Veritas Operating Corp. v. Microsoft Corp.

• Decision Date: 20 February 2008
• Docket Number: No. C06-0703-JCC.,C06-0703-JCC.
• Citation: 562 F.Supp.2d 1141
• Parties: VERITAS OPERATING CORPRATION, a Delaware corporation, Plaintiff, v. MICROSOFT CORPORATION, a Washington corporation, Defendant. Microsoft Corporation, a Washington corporation, Counterclaim Plaintiff, v. Veritas Operating Corporation, a Delaware corporation, and Veritas Software Corporation, a Delaware corporation, Counterclaim Defendants.
• Court: U.S. District Court — Western District of Washington

562 F.Supp.2d 1141

VERITAS OPERATING CORPRATION, a Delaware corporation, Plaintiff, v. MICROSOFT CORPORATION, a Washington corporation, Defendant.

Microsoft Corporation, a Washington corporation, Counterclaim Plaintiff, v. Veritas Operating Corporation, a Delaware corporation, and Veritas Software Corporation, a Delaware corporation, Counterclaim Defendants.

No. C06-0703-JCC.

United States District Court, W.D. Washington. At Seattle.

February 20, 2008.

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Belinda Lee, D. Inder Comar, Jennifer T. Barnett, Mark A. Flagel, Renny Hwang, Robert Steinberg, Sean Pak, Yury Kapgan, Latham & Watkins, Los Angeles, CA, David A. Nelson, Latham & Watkins, Chicago, IL, Karen Y. Tu, Latham & Watkins, New York, NY, Lynn M. Engel, Ralph H. Palumbo, Philip S. McCune Summit Law Group, Seattle, WA, Michael J. Schallop, Symantec Corporation, Cupertino, CA, for Plaintiff.

Arthur W. Harrigan, Jr., Christopher T. Wion, Danielson Harrigan & Tollefson, Adam Randal Wichman, Klarquist Sparkman, Seattle, WA, Bruce Braun, Dan K. Webb, Raymond C. Perkins, Winston & Strawn, Chicago, IL, Garth A. Winn, Kristin L. Cleveland, Richard D. McLeod, Todd M. Siegel, Klarquist Sparkman, James E. Geringer, John D. Vandenberg, Klarquist Sparkman Campbell Leigh & Whinston, LLP, Portland, OR, Michael F. Browning, Porzak Browning & Bushong LLP, Boulder, CO, for Defendant.

ORDER

John C. COUGHENOUR, District Judge.

This matter comes before the Court for review of the Special Master's Report and Recommendation on Microsoft Corporation's Motion for Summary Judgment on Veritas' Claim of Infringement of U.S. Patent No. 5,469,573 (Dkt. No. 396). The Court has reviewed de novo the Special Master's Report and Recommendation ("`573 Infringement R & R"), the parties' respective objections and responses thereto (Dkt. Nos. 403, 409), the briefing and exhibits presented to the Special Master in the first instance, and all other relevant documents in the case file. The Court has determined that oral argument is not necessary.

The Court hereby APPROVES and ADOPTS the Special Master's '573 Infringement R & R in its entirety. Accordingly, the Court hereby GRANTS Microsoft's Motion for Summary Judgment on Veritas' Claim of Infringement of U.S. Patent No. 5,469,573 (Dkt. No. 204).

SPECIAL MASTER'S REPORT AND RECOMMENDATION ON MICROSOFT CORPORATION'S MOTION FOR SUMMARY JUDGMENT ON VERITAS' CLAIM OF INFRINGEMENT OF U.S. PATENT NO. 5,469,573

FILED UNDER SEAL CONTAINS INFORMATION DESIGNATED AS "CONFIDENTIAL," "CONFIDENTIAL—ATTORNEY EYES ONLY," AND/OR "CONFIDENTIAL—ATTORNEY EYES ONLY—SOURCE CODE" SUBJECT TO PROTECTIVE ORDER

                TABLE OF CONTENTS
                   I. Introduction...........................................................1149
                      A. Nature of the Suit..................................................1149
                      B. Referral to the Special Master......................................1150
                      C. Issued Under Seal...................................................1150
                  II. Summary Judgment Standard..............................................1150
                      A. Summary Judgment ...................................................1150
                      B. Burden of Proof.....................................................1151
                 III. Brief Overview of the Patent-in-Suit...................................1152
                  IV. Infringement...........................................................1154
                      A. Direct Infringement.................................................1154
                      B. Indirect Infringement...............................................1155
                         1. Inducing Infringement............................................1155
                         2. Contributory Infringement........................................1156
                      C. Asserted Claims.....................................................1158
                

