Vringo ZTE Nov 20 Motion

8/10/2019 Vringo ZTE Nov 20 Motion

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

VRINGO, INC., and

VRINGO INFRASTRUCTURE, INC.

Plaintiffs,

v.

ZTE CORPORATION, and

ZTE USA Inc.,

Defendants

Civil Action No. 14-cv-4988 (LAK)

PLAINTIFFS MEMORANDUM OF LAW IN FURTHER SUPPORT OF

PLAINTIFFS MOTION FOR JUDGMENT ON THE PLEADINGS

AND IN OPPOSITION TO DEFENDANTS

MOTION FOR JUDGMENT ON THE PLEADINGS

Case 1:14-cv-04988-LAK Document 72 Filed 11/20/14 Page 1 of 27


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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES .......................................................................................................... ii

INTRODUCTION ...........................................................................................................................1

ARGUMENT...................................................................................................................................2

I. ZTE Does Not Deny Breach of Contract.............................................................................2

II. ZTEs Excuses for its Breach Fail .......................................................................................3

A. ZTE Attempts to Convert Vringos Contract Claim into a Tort Claim...................3

B. ZTE Argues Unenforceability..................................................................................6

C. ZTE Argues That Vringo Cannot Demonstrate Damages.......................................9

III. ZTEs Motion for Judgment on the Pleadings Should Be Denied.....................................10

A. Vringo Has Stated a Claim for Breach of Contract ...............................................11

B. Vringo Has Stated a Claim for Fraudulent Inducement.........................................13

C. Vringo Has Stated a Claim for Breach ofthe Duty of Good Faith and Fair Dealing ..............................................................16

D. Vringo Has Stated a Claim for Unfair Competition ..............................................18

CONCLUSION..............................................................................................................................22



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TABLE OF AUTHORITIES

Cases Page(s)

511 West 232nd Owners Corp. v. Jennifer Realty Co.,98 N.Y.2d 144 (2002) ........................................................................................................16, 18

Acito v. IMCERA Group, Inc.,47 F.3d 47 (2d Cir. 1995).........................................................................................................14

Ahead Realty LLC v. India House, Inc.,92 A.D.3d 424 (1st Dept 2012) ..............................................................................................21

Ashcroft v. Iqbal,

556 U.S. 662 (2009).................................................................................................................12

Asta, L.L.C. v. Telezygology, Inc.,

629 F. Supp. 2d 837 (N.D. Ill. 2009) .........................................................................................2

AXA Mediterranean Holding, S.P. v. ING Ins. Intl, B.V.,106 A.D.3d 457 (1st Dept 2013) ..............................................................................................4

Cronk v. State,100 Misc. 2d 680 (Ct. Cl. 1979) ................................................................................................8

Dalton v. Educ. Testing Serv.,87 N.Y.2d 384 (1995) ..............................................................................................................18

Dodge v. Richmond,

10 A.D.2d 4 (1st Dept 1960) ....................................................................................................8

Flextech Rights Ltd. v. RHI Entt, LLC,No. 09-cv-3462, 2010 WL 245570 (S.D.N.Y. Jan. 22, 2010) ...................................................6

Fourth Branch Assoc. Mechanicville v. Niagara Mohawk Power Corp.,235 A.D.2d 962 (3d Dept. 1997)......................................................................................16, 18

Harvest Town Vill. Vestavia Hills LLC v. Tvillage Tulsa LP,No. 650146/13, 2013 WL 4494377 (Sup. Ct. N.Y. County Aug. 20, 2013) .......................4, 11

In re CCT Communications, Inc.,464 B.R. 97 (Bankr. S.D.N.Y. 2011)...............................................................................4, 5, 11

In re Lehman Bros. Sec. & ERISA Litig.,Nos. 10-cv-6637, 09-md-2017, 2013 WL 3989066(S.D.N.Y. July 31, 2013) .........................................................................................................13



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Cases Page(s)

ITC Ltd. v. Punchgini, Inc.,9 N.Y.3d 467 (2007) ................................................................................................................21

Jeffrey Milstein, Inc. v. Greger, Lawlor, Roth, Inc.,58 F.3d 27 (2d Cir. 1995).........................................................................................................20

Kalisch-Jarcho, Inc. v. City of New York,58 N.Y.2d 377 (1983) ................................................................................................................5

Koehler v. Bank of Bermuda (New York) Ltd.,209 F.3d 130 (2d Cir. 2000).....................................................................................................14

Lyons v. Westinghouse Elec. Corp.,235 F. Supp. 526 (S.D.N.Y. 1964) ............................................................................................6

Martirano Constr. Corp. v. Briar Contracting Corp.,104 A.D.2d 1028 (2d Dept 1984).............................................................................................5

MBIA Ins. Corp. v. Royal Bank of Can.,No. 12238/09, 2010 WL 3294302(Sup. Ct. Westchester County Aug. 19, 2010).........................................................................18

McCoy Assocs., Inc. v. Nulux, Inc.,218 F. Supp. 2d 286 (E.D.N.Y. 2002) .....................................................................................10

Meagher v. Compania Mexicana de Aviacion S.A. de C.V.,No. 90-cv-7464, 1992 WL 84543 (S.D.N.Y. Apr. 10, 1992) ................................................5, 6

Metropolitan Life Ins. Co. v. Noble Lowndes Intl,192 A.D.2d 83 (1st Dept 1993) ..........................................................................................4, 11

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,473 U.S. 614 (1985)...................................................................................................................7

OFSI Fund II, LLC v. Canadian Imperial Bank of Commerce,82 A.D.3d 537 (1st Dept 2011) ................................................................................................4

PaineWebber Inc. v. Intl Mobile Machines Corp.,

No. 91-cv-7353, 1992 WL 75068 (S.D.N.Y. Mar. 30, 1992)....................................................6

Papago Tribal Util. Auth. v. FERC,723 F.2d 950 (D.C. Cir. 1983)...................................................................................................8

Pirone v. MacMillan, Inc.,894 F.2d 579 (2d Cir. 1990).....................................................................................................20



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Cases Page(s)

Redf-Organic Recovery, LLC v. Rainbow Disposal Co., Inc.,116 A.D.3d 621 (1st Dept 2014) ......................................................................................19, 20

Rehberger v. Garguilo & Orzechowsi, L.L.P.,

No. 8857/09, 2011 WL 11069687 (Sup. Ct. Westchester County Feb. 16, 2011) ....................8

Simon v. Unum Group,No. 07-cv-11426, 2008 WL 2477471 (S.D.N.Y. June 19, 2008) ............................................18

