Synopsys, Inc. v. Sunlune Corporation

N.D. California

Synopsys, Inc. v. Sunlune Corporation

DecidedJanuary 25, 2024

Docket5:24-cv-00220

StatusUnknown

This text of Synopsys, Inc. v. Sunlune Corporation (Synopsys, Inc. v. Sunlune Corporation) 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.

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Synopsys, Inc. v. Sunlune Corporation, (N.D. Cal. 2024).

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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 SYNOPSYS, INC., Case No. 24-cv-00220-BLF

8 Plaintiff, ORDER GRANTING PLAINTIFF’S MOTION FOR TRO AND ORDER TO 9 v. SHOW CAUSE WHY A PRELIMINARY INJUNCTION SHOULD NOT ISSUE 10 SUNLUNE CORPORATION, [Re: ECF 10] 11 Defendant.

12 13 Plaintiff Synopsys, Inc. filed this suit against Defendant Sunlune Corporation on January 14 11, 2024, asserting claims for violation of the Digital Millennium Copyright Act (“DMCA”) and 15 breach of contract. See Compl., ECF 1. Synopsys develops electronic design automation 16 (“EDA”) software for use in the design, testing, and manufacture of microchips and electronic 17 systems. Sunlune, a chip design company, obtained a license to certain Synopsys EDA software. 18 Synopsys asserts that Sunlune thereafter began using counterfeit license keys to pirate more and 19 different copies of Synopsys EDA software than authorized under the license. 20 On January 19, 2024, Synopsys filed a motion seeking a temporary restraining order 21 (“TRO”), an order to show cause why a preliminary injunction should not issue, and expedited 22 discovery. See Pl.’s Mot., ECF 10. The Court ordered Sunlune to file a response to the motion by 23 January 24, 2024, and set a hearing for January 25, 2024. See Order, ECF 11. Sunlune did not 24 file a response or appear for the hearing, despite receiving notice of the suit, the motion, and the 25 Court’s order setting the briefing deadline and hearing date. See POS, ECF 15. 26 For the reasons stated on the record at the hearing on January 25, 2024, and discussed 27 herein, Synopsys’ motion for a TRO and an order to show cause re preliminary injunction is 1 “[T]he legal standards applicable to TROs and preliminary injunctions are substantially 2 identical.” Babaria v. Blinken, 87 F.4th 963, 976 (9th Cir. 2023) (internal quotation marks and 3 citation omitted). “To obtain a preliminary injunction, a plaintiff must establish (1) a likelihood of 4 success on the merits, (2) a likelihood of irreparable harm in the absence of preliminary relief, (3) 5 that the balance of equities favors the plaintiff, and (4) that an injunction is in the public interest.” 6 Id. (internal quotation marks and citation omitted); see also Winter v. Natural Resources Defense 7 Council, Inc., 555 U.S. 7, 22 (2008). 8 Synopsys has shown a likelihood of success on its claim under the DMCA, which provides 9 in relevant part that “[n]o person shall circumvent a technological measure that effectively 10 controls access to a work protected under this title.” 17 U.S.C. § 1201(a)(1)(A). Synopsys 11 presents evidence that it controls access to its EDA software with a license key system. See 12 Bradley Decl. ¶¶ 3-8, ECF 10-1. Courts in this district have held expressly that Synopsys’ license 13 key system constitutes “a technological measure that effectively controls access” to a protected 14 work under § 1201(a)(1) of the DMCA. See, e.g., Synopsys, Inc. v. InnoGrit, Corp., No. 19-CV- 15 02082-LHK, 2019 WL 4848387, at *7 (N.D. Cal. Oct. 1, 2019). Synopsys presents substantial 16 evidence that Sunlune circumvented Synopsys’ license key system through use of counterfeit 17 license keys, thereby gaining unauthorized access to Synopsys’ EDA software least 11,000 times. 18 See Bradley Decl. ¶¶ 9-16; Roffman Decl. ¶¶ 7-13, ECF 10-2. 