Splunk Inc. v. Cribl, Inc.

CourtDistrict Court, N.D. California
DecidedMarch 17, 2023
Docket3:22-cv-07611
StatusUnknown

This text of Splunk Inc. v. Cribl, Inc. (Splunk Inc. v. Cribl, 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
Splunk Inc. v. Cribl, Inc., (N.D. Cal. 2023).

Opinion

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8

10 SPLUNK INC., 11 Plaintiff, No. C 22-07611 WHA

12 v.

13 CRIBL, INC. and CLINT SHARP, ORDER RE MOTION TO DISMISS 14 Defendants.

15 16 17 INTRODUCTION 18 In this intellectual property dispute, alleged infringers move to dismiss patent and 19 copyright claims. For the following reasons, the motion is GRANTED IN PART and DENIED IN 20 PART. 21 STATEMENT 22 Patent and copyright owner Splunk Inc. was founded in 2003 and runs a platform for 23 analyzing large volumes of data. Its flagship product, Splunk Enterprise, “ingests real-time 24 flows of machine data from disparate sources across a distributed environment and indexes that 25 data, regardless of its source or format.” This allows customers to “interact with their data 26 through an interface from which they can generate graphs, reports, alerts, dashboards, and 27 visualizations,” and “monitor and react to their data in real time” (Compl. ¶¶ 1, 17). 1 Splunk Enterprise is customizable. Recognizing that customers use different types of 2 data in different ways, Splunk “supports and encourages third parties to develop on top of the 3 Splunk platform,” “extending the features and functionality.” Through its Technology 4 Alliance Partner (“TAP”) program, Splunk grants partners a license to use its software 5 development tools and a limited license to run Splunk Enterprise software for related 6 development (Compl. ¶¶ 22, 24–25). 7 According to Splunk, some Splunk software is specifically provided for partners to use, 8 such as the “HEC” protocol, which enables partners to send data to, or receive data from, a 9 running copy or “instance” of Splunk Enterprise. Other Splunk software is apparently 10 proprietary, such as the “S2S” or “Splunk-to-Splunk” protocol, which Splunk uses to send data 11 to, or receive data from, Splunk Enterprise and other Splunk software. Splunk alleges that it 12 “does not support use of S2S by third parties, does not publish S2S’s source code, and does not 13 document S2S in a manner that facilitates third-party use of this protocol” (Compl. ¶¶ 31–32). 14 Alleged infringer Cribl, Inc. was founded in 2017 by three former Splunk employees, 15 including alleged infringer and Cribl CEO Clint Sharp. In 2018, Cribl launched its first 16 product, now known as Stream, and joined the TAP program by entering into a TAP agreement 17 with Splunk. Stream and other Cribl products interoperate with Splunk Enterprise. As 18 explained by Splunk with respect to Stream, “Stream sits between a Splunk customer’s sources 19 of machine data and that customer’s Splunk Enterprise instance. Instead of flowing directly 20 from data sources into Splunk Enterprise, data flows into Stream. Stream can then filter this 21 data before it is passed along to Splunk Enterprise, with a goal of reducing the total volume of 22 data a customer adds to its Splunk Enterprise instance” (Compl. ¶¶ 2–3, 39, 46, 51). 23 In November 2021, Splunk terminated Cribl’s membership in the TAP program, thereby 24 terminating the TAP agreement. Roughly one year later, it filed an 85-page complaint against 25 Cribl and CEO Sharp alleging patent infringement, copyright infringement, and other unfair 26 business practices. According to Splunk, Cribl has infringed patents awarded to Splunk for its 27 foundational innovations, developed and marketed its software by making unlicensed copies of 1 against Splunk. Meanwhile, CEO Sharp “actively participated” in the misappropriation. 2 Among other actions, he purportedly posted a derivative of Splunk’s copyrighted source code 3 — “go-S2S” — to his personal webpage on code hosting platform GitHub before leaving 4 Splunk to found Cribl with this source code, replacing Splunk’s copyright headers with a false 5 open-source license to obscure unlawful copying before taking the code offline in December 6 2021 (Compl. ¶¶ 2, 4, 33–37, 42–44, 67; see generally Compl. ¶¶ 119–338). 7 Cribl and CEO Sharp (together, “alleged infringers”) now move to dismiss patent and 8 copyright claims under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Specifically, 9 they move to dismiss: (1) all claims for willful and indirect patent infringement against Cribl; 10 (2) all claims for patent infringement against Cribl based on ineligibility of all asserted patents; 11 (3) all claims for indirect copyright infringement against Cribl and CEO Sharp; and (4) a claim 12 for violation of the Digital Millennium Copyright Act Section 1202 against CEO Sharp. The 13 claims will be taken up in turn. This order follows full briefing and oral argument. 14 ANALYSIS 15 To survive a motion to dismiss, a complaint must plead “enough facts to state a claim to 16 relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A 17 claim has facial plausibility when the plaintiff pleads factual content that allows the court to 18 draw the reasonable inference that the defendant is liable for the misconduct alleged.” 19 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 570). At the pleading 20 stage, a district court “accept[s] all factual allegations in the complaint as true and construe[s] 21 the pleadings in the light most favorable to the nonmoving party.” Knievel v. ESPN, 393 F.3d 22 1068, 1072 (9th Cir. 2005). A “legal conclusion couched as a factual allegation,” however, 23 may be disregarded. Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). 24 1. WILLFUL AND INDIRECT PATENT INFRINGEMENT. 25 Splunk alleges that Cribl committed willful patent infringement and both forms of 26 indirect patent infringement (induced and contributory infringement) of all five asserted 27 patents: U.S. Patent Nos. 9,208,206; 9,762,443; 10,805,438; 10,255,312; and 9,838,467. 1 According to alleged infringers, Splunk’s willful and indirect infringement claims 2 against Cribl should be dismissed because Splunk has not pleaded that Cribl had pre-suit 3 knowledge of the asserted patents, let alone pre-suit knowledge of their infringement. Alleged 4 infringers emphasize that Splunk has failed to assert that it sent Cribl a notice letter, much less 5 that anyone at Cribl was personally aware of the asserted patents. Instead, Splunk “merely 6 implies” that Cribl gained knowledge of the asserted patents because its co-founders and some 7 of its employees previously participated in Splunk’s patent program (Br. 1). According to 8 alleged infringers, this is insufficient when “general knowledge of a patentee’s portfolio does 9 not plausibly allege actual notice of a particular patent” (Br. 1–2). Splunk counters that it has 10 alleged pre-suit knowledge not based on general knowledge of a patent portfolio but rather 11 “extensive factual allegations,” such as: 12 (1) Cribl was founded by ex-Splunkers who managed Splunk software products that practice the patents Cribl infringes (e.g., 13 Compl. ¶¶ 89–93, 116–118); (2) this software is marked as practicing the asserted patents (id. ¶ 114); (3) Cribl has been a 14 customer/user of the software since it was founded (id. ¶¶ 22–29; 69–78); (4) Cribl copied this software (id. ¶ 118); and (4) [sic] 15 Cribl’s founders and employees were aware of Splunk’s patent- marking page when it copied and used this software (id. ¶¶ 116– 16 118). 17 (Opp. 22–23). This order agrees with alleged infringers that such allegations are too attenuated 18 to support a showing of pre-suit knowledge. 19 To establish willful infringement, a patent owner must prove knowledge of the asserted 20 patents and knowledge of their infringement.

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Splunk Inc. v. Cribl, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/splunk-inc-v-cribl-inc-cand-2023.