Shum v. Intel Corp.

United States Court of Appeals
for the Federal Circuit
__________________________

FRANK T. SHUM,
Plaintiff-Appellant,

v.
INTEL CORPORATION, LIGHTLOGIC, INC.,
AND JEAN-MARC VERDIELL,
Defendants-Cross Appellants.
__________________________

2009-1385, -1419
__________________________

Appeal from the United States District Court for the
Northern District of California in case no. 02-CV-3262,
Senior Judge D. Lowell Jensen.
__________________________

Decided: December 22, 2010
__________________________

PAUL F. KIRSCH, Shopoff & Cavallo LLP, of San Fran-
cisco, California, argued for plaintiff-appellant. Of coun-
sel on the brief was ROBERT A. MCFARLANE, Townsend
and Townsend and Crew LLP, of San Francisco, Califor-
nia.

WILLIAM F. LEE, Wilmer Cutler Pickering Hale and
Dorr LLP, of Boston, Massachusetts, argued for defen-
SHUM v. INTEL CORPORATION 2

dants-appellees. With him on the brief were RICHARD W.
O’NEILL, MARK C. FLEMING; SETH P.WAXMAN, BRIAN M.
BOYNTON, MARY K. GARDNER, and GREGORY H. LANTIER of
Washington, DC. Of counsel on the brief was STEPHEN E.
TAYLOR, Taylor & Company Law Offices, LLP of San
Francisco, California.
__________________________

Before NEWMAN, LOURIE, and PROST, Circuit Judges.
Opinion for the court filed by Circuit Judge PROST.
Dissenting opinion filed by Circuit Judge NEWMAN.

PROST, Circuit Judge.

In part, this case is about inventorship. Mostly, how-
ever, this case is about various claims arising under
California law. While the theories as to each state law
claim differ slightly, all are essentially grounded in fraud.
The ones at issue on appeal include breach of fiduciary
duty, fraudulent concealment, unjust enrichment, breach
of contract, and intentional misrepresentation. This
appeal also challenges the district court’s findings regard-
ing the inventorship of certain claims for two of the pat-
ents-in-suit.

This case was filed by an optical engineer named
Frank Shum (“Shum”). Shum’s amended complaint
sought correction of inventorship for seven patents that
listed his former business partner, Jean-Marc Verdiell
(“Verdiell”), as the sole inventor. Shum contended that he
should be named as a co-inventor, if not the sole inventor,
of these patents.

Shum’s state law claims all stem from the sale of Ver-
diell’s company LightLogic, Inc. (“LightLogic”) to Intel
Corporation (“Intel”). Before Verdiell formed and later
3 SHUM v. INTEL CORPORATION

sold LightLogic, Verdiell and Shum had been equal
shareholders and co-officers of a company called Radiance
Design, Inc. (“Radiance”). A mere nine months after its
formation, however, Shum and Verdiell dissolved Radi-
ance pursuant to a detailed Plan of Liquidation (“POL”).
The POL gave them equal rights to exploit Radiance’s
intellectual property. While Shum shortly thereafter
returned to a salaried position at an established company,
Verdiell chose to form and continue his own company,
LightLogic. Pursuant to his state law claims, Shum seeks
to recover some of the $409 million Intel paid for Light-
Logic.

Shum’s claims were decided at various stages of the
proceedings below. On remand from an earlier appeal to
this court, the district court granted defendants’ summary
judgment on Shum’s breach of fiduciary duty and fraudu-
lent concealment claims. A jury subsequently heard
Shum’s claims for correction of inventorship, intentional
misrepresentation, breach of contract, and unjust enrich-
ment. The jury found that Shum was a co-inventor of
some claims in five of the six patents still in dispute at
trial. 1 More importantly for our purposes, the jury was
unable to reach a verdict on any of the state law claims.
It also deadlocked on correction of inventorship for claim
5 of U.S. Patent No. 6,227,724 (“’724 patent”) and claim 1
of U.S. Patent No. 6,585,427 (“’427 patent”). The district
court declared a mistrial on these claims. After trial,
defendants Verdiell, Intel, and LightLogic renewed their
motion for judgment as a matter of law (“JMOL”) on the
unresolved state law and inventorship claims. The dis-

1 Before the close of evidence, Shum withdrew his
correction of inventorship claim as to U.S. Patent No.
6,252,726.
SHUM v. INTEL CORPORATION 4

trict court granted defendants’ motion, concluding that a
reasonable jury would not have had a legally sufficient
basis to find for Shum. Shum timely appealed.

On appeal, Shum argues that there are genuine is-
sues of material fact entitling him to proceed to trial on
his breach of fiduciary duty and fraudulent concealment
claims. As for the claims on which the district court
granted post-verdict JMOL, Shum argues that he pre-
sented sufficient evidence such that a reasonable jury
could find for him, thus entitling him to a new trial. In
support of his request for a new trial, Shum argues that
various evidentiary and discovery rulings by the district
court were erroneous.

We disagree and now affirm the district court’s judg-
ment. 2 Under California law, Verdiell did not owe Shum
a fiduciary duty; as for any fiduciary duty that Verdiell
owed Radiance, their jointly owned and now-defunct
corporation, Shum lacks standing to sue. Further, be-
cause Verdiell owed Shum no fiduciary duty and there is
no evidence Verdiell knew or actively concealed material
facts Shum did not know or could not have reasonably
discover, Verdiell is not liable for fraudulent concealment.

Shum’s claim for intentional misrepresentation simi-
larly fails because there is no evidence that defendants
made a false statement or that Shum suffered any actual
monetary loss as a result of the alleged misrepresenta-
tion. As for Shum’s breach of contract claim, there is
again a dearth of evidence that Shum was harmed as a

2 Because we conclude that Shum is not entitled to
a new trial, we do not reach defendants’ conditional cross-
appeal, which sought to retry the correction of inventor-
ship claims in the event a new trial was granted as to any
claim.
5 SHUM v. INTEL CORPORATION

result of defendants’ alleged breach. The unjust enrich-
ment claim suffers a similar fate: no evidence supports
Shum’s assertion that defendants’ alleged wrongful acts
caused them to obtain a benefit at Shum’s expense.
Finally, we agree with the district court that the evidence
Shum offered at trial was not sufficient for a reasonable
jury to find that Shum made an inventive contribution to
claim 5 of the ’724 patent or claim 1 of the ’427 patent.

BACKGROUND

The facts below resulted in two separate appeals to
this court, both of which arose from the same trial and
post-trial proceedings. We combined the appeals for the
purpose of oral argument, but address the discrete issues
each raises in separate opinions. Here, we address the
merits. Shum separately appealed the district court’s
award of costs pursuant to Federal Rule of Civil Proce-
dure 54(d)(1). That appeal is the subject of a companion
opinion, Shum v. Intel Corp., No. 2010-1109.

Shum’s claims for inventorship and violations of state
law are intimately bound up in his brief business venture
with Verdiell, as well as Verdiell’s business activities
after the two parted company. That history is set forth
below.

Shum and Verdiell met while working at Spectra Di-
ode Laboratories (“SDL”). Both are engineers in the
optoelectronics field. In 1996, Shum left SDL and formed
his own company. Verdiell continued to work at SDL,
though he helped Shum prepare grant proposals for
various optoelectronic packaging products. In March
1997, Verdiell resigned from SDL. Shortly thereafter, in
April 1997, Shum and Verdiell incorporated Radiance as
equal shareholders and co-officers: Verdiell was Presi-
SHUM v. INTEL CORPORATION 6

dent and Treasurer; Shum, Vice President and Secretary.
Shum and Verdiell also executed agreements assigning all
of their rights in any inventions to Radiance.

