United States District Court, D. Maryland, Southern Division
Honorable Gina L. Simms United States Magistrate Judge.
LLC (“MedSense” or “Plaintiff”)
brings this action against Defendants University System of
Maryland, University of Maryland, College Park, Miao Yu, and
Hyung Dae Bae (collectively, the “Defendants”).
(ECF No. 25). In essence, Plaintiff alleges that: (a) the
University System of Maryland (“USM”) and
University of Maryland, College Park (“UMD”)
breached an exclusive licensing agreement related to certain
intellectual property (“IP”) by failing to
disclose authored publications to MedSense; and (b)
Defendants Yu and Bae, the authors of those publications,
disclosed trade secrets and confidential information.
before this Court is Defendants’ “Motion to
Dismiss Plaintiff’s First Amended Complaint or, in the
Alternative, for Summary Judgment, ” which Plaintiff
opposes. The issues have been fully briefed. ECF Nos. 29, 30
and 32, and this Court finds that no hearing is necessary.
See Local Rule (L.R.) 105.6. For the reasons set
forth more fully below, Defendant’s motion is
FACTUAL BACKGROUND 
is a limited liability corporation organized under the laws
of the State of Delaware, with a principal place of business
in Irvine, California. (ECF No. 25, ¶ 3). The company
engages in the design and manufacture of miniature fiber
optic pressure and temperature sensors and sensor-based
systems, as well as those related to medical or industrial
application. (Id.). USM is body corporate and
politic composed of constituent organizations. (Id.,
¶ 4). UMD is a higher learning institution and
constituent organization of USM. (Id., ¶ 5).
Miao Yu, Ph.D., is a Maryland resident and UMD professor of
mechanical engineering and research scientist. (Id.,
¶ 6). Hyung Dae Bae, Ph.D., is a Maryland resident and
former UMD professor of mechanical engineering and research
scientist. (Id., ¶ 7). Dr. Bae currently is a
professor at Howard University. (Id.).
about March 15, 2010, MedSense and UMD entered into an
“Exclusive Licensing Agreement” (“2010
Licensing Agreement”). (ECF No. 25, ¶ 15). The
2010 Licensing Agreement granted Plaintiff a worldwide,
exclusive right and license for certain IP, and patent rights
to make and sell certain products, services, and processes
concerning PS-2009-085 “Surface Mountable
Ultra-Miniature Fiber Optic Pressure Sensor”
(“PS-2009-085”). (Id. ¶¶ 15,
20). The sensor technology had been developed by Defendants
Yu and Bae, who MedSense had engaged to further assist with
working on a “proof of concept” or prototype.
(Id., ¶¶ 25-26).
about April 2012, MedSense and UMD agreed to amend the 2010
Licensing Agreement. In addition, in May and July 2012, the
2010 Licensing Agreement was further amended, providing
Plaintiff with exclusive license to inventions IS-2012-047
“Optical Interrogation Program for Fiber-Optic Pressure
Sensors Based on LabVIEW (“IS-2012-047”) and
PS-2012-061 “Smart Multifunctional Optical
System-on-a-Chip Sensor Platform and Optical Wireless Sensor
Network Node” (“PS-2012-061”).
(Id. ¶¶ 19-20). The remaining terms of the
2010 Licensing Agreement remained the same.
about July 2013, the parties entered into an amended and
superseding Exclusive Licensing Agreement (“2013
Licensing Agreement”), whereby Plaintiff agreed to
provide an increased royalty payment to UMD and to provide
equity stakes in MedSense to UMD, Yu, and Bae, as well as
other individuals, in exchange for their existing and future
work in developing the licensed technology. (Id.,
¶ 31). The 2013 Licensing Agreement continued to govern
the patent and licensing rights related to PS-2009-085,
IS-2012-047, and PS-2012-061, as well as PS-2015-080. (ECF
No. 25, ¶¶ 19, 75).
Phase I & III Grants
about August 2013 the Maryland Technology Economic
Development Corporation (“TEDCO”) awarded
MedSense a $100, 000 grant to facilitate the development of a
working proof of concept related to the licensed IP.
(Id., ¶ 34). According to Plaintiff, Defendant
Yu led the efforts of the Phase I Grant and was involved in
sensor design, modeling, and management of the project
(Id.). Defendant Bae oversaw sensor development,
fabrication and evaluation. (Id.). Thereafter, in or
around March 13, 2014, Plaintiff was granted an additional
$100, 000 through a TEDCO Phase III Grant, which was used to
fund a batch fabrication process of first generation optic
sensors, a project led by Defendants Yu and Bae.
(Id., ¶ 42).
about August 1, 2014, Plaintiff and UMD entered into Maryland
Industrial Partnership Agreement No. 5430 (“MIPS
Agreement”) to facilitate additional funding toward
further developing the licensed technology. (Id.,
¶ 36). As a partner, Plaintiff contributed $10, 000 in
cash to UMD and an additional $35, 000 as an “in-kind
contribution.” (Id.). Contained within the MIPS
Agreement was a clause permitting UMD to publish papers or
make public presentations regarding the underlying project,
but subject to providing MedSense with a copy of such
publication or presentation 30-days prior to the date of
submission for MedSense’s review of any company-owned
confidential information. (ECF No. 25, ¶ 38). In
addition, the MIPS Agreement contained a section that told
each party that it had a duty to prevent the disclosure to
third parties of confidential information belonging to the
other party, and also told each party to not use confidential
information for any other purpose not contemplated by the
project and without consent of the other party.
in or about June 2012 until about June 2016, Defendants Yu
and Bae published a series of articles allegedly relating to
their work during the time that they were involved with
MedSense. In a June 2012 article in Optics Express, Vol. 20,
No. 13 entitled “Hybrid Miniature Fabry-Perot Pressure
Sensor Created Using UV-molding Process with Optical Fiber
based Mold, ” Defendants Yu and Bae described the
polymer fiber optic sensor and design manufacturing process.
