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T-Jat Systems 2006 Ltd. v. Amdocs Software Systems Limited

United States District Court, S.D. New York

January 29, 2015

T-JAT SYSTEMS 2006 LTD., Plaintiff,
v.
AMDOCS SOFTWARE SYSTEMS LIMITED et al., Defendants.

OPINION AND ORDER

JESSE M. FURMAN, District Judge.

The present case involves a dispute between Plaintiff T-Jat Systems 2006 Ltd. ("T-Jat" or "Plaintiff"), a technology start-up, and Defendants Amdocs Software Systems Limited, Amdocs Limited, and Amdocs, Inc. (together, "Amdocs" or "Defendants"), software providers. To the extent relevant here, T-Jat accuses Amdocs of breaching its contractual obligations with respect to technology that T-Jat had developed by, among other things, using that technology to create a competing application. Pursuant to their agreement, the parties' dispute was submitted to arbitration. On April 18, 2014, the arbitrator (the "Arbitrator") issued an award, finding that Amdocs had inadvertently breached its agreement with T-Jat by sharing T-Jat's technology more broadly than permitted. The Arbitrator, however, rejected T-Jat's other claims, including claims of trade-secret misappropriation and breach of the parties' non-disclosure agreement.

T-Jat moves to vacate the Arbitrator's award to the extent that it rejected those other claims on the ground that the Arbitrator committed manifest disregard of the terms of the parties' contract and of the law. (Docket No. 93). Defendants cross-move to confirm the award and for sanctions. (Docket No. 104). Both Plaintiff and Defendants have also requested that the Court seal certain documents submitted in connection with their cross-motions. For the reasons explained below, Plaintiff's motion to vacate the arbitration award is DENIED, Defendants' cross-motion to confirm the arbitration award is GRANTED, and Defendants' request for sanctions is DENIED. Additionally, Plaintiff's request for redactions is GRANTED, while Defendants' request is GRANTED in part and DENIED in part.

BACKGROUND

T-Jat, which was founded in 2006, created a software application that unifies contact information across multiple communications platforms (the "Unified Contact List" or "UCL"). (Decl. Sanket J. Bulsara Opp'n T-Jat's Mot. To Vacate & Supp. Amdoc's Cross-Mot. To Confirm Arbitration Award & Award Costs & Attorneys' Fees (Docket No. 106) ("Bulsara Decl."), Ex. 1 at 2). Amdocs subcontracted T-Jat to work on a mobile application, called "LoopMe, " that it was developing for another company, Singapore Telecommunications Limited ("SingTel"). ( Id., Ex. 1 at 3-4). In connection with the project, T-Jat and Amdocs entered into an agreement (the "OEM Agreement") granting Amdocs "a [p]erpetual license to use [the UCL] for unlimited number of users for use in SingTel Group operators." (Decl. Baruch Weiss Supp. T-Jat's Mot. To Vacate Portion Arbitration Award (Docket No. 95) ("Weiss Decl."), Ex. B at 1). The parties also signed a Non-Disclosure and Confidentiality Agreement ("NDA"), which was referenced in the OEM Agreement. ( Id., Ex. A, Ex. B at 8). To the extent relevant here, the NDA prohibited Amdocs from disclosing or using T-Jat's "[p]roprietary [i]nformation" without express permission. ( Id., Ex. A at 1-2). It defined proprietary information broadly as "routines, computer programs, documentation, trade secrets, systems, methodology, know-how, marketing and other commercial knowledge, techniques, specifications, plans and other proprietary information associated with and forming part of the proprietary software products of [T-Jat]." ( Id., Ex. A at 1-2).

The details of the parties' underlying dispute are largely irrelevant. For present purposes, it suffices to say that SingTel ultimately initiated a global "soft launch" of LoopMe, without restricting downloads to the SingTel Group of companies or to the geographic locations of those companies; the application was downloaded 755 times. (Bulsara Decl., Ex. 1 at 8). In addition, separate and apart from the LoopMe project, Amdocs developed its own, in-house application that included a unified address book (the "Unified Communications" or "UC" product), which it eventually sold for $7, 500, 000. ( Id., Ex. 1 at 8-9). T-Jat believes that Amdocs created the UC product using its proprietary information in violation of the NDA. (Mem. Law Supp. T-Jat's Mot. To Vacate Portion Arbitration Award (Docket No. 95) ("Pl.'s Mem.") at 10-12).

T-Jat filed this lawsuit on July 31, 2013. (Docket No. 1). It sought, and obtained, a temporary restraining order, alleging, among other things, that Amdocs had breached the NDA, infringed T-Jat's copyrights, and misappropriated its trade secrets in connection with both the LoopMe and the UC products. (Docket No. 1 ¶¶ 1-6; Docket No. 33). Thereafter, T-Jat filed a Notice of Arbitration and Statement of Claim, seeking "compensatory damages of $118 million, punitive damages of $118 million, attorneys' fees and arbitration fees and costs, and a production injunction' to prevent Amdocs from distributing its UC' product." (Bulsara Decl., Ex. 1 at 1). After discovery, eight days of evidentiary hearings, and extensive briefing, the Arbitrator issued his final award (the "Award") on April 18, 2014. ( Id., Ex. 1). The Arbitrator found that Amdocs had breached the OEM Agreement during the soft launch of LoopMe, and awarded T-Jat $2.25 million in damages as a result. ( Id., Ex. 1 at 12-14). The Arbitrator denied T-Jat's other claims, however, including all claims arising out of Amdocs's creation of the UC product. ( Id. Ex. 1 at 11). Specifically, the Arbitrator found that Amdocs had not appropriated T-Jat's trade secrets or infringed its copyright and that the remaining claims failed because they were based on the same set of facts as the trade-secret and copyright claims. ( Id. Ex. 1 at 14-17 & n.7).

Amdocs paid T-Jat $2.25 million pursuant to the Award. On July 18, 2014, however, T-Jat filed a petition to vacate the portion of the Award rejecting T-Jat's NDA, unfair competition, unjust enrichment, and tortious interference claims, as well as the Arbitrator's denial of injunctive relief. (Docket No. 93). Thereafter, Amdocs filed a cross-motion to confirm the Award, and requested that T-Jat be sanctioned in the form of costs and attorney's fees for filing a frivolous petition to vacate the Award. (Docket No. 104).

DISCUSSION

Under Section 9 of the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-16, a reviewing court must confirm an arbitration unless one of the statutory grounds for vacatur or modification is satisfied. See 9 U.S.C. § 9; see also STMicroelectronics, N.V. v. Credit Suisse Sec. (USA) LLC, 648 F.3d 68, 74 (2d Cir. 2011). Section 10 of the FAA, in turn, establishes four instances in which a court may vacate an arbitral award:

(1) where the award was procured by corruption, fraud, or undue means;
(2) where there was evident partiality or corruption in the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the ...

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