Gen Digital, Inc. v. Sycomp, a Technology Company, Inc.

Background

Gen Digital, formerly known as Symantec, alleged three breach-of-contract claims involving IT-related services. Count 1 alleged that Sycomp breached a written Product Purchase Agreement. Count 2 alleged that North American Systems International breached a written Service Delivery Agreement. Count 3 alleged that Sycomp, North American, and Terix entered into a partly oral and partly written “Solaris Patching Agreement” and then breached it.

Gen Digital alleged that the defendants were required to indemnify it after Hewlett Packard Enterprise Services sought indemnification from Gen Digital in connection with an intellectual-property lawsuit involving Solaris software patches. Both defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not allege enough facts to state a legally plausible claim.

Count 2: North American’s Service Delivery Agreement

North American’s agreement covered on-site hardware support, replacement parts, operating-system telephone support, and telephone technical support. The agreement required indemnification for claims that North American’s services infringed or misappropriated third-party intellectual-property rights.

The court concluded that the agreement did not require North American to provide Solaris patches. Gen Digital did not allege that the services North American agreed to provide—hardware support, part exchanges, or telephone support—infringed Oracle’s intellectual-property rights or formed the basis of the lawsuit against Hewlett Packard Enterprise Services. The court therefore granted North American’s motion to dismiss Count 2. It did not reach North American’s other two arguments concerning that count.

Count 3: The “Solaris Patching Agreement”

As to Sycomp, the court held that the alleged Solaris Patching Agreement was not a separate contract. Sycomp’s written agreement required any modification to be in a written amendment signed by both parties. Gen Digital alleged that the Solaris Patching Agreement was partly oral and did not allege that Gen Digital and Sycomp signed it. The court also concluded that the alleged agreement involved the same general type of IT-support services covered by Sycomp’s existing agreement. It therefore granted Sycomp’s motion to dismiss Count 3 as to Sycomp.

As to North American, the court found that Gen Digital had not adequately alleged the existence of a valid contract. The complaint did not describe each party’s promises, explain when or how North American agreed to be bound, or allege facts showing that North American’s conduct implied an agreement. The court also found that the complaint’s references to the defendants acting as “partners” were conclusory and did not adequately connect North American to the alleged agreement. It therefore granted North American’s motion to dismiss Count 3 as to North American.

Disposition

Judge Charles R. Breyer granted both defendants’ motions to dismiss in full. The court dismissed Counts 2 and 3 without prejudice. The opinion does not state a disposition for Count 1.