Comcast Urges Dismissal of MaxLinear’s Trade Secret Misappropriation Counterclaims

Comcast is asking the U.S. District Court for Southern New York in Manhattan to dismiss MaxLinear’s misappropriation of trade secrets counterclaims in their entirety under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, said Comcast’s memorandum of law Friday (docket 1:23-cv-04436) in support of its motion to dismiss.

The cable company sued May 26 to hold MaxLinear accountable for its “improper attempted termination” of contracts to supply chips for millions of broadband gateways deployed to Comcast internet customers (see 2305300045). MaxLinear breached its Comcast contracts, “which remain in full force and effect,” said the memorandum.

Recognizing its “legal peril,” MaxLinear now has deployed a “new made-for-litigation gambit” by asserting “wholly unrelated” trade-secret misappropriation and breach-of-contract counterclaims against Comcast in this case, said the memorandum. Misappropriation is a serious accusation, yet MaxLinear “never once raised any concerns to Comcast” before filing its counterclaims, it said.

If MaxLinear surely believed that Comcast had misappropriated its highly valuable confidential information and then disclosed it years ago to MaxLinear competitor Broadcom, as alleged, “it would have acted immediately,” said the memorandum. But it didn’t, it said. It instead waited until more than six months into this litigation “after it had no choice but to face Comcast’s claims,” it said.

MaxLinear’s counterclaims accuse Comcast of taking unspecified MaxLinear information related to full-duplex (FDX) amplifiers and providing it to Broadcom so that Broadcom could develop a competing device, said the memorandum. MaxLinear does so based entirely on its information and belief and “self-aggrandizing speculation” that MaxLinear was the only company capable of developing such technology, it said.

MaxLinear also alleges that Comcast disclosed the purported trade secrets to Broadcom so that it could pay Broadcom to develop a competing FDX-amplifier solution, “even though MaxLinear had allegedly already developed one without Comcast paying MaxLinear a dime,” said the memorandum. MaxLinear’s counterclaims “are just as implausible as they sound, and they should be dismissed for several independent reasons,” it said.

The counterclaims fail to “plausibly allege” use or disclosure of any MaxLinear information, said the memorandum. The core of MaxLinear’s claims is based on the “bare assertion” that Broadcom’s supposedly rapid development of such a device is simply too convenient to be believed. it said.

But courts have repeatedly recognized that such conclusory allegations “are equally consistent with good-faith product development competition and thus fail to cross the line from possible to plausible, as required,” said the memorandum. MaxLinear further contends that Comcast improperly disclosed MaxLinear’s undefined FDX trade-secret technology when a Comcast employee published two papers that allegedly reflected aspects of MaxLinear’s FDX-amplifier information supposedly shared with Comcast, it said.

But MaxLinear doesn’t identify the purported “materially identical” aspects, citing instead two diagrams from the papers and inviting the court and Comcast "to guess," said the memorandum. Beyond generic references to common publicly known components, the diagrams in the articles “bear no similarity to any figure MaxLinear allegedly presented to Comcast,” it said. MaxLinear can’t plead improper disclosure “without even explaining what information it alleges was improperly disclosed,” it said.

MaxLinear also fails to adequately plead a trade secret, said the memorandum. Courts in the 2nd U.S. Circuit Court of Appeals require claimants “to specify their alleged trade secrets in enough detail for defendants to understand what they are accused of misappropriating,” it said. Information already in the public domain doesn’t suffice, it said.

Nor do “broad concepts or overall product design ideas,” said the memorandum. Yet MaxLinear’s counterclaims focus on two such concepts -- an FDX amplifier and the mitigation of signal interference -- that were “indisputably publicly known at the time of any alleged disclosure by MaxLinear to Comcast,” it said.

The rest of MaxLinear’s pleading identifies “only generic, undifferentiated categories of information that courts routinely deem insufficient to support trade-secret claims,” said the memorandum. MaxLinear independently fails to allege “the requisite protective measures used to safeguard whatever it is that MaxLinear claims to be its trade secret,” it said. The pleading points only “to a single non-disclosure agreement with Comcast, which is insufficient as a matter of law,” it said.

MaxLinear’s claim for breach of a nondisclosure agreement “fails for many of the same reasons as its trade-secret claims,” said the memorandum. Nothing in the counterclaims “plausibly alleges the actual use or disclosure of confidential information,” it said. MaxLinear’s claims for unfair competition and New York State trade-secret misappropriation “impermissibly duplicate its breach-of-contract claim and should be dismissed for that reason too,” it said.