The day after Radiance was incorporated, a patent
agent named Marek Alboszta (“Alboszta”) filed U.S.
Patent Application No. 08/838,022 on behalf of Radiance
(“’022 patent application” or “Radiance patent applica-
tion”). It covered optoelectronic assemblies and methods
for making them. Although Verdiell undisputedly made
inventive contributions to the application, Shum was
named as the sole inventor. At trial, the evidence showed
that Shum and Verdiell decided to omit Verdiell’s name
from the application because some of the matter was
conceived by Verdiell while he was still working for SDL
and they wished to avoid disputes regarding ownership of
the invention.

While the Radiance patent application was pending,
Verdiell told patent agent Alboszta that he, not just
Shum, was an inventor of the claimed subject matter.
Based on this information, Alboszta concluded that the
Radiance patent application was invalid and had to be
withdrawn. Both Alboszta and Verdiell subsequently told
Shum that the application would have to be withdrawn.
Shum agreed; the Radiance patent application was with-
drawn in November 1997.

By the time the Radiance patent application had been
withdrawn, the relationship between Shum and Verdiell
had deteriorated. Both had begun to separately prepare
business plans and seek financing for new companies
based on Radiance’s technology. Both also hired attor-
neys. After buy out talks for Radiance broke down, nego-
tiations turned to dissolving Radiance and drafting a
satisfactory POL. The final version of the POL was
7 SHUM v. INTEL CORPORATION

agreed to and executed on January 5, 1998. Pursuant to
the POL, Shum and Verdiell

acknowledge[d] and agree[d] that, after approval
of this Plan, each of them shall be entitled, with-
out any liability or duty to account to the Corpora-
tion or to the other, to pursue any and all such
other business activities as they shall desire, even
if such activities are in competition with the busi-
ness of the Corporation [Radiance] and even if
they take, or attempt to take, a business opportu-
nity that the Corporation could itself have pur-
sued.

The day after the POL took effect and Radiance was
formally dissolved, patent agent Alboszta filed a new
patent application on Verdiell’s behalf. This first patent
application related to the same subject matter as the
withdrawn Radiance patent application, with Verdiell
even using the Radiance patent application as a starting
point and then editing it to remove portions he viewed as
Shum’s contribution. The application Alboszta filed in
January 1998 named Verdiell as the sole inventor. Verdi-
ell subsequently assigned his rights in the application to
his new company, LightLogic. Verdiell formed LightLogic
a day before Radiance withdrew its patent application. At
no time before or after dissolution of Radiance did Verdi-
ell tell Shum about his plans to form LightLogic or to file
a new patent application covering the same subject mat-
ter as the Radiance application. The application filed in
Verdiell’s name issued in November 1999 as U.S. Patent
No. 5,977,567 (“’567 patent”).

From the time Verdiell filed his first patent applica-
tion in January 1998 until Intel acquired LightLogic in
2001, LightLogic grew from a single-person corporation
SHUM v. INTEL CORPORATION 8

operating out of a small laboratory in Verdiell’s bedroom
to a company with approximately seventy-five employees
that had attracted tens of millions of dollars in financing
from venture capitalists and companies like Cisco. These
investors in LightLogic were given copies of the Radiance
POL. Moreover, closing documents for each round of
financing stated that “[p]ursuant to the Radiance Design,
Inc. Plan of Liquidation [POL], Frank Shum and Jean-
Marc Verdiell have equal rights to independently exploit
the intellectual property developed by Radiance Design,
Inc.”

In addition to expanding, LightLogic also began to
shift its focus from optical modules to a fully-integrated
optoelectronic telecommunications subsystem called a
transponder. Transponders allow two-way communica-
tion between computers or other telecommunication
devices and an optical fiber network. They work by
combining multiple streams of electronic data, such as
telephone calls, into a single, high-speed electronic data
stream which is then converted into light and sent over a
fiber-optic network. In addition to sending information,
transponders also receive an incoming stream of optical
data. The incoming stream is converted into an electronic
data stream, which is further disaggregated, or “demulti-
plexed,” into multiple separate data streams. One of the
challenges of designing and building transponders is
preserving signal quality at high data transmission
speeds.

LightLogic successfully built and demonstrated a
10Gb/sec transponder at a trade show in March 2000. As
the only company to have a working prototype at that
speed, LightLogic was able to obtain more financing. By
September 2000, LightLogic had begun shipping produc-
9 SHUM v. INTEL CORPORATION

tion models of its transponder, with demand soon exceed-
ing supply.

By that time, LightLogic had also filed six additional
patent applications that would issue as U.S. Patent Nos.
6,376,268 (“’268 patent”); 6,207,950 (“’950 patent”);
6,586,726 (“’6726 patent”); 6,227,724 (“’724 patent”);
6,585,427 (“’427 patent”); and 6,252,726 (“’2726 patent”)
(collectively, along with the ’567 patent, known as the
“LightLogic patents”). With the exception of the ’427
patent, all of these patents named Verdiell as the sole
inventor. The ’427 patent named Verdiell and four co-
inventors. Shum was not listed as an inventor on any of
the patents.

LightLogic’s patents covered roughly three different
areas of optoelectronic technology, though all were di-
rected to producing less expensive, high-speed optoelec-
tronic modules suitable for automated manufacture. The
first, known as “dual enclosure” technology, is the subject
of the ’2726 patent. The ’2726 patent claims an optoelec-
tronic package composed of two separate enclosures
designed to cost-effectively regulate temperature in the
packages. The second area is “directed bonded copper” or
“step” technology, which sought to provide a material that
could endure high temperatures without expanding, thus
making a better optoelectronic package. The ’567 and
’268 patents relate to this area. Both disclose an optoelec-
tronic package with a substrate made of an insulating
ceramic material and a layer of bonded copper. The third
area is “flexure” technology, which was meant to help the
industry transition from the existing, labor-intensive
process of aligning, attaching, and checking components
by hand, to automated production. The remaining four
patents, the ’950, ’724, ’427 and ’6726, relate to this area.
All address how to align a laser diode and optical fiber
SHUM v. INTEL CORPORATION 10

during an automated assembly process and keep the
components aligned during use.

In June 2001, Intel acquired LightLogic for $409 mil-
lion, with Verdiell personally receiving $58.4 million.
Pursuant to this stock-for-stock exchange, Intel acquired
LightLogic’s physical assets, personnel, and rights to its
seven patents. During negotiations to acquire LightLogic,
Intel received a copy of the Radiance POL. In its pre-
acquisition disclosures to Intel, LightLogic stated that

Jean-Marc Verdiell and Frank Shum founded a
company called Radiance Design, Inc. (“Radi-
ance”). Pursuant to the Radiance Design, Inc.
Plan of Liquidation [POL] . . . Frank Shum and
Jean-Marc Verdiell were given equal rights to in-
dependently exploit the intellectual property de-
veloped by Radiance Design, Inc., Including the
rights to U.S. Patent No. 5,977,567. To the Com-
pany’s knowledge, Mr. Shum is not presently en-
gaged in any business directly competitive with
the Company and has not made any efforts to ex-
ploit or to permit others to exploit the rights un-
der that patent.

