Yahoo! Inc. v. Media Relevance, Inc. CA6

Filed 2/23/16 Yahoo! Inc. v. Media Relevance, Inc. CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

YAHOO! INC., H041872
(Santa Clara County
Plaintiff and Respondent, Super. Ct. No. 1-14 CV-264874)

v.

MEDIA RELEVANCE, INC. et al.,

Defendants and Appellants.

In this appeal, Steven Clarke-Martin and the company he created, Media
Relevance, Inc., seek review of an order denying their motion to strike a complaint
brought against them by plaintiff Yahoo! Inc. In the complaint Yahoo! alleged that
Clarke-Martin had wrongfully assigned patent rights belonging to Yahoo! and copied
Yahoo!’s confidential information without authorization, both in violation of an
employment agreement between him and Yahoo! On appeal, defendants contend that
reversal is required because Yahoo!’s action is clearly a Strategic Lawsuit Against Public
Participation (SLAPP) which has impugned Clarke-Martin’s integrity and damaged his
business. We conclude that the criteria for striking an order under Code of Civil
Procedure section 425.16 have not been met. Consequently, we must affirm the order.
Background
Clarke-Martin was an employee of Yahoo! between 2003 and 2007. When he
joined the company in October 2003 he signed an “Employee Confidentiality and
Assignment of Inventions Agreement” (Confidentiality and Assignment Agreement).
Among the terms of the agreement were two provisions material to this lawsuit. In
paragraph 6 Clarke-Martin promised not to disclose Yahoo!’s “Confidential Information”
or to reproduce Yahoo!’s “Proprietary Information.”1 The terms “Proprietary
Information” and “Confidential Information” included patents, trade secrets, and other
intellectual property.
Then, in paragraph 8, Clarke-Martin promised to “assign to Yahoo! . . . my entire
right, title, and interest in and to . . . all Inventions which I may solely or jointly develop
or reduce to practice during (a) the time I am employed, whether or not during normal
working hours, (b) any prior period in which I performed services for or on behalf of
Yahoo!, or (c) within three (3) months following the termination of my employment with
Yahoo!, which (i) relate to, result from or are suggested by any current or reasonably
anticipated business activity of Yahoo!, (ii) are aided by the use of time, material,
Proprietary Information or facilities of Yahoo!, whether or not during working hours or
(iii) relate to any work I performed for Yahoo!, whether or not during normal working
hours, at any time. I understand and agree that any inventions I create at any time which

1
This provision stated, in relevant part, “I agree that both during and following the
termination of my employment with Yahoo! for any reason, I shall hold in confidence all
Confidential Information of Yahoo! furnished by Yahoo! to me, or reproduced or
developed by me based on or incorporating Yahoo!’s Proprietary Information. I agree
that, except with Yahoo!’s prior written permission or in furtherance of my duties for
Yahoo!, I shall not, directly or indirectly, use, disclose, reproduce, distribute, reverse
engineer, or otherwise misappropriate any Proprietary Information, in whole or in part,
and shall take no action that may cause, or fail to take any action necessary to prevent
causing any Proprietary Information to lose its character as Proprietary Information.
Upon termination of my employment with Yahoo! for any reason, or upon any earlier
request by Yahoo!, I shall promptly return to Yahoo! or destroy all documents or
materials, of any nature, in my possession, custody or control containing Proprietary
Information (regardless of the medium in which such information is stored) that have
been furnished by Yahoo! to me, or reproduced or developed by me based on or
incorporating Yahoo!’s Proprietary Information.” There was no dispute in this
proceeding over the comprehensive meaning of the term “Confidential Information.”

2
incorporate the Proprietary Information or other property of Yahoo! are the property of
Yahoo! and I hereby assign all such Inventions.” In an exception highlighted by
Clarke-Martin, this paragraph stated, “Notwithstanding the foregoing, this Agreement
does not apply to any Invention that I developed entirely on my own time without using
Yahoo!’s equipment, supplies, facilities, or Proprietary Information except for those
Inventions that either relate at the time of conception or reduction to practice of the
Invention to Yahoo!’s business, or actual or demonstrably anticipated research or
development of Yahoo!; or result from any work performed by me for Yahoo!. I agree to
identify all Inventions made by me to Yahoo! in confidence to permit a determination as
to whether . . . the Inventions are the property of Yahoo!, and I agree to disclose all
information Yahoo! reasonably requests about Inventions including those I contend
qualify under this exception to my duty to assign Inventions. I shall not apply for any
patent, copyright, or trademark on any Inventions conceived during any period of
employment with Yahoo! without the prior written approval of Yahoo!’s legal
department.”
In August 2005 Clarke-Martin submitted an idea that would “leverage assisted
matching” of “Y! Music listeners” to Yahoo!’s advertiser base. In October 2006,
together with another Yahoo! employee, Chris Kalaboukis, Clarke-Martin submitted their
project to display advertising as users play music or watch music videos on their devices.
Yahoo!’s Patent Asset Development Group notified Kalaboukis and Clarke-Martin that it
would be contacting them “in the near future” to discuss their “idea submission.”
On April 6, 2007, Yahoo! filed U.S. Patent Application No. 11/697,615 (’615),
bearing the title “Method and System for Displaying Contextual Advertisements with
Media.” The application identified both Kalaboukis and Clarke-Martin as inventors and
listed Yahoo! as assignee. Kalaboukis signed the application and his assignment to
Yahoo! was recorded on July 20, 2007. Clarke-Martin, however, refused to sign the
supporting declaration confirming that he was one of the inventors. Pursuant to

