New IP Litigation: Synopsys, Inc. (SNPS) v. Ubiquiti Networks, Inc. (UBNT)

Synopsis just sued Ubiquiti alleging violations of the Digital Millenium Copyright Act, but it hasn’t yet been reported.

One of the largest software companies in the world, Synopsys describes itself as a leading provider of Electronic Design Automation solutions for the semiconductor industry.

Synopsys alleges that Ubiquiti’s Hong Kong division used counterfeit keys in an end-around Synopsys’ DRM:

Beginning at a time unknown to Synopsys, Defendants have been using counterfeit keys obtained or created with tools obtained through hacker websites to circumvent the Synopsys License Key system and access and use Synopsys’ EDA software, including at least its Debussy, Design Compiler, Formality, HSPICE, IC Compiler, Laker, Nlint, nWave, PrimeTime, Synplify Pro AV, Synplify Premier AV, TetraMAX, VCS, and Verdi applications, without a valid license.

The complaint continues:

The fact that Defendants were not being required to pay Synopsys a license fee for access and use of the software alone should have put Defendants on notice that their access and use of Synopsys’ software was unauthorized. Furthermore, Synopsys previously informed Ubiquiti of its unauthorized use of Synopsys’ software.

Yep, that would be suspicious. But perhaps the use was merely incidental:

Upon information and belief, Defendants Ubiquiti and Ubiquiti International have used counterfeit keys to circumvent the Synopsys License Key access-control system at least 39,000 times by 15 usernames. Upon information and belief, Defendant Tsai has used a counterfeit key to circumvent the Synopsys License Key access-control system at least 66 times.

Uh oh.

Stay tuned. Details here. View the full complaint below.

DENISE M. MINGRONE (STATE BAR NO. 135224) dmingrone@orrick.com

ROBERT L. URIARTE (STATE BAR NO. 258274) ruriarte@orrick.com

ORRICK, HERRINGTON & SUTCLIFFE LLP

1000 Marsh Road

4 Menlo Park, CA 94025-1015 Telephone: +1 650 614 7400 5 Facsimile: +1 650 614 7401

6 Attorneys for Plaintiff SYNOPSYS, INC.

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION

12Case No. ________________

13COMPLAINT FOR

(1) VIOLATION OF DIGITAL

14MILLENNIUM COPYRIGHT

ACT 17 U.S.C. §§ 1201, ET SEQ.;

15and (2) AIDING AND ABETTING

VIOLATIONS OF DIGITAL

16MILLENNIUM COPYRIGHT

ACT, 17 U.S.C. §§ 1201, ET SEQ.

DEMAND FOR JURY TRIAL

Plaintiff Synopsys, Inc. (“Synopsys”) hereby brings this Complaint against Defendants

Ubiquiti Networks, Inc. (“Ubiquiti”), Ubiquiti Networks International, Ltd. (“Ubiquiti

International”), and Ching-Han Tsai (“Tsai”) for circumventing technological measures that

effectively control access to Synopsys’ software, including at least its Debussy, Design Compiler,
Formality, HSPICE, IC Compiler, Laker, Nlint, nWave, PrimeTime, Synplify Pro AV, Synplify
Premier AV, TetraMAX, VCS, and Verdi applications, in violation of the Digital Millennium
Copyright Act, 17 U.S.C. §§ 1201, et seq. (the “DMCA”). Synopsys seeks injunctive relief,
statutory and/or actual damages, attorneys’ fees and costs, an accounting, and any such other
relief as the Court may deem proper. Synopsys alleges the following based on personal 10 knowledge, unless indicated as on information and belief.
PARTIES
Plaintiff Synopsys is a corporation organized and existing under the laws of the 13 State of Delaware, with its principal place of business in Mountain View, California. 14 2. Defendant Ubiquiti is a corporation organized and existing under the laws of the 15 State of Delaware, with its principal place of business in San Jose, California.
Defendant Ubiquiti International is a subsidiary of Ubiquiti operating in Hong
Plaintiff is informed and believes that Defendant Tsai is an individual employed 19 by Ubiquiti and is a resident of California.
Plaintiff does not presently know the true names and capacities of the defendants
sued herein as Does 1 through 20, inclusive. Plaintiff will seek leave of court to amend this 22 Complaint to allege said defendants’ true names and capacities as soon as Plaintiff ascertains
JURISDICTION AND VENUE
This action arises under the Digital Millennium Copyright Act, 17 U.S.C. §§ 1201,

et seq. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331 and 1338(a).

This Court has personal jurisdiction over Ubiquiti because its principal place of

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business lies within the State of California, and because it has conducted and does conduct business within the State of California and the Northern District of California.

This Court has personal jurisdiction over Ubiquiti International because, on 4 information and belief, it is a subsidiary of Ubiquiti and has conducted and does conduct business 5 within the State of California and the Northern District of California.

6 9. This Court has personal jurisdiction over Tsai because, on information and belief, 7 he conducts business within the State of California and the Northern District of California.

