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MicroTechnologies, LLC v. Autonomy, Inc.

United States District Court, N.D. California

May 8, 2017

MICROTECHNOLOGIES, LLC, Plaintiff,
v.
AUTONOMY, INC., et al., Defendants.

          ORDER REGARDING MOTIONS FOR SUMMARY JUDGMENT RE: DKT. NOS. 70, 83

          JOSEPH C. SPERO Chief Magistrate Judge.

         I. INTRODUCTION

         This case, brought under the Court's diversity jurisdiction, concerns disputes arising from the commercial relationship between Plaintiff MicroTechnologies, LLC ("MicroTech") and Defendants Autonomy, Inc. and Autonomy Systems Limited (collectively, "Autonomy"). MicroTech previously served as a reseller for Autonomy's software products and claims that Autonomy failed to either deliver software or refund MicroTech's payment for anticipated transactions that were never completed with two potential end users, Hewlett-Packard ("HP")[1] and the Biblioteca Apostolica Vaticana (the "Vatican Library"). Autonomy counterclaims that MicroTech aided and abetted former Autonomy directors in breaching their fiduciary duty by artificially inflating Autonomy's reported revenue and similar metrics. Both parties also bring claims for unjust enrichment. The Court held a hearing on March 24, 2017. For the reasons discussed below, each party's motion for summary judgment is GRANTED with respect to the opposing party's unjust enrichment claim, but DENIED with respect to the remaining claims due to genuine issues of material fact.[2]

         II. BACKGROUND

         A. Factual Record

         1. The Reseller Agreement and Course of Dealing

         In 2006, MicroTech entered an agreement with Autonomy for MicroTech to resell Autonomy products (the "Reseller Agreement").[3] As is relevant to this action, the Reseller Agreement provided that MicroTech would market Autonomy's products to federal government customers and to "mutually agreed upon commercial customers, " and that MicroTech would maintain marketing centers with sufficient demonstration equipment and trained personnel to demonstrate Autonomy's products and respond to customer inquiries. Reseller Agreement §§ 3.1(1), 3.1(3), 3.2. MicroTech was also required to ensure that each customer entered a standard license agreement for the software with MicroTech. Id. § 3.6. MicroTech's potential services to end users included "demonstrations, pre-sales, support, installation, customization, training and such other consulting or integration of or with respect to the Autonomy products with third party products." Id. § 1.1(22).

         The Reseller Agreement provided that MicroTech would submit a purchase order to Autonomy, and-assuming Autonomy did not reject the purchase order, which it retained the right to do-the products would be "shipped by means and on media agreed between the parties, and in the absence of agreement otherwise shall be FTP download or if physical then FOB Point of Origin." Id. § 5.1. After receiving an order, Autonomy would issue an invoice to MicroTech for the amount due, "equal to 90% of the prices listed in the then current Government Reseller Price List, " and MicroTech was required to pay within thirty days. Id. § 5.5 & Ex. B § 2. The Reseller Agreement specifically provided that MicroTech "shall not be relieved of its obligations to pay fees owed to Autonomy hereunder by the nonpayment of fees by an End User." Reseller Agreement § 5.5. The Reseller Agreement also stated that it was an integrated contract representing the entire agreement between the parties, id. § 14.10, and that "[n]o amendment to, or change, waiver or discharge of, any provision of this Agreement shall be valid unless in writing and signed by an authorized representative of each of the parties, " id. § 14.10.

         From 2006 until late 2009, MicroTech sold Autonomy products nearly exclusively to United States government agencies. Jimenez Decl. (dkt. 83-3) ¶ 4 & n.2. Beginning in 2009, MicroTech began to sell Autonomy products to commercial end users at Autonomy's suggestion. See Id. ¶ 5; Glass Decl. (dkt. 71) Ex. 4 (Jimenez Dep.) at 49:19-52:15. According to MicroTech's owner and chief executive officer Tony Jimenez, Autonomy would frequently call MicroTech to say that Autonomy had an opportunity with an end user, and ask what sort of fee would be required for MicroTech to serve as the reseller on that transaction. Id. at 384:2-19. Steven Truitt[4]-who served at different times as MicroTech's chief financial officer, senior vice president, executive vice president, and chief operating officer-managed MicroTech's sales of Autonomy products, and Jimenez was also involved, although he generally did not play a hands-on role in individual deals. Glass Decl. Ex. 4 (Jimenez Dep.) at 12:5-13:22, 14:1-15:2, 40:13- 42:6; Glass Decl. Ex. 23 (Esterrich Dep.)[5] at 17:2-18:1, 22:8-10. John Cronin-who at various times worked as a consultant for both MicroTech and Autonomy, see Glass Decl. Ex. 4 (Jimenez Dep.) at 81:3-82:5-emailed Truitt about a number of orders for commercial end users "ready to go" on December 31, 2009, and attached purchase orders for MicroTech to complete and return to Autonomy. Bianco Decl. (dkt. 68-5) Exs. A, B. An email between Cronin and an Autonomy employee indicates that certain of those deals were closed by March of 2010. Id. Ex. E.