3
35 U.S.C. section 116, subdivision (b), and paragraph 10 of the Confidentiality and
Assignment Agreement,2 Yahoo! submitted a petition to waive his signature. Attached to
the petition was an e-mail message from Clarke-Martin to Kalaboukis stating that
Clarke-Martin would not sign the application because Yahoo! had “violated my equal
employment rights, invalidating my employment agreements and claims to my
intellectual property.” Yahoo!’s petition was granted in May 2008, and Patent
No. 7739596 (the ’596 patent) issued on June 15, 2010. Yahoo! later filed applications
for additional patents, which it has referred to in this litigation as “the ’596 patent
family.”
Meanwhile, on January 2, 2007, following the December holiday period,
Clarke-Martin stopped reporting for work. Two days later he copied material from his
laptop onto eight compact discs. A forensic search later indicated that dozens of the
documents copied were labeled “Confidential” or “Proprietary and Confidential.”
Included among these, according to David Brightman, a vice president and counsel for
Yahoo!, were “internal business strategy documents.”3 In the ensuing days,

2
According to 35 U.S.C. section 116, subdivision (b), “If a joint inventor refuses
to join in an application for patent or cannot be found or reached after diligent effort, the
application may be made by the other inventor on behalf of himself and the omitted
inventor.” In addition, paragraph 10 of the Confidentiality and Assignment Agreement
stated, “If Yahoo! is unable for any reason to secure my signature to apply for or to
pursue any application for any Inventions assigned to Yahoo! as above, then I hereby
irrevocably designate and appoint Yahoo! and its duly authorized officers and agents as
my agent and attorney in fact, to act for and on my behalf and stead to execute and file
any such applications and to do all other lawfully permitted acts to further the prosecution
and issuance of letters patent . . . with the same legal force and effect as if executed by
me.”
3
Brightman was convinced by the subsequent forensic analysis that several of
those “internal business strategy documents” were relevant to Media Relevance, a
business Clarke-Martin had started in 2009. That business, according to Clarke-Martin,
“shares revenue with the sellers of advertising or content publishers in return for targeting
ads based on contextual relevance.”

4
Clarke-Martin complained to Yahoo!’s human resources (HR) personnel, accusing the
company of racial discrimination and noncompliance with the Sarbanes-Oxley Act of
2002 (SOX). He complained that the company was asking him to “lie, or misrepresent
information” and suggested that “[t]he spirit of direct or indirect actions feel [sic] very
much like retaliation.”4
A Yahoo! HR employee, Melina Leyco, responded to Clarke-Martin’s complaints,
reminding him that he had previously stated that the company had “never asked [him] to
lie or make any misrepresentation.” Leyco added that her investigation had uncovered no
violation of the company’s SOX obligations, and she requested more information about
Clarke-Martin’s assertion of racial discrimination. Leyco encouraged Clarke-Martin to
return to work, or if he was sick, to secure a doctor’s note for his absence or apply for a
medical leave of absence. Instead, on January 5, 2007, Clarke-Martin submitted
complaints with the Securities and Exchange Commission (SEC) and the Equal
Employment Opportunity Commission (EEOC).5 His employment ended April 6, 2007.
Clarke-Martin also brought suit against Yahoo!, but after proceeding to arbitration
the parties settled that dispute in May 2008. Yahoo! agreed to pay Clarke-Martin
$166,700 and provide him with three months of employment “outplacement services.”
Clarke-Martin expressly represented that he had not suffered any “job-related wrongs or
injuries” such as discrimination. He released “all known and unknown claims that he
presently has against the Company,” with specified exceptions, such as “any potential
claims related to” the ’615 patent application.

4
According to a November 2014 declaration submitted by Clarke-Martin in
support of his motion to reconsider his anti-SLAPP motion, Yahoo! had exerted pressure
on him to submit a false report in preparation for a company audit.
5
After receiving Yahoo!’s response, the EEOC found the complaint to be without
cause. Any action taken by the SEC is not in the record before us.

