Opal Labs Inc. v. Sprinklr, Inc.
| Decision Date | 20 August 2021 |
| Docket Number | 3:18-cv-01192-HZ |
| Parties | OPAL LABS INC., Plaintiff, v. SPRINKLR, INC., Defendant. |
| Court | U.S. District Court — District of Oregon |
Chad M. Colton
Adam M. Starr
Stanton R. Gallegos
Daniel J. DiCicco
Kathryn P. Roberts
MARKOWITZ HERBOLD PC
Attorneys for Plaintiff
Christopher J. Pallanch
Michael Willes
Sadie Concepcion
Paul M. Balmer
TONKON TORP LLP
Attorneys for Defendant
This trade secrets dispute arises out of a failed collaboration between two software companies. Plaintiff Opal Labs Inc. alleges that Defendant Sprinklr, Inc., stole its trade secrets after the parties collaborated for a joint customer. Plaintiff brings claims for breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, tortious interference with economic relations, and violation of the Oregon Uniform Trade Secrets Act.
Both parties move for summary judgment on some of Plaintiff's claims and Defendant's affirmative defenses. At oral argument, the Court resolved part of the parties' motions and reserved ruling on Defendant's first, third and fourth motions, and Plaintiff's first and fifth motions. Hr'g Tr., ECF 289. For the reasons that follow, the now Court grants in part and denies in part the remaining motions.
Plaintiff and Defendant are software companies with complementary products geared toward the creation and publishing of marketing content. At the beginning of the parties' working relationship, Defendant's primary product enabled marketing teams to publish content across different “channels, ” including social media platforms like Facebook and Twitter. Plaintiff's product helps marketing teams plan and create marketing campaigns. Using both systems together, a marketing team could plan and create a marketing campaign with Plaintiff's product and then publish that campaign on various platforms with Defendant's product. And that is exactly what was intended when the parties worked for Nike in 2013. Giannini Decl. ¶ 3, ECF 263.
Defendant and Plaintiff each had independent relationships with Nike that pre-existed the parties' collaboration. Herman Decl. ¶¶ 2-3, ECF 227. In mid-2013, Nike suggested to Plaintiff and Defendant that they explore “integration” of both of their platforms. Giannini Decl. ¶ 4. The parties subsequently executed a nondisclosure agreement to share information with each other. Pallanch Decl. Ex. 12, ECF 226; Giannini Decl. ¶ 5. As the parties began working together, Defendant showed its platform to Plaintiff, and Plaintiff granted some of Defendant's employees access to Plaintiff's software. Pallanch Decl. Exs. 13-14. Both parties also continued to provide services to Nike. Soon after, Defendant began to consider further development of its own content planning software. See Starr Decl. Ex. 3, ECF 265.
In early 2014, Nike asked Defendant to estimate the cost and time to build a “functional equivalent” of Plaintiff's platform. Pallanch Decl. Ex. 22 (). Along with its request, Nike sent Defendant a document identifying its requirements for content planning software. Id. Defendant and Nike- through Nike employee Paul Herman-ultimately planned to work on building a platform together. Starr Decl. Exs. 7, 8.
In April 2014, Herman provided a Sprinklr employee with access to Plaintiff's platform through Nike's Opal account, Starr Decl. Exs. 10, 11, 12, and a software developer for Defendant in India obtained access to Plaintiff's platform and the list of requirements for Nike's content planning software, id. at Exs. 11, 12.
When Plaintiff discovered that Defendant had access to Plaintiff's live environment, Plaintiff sent Defendant a cease-and-desist letter. Pallanch Decl. Ex. 36; Giannini Decl. ¶ 7. Two of Plaintiff's executives then had a telephone conference with three of Defendant's executives on May 1, 2014. Pallanch Decl. Ex. 37 (Giannini Dep.) 67:14-21; Giannini Decl. Ex. 1. During the call, Defendant's CEO-Ragy Thomas-claimed that there had been a misunderstanding and that the access had been for the purposes of the Nike integration. Giannini Decl. Ex. 1. He also stated that they were not interested in competing with Plaintiff and were only developing a platform with “baseline content planning capabilities.” Id. at 55:25-56:7, 39:16-18. Ultimately, Thomas proposed that the parties form a partnership to pitch their complementary software to their clients. Id. at 40:20-22. This discussion led to the Teaming Agreement, which allowed the parties to introduce clients or customers to one another while restricting the use of confidential information shared between the parties to activities in furtherance of their relationship under the Teaming Agreement. Pallanch Decl. Ex. 41.
