Brocade Commc'ns Sys., Inc. v. A10 Networks, Inc.

• Decision Date: 12 June 2012
• Docket Number: Case No. 10–CV–03428–LHK.
• Citation: 873 F.Supp.2d 1192
• Parties: BROCADE COMMUNICATIONS SYSTEMS, INC., a Delaware corporation; and Foundry Networks, LLC, a Delaware limited liability company, Plaintiffs and Counterclaim Defendants, v. A10 NETWORKS, INC., a California corporation; Lee Chen, an individual; Rajkumar Jalan, an individual; Ron Szeto, an individual; David Cheung, an individual; Liang Han, an individual; and Steve Hwang, an individual, Defendants and Counterclaimants.
• Court: U.S. District Court — Eastern District of California

873 F.Supp.2d 1192

BROCADE COMMUNICATIONS SYSTEMS, INC., a Delaware corporation; and Foundry Networks, LLC, a Delaware limited liability company, Plaintiffs and Counterclaim Defendants,

v.A10 NETWORKS, INC., a California corporation; Lee Chen, an individual; Rajkumar Jalan, an individual; Ron Szeto, an individual; David Cheung, an individual; Liang Han, an individual; and Steve Hwang, an individual, Defendants and Counterclaimants.

Case No. 10–CV–03428–LHK.

United States District Court,

N.D. California,

San Jose Division.

June 12, 2012.

Matthew Herman Poppe, Bas De Blank, Daniel Justin Weinberg, Denise Marie Mingrone, Gary Evan Weiss, Nitin Gambhir, Siddhartha M. Venkatesan, Teri H.P. Nguyen, Orrick, Herrington & Sutcliff LLP, Menlo Park, CA, Allen Ruby, Skadden Arps Slate Meagher & Flom, LLP, Palo Alto, CA, Annette L. Hurst, Christina Marie Von Der Ahe, Orrick, Herrington & Sutcliffe, LLP, San Francisco, CA, Elizabeth Cincotta McBride, Orrick Herrington, Menlo Park, CA, for Plaintiffs, Counter-claimant and Counter-defendants.

Scott Richard Mosko, Finnegan, Henderson, Farabow, Garrett & Dunner LLP, Palo Alto, CA, John F. Hornick, Finnegan Henderson, Washington, DC, Lionel M. Lavenue, Finnegan Henderson Farabow, et al., Reston, VA, Smith R. Brittingham, IV, E. Robert Yoches, Finnegan Henderson Farabow Garrett & Dunner LLP, Washington, DC, William Brownell Dyer, III, Finnegan LLP, Atlanta, GA, Jessica Claire Kronstadt, Mark A. Flagel, Robert Steinberg, Latham & Watkins LLP, Los Angeles, CA, Joseph Ehrlich, Losch & Ehrlich, San Francisco, CA, H. Ann Liroff, Haight Brown & Bonesteel LLP, San Francisco, CA, for Defendants and Counterclaimants.

Scott Alan Herbst, Finnegan Henderson Farabow Garrett and Dunner, Palo Alto, CA, for Defendants.

Fabio Elia Marino, McDermott Will & Emery, Menlo Park, CA, for Plaintiffs, Counterclaim, Counter–defendants and Defendants.

ORDER GRANTING IN PART AND DENYING IN PART A10'S MOTION FOR SUMMARY JUDGMENT

LUCY H. KOH, District Judge.

On May 3, 2012, Defendants Lee Chen, Rajkumar Jalan, Ron Szeto, and Steve Hwang (collectively, the “Individual A10 Defendants”) and A10 Networks, Inc. (“A10”; collectively “A10 Defendants”) filed a motion for summary judgment (“A10's Mot.”). Defendant David Cheung joined that motion. On May 17, 2012, Plaintiffs Brocade Communications Systems, Inc. and Foundry Networks, LLC (collectively, “Brocade”) filed an opposition to A10's motion. On May 24, 2012, the A10 Defendants filed a reply. ECF No. 550. The Court held a hearing on A10's motion on June 8, 2012. The pretrial conference in this matter is set for June 27, 2012; the trial will begin on July 16, 2012. Because the parties require a ruling on this motion on an expedited basis, the Court will keep its analysis brief.

The parties are familiar with the factual and procedural background of this case, and the Court will not repeat it here. The Court refers the unfamiliar reader to its Orders of January 6, 2012, 2012 WL 33251.See ECF Nos. 434, 438. In short, Brocade alleges that in 2004, Mr. Chen, a co-founder of Foundry (a wholly owned subsidiary of Brocade), secretly began to develop a new company, Raksha Networks, while still working at Foundry. Mr. Chen left Foundry in August 2004, and renamed his new company A10 Networks. Brocade alleges that Mr. Chen recruited Foundry's employees Jalan, Szeto, Han, and Hwang. Brocade further alleges that these former Foundry employees (including Mr. Chen) took Brocade's intellectual property with them to A10. According to Brocade, A10 used this intellectual property to develop a competing product, the AX Series, which allegedly infringes several Brocade patents. Additional facts are discussed below, as necessary, in the Court's analysis.