Small Business Bodyguard Inc. v. House of Moxie, Inc.,No. 14-cv-7170, 2014 WL 5585339 (S.D.N.Y. Oct. 31, 2014).........................................19, 21

Sovereign Bank v. RCI Plumbing Corp.,Nos. 11cv0094, 11cv02067, 2012 WL 3027539(E.D.N.Y. July 24, 2012) .........................................................................................................18

Sudul v. Computer Outsourcing Services,868 F. Supp. 59 (S.D.N.Y. 1994) ............................................................................................13

Telecom Intl America, Ltd. v. AT&T Corp.,280 F.3d 175 (2d Cir. 2001)...................................................................................18, 19, 20, 21

Trs. of Leake & Watts Orphan House in City of N.Y. v. Hoyle,79 Misc. 301 (Sup. Ct. Westchester County 1913)....................................................................1

Voiceage Corp. v. Realnetworks, Inc.,926 F. Supp. 2d 524 (S.D.N.Y. 2013)..................................................................................8, 10

Statutes and Rules

Fed. R. Civ. P. 9...................................................................................................................7, 14, 15

Fed. R. Evid. 408 .....................................................................................................................2, 8, 9

N.Y. CPLR 4547...........................................................................................................................8

Other Authorities

Wright, Miller & KaneFederal Practice and Procedure: Civil 3d 2736 ....................................9



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INTRODUCTION

ZTE does not deny that there was a breach of the NDA as a contract claim. Instead,

using semantics, ZTE asserts that Vringo withdrew its contract claim and replaced it with a tort

claim. (Dkt. No. 67, ZTE Br. at pp. 9-10.) Only under this tort theory does ZTE even attempt

to argue that Vringos 12(c) motion should be denied and Vringos breach of contract claim fails

based on mere denials by ZTE of any wrongdoing and assertion that ZTE acted in good faith.

(Id.at p. 16.) But ZTEs tort theory is belied by the clear language of Vringos First Amended

Complaint (Dkt. No. 52) (the Am. Complaint):

Plaintiffs Vringo, Inc. and Vringo Infrastructure, Inc. (collectively, Vringo) file thisfirst amended complaint against ZTE Corporation (ZTE Corp.) and ZTE USA Inc.(ZTE USA) (collectively, ZTE) for breach of a Non-Disclosure Agreement. . . .(Am. Complaint at p. 1, emphasis added.)

This is a civil action forbreach of contract. . . . (Id.at 5, emphasis added.)

And, contrary to ZTEs assertion, the fact that Vringo used adjectives such as flagrant,

willful and malicious to describe ZTEs actions cannot convert Vringos cause of action into

a tort. For ZTE to suggest that Vringo abandoned its straightforward contract claim (for which it

received a TRO) in favor of a tort claim (without the benefit of discovery) defies logic. 1

Without any reasonable basis to deny its breach of contract, ZTE once again rehashes the

same argument that it raised during the preliminary injunction stage the NDA is an illegal

contract for the suppression of evidence and, thus, unenforceable. ZTE even recycles some of its

old case law including the 1913 Westchester County case2 about which this Court has already

expressed its views. (Dkt. No. 19, July 7, 2014 Transcript, 24:2-6.) These cases, however, do

1 Vringo has alleged tortious acts by ZTE fraudulent inducement for which Vringo can recover (and hasrequested) punitive damages.

2 Trs. of Leake & Watts Orphan House in City of N.Y. v. Hoyle, 79 Misc. 301 (Sup. Ct. Westchester County 1913).As the Court noted, ZTE is citing to dictum inLeakewhich does not support ZTEs arguments.



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not support the proposition that an agreement is unenforceable merely because it sets forth

restrictions on how settlement offers/discussions can be used.3

The timing of ZTEs 12(c) motion also raises doubt as to the veracity of ZTEs positions.

Although ZTE never moved to dismiss Vringos Amended Complaint, ZTE now after Vringo

filed a 12(c) motion alleges that Vringos claims are so deficient that not a single one of them

can survive. But, as set forth below, Vringo adequately pleads all elements of its causes of

action. Accordingly, Vringo respectfully requests the Court find that ZTE breached the NDA

and deny ZTEs 12(c) motion.

ARGUMENT

I. ZTE Does Not Deny Breach of Contract

In its brief, ZTE does not dispute the following facts that it had already admitted in its

Answer ( 28, 29, 31, 36, 38, 40, 44):

ZTE entered into the NDA with Vringo pursuant to which material provided duringsettlement discussions could not be used or referenced in litigation;

At a settlement meeting in December 2013, Vringo provided ZTE with a presentation

under the NDA; and

A few months after being provided with the presentation, ZTE filed a lawsuit againstVringo in China referencing and attaching that presentation.

ZTE also does not attempt to argue that the NDA is ambiguous or that ZTE did not

understand its terms. This leaves no doubt that ZTE has breached the NDA. Asta, L.L.C. v.

Telezygology, Inc., 629 F. Supp. 2d 837, 843 (N.D. Ill. 2009) (Especially when dealing with a

3 ZTE is a commercially sophisticated, multi-national company and, as the Court noted, could have drafted the NDAto include the language of Rule 408, verbatim (Dkt. No. 19, July 7, 2014 Transcript, 6:23-7:2.) ZTE chose not to doso and is now looking for ways to avoid its contractual obligations. So, ZTE has taken the position that, at the timeof entering into the NDA, there was no way it could have known that Vringos opening offer would allegedly violateChinese anti-monopoly law. But, as this Court already pointed out, when ZTE entered into the NDA, ZTE musthave known that any offer Vringo made to ZTE was unlikely to be acceptable to ZTE. (Dkt. No. 36, July 24, 2014Transcript, 30:18-32:3.) After all, this was to be a negotiation. And, there was nothing to stop ZTE from assertingthat any amount offered by Vringo ran afoul of Chinese anti-monopoly law.



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substantial contract between commercially sophisticated parties, it is particularly appropriate

to enforce an unambiguous contract as a matter of law.)

II. ZTEs Excuses for its Breach Fail

Vringos 12(c) motion clearly treats Vringos first cause of action as a contract claim

focusing on the elements of a contract claim, not tortious acts by ZTE. Since ZTE cannot deny

the core facts that establish breach of contract, ZTE has sought to obfuscate and muddy the

waters by asserting a number of untenable positions, each of which fails.

