Methods and Scientific Information 27 Trade Secrets, including “[m]ethods for synthesizing AbbVie’s designs for AbbVie 28 proprietary MTi ADC payloads (such as DJL-43, DJL-51), linkers, linker-drugs, and ADCs 1 incorporating the same” (“Design Synthesis Methods”); “[m]ethods (assays) for testing key 2 chemical and biological properties of AbbVie proprietary MTi ADC payloads, linkers, 3 linker-drugs, and ADCs” (“Design and Structural Formula Testing Methods”); and 4 “[s]cientific information and data regarding chemical and biological properties of its 5 payloads, linkers, linker-drugs, and ADCs,” including “information about efficacy, 6 therapeutic index, potency, free drug levels, bystander activity, hydrophilicity, drug- 7 antibody ratio (“DAR”), stability and tolerability of various MTi ADC designs and 8 structural formulas, such as ABBV-1 and ABBV-2, and the associated linker-drug and 9 antibody-drug conjugate designs that were synthesized in the MTi ADC program.” (See 10 FAC ¶ 63.) As with the ADC Trade Secrets, Defendants contend that these allegations 11 “could not be more vague or implausible,” (see Adcentrx Mot. at 11–12; Lee Mot. at 12 21–22), and that AbbVie fails to allege secrecy or independent economic value. (See 13 Adcentrx Mot. at 12; Lee Mot. at 22.) Specifically, “there is not a single description of 14 what the alleged trade secret methods are, what specific ‘payloads, linkers, linker-drugs, 15 and ADCs’ AbbVie claims are its trade secrets, or to what ‘scientific information and data’ 16 it is attempting to refer.” (See Adcentrx Mot. at 11–12 (emphasis in original); Lee Mot. at 17 22 (emphasis in original).) 18 Although a closer question, AbbVie’s final category of trade secrets is sufficiently 19 tethered to the first three categories of trade secrets such that AbbVie’s allegations suffice 20 to put Defendants on notice. In Alta Devices, Inc. v. LG Elecs., Inc., for example, the 21 Honorable Lucy H. Koh concluded that the plaintiff had identified “the exact technology 22 in question: thin-film GaAs solar technology,” and adequately had alleged “Methods of: 23 high throughput thin-film deposition; epitaxial lift-off of the thin-film; and GaAs substrate 24 maintenance and re-use,” as well as “proofs and tests of manufacturing concepts and 25 techniques; tool roadmaps; manufacturing process flows; and identification of equipment 26 and equipment vendors; and information related to the foregoing.” See 343 F. Supp. 3d 27 868, 881 (N.D. Cal. 2018); see also, e.g., Cedars Sinai Med. Ctr., 2018 WL 2558385, at 28 *6 (concluding that the plaintiff had “adequately identified its trade secrets” where it 1 “describe[d] its trade secrets as ‘financial, business, scientific, technical, economic, and/or 2 engineering information, including patterns, plans, compilations, program devices, 3 formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or 4 codes, tangible and/or intangible, related to IBS diagnostic techniques and validation of the 5 same, as well as how to serve unmet clinical needs associated with IBS’”). Accordingly, 6 for the same reasons discussed above, see supra Sections II.A.1.a–c, the Court concludes 7 that AbbVie has identified its Methods and Scientific Information Trade Secrets with 8 sufficient particularity and that those trade secrets have been kept confidential and have 9 derived independent economic value from that secrecy. 10 2. Misappropriation 11 For purposes of the DTSA, “[m]isappropriation is defined as improper: 12 (1) acquisition; (2) disclosure; or (3) use of a trade secret,” (Prior Order at 9 (citing Kimera 13 Labs, 2022 WL 11965058 at *6)), and “[i]mproper is further defined as ‘theft, bribery, 14 misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or 15 espionage through electronic or other means.’” (Id. (quoting Physician’s Surrogacy, Inc. 16 v. German, No. 17cv718-MMA (WVG), 2018 WL 638229 at *4 n.3 (S.D. Cal. Jan. 31, 17 2018)).) Defendants also argue for dismissal of AbbVie’s DTSA cause of action on the 18 grounds that, “[l]ike the deficient initial complaint, the FAC provides no detail about to 19 what, specifically, Dr. Lee is claim[ed] to have had access, and wh[at], if anything, AbbVie 20 claims he took with him when he left his employment with AbbVie/PCYC.” (See Adcentrx 21 Mot. at 12; Lee Mot. at 23.) Adcentrx also contends that “the FAC is devoid of any 22 allegations specifically directed at alleged misappropriation by Adcentrx.” (See Adcentrx 23 Mot. at 13.) 24 As AbbVie notes, (see Opp’n at 32), “trade secrets can exist in employees’ 25 memories; a trade-secret plaintiff does not need to show that an actual document was 26 taken.” See Wisk Aero LLC v. Archer Aviation Inc., No. 3:21-CV-02450-WHO, 2021 WL 27 8820180, at *24 (N.D. Cal. Aug. 24, 2021). Here, AbbVie alleges that, “[f]ollowing his 28 employment with AbbVie, Lee took, used, and disclosed AbbVie’s trade secrets and 1 confidential information without authorization, in connection with his work for Adcentrx,” 2 (see FAC ¶ 94), and that “Adcentrx itself then used and disclosed AbbVie’s trade secrets 3 and confidential information, including by creating an MTi ADC program for itself based 4 on AbbVie’s trade secrets and confidential information, and prepared patent applications 5 and other publications (e.g., investor presentations) that disclose AbbVie trade secret and 6 confidential information.” (See id. ¶ 95.) Specifically, for example, “the very same two 7 payload designs Lee described in AbbVie documents during his AbbVie employment as 8 ‘novel’—ABBV-1 and ABBV-2 (then known as DJL-43 and DJL-51)—are exactly 9 replicated in Adcentrx patent applications naming Lee as an inventor,” (see id. ¶ 96), that 10 was submitted on “an impossibly fast timeframe for independent invention of the subject 11 matter.” (See id. ¶ 102.) Dr. Lee’s and Adcentrx’s acquisition, disclosure, and use of these 12 trade secrets was “improper” given, among other things, Dr. Lee’s continuing contractual 13 obligation under his Employment Agreement with AbbVie to protect the secrecy and 14 confidentiality of AbbVie’s confidential information. (See, e.g., id. ¶ 154.) The Court 15 concludes that these allegations suffice to state a claim for trade secret misappropriation 16 against both Dr. Lee and Adcentrx. See, e.g., Wisk Aero LLC v. Archer Aviation Inc., No. 17 3:21-CV-02450-WHO, 2021 WL 8820180, at *15 (N.D. Cal. Aug. 24, 2021) (“At the very 18 least, the allegedly implausible development timeline concurrent with the influx of former 19 [plaintiff] employees reasonably implies that [defendant company] ‘had reason to know’ 20 that the [competitor project] was improperly derived in part from [the plaintiff]’s trade 21 secrets” (citing 18 U.S.C. § 1839(5)(A); Cal. Civ. Code § 3426.1(b)(1); Navigation 22 Holdings, LLC v. Molavi, 445 F. Supp. 3d 69, 79 (N.D. Cal. 2020))). Accordingly, the 23 Court DENIES Defendants’ Motions to dismiss AbbVie’s first cause of action. 24 B. Second Cause of Action: Declaratory Relief 25 AbbVie also asserts a cause of action against Adcentrx and Dr. Lee under the 26 Declaratory Judgment Act, 28 U.S.C. § 2201, (see FAC ¶¶ 190–99), seeking two 27 declarations, namely, that “AbbVie possesses the right to prosecute the Disputed 28 / / / 1 Applications, and all related . . . patents, applications, continuations, divisionals, 2 continuations-in-part, and thereto,” (see id. at Prayer ¶ 6), and that 3 AbbVie possesses legal or equitable ownership and interest in the Disputed Applications, and all related patents, patent applications, continuations, and 4 derivatives thereto, inconsistent and superior to any interest asserted by 5 Defendants, including, but not limited to, PCT/US2022/048735; PCT/US2022/048739; PCT/US2022/053738; U.S. Provisional Application 6 Serial Nos. 63/275,177; 63/275,403; 63/293,583; and 63/295,476; and that 7 any license to any of these rights purportedly granted by Adcentrx, Lee, or anyone affiliated with them is null and void ab initio. 8