5
 In 2009 Clarke-Martin started a business called 41 Ads, Inc., which was later
renamed Media Relevance. The company consisted in an implementation of
Clarke-Martin’s targeted ad-matching invention, which had become the basis of the
’615 patent application and eventual ’596 patent. On October 4, 2011, Clarke-Martin
executed an “Assignment of Patent Rights” to 41 Ads. In this document Clarke-Martin
asserted that he possessed “the right, title and interest for and in” the invention described
in the ’596 patent, and he requested the Commissioner for Patents to issue the patent to
the assignee. Clarke-Martin recorded this assignment on October 11, 2011.
It was not until January 2013 that the assignment came to Yahoo!’s attention. On
that occasion Jesse Martinez, a representative of 41 Ads, contacted Yahoo!’s “business
development” director, Bob Upham, saying that 41 Ads “[would] like to discuss the IP
we co-share with Yahoo[!] as it relates to our startup and if there is an opportunity to
partner with Yahoo[!].” Upham expressed confusion over whether 41 Ads was seeking a
business partnership or a licensing of Yahoo!’s intellectual property. Martinez replied,
“Most likely both since we would like to partner with Yahoo[!] but we are also
leveraging IP that we co-own.” According to its patent counsel, David Ishimaru, Yahoo!
then reviewed the assignment records associated with the ’596 patent and discovered
Clarke-Martin’s October 4, 2011 assignment. On February 21, 2013 Yahoo! recorded the
July 2007 assignment of Clarke-Martin’s interest in the ’615 application (the eventual
’596 patent).
Yahoo! initiated this action on May 6, 2014, naming Clarke-Martin and Media
Relevance, the successor to 41 Ads. The first four causes of action—quiet title, breach of
contract, conversion, and a request for declaratory relief—were directed at
Clarke-Martin’s assignment to his own company by falsely claiming title to the ’596
patent. The fifth through eighth causes of action—breach of contract, conversion, breach

6
of the duty of loyalty, and violation of Penal Code section 5026—were aimed at
Clarke-Martin’s “[u]nauthorized [c]opying” of the contents of his Yahoo! personal
computer onto compact discs and his failure to return the discs thereafter. Yahoo! sought
damages, a declaration that it was the rightful owner of the entire ’596 patent family, an
order requiring Clarke-Martin to reverse the assignment to his company, an order
requiring him to return the improperly copied Yahoo! information he possessed, and an
injunction against his asserting any claims of ownership interest in the ’596 patent family.
Clarke-Martin attempted to answer the complaint on behalf of Media Relevance as
well as himself. After securing counsel, defendants obtained leave to file the motion at
issue here, the anti-SLAPP motion under Code of Civil Procedure section 425.16
(hereafter section 425.16). Defendants contended that this action was a SLAPP because

6
Penal Code section 502, subdivision (c), describes multiple offenses related to
the use of computers and computer data. An offender under this expansive provision
includes one who “(1) Knowingly accesses and without permission alters, damages,
deletes, destroys, or otherwise uses any data, computer, computer system, or computer
network in order to either (A) devise or execute any scheme or artifice to defraud,
deceive, or extort, or (B) wrongfully control or obtain money, property, or data. [¶] (2)
Knowingly accesses and without permission takes, copies, or makes use of any data from
a computer, computer system, or computer network, or takes or copies any supporting
documentation, whether existing or residing internal or external to a computer, computer
system, or computer network. [¶] (3) Knowingly and without permission uses or causes
to be used computer services. [¶] (4) Knowingly accesses and without permission adds,
alters, damages, deletes, or destroys any data, computer software, or computer programs
which reside or exist internal or external to a computer, computer system, or computer
network. [¶] (5) Knowingly and without permission disrupts or causes the disruption of
computer services or denies or causes the denial of computer services to an authorized
user of a computer, computer system, or computer network. [¶] (6) Knowingly and
without permission provides or assists in providing a means of accessing a computer,
computer system, or computer network in violation of this section. [¶] [or] (7)
Knowingly and without permission accesses or causes to be accessed any computer,
computer system, or computer network.” The affected owner of the “computer, computer
system, computer network, computer program, or data” may sue the offender for any loss
it incurs as a result of these violations, as well as attorney fees for the action. (Pen. Code,
§ 502, subds. (e)(1), (e)(2).)