A. ZTE Attempts to Convert Vringos Contract Claim into a Tort Claim

Recognizing that it has no basis to dispute a contract claim, ZTE decides to reimagine

Vringos contract claim as a tort claim. Only then does ZTE even attempt argue that Vringos

claim fails. To do so, ZTE plays a linguistic game, relying on adjectives used by Vringo such as

flagrant, willful and malicious to argue that Vringo withdrew its straightforward contract

claim in favor of a tort claim. ZTE then argues that the tort claim can be defeated by ZTEs bare

denials denials of bad intent without any new, well-pleaded assertions. 4

First, Vringos Amended Complaint clearly refers to a contract claim:

Plaintiffs Vringo, Inc. and Vringo Infrastructure, Inc. (collectively, Vringo)file this first amended complaint against ZTE Corporation (ZTE Corp.) andZTE USA Inc. (ZTE USA) (collectively, ZTE) for breach of a Non-

Disclosure Agreement. . . . (Am. Complaint at p. 1, emphasis added.)

This is a civil action forbreach of contract. . . . (Id.at 5, emphasis added.)

Indeed, Vringos first cause of action clearly sets forth breach of contract elements. (Id. at

100-106.)

Second, the use of adjectives flagrant, willful and malicious does not convert

4 Under ZTEs logic, no tort claim could ever survive a 12(c) motion and proceed to discovery unless the defendantadmits to a tortious act in an answer. That cannot be correct.



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Vringos cause of action from a contract claim into a tort claim. New York law is unequivocal

that [t]he mere allegation that the alleged breach of contract was maliciously intended or

constituted willful misconduct does not render the breach of contract claim a separate and

independent tort claim. AXA Mediterranean Holding, S.P. v. ING Ins. Intl, B.V., 106 A.D.3d

457, 458 (1st Dept 2013); OFSI Fund II, LLC v. Canadian Imperial Bank of Commerce, 82

A.D.3d 537, 539 (1st Dept 2011) (same). ZTE fails to cite a case contrary to the clear holdings

ofAXA and OFSIwhere a court has held that the mere use of adjectives converts a contract claim

into a tort claim.

Instead, ZTE cites to a number of cases where courts discuss whether a breach of contract

could be considered willful. But, those courts only discussed willfulness because the contracts at

issueincluded exculpatory or damage-limiting clauses that required discussion of willfulness.

The opinion in Metropolitan Life Ins. Co. v. Noble Lowndes Intl, opens by stating that [a]t

issue in this litigation is the application of a limitation of damages clause which precludes

recovery of [certain damages] except where occasioned by intentional misrepresentations, or

damages arising out of [defendants] willful acts or gross negligence. 192 A.D.2d 83, 85 (1st

Dept 1993),affd, 84 N.Y.2d 430 (1994). That court determined whether defendants acts were

willful, such that the damage-limiting clause would not apply. Harvest Town Vill. Vestavia Hills

LLC v. Tvillage Tulsa LPalso discusses a breach of a contract containing a liquidated damages

clause, in order to determine whether or not the alleged conduct supports the award of damages

above and beyond those set forth in the liquidated damages clause. No. 650146/13, 2013 WL

4494377, at *4 (Sup. Ct. N.Y. County Aug. 20, 2013),affd, 116 A.D.3d 599 (2014).

Similarly, the opinion inIn re CCT Communications, Inc. analyzes an exculpation clause

that precludes most forms of damages. 464 B.R. 97, 102 (Bankr. S.D.N.Y. 2011). CCTholds



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that New York law prohibits parties from limiting their liability for gross negligence or willful

misconduct,id. at 104, and then determines whether or not the entire exculpation clause should

be rendered invalid in light of this New York public policy, or whether it should be enforced

with an implied willful misconduct/gross negligence public policy exception. Id. at 108.5

These cases are inapposite as there are neither damage-limiting nor exculpatory clauses in the

Vringo/ZTE NDA. Any and all breaches of the NDA, whether willful or not, are subject to

damages to the fullest extent that New York law allows.

The remaining cases cited by ZTE are much further afield. InMartirano Constr. Corp. v.

Briar Contracting Corp., the court held that the complaint at issue alleged a cause of action

sounding exclusively in breach of contract, two additional causes of action, and then a fourth

cause of action sounding in both breach of contract and misappropriation of trust funds, before

simply going on to address whether each cause of action stated a claim. 104 A.D.2d 1028, 1029

(2d Dept 1984). The court inMeagher v. Compania Mexicana de Aviacion S.A. de C.V. had

previously decided a motion to dismiss between the parties and had allowed plaintiff to re-plead

some claims, but barred it from re-pleading fraud claims. No. 90-cv-7464, 1992 WL 84543, at

*5 (S.D.N.Y. Apr. 10, 1992). When the plaintiffs next complaint included allegations that the

other party had negligently and/or willfully misrepresented facts, the Meaghercourt did not

hold that the word willfully had converted the claim to a fraud claim. Id. Instead it analyzed

whether the complaint stated a claim for negligent misrepresentation, and found that it did not do

so. Id. Only then did theMeagher court determine that the allegation also had the effect of

stating a separate fraud claim, and hold that the willful misrepresentation portion of the

5 ZTE notes that this case citesKalisch-Jarcho, Inc. v. City of New York, 58 N.Y.2d 377 (1983). However,Kalisch-Jarchoalso analyzes an exculpatory agreement that, pursuant to New York public policy, cannot exonerate a partyfrom liability for willful or grossly negligent acts. Id. at 384-85.



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allegation was barred by the courts previous holding. Id. Finally ZTE gets Lyons v.

Westinghouse Elec. Corp. wrong: this fifty year old case involved a plaintiffs unsuccessful

attempts to obtain antitrust damages against a defendant who had won prior contract cases

against it, not vice-versa as ZTE claims. 235 F. Supp. 526, 528-29, 539 (S.D.N.Y. 1964). None

of these cases even remotely stand for the proposition that a breach of contract cause of action

that contains the word willful is transformed from a contract claim into a tort claim.

Third, even if intent were a necessary element of Vringos breach of contract claim

(which it is not), Vringo has sufficiently pled intent and willfulness. (See Section II.A infra.)

