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Arvest Bank v. RSA Security Inc.

United States District Court, D. Massachusetts

September 27, 2017

ARVEST BANK, Plaintiff,
v.
RSA SECURITY INC., RSA SECURITY LLC, and EMC CORPORATION, Defendants.

          MEMORANDUM AND ORDER

          Indira Talwani United States District Judge

         I. Introduction

         Plaintiff Arvest Bank (“Arvest”) entered into a software license agreement[1] with Defendants RSA Security, Inc., RSA Security LLC, and EMC Corporation's (collectively, “RSA”) granting Arvest a license to use RSA's software as part of Arvest's online banking business. This action was commenced after Arvest settled a patent infringement lawsuit brought against Arvest by non-party Secure Axcess, LLC (the “Secure Axcess litigation”). In the first three claims for relief, Arvest contends that RSA breached its contractual duties to defend and to indemnify Arvest, as well as the implied covenant of good faith and fair dealing. Compl. [#1]. Arvest also claims unjust enrichment. Id. Now before the court is RSA's Motion for Summary Judgment [#73], which argues that Arvest's three contract-based claims are time-barred by the Agreement's two-year limitation of actions, and that Arvest's unjust enrichment claim is barred under Massachusetts law because the Agreement governs the relationship between the parties.

         Arvest cross-moved for partial summary judgment as to RSA's affirmative limitations defense to Arvest's indemnification claim. Mot. Partial Summ. J. [#89].[2]

         For the following reasons, RSA's Motion [#73] is ALLOWED IN PART as to the contractual duty to defend and unjust enrichment, and DENIED as to the contractual duty to indemnify. Arvest's Motion [#89] is ALLOWED IN PART as to the duty to indemnify.

         II. Facts

         In December 2006, the parties executed the Agreement, by which RSA granted Arvest a license to run and use “Licensed Software, ” described at Exhibit A to the Agreement. Agreement ¶ 3(a). The Agreement includes an “Intellectual Property Indemnity” provision (“Indemnity Provision”), which provides in relevant part that:

RSA shall defend, indemnify and hold Licensee . . . harmless from and against all claims, actions, judgments, awards, expenses (including reasonable attorneys' fees) and awarded damages assessed against Licensee or agreed to be paid by RSA in settlement that arise from a claim that the current, unaltered release of the Licensed Software used in accordance with the terms of this Agreement infringes a third party copyright, trademark or U.S. patent, as long as Licensee gives RSA (1) prompt written notice of such claim or action; (2) the right to control and direct the investigation, preparation, defense, and settlement of the action; and (3) reasonable assistance and information with respect to the claim or action.

Id. ¶ 11(d)(1). The Agreement contains the following limitation of liability:

Neither party shall bring any action, whether in contract or tort, including negligence, arising out of or in connection with this Agreement, more than two years after the cause of action has accrued.

Id. ¶ 13(d).

         On March 3, 2011, Arvest's counsel notified RSA that Arvest had been sued by Secure Axcess, stating that:

[RSA] has an obligation to defend, indemnify and hold Arvest harmless against any and all claims that arise from a claim that the licensed software infringes a U.S. patent. This letter constitutes written notice of the claims against Arvest. Please confirm that you received this letter and that RSA will comply . . . .

[#77-12].

         The next day, March 4, 2011, RSA's counsel responded, stating:

We have studied the patent-in-suit, and have concluded that RSA's “site-to-user” authentication feature clearly does not infringe, nor does any system that utilizes it in its intended manner. . . . [F]urther, our product is only one piece of the system implementation, so it's not clear that the claim is against RSA's product.
However, we do confirm that if it becomes clear that the claim is against RSA's product, RSA will live up to and fulfill its indemnity obligations under applicable agreements. Further, we will not just stand by, but ...

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