7
it arose from a protected act—namely, the recording of an assignment of a patent, which
“constitutes a formal communication to the USPTO [United States Patent and Trademark
Office] seeking official action in an official proceeding governed by statute, and
Clarke-Martin’s recording his patent assignment was the final official act in [a] series of
acts that started with his filing of inventor’s declaration . . . [which] creates a presumption
of ownership.”7
In support of their position defendants cited Mindys Cosmetics, Inc. v. Dakar (9th
Cir. 2010) 611 F.3d 590, 596-597, where the Ninth Circuit determined that the act of
filing a trademark application with the USPTO was a protected act under section 425.16,
subdivision (e)(1). According to defendants, the first three causes of action “hinge on
Clarke-Martin’s public statement that he was a co-owner of the Patent and had the power
to assign it,” and all arose from his recording of the assignment. The claims regarding
the copying of information (the copying causes of action) likewise were related to the
recording of the assignment, and they did not in any case allege that the copying was
“illegitimate” rather than in furtherance of Clarke-Martin’s duties.
Defendants further attacked the complaint as legally insufficient on both
procedural and substantive grounds. Defendants specifically contended that Yahoo! was
unlikely to prevail because all of its claims were barred by both the applicable statutes of
limitations and laches, and because the allegations were technically deficient.
In its opposition Yahoo! asserted that its claims did not arise from any protected
activity. The first four causes of action, it argued, were based not on Clarke-Martin’s
recording of an assignment but from the original act of making the assignment. As for

7
In June 2008 Clarke-Martin submitted a declaration to the United States Patent
and Trademark Office (USPTO), stating that he was the inventor of the subject matter of
the ‘615 application. In May 2010 Clarke-Martin wrote to the patent office, identifying
himself as “inventor and holder” of the pending ‘596 patent and requesting that it change
his address on file.

8
the four “copying causes of action,” Yahoo! argued likewise that they did not arise from
any protected recording activity—indeed, Yahoo! emphasized, they had “nothing to do
with the assignment of the ’596 patent—much less the recording of that assignment.”
Instead, according to Yahoo!, those claims were directed at the unauthorized copying of
Yahoo!’s confidential information, including business strategy documents that predated
the filing of the patent application.
The superior court denied defendants’ motion, finding that Yahoo!’s lawsuit was
not based on protected activity. Citing Code of Civil Procedure section 1008, defendants
then moved for reconsideration in order to bring to light what they called a
mischaracterization of facts by Yahoo! regarding Clarke-Martin’s alleged theft of
Yahoo!’s strategic plans in January 2007. Defendants now claimed that Clarke-Martin
had “created a back-up of his hard-drive to provide whistleblower evidence to relevant
authorities because he felt he was being pressured by Yahoo to commit a crime.”
Accompanying defendants’ reconsideration motion was Clarke-Martin’s
declaration attesting to his conflict with Yahoo! over compliance with SOX and the
pressure he had experienced over Yahoo!’s requirement that he submit a false verification
report in preparation for the year-end audit. According to this declaration, Clarke-Martin
had created the hard-drive backup in order to substantiate his complaints to the EEOC
and the SEC. Clarke-Martin defended his failure to provide this evidence earlier by
noting that the settlement agreement required him to avoid disparaging Yahoo!. But now
that Yahoo! had falsely accused him of stealing strategic plans for use in a rival company,
he had “no choice but to set the record straight.”
Yahoo! opposed the reconsideration motion, disputing Clarke-Martin’s claim that
he could not have brought his whistleblowing justification to the court’s attention earlier.
It also emphasized that the “copying causes of action” were not based on Clarke-Martin’s
complaints to the government but on the copying itself, which was not protected activity.
Furthermore, it was apparent that Clarke-Martin had provided only hard copies of

9
documents to the government, but had never returned the discs to Yahoo! as required by
both the Confidentiality and Assignment Agreement and the settlement agreement.
The superior court rejected defendants’ proffered justification for not presenting
earlier their explanation for Clarke-Martin’s copying of the information. It further ruled
that “[e]ven if the purportedly new facts warranted reconsideration, the prior ruling
remains correct . . . Yahoo[!]’s fifth through eighth causes of action do not arise from
Defendant’s [sic] alleged filing of whistleblower complaints; rather, [those] causes of
action arise from Defendants’ [sic] unlawful copying of Yahoo[!] content.” This timely
appeal followed.
Discussion
1. Standard and Scope of Review
The parties understand the nature of section 425.16 and the legislative intent
underlying its enactment. “A SLAPP is a civil lawsuit that is aimed at preventing citizens
from exercising their political rights or punishing those who have done so. ‘ “While
SLAPP suits masquerade as ordinary lawsuits such as defamation and interference with
prospective economic advantage, they are generally meritless suits brought primarily to
chill the exercise of free speech or petition rights by the threat of severe economic
sanctions against the defendant, and not to vindicate a legally cognizable right.” ’ ”
(Simpson Strong-Tie Co., Inc. v. Gore (2010) 49 Cal.4th 12, 21 (Simpson Strong-Tie);
Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1126.)
Section 425.16 was enacted in 1992 to address the “disturbing increase” in the
frequency of these meritless harassing lawsuits. (§ 425.16, subd. (a); see Navellier v.
Sletten (2002) 29 Cal.4th 82, 85, fn. 1 (Navellier); Simpson Strong-Tie, supra, 49 Cal.4th
at p. 21.) It was the Legislature’s finding “that it is in the public interest to encourage
continued participation in matters of public significance, and that this participation should
not be chilled through abuse of the judicial process. To this end, this section shall be
construed broadly.” (§ 425.16, subd. (a).) The statute was thus designed to deter