ZTE, on the other hand, merely provides bare bones, conclusory denials and allegations ( e.g.,

ZTE acted in good faith (ZTE Br. at p. 16)) which are not well-pleaded and do not raise issues

of fact. As ZTE recognizes,only well pleadeddenials and allegations need be taken as true and

assertions in the complaint that are denied by the answer must be taken as false. (ZTE Br. at

p. 9, citingPaineWebber Inc. v. Intl Mobile Machines Corp., No. 91-cv-7353, 1992 WL 75068,

at *1 (S.D.N.Y. Mar. 30, 1992), and Flextech Rights Ltd. v. RHI Entt, LLC, No. 09-cv-3462,

2010 WL 245570, at *2 (S.D.N.Y. Jan. 22, 2010) (finding that an answer must raise[] issues of

fact).) As such, ZTEs denials and allegations are not entitled to the presumption of truth nor

should they be afforded any weight and, thus, cannot defeat any allegations of intent/willfulness. 6

B. ZTE Argues Unenforceability

Realizing it has breached the NDA, ZTE is now attempting to paint the NDA as

6 ZTE has argued that its Answer includes well-pleaded denials and allegations. (ZTE Br. p. 16.) But anexamination of ZTEs Answer reveals nothing more than its formulaic third affirmative defense: ZTE acted ingood faith with respect to all conduct alleged in the amended complaint. (Dkt. No. 58 at p. 17.) ZTE cites no casefor the proposition that a simple formulaic affirmative defense can defeat a 12(c) motion. Moreover, that rotedefense is contradicted by ZTEs fourth affirmative defense claiming that the NDA is illegal or against public policy(as is reiterated in its briefs public policy arguments), which demonstrates that ZTE entered into the NDA whileintending to disregard it under the argument that it was illegal or unenforceable.



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unenforceable to avoid the consequences of its breach. ZTE tries to put a spin on the language of

the NDA to be a bar to ZTE everfiling any antitrust claim. To make its point, ZTE uses the

following rather astonishing leaps of logic:

In 65 of its Answer, ZTE denied Vringos allegation that: Unbeknownst to Vringo,upon information and belief, prior to ZTE executing the NDA, ZTE considered filing anantitrust lawsuit against Vringo in China. Upon information and belief, prior to ZTEexecuting the NDA, ZTE believed it was missing a critical piece of evidence for anantitrust lawsuit against Vringo in China a ZTE Specific Offer which ZTE couldallege was not compliant with FRAND principles. (Am. Complaint 65, emphasisadded.)

For the purposes of its brief, ZTE now embraces Vringos allegation as if ZTE hadadmitted it. ZTE then selectively misquotes a portion of that paragraph using an

ellipsis to mischaracterize the allegation as if to say Vringo believes that theconfidential settlement material is critical . . . for an antitrust lawsuit against [Vringo](which is not the case). (ZTE Br. at p. 20.)

With this, ZTE asserts that denying the right to use this critical material is equivalent todenying ZTE the right to bring any litigation, and then cites to inapposite cases7

regarding exculpation agreements. (Id.at p. 20).

Vringo, however, is not seeking to keep ZTE from filing an antitrust lawsuit; that is not

what the NDA provides, and that is not what Vringos Amended Complaint seeks. Although

Vringo does not believe that an antitrust case against it would have merit,8 to the extent that ZTE

wanted to file an antitrust complaint against Vringo, ZTE could rely on any alleged evidence

(other than confidential settlement material9) to support such a complaint.10 In fact, this is

7 The dicta that ZTE cites in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 636 n.19(1985), for example, deals with a theoretical agreement to waive all rights to bring an antitrust claim, not the non-disclosure of a document.

8For example, Vringos rack licensing rates are actually lower than ZTEs own published rack rates. (Am.

Complaint 74.)9 In a transparent attempt by ZTE to further its Chinese litigation strategy, ZTE argues that this Court should requirethat the confidential settlement material be shown to it as a prerequisite for resolving enforceability. (ZTE Br. at

p. 21.) ZTE would like to be able to argue to the Shenzhen Court that, notwithstanding the prohibition that thisCourt has placed on any use of or reference to the confidential settlement material, this Court has allowed limiteduse of them in this litigation, and the Shenzhen Court should therefore do the same. This is just the latest attempt byZTE to seek this type of waiver, as ZTEs brief also attempts to bait Vringo into disclosing the parties settlementdiscussions in the guise of seeking Rule 9(b) particularity, as discussed in further detail at p.15 below.



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exactly what ZTE did in the Chinese Complaint by also citing and relying on Vringos public

FRAND offer to ZTE.

ZTE attempts to create the perception that it was requiredby Chinese law to (1) file an

antitrust suit against Vringo (ZTE refers to a statutory antitrust claim), and (2) provide all

materials in its possession to the Chinese court. The reality is that ZTEvoluntarilyfiled a civil

lawsuit against Vringo and couldchooseto include whatever material it wanted in its complaint.

As Vringo discussed in its preliminary injunction briefing, ZTE does not identify (and still has

not identified) any rule that requires ZTE to file a civil antitrust lawsuit or requires ZTE to

submit all materials in its possession. (Dkt. No. 23, pp. 1, 4.) Indeed, not even ZTEs own

Chinese attorney would take such a position (id.at p. 4.), because the rules in China merely state

that evidence (of some sort) supporting a claim should be provided to Chinese courts.

The cases cited by ZTE do not stand for the proposition that an NDA is unenforceable,

because it contains restrictions on the use of settlement information to support a future

litigation.11 The cases cited by Vringo, on the other hand, demonstrate that the NDA, far from

meeting the necessary grossly unreasonable or unconscionable standard described in Voiceage

Corp. v. Realnetworks, Inc., 926 F. Supp. 2d 524 (S.D.N.Y. 2013), is reasonable and consistent

with New York (and federal) norms and business practices favoring settlement by making

settlement discussions inadmissible in court. SeeN.Y. CPLR 4547; Fed. R. Evid. 408.12

10 Notably, ZTE filed an antitrust complaint with the European Commission against Vringo after the partiesDecember 2013 meeting and did so without using Vringos confidential presentation.

11Dodge v. Richmond, 10 A.D.2d 4, 16, (1st Dept 1960), for example, deals with a commission agreement that

both parties allegedly used to deceive the SEC,not a garden variety NDA. And ZTE cites to dicta inCronk v. State,100 Misc. 2d 680, 685 (Ct. Cl. 1979) (dealing with a document that the court held was no contract at all) andPapago Tribal Util. Auth. v. FERC, 723 F.2d 950, 954 (D.C. Cir. 1983) (regarding a contract with a regulatoryagency where contractual provisions had to be interpreted in light of the public interest).