9 (See id. at Prayer ¶ 4.) Defendants’ only argument for dismissal of AbbVie’s second cause 10 of action is that it is dependent on AbbVie’s first cause of action. (See Adcentrx Mot. at 11 14–15; Lee Mot. at 24.) Because the Court concludes that AbbVie’s plausibly alleges that 12 Defendants misappropriated its trade secrets, see supra Section II.A, the Court DENIES 13 Defendants’ Motions to Dismiss AbbVie’s dependent second cause of action. 14 C. Third and Fourth Causes of Action: Breach of Contract 15 AbbVie’s third and fourth causes of action for breach of contract are asserted only 16 against Dr. Lee and relate to his alleged breach of the Inventions Assignment Provisions, 17 (see FAC ¶¶ 200–10), and Confidentiality Provisions, (see id. ¶¶ 211–23), of his 18 Employment Agreement with AbbVie. As with AbbVie’s second cause of action, Dr. Lee 19 contends that AbbVie’s third and fourth causes of action must be dismissed because they 20 are “both . . . based on [Dr. Lee’s] alleged trade secret misappropriation.” (See Lee Mot. 21 at 24–25.) Because the Court concludes that AbbVie’s plausibly alleges that Dr. Lee 22 misappropriated its trade secrets, see supra Section II.A, the Court also DENIES Dr. Lee’s 23 Motion to Dismiss AbbVie’s third and fourth causes of action. 24 III. Conclusion 25 For the foregoing reasons, the Court DENIES Adcentrx’s and Dr. Lee’s Motions to 26 Dismiss. 27 / / / 28 / / /

I CONCLUSION

2 In light of the foregoing, the Court DENIES Adcentrx’s and Dr. Lee’s Motions 3 (ECF Nos. 32 and 33, respectively). Specifically, the Court DENIES Dr. Lee’s Motion to 4 ||compel AbbVie to arbitration, DENIES AS MOOT Adcentrx’s and Dr. Lee’s requests to 5 this action pending arbitration of AbbVie’s claims against Dr. Lee, and DENIES 6 || Adcentrx’s and Dr. Lee’s Motions to Dismiss. Accordingly, Defendants SHALL 7 || ANSWER AbbVie’s First Amended Complaint in accordance with Federal Rule of Civil 8 || Procedure 12(a)(4)(A). 9 IT IS SO ORDERED. 10 || Dated: February 6, 2025 1 [ Od) (2 re Honorable Todd W. Robinson United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28