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Long Fish v. Nanotronics Corp.6/9/2003
ontinued to exist separately for more than a year after the sale. Thus there was no actual merger or continuation of Nanotronics's business by Patriot. The Fish trust has not suggested the Sh-Boom technology had a value which exceeded the value of the Patriot stock Nanotronics received and there is no dispute Patriot devoted substantial funds and additional time to the Sh-Boom technology. Given these circumstances there is no equitable basis upon which a court could find a de facto merger.
We also reject the Fish trust's claim the purpose of the asset acquisition was to defraud the trust by delaying or hindering the trust's ability to recover royalties under the terms of the Technology Transfer Agreement. (See Civ. Code, ยง 3439.04.) There is no dispute that by the time Patriot acquired the Sh-Boom technology, Falk and Nanotronics had expended three years and $1 million in attempting to develop the technology and they were not then in a position to market any products or make any further investment in the technology. In light of these circumstances, the Fish trust cannot establish that at the time of the asset sale to Patriot the trust had any realistic expectation royalties would ever be forthcoming from Nanotronics. Thus the Fish trust cannot show the asset acquisition hindered or delayed payment of any amounts due or likely to become due. Although the terms of Patriot's asset acquisition agreement make it clear Nanotronics and Patriot were anxious to avoid claims by the Fish trust, the attempt to avoid claims is not evidence such claims would have had any merit.
In sum then there is no basis upon which to hold Patriot liable as a successor to Nanotronics.
IV.
Finally, reasserting the general unfairness of the transaction by which Patriot acquired and developed the Sh-Boom technology, the trust contends Patriot and Nanotronics are liable under the unfair competition provisions of Business and Professions Code section 17200. Having found no impropriety in the transaction, we find no liability under Business and Professions Code section 17200.
CONCLUSION
Like any other contract, the Technology Transfer Agreement assigned certain risks and certain benefits to the respective parties. As we have explained, with respect to the potential development of the Sh-Boom technology, the agreement provided Fish with fixed compensation for products sold by Sh-Boom and stock options in the event the corporation was sold. We are not in a position to alter that bargain by requiring Nanotronics to pay a fixed return on products sold by third parties. Moreover, because the record shows the Patriot asset acquisition was a bona fide arms-length transaction, Patriot cannot be held responsible for Nanotronics's obligations to Fish.
The judgment is affirmed.Respondents to recover their costs of appeal.
WE CONCUR:
KREMER, P. J.
NARES, J.
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