While Verdiell was forming and fostering LightLogic,
Shum also briefly attempted to pursue Radiance’s tech-
nology and business on his own. After Radiance’s dissolu-
tion, Shum formed a company called Luminance and
attempted to obtain financing. These efforts were not
successful. Less than six months later, Shum accepted a
job at Ditech Communications and ceased work on Lumi-
nance. It is undisputed that nothing Verdiell or Light-
Logic did between 1998 and 2000 had any effect on
Shum’s decision to not pursue Radiance’s technology or
business. Indeed, until Shum learned of LightLogic’s
11 SHUM v. INTEL CORPORATION

acquisition by Intel in 2001, Shum did not even know
what Verdiell had been doing since Radiance’s dissolu-
tion.

In 2001, Shum filed the original complaint in this ac-
tion in California state court. The complaint alleged
numerous violations of state law, all of which were essen-
tially grounded in fraud surrounding the dissolution of
Radiance and much later sale of LightLogic to Intel. After
the case was removed to federal court, Shum amended his
complaint, adding claims for correction of inventorship
with respect to all seven of the LightLogic patents.

The procedural history preceding this latest appeal is
long and tortuous; only the relevant parts are set out
below. After the case was removed to federal court, the
district court dismissed Shum’s claim for unjust enrich-
ment and granted defendants’ motion to bifurcate the
inventorship and state law claims. A bench trial on the
inventorship claims followed, after which the district
court found that Shum had not shown by clear and con-
vincing evidence that he was an inventor of any claims in
the disputed LightLogic patents. The district court then
granted defendants’ motion for summary judgment on
Shum’s remaining state law claims. Shum filed his first
appeal with this court. We vacated the judgment, re-
versed the dismissal of the unjust enrichment claim, and
remanded for further proceedings. Shum v. Intel Corp.,
499 F.3d 1272, 1275 (Fed. Cir. 2007). We held that on
remand Shum was entitled to a jury trial on his state law
claims prior to any determination of his inventorship
claims because his inventorship claims and state law
claims shared common factual issues. We also reinstated
Shum’s unjust enrichment claim because it was not
duplicative or dependent on his fraudulent concealment
claim. Id. at 1279-80.
SHUM v. INTEL CORPORATION 12

Before the case was tried to a jury on remand, defen-
dants again moved for summary judgment on Shum’s
inventorship claims and some of his state law claims. The
district court granted defendants’ motion with respect to
Shum’s breach of fiduciary and fraudulent concealment
claims. At trial, Shum withdrew his correction of inven-
torship claims with respect to the ’2726 patent before the
close of evidence and limited his claims with respect to
the remaining six patents to co-inventorship, thus aban-
doning his prior, alternative claim for sole inventorship.
The jury heard testimony and saw extensive documentary
evidence regarding these remaining inventorship claims
and the state law claims for intentional misrepresenta-
tion, breach of contract, and unjust enrichment.

The jury found that Shum was the co-inventor of some
claims in five of the six contested patents. 3 For the ’427
patent, the jury found that Shum was not the co-inventor
of all claims except claim 1, as to which it deadlocked.
The jury also failed to reach a verdict as to claim 5 of the
’724 patent and Shum’s state law claims for intentional
misrepresentation, breach of contract, and unjust enrich-
ment.

The district court declared a mistrial for the claims on
which the jury failed to reach a verdict. After declaring a
mistrial, the district court entertained defendants’ motion

3 For the ’567 patent, the jury found Shum was the
co-inventor of claims 1, 6, 7, 8, 11, and 18. For the ’268
patent, the jury found Shum was the co-inventor of claims
1, 4, 12, 13, and 26. For the ’950 patent, Shum was found
to be the co-inventor of claims 1, 2, 14, and 29. For the
’726 patent, Shum was found to be the co-inventor of
claims 1, 2, 5, and 8. For the ’724 patent, the jury found
Shum was the co-inventor of claims 1, 7, 14, and 16.
13 SHUM v. INTEL CORPORATION

for judgment as a matter of law. It then entered judg-
ment for Shum on his co-inventorship claims for the five
patents on which the jury reached a verdict. On the
remaining claims, the court entered judgment for defen-
dants. In support of its grant of post-verdict JMOL, the
district court concluded that a reasonable jury could not
find for Shum on these state law claims or the remaining
co-inventorship claims as to the ’427 and ’724 patents.

Shum now appeals. We have jurisdiction pursuant to
28 U.S.C. § 1295(a)(1). 4

ANALYSIS

We review grants of summary judgment and post-
verdict JMOL on state law claims under the law of the
regional circuit, since they present procedural issues not
unique to patent law. Koninklijke Philips Elects. N.V. v.
Cardiac Sci. Operating Co., 590 F.3d 1326, 1332 (Fed. Cir.
2010). Here, Ninth Circuit law applies.

Summary judgment “should be rendered if the plead-
ings, the discovery and disclosure materials on file, and

4 Here, as in his companion appeal, Shum asserts
that there is a significant question as to whether subject
matter jurisdiction is lacking under this court’s decision
in Larson v. Correct Craft, Inc., 569 F.3d 1319 (Fed. Cir.
2009). In both instances, Shum’s argument lacks merit
for the same reason: because his state law claims neces-
sarily involve a substantial question of federal patent law,
inventorship, the district court had subject matter juris-
diction. See Christianson v. Colt Indus. Operating Corp.,
486 U.S. 800, 808-09 (1988). Further, Shum has not
assigned away all of his financial interest in the patents,
making him unlike the plaintiff in Larson, where the
correction of inventorship claims were the sole basis for
the district court’s subject matter jurisdiction.
SHUM v. INTEL CORPORATION 14

any affidavits show that there is no genuine issue as to
any material fact and that the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(c). A
“material” fact is one that is relevant to an element of a
claim or defense and whose existence might affect the
outcome of the suit. T.W. Elec. Serv., Inc. v. Pac. Elec.
Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987). If
the moving party meets its burden of establishing that
there is no genuine issue of material fact and is entitled to
judgment as a matter of law, then the burden shifts to the
nonmoving party to set forth specific facts showing that
there is a genuine issue for trial. Id.

Judgment as a matter of law is proper “[i]f a party has
been fully heard on an issue during a jury trial and the
court finds that a reasonable jury would not have a legally
sufficient evidentiary basis to find for the party on that
issue.” Fed. R. Civ. P. 50(a). The court may “grant a
motion for judgment as a matter of law against the party
on a claim or defense that, under the controlling law, can
be maintained or defeated only with a favorable finding
on that issue.” Id. A jury’s inability to reach a verdict
does not necessarily preclude a judgment as a matter of
law. Headwaters Forest Def. v. Cnty. of Humboldt, 240
F.3d 1185, 1197 (9th Cir. 2000). The question is
“‘whether the evidence, construed in the light most favor-
able to the non-moving party, permits only one reasonable
conclusion.’” White v. Ford Motor Co., 312 F.3d 998, 1010
(9th Cir. 2002).

On appeal Shum challenges the district court’s grant
of summary judgment on his breach of fiduciary duty and
fraudulent concealment claims, as well as its grant of
post-verdict JMOL on his claims for intentional misrepre-
sentation, breach of contract, unjust enrichment, and co-
inventorship of the ’427 and ’724 patents. In support of
15 SHUM v. INTEL CORPORATION

his request for a new trial, Shum argues that various
evidentiary rulings were erroneous and prejudicial.

