Multiven Inc. v. Cisco Sys. Inc.

• Decision Date: 20 July 2010
• Docket Number: No. C 08-05391 JW.,C 08-05391 JW.
• Citation: 725 F.Supp.2d 887
• Parties: MULTIVEN, INC., Plaintiff, v. CISCO SYSTEMS, INC., Defendant. Cisco Systems, Inc., et al., Counterclaimants, v. Multiven, et al., Counterdefendants.
• Court: U.S. District Court — Northern District of California

725 F.Supp.2d 887

MULTIVEN, INC., Plaintiff,

v.CISCO SYSTEMS, INC., Defendant.

Cisco Systems, Inc., et al., Counterclaimants,

v.Multiven, et al., Counterdefendants.

No. C 08-05391 JW.

United States District Court,N.D. California, San Jose Division.

July 20, 2010.

Donald Ross Pepperman, James Robert Noblin, Maxwell Michael Blecher, Blecher & Collins, Brian Curtis Vanderhoof, Thomas Michael O'Leary, Ropers Majeski, Kohn & Bentley, James C. Potepan, Attorney at Law, Los Angeles, CA, Charles F. Rule, Joseph J. Bial, Cadwalader Wickersham & Taft LLP, Washington, DC, for Plaintiff, Counterdefendants.

Patrick Martin Ryan, Krista M. Enns, John Caleb Donaldson, Winston & Strawn LLP, San Francisco, CA, Dan Keith Webb, Winston & Strawn LLP, Chicago, IL, for Defendant, Counterclaimants.

Michael Sungwoo Kim, Ropers, Majeski, Kohn & Bentley, Los Angeles, CA, for Counterdefendants.

ORDER GRANTING CISCO'S MOTION FOR PARTIAL SUMMARY JUDGMENT; DENYING MULTIVEN'S MOTION FOR PARTIAL SUMMARY JUDGMENT

JAMES WARE, District Judge.

Presently before the Court are Defendants and Counterclaimants Cisco Systems, Inc. and Cisco Technology, Inc.'s (collectively, “Cisco”) Motion for Partial Summary Judgment Against Counterdefendants Peter Alfred-Adekeye (“Adekeye”) and Multiven, Inc. (collectively, “Multiven”) ¹ and Counterdefendants' Motion for Partial Summary Judgment. ² The Court conducted a hearing on June 7, 2010. Based on the papers submitted to date and oral argument, the Court GRANTS Cisco's Motion and DENIES Multiven's Motion.

A. Background 1. Undisputed Facts

Cisco Systems, Inc. is a leading provider of networking equipment (primarily switches and routers) and related services. ³ Cisco Technology, Inc. is a wholly-owned subsidiary of Cisco Systems, Inc. ⁴ Until May 2005, Adekeye was a Cisco employee. (Answer ¶¶ 45, 47.) During his employment with Cisco, Adekeye worked as a Technical Assistance Center (“TAC”) engineer. ( Id. ¶ 45.)

On or about March 2, 2005, Adekeye incorporated Multiven. (Answer ¶ 48.) Multiven is a Delaware Corporation that purports to provide service and maintenance support for router and networking systems, including those placed in the market by Cisco. ⁵ At all relevant times, Adekeye has been the CEO of Multiven. ( Id. ¶ 49.)

2. Procedural History

On December 1, 2008, Multiven filed this action against Cisco alleging, inter alia, monopolization and attempted monopolization of the market for provision and maintenance of Cisco network software in violation of the Sherman Act, 15 U.S.C. § 2. (Complaint ¶¶ 17-61.) On November 20, 2009, Cisco filed a First Amended Answer and Second Amended Counterclaims alleging, inter alia, violation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030, violation of the California Penal Code § 502, and violation of the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof.Code § 17200 et seq. (hereafter, “SAC,” Docket Item No. 59.)

Presently before the Court are the parties' Motions for Partial Summary Judgment.

B. Standards

Although motions for partial summary judgment are common, Rule 56 of the Federal Rules of Civil Procedure, which governs summary judgment, does not contain an explicit procedure entitled “partial summary judgment.” However, partial summary judgment is inherent in that Rule 56(a) provided for summary judgment on “all or part of the claim.” Thus, a party may move for summary judgment on the liability issues in a claim, leaving the issue of damages, for example, for trial.

The purpose of summary judgment “is to isolate and dispose of factually unsupported claims or defenses.” Celotex v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Thus, partial summary judgment may be used to dispose of a factually unsupported claim or affirmative defense.

As with a motion on the entire claim, under Rule 56(c), partial summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment [on a part of the claim or an affirmative defense] as a matter of law.” Fed.R.Civ.P. 56(c). The moving party “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying the evidence which it believes demonstrates the absence of a genuine issue of material fact.” Celotex, 477 U.S. at 323, 106 S.Ct. 2548. The non-moving party must then identify specific facts “showing a genuine issue for trial.” Fed.R.Civ.P. 56(e).