19 Synopsys has shown that it will suffer irreparable harm unless the requested TRO is 20 granted, including loss of revenue and harm to business relationships, reputation, and goodwill. 21 See Bradley Decl. ¶¶ 17-23. These types of harm are sufficient to support issuance of a TRO. See 22 Disney Enterprises, Inc. v. VidAngel, Inc., 869 F.3d 848, 866 (9th Cir. 2017). 23 The balance of equities favors issuance of the TRO, as Synopsys will suffer irreparable 24 harm in the absence of a TRO while Sunlune will merely be required to refrain from illegal 25 activity. See DISH Network L.L.C. v. Rios, No. 2:14-CV-2549-WBS-KJN, 2015 WL 632242, at 26 *7 (E.D. Cal. Feb. 13, 2015) ([D]efendant would suffer no cognizable hardship from merely being 27 prevented from engaging in unlawful activity.”). 1 Finally, issuance of the requested TRO is in the public interest, as “the public has a 2 compelling interest in protecting copyright owners’ marketable rights to their work and the 3 economic incentive to continue creating” works. Disney Enterprises, 869 F.3d at 867 (internal 4 quotation marks and citation omitted). 5 Accordingly, Synopsys’ motion for a TRO is GRANTED. Sunlune is ORDERED TO 6 SHOW CAUSE, in writing by February 23, 2024 and at a hearing set for 9:00 a.m. on March 21 7 2024, why a preliminary injunction should not issue. Because this TRO was issued with notice to 8 Sunlune, it is not subject to the 14-day limit applicable to TROs issued without notice. See Fed. 9 R. Civ. P. 65(b)(2); Patino v. Franklin Credit Mgmt. Corp., No. 16-CV-02695-LB, 2017 WL 10 1246853, at *3 (N.D. Cal. Apr. 5, 2017). 11 Federal Rule of Civil Procedure 65(c) provides that “[t]he court may issue a preliminary 12 injunction or a temporary restraining order only if the movant gives security in an amount that the 13 court considers proper to pay the costs and damages sustained by any party found to have been 14 wrongfully enjoined or restrained.” Fed. R. Civ. P. 65(c). The Ninth Circuit has “recognized that 15 Rule 65(c) invests the district court with discretion as to the amount of security required, if any.” 16 Jorgensen v. Cassiday, 320 F.3d 906, 919 (9th Cir. 2003) (internal quotation marks and citation 17 omitted) (italics in original). “The district court may dispense with the filing of a bond when it 18 concludes there is no realistic likelihood of harm to the defendant from enjoining his or her 19 conduct.” Id. The Court finds that there is no realistic likelihood of harm to Sunlune because a 20 TRO would simply enjoin it from refrain from illegal activity. Accordingly, the Court finds it 21 appropriate to issue the TRO without requiring Synopsys to provide security. 22 ORDER 23 (1) Defendant Sunlune Corporation, its representatives, officers, agents, directors, 24 affiliates, servants, employees, and all persons acting in concert or participation with it, including 25 employees and independent contractors, ARE ENJOINED from directly or indirectly accessing, 26 using, transferring, or copying, in any way, any Synopsys software, including but not limited to 27 Synopsys’s IC Compiler II, Fusion Compiler, HSPICE, and PrimeLib applications, without 1 (2) Defendant Sunlune Corporation, its representatives, officers, agents, directors, 2 affiliates, servants, employees, and all persons acting in concert or participation with it, including 3 employees and independent contractors, SHALL immediately preserve all evidence that may 4 || relate to this matter, including all hard copy materials and all computer hard drives and other 5 electronic devices in their possession, custody, or control. 6 (3) Defendant Sunlune Corporation is ORDERED TO SHOW CAUSE why a 7 || preliminary injunction shall not be entered in this matter pending final resolution of the complaint 8 filed against Sunlune.

