Snapkeys, Ltd. v. Google LLC

539 F.Supp.3d 1040

SNAPKEYS, LTD., Plaintiff,

v.GOOGLE LLC, Defendant.

Case No. 19-CV-02658-LHK

United States District Court, N.D. California, San Jose Division.

Signed May 17, 2021

Dawn Marie Smith, Smith Clinesmith LLP, Don Bradley Kizzia, Pro Hac Vice, Kizzia Johnson PLLC, Dallas, TX, for Plaintiff.

Jason B. Mollick, Pro Hac Vice, Brian J. Levy, Pro Hac Vice, Wilson Sonsini Goodrich and Rosati PC, New York, NY, Charles Tait Graves, Wilson Sonsini Goodrich & Rosati, San Francisco, CA, David H. Kramer, Sara Lai-Ming Rose Tolbert, Wilson Sonsini Goodrich & Rosati, Palo Alto, CA, for Defendant.

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

Re: Dkt. No. 98

LUCY H. KOH, United States District Judge Plaintiff Snapkeys, Ltd. ("Snapkeys") sues Defendant Google LLC ("Google") for breach of contract and conversion. Before the Court is Google's motion for summary judgment as to Snapkeys’ claims for breach of contract and conversion, ECF No. 98. Having considered the submissions of the parties, the relevant law, and the record in this case, the Court GRANTS Google's motion for summary judgment.

I. BACKGROUND

A. The Parties

Snapkeys is a "software development company that specializes in creating smartphone and smartwatch keyboard technology." TAC ¶ 7. Snapkeys is a foreign limited liability company based in Israel. Id. ¶ 1. Google is a corporation organized under the laws of Delaware with its principal place of business in Mountain View, California. Id. ¶ 2.

B. Google's Smartwatch Keyboard Application

The instant case stems from discussions between the parties regarding the promotion of Snapkeys’ keyboard application, which runs on Google's Android Wear smartwatches. Id. ¶ 9. Prior to the parties’ engagement with each other, several Google engineers began to develop Google's own keyboard application for Android Wear smartwatches, whose code was based on code from Google's pre-existing keyboard application for Android phones. Wright Decl. ¶ 21; Blume Decl. ¶ 3; Renouf Decl. ¶¶ 5–6; Ouyang Decl. ¶ 7; Ou Decl. ¶¶ 5, 8.

In September 2014, Arthur Blume, who was an engineering manager at Google, came up with the idea of scaling Google's already existing keyboard to a smartwatch. Blume Decl. ¶ 3. Blume created a prototype of this keyboard by October 2014. Id. ¶ 3, Exh. 1. Shortly after developing the prototype keyboard, Blume asked Mark Renouf, a software engineer at Google, to work on the keyboard. Id. ¶ 4; Renouf Decl. ¶ 2. By late 2014, Blume and Renouf began to work on the keyboard with Clement Wright, who was a Product Manager on the Android Wear team, and Mikkel Koser, who was a user interface designer. Renouf Decl. ¶ 3.

Separately, in early 2015, Tom Ouyang, an engineer at Google who had written the code for Google's pre-existing keyboard, became interested in understanding how the code for Google's pre-existing keyboard could be used to create a keyboard for smartwatches. Ouyang Decl. ¶ 6. In February 2015, Ouyang circulated his first prototype of a smartwatch keyboard based on the code for Google's pre-existing keyboard. Id. ¶ 7. In April 2015, a video showing the prototype was created. Id. ¶ 8.

In May 2015, the two teams merged. Ou Decl. ¶ 3. That summer, Renouf and Henry Ou, another software engineer at Google, further modified the code for Google's pre-existing keyboard to adapt it to a smartwatch. Id. ¶ 5; Renouf Decl. ¶ 5. On August 28, 2015, the Google team released a prototype of its smartwatch keyboard application for internal testing. Id. ¶ 9; Ouyang Decl. ¶ 10; Renouf Decl. ¶ 7. The final version of Google's smartwatch keyboard application, which was released in March 2016, was consistent with the version released in August 2015. Wright Decl. ¶ 21; Renouf Decl. ¶ 8.

C. The Non-Disclosure Agreement

Beginning in July 2015, the parties engaged in preliminary discussions to promote Snapkeys’ keyboard application on Android Wear. TAC ¶ 9. Snapkeys’ main contact at Google was Clement Wright ("Wright"), a Product Manager for the Android Wear team. Wright Decl. ¶ 5. Wright is "not a software engineer and do[es] not have the skills or training to read or write software code at a professional level." Id. As a Product Manager, part of Wright's role was "to facilitate third party app developers in their own efforts to solve the challenges of fitting keyboards ... on a small watch face." Id. ¶ 9. It was within this context that Wright engaged with Snapkeys, which had created a keyboard application.