         Truitt was employed by MicroTech from approximately 2006 to 2014, at which time the division he then worked in was sold to a different company. Glass Decl. Ex. 4 (Jimenez Dep.) at 10:8-11:8. When counsel for Autonomy deposed Truitt, he refused to answer virtually every question asked of him on the basis that an answer might incriminate him with respect to criminal proceedings. See generally Glass Decl. Ex. 5 (Truitt Dep.).

         Jimenez's first declaration describes the structure of a typical transaction involving a commercial end user as follows:

. . . Autonomy would identify an end-user for the purchase of Autonomy software and negotiate an agreement for the sale of the software, inform and provide the details of the transaction to MicroTech and ask MicroTech to issue a purchase order for the software. MicroTech would issue a purchase order for the software, Autonomy would invoice MicroTech for the cost of the software, Autonomy would deliver the software to the end-user and Micro Tech would be paid a fee for its participation, typically ten (10) percent. In some cases, Micro Tech would advance the costs of the software to Autonomy and collect from the end-user, and in others the end-user would pay Autonomy directly and Autonomy would issue a credit to MicroTech for the payment. In all of the commercial transactions, Autonomy controlled the details of the transaction and handled all of the negotiations with the end-user.

Jimenez Decl. ¶ 5; see also Jimenez Opp'n Decl. (dkt. 73-3) ¶ 6 ("Although the Reseller Agreement called for MicroTech to be primarily responsible for identifying, negotiating, and finalizing Autonomy software resale opportunities, in practice, it was Autonomy that took on this responsibility for all the commercial transactions . . . .").

         Truitt maintained a separate "enterprise" accounting system for Autonomy transactions involving commercial end users, distinct from the "normal" accounting system that MicroTech used for its government contract business. Glass Decl. Ex. 23 (Esterrich Dep.) at 117:9-118:15; see also Id. at 216:14-15 (stating that a purchase order related to the HP transaction came from Truitt's accounting system).[6] Chief financial officer Tomas Esterrich, who did not have access to that system, had difficulty obtaining documents from Truitt to confirm the validity of Autonomy transactions involving commercial end users, and testified that the experience was "very frustrating." See Id. at 48:1-5, 177:19-178:5, 239:18-21. According to Esterrich, MicroTech paid invoices from Autonomy regarding government contracts on time, but invoices related to commercial end users "were primarily based on [MicroTech] getting paid, " and were not paid until "money was at the bank, the money had been transferred into [MicroTech's] bank account." Glass Decl. Ex. 23 (Esterrich Dep.) at 29:10-30:6. Esterrich testified that MicroTech had "basically . . . no risk" on the commercial transactions "because we were getting paid at the same time we were disbursing the money. So we didn't make any payments unless we had payment from the client." Id. at 87:4-8. According to Esterrich, "most of the payments didn't come from the clients, they came from Autonomy." Id. at 257:20-21. In some cases, payments MicroTech received for a given project were used to pay Autonomy for a different, older invoice. Id. at 258:13-259:7. Esterrich believed that this practice of waiting to receive funds before making payment was based on an informal agreement between Truitt and his counterparts at Autonomy. Id. at 134:21-135:4.

