Quest v. Centrify Complaint

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See: http://ndcal.blogspot.com/2010/08/centrify-would-like-to-move-patent.html. Complaint in Quest v. Centrify and Likewise.

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Case 2:10-cv-00859-TS Document 2

Filed 08/27/10 Page 1 of 11

BRENT O. HATCH (5715) [email protected] HATCH, JAMES & DODGE, PC 10 West Broadway, Suite 400 Salt Lake City, UT 84101 Telephone: (801) 363-6366 Facsimile: (801) 363-6666 THOMAS J. FRIEL, JR. (pro hac vice pending) [email protected] COOLEY LLP 101 California Street, 5th Floor San Francisco, CA 94111-5800 Telephone: (415) 693-2000 Facsimile: (415) 693-2222 WAYNE O. STACY (pro hac vice pending) [email protected] ORION ARMON (pro hac vice pending) [email protected] COOLEY LLP 380 Interlocken Crescent, 9th Floor Broomfield, CO 80021-8023 Telephone: (720) 566-4000 Facsimile: (720) 566-4099 Attorneys for Plaintiff ______________________________________________________________________________ UNITED STATES DISTRICT COURT DISTRICT OF UTAH, CENTRAL DIVISION QUEST SOFTWARE, INC., Plaintiff, v. CENTRIFY CORPORATION and LIKEWISE SOFTWARE, INC., Defendants.

COMPLAINT
(Jury Demanded) Case No. 2:10-cv-00859-TS Judge Ted Stewart

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Plaintiff Quest Software, Inc. (“Quest”) alleges against Defendants Centrify Corporation and Likewise Software, Inc. (collectively, “Defendants”) as follows: JURISDICTION 1. This action arises under the Patent Laws of the United States, 35 U.S.C. § 101, et

seq. The Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338(a). 2. The Court has personal jurisdiction over Defendants because they regularly

conduct business in the State of Utah and in this district, including selling products and/or services to individuals in Utah and in this judicial district that infringe one or more claims of the patent-in-suit in this forum. Each Defendant has established minimum contacts with this forum such that the exercise of jurisdiction over these Defendants would not offend traditional notions of fair play and substantial justice. VENUE 3. Each of the Defendants has committed acts within this judicial district giving rise

to this action, including making, using, offering for sale, selling, or providing infringing products, services, and support to customers in this district, and actively soliciting and doing business in this judicial district. Venue is proper in this judicial district pursuant to 28 U.S.C. §§ 1391(b) and (c), and 28 U.S.C. § 1400(b) because defendants may be found in, and have committed infringement in, this district.

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THE PARTIES 4. Quest Software, Inc. is a Delaware corporation with a principal place of business

at 5 Polaris Way, Aliso Viejo, California 92656. Quest Software simplifies and reduces the cost of managing IT across physical, virtual and cloud environments for more than 100,000 customers worldwide. Quest’s innovative solutions make solving the toughest IT management problems easier, enabling customers to save time and money. 5. Defendant Centrify Corporation is a Delaware corporation with its principal place

of business located at 785 N. Mary Avenue, Suite 200, Sunnyvale, California 94085. Centrify sells or offers for sale, licenses, offers to license, imports, and supports infringing products and services in this jurisdiction and throughout the United States, including its Centrify DirectControl software suite and reasonably similar products and services. 6. Defendant Likewise Software, Inc. is a Delaware corporation with its principal

place of business located at 15395 SE 30th Place, Suite 140, Bellevue, Washington 98007. Likewise sells or offers for sale, licenses, offers to license, imports, and supports infringing products and services in this jurisdiction and throughout the United States, including its Likewise Enterprise software suite and reasonably similar products and services. THE PATENT-IN-SUIT 7. On November 10, 2009, U.S. Patent No. 7,617,501 (the ‘501 Patent) entitled

“Apparatus, System, and Method for Managing Policies on a Computer Having a Foreign Operating System” issued to Matthew T. Peterson and Daniel F. Peterson, who live in the Salt Lake City, Utah metropolitan area. A true and correct copy of the ‘501 Patent is attached hereto as Exhibit 1. -3-

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8.

Quest has been the assignee and sole holder of all right, title, and interest in the