We address each of these issues in turn.

I. Breach of Fiduciary Duty

A necessary predicate for claiming breach of a fiduci-
ary duty is showing that such a duty exists. Under Cali-
fornia law, moreover, fiduciary duties do not arise or exist
untethered from particular relationships or special fac-
tual circumstances.

A fiduciary duty exists in certain technical, legal rela-
tionships. Particular relationships giving rise to the duty
include attorney-client, trustee-beneficiary, guardian-
ward, or principal-agent. Richelle L. v. Roman Catholic
Archbishop, 106 Cal. App. 4th 257, 271 (2003). Outside of
these long-recognized categories, California state courts
have largely declined to find that a fiduciary duty exists.
Oakland Raiders v. Nat’l Football League, 131 Cal. App.
4th 621, 633 (2005). For example, a fiduciary duty does
not arise between equal shareholders in a corporation
merely by virtue of their legal relationship as sharehold-
ers. There is similarly no duty even if they also serve as
directors or officers of the corporation. Persson v. Smart
Inventions, Inc., 125 Cal. App. 4th 1141, 1156-59 (2005).

Outside of “technical, legal relationships,” certain fac-
tual circumstances surrounding a “confidential relation-
ship” may give rise to a fiduciary relationship, with
attendant fiduciary duties. Id. at 1159-62. A confidential
relationship may arise when one party reposes trust and
confidence in another who is aware of that fact. In order
for that confidential relationship to also qualify as a
fiduciary relationship, four additional requirements must
SHUM v. INTEL CORPORATION 16

be met. First, one party must be vulnerable. Second, that
vulnerability must result in the empowerment of the
stronger party by the weaker. Third, that empowerment
must have been solicited or accepted by the stronger
party. Fourth, the empowerment must prevent the
weaker party from effectively protecting itself. Id. at
1161; see also City of Hope Nat’l Med. Ctr. v. Genentech,
Inc., 43 Cal. 4th 375, 388 (2008).

On appeal, Shum argues that the district court erred
in granting summary judgment for defendants with
respect to his breach of fiduciary duty claim. As he did
below, on appeal Shum argues that Verdiell breached the
fiduciary duty that Verdiell owed to Radiance as an officer
of the corporation, as well as the fiduciary duty Verdiell
owed to Shum as a joint collaborator and equal share-
holder in Radiance.

The district court rejected both of Shum’s theories.
Assuming that Shum would have standing to sue for any
breach of fiduciary duty that Verdiell owed to Radiance,
the district court nevertheless noted that Verdiell’s con-
duct in obtaining the LightLogic patents occurred after
Radiance’s formal dissolution, at a time when Radiance
no longer existed (and thus was no longer owed a duty by
Verdiell).

Further, the district court noted that the POL ex-
pressly permitted both Verdiell and Shum to engage in
activities “in competition with the business of the Corpo-
ration [Radiance].” Shum v. Intel Corp., 630 F. Supp. 2d
1063, 1070 (N.D. Cal. 2009). As for Verdiell’s activities
before Radiance’s dissolution, the district court found that
under California law “plans and activities to dissolve and
compete with an existing business . . . do not, of them-
selves, constitute a breach of any fiduciary duty.” Shum
17 SHUM v. INTEL CORPORATION

v. Intel Corp., No. 02-03262, slip op. at 9 (N.D. Cal. Sept.
26, 2008).

The district court similarly found that Verdiell did not
owe any fiduciary duty to Shum. Citing the California
Court of Appeal’s decision in Persson, the district court
concluded that Shum and Verdiell’s legal relationship as
shareholders and co-officers of Radiance did not give rise
to any fiduciary duty to each other. Id. Further, the
district court found that the factual circumstances sur-
rounding Shum and Verdiell’s relationship as joint col-
laborators did not establish a confidential relationship
with attendant fiduciary duties. At minimum, the district
court noted that Shum had produced no evidence of
vulnerability or incapacity that might give rise to such a
duty. Id. at 8.

We agree that, under either theory, Shum’s claim for
breach of fiduciary duty fails as a matter of law.

Shum is correct that Verdiell owed a duty to Radiance
as an officer of the corporation. Assuming, without decid-
ing, that Verdiell did breach his fiduciary duty to Radi-
ance, Shum still cannot maintain his claim because he
lacks standing. Simply put, California law prohibits
Shum from bringing an action in his personal capacity or
capacity as a shareholder for a breach of duties owed to
Radiance, a corporation. See Nelson v. Anderson, 84 Cal.
Rptr. 2d 753, 762-63 (Ct. App. 1999); see also Cal. Corp.
Code § 800; Anderson v. Derrick, 220 Cal. 770, 773 (1934).
Here, the harms Shum alleges are the dissolution of
Radiance and diminished value of Radiance’s intellectual
property. Both of these are injuries to the corporation,
not to Shum in his individual capacity as a shareholder.
See Nelson, 84 Cal. Rptr. 2d at 761. Any damage to Shum
is merely incidental to Radiance’s injury. See id.; see also
SHUM v. INTEL CORPORATION 18

Bader v. Anderson, 101 Cal. Rptr. 3d 821, 840-42 (Ct.
App. 2009). To bring a claim on behalf of Radiance, Shum
would have had to plead and satisfy California’s statutory
requirements for a derivative action. Id. at 763-64. It is
undisputed that Shum has not met these requirements.
Accordingly, he has no standing to sue with regards to
any duty that Verdiell owed to Radiance as an officer of
the corporation.

As for Shum’s second theory, Shum cannot establish
that Verdiell owes him a fiduciary duty based on either a
legal relationship or the factual circumstances of their
joint collaboration while with Radiance. We agree with
the district court that Verdiell and Shum are like the
shareholders and co-officers in Persson. In Persson, the
California Court of Appeal rejected Persson’s claim that
the other shareholder and co-officer owed him a fiduciary
duty. 125 Cal. App. 4th at 1159-62. We do the same here.

The undisputed facts similarly fail to show the exis-
tence of a confidential relationship between Shum and
Verdiell. Simply put, there is no evidence that their
relationship while working together at Radiance was
characterized by the type of vulnerability that might give
rise to a fiduciary duty. Cf. Richelle L., 130 Cal. Rptr. 2d
at 611. Shum is not elderly, underage, lacking education,
or displaying a weakness of mind, grief, or sickness that
might support an inference of vulnerability. Id. To the
contrary, the record shows that Shum is highly educated,
intimately familiar with the technology in question, and
was represented by counsel at all relevant times.

For these reasons, the district court properly granted
summary judgment in favor of defendants on Shum’s
breach of fiduciary duty claim.
19 SHUM v. INTEL CORPORATION

II. Fraudulent Concealment

Fraudulent concealment involves the “suppression of
a fact, by one who is bound to disclose it, or who gives
information of other facts which is likely to mislead by
want of communication of that fact.” Cal. Civ. Code §
1710(3); see also Rogers v. Warden, 20 Cal. 2d 286, 289
(1942). Typically, a duty to disclose only arises when
there is a fiduciary or confidential relationship between
the parties. Warner Const. Corp. v. Los Angeles, 2 Cal. 3d
285, 294 (1970). A duty may also arise, however, if the
defendant (1) has exclusive knowledge of material facts
that are not reasonably discoverable by the plaintiff, (2)
actively conceals a material fact from the plaintiff, or (3)
makes partial representations but suppresses other
material facts, rendering the partial disclosure likely to
mislead. Id.; see also LiMandri v. Judkins, 52 Cal. App.
4th 326, 336-37 (1997).

