Judge Allows Trade Secret Counterclaims Against Fujitsu
Fujitsu Limited failed on Thursday to knock out trade secret counterclaims brought by rival optical communications company Tellabs Operations Inc. in patent litigation pending in Chicago federal court. U.S. District Judge James Holderman denied Fujitsu's motion to dismiss the counterclaims with this 13-page decision.
Orrick, Herrington & Sutcliffe represents Japan-based Fujitsu in the litigation. Tellabs, based in Naperville, Ill., is represented by counsel from Sidley Austin.
The ruling is the latest in a long-running patent dispute between the two companies, which make components to optical broadband networks. An Illinois jury found a Fujitu patent valid but not infringed by Tellabs in a related case after a nine-day trial in September 2012 and Holderman has previously found two of Fujitu's patents invalid. (Hat tip: Law360.)
The lawsuit that Holderman weighed in on Thursday was originally filed by Fujitsu in March 2012. The company claimed that versions of Tellabs 7100 optical transport system and its 7100 Nano optical transport system infringed its patents. Tellabs's lawyers at Sidley filed a motion to dismiss in June 2012, claiming that the lawsuit was a brazen attempt to amend patent claims Fujitsu had previously brought in two prior lawsuits.
In January, Holderman partially sided with Tellabs, knocking out claims based on the same patents and same products involved in prior litigation. But he allowed Fujitsu's patent claims in regards to newly accused products to move forward.
In May, Tellabs and Sidley filed their answer to Fujitsui's complaint and added counterclaims that Fujitsu had violated trade secrets laws by obtaining a presentation Tellabs had made about its 7100 products to Verizon—a customer that both Tellabs and Fujitsu had competed for in 2005 but that Tellabs ultimately won. Tellabs also accused Fujitsui of buying Tellabs products and user manuals off eBay while taking measures to hide its identity from the seller. In their highly redacted motion to dismiss the counterclaims, Fujitsu's lawyers at Orrick maintained that Tellabs's allegations were "a thinly veiled attempt to smear the Fujitsu parties by injecting wholly irrelevant facts" and that Tellabs's claims failed meet the legal elements of trade secret misappropriation.
In Thursday's decision Holderman sided with Tellabs on the counterclaims issue. "At this point in the litigation, the court finds that Tellabs has stated a plausible claim for relief against both Fujitsu Limited and [a subsidiary]," he wrote. At the close of his opinion, Holderman encouraged the parties to discuss settlement.
We reached out to Fujitu's lawyer Mark Wine at Orrick, and Sidley's James Bradley, who represents Tellabs. Neither immediately returned our calls.