12 ZTE cites Rehberger v. Garguilo & Orzechowsi, L.L.P., No. 8857/09, 2011 WL 11069687, at *4 (Sup. Ct.Westchester County Feb. 16, 2011), for the unremarkable notion that N.Y. CPLR 4547 does not itself bar



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C. ZTE Argues That Vringo Cannot Demonstrate Damages

ZTE asserts that Vringos breach of contract claim should be dismissed because Vringo

cannot demonstrate damages.13 But Vringo has alleged various types of damages that it has

suffered and will suffer14 and that is all that is required for the interlocutory relief it seeks. See,

e.g., Wright, Miller & Kane Federal Practice and Procedure: Civil 3d 2736 (Summary

Judgment on the Issue of Liability). For example, Vringo has alleged the following damages:

(1) exposure of Vringos confidential material to Vringos competitors and potential licensees;15

(2) harm to Vringos ability to engage in licensing discussions with third parties; (3) Vringos

loss of control of its confidential information; (4) Vringo having to defend specious litigation

claims in China; and (5) exposure of Vringo to specious regulatory claims. (Am. Complaint

80, 88, 89, 92, 93, 98, 104.) Discovery will demonstrate the extent of the damages and

admissibility for all purposes. As the Court has noted, ZTE could have copied a narrower clause tracking similarlanguage in Rule 408, but did not do so. (Dkt. No. 36, July 24 Tr. 35:13-25.)

13 ZTE asserts that Vringo does not allege any damages or harm other than damages for Vringos own liability forantitrust violations. (ZTE Br. at pp. 3, 11.) This is incorrect. Vringo alleges exposure of its confidential material to

competitors and potential licensees, harm to Vringos ability to engage in licensing discussions, and loss of controlof confidential information. These allegations have nothing to do with any liability for antitrust violations such ascost to defend civil or regulatory actions.

14 ZTE alleges that Vringo has shifted its focus away from imminent harm to a new theory. (ZTE Br. at p. 7.) ZTEis incorrect. Vringo still maintains that there is imminent harm of third parties having access to Vringosconfidential information including through the Chinese court. ZTE also asserts that Vringos complaint did notassert anything submitted to the Chinese court had actually been disclosed or that there was any evidence of a leakof information (ZTE Br. at pp. 6, 7.) But, no third party is likely to voluntarily admit to Vringo that they are in

possession of Vringos confidential information. Vringo contracted with ZTE to avoid just this scenario -uncontrolled distribution of confidential information.

15The Amended Complaint alleges in detail that: an unknown number of judges in the Shenzhen Court and possibly

the Guangdong Appellate Court have been exposed to the confidential settlement material; lawyers who are not

involved in a particular case have nevertheless generally been able to access Chinese court files, including inShenzhen; official Chinese government reports substantiate Chinese court corruption and improper behavior; and,

by the time Vringo received notice of the supposedly confidential Chinese complaint third parties were alreadyaware of and investigating it. ( 93-95.) ZTEs only Answer to these paragraphs is to deny knowledge orinformation. ZTEs brief, in an effort to rebut these well-pleaded allegations and to bolster its insufficient denials,has reverted to its preliminary injunction arguments and cited Articles 49, 61, 68 and 129 of Chinese ProceduralLaw for the proposition that Chinese complaints are treated as confidential. (ZTE Br. at p. 5.) These arguments notonly do not exist in ZTEs Answer and cannot be considered at the 12(c) stage, but they have been thoroughlyrefuted by Vringo. (SeeDkt. No. 6, Decl. of Douglas Stephen Clark, at 6-8.)



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experts will use that information to quantify damages.

What ZTE is really arguing is that since Vringo has not quantified damages at this

preliminary stage, the case cannot proceed. As Vringo discussed in its opening brief, however,

both McCoy Assocs., Inc. v. Nulux, Inc., 218 F. Supp. 2d 286, 293-94 (E.D.N.Y. 2002), and

Voiceage, 926 F. Supp. 2d at 529 cases in which the courts awarded plaintiffs judgment either

on the pleadings or at summary judgment for breach of contract deferred the issue of damages

until after discovery. As such, Vringo is not required to quantify its monetary damages at this

preliminary stage and the case can proceed.16

Vringo is currently suffering, and will continue to suffer, irreparable harm as a result of

ZTEs ongoing breach. Indeed, ZTE cannot deny that Vringo (as stated in the NDA) is entitled

to seek equitable relief, including injunction and specific performance, for any actual or

threatened breach of the provisions of this Agreement, in each case, without the necessity of

posting bond or other securityor proving actual damages.17 ZTE fails to cite any case for the

proposition that the Court cannot issue an order finding breach of contract for a cause of action

stating irreparable harm because the plaintiff has not yet quantified damages. Rather, ZTE

analogizes this case to a tort claims damage requirements. But, as set forth above, ZTEs

attempt to convert Vringos breach of contract claim into a tort claim is unfounded.

III. ZTEs Motion for Judgment on the Pleadings Should Be Denied

Although ZTE never moved to dismiss Vringos Amended Complaint, ZTE now after

Vringo filed a 12(c) motion alleges that Vringos claims are all deficient such that none can

16 Discovery, for example, will show whether ZTEs course of conduct was so blatant that punitive damages couldbe applicable.

17NDA at 10 (Dkt. No. 52-1, p. 4, emphasis added). ZTEs Answer denies Am. Complaint 34, which quotes thistext directly from the NDA, but then refers the Court to the text of the NDA containing this quote.



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40, 41, 44.)

Indeed, Vringo alleged that (1) prior to executing the NDA, ZTE considered filing an antitrust

lawsuit against Vringo in China and developed a plan to induce Vringo to provide information

that ZTE could use in a Chinese antitrust complaint (id. at 65, 72-75); and (2) ZTE knew that

Vringo would not make an offer to ZTE or engage in discussion without an NDA in place and

that in order to obtain Vringos offer ZTE agreed to meet with Vringo and enter the NDA under

the guise of discussing possible settlement. (Id. at 76-79, 82.) These well-pleaded factual

allegations by Vringo are entitled to the presumption of truth on ZTEs 12(c) motion to dismiss.

Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009). ZTE merely denies Vringos allegations without

raising any facts. These are issues to be explored further during discovery.

ZTE also asserts that Vringo has not presented a plausible reason as to why ZTE acted

willfully to breach the NDA.20 (ZTE Br. at pp. 13-14.) ZTE posits why would ZTE rely on the

Shenzhen Court to act as its tacit intermediary . . . rather than, for example, just providing those

materials to the third party itself. (ZTE Br. at p. 15.) The fact that ZTE is in the mindset that it

could just hand over Vringos confidential information is disturbing. Putting this aside, Vringo

has a very plausible explanation Paragraph 3 of the NDA provides a framework by which the

parties can, if requested, comply with requests from regulatory authorities for confidential

information. As Vringo has alleged, ZTE intended to use its filing of Vringos confidential

information to encourage Chinese regulatory authorities to make a formal request for Vringos

20 ZTE states that it has no incentive to help ZTEs competitors in negotiations with Vringo. (ZTE Br. at p. 14.)Vringo and ZTE have been locked in world-wide litigation for years. ZTE certainly has incentive to hurt Vringos

business not only making negotiations with ZTEs competitors (Vringos potential licensees) more difficult butmaking Vringos confidential information available to Vringos competitors. Regardless of whether ZTE intendedVringos potential licensees and competitors to have access to Vringos confidential material, it was reasonablyforeseeable by ZTE that such disclosure could occur if ZTE used Vringos confidential information in a lawsuit.And, Vringo specifically contracted to avoid this.