         Jimenez testified at his deposition that "MicroTech is at risk with every transaction, " but that he would not expect that MicroTech would suffer a loss of the full value of the transaction if a deal fell through. Glass Decl. Ex. 4 (Jimenez Dep.) at 93:8-16. Jimenez believed that transactions arranged by Autonomy were "legitimate deals" that would actually occur, but if a "customer changed his mind in the 11th hour, [Jimenez] would assume based upon discussions, [his] personal discussions with the Autonomy people, that they would help [MicroTech] sell that software so that [MicroTech] would not be stuck holding that software." Id. at 93:20-94:9. That understanding was based on conversations early in MicroTech's relationship with Autonomy, and Jimenez believed that it held true for all deals going forward from that point. Id. at 93:12-94:2. Jimenez testified to his understanding, however, that if software was not successfully resold, MicroTech would still be liable to Autonomy for the full contract price of the software. Id. at 95:3-96:1.

         Jimenez testified that the primary value that MicroTech's involvement added to sales of Autonomy software was MicroTech's status as a minority-owned and disabled-veteran-owned business, certifications that go along with that status, and the fact that MicroTech is competent and manages its invoices correctly. Id. at 122:11-128:13; Jimenez Decl. ¶ 3; Jimenez Opp'n Decl. ¶¶ 2-5. He emphasized that MicroTech met its contractual obligation to maintain a marketing center with demonstration equipment and trained staff, although he was not aware of whether those resources were utilized with respect to particular transactions. See Glass Decl. Ex. 4 (Jimenez Dep.) at 153:14-158:16, 177:8-17, 197:12-18.

         On a number of occasions, Autonomy issued credit memos to MicroTech for certain transactions, including a credit memo for $4, 888, 800 for a transaction with Morgan Stanley, a credit memo for $1, 184, 000 for a transaction with Manufacturers Life Insurance, four credit memos for $1, 050, 000 each for a transaction with the United States Department of the Interior, and a credit memo for $768, 500 for a transaction with Bank of Montreal. Glass Decl. Exs. 24-27. Jimenez testified that end users sometimes incorrectly paid the purchase price directly to Autonomy, rather than to MicroTech, and indicated that in such circumstances Autonomy might issue MicroTech a credit to cancel the amount that MicroTech owed, since Autonomy had instead received payment from the end user. Glass Decl. Ex. 4 (Jimenez Dep.) at 130:21-131:17, 170:1- 5. Jimenez suggested that the credit memos MicroTech received from Autonomy might have arisen from those circumstances, or generally from successful transactions-not from transactions that were not ultimately completed. See Id. at 130:21-132:12 (discussing a transaction with Morgan Stanley); id. at 152:8-14 (discussing a transaction with Manufacturers Life Insurance). Later, in response to questioning from MicroTech's counsel, Jimenez testified that "we've normally had credit memos that have come in after we've established a debt. And it was either satisfied by the government or our customer paying somebody or it -- the deal went away." Id. at 383:10-14 (punctuation as in transcript).

         In his second declaration, Jimenez states for the first time that "[i]n the few instances where Autonomy determined that a particular transaction could not be completed, it was understood that Autonomy would make MicroTech whole, and with the exception of the Vatican Library and HP deals, Autonomy did." Jimenez Opp'n Decl. ¶ 7. That declaration also states for the first time that the deals with Manufacturers Life Insurance, Morgan Stanley, the Department of the Interior, and Bank of Montreal were "failed . . . transactions, " and indicates that the credit memos issued for those transactions were Autonomy's method of "mak[ing] MicroTech whole." Id.

         When a deal was complete, Autonomy would usually send software directly to the end user via an FTP server rather than providing it to MicroTech as an intermediary. Glass Decl. Ex. 4 (Jimenez Dep.) at 144:3-10; see also Jimenez Decl. ¶ 5 (stating that "Autonomy would deliver the software to the end-user"). MicroTech would "check to see if [the software was], in fact, there" on Autonomy's FTP server before providing the password for Autonomy's server to the end user. Glass Decl. Ex. 4 (Jimenez Dep.) at 349:19-350:3. Jimenez "could find no instance of [MicroTech] ever downloading Autonomy software that was not for [MicroTech's] personal use." Id. at 352:6-8. Jimenez testified that the usual practice was similar with respect to license keys: MicroTech did not "get the license key [sic], write them down, and send them as a standard practice to the end users, " but instead end users would often "have to get the license key from Autonomy." Id. at 346:17-347:1; see also Id. at 349:19-350:5. According to Esterrich, MicroTech "did not provide financing" to Autonomy. Glass Decl. Ex. 23 (Esterrich Dep.) at 185:2-6.