Before the district court, Shum’s fraudulent conceal-
ment claim was based on Verdiell’s failure to disclose that
Verdiell was forming LightLogic, a corporation that would
compete with Radiance. The district court granted sum-
mary judgment in favor of defendants, finding that Verdi-
ell had no duty to disclose this fact, or any other
potentially harmful facts, to Shum. In support of this
conclusion, the district court emphasized that Verdiell
owed Shum no fiduciary duty and no equivalent duty was
created by the POL.

On appeal, Shum continues to argue that Verdiell
owed him a fiduciary duty because Shum was a share-
holder of Radiance and Verdiell was an officer. In the
alternative, Shum argues that Verdiell had exclusive
knowledge of material facts which he actively concealed,
giving rise to actionable fraud. Shum also appears to
SHUM v. INTEL CORPORATION 20

argue that Verdiell made partial representations while
suppressing other material facts, thus committing further
fraud.

We agree with the district court that Shum has not
made out an actionable claim of fraudulent concealment.
As explained above, Verdiell owed no fiduciary duty to
Shum, and thus had no duty to disclose his plans to form
LightLogic or compete with Radiance. As for Verdiell’s
statement that Shum would have “equal rights” to exploit
Radiance’s technology, that statement was true. Indeed,
the plain language of the POL says exactly that. Simi-
larly, the record does not support Shum’s contention that
Verdiell had exclusive knowledge of how much Radiance
or its technology was worth. It is undisputed that Shum
was also talking to potential investors and had received
valuation estimates; at minimum, Verdiell had access to
no information that Shum could not have reasonably
obtained, including estimates by the same venture capi-
talists. Shum has accordingly failed to meet his burden of
showing what “other” material facts were actively sup-
pressed or exclusively known by Verdiell.

III. Unjust Enrichment

Under California law, an unjust enrichment claim re-
quires showing (1) receipt of a benefit (2) that is unjustly
retained at the expense of another. Peterson v. Cellco
P’ship, 164 Cal. App. 4th 1583, 1593 (2008). In other
words, merely receiving a benefit from another is not
enough; retention of that benefit must also be unjust due
to some wrongful conduct by the receiving party. Cnty. of
San Bernardino v. Walsh, 158 Cal. App. 4th 533, 542-43
(2007).
21 SHUM v. INTEL CORPORATION

In this case, Shum’s theory of unjust enrichment can
be loosely summarized as follows: According to Shum,
Verdiell and LightLogic engaged in wrongful conduct by
falsely claiming exclusive ownership of the Radiance
technology; these false claims of exclusivity were what
induced (caused) Intel to buy LightLogic, resulting in the
unjust enrichment of Verdiell and LightLogic at the
expense of Shum and his rights in the technology. In this
view, Verdiell and LightLogic were unjustly enriched by
some, if not all, of the $409 million Intel paid for Light-
Logic, since Shum maintains that the sale would not have
occurred but for Verdiell and LightLogic falsely claiming
to have exclusive rights in the Radiance technology.

Shum’s theory was presented to the jury, who could
not reach a verdict on this claim. The district court
subsequently granted post-verdict JMOL in favor of
defendants. In support of this conclusion, the district
court explained that Shum had failed to offer sufficient
evidence to prove any element of his unjust enrichment
claim. Specifically, the district court found that the
record did not show that Verdiell or LightLogic engaged
in any wrongful conduct, or that any alleged claims of
exclusive rights were what caused Intel to buy LightLogic.

On appeal, Shum renews the arguments he made be-
low. In doing so, he places special emphasis on the pre-
merger documents and analysis in which Intel empha-
sized LightLogic’s “ownership,” “proprietary” product, and
“patent-pending” technology.

We hold that post-verdict JMOL in favor of defen-
dants was proper on Shum’s claim for unjust enrichment.
Assuming, without deciding, that Verdiell and LightLogic
engaged in “wrongful conduct” by making false state-
ments claiming exclusive rights in the LightLogic patents,
SHUM v. INTEL CORPORATION 22

no reasonable jury could find that these wrongful acts
caused defendants to receive a benefit at Shum’s expense.
See Peterson, 80 Cal. Rptr. 3d at 323.

Causation is lacking because the record does not sup-
port Shum’s assertion that Intel purchased LightLogic
because it was promised sole or exclusive rights in the
Radiance technology. To the contrary, the Intel acquisi-
tion documents themselves acknowledge that the Radi-
ance POL gave Verdiell and Shum “equal rights to
independently exploit the intellectual property developed
by Radiance Design, Inc., including the rights under the
[’567 patent].” Intel also received a copy of the Radiance
POL. Nothing in these documents suggests that Shum’s
rights were limited to the ’567 patent; to the contrary, the
Intel documents construe his rights as broadly and
vaguely as the “intellectual property developed by [Radi-
ance].” While the statements Shum cites concerning
LightLogic’s “ownership,” “proprietary” product, and
“patent-pending” technology suggest that Intel did want
to assure that LightLogic had, and would continue to
have, a right to use its technology, there is no mention
that the sale was contingent on Verdiell and LightLogic
having exclusive rights. Testimony by defendants’ wit-
nesses similarly suggests that Intel was concerned with
buying the right to use the LightLogic patents and tech-
nology, not exclusivity. The record thus refutes Shum’s
contention that the promise of exclusive rights is what
lured Intel to the bargaining table and ultimately caused
it to purchase LightLogic; rather, the evidence shows that
Intel knew it was purchasing LightLogic and LightLogic’s
intellectual property subject to whatever rights Shum
might also have in the Radiance technology.

An additional, and equally fatal, flaw in Shum’s the-
ory is the absence of evidence showing that defendants
23 SHUM v. INTEL CORPORATION

received a benefit at Shum’s expense. While the evidence
does show that LightLogic and Verdiell received $409
million from Intel, there is no evidence that defendants
received any benefit directly from Shum. Nor is there
evidence that defendants received the $409 million from
Intel at the expense of Shum’s right to independently
exploit the Radiance technology or at any other cost to
Shum. Indeed, Shum was not a party to the Intel-
LightLogic deal, nor is there any evidence that Shum
suffered any tangible loss as a result of Verdiell and
LightLogic’s alleged wrongful acts. Shum’s apparent
“injuries”—diminished bargaining power due to his later-
established inventorship and inability to participate in
the Intel-LightLogic deal—are speculative. Shum has not
shown that he would have been a party to the deal or
even had other negotiations fall through as a result of the
alleged wrongful acts. While Verdiell and LightLogic
certainly benefited from the Intel-LightLogic deal, there is
no evidence they did so at Shum’s expense. Cf. Major-
Blakeney Corp. v. Jenkins, 263 P.2d 655, 664 (Cal. Ct.
App. 1953).

For these reasons, post-verdict JMOL was proper.

IV. Breach of Contract

Under California law, a breach of contract claim re-
quires showing four things: (1) a contract existed; (2) the
plaintiff performed his duties under the contract or was
excused from nonperformance; (3) the defendant breached
the contract; (4) the plaintiff suffered damages as a result
of defendant’s breach. Wall St. Network, Ltd. v. N.Y.
Times Co., 164 Cal. App. 4th 1171, 1178 (2008).
SHUM v. INTEL CORPORATION 24

Prior to its grant of post-verdict JMOL on this claim,
the district court interpreted various sections of the
Radiance POL. Two of these provisions are relevant here.