‘501 Patent since its issuance, including all rights to enforce the ‘501 Patent and to collect past and future damages for infringement. 9. Quest has complied with the marking requirements of 35 U.S.C. § 287. FACTUAL ALLEGATIONS Company Background and Technology Overview 10. Quest’s Authentication Services software product, including the Group Policy

module, is covered by claims of the ‘501 Patent. Quest acquired the Authentication Services product and the ‘501 patent in May 2005 when it purchased Vintela, Inc. Vintela was founded and located in Lindon, Utah. Since the acquisition, Quest has maintained the software development team that supports the patented Quest Authentication Services product suite in Lindon, Utah. Presently, Quest’s software development team in Lindon comprises approximately 31 employees. 11. Vintela, Inc. was founded in September 2003 with the goal of providing easily-

deployed software solutions that allow users of Microsoft-based systems to interoperate and integrate with UNIX and Linux-based computer systems. 12. Two of the software products that Vintela developed to support interoperability

between Microsoft-based and Unix or Linux-based computer systems were Vintela Authentication Services (VAS) and Vintela Group Policy (VGP).1 Vintela Authentication Services integrates native Unix and Linux authentication interfaces with Microsoft’s Active Directory. Vintela Group Policy allows IT administrators to apply policies from Microsoft
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After Quest acquired Vintela it eventually renamed Vintela Authentication Services as “Quest Authentication Services.” -4-

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Active Directory to Unix and Linux systems that are joined to Active Directory Domain with the VAS product. When it was first introduced, Vintela Group Policy was a standalone add-on module to the Vintela Authentication Services product. When Authentication Services Version 3.0 was released in December 2005, Vintela Group Policy was included with the product. Since December 2005, the combined Authentication Services and Group Policy products have been referred-to collectively as Vintela Authentication Services.2 13. On July 9, 2004, Matthew T. Peterson and Daniel K. Peterson, employees of

Vintela, filed U.S. Patent Application No. 10/888,845. The ‘845 application eventually issued as the ‘501 Patent. Quest has eight additional patent applications pending before the United States Patent and Trademark Office that relate to products and technologies developed by Vintela. 14. Vintela’s Group Policy product was the first software product of its kind that

allowed Unix and Linux systems to be managed using Microsoft Windows policy management tools. 15. When Vintela Group Policy was introduced to the marketplace in September

2004, it enjoyed immediate commercial success and wide recognition as a groundbreaking product. For example, the product (and the broader Vintela Authentication Services suite) was recognized by Network World magazine as a “Category Breaker” in 2005. Soon after Vintela Group Policy was released, competitors rushed to copy its innovative functionality.

2

Vintela Authentication Services was later re-branded as Quest Authentication Services. -5-

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Defendants’ Infringement 16. Centrify and Likewise offer substantially similar infringing products that copy the

patented features of Quest’s Authentication Services product suite, and specifically, the functionality of the Group Policy module. 17. In early 2004, Tom Kemp, Centrify’s current CEO, contacted Vintela’s CEO on

behalf of Mayfield Fund, a California-based venture capital company. Kemp, claiming to be a representative of Mayfield and without disclosing that he actually was in the process of organizing Centrify to compete with Vintela, expressed interest in facilitating an investment by the Mayfield Fund in Vintela, and peppered Vintela’s CEO with questions about Vintela’s business plan, product offerings, and strategies. Vintela’s CEO described the functionality offered by the Authentication Services suite of products, including the Group Policy module, and the market opportunity the software addressed. 18. Tom Kemp never followed-up with Vintela concerning a venture investment.

Instead, a few months after the conversation, Vintela learned that Kemp was putting together a company named Centrify specifically to compete with Vintela. 19. The products that Centrify eventually brought to market copied Vintela’s.

Centrify’s CEO Kemp even issued statements to the marketplace about Centrify’s products that copied descriptions that Vintela’s CEO had made to Kemp during their 2004 conversation about Vintela’s Authentication Services products. 20. In September 2004—when Vintela Group Policy was publicly released—Centrify

was still working on the first version of its infringing DirectControl product. After Vintela released Group Policy, Centrify postponed the release date of its product into 2005 so that it -6-

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could analyze and copy the functionality in the Authentication Services suite. When Centrify DirectControl was eventually released in 2005, its functionality copied the functionality of Vintela Group Policy. 21. Likewise, which was previously known as Centeris, introduced its Management

Suite in 2006. It, too, copied the functionality of Vintela’s Group Policy product and infringed the ‘501 Patent. 22. Quest has lost sales, sold fewer services and ancillary products, lost market share,

suffered price erosion, and had its reputation and good will damaged as a result of Centrify and Likewise’s copying of the patented features in the Authentication Services suite of products.

Quest Is Suffering Irreparable Harm 23. Quest has suffered, is suffering, and will continue to suffer irreparable harm as a

result of Centrify and Likewise’s infringement of the claims of the ‘501 Patent. Quest competes directly with Centrify and Likewise. Centrify and Likewise’s direct and contributory infringement and inducement of customers’ infringement of the ‘501 Patent have caused Quest to lose sales and market share, damaged Quest’s goodwill in the marketplace, put pressure on Quest to reduce the prices it charges for products and services covered by the ‘501 Patent, damaged its ability to sell associated products and services, and made it more difficult for Quest to establish and maintain long-term customer relationships. Quest’s position in the marketplace will continue to be irreparably harmed unless the Court permanently enjoins each Defendant from continuing to infringe the ‘501 Patent.

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24.