         From time to time, MicroTech would provide certifications to Autonomy's auditors regarding unpaid invoices. See Glass Decl. Exs. 29, 41. Autonomy would send a form letter to MicroTech with a list of invoices and amounts due, requesting that MicroTech certify their validity, unpaid status, and that they were not subject to any "side letters or other agreements, " and return the letter directly to Autonomy's auditors at Deloitte. Id. The letters included an area for MicroTech to note any exceptions, and in some cases MicroTech noted that an invoice had already been partially or fully paid, or that it should be "reversed" because there was "no order" or because the invoice had "not been funded and the product ha[d] not been delivered, " while in other cases MicroTech either indicated that there were no exceptions or left that field blank. Id. The audit letters were usually (if not always) signed by either Steven Truitt or Tomas Esterrich on behalf of MicroTech. See id.

         HP acquired Autonomy in October of 2011, in a transaction not directly related to the purported transaction to sell software to HP discussed separately below.

         2. The Vatican Library Transaction

         One of the primary transactions at issue in this case relates to a purported deal for the Vatican Library to buy Autonomy software for archiving, processing, and retrieving images of manuscripts. See Glass Decl. Ex. 7 (Vatican Library purchase order). Steven Truitt, as chief operating officer, signed a purchase order dated March 31, 2010 on behalf of MicroTech for this transaction, which called for shipment of the software to MicroTech via electronic methods "such as FTP transfer." Id. Jimenez states in his first declaration that he personally approved this transaction. Jimenez Decl. ¶ 6. The payment terms specified that the "Licensee" would pay Autonomy $11, 550, 000 within ninety days-i.e., by June 29, 2010. See Id. The purchase order specifically stated MicroTech's "agreement to purchase the products and services referenced above pursuant to the terms of the . . . Reseller Agreement" and pursuant to the terms stated in the purchase order itself. Glass Decl. Ex. 7. Autonomy issued MicroTech an invoice for $11, 550, 000 for the Vatican Library transaction the same day as MicroTech issued the purchase order for the transaction. Glass Decl. Ex. 36.

         According to Autonomy's chief financial officer Christopher Yellen, Autonomy recognized $11 million in revenue for the Vatican Library transaction in the first fiscal quarter of 2010, which ended in March of that year. Yellen Decl. (dkt. 74-1) ¶ 2.

         Jimenez testified that MicroTech entered into the Vatican Library transaction and committed to pay Autonomy more than eleven million dollars based on a press release from the Vatican Library stating that it intended to use Autonomy software. Glass Decl. Ex. 4 (Jimenez Dep.) at 230:19-231:22. Jimenez testified that, as an incentive for Autonomy to use MicroTech as a reseller, he told Autonomy salespeople that "if we win that Vatican deal, I'm taking you guys to the Superbowl [sic]" because he was "always trying to incentivize the Autonomy salespeople to remember [MicroTech] when they walked in to do a deal." Id. at 360:18-361:2. According to Jimenez, MicroTech and Autonomy signed the deal for the Vatican Library within a matter of days after Steven Truitt informed Jimenez that Autonomy had called to offer MicroTech the opportunity. Id. at 390:18-391:11. Jimenez states in his first declaration that the Vatican Library was "Autonomy's customer, " and that Autonomy "handled all of the negotiations and MicroTech had no direct contact with the Vatican Library." Jimenez Decl. ¶ 9. Jimenez testified that Steven Truitt told him that Autonomy had established a price that the Vatican Library would pay, and that Autonomy represented to Truitt that it would sell the software to MicroTech (to resell to the Vatican Library) at a discount from that price. Glass Decl. Ex. 4 (Jimenez Dep.) at 327:16-328:15.

         MicroTech provided several letters to Autonomy's auditors certifying that the Vatican Library invoice was properly charged, entirely or partially unpaid, and not subject to side letters or other agreements. Glass Decl. Ex. 29 at ¶ 001021, MT001852-53, MT002008, MT002265-66 6 Ex. 41 at AU-MT001303-04, AU-MT002021-22. Those letters were dated July 8, 2010 ($11, 500, 000 unpaid); October 6, 2010 (same); January 26, 2011 ($6, 728, 668.29 unpaid); April 19, 2011 (same); July 12, 2011 ($4, 611, 798.29 unpaid); and July 14, 2011 (same). Id. On each of those letters, MicroTech wrote "none, " "no exceptions, " or "not applicable" in the space to note exceptions, or in one case only noted an exception applicable to a different invoice. Id. Esterrich nevertheless testified to his understanding that the Vatican Library transaction fell within the scope of the practice that MicroTech would not pay Autonomy until MicroTech itself had received payment, even though that agreement deviated from the written Reseller Agreement and was not explicitly noted in any of the audit confirmation letters that MicroTech provided to Autonomy's auditors.[7] Glass Decl. Ex. 23 (Esterrich Dep.) at 147:13-14, 177:6-14.

