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Acacia Communications, Inc. v. ViaSat, Inc.

Superior Court of Massachusetts, Suffolk

March 22, 2018



          Mitchell H. Kaplan, Justice of the Superior Court

         The plaintiff, Acacia Communications, Inc. (Acacia), brings this action against the defendant, ViaSat, Inc. (ViaSat) to recover damages that it allegedly sustained as a result of a letter that ViaSat wrote to an industry standard setting organization, Optical Internetworking Forum (OIF). Acacia alleges that it submitted a technical standard to OIF based upon Acacia’s own technology which, if adopted, would result in substantial competitive advantages to Acacia. It contends that the letter falsely implies that Acacia’s submission contains technology that belongs to ViaSat, and, as a consequence of the letter, OIF may reject Acacia’s submission. Acacia’s amended complaint is pled in eight counts: (1) commercial disparagement; (2) libel; (3) slander of title; (4) unfair competition (G.L. c. 93A § 11); (5) intentional interference with advantageous relations; (6) intentional interference with contractual relations; (7) declaratory judgment of no trade secret misappropriation; and (8) declaratory judgement of no breach of contract. The case is presently before the court on ViaSat’s motion to dismiss Counts 1 through 4 for failure to state a claim on which relief may be granted. See Mass. R. Civ. P. 12(b)(6).

         For the following reasons, ViaSat’s motion to dismiss is DENIED as to Counts 1 through 3 and ALLOWED as to Count 4, but with leave to file an amended complaint with respect to that Count.


         The following facts are taken from the allegations in the Complaint and the letter, which is an exhibit to it, and assumed to be true for the purposes of this motion to dismiss.

         In 2017, Acacia submitted a proposal to the Optical Internetworking Forum (" OIF" ), a standard-setting organization in the field of computer networking, to adopt, as a standard, Acacia’s technical submission for the design of integrated circuit chips using Soft Decision Forward Error Correction (" SDFEC" ). At the time of Acacia’s submission, Acacia and ViaSat were engaged in litigation in federal district court in San Diego, California (" the California Action" ). In the California Action, ViaSat alleges that some years ago it developed SDFEC for Acacia pursuant to a licensing agreement which provided that ViaSat would own the SDFEC technology and Acacia would pay it royalties for its use. However, Acacia made unauthorized use of the licensed technology without paying royalties. ViaSat asserts claims of breach of the licensing agreement and misappropriation of trade secrets against Acacia.

         On July 25, 2017, ViaSat wrote a letter to representatives of OIF (the Letter). The Letter began by describing the California Action. It acknowledged that Acacia denied ViaSat’s allegations and explained that the parties were there engaged in discovery. The Letter went on to say:

We understand that Acacia is advocating that the OIF adopt a 15% overhead SDFEC as an industry standard. ViaSat developed a 15% overhead SDFEC for Acacia under the License Agreement, and ViaSat believes that its intellectual property may be incorporated in what Acacia is representing as its 15% overhead SDFEC. If so, the SDFEC being touted by Acacia to IOF would, in fact, belong to ViaSat. Acacia has represented to ViaSat that the SDFEC it is proposing to OIF is its own independently developed intellectual property, but we have not been able to verify whether that is the case.
In order to protect the rights of all parties, ViaSat requests that OIF refrain from seeking, receiving, or reviewing Acacia’s SDFEC, pending resolution of the dispute between ViaSat and Acacia.
Any disclosure or use of Acacia’s proposed SDFEC may constitute the misappropriation of ViaSat’s trade secrets, as well as a breach of the License Agreement. The receipt or use of such information may also subject additional parties to potential liability to ViaSat.

         Before, ViaSat sent this letter, Acacia told ViaSat that it had independently developed the technology submitted to OIF; it was not the SDFEC that Acacia had developed under the licensing agreement. Nonetheless, ViaSat " maliciously" sent the letter to OIF.[1]

         Acacia alleges that " as a direct result of ViaSat’s actions, Acacia has suffered loss of sales, property, business opportunities, and reputation." [2] The Complaint, however, does not appear to allege that OIF took any specific action in response to receiving the Letter. Indeed, it does not contain a specific allegation of the loss of any identified business opportunity.


         I. Standard for Motion to Dismiss

         When evaluating the legal sufficiency of a complaint pursuant to Mass. R. Civ. P. 12(b)(6), the court accepts as true all factual allegations in the complaint and all reasonable inferences that may be drawn in the plaintiff’s favor. Berish v. Bornstein, 437 Mass. 252, 267 (2002). To survive a motion to dismiss, a complaint must set forth the basis of the plaintiff’s entitlement to relief with " more than labels and conclusions." Iannacchino v. Ford Motor Co., 451 Mass. 623, 635-636 (2008), quoting Bell A. Corp. v. Twombly, 127 S.Ct. 1955, 1964-1965 (2007). While factual allegations need not be detailed, they " must be enough to raise a right to relief above the speculative level ...." Id., quoting Bell A. Corp., 127 S.Ct. at 1964-1965. At the pleading stage, a complaint must set forth " factual ‘allegations plausibly suggesting (not merely consistent with)’ an entitlement to relief ...." Id., quoting Bell A. Corp., 127 S.Ct. at 1966.

         II. The Related Elements of Claims for Commercial Disparagement, ...

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