Permanent injunctions against further infringement by Centrify and Likewise are

warranted because remedies available to Quest at law are insufficient to compensate Quest for the harm Defendants’ infringement has caused, and will continue to cause, to Quest. In addition, Centrify and Likewise may lack sufficient assets to satisfy a money judgment against them. 25. The balance of hardships between Quest and Defendants favors issuance of a

permanent injunction against Defendants. Quest would suffer additional irreparable harm if Defendants were allowed to continue infringing Quest’s rights in the ‘501 Patent. Quest has invested large amounts of time and money in developing the products that are covered by the ‘501 Patent. Further, Quest differentiates itself in the marketplace and creates goodwill for its products through its inventive activities. If Quest’s direct competitors are allowed to compete by copying its products, Quest’s market share, goodwill, and reputation will be permanently harmed. 26. The public interest in upholding the patent system would be served by

permanently enjoining Defendants’ infringement. The product features and capabilities that Quest requests be enjoined by the Court would not be withdrawn from the public if an injunction is entered. Quest’s own award-winning and patented Authentication Services product is, and will remain, available to customers who desire to lawfully benefit from the technology claimed in the ‘501 Patent.

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CLAIM FOR RELIEF (Infringement of U.S. Patent No. 7,617,501) 27. Quest realleges and incorporates by reference paragraphs 1-26 of this Complaint

as if fully set forth herein. 28. Centrify, in making, using, selling, offering for sale, importing into the United

States and/or exporting from the United States its DirectControl product and reasonably similar products or services, has infringed and continues to infringe one or more claims of the ‘501 Patent under 35 U.S.C. § 271, including but not limited to exemplary claims 1-4 and 6 of the ‘501 Patent. Centrify further actively induces infringement of the ‘501 Patent through, for example, providing customers with instructions and support for DirectControl and other reasonably similar products or services. Centrify contributorily infringes the ‘501 Patent by making DirectControl and reasonably similar products or services, which have no substantial non-infringing uses, and which Centrify sells to its customers with knowledge of the ‘501 Patent. 29. Likewise, in making, using, selling, offering for sale, importing into the United

States and/or exporting from the United States its Likewise Enterprise product and reasonably similar products or services, has infringed and continues to infringe one or more claims of the ‘501 Patent under 35 U.S.C. § 271, including but not limited to exemplary claims 1-4 and 6 of the ‘501 Patent. Likewise further actively induces infringement of the ‘501 Patent through, for example, providing customers with instructions and support for Likewise Enterprise and other reasonably similar products or services. Likewise contributorily infringes the ‘501 Patent by making Likewise Enterprise and reasonably similar products or services, which have no substantial non-infringing uses, and which it sells to its customers with knowledge of the ‘501 -9-

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Patent. 30. As a result of the Centrify and Likewise’s infringement of the ‘501 Patent, Quest

has lost profits and suffered irreparable harm, and will continue to lose profits and suffer irreparable harm unless and until Centrify and Likewise are enjoined by this Court from future infringement. 31. Quest is entitled to recover damages from Centrify and Likewise adequate to

compensate for Centrify and Likewise’s infringement. 32. Quest is entitled to obtain injunctive relief to prevent future infringement by

Centrify and Likewise of Quest’s rights in the ‘501 Patent. JURY DEMAND Quest demands a trial by jury on all matters alleged herein in accordance with the Seventh Amendment to the U.S. Constitution and Rule 38(b) of the Federal Rules of Civil Procedure. PRAYER FOR RELIEF WHEREFORE, Quest prays for judgment and relief as follows: 1. 2. Holding that Defendants have infringed U.S. Patent No. 7,617,501. That the Court enter a permanent injunction enjoining each Defendant and its

officers, directors, employees, agents, parent companies, subsidiaries, successors, and assigns, and all other persons acting in concert or participation with each Defendant, including related individuals and entities, business partners, customers, representatives, distributors, dealers, installers, and importers, to prevent each Defendant from committing additional unlawful acts

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that would cause Quest additional irreparable harm, and to prevent Defendants from unjustly benefiting from each of the unlawful actions set forth in Quest’s complaint; 3. That the Court award damages, including past damages under 35 U.S.C. § 287, in

favor of Quest and against each Defendant sufficient to compensate Quest for each Defendant’s infringement of the ‘501 Patent; 4. That the Court find that this case is exceptional and award Quest treble damages

and its reasonable attorney fees and costs pursuant to 35 U.S.C. §§ 284 and 285; 5. That the Court make an assessment of pre- and post-judgment interest in favor of

Quest and against each Defendant; and 6. That the Court grant Quest its fees and costs and such other and further relief as

the Court deems just and proper. Dated: August 27, 2010 HATCH, JAMES & DODGE, PC

/s/ BRENT O. HATCH Brent O. Hatch (5715) Attorneys for Quest Software, Inc.

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