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X CA, Inc. v. Simple.Com

May 26, 2009

X CA, INC., PLAINTIFF,
v.
SIMPLE.COM, INC., WIRED SOLUTIONS, LLC., A REVOKED NEVADA LLC, DEFENDANTS.



The opinion of the court was delivered by: Hurley, Senior District Judge

MEMORANDUM & ORDER

Plaintiff CA Inc. ("CA"), formerly known as Computer Associates International Inc., commenced this action seeking a declaratory judgment that three patents owned by Defendants Simple.com, Inc. and Wired Solutions, LLC (collectively "Simple") are invalid, unenforceable, and not infringed by CA. Simple has counterclaimed for infringement. Presently before the Court is Simple's motion for summary judgment dismissing CA's common law unfair competition claim. For the reasons stated below, Simple's motion is granted.

BACKGROUND

I. The Patents At Issue

A complete factual recitation regarding this matter is contained in this Court's Claim Construction Memorandum & Order, dated March 5, 2009, familiarity with which is presumed.*fn1 For present purposes it suffices to state that the three patents at issue relate to computer technology and are U.S. Patent Nos. 6,272,493, 6,434,563, and 6,535,882 (the '493, '563, and '882 Patents respectively). In general, the subject matter claimed in the '493, '563, and '882 Patents is meant to provide, what the patentee terms, a windowed content manifestation environment ("CME"). An exemplary CME is displayed below in Figure 1, a copy of Figure 2B, from the '493 Patent.

Figure 1

According to the patentee, this was an improvement over pre-existing technology because the claimed invention lets one open, view, resize, minimize, move and otherwise use multiple window objects on the same web browser screen, without: (1) triggering a refresh;*fn2 (2) having to go back and forth from one web page to another; or (3) requiring the use of another web browser.

For example, a user could open, resize, move, close or otherwise manipulate the "NEWS" and "TRAVEL" windows, shown above without forcing the entire CME to be refreshed. The focus now shifts to the factual background pertinent to Simple's motion for summary judgment.

II. Factual Background

In order to address the issues raised by Simple's motion for summary judgment, it is necessary to provide background regarding: the Special Master's report and recommendation on inequitable conduct (Dkt. No. 555 ("Inequitable Conduct R&R")), the parties' legal maneuvering related to CA's unfair competition claim, and the substance, timing, and scope of Simple's comments in the marketplace. Each will be detailed below seriatim.

A. The Inequitable Conduct R&R

One of the claims asserted by CA in the instant action is that the patents in suit should be declared unenforceable because of Simple's inequitable conduct before the United States Patent and Trademark Office ("PTO"). (See Pl.'s Third Am. Compl. (Dkt. No. 631), ¶¶ 35-40.) CA's inequitable conduct claim relies heavily on a series of emails between Sandro Pasquali, the named inventor in the '493 and '882 Patents and a co-inventor of the '563 Patent, David Warga, Simple's outside counsel, and Erik Cherdak, the attorney who prosecuted the patents in suit. (See Inequitable Conduct R&Rat 30-31; see also id. at 28-35 (providing the chronology of events related to CA's charge of inequitable conduct).) In one of his emails, Pasquali stated that "based on the arrival of sites like www.desktop.com and www.webos.com it is clear that . . . what I developed[, the subject matter claimed by the patents in suit,] was not original." (Id. at 31 (providing part of the email exchange between Warga, Pasquali, and Cherdak).) In an Order dated March 9, 2009, the Court adopted the Special Master's recommendation and denied Simple's motion for summary judgment on the issue of inequitable conduct. (Dkt. No. 822; see Inequitable Conduct R&R at 68 (denying Simple's motion for summary judgment seeking to strike CA's inequitable conduct claim).) For present purposes it is sufficient to note that Simple's motion for summary judgment was denied because CA raised genuine issues of material fact as to whether Cherdak satisfied his "duty to investigate" the webos.com web page, mentioned in Pasquali's emails as invalidating prior art, and whether he faxed a copy of Pasquali's emails to the PTO in a timely manner without any intent to deceive. (Id. at 66-68.)

B. The Unfair Competition Claim and the Parties' Legal Maneuvering

The focus now shifts to CA's assertion of the unfair competition claim and the parties' legal maneuvering related thereto.

By Memorandum & Order dated September 30, 2006, the Court adopted the Special Master's recommendation that CA be granted leave to amend its complaint to assert two new claims: the aforementioned inequitable conduct claim and a claim for unfair competition under New York common law. On October 24, 2006, CA filed its amended pleadings. (See Pl.'s Third Am. Compl., Dkt. No. 631, ¶¶ 41-49.) As pleaded, the unfair competition cause of action alleges that Simple made false representations to the marketplace and filed infringement claims against CA with the knowledge the patents at issue are invalid, which acts were likely to deceive a substantial segment of the market for CA's products and influence purchasing decisions, as well as result in a loss of business to CA.

Thereafter, on July 3, 2007, Simple served CA with their fifth set of requests for production ("Simple's 5th Produc. Req.", Dkt. No. 802-10, at 2-3) as well as a list of topics related to CA's unfair competition claim that they wished to depose CA about (Dkt. No. 802-11 ("Palen Letter")). Among Simple's production requests were: (1) all documents related to what Simple termed "Illegal Accounting Practices"*fn3 including documents relating to "the illegal acts, indictments, and guilty pleas of [CA's] current and former executives"; (2) all documents "relating to [CA's] settlement agreement with the SEC and DOJ"; and (3) all documents from 2001 onwards "including but not limited to customer complaints, internal memos, surveys, studies, and reports, that refer or relate to [CA's] reputation, character, standing or perception in the marketplace . . . ." (Simple's 5th Produc. Req.at 2-3.) Some of the topics Simple sought to depose CA about include:

(1) the government's investigation of CA's alleged Illegal Accounting Practices;

(2) CA's settlement with the DOJ and SEC relating to its allegedly Illegal ...


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