Venue in this district is appropriate under 28 U.S.C. §§ 1391 and 1400 because, on
information and belief, all defendants reside or transact business in the State of California and the
Northern District of California, and because a substantial part of the events giving rise to the 11 dispute occurred within this district.
FACTUAL ALLEGATIONS
As modern electronic devices become more and more compact and powerful, they
use increasingly sophisticated computer processor chips. For example, computer chips found in
modern networking equipment can contain millions of transistors. When designing a computer
processing chip, the stakes are enormous. Chip designers need software that will ensure that their
complex designs will work flawlessly. Accordingly, chip designers require extremely robust and 18 powerful computer software to design and test those chips. Many of the world’s biggest and most 19 important chip design companies turn to Synopsys for that software.
Since it was founded in 1986, Synopsys has been a leading provider of Electronic
Design Automation (“EDA”) solutions for the semiconductor industry. EDA generally refers to
using computers to design, verify, and simulate the performance of electronic circuits. For more
than 25 years, Synopsys’ solutions have helped semiconductor manufacturers and electronics
companies design, test, and manufacture microchips and electronic systems for a wide range of
Headquartered in Mountain View, California, Synopsys is the fifteenth largest software company in the world and currently employs over 10,000 employees worldwide. Synopsys has developed a comprehensive, integrated portfolio of prototyping, IP, implementation, verification, manufacturing, optical, field-programmable gate array, and software quality and security

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solutions.

Plaintiff is informed and believes that Ubiquiti, which is based in Silicon Valley and has offices on three continents, develops networking technology.

Plaintiff is informed and believes that Ubiquiti International, which is based in
Hong Kong, is a subsidiary of Ubiquiti and participates in Ubiquiti’s activities relating to the 6 development of networking technology.

7 15. Plaintiff is informed and believes that Tsai is employed as a Project Lead at 8 Ubiquiti.

Synopsys’ EDA software applications, including its Debussy, Design Compiler,
Formality, HSPICE, IC Compiler, Laker, Nlint, nWave, PrimeTime, Synplify Pro AV, Synplify 11 Premier AV, TetraMAX, VCS, and Verdi applications, are works subject to copyright protection 12 under Title 17 of the United States Code.
Synopsys does not sell ownership rights or copyright or other intellectual property
rights to its EDA software and associated services. Instead, Synopsys customers purchase
These licenses grant Synopsys customers limited rights to install Synopsys’ EDA
software and to access and use specific Synopsys software programs subject to control by 17 Synopsys’ License Key system.
Synopsys’ License Key system is a built-in security system that controls access to
its licensed software by requiring a user to access a key code provided by Synopsys in order to
execute the licensed software. This key code controls the quantity and term of the licensed 21 software in accordance with the license terms.

22 19. Defendants have never obtained a valid license from Synopsys to access and use 23 the EDA software that is at issue herein.

24 20. Beginning at a time unknown to Synopsys, Defendants have been using counterfeit 25 keys obtained or created with tools obtained through hacker websites to circumvent the Synopsys

License Key system and access and use Synopsys’ EDA software, including at least its Debussy,

Design Compiler, Formality, HSPICE, IC Compiler, Laker, Nlint, nWave, PrimeTime, Synplify

Pro AV, Synplify Premier AV, TetraMAX, VCS, and Verdi applications, without a valid license.

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Defendants knew or had reason to know that their access and use of Synopsys’ software was unauthorized and in violation of the DMCA and Synopsys’ valuable copyrights. The fact that Defendants were not being required to pay Synopsys a license fee for access and use of the

software alone should have put Defendants on notice that their access and use of Synopsys’
software was unauthorized. Furthermore, Synopsys previously informed Ubiquiti of its 6 unauthorized use of Synopsys’ software.
Upon information and belief, Defendants Ubiquiti and Ubiquiti International have
used counterfeit keys to circumvent the Synopsys License Key access-control system at least
39,000 times by 15 usernames. Upon information and belief, Defendant Tsai has used a
counterfeit key to circumvent the Synopsys License Key access-control system at least 66 times.
FIRST CLAIM FOR RELIEF
(Against All Defendants for Violations of the
Digital Millennium Copyright Act, 17 U.S.C. § 1201)
Synopsys hereby restates and re-alleges the allegations set forth in paragraphs 1 15 through 21 above and incorporates them by reference.

16 23. Section 1201(a)(1) provides, in pertinent part, that no person shall circumvent a 17 technological measure that effectively controls access to a work protected under this title.

Synopsys’ EDA software, including its Debussy, Design Compiler, Formality,
HSPICE, IC Compiler, Laker, Nlint, nWave, PrimeTime, Synplify Pro AV, Synplify Premier AV, 20 TetraMAX, VCS, and Verdi applications, is subject to protection under the copyright laws of the 21 United States.

22 25. Access to Synopsys’ EDA software, including its Debussy, Design Compiler, 23 Formality, HSPICE, IC Compiler, Laker, Nlint, nWave, PrimeTime, Synplify Pro AV, Synplify 24 Premier AV, TetraMAX, VCS, and Verdi applications, is controlled by technological measures:

25 namely, the Synopsys License Key system.

Rather than paying a license to Synopsys for access and use of the EDA software, Defendants used counterfeit license keys that, on information and belief, Defendants knew to be counterfeit and in violation of Synopsys’ valuable rights.