A few months later, Defendant began working on its Content Marketing module. Starr Decl. Ex. 51 (Michaud Dep.) 8:1-17, 14:18-25. Defendant released a prototype of this platform to some customers in early 2015. Id. at 10:11-12:7, 13:20-14:17. Nike also embarked on a project to build a Unified Communications Platform-also called Beacon-to bring its marketing and analytics under one umbrella. Herman Decl. ¶ 4; Starr Decl. Ex. 47 (Herman Dep.) 39:11-12, 40:16-20, 41:3-42:8. In the fall of 2015, Defendant won a bid to program the “back end” of the Beacon platform. Herman Decl. ¶ 5; Starr Decl. Ex. 52 (Singh Dep.) 106:8- 107:13. During this time, Herman and others from Sprinklr accessed Plaintiff's software. Second Gorman Decl. Exs. 3, 5, 6, ECF 264.
In early 2016, Nike changed course and determined that its platform would not be entirely unified, and it would use Opal for planning and Adobe for asset management. Pallanch Decl. Ex. 44; Herman Decl. ¶ 6. Beacon would focus only on targeting, scheduling, publishing, engagement, and measurement functions. Id. Throughout 2016, Nike used Adobe, Opal, and Beacon together. Herman Decl. ¶ 6. Meanwhile, Plaintiff and Defendant entered into an “Integration Agreement, ” which contemplated integration of their platforms for customers like Nike. Pallanch Decl. Ex. 47.
Ultimately, Nike and Defendant abandoned Beacon, and Defendant began developing Planner 2.0. Starr Decl. Ex. 55 (Shibahara Dep.) 5:16-52:7, 53:3-15; Starr Decl. Ex. 52 (Singh Dep.) 107:14-23. Defendant continued to access Plaintiff's software in March, May and June of 2016. Gorman Decl. Ex. 6 at 10-18. Defendant then began to sell Planner 2.0, which it dubbed a “full replacement” of Opal. Starr Decl. Exs. 31, 25, 36. Plaintiff heard that Defendant was “undermining Opal in the market.” Giannini Decl. ¶ 11. Plaintiff's CEO-Steve Giannini- spoke with Thomas about the parties' relationship and was reassured that the sales team pitching Sprinklr “was probably just not up to speed” on their relationship. Id. Giannini spoke with Sprinklr's president, who echoed this sentiment. Id. But soon after this meeting, Nike-after working out a deal with Defendant-considered ending its relationship with Plaintiff to adopt Defendant's new planning tool. Starr Decl. Exs. 29, 38, 26; Pallanch Decl. Ex. 48.
Nike officially notified Plaintiff that it was terminating its contract with Plaintiff in May 2017. Pallanch Decl. Ex. 49. Nike and Plaintiff later agreed to extend their agreement to 2018. Pallanch Decl. Ex. 50. In March 2018, Nike sent Plaintiff another notice of termination, and Plaintiff's work for Nike ended in mid-2018. Pallanch Dec. Ex. 51. Nike ultimately replaced Plaintiff's platform with Defendant's Planner 2.0.
Summary judgment is appropriate if there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving party bears the initial responsibility of informing the court of the basis of its motion, and identifying those portions of “‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting former Fed.R.Civ.P. 56(c)).
Once the moving party meets its initial burden of demonstrating the absence of a genuine issue of material fact, the burden then shifts to the nonmoving party to present “specific facts” showing a “genuine issue for trial.” Fed. Trade Comm'n v. Stefanchik, 559 F.3d 924, 927-28 (9th Cir. 2009) (internal quotation marks omitted). The nonmoving party must go beyond the pleadings and designate facts showing an issue for trial. Bias v. Moynihan, 508 F.3d 1212, 1218 (9th Cir. 2007) (citing Celotex, 477 U.S. at 324).
The substantive law governing a claim determines whether a fact is material. Suever v. Connell, 579 F.3d 1047, 1056 (9th Cir. 2009). The court draws inferences from the facts in the light most favorable to the nonmoving party. Earl v. Nielsen Media Rsch., Inc., 658 F.3d 1108, 1112 (9th Cir. 2011). If the factual context makes the nonmoving party's claim as to the existence of a material issue of fact implausible, that party must come forward with more persuasive evidence to support its claim than would otherwise be necessary. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
Plaintiff and Defendant both move for partial summary judgment. Defendant moves on all of Plaintiff's claims except for its breach of contract claims. Def. Mot. Summ. J (“Def. MSJ”), ECF 225. Defendant also argues that it is entitled to summary judgment on some of Plaintiff's theories of damages. Id. Plaintiff moves for...
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