Brocade's third amended complaint alleges the following claims: (a) patent infringement (10 asserted claims from six patents); (b) trade-secret misappropriation (20 trade secrets); (c) copyright infringement (5 copyrights); (d) breach of contract; (e) breach of fiduciary duty; (f) breach of loyalty; (g) interference with contract and prospective economic advantage; and (h) California's Unfair Competition Law (“UCL”), Cal. Bus. & Prof.Code §§ 17200, et seq.

A10 moves for summary judgment on all of Brocade's claims. A10 argues that Brocade has adduced no evidence of patent infringement, copyright infringement, trade secret misappropriation, or any of its other state law claims. Brocade has withdrawn its breach of fiduciary duty, breach of loyalty, and UCL claims. See Opp'n 22. Accordingly, A10's motion is GRANTED as to Brocade's breach of fiduciary duty, breach of loyalty, and UCL claims. The Court sets forth the general standard for summary judgment and then discusses each of Brocade's remaining claims in turn.

I. Legal Standard

Under Federal Rule of Civil Procedure 56(a), “the court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Material facts are those that may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute as to a material fact is “genuine” if the evidence is such that “a reasonable jury could return a verdict for the nonmoving party.” See id. “[I]n ruling on a motion for summary judgment, the judge must view the evidence presented through the prism of the substantive evidentiary burden.” Id. at 254, 106 S.Ct. 2505. The question is “whether a jury could reasonably find either that the [moving party] proved his case by the quality and quantity of evidence required by the governing law or that he did not.” Id. “[A]ll justifiable inferences must be drawn in [the nonmovant's] favor.” See United Steelworkers of Am. v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir.1989) (en banc) (citing Liberty Lobby, 477 U.S. at 255, 106 S.Ct. 2505).

The moving party bears the initial responsibility for informing the district court of the basis for its motion and identifying those portions of the pleadings, depositions, interrogatory answers, admissions and affidavits, if any, that it contends demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A party opposing a properly supported motion for summary judgment “may not rest upon the mere allegations or denials of [that] party's pleading, but ... must set forth specific facts showing that there is a genuine issue for trial.” SeeFed.R.Civ.P. 56(e); see also Liberty Lobby, 477 U.S. at 250, 106 S.Ct. 2505. The opposing party need not show the issue will be resolved conclusively in its favor. See Liberty Lobby, 477 U.S. at 248–49, 106 S.Ct. 2505. All that is necessary is submission of sufficient evidence to create a material factual dispute, thereby requiring a jury or judge to resolve the parties' differing versions at trial. See id.

As the Federal Circuit has noted, summary judgment of noninfringement is a two-step analysis. “First, the claims of the patent must be construed to determine their scope. Second, a determination must be made as to whether the properly construed claims read on the accused device.” Pitney Bowes, Inc. v. Hewlett–Packard Co., 182 F.3d 1298, 1304 (Fed.Cir.1999) (internal citation omitted). “[S]ummary judgment of non-infringement can only be granted if, after viewing the alleged facts in the light most favorable to the non-movant, there is no genuine issue whether the accused device is encompassed by the claims.” Id. at 1304.

II. Patent Infringement against A10, Chen, and Jalan

Brocade alleges that Defendants A10, Chen, and Jalan infringe eight apparatus claims and two method claims from six patents through either: (1) direct infringement; (2) the doctrine of equivalents; or (3) indirectly through inducement or contributory infringement. The parties disagree as to the legal standard that should apply to these claims.

As an initial matter, Brocade has submitted only argument without citing any evidence that Messrs. Chen and Jalan engaged in any kind of patent infringement. See Opp'n 7–11. Federal Rule of Civil Procedure 56 requires a party asserting that a fact is genuinely disputed to support the assertion by: “citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Brocade has not done so with regard to its patent infringement claims against Messrs. Chen and Jalan. Although Brocade states the proposition of law that corporate officers who actively aid and abet their corporation's infringement may be personally liable for inducing infringement, Brocade does not cite any facts, let alone sufficient facts to raise a genuine factual dispute as to whether this proposition of law applies to Messrs. Chen and Jalan. Opp'n 11 (citing Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565, 1579 (Fed.Cir.1986)). Accordingly A10's motion for summary judgment is GRANTED as to all patent infringement claims against Messrs. Chen and Jalan.

A. Legal Standard

1. Direct Infringement

A10 argues that for the apparatus claims at issue here, Brocade is required to show more than the capacity to perform a particular claim element; rather “Plaintiffs must show evidence of direct infringement by showing that customers actually use the infringing features.” Mot. 5 (citing Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321, 1329 (Fed.Cir.2010); Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197, 1204 (Fed.Cir.2010)). Brocade, on the other hand, argues that “[t]here is no requirement that [an] apparatus be used in a particular manner” to establish direct infringement. Opp'n 7 (citing Hewlett–Packard Co. v. Bausch & Lomb, Inc., 909 F.2d 1464, 1468 (Fed.Cir.1990)).

The...