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settlement presentation that would fall within the NDA exception. (Am. Complaint at 88-91).

ZTE could then use the regulatory investigation as leverage for settlement discussions.

B. Vringo Has Stated a Claim for Fraudulent Inducement

Vringos second cause of action satisfies each of the elements of a fraudulent inducement

tort under New York law (1) a material misrepresentation of fact, (2) knowledge of its falsity,

(3) an intent to induce reliance, (4) justifiable reliance by the plaintiff, and (5) damages. In re

Lehman Bros. Sec. & ERISA Litig., Nos. 10-cv-6637, 09-md-2017, 2013 WL 3989066, at *3

(S.D.N.Y. July 31, 2013).

Material misrepresentation of fact. Vringo has alleged not only that ZTEmisrepresented to Vringo that ZTE would comply with the NDA, and that it would notuse settlement materials in any judicial proceeding, but also that ZTE would meet with

Vringo in December 2013 with the sole intent to discuss possible settlement of Vringos

patent infringement claims. (Am. Complaint 77-79, 108.)21

Knowledge of its falsity. Vringo has alleged that ZTE knew that its misrepresentationswere false and intended to use them to deceive Vringo, because ZTEs true intent inagreeing to the December 2013 meeting was to obtain confidential settlement materialfrom Vringo that ZTE could use to widen the scope of the litigation between the parties,not to settle it. (Am. Complaint 72, 74, 91, 109.)

Intent to induce reliance. Vringo has alleged that ZTE intended for Vringo to believeZTEs misrepresentations that ZTE wanted to discuss settlement so that ZTE could obtaina settlement offer. As Vringo has alleged, if Vringo did not believe ZTE, then ZTEwould never gain access to Vringos confidential settlement materials. (Id. at 76-77,82, 110.)

Justifiable reliance by Vringo. Vringo has alleged that it justifiably believed that afteryears of refusing to pay for a patent license, resulting in intensive worldwide patentlitigation, ZTE was finally ready to meet with Vringo with the sole intent of discussing

possible settlement of Vringos patent infringement claims, and ZTE was finally willingto execute the type of NDA that was a prerequisite for making the settlement discussions

possible. (Id.at 36, 111, 112.)

21 ZTEs fraudulent inducement cases, e.g. Sudul v. Computer Outsourcing Services, 868 F. Supp. 59, 62-63(S.D.N.Y. 1994), are inapposite because those plaintiffs had not alleged an additional, separate fraud. Here, ZTEadmits that the misrepresentation allegations involving ZTEs claims that it wanted to discuss settlement areseparate and apart from ZTEs breach of contract. (ZTE Br. p. 23.)



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Damage. Vringo has alleged that it has suffered and will continue to suffer harm,including irreparable harm, by its reliance on ZTEs misrepresentation which made thesettlement meeting possible, allowing ZTE to obtain Vringos confidential settlementmaterials which resulted in ZTE subsequently launching its Chinese litigation. (Id. at

80, 98, 104-06, 113-115.)

Yet, ZTE asserts that Vringo has not satisfied Fed. R. Civ. P. 9(b)s requirement that

fraud be pled with particularity. Vringo, however, has identified the fraudulent statement(s), the

speaker(s), the time and place of the fraudulent statement(s), and why Vringo believes the

statements were fraudulent. Koehler v. Bank of Bermuda (New York) Ltd., 209 F.3d 130, 136 (2d

Cir. 2000). The purpose of Rule 9 is to provide fair notice of a claim, to safeguard a partys

reputation from improvident charges of wrongdoing, and to protect against the institution of a

strike suit. Acito v. IMCERA Group, Inc., 47 F.3d 47, 52 (2d Cir. 1995). Vringo has provided

ZTE with more than enough facts to put it on notice of the series of fraudulent acts that ZTEs

own high-level legal staff engaged in over a period of a few weeks, from late November through

mid-December 2013.

Vringo identified ZTEs Chief Intellectual Property Officer Shen Jianfengas the ZTE

lawyer who not only signed the NDA which includes ZTEs written misrepresentation that

ZTE wish[es] to enter into discussions to explore a potential settlementof some portion or all

of the outstanding litigation as well as any other disputes between the Parties but who also led

the discussions with Vringo.(Am. Complaint 59 (emphasis added).).22

Vringo has alleged that ZTEs fraudulent statements began [i]n late November 2013

when ZTE personnel agreed to meet with Vringo personnel to discuss a resolution to the

intellectual property disputebetween the parties (Id.at 28, emphasis added.) The fraudulent

22 Vringo further identified ZTEs Vice President and Chief Counsel, Guo Xiaoming, as an additional ZTE senior in-house lawyer who has intimate knowledge of those purported settlement discussions. (Id.at 61.)



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statements continued when Shen Jianfeng signed the NDA with the written misrepresentation

(identified above) and up to and through the December 2013 meeting in Shenzhen China

between the parties. (Id. at 28-39.) Vringo also alleged its belief that ZTE agreed to meet

with Vringo in December 2013 with the sole intent to discuss possible settlement of Vringos

patent infringement claims. (Id. at 109, emphasis added.) Finally, Vringo explained why it

believed ZTEs statements were fraudulent:

Unbeknownst to Vringo, upon information and belief, prior to ZTE executing theNDA, ZTE considered filing an antitrust lawsuit against Vringo in China. Uponinformation and belief, prior to ZTE executing the NDA, ZTE believed it wasmissing a critical piece of evidence for an antitrust lawsuit against Vringo in

China a ZTE Specific Offer which ZTE could allege was not compliant withFRAND principles. (Id.at 65.)

Upon information and belief in order to obtain a ZTE Specific Offer fromVringo that ZTE could use as part of an antitrust lawsuit against Vringo in China,ZTE agreed to meet with Vringo in December 2013 and entered into the NDAunder the guise of discussing possible settlement of Vringos patent infringementclaims. (Id.at 77.)

ZTE entered into the NDA with the intent to induce Vringo to rely on ZTEsmisrepresentations in order for ZTE to obtain a settlement offer from Vringo thatZTE could use as part of an antitrust lawsuit against Vringo in China. Upon

information and belief, ZTE knew that Vringo would not make an offer withoutan NDA in place. (Id.at 110.)

