United States District Court, D. Massachusetts
ICONICS, INC. Plaintiff,
SIMONE MASSARO, CHRISTOPHER VOLPE, VENTO INDUSTRIES, INC., BAXENERGY GmbH And BAXENERGY ITALIA S.r.L., Defendants.
MEMORANDUM AND ORDER
DOUGLAS P. WOODLOCK UNITED STATES DISTRICT
case involves two sets of business disputes, tied together by
a common cast of characters and allegations concerning
misappropriation of plaintiff’s intellectual property.
ICONICS is a software company which produces HMI/SCADA (Human
Machine Interface/Supervisory Control and Data Acquisition)
systems. HMI/SCADA systems collect data from a machine and
transmit that data in a useful, visualized form to client
computers. For example, a SCADA system might be connected to
a boiler in a factory, allowing a factory operator to see and
control data such as water levels or temperature.
process necessarily requires customization - by either
ICONICS itself or by middlemen known as “system
integrators” -to the particular machines being
monitored and controlled. Certain aspects of SCADA systems
are standardized under the “OPC” interoperability
standard. ICONICS’s software includes the GENESIS32,
GENESIS64, and BizViz products.
Simone Massaro is a former ICONICS employee. Beginning in
late 2007, while still employed by ICONICS, Massaro started
helping another former ICONICS employee, Chris Volpe, with
software development for Volpe’s company, Volpe
Industries. The remaining defendants, BaxEnergy GmbH,
BaxEnergy Italia, S.r.L., and Vento Industries, Inc. are
entities with which Massaro or Volpe was affiliated after
Massaro left ICONICS.
Industries worked in the surveillance camera business and
sought to develop its own surveillance software. This
software development project, with which Massaro became
involved, was known as Project Foxtrot. Massaro has admitted
that while still employed by ICONICS, he took ICONICS source
code without permission for use in Project Foxtrot. ICONICS
first learned that Massaro was using its code in Project
Foxtrot in August, 2008 and confronted him on September 16,
2008. Massaro resigned from ICONICS on January 6, 2009.
wake of the Project Foxtrot initiative, ICONICS commenced
state and federal litigation. In December 2009, the Suffolk
Superior Court issued a declaratory judgment holding that
ICONICS owned all of Massaro’s interest in Project
Foxtrot, due to employment contracts between ICONICS and
Massaro. ICONICS, Inc. v. Volpe Industries, Inc.,
No. 09-0361-BLS2 (Mass. Super. Ct. Dec. 14, 2009). In 2010,
Volpe Industries filed for bankruptcy. Those bankruptcy
proceedings were marred by efforts to conceal the activities
of Massaro and Volpe:
It is undisputed that in the bankruptcy proceedings, Vince
Volpe, the brother of Chris, set up a shell company to
purchase and then wipe Volpe Industries' servers. The
Bankruptcy Court expressed concern that it had been defrauded
by this purchase and when ICONICS ultimately acquired those
servers, found that 80, 000 files had been deleted. It is
also undisputed that Chris Volpe testified in the state court
proceedings that he never knew that Massaro was using ICONICS
software in his Project Foxtrot work but also stated in his
deposition for this proceeding that he was in fact aware.
ICONICS alleges, but defendants dispute, that in the state
court litigation, Massaro and Volpe Industries intentionally
withheld part of the source code to hide the fact that he had
copied it from ICONICS.
ICONICS, Inc. v. Massaro, No. CV
11-11526-DPW, 2016 WL 199407, at *2 (D. Mass. Jan. 15, 2016).
Energy Studio Pro
Massaro moved on to a new enterprise. Two weeks after his
resignation, Massaro began communicating with Rüdiger
Bax, of the system integrator firm Bax Engineering GmbH,
about possible work. By June 2009 - ICONICS contends earlier
- Massaro’s new consulting company was working with Bax
Engineering on a new wind power software product called Bax
Wind Power. In February of 2010, Bax and Massaro formed a new
German company, defendant BaxEnergy GmbH, to run renewable
energy operations, as well as an Italian subsidiary defendant
BaxEnergy Italia SRL (the two companies will be referred to
herein as BaxEnergy). The development history of Bax Wind
Power begins in February 2010, after the formation of
BaxEnergy, leaving a potential gap in the record regarding
how the product was coded in the early stages of its
time, BaxEnergy developed the Bax Wind Power product into a
new product, still focused on wind power, called Energy
Studio Pro (“ESP”). ESP includes a SCADA
component, which for one of its customers is provided by
ICONICS and for other customers is provided by an ICONICS
competitor. The Volpe brothers were also involved with
BaxEnergy. Vince Volpe eventually purchased Mr. Bax’s
majority share of BaxEnergy. Chris Volpe founded a new
company, defendant Vento Industries, Inc., which operates as
an American partner or division of BaxEnergy providing sales
and support in the American market.
contends, among other things, that ESP was developed using
misappropriated ICONICS code, provided by Massaro, violating
both copyright protection and trade secrets law. There is no
dispute that at least some ICONICS code appears in ESP. A
webHMI.js can be found on the BaxEnergy source code
repository. Most of that code was also copied into a
different file titled ScadaAutomation.js. WebHMI.js allows
clients to view relevant data visualizations over a web
browser. That said, plaintiff’s technical expert opined
that webHMI.js is the only directly copied ICONICS
code he found in Energy Studio Pro. ICONICS alleges
additional copyright and trade secret violations based on the
development process itself.
original complaint in this proceeding was filed in August
2011, alleging only one count (copyright infringement)
against only Massaro, for claims related to Project Foxtrot.
