Morrison Foerster Wins Copyright Dismissal for F5 Networks

Morrison Foerster won a dismissal for its client F5 Networks, Inc. in a copyright infringement, fraud, and tortious interference action filed by Lynwood Investments CY Limited, in the United States District Court for the Northern District of California, Case 3:20-cv-03778-MMC.

F5 Networks is a leading multi-cloud application services company that acquired NGINX, Inc. and its eponymous product, NGINX—the world’s most-popular web server software—in May 2019.

Lynwood, a Cyprus-based holding company controlled by Russian oligarch Alexander Mamut, filed suit in June 2020 against F5 Networks and 12 other defendants, including NGINX’s founder and creator Igor Sysoev, asserting 26 causes of action and seeking over $750 million in damages and the rights to NGINX. Lynwood alleged that NGINX was stolen in 2011 from Sysoev’s former employer Rambler Internet Holding LLC, a Russian media company that assigned its purported rights to Lynwood in 2015.

In March 2021, Judge Lucy Koh dismissed 10 claims that Lynwood selected for early resolution, including direct copyright infringement, fraud, and tortious interference, on several grounds, including that they failed to state a claim and were untimely. Lynwood then filed an amended complaint, adding 100 new paragraphs and 25 more pages. F5 and the other defendants again moved to dismiss.

On August 16, 2022, Judge Maxine M. Chesney dismissed Lynwood’s claims with prejudice, finding that they failed under Rule 12(b)(6), were untimely, or both. On the claim of copyright infringement, the court found that, “Lynwood fails to adequately identify in the AC which particular work or works were copied.” Nearly all of Lynwood’s non-stayed claims were also untimely. In particular, Sysoev had been exercising ownership rights over NGINX for the last decade, but Lynwood had not acted. 

“In sum,” Judge Chesney found, “Lynwood had constructive knowledge of the facts giving rise to its claims by 2011 or at least by 2013 but failed to act diligently in discovering its claims.”

The Morrison Foerster team representing F5 Networks includes Michael Jacobs, Jessica Grant, Benjamin J. Fox, Eric Tate, Joyce Liou, and Cooper Spinelli and Professor Paul Goldstein of Stanford University, of counsel to the firm.