Open Text, S.A. v. Box, Inc.
| Decision Date | 09 April 2014 |
| Docket Number | Case No.: 5:13–CV–04910–EJD |
| Citation | 36 F.Supp.3d 885 |
| Court | U.S. District Court — Northern District of California |
| Parties | Open Text, S.A., Plaintiff, v. Box, Inc. and Carahsoft Technology Corporation, Defendants. |
Brian Jeffrey Eutermoser, Britton Frederic Davis, Peter Joseph Sauer, Sara Jane Radke, Sarah Joann Guske, Thomas Joseph Friel, Jr., Wayne Odis Stacy, Angela Leann Campbell, Brian Jeffrey Eutermoser, Frank V. Pietrantonio, Cooley Godward Kronish LLP, Broomfield, CO, Christopher Charles Campbell, Cooley LLP, Reston, VA, Gregory N. Stillman, Brent Lee Vannorman, Hunton & Williams, Norfolk, VA, Thomas J. Friel, Jr., Cooley Godward Kronish LLP, San Francisco, CA, for Plaintiff.
Mark Wayne Wasserman, Richard Cyril Sullivan, Jr., Reed Smith LLP, Falls Church, VA, Stuart A. Shanus, Reed Smith Crosby Heafey LLP, Los Angeles, CA, Adaline J. Hilgard, Doyle Johnson, Jesse Luke Miller, John P. Bovich, Jonah Dylan Mitchell, Kirin Kaur Gill, Paulo L. Sousa, Scott David Baker, William Ross Overend, Reed Smith LLP, San Francisco, CA, Jennifer Depriest, Reed Smith LLP, Chicago, IL, Matthew Robertson Sheldon, Reed Smith LLP, Falls Church, VA, for Defendants.
[Re: Docket No. 64]
ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION
Open Text S.A. (“Open Text”) brings this motion for a preliminary injunction to enjoin Box, Inc. (“Box”) from “selling, offering to sell, licensing, offering to license, installing, offering for download, offering for installation, providing, or otherwise making available” any of its products or services containing “Box Edit” or “colorably similar features to customers, potential customers, or entities that have or may have 100 or more users.” See Pl.'s Mot. for Prelim. Inj. (“Pl.'s Mot.”) at 24–25, Docket Item No. 65. This motion is limited to four patents from two patent families. The first family, the “Synchronization Patents,” includes U.S. Patent No. 7,062,515 (“the '>515 patent”) and U.S. Patent No. 8,117,152 (“the '152 patent”). The second family, the “Groupware Patents,” includes U.S. Patent No. 7,287,055 (“the '055 patent”) and U.S. Patent No. 7,299,258 (“the '>258 patent”).
The Court held a hearing on this motion on January 24, 2014. Having considered the parties' submissions, argument, and the relevant law, and for the reasons discussed herein, Open Text's motion to preliminarily enjoin Box is DENIED.
Open Text is a Luxembourg corporation with its registered address at 29 Boulevard Royal, L–2449 Luxembourg. Complaint at ¶ 6, Docket Item No. 1. Open Text S.A. is a subsidiary of Open Text Corporation, a Canadian corporation with its principal place of business at 275 Frank Tompa Drive, Waterloo, Ontario, Canada.Id. Open Text Corporation distributes software products and provides customer support and professional services through a number of subsidiaries, including Open Text, Inc., which sells Open Text software and services in the United States. Id. at ¶ 7. Open Text Public Sector Solutions, Inc. (“OTPSS”), a Virginia corporation with its headquarters in Arlington, Virginia, is a subsidiary of Open Text, Inc. Id. at ¶ 8. One of Open Text's core markets is Enterprise Content Management (“ECM”), which refers to a variety of solutions for managing business content. Id. at ¶ 10. One such solution provides a repository for electronic documents and allows for functions such as organization, display, classification, access and version control, event auditing, rendition, and search. ECM also includes software tools and services for collaboration, records and email management, and archiving. Id. Open Text's ECM provides the foundation for its offerings in a broader market category known as Enterprise Information Management (“EIM”). EIM encompasses capabilities such as Business Process Management (“BPM”), Customer Experience Management (“CEM”), Information Exchange (“IE”), and Discovery. Open Text offers a range of software products and services in each of these areas. Id. at ¶ 11.
