Synchronoss Technologies v. Dropbox Inc

District Court, N.D. California·Decided February 14, 2020·No. 4:16-cv-00119·Unknown

Opinion

SYNCHRONOSS TECHNOLOGIES, INC., Case No. 16-cv-00119-HSG

Plaintiff, ORDER DENYING DROPBOX INC.'S MOTION FOR ATTORNEYS' FEES v. Re: Dkt. Nos. 435, 436, 449, 461, 465 DROPBOX INC., et al., Defendants.

Pending before the Court is Defendant Dropbox, Inc.’s (“Dropbox”) motion for attorneys’ fees. Dkt. No. 436 (“Mot.”). The parties also filed motions to seal portions of their briefs and accompanying exhibits. Dkt. Nos. 435, 449, 461, and 465. For the reasons detailed below, the Court DENIES Dropbox’s motion for attorneys’ fees and GRANTS in part and DENIES in part the parties’ motions to seal. Plaintiff Synchronoss Technologies, Inc. (“Synchronoss”) filed this action on March 27, 2015, in the Northern District of New Jersey, alleging infringement of United States Patent Nos. 6,671,757 (“the ’757 Patent”), 7,587,446 (“the ’446 Patent”) and 6,757,696 (“the ’696 Patent”). Dkt. No. 1. On December 30, 2015, Defendant’s motion to transfer the case to the Northern District of California was granted. Dkt. Nos. 24, 35. The Court granted Defendant’s motion for summary judgment of non-infringement of the patents-in-suit on June 17, 2019. Dkt. No. 406. A. Motion for Attorneys’ Fees Section 285 of the Patent Act states that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C.A. § 285. The Supreme Court has held strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated. District courts may determine whether a case is exceptional in the case-by-case exercise of their discretion, considering the totality of the circumstances.” Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014) (internal quotation marks omitted). Further, “[t]here is no precise rule or formula for making these determinations, but instead equitable discretion should be exercised in light of the considerations we have identified.” Id. (internal quotation marks omitted). B. Motions to Seal For motions to seal that comply with the local rules, courts generally apply a “compelling reasons” standard. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 677–78 (9th Cir. 2010). “This standard derives from the common law right ‘to inspect and copy public records and documents, including judicial records and documents.’” Id. (quoting Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)). “Unless a particular court record is one traditionally kept secret, a strong presumption in favor of access is the starting point.” Kamakana, 447 F.3d at 1178 (quotation marks and citation omitted). To overcome this strong presumption, the moving party must “articulate compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure, such as the public interest in understanding the judicial process.” Id. at 1178–79 (citations, quotation marks, and alterations omitted). “In general, compelling reasons sufficient to outweigh the public’s interest in disclosure and justify sealing court records exist when such court files might have become a vehicle for improper purposes, such as the use of records to gratify private spite, promote public scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 (quotation marks and citation omitted). The Court must: balance the competing interests of the public and the party who seeks to keep certain judicial records secret. After considering these interests, if the Court decides to seal certain judicial records, it must base its decision on a compelling reason and articulate the factual basis for its ruling, without relying on hypothesis or conjecture. Id. (citations, brackets, and quotation marks omitted). to file under seal must submit “a request that establishes that the document, or portions thereof, are privileged, protectable as a trade secret or otherwise entitled to protection under the law . . . . The request must be narrowly tailored to seek sealing only of sealable material . . . .” Civil L.R. 79- 5(b). Courts have found that “confidential business information” in the form of “license agreements, financial terms, details of confidential licensing negotiations, and business strategies” satisfies the “compelling reasons” standard. See In re Qualcomm Litig., No. 3:17-cv-0108- GPCMDD, 2017 WL 5176922, at *2 (S.D. Cal. Nov. 8, 2017) (observing that sealing such information “prevent[ed] competitors from gaining insight into the parties’ business model and strategy”); Finisar Corp. v. Nistica, Inc., No. 13-cv-03345-BLF (JSC), 2015 WL 3988132, at *5 (N.D. Cal. June 30, 2015). Finally, records attached to motions that are only “tangentially related to the merits of a case” are not subject to the strong presumption of access. Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1101 (9th Cir. 2016). Accordingly, parties moving to seal such records need only meet the lower “good cause” standard of Rule 26(c). Id. at 1097. The “good cause” standard requires a “particularized showing” that “specific prejudice or harm will result” if the information is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th Cir. 2002) (citation and internal quotation marks omitted); see also Fed. R. Civ. P. 26(c). A. Motion for Attorneys’ Fees Dropbox argues that because (1) Synchronoss’s substantive positions were unreasonable after the Court’s claim construction hearing and (2) Synchronoss engaged in misconduct, this case qualifies as an “exceptional case” under 35 U.S.C. § 285. See Mot. at 8–23. i. Strength of Synchronoss’s Substantive Positions Dropbox first argues that Synchronoss’s position on direct infringement of the ’757 Patent and ’446 Patent was objectively meritless because it was “premised on Dropbox’s distribution of software alone.” Mot. at 9. At the claim construction hearing, the Court adopted Plaintiff’s construction of the terms “device” and “system.” It defined the terms as: purpose, and may include hardware components of a computer system, personal information devices, hand-held computers, notebooks, or any combination of hardware which may include a processor and memory which is adapted to receive or provide information to another device; or any software containing such information residing on a single collection of hardware or on different collections of hardware Dkt. No. 168 at 9. Dropbox argues that because the Court held that the claim construction order unambiguously foreclosed Synchronoss’s “software-only” position, Synchronoss’s “choice to maintain its infringement position[] . . . was objectively baseless.” Mot. at 10 (quoting Spitz Techs. Corp. v. Nobel Biocare USA LLC, No. SACV 17-00660 JVS (JCGx), 2018 WL 6164300, at *6 (C.D. Cal. June 7, 2018), aff’d, 773 F. App’x 625 (Fed. Cir. 2019). Synchronoss responds that while the Court disagreed with its construction, Synchronoss understood the phrase “software . . . residing on . . . hardware to be focused on software” and not require that the hardware be made and sold by Dropbox. Opp. at 5. It further argues that this misunderstanding does not make this case exceptional, in contrast to a case like Spitz, in which the court rejected the patentee’s claim construction. Id. at 6. Here, the Court adopted Synchronoss’s proposed claim construction, but disagreed with its interpretation. Id. Although the Court agrees that the “c

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