When evaluating a motion for partial or full summary judgment, the court views the evidence through the prism of the evidentiary standard of proof that would pertain at trial. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The court draws all reasonable inferences in favor of the non-moving party, including questions of credibility and of the weight that particular evidence is accorded. See, e.g., Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 520, 111 S.Ct. 2419, 115 L.Ed.2d 447 (1991). The court determines whether the non-moving party's “specific facts,” coupled with disputed background or contextual facts, are such that a reasonable jury might return a verdict for the non-moving party. T.W. Elec. Serv. v. Pac. Elect. Contractors, 809 F.2d 626, 631 (9th Cir.1987). In such a case, partial summary judgment is inappropriate. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. However, where a rational trier of fact could not find for the non-moving party based on the record as a whole, there is no “genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

C. Discussion 1. Cisco's Motion re: the CFAA Claim

Cisco move for summary judgment on their CFAA claim on the ground that on multiple occasions and without authorization, Adekeye used a Cisco employee's password to gain access to Cisco's computer systems and download Cisco's proprietary and copyrighted software. (Cisco's Motion at 2.) Multiven respond that Adekeye only used a Cisco employee's password to access Cisco's computer systems once, and on that occasion he had the employee's permission to do so. ⁶

The Ninth Circuit has explained the purpose of the CFAA as follows:

The CFAA was enacted in 1984 to enhance the government's ability to prosecute computer crimes. The act was originally designed to target hackers who accessed computers to steal information or to disrupt or destroy computer functionality, as well as criminals who possessed the capacity to access and control high technology processes vital to our everyday lives. The CFAA prohibits a number of different computer crimes, the majority of which involve accessing computers without authorization or in excess of authorization, and then taking specified forbidden actions, ranging from obtaining information to damaging a computer or computer data.

LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1130-31 (9th Cir.2009) (internal quotation omitted).

Although Cisco's Counterclaim only alleges violation generally of 18 U.S.C. § 1030, and does not specify which subsections cover Adekeye's alleged actions, ⁷ Cisco move for Summary Judgment pursuant to §§ 1030(a)(4) and 1030(a)(5)(A)(iii). ( See Cisco's Motion at 11.) Thus, the Court only considers those two subsections for purposes of this Motion.

To successfully bring an action under § 1030(a)(4), a plaintiff must show that the defendant: (1) accessed a “protected computer,” (2) without authorization or exceeding such authorization that was granted, (3) “knowingly” and with “intent to defraud,” and thereby (4) “further[ed] the intended fraud and obtain[ed] anything of value,” causing (5) a loss to one or more persons during any one-year period aggregating at least $5000 in value. See 18 U.S.C. § 1030(a)(4); LVRC Holdings, 581 F.3d at 1132.

To successfully bring an action under § 1030(a)(5)(A)(iii), a plaintiff must show that the defendant: (1) accessed a “protected computer,” (2) without authorization, ⁸ (3) intentionally, and (4) “as a result of such conduct, cause[d] damage.” ⁹

The Court addresses the elements necessary to establish liability under the CFAA in turn.

a. Protected Computer

At issue is whether Adekeye accessed a “protected computer,” as that term is defined under the statute.

The CFAA defines a “protected computer” as one “which is used in interstate or foreign commerce or communication.” 18 U.S.C. § 1030(e)(2)(B). The Ninth Circuit has found that “[a]s both the means to engage in commerce and the method by which transactions occur, the Internet is an instrumentality and channel of interstate commerce.” United States v. Sutcliffe, 505 F.3d 944, 953 (9th Cir.2007).

Here, the parties do not dispute that Cisco's network is connected to the internet. ( See Cisco's Motion at 12-13; Multiven's Opposition.) Thus, the Court finds that computers using the Cisco network are “protected” within the meaning of the statute.

b. Without Authorization

At issue is whether Adekeye accessed secure areas of Cisco's network without authorization.

In the context of the CFAA, the Ninth Circuit has held that “a person uses a computer ‘without authorization’ ... when the person has not received permission to use the computer for any purpose ... or when the employer has rescinded permission to access the computer and the defendant uses the computer anyway.” LVRC Holdings, 581 F.3d at 1135.

Here, Adekeye is a former employee of Cisco, however, there is no evidence that any privileges he had as an employee to access secure areas of the Cisco website extended beyond his employment. Cisco, however, has presented unrebutted evidence that upon leaving Cisco's employ, neither Adekeye nor Multiven had Cisco's permission or authorization to access Cisco's network. (Bouja Decl. ¶ 3.) Thus, the Court finds that any access by Adekeye to...