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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 SYNOPSYS, INC., Case No. 24-cv-00220-BLF

8 Plaintiff, ORDER GRANTING PLAINTIFF’S MOTION FOR TRO AND ORDER TO 9 v. SHOW CAUSE WHY A PRELIMINARY INJUNCTION SHOULD NOT ISSUE 10 SUNLUNE CORPORATION, [Re: ECF 10] 11 Defendant.

12 13 Plaintiff Synopsys, Inc. filed this suit against Defendant Sunlune Corporation on January 14 11, 2024, asserting claims for violation of the Digital Millennium Copyright Act (“DMCA”) and 15 breach of contract. See Compl., ECF 1. Synopsys develops electronic design automation 16 (“EDA”) software for use in the design, testing, and manufacture of microchips and electronic 17 systems. Sunlune, a chip design company, obtained a license to certain Synopsys EDA software. 18 Synopsys asserts that Sunlune thereafter began using counterfeit license keys to pirate more and 19 different copies of Synopsys EDA software than authorized under the license. 20 On January 19, 2024, Synopsys filed a motion seeking a temporary restraining order 21 (“TRO”), an order to show cause why a preliminary injunction should not issue, and expedited 22 discovery. See Pl.’s Mot., ECF 10. The Court ordered Sunlune to file a response to the motion by 23 January 24, 2024, and set a hearing for January 25, 2024. See Order, ECF 11. Sunlune did not 24 file a response or appear for the hearing, despite receiving notice of the suit, the motion, and the 25 Court’s order setting the briefing deadline and hearing date. See POS, ECF 15. 26 For the reasons stated on the record at the hearing on January 25, 2024, and discussed 27 herein, Synopsys’ motion for a TRO and an order to show cause re preliminary injunction is 1 “[T]he legal standards applicable to TROs and preliminary injunctions are substantially 2 identical.” Babaria v. Blinken, 87 F.4th 963, 976 (9th Cir. 2023) (internal quotation marks and 3 citation omitted). “To obtain a preliminary injunction, a plaintiff must establish (1) a likelihood of 4 success on the merits, (2) a likelihood of irreparable harm in the absence of preliminary relief, (3) 5 that the balance of equities favors the plaintiff, and (4) that an injunction is in the public interest.” 6 Id. (internal quotation marks and citation omitted); see also Winter v. Natural Resources Defense 7 Council, Inc., 555 U.S. 7, 22 (2008). 8 Synopsys has shown a likelihood of success on its claim under the DMCA, which provides 9 in relevant part that “[n]o person shall circumvent a technological measure that effectively 10 controls access to a work protected under this title.” 17 U.S.C. § 1201(a)(1)(A). Synopsys 11 presents evidence that it controls access to its EDA software with a license key system. See 12 Bradley Decl. ¶¶ 3-8, ECF 10-1. Courts in this district have held expressly that Synopsys’ license 13 key system constitutes “a technological measure that effectively controls access” to a protected 14 work under § 1201(a)(1) of the DMCA. See, e.g., Synopsys, Inc. v. InnoGrit, Corp., No. 19-CV- 15 02082-LHK, 2019 WL 4848387, at *7 (N.D. Cal. Oct. 1, 2019). Synopsys presents substantial 16 evidence that Sunlune circumvented Synopsys’ license key system through use of counterfeit 17 license keys, thereby gaining unauthorized access to Synopsys’ EDA software least 11,000 times. 18 See Bradley Decl. ¶¶ 9-16; Roffman Decl. ¶¶ 7-13, ECF 10-2. 19 Synopsys has shown that it will suffer irreparable harm unless the requested TRO is 20 granted, including loss of revenue and harm to business relationships, reputation, and goodwill. 21 See Bradley Decl. ¶¶ 17-23. These types of harm are sufficient to support issuance of a TRO. See 22 Disney Enterprises, Inc. v. VidAngel, Inc., 869 F.3d 848, 866 (9th Cir. 2017). 