Proofpoint, Inc. v. Vade Secure, Incorporated

District Court, N.D. California·Decided June 4, 2021·No. 3:19-cv-04238·Unknown

Opinion

1 2 3 IN THE UNITED STATES DISTRICT COURT 4 FOR THE NORTHERN DISTRICT OF CALIFORNIA 5 6 PROOFPOINT, INC., et al., Case No. 19-cv-04238-MMC

7 Plaintiffs, ORDER GRANTING IN PART AND 8 v. DENYING IN PART DEFENDANT LEMARIÉ'S MOTION FOR PARTIAL 9 VADE SECURE, INCORPORATED, et SUMMARY JUDGMENT al., 10 Defendants.

11 12 Before the Court is defendant Olivier Lemarié's ("Lemarié") Motion for Partial 13 Summary Judgment, filed April 24, 2021. Plaintiffs Proofpoint, Inc. ("Proofpoint") and 14 Cloudmark LLC ("Cloudmark") have filed opposition, to which Lemarié has replied. 15 Having read and considered the parties' respective written submissions, the Court rules 16 as follows.1 17 BACKGROUND 18 In the operative complaint, the First Amended Complaint ("FAC"), plaintiffs allege 19 Cloudmark employed Lemarié as its Vice President of Gateway Technology from 2010 20 until November 11, 2016 (see FAC ¶¶ 30, 54), and that, in February 2017, Lemarié 21 began working for defendants Vade Secure, Incorporated and Vade Secure SASU 22 (collectively, "Vade Secure") as their Chief Technology Officer (see FAC ¶ 54). Plaintiffs 23 further allege "Vade [Secure] – like Cloudmark and Proofpoint2 – develops and markets 24 cyber security products." (See FAC ¶ 7.) 25 According to plaintiffs, Vade Secure and Lemarié entered into a "scheme" to 26 1 By order filed May 25, 2021, the Court took the matter under submission. 27 1 "misappropriate, misuse, and copy [p]laintiffs' proprietary and confidential information, 2 including valuable trade secrets, to gain an unfair competitive advantage in the 3 marketplace." (See FAC ¶ 1.) In particular, plaintiffs allege, Lemarié, in the course of his 4 employment with Vade Secure, has used "Cloudmark's confidential and trade secret 5 information for the development of Vade [Secure]'s . . . products" (see FAC ¶ 11), and 6 that he "still possess[es] one or more unauthorized copies of [p]laintiffs' confidential and 7 proprietary source code, which incorporates and implements [p]laintiffs' asserted trade 8 secret and proprietary technology" (see FAC ¶ 39). 9 Based on said allegations, plaintiffs assert, against all defendants, a claim for 10 misappropriation of trade secrets and a claim for copyright infringement. In addition, 11 plaintiffs assert against Lemarié four claims titled "Breach of Contract," each of which is 12 based on an alleged violation of an obligation set forth in Lemarié's employment 13 agreement. 14 LEGAL STANDARD 15 Pursuant to Rule 56 of the Federal Rules of Civil Procedure, a "court shall grant 16 summary judgment if the movant shows that there is no genuine issue as to any material 17 fact and that the movant is entitled to judgment as a matter of law." See Fed. R. Civ. P. 18 56(a). 19 The Supreme Court's 1986 "trilogy" of Celotex Corp. v. Catrett, 477 U.S. 317 20 (1986), Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986), and Matsushita Electric 21 Industrial Co. v. Zenith Radio Corp., 475 U.S. 574 (1986), requires that a party seeking 22 summary judgment show the absence of a genuine issue of material fact. Once the 23 moving party has done so, the nonmoving party must "go beyond the pleadings and by 24 [its] own affidavits, or by the depositions, answers to interrogatories, and admissions on 25 file, designate specific facts showing that there is a genuine issue for trial." See Celotex, 26 477 U.S. at 324 (internal quotation and citation omitted). "When the moving party has 27 carried its burden under Rule 56[ ], its opponent must do more than simply show that 1 "If the [opposing party's] evidence is merely colorable, or is not significantly probative, 2 summary judgment may be granted." Liberty Lobby, 477 U.S. at 249-50 (citations 3 omitted). "[I]nferences to be drawn from the underlying facts," however, "must be viewed 4 in the light most favorable to the party opposing the motion." See Matsushita, 475 U.S. at 5 587 (internal quotation and citation omitted). 6 DISCUSSION 7 By the instant motion, Lemarié seeks summary judgment on the four breach of 8 contract claims asserted against him, which claims are asserted as Counts II through IV 9 in the FAC. The Court considers the four Counts, in turn.

10 A. Count II – "Unauthorized Disclosure and Failure to Maintain Confidentiality of Cloudmark Propriety Information" 11 In Count II, plaintiffs allege Lemarié violated the terms of his employment 12 agreement, titled "Employee Proprietary Information and Inventions Agreement ("PIIA"), 13 by using, without obtaining Cloudmark's permission, "Cloudmark's Proprietary Information 14 in the design and development of Vade [Secure]'s integration with Microsoft Office 365 15 products," and by using and disclosing to Vade Secure two types of Cloudmark's 16 proprietary information, specifically, information "relating to the design, development, and 17 operation of the Cloudmark Trident anti-spear phishing and related products" and 18 "relating to the design, development, and operation of the Cloudmark MTA technology." 19 (See FAC ¶¶ 1, 84.) 20 The provision of the PIIA precluding disclosure of Cloudmark's proprietary 21 information reads as follows: 22 At all times during my employment and thereafter, I will hold in strictest 23 confidence and will not disclose, use, lecture upon or publish any of the Company's Proprietary Information . . ., except as such disclosure, use or 24 publication may be required in connection with my work for the Company, or unless an officer of the Company expressly authorizes such in writing. 25 (See Budaj Decl. Ex. H ¶ 1.1)3 26 27 1 The PIAA defines "Proprietary Information" as follows:

2 The term "Proprietary Information" shall mean any and all confidential and/or proprietary knowledge, data or information of the Company. By way 3 of illustration but not limitation, "Proprietary Information" includes (a) trade secrets, inventions, mask works, ideas, processes, formulas, source and 4 object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques 5 (hereinafter collectively referred to as "Inventions"); and (b) information regarding plans for research, development, new products, marketing and 6 selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers; and (c) information 7 regarding the skills and compensation of other employees of the Company. 8 (See id. Ex. H ¶ 1.2) 9 In seeking summary judgment on Count II, Lemarié contends the above-quoted 10 provisions are void under § 16600 of the California Business & Professions Code and, 11 even if those provisions are not void, the relief plaintiffs seek is not available under state 12 contract law. 13 1. Business & Professions Code § 16600 14 Section 16600 of the California Business & Professions Code provides that "every 15 contract by which anyone is restrained from engaging in a lawful profession, trade, or 16 business of any kind is to that extent void." See Cal. Bus. & Prof. Code § 16600.

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Proofpoint, Inc. v. Vade Secure, Incorporated, (N.D. Cal. 2021).

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