ICONICS has amended its complaint twice, in May 2013 and
April 2014, and now pleads ten causes of action against the
current list of defendants. Almost immediately after this
litigation began, discovery disputes arose. By the summer of
2014, ICONICS was complaining - as it still does - that it
was being improperly denied access to BaxEnergy code, while
defendants were complaining - as they still do - that ICONICS
had not properly identified its trade secrets with
specificity. These issues, which have been litigated
aggressively, have required consistent judicial oversight and
intervention since then, as have other discovery matters.
They remain intertwined with the instant summary judgment
motions, both on the merits and as a continuing source of
contention between the parties and their counsel.
2014, a separate settlement was reached that resolved all
claims against Vince Volpe. He is no longer a defendant in
this matter. Otherwise, motion practice has failed to narrow
the scope of this litigation substantially. On September 17,
2014, by oral order, I denied motions to dismiss by BaxEnergy
and by Chris Volpe (with the exception of dismissing on
preemption grounds state unfair business practice claims
concerning copyright infringement) and denied
defendants’ motion to strike trade secret claims.
this year, on defendant’s motion for partial summary
judgment, I entered an order denying the motion in part (as
to Massaro) on statute of limitations defenses and granting
the motion in part (as to the trade secrets, intentional
interference with contractual relations and DMCA claims
against Christopher Volpe, and as to the copyright
infringement claims related to Volpe Industries).
ICONICS, Inc. v. Massaro, No. CV
11-11526-DPW, 2016 WL 199407, at *1 (D. Mass. Jan. 15, 2016).
before me are two separate summary judgment motions brought
by defendants, one concerning plaintiff’s civil RICO
and civil conspiracy claims and one concerning all other
claims insofar as they relate to Energy Studio Pro (but
focused almost entirely on the intellectual property issues).
Notably, this means that summary judgment is not sought as to
the non-BaxEnergy defendants for eight of ten counts. For its
part, Plaintiff has moved for summary judgment on its claims
under the Digital Millennium Copyright Act
(“DMCA”). In addition, there are three motions to
strike expert witness testimony under Daubert, two
from plaintiff, one as to defendant’s technical expert,
Arthur Zatarain, and the other as to defendant’s
damages expert, Bradford J. Kullberg, and one from defendants
(as to Jimmy S. Pappas, plaintiff’s damages expert).
Finally, ICONICS has a pending motion to compel discovery and
for sanctions based on long-standing discovery controversies.
Memorandum and Order I consider and reject all summary
judgment motions with respect to the issues presented except
those raising trade secret claims, which I reserve, awaiting
the development of additional initiatives to clarify the
trade secrets at issue. I will allow Plaintiff’s motion
to compel as a predicate for further developments and
clarification of the disputed trade secrets. I will treat as
moot the motions to strike the expert witness submission as
to trade secrets in light of such further trade secret claim
clarification initiatives. I will reserve the motions to
strike the damages experts until further clarification of the
STANDARD OF REVIEW
Rule 56, I may only grant summary judgment if there is no
genuine dispute of material fact and if the undisputed facts
demonstrate that the moving party is entitled to judgment as
a matter of law. Fed. R. Civ. P. 56(a); Carmona
v. Toledo, 215 F.3d 124, 132 (1st Cir. 2000).
An issue is genuine if it “may reasonably be resolved
in favor of either party.” Vineberg v.
Bissonnette, 548 F.3d 50, 56 (1st Cir. 2008). A fact
is material if it could sway the outcome of the litigation.
Id. In determining whether genuine disputes of
material fact exist, all reasonable inferences must be drawn
in the non-movant’s favor. Id. Once the moving
party has carried its burden, the burden shifts to the
non-moving party, which must provide specific and supported
evidence of disputed material facts. LeBlanc v.
Great Am. Ins. Co., 6 F.3d 836, 841 (1st Cir. 1993).
The non-moving party “may not rest upon mere allegation
or denials” and must “establish a trial-worthy
BAXENERGY COPYRIGHT CLAIMS
has alleged both direct copying - specifically, in the form
of the single webHMI.js file - and indirect copying in which
defendants used ICONICS code while developing the Energy
Studio Pro software but ultimately did not retain that code
in ESP. Defendants raise two general arguments against
ICONICS’ copyright claims. First, they argue that the
copyright allegations are extraterritorial and therefore
outside the scope of domestic copyright law. Second, they
argue that the copyright registrations covering
ICONICS’ products do not cover the relevant,
potentially copied code, barring an infringement suit. With
respect to allegations of indirect copying, defendants argue
that the evidence of infringement is only circumstantial and
refuted by direct record evidence. As for WebHMI.js, where
copying is admitted, defendants assert that the file was
either permissibly used under license or copied in a de
minimis fashion. I address these contentions in turn.