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By using counterfeit license keys, Defendants have circumvented the Synopsys

License Key access-control system, and have unlawfully gained access thereby to at least its Debussy, Design Compiler, Formality, HSPICE, IC Compiler, Laker, Nlint, nWave, PrimeTime, 4 Synplify Pro AV, Synplify Premier AV, TetraMAX, VCS, and Verdi applications.

5 28. The conduct described above has cost Synopsys an amount to be computed at trial, 6 but that amount is in the millions of dollars in lost revenue, and constitutes a violation of 17 7 U.S.C. § 1201.

8 29. The conduct described above was willful and with knowledge of wrongdoing; an 9 award of statutory damages is necessary to dissuade Defendants and others from the use of 10 counterfeit license keys.

11 30. Accordingly, pursuant to 17 U.S.C. § 1203, Synopsys is entitled to and hereby 12 demands statutory damages in the maximum amount of $2,500 for each of the violations of the 13 statute.

14 31. Synopsys is further entitled to an award of attorneys’ fees and costs as provided 15 under 17 U.S.C. § 1203.

Defendants’ conduct, unless enjoined and restrained by the Court, will cause
irreparable harm to Synopsys, which has no adequate remedy at law. Pursuant to 17 U.S.C. § 18 1203, Synopsys is entitled to a preliminary and permanent injunction prohibiting further 19 violations of § 1201.
SECOND CLAIM FOR RELIEF
(Against Defendant Tsai for Aiding and Abetting Violations of the
Digital Millennium Copyright Act, 17 U.S.C. § 1201)
Synopsys hereby restates and realleges the allegations set forth in paragraphs 1 24 through 33 above and incorporates them by reference.

25 34. Upon information and belief, Defendant Tsai was aware that none of the

Defendants obtained valid licenses from Synopsys to use the EDA software at issue herein. Upon information and belief, Defendant Tsai encouraged and assisted Defendants Ubiquiti and Ubiquiti International to commit violations of the Digital Millennium Copyright Act by inducing

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Defendants Ubiquiti and Ubiquiti International to use a counterfeit license key to access and use Synopsys’ EDA software, and by providing their services as employees or independent contractors to assist Defendants Ubiquiti and Ubiquiti International in doing so.

As a direct and proximate result of Defendant Tsai’s assistance in encouraging
Defendants Ubiquiti and Ubiquiti International to commit violations of the Digital Millennium
Copyright Act, Synopsys has been greatly damaged. There is no adequate remedy of law to
compensate for the great harm caused by this assistance. Defendant Tsai must be enjoined from
continuing to aid and abet Defendants Ubiquiti and Ubiquiti International in committing 9 violations of the Digital Millennium Copyright Act.
By this conduct Defendant Tsai made unlawful gains and profits for himself and/or
for Defendants Ubiquiti and Ubiquiti International, depriving Synopsys of rights and
remunerations that would otherwise have come to Synopsys but for Defendants Tsai’s conduct. 13 Defendant Tsai has thus caused Synopsys irreparable damages and will continue to cause 14 additional damages.
PRAYER FOR RELIEF
WHEREFORE, Synopsys prays for judgment against Defendants as follows:
Entry of judgment in favor of Synopsys against Defendants;
An order awarding Synopsys statutory and/or actual damages for each instance on
which Defendants circumvented measures controlling access to Synopsys’ software pursuant to
17 U.S.C. § 1203;
Prejudgment and post-judgment interest;
An order awarding Synopsys its costs and attorneys’ fees pursuant to 17 U.S.C. §
1203;
An order for an accounting of all gains, profits, cost savings and advantages
realized by Defendants from their acts;
1. An order preliminarily and permanently enjoining Defendants, their officers, agents, servants, employees, attorneys, and affiliated companies, its assigns and successors in interest, and those persons in active concert or participation with them, from circumventing or

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aiding and abetting others to circumvent Synopsys’ License Key system or other technological measures that control access to Synopsys’ works in violation of 17 U.S.C. § 1201; and

All such further and additional relief, in law or equity, to which Synopsys may be 4 entitled or which the Court deems just and proper.

6 Dated: February 3, 2017

DENISE M. MINGRONE

ROBERT L. URIARTE

Orrick, Herrington & Sutcliffe LLP

By: /s/ Denise M. Mingrone

DENISE M. MINGRONE

Attorneys for Plaintiff

SYNOPSYS, INC.

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DEMAND FOR A JURY TRIAL

Synopsys demands a jury trial for all issues so triable.

Dated: February 3, 2017 DENISE M. MINGRONE

4 ROBERT L. URIARTE

Orrick, Herrington & Sutcliffe LLP

By: /s/ Denise M. Mingrone

DENISE M. MINGRONE

Attorneys for Plaintiff

SYNOPSYS, INC.

– 8 – COMPLAINT FOR VIOLATION OF DIGITAL

MILLENNIUM COPYRIGHT ACT

New IP Litigation: Synopsys, Inc. (SNPS) v. Ubiquiti Networks, Inc. (UBNT)

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