The section titled “Business Activities of the Officers
and Directors” states:

Shum and Verdiell acknowledge and agree that,
after the approval of this Plan [POL], each shall
be entitled, without any liability or duty to ac-
count to [Radiance] or to the other, to pursue any
and all such other business activities as they shall
desire, even if such activities are in competition
with the business of [Radiance] and even if they
take, or attempt to take, a business opportunity
that [Radiance] could have itself pursued.

The district court construed this provision of the POL as
eliminating any liability between Shum and Verdiell
based on the “business activities” by either Shum or
Verdiell in any commercial exploitation of the Radiance
technology. It also concluded that the provision allowed
Shum and Verdiell to compete with each other without
giving notice or accounting for profits. The district court
further held that the POL eliminated any liability be-
tween Shum and Verdiell based on either party obtaining
a lawful patent related to the intellectual property devel-
oped at Radiance.

The district court also interpreted a section of the Ra-
diance POL titled “Distribution of Property.” It provides
that “Verdiell and Shum shall have equal rights to inde-
pendently exploit the intellectual property developed by
[Radiance].” The district court construed this provision as
entitling Shum and Verdiell to lawfully patent any of
25 SHUM v. INTEL CORPORATION

their own inventions in the intellectual property belong-
ing to Radiance.

Both before the district court and on appeal, Shum
argues that Verdiell (and LightLogic) breached the ex-
press terms of the POL. According to Shum, defendants
also breached the attendant implied duty of good faith
and fair dealing by applying for and obtaining the Light-
Logic patents without listing Shum as a co-inventor.

Shum set out this theory at trial in arguing that de-
fendants breached the POL. After the jury deadlocked on
the breach of contract claim, the district court granted
post-verdict JMOL in favor of defendants. Based on its
interpretation of the POL, the district court found that
Shum failed to prove this claim as a matter of law.

Based on its conclusion that the POL gave Shum and
Verdiell the right to lawfully patent any Radiance tech-
nology that belonged to them individually, the district
court reasoned that Verdiell could only breach the POL if
Verdiell unlawfully obtained a patent. According to the
district court, because Verdiell was at least the undis-
puted co-inventor of all the LightLogic patents, Verdiell’s
conduct in obtaining the patents could only have been
unlawful if Verdiell knew that Shum was a co-inventor
and omitted Shum’s name with the intent to mislead the
United States Patent and Trademark Office (“PTO”) as to
the true inventor of the patent.

The district court also found that Shum’s breach of
contract claim failed for the separate, independent reason
that Shum presented no evidence that he was harmed as
the result of the alleged breach of the POL. Noting that
California law requires a showing of damages in a breach
of contract case to be actionable, the district court con-
SHUM v. INTEL CORPORATION 26

cluded that Shum’s asserted harm—failure to have his
rights bought out by Verdiell or LightLogic—was too
speculative, given that Verdiell had no duty to buy any
rights from Shum.

We agree that defendants were entitled to post-
verdict JMOL on Shum’s breach of contract claims be-
cause, at minimum, Shum has offered no evidence that
Verdiell’s alleged breach caused any harm. The record
shows that Shum abandoned efforts to exploit the Radi-
ance technology in 1998, long before the LightLogic pat-
ents issued and before most had even been filed.

Moreover, there is no evidence that Shum suffered fi-
nancial harm by being omitted from the patents as a co-
inventor. Shum’s inclusion would not have entitled him
to proceeds from the Intel-LightLogic deal, since Verdiell
was allowed to sell his rights without any duty to account
to Shum. 35 U.S.C. § 262. Nor did Verdiell have any
duty under the POL to buy out Shum before forming
LightLogic or inking the Intel-LightLogic transaction.
Finally, there is no evidence that Shum tried to acquire
patents covering the same subject matter or sought to
exploit the covered technology in any way that was im-
peded or prevented by his omission from the patents.

V. Intentional Misrepresentation

A party is liable for intentional misrepresentation if
(1) the defendant represented to plaintiff that an impor-
tant fact was true; (2) that representation was false; (3)
the defendant knew the representation was false when
the defendant made it, or made it recklessly and without
regard for its truth; (4) the defendant intended the plain-
tiff to rely on the representation; (5) the plaintiff did
reasonably rely on the representation; (6) the plaintiff
27 SHUM v. INTEL CORPORATION

was harmed; (7) the plaintiff’s reliance on defendant’s
representation was a substantial factor in causing the
harm to the plaintiff. Manderville v. PCG & S Grp., Inc.,
146 Cal. App. 4th 1496, 1498 (2007); see also Cal. Civ.
Code §§ 1709, 1710; Lazar v. Superior Court, 12 Cal. 4th
631, 638 (1996).

At trial, Shum’s intentional misrepresentation claim
was based on Verdiell’s statement to Shum in 1997 that
the Radiance patent application was invalid and had to be
withdrawn. 5 Shum presented this theory, and only this
theory, at trial. As with Shum’s other state law claims,

5 Shum argues on appeal that the district court
“improperly eviscerated” his intentional misrepresenta-
tion claim by limiting it to Verdiell’s 1997 statement. We
disagree.
The district court did not abuse its discretion by re-
quiring Shum to state with particularity which state-
ments this cause of action rested upon. As with any other
claim alleging fraud, Shum was subject to a heightened
pleading standard under both state and federal law. Fed.
R. Civ. P. 9(b); see also Conrad v. Bank of Am., 45 Cal.
App. 4th 133, 156 (1996) (“In order to establish a cause of
action for fraud a plaintiff must plead and prove in full,
factually and specifically, all of the elements of the cause
of action. General and conclusory claims of fraud will not
suffice.”)
As relevant here, Rule 9 requires a plaintiff to state
with particularity the basis for his claims. In this case,
the record shows that it was Shum’s attorney, not the
district court, who limited Shum’s intentional misrepre-
sentation claim at trial to Verdiell’s 1997 statement.
While Shum may now be suffering buyer’s remorse for
choosing only this statement, we can discern no error on
the district court’s part. In light of the particularity
requirement for claims grounded in fraud, Shum was
required to disclose the factual basis for his intentional
misrepresentation claim; he could not lie in the weeds,
obfuscate until a jury was empanelled, then pounce.
SHUM v. INTEL CORPORATION 28

the jury was unable to reach a verdict. The district court
then granted post-verdict JMOL in favor of defendants. It
found that the intentional misrepresentation claim failed
as a matter of law because Shum had not shown that
Verdiell’s statement was false or that Shum was harmed
as a result of the alleged misrepresentation.

We agree with the district court that post-verdict
JMOL on this claim was proper because Shum has not
shown that he suffered any monetary loss as a result of
Verdiell’s alleged misrepresentation, a necessary element
under California law. Cal. Civ. Code § 3333; Strebel v.
Brenlar Invs., Inc., 135 Cal. App. 4th 740, 749 (2006).