         John Cronin emailed Steven Truitt on October 13, 2010 to say that a pending $500, 000 payment was "very time sensitive" and should be directed to MicroTech's debt for the "Vatican" transaction. Glass Decl. Ex. 10. Truitt responded that he would talk to Esterrich about making the payment, id., and the payment was made the following day, Glass Decl. Ex. 13. MicroTech made another payment of $4, 321, 331.71 on December 31, 2010-the same day that it received payment from Autonomy for the ATIC project discussed below-as well as payments of $2, 000, 000 on April 21, 2011 and $2, 400, 000 on June 30, 2011. Id. Autonomy wrote off the remaining balance of $2, 328, 668.29 in September of 2011, meaning that MicroTech paid a total of $9, 221, 331.71 for the Vatican Library transaction. See id.

         On January 16, 2011, Esterrich sent an email to Jimenez stating his intent to transfer two million dollars to Autonomy the next day for the Vatican Library transaction. Id. at 209:7-12. He testified at his deposition that "some money had to be in our account, " that "[t]he only way [he could] make a payment is if we have the money in the account based on the agreement that we had that once we get paid, we pay it out, " and that the reason the payment was to be made the next day was likely because the money was not yet in MicroTech's account. Id. at 209:12-210:10; see also Id. at 258 ("Some money has to come from some place before I sent them."). As noted above, however, financial records indicate that MicroTech did not make a $2, 000, 000 payment to Autonomy for the Vatican Library transaction until April of 2011. Glass Decl. Ex. 13.

         Jimenez believed that Autonomy had in fact completed a deal with the Vatican Library to sell the software at issue, based in part on a telephone conversation between Truitt and an Autonomy employee (likely Joel Scott) that Jimenez overheard when he walked into the room where Truitt was using the telephone. Glass Decl. Ex. 4 (Jimenez Dep.) at 329:11-331:10. Although Truitt wrote in an email dated April 20, 2010 that MicroTech had received the software that was the subject of the Vatican Library transaction, Glass Decl. Ex. 14, and an email from John Cronin indicated that the software had been delivered on a disk on March 31, 2010, id. Ex. 15, Jimenez testified that Truitt was mistaken and the email was not accurate because MicroTech did not receive license keys for the software, because MicroTech did not receive the software on a disk, and because the FTP link that MicroTech received was not functional, id. Ex. 4 (Jimenez Dep.) at 232:14-235:5, 239:10-240:5, 243:10-244:6, 248:18-249:4, 252:6-12. Christopher Yellen states in a declaration submitted with Autonomy's reply brief that "an entity like MicroTech . . . may request" license keys after it has downloaded Autonomy software, but that MicroTech never made such a request with respect to this transaction. 2d Yellen Decl. (dkt. 76-1) ¶ 4.

         Jimenez believes that MicroTech was "cheated" by Autonomy on the Vatican Library deal, regardless of whether the software and license keys were ever delivered to the Vatican Library. Glass Decl. Ex. 4 (Jimenez Dep.) at 235:6-237:9, 24:20-242:10, 244:7-10. According to Jimenez, when the deal for HP to acquire Autonomy was announced, he resolved to wait "until the dust kind of settles around the acquisition" before requesting that HP "please figure out what the hell is going on with [MicroTech's] Autonomy deal at the Vatican and why [MicroTech] ha[d] still not been paid." Id. at 334:2-10. In the period from 2011 through 2013, Jimenez asked Truitt to reduce the amount of business MicroTech did with Autonomy and to "put[] more paper on these deals" to reduce risk and ensure an evidentiary record in case of litigation, particularly in the event that Autonomy went out of business. Id. at 338:15-339:1. Jimenez asked Truitt not to "do any more deals where we did verbal deals without all of the paperwork in place, " because "[t]here was a lot of that going on." Id. at 340:1-4.

