Proofpoint, Inc. v. Vade Secure, Incorporated

Background

Vade Secure, Inc. and Vade Secure SASU, collectively called “Vade Secure,” moved for partial summary judgment. Summary judgment is a decision without a trial when the moving party shows there is no genuine dispute over facts that matter to the claim. Proofpoint, Inc. and Cloudmark LLC opposed the motion. Olivier Lemarié filed a notice joining Vade Secure’s motion.

Vade Secure sought summary judgment on certain parts of the plaintiffs’ trade-secret misappropriation claim, Count I, and on all of the plaintiffs’ copyright-infringement claims, Count VI.

Trade-Secret Claim

Vade Secure first argued that the plaintiffs had not identified their five categories of technical trade secrets with enough detail. The court rejected that argument. It found that the plaintiffs’ technical experts had described the five categories in detail and that Vade Secure’s experts had been able to use those descriptions to present detailed arguments about whether the information was publicly known and whether any of the alleged code had been incorporated into Vade Secure’s products. The court therefore denied the motion to the extent it was based on an alleged failure to identify the trade secrets.

Vade Secure separately argued that the plaintiffs lacked evidence concerning its Content Filter product. The plaintiffs relied on an expert report stating that misappropriation could be inferred from code produced in discovery and pointed to evidence they said showed Vade Secure had acknowledged using the information. The court held that the evidence could be challenged at trial, but its strength was for a jury to assess. It found a triable issue—a factual dispute requiring resolution at trial—about whether the Content Filter used the plaintiffs’ trade secrets.

Vade Secure also argued that the plaintiffs lacked evidence concerning the current version of its O365 product after a third party replaced the accused module. The plaintiffs relied on an expert opinion that design choices for the replacement module were derived from knowledge of their trade secrets, as well as evidence about specifications provided to the third-party developer. The court found a triable issue about whether the current O365 version used the plaintiffs’ trade secrets. It concluded that Vade Secure had not shown entitlement to summary judgment on Count I.

Copyright Claim

The plaintiffs’ copyright claim concerned software, related source code, and computer programs covered by four copyright registrations effective in August 2020. Vade Secure argued that the registrations were invalid because the plaintiffs knowingly gave inaccurate information by stating in their applications that the works were unpublished.

The court explained that a copyright-infringement plaintiff must prove ownership of a valid copyright. A registration certificate generally provides initial evidence of validity, but it does not satisfy the registration requirement if the registrant knowingly included inaccurate information that would have caused the Copyright Office to deny registration.

The plaintiffs did not dispute that their applications described the works as unpublished. They disputed whether the works had actually been “published.” The court explained that publication generally involves distributing copies to the public without restrictions on disclosure. Vade Secure relied on licensing agreements with customers, but the court noted that those agreements restricted the recipients’ use and distribution of the software. The court also found that Vade Secure had not shown that the works identified in the copyright applications were among the works covered by the cited agreements. It therefore found a triable issue about publication and concluded that Vade Secure had not shown entitlement to summary judgment on Count VI.

Disposition

Judge Maxine M. Chesney denied Vade Secure’s motion for partial summary judgment. The opinion does not state a final determination of liability on the trade-secret or copyright claims.