                      D. The Parties' Arguments..............................................1159
                      E. Discussion..........................................................1160
                         1. The Accused Products.............................................1160
                            a) System Deployment.............................................1162
                            b) System Backup & Recovery......................................1163
                         2. Uses of the Accused Products.....................................1163
                            a) Infringing Uses...............................................1163
                            b) Substantial Non-Infringing Uses...............................1163
                            c) U.S. and Foreign Uses........................,................1175
                            d) Use with Veritas' Products....................................1175
                        3. Infringement......................................................1175
                            a) "users manuals, advertising materials and other product
                               documentation"................................................1177
                              (1) WAIK Guide.................................................1178
                              (2) WAIK Getting Started.......................................1192
                              (3) OPK Guide..................................................1200
                              (4) BRC74......................................................1210
                              (5) Presentation...............................................1213
                              (6) Remaining Product Manuals, Materials & Documentation.......1216
                        4. "Microsoft's own witnesses".......................................1235
                            a) John MacIntyre................................................1235
                            b) Mark Myers....................................................1241
                            c) Wes Miller....................................................1242
                        5.  "e-mails, customer specifications and other documents" ..........1247
                            a) Nike Email....................................................1247
                            b) Boeing Email..................................................1249
                            c) Hershey Email.................................................1250
                            d) DaimlerChrysler Documents.....................................1251
                            e) "dogfood" Documents...........................................1258
                            f) Windows Vista CompletePC Restore Documents....................1260
                            g) "14 bugs" Email...............................................1262
                            h) Zions Bank Email..............................................1264
                            i) Dr. Nichols Report, Exh. L....................................1266
                      F. Recommendation......................................................1268
                   V. Software as a Material or Apparatus Under § 271(c) ....................1268
                      A. The Parties' Arguments...............................................1268
                      B. Discussion..........................................................1269
                      C. Recommendation......................................................1275
                  VI. Inducing Infringement—Intent...........................................1275
                      A. The Parties' Arguments..............................................1275
                      B. Discussion..........................................................1277
                      C. Recommendation......................................................1285
                 VII. Willfulness............................................................1285
                      A. The Parties' Arguments..............................................1285
                      B. Discussion..........................................................1285
                      C. Recommendation......................................................1286
                VIII. Damages................................................................1286
                      A. The Parties' Arguments..............................................1286
                      B. Discussion...................................,......................1287
                      C. Recommendation......................................................1287
                  IX. Recommended Disposition................................................1287
                   X. Report and Recommendation..............................................1287
                

GAIL R. PETERSON, Special Master.

I. Introduction

A. Nature of the Suit

Veritas alleges in its complaint causes of action for trade secret misappropriation, breach of contract, breach of an implied covenant of good faith and fair dealing, unfair competition, unjust enrichment and collective trust, conversion, copyright infringement, and infringement of U.S. Patent No. 6,826,661 ("the '661 patent") [Dkt. No. 1]. Microsoft alleges in its counterclaim causes of action for breach of contract, breach of an implied covenant of good faith and fair dealing, and for declaratory judgments of invalidity and non-infringement of the '661 patent, and for infringement of U.S. Patent Nos. 5,588,147 ("the '147 patent"); 6,820,214 ("the '214 patent"); and 6,851,073 ("the '073 patent") [Dkt. No. 32]. Veritas, in response, alleged additional counterclaims seeking declaratory judgments of non-infringement and invalidity of the '147, '214 and '073 patents, declaratory judgments that the '073 and '214 patents are unenforceable due to inequitable conduct, and a counterclaim asserting infringement of U.S. Patent No. 5,469,573 ("the '573 patent") [Dkt. No. 39]. Microsoft answered and added counterclaims for declaratory judgments that the '573 patent was invalid and not infringed [Dkt. No. 53]. The parties subsequently stipulated to dismiss Microsoft's counterclaims for infringement of the '214 and '073 patents, and Veritas' corresponding declaratory judgment counterclaims for non-infringement, invalidity and unenforceability of those patents [Dkt. No. 58]. The parties further stipulated to stay the action with respect to the '661 patent after the U.S. Patent and Trademark Office (PTO) granted Microsoft's request for inter partes reexamination of the '661 patent [Dkt. No. 63].

Thus, the patents remaining in this action are Veritas' '573 patent and...