10
meritless actions that “deplete ‘the defendant’s energy’ and drain ‘his or her resources,’
[citation] . . . ‘ “by ending them early and without great cost to the SLAPP target” ’
[citation].” (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192; Soukup
v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 278 (Soukup); Chabak v. Monroy
(2007) 154 Cal.App.4th 1502, 1509.)
In evaluating a motion under the statute the trial court engages in a two-step
process. “First, the court decides whether the defendant has made a threshold showing
that the challenged cause of action is one ‘arising from’ protected activity. (§ 425.16,
subd. (b)(1).) If the court finds such a showing has been made, it then must consider
whether the plaintiff has demonstrated a probability of prevailing on the claim.” (City of
Cotati v. Cashman (2002) 29 Cal.4th 69, 76; Oasis West Realty, LLC v. Goldman (2011)
51 Cal.4th 811, 819-820 (Oasis West Realty).) “Only a cause of action that satisfies both
prongs of the anti-SLAPP statute—i.e., that arises from protected speech or petitioning
and lacks even minimal merit—is a SLAPP, subject to being stricken under the statute.”
(Navellier, supra, 29 Cal.4th at p. 89.)
We review an order granting or denying a motion to strike under section 425.16
de novo. (Soukup, supra, 39 Cal.4th at p. 269, fn. 3; Oasis West Realty, supra, 51 Cal.4th
at p. 820.) As directed by the statute, we consider “the pleadings, and supporting and
opposing affidavits stating the facts upon which the liability or the defense is based.”
(§ 425.16, subd. (b)(2).) We may also consider the order denying reconsideration.
(Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106
Cal.App.4th 1219, 1244-1245.)
The court below addressed only the first prong of the anti-SLAPP analysis,
implicitly finding the second to be moot because the action did not arise from protected
activity. Because we review the motion independently, however, we are not bound by
the superior court’s reasoning. “If the trial court’s decision is correct on any theory
applicable to the case, we affirm the order regardless of the correctness of the grounds on

11
which the lower court reached its conclusion.” (Robles v. Chalilpoyil (2010) 181
Cal.App.4th 566, 573; City of Alhambra v. D’Ausilio (2011) 193 Cal.App.4th 1301,
1307; Bernardo v. Planned Parenthood Federation of America (2004) 115 Cal.App.4th
322, 357.)
Our independent review has convinced us that the denial of defendants’ motion
was correct for a reason separate from that of the superior court: Even if Yahoo!’s action
arises from defendants’ protected activity, the company has met its burden to show a
probability of prevailing within the meaning of section 425.16. Thus, out of judicial
efficiency we will pass the “arising from” prong to discuss the second prong of the
anti-SLAPP analysis, which is dispositive of the motion. (Cf. Oasis West Realty, supra,
51 Cal.4th at p. 820 [exercising its “ ‘inherent, primary authority’ ” by proceeding
“directly to the second prong”]; see also Southern California Gas Co. v. Flannery (2014)
232 Cal.App.4th 477, 485-486 [declining to address first prong because plaintiff had
established probability of prevailing]; Hardin v. PDX, Inc. (2014) 227 Cal. App. 4th 159,
166 [assuming arguendo that plaintiff’s claims arose from protected first amendment
activity, “if credited at trial her evidence would be sufficient to support a favorable
judgment”].)
2. Probability of Prevailing
The Supreme Court’s past decisions in SLAPP cases are instructive for purposes
of determining whether a plaintiff’s claims have potential merit. “To satisfy the second
prong, ‘a plaintiff responding to an anti-SLAPP motion . . . “must demonstrate that the
complaint is both legally sufficient and supported by a sufficient prima facie showing of
facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited
[by a trier of fact].” ’ [Citation.] ‘We consider “the pleadings, and supporting and
opposing affidavits . . . upon which the liability or defense is based.” (§ 425.16,
subd. (b)(2).) However, we neither “weigh credibility [nor] compare the weight of the
evidence. Rather, [we] accept as true the evidence favorable to the plaintiff [citation] and