23 The balance of equities favors issuance of the TRO, as Synopsys will suffer irreparable 24 harm in the absence of a TRO while Sunlune will merely be required to refrain from illegal 25 activity. See DISH Network L.L.C. v. Rios, No. 2:14-CV-2549-WBS-KJN, 2015 WL 632242, at 26 *7 (E.D. Cal. Feb. 13, 2015) ([D]efendant would suffer no cognizable hardship from merely being 27 prevented from engaging in unlawful activity.”). 1 Finally, issuance of the requested TRO is in the public interest, as “the public has a 2 compelling interest in protecting copyright owners’ marketable rights to their work and the 3 economic incentive to continue creating” works. Disney Enterprises, 869 F.3d at 867 (internal 4 quotation marks and citation omitted). 5 Accordingly, Synopsys’ motion for a TRO is GRANTED. Sunlune is ORDERED TO 6 SHOW CAUSE, in writing by February 23, 2024 and at a hearing set for 9:00 a.m. on March 21 7 2024, why a preliminary injunction should not issue. Because this TRO was issued with notice to 8 Sunlune, it is not subject to the 14-day limit applicable to TROs issued without notice. See Fed. 9 R. Civ. P. 65(b)(2); Patino v. Franklin Credit Mgmt. Corp., No. 16-CV-02695-LB, 2017 WL 10 1246853, at *3 (N.D. Cal. Apr. 5, 2017). 11 Federal Rule of Civil Procedure 65(c) provides that “[t]he court may issue a preliminary 12 injunction or a temporary restraining order only if the movant gives security in an amount that the 13 court considers proper to pay the costs and damages sustained by any party found to have been 14 wrongfully enjoined or restrained.” Fed. R. Civ. P. 65(c). The Ninth Circuit has “recognized that 15 Rule 65(c) invests the district court with discretion as to the amount of security required, if any.” 16 Jorgensen v. Cassiday, 320 F.3d 906, 919 (9th Cir. 2003) (internal quotation marks and citation 17 omitted) (italics in original). “The district court may dispense with the filing of a bond when it 18 concludes there is no realistic likelihood of harm to the defendant from enjoining his or her 19 conduct.” Id. The Court finds that there is no realistic likelihood of harm to Sunlune because a 20 TRO would simply enjoin it from refrain from illegal activity. Accordingly, the Court finds it 21 appropriate to issue the TRO without requiring Synopsys to provide security. 22 ORDER 23 (1) Defendant Sunlune Corporation, its representatives, officers, agents, directors, 24 affiliates, servants, employees, and all persons acting in concert or participation with it, including 25 employees and independent contractors, ARE ENJOINED from directly or indirectly accessing, 26 using, transferring, or copying, in any way, any Synopsys software, including but not limited to 27 Synopsys’s IC Compiler II, Fusion Compiler, HSPICE, and PrimeLib applications, without 1 (2) Defendant Sunlune Corporation, its representatives, officers, agents, directors, 2 affiliates, servants, employees, and all persons acting in concert or participation with it, including 3 employees and independent contractors, SHALL immediately preserve all evidence that may 4 || relate to this matter, including all hard copy materials and all computer hard drives and other 5 electronic devices in their possession, custody, or control. 6 (3) Defendant Sunlune Corporation is ORDERED TO SHOW CAUSE why a 7 || preliminary injunction shall not be entered in this matter pending final resolution of the complaint 8 filed against Sunlune. Sunlune SHALL file any written response by February 23, 2024, and 9 Synopsys SHALL file any written reply by March 8, 2024. The Court will hold a hearing on the 10 Order to Show Cause at 9:00 a.m. on March 21, 2024, via Zoom. 11 (4) Synopsys SHALL NOT be required to provide security. 12 (5) Synopsys SHALL serve this order on Sunlune via personal service and electronic 5 13 service. The order will take effect upon service of the order on Sunlune. 14 15 Dated: January 25, 2024 16 fp infiicener TH LABSON FREEMAN 17 United States District Judge 18 19 20 21 22 23 24 25 26 27 28

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