BladeRoom Group Ltd. v. Facebook, Inc.

219 F. Supp. 3d 984, 2017 WL 1233555, 2017 U.S. Dist. LEXIS 20176
CourtDistrict Court, N.D. California
DecidedFebruary 10, 2017
DocketCase No. 5:15-cv-01370-EJD
StatusPublished
Cited by3 cases

This text of 219 F. Supp. 3d 984 (BladeRoom Group Ltd. v. Facebook, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BladeRoom Group Ltd. v. Facebook, Inc., 219 F. Supp. 3d 984, 2017 WL 1233555, 2017 U.S. Dist. LEXIS 20176 (N.D. Cal. 2017).

Opinion

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO DISMISS

EDWARD J. DAVILA, United States District Judge

This is a case about data centers, “which are the buildings that house the vast arrays of computer servers that form the backbone of the internet and the high-technology economy.” Second Am. Compl. (“SAC”), Dkt. No. 107, at ¶1. Plaintiffs BladeRoom Group Limited (“BRG”) and Bripco (UK) Limited (“Bripco”)1 are two English companies who allege that Defendants Facebook, Inc. (“Facebook”), Emerson Electric Co. (“Emerson”), Emerson Network Power Solutions, Inc. and Lie-bert Corporation2 enticed them to reveal their data center designs and construction methods with promises of acquisition and partnership, only to then copy those designs and methods and pass them off as their own.

Federal jurisdiction arises pursuant to 28 U.S.C. §§ 1331 and 1332. Presently before the court is Facebook’s Motion to Dismiss the SAC under Federal Rule of Civil Procedure 12(b)(6). Dkt. No. 114. Plaintiffs have filed written opposition to this, motion. Having carefully considered the parties’ arguments, the court concludes that most but not all of the SAC withstands a Rule 12(b)(6) review. Thus, Face-book’s motion will be granted in part and denied in part for the reasons explained below.

I. BACKGROUND

A. Plaintiffs and the BladeRoom Technology

Plaintiffs developed and perfected a method for manufacturing and installing a type of pre-fabricated data center known as a “BladeRoom.” Id. at ¶4. [Redacted] Id. at ¶ 26. Plaintiffs built the first Blade-Room in 2009, and have since built over 40 BladeRooms on four continents. Jd. at ¶ 27.

Though some of the techniques used to build a BladeRoom are publicly disclosed, Plaintiffs keep others as confidential trade [987]*987secrets and limit the release of this information in several ways. Id. at ¶¶ 28, 31. They ensure that private disclosure to potential clients, suppliers and others is. covered by non-disclosure agreements. Id. at ¶ 31. The computer systems containing the trade secrets are password-protected and the facilities where they are stored are physically secured. Id. Additionally, employee access to trade secrets is limited to only those that need to know of them and is subject to confidentiality agreements. Id.

Bripco is the legal owner, and BRG is the licensee, of all right, title and interest in the trade secrets and other confidential information developed by BRG, including the BladeRoom technology. Id. at ¶ 5.

B. BRG Discusses BladeRoom Technology with Emerson and Face-book

In August 2011, BRG entered into [Redacted] Id. at ¶ 34. Emerson executed a non-disclosure agreement before any substantive discussions occurred, [Redacted]. Id. at ¶ 35. BRG then hosted a meeting for several Emerson executives at its factory in England in September, 2011, [Redacted] Id. at ¶ 47. Emerson later informed BRG in October, 2011, [Redacted] Id. at ¶ 48.

BRG also began discussing the Blade-Room technology with Facebook in October, 2011. Id. at ¶ 37. In connection with those discussions, BRG and Facebook entered into, a non-disclosure agreement [Redacted] Id. at ¶40. [Redacted], Facebook “urgently requested” a proposal to supply BladeRooms for a data center in North Carolina. Id. at ¶ 49. BRG provided the proposal in November, 2011, [Redacted]. Id. According to BRG, “[fjeedback from Facebook was positive, and Facebook quickly began asking to learn even more details about” BladeRooms. Id. at ¶ 50. BRG representatives met with Facebook in California, and two Facebook representatives met with BRG in England in March, 2012. Id. at ¶ 51. During this trip, BRG took the Facebook representatives on a tour of an operating BladeRoom and provided them with additional confidential information. Id. Subsequently, “Facebook continued to request yet more detailed confidential information from BRG,” and “suggested that the next step should be for a team of Facebook design and engineering staff to travel to BRG in England for an in-depth workshop with BRG’s technical teams to enable Facebook to learn more-” Id. at ¶ 52.

BRG alleges that soon after the March, 2012, meeting in England, one of the attending Facebook representatives met with an Emerson Network Power executive [Redacted] Id. at ¶ 53. [Redacted], Emerson contacted BRG and sought to reopen discussions, to which BRG agreed. Id. Emerson told BRG, however, that a group of individuals other than the ones who had visited BRG in 2011 [Redacted]. Id. Emerson proposed that several of its representatives visit BRG’s facilities in June, 2012. Id. at ¶ 54.

. On May 29th and May 30, 2012, BRG attended a meeting with Facebook at its data center campus in Prineville, Oregon, and was told the purpose of the meeting was to “survey and physically see the functionality of a Facebook data center and meet Facebook’s lead architect and engineers.” Id. at ¶ 56. Third party architects and contractors also attended. Id. Face-book told BRG it would request a proposal for an expansion of the Prineville data center campus and asked BRG to present and discuss BladeRoom technology, which it did. Id. at ¶ 57. BRG alleges that unbeknownst to it at the time, Facebook had already agreed that its construction contractor [Redacted] Id. at ¶ 58.

[988]*988BRG’s previously discussed in-depth workshop with Facebook occurred in England between June 19th and June 21, 2012, during which BRG revealed additional confidential information. Id. at ¶1¶60, 61. A meeting between BRG and Emerson, during which BRG also revealed confidential information, occurred at the same time. Id. at ¶ 64. To maintain the confidentiality of the respective discussions, BRG ensured the two companies’ representatives were separated during their visits. Id.

But despite BRG’s efforts, representatives from Facebook and Emerson did engage in a “pre-arranged, clandestine meeting” in London on June 21, 2012, and “compared notes” on what each had learned from their meetings with BRG. H. at ¶ 68. Facebook also continued to indicate an interest in partnering with BRG and requested more information and proposals. Id. at ¶ 69.

C. Facebook and Emerson Allegedly Misappropriate the BladeRoom Technology

Facebook never placed an order for BladeRooms. Id. at ¶71. Instead, BRG alleges that Facebook and Emerson [Redacted] Id. at ¶ 74. [Redacted] Id. at ¶¶ 75, 80. On January 16, 2013, Emerson publicly announced that it was launching a new business focusing on “serving the needs of massive data centers” using “customized, highly scalable, and often modular infrastructures.” Id. at ¶ 78. And in May, 2014, Facebook announced it had chosen Emerson to construct a pre-fabricated, modular data center in Sweden, which it alleges will be constructed using appropriated Blade-Room technology. Id. at ¶ 113.

D. Facebook’s Disclosure of BRG Confidential Information

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Bluebook (online)
219 F. Supp. 3d 984, 2017 WL 1233555, 2017 U.S. Dist. LEXIS 20176, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bladeroom-group-ltd-v-facebook-inc-cand-2017.