12
evaluate the defendant’s evidence only to determine if it has defeated that submitted by
the plaintiff as a matter of law.” ’ [Citation.]” (Oasis West Realty, supra, 51 Cal. 4th at
p. 820.) The Supreme Court made it clear that if the plaintiff shows a probability of
prevailing “ ‘on any part of its claim,’ ” it has thereby established “ ‘that its cause of
action has some merit and the entire cause of action stands.’ [Citation.]” (Ibid.) The
motion should be granted only “if, as a matter of law, the defendant’s evidence
supporting the motion defeats the plaintiff’s attempt to establish evidentiary support for
the claim.” (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821 (Wilson),
italics added; Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 741, fn. 10
(Jarrow Formulas.)
Guided by these principles, we proceed to determine “whether any portion of
[Yahoo!’s] causes of action have even minimal merit within the meaning of the
anti-SLAPP statute.” (Oasis West Realty, supra, 51 Cal.4th at p. 825.) As noted above,
in determining whether a plaintiff has made a prima facie showing for purposes of
defeating an anti-SLAPP motion, “the court does not weigh the credibility or comparative
probative strength of competing evidence.” (Soukup, supra, 39 Cal.4th at p. 291.)
Instead, “it is ‘the court’s responsibility . . . to accept as true the evidence favorable to the
plaintiff . . . .’ [Citation.] The plaintiff need only establish that his or her claim has
‘minimal merit’ (Navellier v. Sletten, supra, 29 Cal.4th at p. 89) to avoid being stricken
as a SLAPP.” (Ibid.)
The first three causes of action in Yahoo!’s complaint alleged quiet title, breach of
contract, and conversion, all based on Clarke-Martin’s “fraudulent” assignment of the
’596 patent to Media Relevance in violation of Yahoo!’s rights under the Confidentiality
and Assignment Agreement. The fourth was a request for a declaratory judgment that
Yahoo! was the “sole and rightful owner and legal title holder of the ’596 [p]atent
[f]amily.” The last four causes of action (for breach of contract, conversion, breach of
the duty of loyalty, and violation of Penal Code section 502) were all based on

13
Clarke-Martin’s copying of the contents of his hard drive to compact discs without
Yahoo!’s authorization.
a. Timeliness
Defendants’ initial challenge is to the timeliness of this action. In their view,
“Yahoo!’s 2014 complaint completely violates the purpose, letter, and spirit of applicable
statutes of limitations, the doctrine of laches, and analogous estoppel or waiver
principles.”8 Defendants assert no specific limitations period, other than to suggest that
“the longest statute of limitations” for any of the causes of action is four years. They
review the history of the disputes between the parties, culminating in the May 2008
settlement agreement and Clarke-Martin’s Declaration of Inventor, which he submitted to
the USPTO in June 2008. The settlement agreement, defendants argue, constituted an
“affirmative acquiescence to Clarke-Martin’s ‘rights, interests, or potential claims’ ” in
the ’615 application. They also suggest that Yahoo! was on notice of the alleged harm to
the company because it knew by April 2007 that Clarke-Martin had provided information
to the EEOC and the SEC, as evidenced by its request to the EEOC for the return of its
computer and certain documents.
Yahoo! responds, however, that none of this history triggered any statute of
limitations. In its view, the assignment of the invention to Yahoo! had already taken
place under the Confidentiality and Assignment Agreement, so none of the ensuing
events had caused harm to Yahoo!’s ownership rights. Yahoo! correctly points out,
contrary to defendants’ depiction of the May 2008 settlement agreement, that Yahoo! did
not affirmatively acquiesce to Clarke-Martin’s rights in the ’615 technology. The
agreement merely excluded from its reach any “potential claims” Clarke-Martin might
have regarding the ’615 application, and Clarke-Martin was not restricted from using

8
Defendants proceed to address only the first two grounds in their appellate briefs
and do not discuss “analogous estoppel or waiver principles.”

14
Yahoo!’s confidential or proprietary information in the prosecution of his “potential
rights” to the ’615 patent application.
Yahoo! further maintains that it had no reason to know about the assignment
charged in the first four causes of action until January 2013, when the e-mail exchange
between Upham from Yahoo! and Martinez from 41 Ads occurred. If these facts are
believed by a trier of fact, they are sufficient to withstand the challenge based on any of
the applicable statute of limitations, as Yahoo! filed its complaint less than 16 months
after this discovery. That delayed discovery would likewise toll the statutes of limitations
for the other claims based on the asserted wrongful assignment—i.e., the second cause of
action for breach of the Confidentiality and Assignment Agreement (four years under
Code of Civ. Proc. § 337) and the third cause of action for conversion (three years under
Code of Civ. Proc. § 338, subd. (c)). (See AmerUS Life Ins. Co. v. Bank of America, N.A.
(2006) 143 Cal.App.4th 631, 639 [noting discovery rule exception to statute of
limitations for conversion].)9
Yahoo!’s better argument is its simpler one: The first four causes of action are
directed at Clarke-Martin’s unauthorized assignment to 41 Ads, which took place in
October 2011. The complaint was filed in May 2014, well within any of the statutes of
limitations defendants might have cited.
Defendants do not specifically assert Yahoo!’s noncompliance with the statutes of
limitations in connection with the fifth through eighth “copying” causes of action, except

9
An action for quiet title to property other than real property is not governed by a
specific statute of limitations. If, as defendants assume, the nature of Yahoo!’s first cause
of action is Clarke-Martin’s fraud (based on the alleged “fraudulent assignment”), the
three-year statute of limitations under Code of Civil Procedure section 338,
subdivision (d), would apply. (See Day v. Greene (1963) 59 Cal.2d 404, 411 [applicable
statute of limitations is determined by “the nature of the right sued upon, not by the form
of the action or the relief demanded”]; Ankoanda v. Walker-Smith (1996) 44 Cal.App.4th
610, 615 “the theory of relief underlying an action for quiet title, in this case fraud or
mistake, determines which statute of limitations applies.”)