IV. Correction of Inventorship for the ’427 and ’724
Patents

Inventorship is a question of law we review without
deference. Ethicon Inc. v. U.S. Surgical Corp., 135 F.3d
1456, 1460 (Fed. Cir. 1998). Because the inventors named
on the issued patent are presumed to be correct, a person
seeking to add his name “must meet the heavy burden of
proving its case by clear and convincing evidence.” Eli
Lilly & Co. v. Aradigm Corp., 376 F.3d 1352, 1358 (Fed.
Cir. 2004). A joint inventor “must contribute in some
significant manner to the conception or reduction to
practice of the invention [and] make a contribution to the
claimed invention that is not insignificant in quality,
when that contribution is measured against the dimen-
sion of the full invention.” Narton Corp. v. Schukra
U.S.A. Inc., 558 F.3d 1352, 1356 (Fed. Cir. 2009); see also
Fina Oil & Chem. Co. v. Ewen, 123 F.3d 1466, 1473 (Fed.
Cir. 1997).

Here, Shum’s correction of inventorship claims for
both patents turn on the question of Shum’s contribution
29 SHUM v. INTEL CORPORATION

to the idea of adding a second pair of legs to the flexure
described in other claims of those respective patents. We
agree with the district court that the evidence Shum cites
from March 1997 does not show a second pair of legs,
while the later drawings and evidence from June 1997 are
past the point of conception. The district court correctly
granted post-verdict JMOL with respect to claim 1 of the
’724 patent and claim 5 of the ’427 patent.

VII. Evidentiary Rulings

In support of his request for a new trial, Shum argues
that various rulings by the district court before and
during trial were erroneous and prejudicial.

Our review of the record does not show that the dis-
trict court abused its wide discretion in limiting the use of
Intel’s interrogatory answers to only Intel, the party that
provided them. Similarly, the district court properly
admitted the testimony of defendants’ experts regarding
the effect of PTO assignments. Shum’s quarrel with the
opinions goes to the weight the opinions warranted, not
their admissibility. To the extent language in the as-
signments themselves contradicted the experts’ opinions,
Shum was free, as he did, to bring out such contradictions
on cross examination. Nor was it unreasonable for the
district court to limit the scope of discovery when reopen-
ing the record on remand, particularly given that there
had already been ample opportunity to develop the record.
Finally, we reject Shum’s general challenge to the jury
instructions, which lacked detail both as to the nature of
the error and resulting prejudice.

CONCLUSION

Because Shum has not identified any genuine issues
SHUM v. INTEL CORPORATION 30

of material fact with respect to his breach of fiduciary
duty or fraudulent concealment claims, we affirm the
district court’s grant of summary judgment as to them.
We also affirm the district court’s grant of post-verdict
JMOL on Shum’s claims for unjust enrichment, breach of
contract, intentional misrepresentation, and correction of
inventorship for the ’472 and ’724 patents. Shum has not
presented sufficient evidence that would allow a reason-
able jury to find for him on those claims.

AFFIRMED
 United States Court of Appeals
for the Federal Circuit
__________________________

FRANK T. SHUM,
Plaintiff-Appellant,
v.
INTEL CORPORATION, LIGHTLOGIC, INC.,
AND JEAN-MARC VERDIELL,
Defendants-Cross Appellants.
__________________________

2009-1385,-1419
__________________________

Appeal from the United States District Court for the
Northern District of California in Case No. 02-CV-3262,
Senior Judge D. Lowell Jensen.
__________________________

NEWMAN, Circuit Judge, dissenting.
The jury verdict was that Frank T. Shum is the joint
inventor, and thus owner in common, of five of the six
patents presented to the jury. The jury was deadlocked as
to the award of damages on the counts that related to
issues of fraud, misrepresentation, unjust enrichment,
and breach of fiduciary duty. The district court entered
judgment as to Shum’s joint inventorship, and granted
judgment as a matter of law as to all of the deadlocked
counts. It cannot be said that no reasonable jury could
have found any of the liability issues in favor of Shum, for
some jurors did find in his favor, although not unani-
mously. It is relevant that the jury had already found
SHUM v. INTEL CORPORATION 2

unanimously in favor of Shum as to joint inventorship,
which was the foundation of the issues related to dam-
ages. In these circumstances, it was improper for the
district court, and now this court, to make their own
findings of disputed material fact on traditional jury
questions. That a jury is deadlocked does not convert fact
into law, and the constitutional right is not negated when
the jury is deadlocked. See Union Pac. R.R. Co. v. Bridal
Veil Lumber Co., 219 F.2d 825, 832 (9th Cir. 1955) (“To do
other than send the case back for a new trial when a
decision on a vital issue by the jury is missing would
deprive the parties of the jury trial to which they are
entitled constitutionally.”). From my colleagues’ en-
dorsement of and participation in this improper proce-
dure, I respectfully dissent.
A
THE PRETRIAL SUMMARY JUDGMENTS
Before the jury trial, and thus before the verdict of
joint inventorship, the district court granted summary
judgments as to the counts of breach of fiduciary duties
and fraudulent concealment.
Breach of Fiduciary Duties
This summary judgment was predicated on the duties
that Verdiell owed to Radiance and to Shum, who was the
only other owner of Radiance. Shum’s position was that
Verdiell violated his fiduciary duties when he appropri-
ated Shum’s inventions as his own and patented their
joint technology as his sole and exclusive property. Shum
points out that Verdiell filed his first patent application,
in his sole name, one day after the Plan of Liquidation of
Radiance was executed. The district court held, on sum-
mary judgment, that there was no fiduciary obligation as
3 SHUM v. INTEL CORPORATION

a matter of law, citing Persson v. Smart Inventions, Inc.,
125 Cal. App. 4th 1141 (2005).
The ruling in Persson was misapplied. Persson in-
volved two equal shareholders who parted ways, and then
one went on to exploit an opportunity he had not revealed
when he bought out the other. The court ruled that no
fiduciary duties were owed. Id. at 1156-59. Shum argues
that there is a significant factual difference, for Verdiell
didn’t simply exploit an opportunity on which he had
remained silent, but did so by patenting Shum’s inven-
tions as his own. The district court held that Verdiell’s
activities were permitted by the Plan of Liquidation,
which gave both him and Shum the right to use the
Radiance technology.
Shum argues that the Plan of Liquidation did not au-
thorize Verdiell to appropriate the sole and exclusive right
to Shum’s inventions. Shum states that under California
law, former officers of a company continue to owe duties of
fair dealing, citing ViChip Corp. v. Lee, 438 F. Supp. 2d
1087, 1100 (N.D. Cal. 2006) (duty violated when an officer
who had been asked to step down destroyed certain
documents), and Fox v. Abrams, 163 Cal. App. 3d 610, 617
(1985) (recognizing post-dissolution fiduciary obligations).
Shum stresses that Verdiell’s breaching conduct was not
that he continued the Radiance business, but that he
patented Shum’s inventive contributions as his sole
invention and exclusive property.
Breach of fiduciary duty is a question of fact. See City
of Hope Nat’l Med. Ctr. v. Genentech, Inc., 43 Cal. 4th 375,
391 (2008) (the existence of a fiduciary duty depends on
the facts and circumstances of each case). Summary
judgment of disputed factual questions is proper only if
the evidence, construed in the light most favorable to the
non-movant, nonetheless requires that the movant must
SHUM v. INTEL CORPORATION 4

prevail. Ybarra v. Reno Thunderbird Mobile Home Vill.,
723 F.2d 675, 677 (9th Cir. 1984); see also, Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (on motion
for summary judgment “the evidence of the nonmovant is
to be believed, and all justifiable inferences are to be
drawn in his favor”). This summary judgment motion
was decided before the jury had found that Shum was a
joint inventor, a finding material to this aspect of fiduci-
ary duty. A reasonable jury could have found this issue in
favor of Shum; thus summary judgment was improperly
granted, and is incorrectly sustained by the panel major-
ity.
Fraudulent Concealment
The district court also granted summary judgment
that there was no fraudulent concealment, again before
the jury found the joint inventorship of these five patents
on the Radiance technology, and even though the question
of inventorship was at the core of the asserted fraudulent
concealment.
Under California law, fraudulent concealment re-
quires “the suppression of a fact, by one who is bound to
disclose it, or who gives information of other facts which
are likely to mislead for want of communication of that
fact.” Cal. Civ. Code §1710(3). Shum’s fraudulent con-
cealment claim focused on Verdiell’s concealment of
Shum’s inventive contributions and thereby patenting of
the joint technology as Verdiell’s exclusive property. The
Plan of Liquidation cannot be construed as intending to
authorize Verdiell to curtail Shum’s equal rights in the
Radiance technology, by falsely claiming exclusive patent
rights in the technology. Disputed factual questions could
not be resolved adversely to Shum on summary judgment,
by the district court and this court. See Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)
5 SHUM v. INTEL CORPORATION