At the outset of the parties’ relationship, Wright sent Snapkeys a Developer Non-Disclosure Agreement (the "NDA"), which was executed by the parties on July 29, 2015. Id. ¶ 10. The NDA's purpose was "to facilitate technical discussions concerning existing or future product development efforts by the parties (the ‘Purpose’)." The NDA provided that "[a] party (the ‘Discloser’) may disclose to the other party (the ‘Recipient’) information pertaining to the Purpose that the Discloser considers confidential (‘Confidential Information’)." Id. The NDA further provided that the "Recipient may use Confidential Information only for the Purpose." Id.

The NDA required the recipient of confidential information to "use a reasonable degree of care to protect Confidential Information and to prevent any unauthorized use or disclosure of Confidential Information." Id. The NDA established that "[u]nless the parties otherwise agree in writing, Recipient's duty to protect Confidential Information expires five years from disclosure." Id. The NDA did not require confidential information to be returned. Id. The NDA also stated that "[n]o party acquires any intellectual property rights under this agreement except the limited rights necessary to use the Confidential Information for the Purpose." Id.

The NDA "impose[d] no obligation to proceed with any business transaction." Id. The NDA further stated that "each party recognizes that the other party may in the future develop or purchase products or services related to or similar to the subject matter of Confidential Information disclosed under this agreement." Id.

D. Snapkeys’ Delivery of Smartwatches to Google

Snapkeys alleges that, over the course of the following year and a half, Google made a number of fraudulent and misleading promises that it would use and promote Snapkeys’ iType keyboard technology. TAC ¶¶ 12–13. Snapkeys consequently provided Google with two smartwatches, which cost Snapkeys a total of $400, with Snapkeys’ keyboard application installed. Id. ¶¶ 14, 18; Graves Decl. Exh. A at 39:18–19, 40:25–41:3 (deposition of Ryan Ghassabian) (stating that Snapkeys spent about $300 on one smartwatch and $100 on the other).

Specifically, on September 20, 2015, Benjamin Ghassabian, the Chief Executive Officer of Snapkeys, emailed Wright and offered to send Wright a smartwatch with the Snapkeys keyboard application installed. Wright Decl. ¶ 28. Subsequently, in October 2015, the first smartwatch was delivered to Wright by mail. Id.

Around the same time that Wright received the first smartwatch, Benjamin Ghassabian emailed Wright and offered to send a second smartwatch with Snapkeys’ keyboard application installed. Id. ¶ 30. Benjamin Ghassabian asked whether the smartwatch could be provided to Wright in person at Google's headquarters in Mountain View, California. Id. ¶ 31. Subsequently, the second smartwatch was given to Wright during a November 2015 meeting with Ryan Ghassabian and Eby Anavian, two Snapkeys employees. See id. ¶ 32; Graves Decl. Exh. A at 37:9–17; Exh. I at 105:22–106:6.

When Wright was given the watches by Snapkeys, Snapkeys never stated that Wright should return the watches to Snapkeys. Wright Decl. ¶ 31. Both Ryan Ghassabian and Anavian testified in their depositions that, during the meeting with Wright, neither Ryan Ghassabian nor Anavian told Wright that Google needed to return the smartwatches to Snapkeys. See Graves Decl. Exh. A at 37:9–17 (deposition of R. Ghassabian) ("Q. When you helped deliver the two prototypes to Google, you didn't ask Mr. Wright to return them to SnapKeys when he was finished with them, did you? A. I didn't tell them he could keep them. Q. Okay. You didn't say either way, did you? A. That discussion never came up."); Exh. I at 105:22–106:6 (deposition of Anavian) ("Q. Now, during the meeting in November that you attended with Mr. Wright and Mr. Ghassabian, you left the prototype with Mr. Wright at that meeting, correct? A. Correct. Q. Okay. And you didn't tell him, ‘You need to give this back to us,’ correct? A. No, I didn't. Q. And neither did Mr. Ghassabian? A. I don't remember, but I'm sure he didn't.").

E. Google's Discarding of the Smartwatches

Following the delivery of the first smartwatch, Wright typed on the keyboard for a few minutes as a consumer would. Wright Decl. ¶¶ 28–29. Wright found the user interface in Snapkeys’ keyboard application to be "impressive but complicated." Id. Wright also found the user interface to be "confusing." Id. For example, Wright was not sure how to access punctuation on the keyboard. Wright Decl. ¶ 29, Exh. 1 at 139:15–140:19 (deposition of Wright) ("[I was] asking how to access punctuation, and that was because I found the interface a little bit confusing.").

Similarly, following the delivery of the second smartwatch, Wright typed on the keyboard for a few minutes as a consumer would. Wright Decl. ¶ 35. Wright had a similar experience to when Wright used the first smartwatch. Id. ¶ 33 ("I still found the user interface to be confusing and complex.").

Wright did not share the smartwatches with any other Google employee. Id. ¶ 37 ("I was the only person who ever used or saw the watches."). Wright stored the smartwatches under his desk in a secure bin that was available only to Wright. Id. ¶ 37, Exh. 1 at 41:1–6 (deposition of Wright) (stating that Wright stored the watches "under my desk in a secure bin that was available only to me, along with a number of other samples from other manufacturers"). Wright "treated ... the keyboards that...