15
to assert that (1) Yahoo! knew about Clarke-Martin’s provision of “whistleblowing”
information to the SEC and EEOC by April 2007and negotiated with Clarke-Martin on
this subject in early 2008, and (2) “[i]n mid-2008” Clarke-Martin returned his laptop
computer to Yahoo! in accordance with the 2008 settlement agreement. The second point
is made without any supporting facts in the record, and we will disregard it. (Cal. Rules
of Court, rule 8.204(a)(1)(C).) The first offers no basis for inferring anything except an
employment-related grievance that led to the copying of information for disclosure to the
government.
Defendants’ assertion of laches is based on their general assertion of Yahoo!’s
acquiescence in Clarke-Martin’s interest in the patent over a period of six years, which
prejudiced defendants in their effort to develop their new business. “The defense of
laches requires unreasonable delay plus either acquiescence in the act about which
plaintiff complains or prejudice to the defendant resulting from the delay.” (Conti v.
Board of Civil Service Commissioners (1969) 1 Cal.3d 351, 359; Johnson v. City of Loma
Linda (2000) 24 Cal.4th 61, 68.) The record before us, however, does not permit an
inference that Yahoo!’s delay in bringing suit was unreasonable as a matter of law. We
are left with Yahoo!’s factual assertions—supported by declarations from Ishimaru and
Brightman and accompanying exhibits—that (1) it had no reason to inquire into the status
of its rights in the ’596 patent because the assignment of the invention had already been
made (though not recorded) in April 2007, and (2) until January 2013 it had no reason to
believe that Clarke-Martin’s copying of Yahoo!’s proprietary information had been used
not just for his “whistleblowing” acts but also for his competing business, thus creating
the damage alleged in the complaint. Accordingly, without resolving questions of
credibility or weighing evidence, we must conclude that Yahoo! provided evidence
sufficient to withstand defendants’ assertions that their action was untimely under either
the applicable statutes of limitations or the doctrine of laches.

16
 b. Potential Merit of Yahoo!’s Claims
As discussed earlier, the central question in step two of the anti-SLAPP analysis is
whether the complaint is “ ‘both legally sufficient and supported by a sufficient prima
facie showing of facts to sustain a favorable judgment if the evidence submitted by the
plaintiff is credited.’ [Citation.]” (Soukup, supra, 39 Cal.4th at p. 291; Wilson, supra, 28
Cal.4th at p. 821; Jarrow Formulas, supra, 31 Cal.4th at p. 741.) “In making this
assessment it is ‘the court’s responsibility . . . to accept as true the evidence favorable to
the plaintiff . . . ’ [Citation.]” Soukup, supra, at p. 291 As noted, “the anti-SLAPP statute
requires only ‘a minimum level of legal sufficiency and triability’ ” to survive an
anti-SLAPP motion.) (Jarrow Formulas, supra, at p. 738; Navellier, supra, 29 Cal.4th at
p. 89, quoting Linder v. Thrifty Oil Co. (2000) 23 Cal. 4th 429, 438, fn. 5.)
The claims comprised in Yahoo!’s complaint pertain to the allegedly improper
assignment to 41 Ads in October 2011 (first through fourth causes of action) and the
unauthorized copying of Yahoo!’s confidential and proprietary information, including
documents detailing Yahoo!’s business strategy (fifth through eighth causes of action).
In an argument suggestive of a demurrer, defendants first attack the facial adequacy of
the complaint, as it “doesn’t bother mentioning the identity of the relevant statutes or
their elements, much less how the substantive allegations line up with the elements. . . .
Key paragraphs throughout are entirely conclusory. . . . The complaint purports to be
based on breach of contract, but fails to restate the relevant portions of the contract in
haec verba. It repeatedly misrepresents the 2003 [Confidentiality and Assignment]
Agreement [and] fails substantively to allege the element of damages for any of the
allegations.” In addition to the contract claims, defendants attack the first cause of action
for quiet title, because it accuses Clarke-Martin of the “fraudulent assignment of the ‘596
patent” without the “fullest possible details of the charge [of fraud.]”
Defendants’ argument, which cites no legal authority, fails to convince us that
Yahoo!’s allegations are legally insufficient. The complaint sets forth the provision of