Box, Inc. is a Delaware corporation founded in 2005 with its headquarters at 4440 El Camino Real, Los Altos, California 94022. Id. at ¶ 23. Box exclusively offers “cloud-based” storage and content management products and services. Def.'s Opp'n to Mot. for Prelim. Inj. (“Def.'s Opp'n”) at 4, Docket. Item No. 85. The cloud is often referred to as an “off-premises” solution because the end user does not own or control the servers that are used to deploy the features and functionality. Declaration of Grant Shirk (“Shirk Decl.”) ¶ 4, Docket Item No. 88. Box provides five versions of its software: Box Personal, Box Starter, Box Business, Box Enterprise, and Elite Plan. Pl.'s Mot. at 8, Dkt. No. 65. In October 2012, Box introduced a new access feature for all users called Box Edit. Id. Box Edit allows users to access documents stored in the Box database through a web browser and automatically syncs the locally-edited copy to the Box database. Id. at 10. In April 2013, Box released an “auto-updates” feature for Box Edit, which automatically integrates new product upgrades as they are released. Id.
Open Text argues the Elite Plan directly competes with Open Text's Content Server. Pl.'s Mot. at 9–10, Dkt. No. 65. Box released Box Enterprise in 2007 and the Elite Plan in late August 2013. Shirk Decl. ¶ 11, Dkt. No. 88; Pl.'s Mot. at 10, Dkt. No. 65. Box argues the Elite Plan was not Box's entry point into the market for customers with more than 100 users, it was the Enterprise software. Shirk Decl. ¶ 10, Dkt. No. 88. According to Box, the Elite Plan does not add any new functionality and instead provides Box customers with multiple enterprise ID's (commonly referred to as a “sandbox environment”), Box Premier Support, and the ability to build custom internal applications on the Box platform. Id.
The instant preliminary injunction motion filed September 13, 2013 seeks to enjoin Box from providing its Box Edit feature. Def.'s Opp'n at 9, Dkt. No. 85.
Four patents from two patent families are at issue in this motion. The Synchronization Patents include the '515 and '258 patents and relate to cached file synchronization. The '515 patent was filed on December 28, 2001. The '152 patent is a continuation of U.S. Patent No. 7,590,655, filed Jan. 10, 2006, which in turn claims priority to the '515 patent. The Groupware Patents include the '055 and '258 patents and relate to web-based groupware systems. The Groupware Patents were filed on July 22, 2004 and claim priority to a U.S. Patent Application No. 08/955,569, filed on October 22, 1997.
The Synchronization Patents purport to invent a software program that allows users to retrieve a file from a remote database, edit the file locally, then save the edited file directly back to the remote database. '515 patent, cl. 1. The software, described as a cache manager, stores the file as a local cached copy and determines if the cached file has been modified based on a notification from the file management system of an operating system. Id. This allows the user flexibility to choose which local application to edit the file. Id. at 3:54–61. Moreover, the use of the cache manager does not require specifically programmed applications to send notifications because the cache manager can seamlessly synchronize the cached file based on a notification from the file management system of the operating system. Id. at 3:62–67. Before the patent was filed, prior systems of document management attempted to address the drawbacks of file synchronization through the use of custom-designed tools for editing, secondary synchronization programs, and operating system-level implementation. Id. at 2:13–3:18.
The Groupware Patents purport to invent a collaborative workspace accessible through a web browser. ability to interact with the workspace based on varying levels of access to the workspace. Id. In response to the primary user's designations, a computer creates the dedicated network site, or collaborative workspace, on a network-connected server. computers. Id. at 1:52–59.
Congress has authorized district courts in patent cases to grant injunctions “in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.” 35 U.S.C. § 283 (2006). It is well-established that a preliminary injunction is an extraordinary remedy “not to be routinely granted” and reserved only for those cases where it is clearly warranted. High Tech Med. Instrumentation , Inc. v. New Image Idus., Inc., 49 F.3d 1551, 1554 (Fed.Cir.1995).
Because this motion arises in the context of a patent infringement action, Federal Circuit law applies. See Hybritech Inc. v. Abbott Labs., 849 F.2d 1446, 1450, n. 12 (Fed.Cir.1988). Under Federal Circuit law, the court considers whether the plaintiff seeking a preliminary injunction can establish that: (1) he is likely to succeed on the merits; (2) he is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in his favor; and (4) that an injunction is in the public interest. Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). These traditional four factors “apply with equal force...
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