ZTEs position that even more detail is required is an effort to put Vringo between a rock

and a hard place: either (1) Vringo provides additional details of ZTEs misrepresentations made

during discussions protected under the NDA (in which case ZTE would move to dismiss the

Amended Complaint for unclean hands23); or (2) Vringo does not provide additional details and

ZTE moves for dismissal of Vringos claim for failure to meet the requirements of Rule 9(b)

under ZTEs improperly stringent read (as it has already done).

23 ZTE already tried to argue unclean hands in this Court with regard to a Vringo filing before the EuropeanCommission an argument that failed miserably for ZTE, resulting in ZTE having to withdraw portions of anaffidavit and its preliminary injunction briefing.



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C. Vringo Has Stated a Claim for Breach of the Duty of Good Faith and Fair

Dealing

The New York Court of Appeals has recently confirmed that all contracts imply a

covenant of good faith and fair dealing in the course of performance. 511 West 232nd Owners

Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 153 (2002). This covenant is breached when a

party to a contract acts in a matter that, although not expressly forbidden by any contractual

provision, would deprive the other party of the right to receive the benefits under their

agreement. Fourth Branch Assoc. Mechanicville v. Niagara Mohawk Power Corp. , 235 A.D.2d

962, 965-66 (3d Dept. 1997) (denying a motion to dismiss on the basis that plaintiff had

sufficiently alleged breach of good faith). The duties to act in good faith encompass any

promises which a reasonable person in the position of the promisee would be justified in

understanding were included. 511 West 232nd Owners, 98 N.Y.2d at 153 (denying a motion to

dismiss where plaintiff had alleged breaches of these implied promises).

In this litigation, Vringo has alleged in detail that ZTE has engaged in a concerted

campaign to use confidential settlement material to exert even more leverage against Vringo by

persuading Chinese antitrust authorities to bring protectionist regulatory actions against Vringo

using that same confidential settlement material. (Am. Complaint 57-61, 68-71, 88-91, 121

Exh. H and J.) In particular, Vringo has alleged that:

At the urging of Chinese manufacturers Chinese regulatory authorities have been usingChinas new anti-monopoly laws with increasing frequency to bring protectionistregulatory actions against foreign companies. (Am. Complaint 70 and Exh. J.)

These lawsuits include (1) an action in which another telecommunications company,Qualcomm, faces the potential of a $1 billion fine; and (2) an anti-monopolyinvestigation against InterDigital that parallels a private litigation brought by Huaweiagainst InterDigital. (Id.at 68-70.)

ZTE is trying to leverage its lawsuit into a parallel Chinese regulatory action. (Id. at 61, 91.)



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ZTE separately orchestrated a press strategy to induce the Chinese regulators to act byplacing an article in the Peoples Daily,24 the official newspaper of the CentralCommittee of the Communist Party of China that (1) references the parties negotiations,(2) argues that Vringo has always insisted on its high and obviously unreasonable patentlicensing prices, and (3) concludes by recommending that [t]he antitrust law

enforcement authorities should pay more attention to the new patent holding companies,especially those so-called patent trolls aiming at Chinese enterprises. (Id.at 57-61,88-91, Exh. H.)

As Vringo has also alleged, NDA 3 describes limited circumstances that govern when

the parties are required to provide information to governmental entities. (Id.at 121 and Exh.

A, 3.) By breaching the NDA, using the confidential settlement material in its high-profile

litigation, and ramping up the pressure on the regulatory authorities with its press strategy, ZTE

is attempting to create circumstances under which the NDRC or other Chinese regulatory

authorities will demand access to Prohibited Material. (Id. 89, 121.)

NDA 3 does not explicitly forbid the parties from complying with regulatory

authorities demands for confidential settlement material, but instead provides a framework by

which the parties can comply with those demands after seeking confidentiality safeguards.

Therefore, ZTE could arguably provide the confidential settlement material to Chinese

regulatory authorities without explicitly breaching the NDA if those regulatory authorities made

a formal request for the confidential settlement material. What Vringo has pled is that ZTE is

using its explicit breach to influence the Chinese regulatory authorities to demand that

confidential settlement material in the first place, as part of ZTEs overarching strategy to exert

whatever legal or regulatory leverage it can by, according to ZTE, tak[ing] various methods

allowed by law . . . to make Vringo responsible and rational. (Id.at 89-90, 121, Exh. H.)

24 ZTE asserts that Vringo has conceded that the Peoples Daily article does not disclose confidential information.(ZTE Br. at p. 7 n. 4.) Vringo, however, never asserted that the article itself contained confidential information.Instead, Vringo asserted that the article indicated that ZTE may have discussed confidential information with theauthor when the article was being prepared.



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Vringo entered into the NDA with the understanding that ZTE would not use confidential

settlement material against it in judicial proceedings. Any reasonable person in Vringos

position would be justified in understanding that ZTE would not engineer a situation in which

ZTE could use an express breach of the contract to induce regulatory demands for Vringos

confidential settlement material. 511 West 232nd Owners, 98 N.Y.2d at 153; (Am. Complaint

119-124). ZTEs efforts to cause further disclosure of the confidential settlement material to

the Chinese authorities are acts, that, although not expressly forbidden by any contractual

provision, would deprive [Vringo] of the right to receive the benefits under their agreement.

Fourth Branch, 235 A.D.2d at 965-66; (Am. Complaint 119-124). The cases cited by ZTE

25

are inapposite because they allege breaches of explicit contractual language rather than breaches

of this implied duty.

D. Vringo Has Stated a Claim for Unfair Competition

In 2001, the Second Circuit described the variety of wrongful acts that can be covered by

a New York common law unfair competition claim. Telecom Intl America, Ltd. v. AT&T Corp.,

280 F.3d 175, 197-98 (2d Cir. 2001). The Second Circuit held that the essence of an unfair

competition claim under New York law is that the defendant misappropriated the fruit of

plaintiff's labors and expenditures by obtaining access to plaintiff's business idea either through

fraud or deception, or an abuse of a fiduciary or confidential relationship. Id.at 197. It further

held, citing longstanding New York appellate precedent, that [t]here is no complete list of the

activities which constitute unfair competition and that the incalculable variety of illegal

commercial practices denominated as unfair competition is proportionate to the unlimited

25 Sovereign Bank v. RCI Plumbing Corp., Nos. 11cv0094, 11cv02067, 2012 WL 3027539, **6-7 (E.D.N.Y.July 24, 2012);Dalton v. Educ. Testing Serv., 87 N.Y.2d 384, 389 (1995); MBIA Ins. Corp. v. Royal Bank of Can. ,

No. 12238/09, 2010 WL 3294302, *36 (Sup. Ct. Westchester County Aug. 19, 2010); Simon v. Unum Group, No.07-cv-11426, 2008 WL 2477471, *4 (S.D.N.Y. June 19, 2008).