17
the Confidentiality and Assignment Agreement requiring Clarke-Martin to assign to
Yahoo! “all Inventions which I may solely or jointly develop or reduce to practice”
during or within three months of his employment at Yahoo!. As defendants have
emphasized, the complaint did not quote the exception to this requirement for inventions
Clarke-Martin might create on his own time without using Yahoo! resources; but that
omission alone does not vitiate the sufficiency of the complaint. The complaint alleges
that Yahoo! suffered harm from defendants’ conduct; it was not obligated to set forth the
amount of damages in the complaint itself. The essence of the first cause of action was
not fraud but quiet title, based on Clarke-Martin’s allegedly wrongful assignment in
violation of Yahoo!’s valid title to the ’596 patent. The complaint alleged that
Clarke-Martin had “falsely claimed” title to the patent and wrongfully assigned the patent
to his business. The allegation thus sufficiently identified the nature of the right and the
misconduct to form an actionable claim for quiet title.
Defendants challenge the legal sufficiency of the “copying” causes of action by
asserting that they are all based on misappropriation of trade secrets and are therefore
preempted by the California Uniform Trade Secrets Act, Civil Code section 3426 et seq.
(CUTSA).10 We do not dismiss this point as readily as does Yahoo!; we do note,
however, that defendants do not contend that Yahoo! cannot state a cause of action under
the CUTSA, but only that it does not. We cannot presume that future proceedings will
deprive Yahoo! of an opportunity to amend its pleading should a demurrer or similar
proceeding result in striking any of these causes of action. Any purported resolution of
this issue would therefore be premature.

10
The CUTSA “provides the exclusive civil remedy for conduct falling within its
terms, so as to supersede other civil remedies ‘based upon misappropriation of a trade
secret.’ ” (Silvaco Data Systems v. Intel Corp. (2010) 184 Cal.App.4th 210, 236.)
It supersedes “common law claims that are ‘based on the same nucleus of facts as the
misappropriation of trade secrets claim for relief.’ ” (K.C. Multimedia, Inc. v. Bank of
America Technology & Operations, Inc. (2009) 171 Cal.App.4th 939, 958.)

18
 Defendants’ final contention is that “the most basic premise of the Patent
Claims—that Yahoo! ever had any right to Clarke-Martin’s co-ownership of his own
software invention in the first place—is false.” In defendants’ view, the evidence
presented was “highly probative that neither party regarded the ad-matching invention as
falling within the 2003 Employment Agreement . . . Yahoo!’s own conduct demonstrates
that it did not consider Clarke-Martin’s invention to be ‘related to’ its business.”
We do not view the evidence so unequivocally. Defendants’ position depends on
more than one factual premise that was either in dispute or speculative: that Yahoo!
“deemed” the invention to be worthless as early as 2005; that the invention was unrelated
to Yahoo!’s business; that it “was perfectly willing to affirmatively acquiesce to
Clarke-Martin’s co-ownership of the Patent” when it executed the settlement agreement;
and that Yahoo! has not used the invention, “whereas Clarke-Martin has built a company
to implement it.” This focus on Yahoo!’s approach to Clarke-Martin’s invention and its
reaction to his conduct requires an adjudication of facts and a drawing of inferences that
we cannot undertake within the limited scope of our review. As noted earlier, in
considering step two of the anti-SLAPP analysis “the court does not weigh the evidence
or make credibility determinations.” (Kashian v. Harriman (2002) 98 Cal.App.4th 892,
906; accord, Navellier, supra, 106 Cal.App.4th at p. 768.) “Rather, the court’s
responsibility is to accept as true the evidence favorable to the plaintiff . . . and evaluate
the defendant’s evidence only to determine [whether] it has defeated [the plaintiff’s
evidence] as a matter of law. [Citations.]” (HMS Capital, Inc. v. Lawyers Title Co.
(2004) 118 Cal.App.4th 204, 212.) We cannot overlook this stringent standard of review
in order to accommodate a version of the facts that does not defeat Yahoo!’s evidence as
a matter of law.
We thus conclude that the declarations submitted by Yahoo!, together with the
Employment and Assignment Agreement, were sufficient to create viable factual issues
that cannot be resolved as a matter of law in this proceeding. Whether Yahoo! can

19
ultimately succeed in its effort to establish defendants’ liability remains to be seen, and
we express no opinion about the merits of the issues raised in its complaint beyond the
conclusion that Yahoo! met the “minimal merit” standard required to withstand an
anti-SLAPP motion. Because its opposition demonstrated “ ‘a minimum level of legal
sufficiency and triability,’ ” (Jarrow Formulas, supra, 31 Cal.4th at p. 738), reversal of
the court’s order is not required.
Disposition
The order is affirmed.

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 _________________________________
ELIA, ACTING P.J.

WE CONCUR:

_______________________________
BAMATTRE-MANOUKIAN, J.

_______________________________
MIHARA, J.