(Id., ¶ 44). On or about September 23, 2013,
Defendants Yu and Bae, as well as another individual,
published an article in Optics Express, Vol. 21, No. 19,
entitled “MEMS Fabry-Perot Sensor Interrogated by
Optical System-on-a-Chip for Simultaneous Pressure and
Temperature Sensing, ” which purportedly described
optical system-on-a-chip interrogator for pressure and
temperature sensing. (Id., ¶ 48).
around April 2014, Defendants Yu and Bae published an article
in the Journal of Lightwave Technology entitled “Hybrid
Miniature Fabry-Perot Sensor with Dual Optical Cavities for
Simultaneous Pressure and Temperature [M]easurements, ”
which purportedly described the drawback of an all polymer
miniature fiber optic pressure sensor. (Id., ¶
45). Thereafter, in 2015, Defendants Yu and Bae published an
article in Optics Express entitled “On-Fiber Plasmonic
Interferometer for Multi-Parameter-Sensing.”
(Id., ¶ 54).
about June 27, 2016, Defendants Yu and Bae published an
article in Optics Express, Vol. 24, No. 17, entitled
“Low cost, high performance white-light fiber-optic
hydroponic system with a trackable working point, ”
with co-authors employed by Tianjin University.
(Id., ¶ 57). This article described how
Fabry-Perot hydrophones suffer from working point drift and
the method to correct the issue. (Id.).
October 22, 2018, MedSense filed this case in this Court.
(ECF No. 1). On January 4, 2019, MedSense filed an Amended
Complaint, first asserting that Defendant UMD allowed
Defendants Yu and Bae to publish five articles that disclosed
MedSense’s trade secrets without its permission, and in
violation of its exclusive rights to the IP under the terms
of the 2013 Licensing Agreement. (ECF No. 25, Count 1, breach
of contract). Second, according to MedSense,
Defendants’ actions deprived it of its right to protect
from China its trade secrets and its interests in the
exclusively licensed IP through publications. (Id.,
Counts 6 & 7, misappropriation of federal and state trade
secret laws). Third, MedSense avers that the Defendants made
misrepresentations regarding the viability of the IP and what
they would do to promote it, in order to induce MedSense into
the 2010 & 2013 Licensing Agreements, the MIPS Agreement,
the TAPS Licensing Agreement, among others. (Id.,
Counts 2 – 4, state tort claims). Fourth, MedSense
alleges that Defendants’ actions unjustly enriched
them. (Id., Count 8, unjust enrichment). MedSense
further contends that Defendants Yu and Bae tortuously
interfered with the 2013 Licensing Agreement. (Id.,
Count 9, tortious interference with contract). Finally,
Plaintiff requests a declaratory judgment against all
Defendants pursuant to 28 U.S.C. §§ 2201 et
seq. (Id., Count 5). Count 1 is solely against
USM and UMD, whereas Count 9 is solely against Defendants Yu
and Bae in their official and individual capacities.
(Id.). Counts 2-8 are against all Defendants.
STANDARDS OF REVIEW
Motion to Dismiss for Lack of Subject Matter
to Federal Rules of Civil Procedure (“Fed. R. Civ.
P.”) 12(b)(1), a party may move to dismiss a complaint
for lack of subject matter jurisdiction. A Rule 12(b)(1)
motion may allege that sovereign immunity serves to be a
jurisdictional bar against the claim. Cunningham v. Gen.
Dynamics Info. Tech., Inc., 888 F.3d 640, 649 (4th Cir.
2018). When a defendant challenges subject matter
jurisdiction, plaintiff bears the burden of establishing that
subject matter jurisdiction exists. See Evans v. B.F.
Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999).
12(b)(1) challenge to subject matter jurisdiction may proceed
“in one of two ways”: (1) by mounting either a
facial challenge, asserting that the allegations pleaded in
the complaint are insufficient to establish subject matter
jurisdiction; or (2) a factual challenge, asserting
“‘that the jurisdictional allegations of the
complaint [are] not true.’” Kerns v. United
States, 585 F.3d 187, 192 (4th Cir. 2009) (citation
omitted)(alteration in original). In a facial challenge,
“the facts alleged in the complaint are taken as true,
and the motion must be denied if the complaint alleges
sufficient facts to invoke subject matter
jurisdiction.” Kerns, 585 F.3d at 192. In a
factual challenge, however, a “district court is
entitled to decide disputed issues of fact with respect to
subject matter jurisdiction.” Id. Under this
scenario, a district court may regard the pleadings as mere
evidence on the issue and may consider evidence outside the
pleadings without converting the proceeding to one for
summary judgment.” Velasco v. Gov’t of
Indonesia, 370 F.3d 392, 398 (4th Cir. 2004).
district court finds that subject matter jurisdiction is
lacking, then the complaint must be dismissed.
Cunningham, 888 F.3d at 649.
Motion to Dismiss for Failure to State a Claim
defendant files a motion to dismiss pursuant to Fed.R.Civ.P.
12(b)(6), it is asserting that, even if you construe the
facts advanced in the Plaintiff’s complaint as true,
that complaint fails to state a claim upon which relief can
be granted. To survive a motion to dismiss, then, a complaint
must contain sufficient facts, and must state a
“plausible claim for relief.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009); see also Fed.
R. Civ. P. 8(a); Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 556 (2007) (complaint must set forth enough facts
as to suggest a “cognizable cause of action”). A
claim “has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678.
The purpose of Rule 12(b)(6) “‘is to test the
sufficiency of a complaint and not to resolve contests