         After MicroTech made its last payment to Autonomy for the Vatican Library transaction, MicroTech "reached out to Autonomy on several occasions asking for the status" of the transaction, and Autonomy told MicroTech that it was still being negotiated but would eventually close. Jimenez Decl. ¶ 9. Jimenez sent a letter directly to the Vatican Library dated April 23, 2014 stating that Autonomy had asked MicroTech in 2010 to serve as a reseller for an ongoing project between Autonomy and the Vatican Library, and that MicroTech had purchased $11, 550, 000 worth of software but had never been paid. Glass Decl. Ex. 9. Jimenez noted a March 2014 press release by another company, NTT Data Corporation, indicating that it had been selected by the Vatican Library for what Jimenez believed was the same project. Id. Jimenez sought to obtain confirmation from the Vatican Library that it received and used Autonomy software, and to obtain payment to MicroTech for the software. Id. By letter dated May 15, 2014, Monsignor Cesare Pasini of the Vatican Library forwarded Jimenez's letter to "HP Autonomy, " stating that Jimenez's assumption that the Vatican Library used Autonomy software was "absolutely false, " and that "the current project with NTT DATA is completely new and uses software of NTT DATA and third-party providers, different from Autonomy and MicroTech." Id. Pasini went on to explain:

As you well know, [the Vatican Library] has never dealt with the company MicroTech and was not even aware of its involvement with Autonomy at the time of the latter's contacts with [the Vatican Library] to analyze the possibility of a possible collaboration in the digitization project. As you are aware, this collaboration between Autonomy and [the Vatican Library] was never formalized, and from 2011 Autonomy and [the Vatican Library] have ceased to relate.

Id. Pasini asked Autonomy to clear up the matter with MicroTech. Id. Jimenez states that soon after that, he learned for the first time from the media that Autonomy's transaction with the Vatican Library had "fallen through." Jimenez Decl. ¶ 9.

         In May and July of 2013, counsel for Autonomy and HP (which had by that time acquired Autonomy) sent letters to the United States Air Force stating that Autonomy's previous management had used transactions with resellers to artificially inflate Autonomy's stated revenue, and presented the Vatican Library transaction as an example. Jimenez Opp'n Decl. Exs. A, B. Jimenez states in a declaration that the letters led to proceedings by the Small Business Administration, which ultimately cleared MicroTech of any wrongdoing. Jimenez Opp'n Decl. ¶ 13.

         3. The ATIC Facility

         MicroTech developed a demonstration facility known as the Advanced Technology Innovation Center ("ATIC"), or later the "I2C, " short for "Innovation & Integration Center."[8]MicroTech submitted a twenty-eight page proposal to Autonomy for creation of the ATIC "featuring" Autonomy software in November of 2010. Jimenez Decl. ¶ 13 & Ex. 2. The record includes a number of internal Autonomy emails and detailed memoranda discussing MicroTech's proposal, substantially all of which stated support for Autonomy investing in the project. Bianco Decl. Exs. O-Q. On December 30, 2010-one day before MicroTech's first multi-million dollar payment on the Vatican Library project-Autonomy issued a purchase order to pay MicroTech $9, 600, 000 for a "3 Year Option" related to the ATIC, with payment due the following day. Glass Decl. Ex. 11; Bianco Decl. Ex. W.[9] Autonomy now contends that its payment for the ATIC transaction was a sham to allow MicroTech to repay its debt for the never-completed Vatican Library, and thus to allow Autonomy to recognize revenue; MicroTech contends that the ATIC deal was a legitimate transaction to promote Autonomy products at the ATIC, and was not related to the Vatican Library transaction.