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ingenuity that overreaching entrepreneurs and trade pirates put to use. Id. See also Small

Business Bodyguard Inc. v. House of Moxie, Inc., No. 14-cv-7170, 2014 WL 5585339, *8

(S.D.N.Y. Oct. 31, 2014) (denying motion to dismiss, holding that while some competitive

injury is required . . . a practice grounded in either deception or appropriation of the exclusive

property of the plaintiff can constitute unfair competition in New York.)

One of the many circumstances in which a party can maintain a claim under New York

law for unfair competition is where the defendant has misappropriated plaintiffs commercial

advantage in circumstances. In this instance, Vringo has adequately alleged this

misappropriation by pleading that:

It invested time, labor, skill, expenditures including that of in-house counsel, outsidecounsel, outside consultants, a translator, and Vringo executives in developing theconfidential settlement material. (Am. Complaint 126.)

Amongst other things, Vringo is in the business of licensing. Vringos economic worthas an enterprise is intrinsically linked to the value of its patent portfolio. (Id.at 98.)

In reliance that ZTE would honor the NDA, at the December 10th meeting, Vringo

provided ZTE with the confidential settlement material, including payment terms and aroadmap explaining how Vringo arrived at the ZTE Specific Offer. (Id.at 98.)

The confidential settlement material confers upon Vringo a commercial advantage thatbelongs exclusively to Vringo, and that would be extremely valuable in the hands of ZTEand other third parties, including Vringos potential licensees and competitors. (Id. at

126.)

ZTE has misappropriated some of Vringos most sensitive confidential information, andis not only misusing it for its own advantage, (e.g., obtaining a royalty rate for use ofVringos SEP portfolio that is lower than the royalty rate that is objectively reasonable inview of FRAND principles), but has also disseminated it to Vringos detriment. (Id. at

79-82, 98, 126-131.)

ZTE is seeking to harm Vringo by making the confidential settlement material public,resulting in the confidential settlement material falling into the hands of Vringoscompetitors as well as other third parties that might negotiate with Vringo in the futurefor a license to the Vringo SEPs. (Id.at 80, 98.)

Earlier this year, in Redf-Organic Recovery, LLC v. Rainbow Disposal Co., Inc., 116



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A.D.3d 621, 622 (1st Dept 2014), the First Department of the Appellate Division upheld the

trial courts refusal to dismiss a strikingly similar cause of action for unfair competition, holding

that the amended complaint allege[d] that defendant acted in bad faith in misappropriating a

commercial advantage belonging to plaintiff. The Appellate Division held that the complaint

alleged that the parties to the litigation had entered into a confidentiality agreement, that the

agreement reflected the intention that plaintiffs confidential information would be provided to

defendant for just one purpose (i.e., to determine whether the parties should enter into a business

arrangement), and that the defendant had misappropriated the plaintiffs commercial advantage

by using the information in a different manner (i.e.to negotiate an agreement with a third party).

Id. Notably, the Appellate Division also explicitly held that a court may sustain an unfair

competition claim even if the parties are not actual competitors. Id.

ZTE asserts that this Court should dismiss an unfair competition claim because the

complaint fails to allege confusion or deception as to origin. (ZTE Br. p. 26, citing Jeffrey

Milstein, Inc. v. Greger, Lawlor, Roth, Inc., 58 F.3d 27, 35 (2d Cir. 1995) and Pirone v.

MacMillan, Inc., 894 F.2d 579, 584 (2d Cir. 1990).) ZTE conveniently omits mentioning,

however, that the lower court in Telecom Intl made precisely that finding, and was promptly

overruledby the Second Circuit in a case that post-dates their cited authority. TheTelecom Intl

appeals court explicitly held that an unfair competition claim under New York law is not,

therefore, as conceived by the district court, dependent upon a showing of confusion or deception

as to the origin of a product or service. Telecom Intl, at 198.26

The majority of ZTEs remaining cases are similarly outdated and inconsistent with more

26 Although the Second Circuit ultimately upheld the dismissal of that cause of action, it did so on a differentground, namely that the plaintiff had not alleged that it possessed a property interest in its idea. Id. In this instance,Vringo has adequately pled that Vringo has a property interest in some of its most sensitive confidential information,and that ZTE is misusing that information. (Am. Complaint 79-82, 98, 126-131.)



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recent authority, or worse yet, do not support ZTEs argument. For example, ZTE claims that

the complaint must fail because the parties are not competitors, citing only to a state court case

that holds that unfair competition claims usually involve a party using information in

competition. ITC Ltd. v. Punchgini, Inc., 9 N.Y.3d 467 (2007). The recent Small Business

Bodyguard decision addressed and rejected that same competitors argument, citing multiple

authorities includingTelecom Intl. 2014 WL 5585339, at *8.

Finally, to support its argument that Plaintiffs settlement offer is not a commercial

advantage that ZTE can misappropriate, ZTE cites Ahead Realty LLC v. India House, Inc., 92

A.D.3d 424, 425 (1st Dept 2012), without any introductory signals such as see, see also, or cf.

that would signify that this decision provides anything short of direct, unequivocal support for

that stated proposition. However, the case at issue does not involve any variety of settlement

offer, and the two-line quote from that opinion that ZTE includes in parentheses the second

cause of action, for intentional harm to business and unfair competition, fails to set forth the

requisite showing of bad-faith misappropriation of a commercial advantage contains that

courts entire opinion on misappropriation. The decision contains no rationale at all for the

courts bare holding. Likewise, it provides no rationale or basis for supporting ZTEs arguments

here.



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CONCLUSION

For the foregoing reasons, as well as the reasons stated in its opening brief, Vringo

respectfully requests that this Court find that ZTE has breached the NDA and enter partial

judgment on the pleadings in favor of Vringo on its first cause of action. Vringo further

respectfully requests that this Court find that Vringo has stated a cause of action as to all of the

other causes of action and deny ZTEs motion for judgment on the pleadings.

Dated: November 20, 2014 Respectfully submitted,

/s/ Karl Geercken

KARL GEERCKENAMBER WESSELS-YENAlston & Bird LLP90 Park Avenue

New York, New York 10016Telephone: (212) 210-9400Facsimile: (212) 210-9444

Attorneys for Plaintiffs Vringo, Inc. and

Vringo Infrastructure, Inc.


Documents

Vringo ZTE Nov 20 Motion