(on motion for summary judgment the court must view
the facts in the light most favorable to the non-moving
party and give it the benefit of all reasonable inferences to
be drawn from those facts).
B
THE DEADLOCK AT TRIAL
The jury was unable to reach a verdict on the ques-
tions of liability and damages. The district court then
granted judgment as a matter of law on all of the issues of
liability and damages. Shum states that he is entitled to
a new trial on these issues, and points out that he was
denied discovery on some aspects on which the district
court later criticized the absence of evidence.
Shum presented several theories of liability, as were
discussed by the district court in its grant of JMOL.
Unjust Enrichment
Under California law, unjust enrichment requires un-
just receipt of a benefit and its wrongful retention. Peter-
son v. Cellco P’ship, 164 Cal. App. 4th 1583, 1593 (2008);
Lectrodryer v. Seoulbank, 77 Cal. App. 4th 723, 726 (2000)
(confirming right to jury trial on unjust enrichment
claim). After the jury deadlocked, the district court
decided this issue adversely to Shum “as a matter of law.”
Shum states that there was substantial evidence
whereby a reasonable jury could have found that Verdiell
was unjustly enriched based on Verdiell’s false claims of
sole inventorship. Shum points to Verdiell’s assertions of
exclusive patent rights, starting with the patent applica-
tions where Verdiell declared his sole inventorship when
filing the applications, followed by Verdiell’s representa-
tions on assigning the patent applications to LightLogic in
which he averred that “[a]ssignor is the sole and lawful
SHUM v. INTEL CORPORATION 6

owner of the entire right, title, and interest in and to said
inventions.” LightLogic in turn described itself as the
“sole and exclusive owner” of these patents, and duly
assigned this purported entire and exclusive right to
Intel. Shum also pointed to other acquisition documents
that referred to LightLogic’s ownership, proprietary
products, and patented technology.
A reasonable jury could have found that Verdiell ob-
tained and retained an unjust benefit from these misrep-
resentations. See County of Solano v. Vallejo Redev.
Agency, 75 Cal. App. 4th 1262, 1278 (1999) (the term
“benefit” for unjust enrichment “denotes any form of
advantage”). My colleagues on this panel hold that Shum
was required to prove that “the promise of exclusive
rights is what lured Intel to the bargaining table and
ultimately caused it to purchase LightLogic.” Maj. Op. at
22. That is incorrect; Shum need not prove that but for
the falsehood there would have been no transaction at all.
My colleagues’ argument that “there is no mention that
the sale was contingent on Verdiell and LightLogic having
exclusive rights” does not control whether Verdiell and
LightLogic were unjustly enriched by the misrepresenta-
tions of exclusivity. Shum points to the trial court’s
statement, in colloquy with counsel, that for the defen-
dants to argue that Intel did not value the patent owner-
ship would be “crazy.” Transcript of Proceedings held on
December 1, 2008 at 2193 ln.18, Shum v. Intel Corp., No.
C 02-3262 (N.D. Cal. April 29, 2009).
The district court, and now my colleagues, err in de-
ciding the question of unjust enrichment adversely to
Shum “as a matter of law.” The question of whether these
patents were of value in the transaction is factual, and
was deemed material by both the district court and my
colleagues; however, Intel declined to produce, and the
district court refused to compel, Intel documents poten-
7 SHUM v. INTEL CORPORATION

tially relevant to this question. A reasonable jury could
have found that patent exclusivity was valued, and that
Verdiell and LightLogic were unjustly enriched. When
the jury could not reach a verdict, the appropriate step
was a new trial. See Wahpeton Canvas Co. v. Frontier,
Inc., 870 F.2d 1546, 1555 (Fed. Cir. 1989) (vacating judg-
ment and remanding for a new trial where the jury did
not return answers on vital issues).
Breach of Contract
Shum argues that Verdiell breached the Plan of Liq-
uidation, and its implied duty of good faith and fair deal-
ing between contracting parties, by obtaining exclusive
rights to the Radiance technology in which Shum was
intended to have equal rights. The district court held that
“as a matter of law” there could be no breach of contract
unless the false inventorship claims were made with
deceptive intent. That is not the law. It is hornbook law
that a contract may be breached whether or not there was
deceptive intent. See New York Life Ins. Co. v. Viglas, 297
U.S. 672, 678 (1936); Trauma Service Group v. U.S., 104
F.3d 1321, 1325 (Fed. Cir. 1997) (“a breach of contract is a
failure to perform a contractual duty when it is due”).
My colleagues reason that there was no breach be-
cause Shum did not “suffer[] financial harm by being
omitted from the patents as a co-inventor.” Maj. Op. at
26. That too is not the law of contracts. See Restatement
2d of Contracts §235(2) (1981) (“When performance of a
duty under a contract is due any non-performance is a
breach.”); 11-55 Corbin on Contracts §55.10 (2010) (“a
breach of contract that causes no injury is still a wrong to
the other contracting party”); 23 Williston on Contracts
§63:1 (4th ed. 2010) (“a breach of contract is a failure,
without legal excuse, to perform any promise that forms
the whole or part of a contract”). The availability or
SHUM v. INTEL CORPORATION 8

nature of remedy does not decide whether the contract
was breached. Restatement, supra, at §236, cmt. a (“Even
if the injured party sustains no pecuniary loss or is unable
to show such loss with sufficient certainty, he has at least
a claim for nominal damages.”).
Shum argues that while the Plan of Liquidation au-
thorized both Shum and Verdiell to use the Radiance
technology, the filing of patents by which Verdiell exclu-
sively appropriated the Radiance technology was a breach
of the Plan. A reasonable jury could have so found. On
deadlock of the jury, it was improper for the district court,
and again for this court on appeal, to decide these dis-
puted factual questions “as a matter of law.” See Cal. v.
Altus Fin. S.A., 540 F.3d 992, 1008-09 (9th Cir. 2008)
(remanding for a new trial where the jury deadlocked on
vital issues).
Conclusion
The jury was presented with a complex of legal theo-
ries derived from the California Civil Code, not all of
which are here discussed. The district court inappropri-
ately terminated the proceedings “as a matter of law,” for
there was sufficient evidence on which a jury could have
found in favor of Shum on one or more liability theories.
Shum is entitled to a retrial. From my colleagues’ im-
proper elimination of this constitutional right, I respect-
fully dissent.