         Esterrich testified that the ATIC facility included a display of Autonomy software, but that other companies' products were also on display, including "SGI" and "a whole bunch of brands." Glass Decl. Ex. 23 (Esterrich Dep.) at 194:16-195:2, 200:6-13. Jimenez likened the ATIC to a car dealership, with the "primary purpose" of not only encouraging customers to buy Autonomy products, but specifically to buy them through MicroTech. Glass Decl. Ex. 4 (Jimenez Dep.) at 385:20-386:19. He states in his first declaration that he "originally conceived of the ATIC [as] a perfect platform to showcase Autonomy software." Jimenez Decl. ¶ 12. According to Jimenez, the ATIC was also intended to reinforce to Autonomy the degree of MicroTech's commitment to Autonomy products, and to demonstrate generally to customers that MicroTech had significant technical capabilities on par with much larger corporations. Glass Decl. Ex. 4 (Jimenez Dep.) at 389:3-390:13. Jimenez testified that the ATIC featured software made by four of five companies, but that the intent of the facility was to demonstrate and sell Autonomy software, with the other software serving as "supporting actors and actresses." Id. at 276:16-18, 281:18-282:3. When MicroTech's counsel asked Jimenez whether MicroTech used the ATIC "to market software, other than Autonomy software, " Jimenez responded as follows:

I don't think so. I can't -- I can't think of any instance where we said, buy this; don't buy Autonomy, or this is how it runs, but don't -- we're not going to put Autonomy -- everyone one of the solutions we offered had an Autonomy capability built into it to make it just that much better.
Because we were huge fans of Autonomy. I thought Autonomy was just an amazing product, and so did a lot of people in the environment, including HP, who I think loved Autonomy until somebody decided they overpaid. And all of a sudden they've got buyer's remorse.

Id. at 388:3-17. According to Jimenez, "Autonomy worked closely with [MicroTech] through the construction of the ATIC." Jimenez Decl. ¶ 13.

         MicroTech issued a press release when the ATIC opened in July of 2011, which generally touted MicroTech's capabilities and products. See Glass Decl. Ex. 3. The press release included quotes from senior officers at SGI Federal and Lee Technologies expressing their excitement at partnering with MicroTech on the ATIC, but did not mention Autonomy as a partner on the project. Id. The only reference to Autonomy was in a section at the end of the press release titled "About MicroTech, " which noted-in a list of relationships with twelve vendor corporations- that MicroTech was an "Autonomy Added Value Reseller." Id.

         Esterrich believed that vendors' support for the ATIC project primarily consisted of donating equipment and software, but some vendors also contributed funding for marketing purposes. Glass Decl. Ex. 23 (Esterrich Dep.) at 197:1-22. He recalled a "transaction" with Autonomy related to ATIC, but testified that "there wasn't money exchanged." Id. at 200:15- 201:10. Jimenez testified that some companies besides Autonomy contributed technology to use at the ATIC, but those other companies did not pay money for the ATIC project. Glass Decl. Ex. 4 (Jimenez Dep.) at 404:10-15. According to Jimenez, companies such as CA Technologies and Microsoft did not pay MicroTech for the use of their software in the ATIC because their products were not prominently featured, but were instead used to make the facility and the Autonomy software functional. Id. at 282:4-284:7.

         MicroTech did not a submit to any other companies partnership proposals that were as comprehensive as the proposal it offered to Autonomy, but it approached companies including Lee Technologies, HP, and Dell with more limited proposals. Id. at 295:10-297:2. Jimenez testified that the deal with Autonomy regarding the ATIC was not exclusive because "Autonomy didn't want that" and it would "defeat[] the whole purpose of having an innovation and integration center, " which was to show Autonomy software integrated with other companies' products. Id. at 298:22-301:21. Jimenez testified that he spoke to a number of Autonomy employees about the ATIC facility, both before and after construction of the facility was complete. Id. at 304:6-307:21. Although the ATIC featured Autonomy software, Jimenez testified that it was "not a software center" but rather "the innovation and integration center." Id. at 285:14-19.

         More than one hundred companies toured the ATIC to see MicroTech's demonstrations of its capabilities. Id. at 274:6-20. The ATIC shut down in June or July of 2014 because MicroTech had lost money on it, having "paid in more than [it was] given by Autonomy." Id. at 279:16-280:12, 404:7-8. Although the ATIC had allowed MicroTech to showcase its skills, it did not result in additional revenue. Id. at 404:4-6. Autonomy's chief financial officer Christopher Yellen states that Autonomy did not, to his knowledge, use the ATIC, and that Autonomy does not have records of using the ATIC. Yellen Decl. ¶ 3.

         Jimenez testified that "[s]ome of" the $6, 305, 000 that MicroTech paid to Autonomy when MicroTech had received $9, 600, 000 for the ATIC consisted of "money that had come in from Autonomy and was going out to Autonomy in payment of ...


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