Philips North America LLC v. Image Technology Consulting LLC et al

Filing 334

Memorandum Opinion and Order: Before the Court is Plaintiff Philips North America LLC ("Philips")' Motion for Partial Summary Judgment (Doc. 239 ), Defendants Image Technology Consulting, LLC, Marshall R. Shannon, Image Technology Consulting II, LLC, and Axiom Imaging Inc. (collectively, "Defendants")'s Motion for Summary Judgment (Doc. 244 ), Philips' Motion to Exclude Certain Opinions of Michael Fenn (Doc. 227 ), Philips' Motion to Strike an Am icus Brief (Doc. 221 ), Philips' Motion to Strike a Response Filed by a Non- Party (Doc. 255 ), Defendants' Motion to Strike the Expert Report of Dr. Alberto Gutierrez (Doc. 234 ), Defendants' Motion to Strike the Expert Report of Dr. Alessandro Orso (Doc. 275 ), Defendants Motion to Strike the Expert Report of Schoettelkotte (Doc. 279 ), and Tommy Geske's Motion to Compel (Doc. 297 ).1 For the following reasons, the Court GRANTS IN PART and DENIES IN PART the Motions (Ordered by Judge Jane J Boyle on 11/22/2024) (ndt)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
PHILIPS NORTH AMERICA LLC,
Plaintiff,
v.
IMAGE TECHNOLOGY
CONSULTING, LLC; MARSHALL R.
SHANNON, IMAGE TECHNOLOGY
CONSULTING II, LLC; and AXIOM
IMAGING INC.,
Defendants.

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CIVIL ACTION NO. 3:22-CV-0147-B

MEMORANDUM OPINION & ORDER
Before the Court is Plaintiff Philips North America LLC (“Philips”)’ Motion for Partial
Summary Judgment (Doc. 239), Defendants Image Technology Consulting, LLC, Marshall R.
Shannon, Image Technology Consulting II, LLC, and Axiom Imaging Inc. (collectively,
“Defendants”)’s Motion for Summary Judgment (Doc. 244), Philips’ Motion to Exclude Certain
Opinions of Michael Fenn (Doc. 227), Philips’ Motion to Strike an Amicus Brief (Doc. 221), Philips’
Motion to Strike a Response Filed by a Non-Party (Doc. 255), Defendants’ Motion to Strike the
Expert Report of Dr. Alberto Gutierrez (Doc. 234), Defendants’ Motion to Strike the Expert Report
of Dr. Alessandro Orso (Doc. 275), Defendants’ Motion to Strike the Expert Report of
Schoettelkotte (Doc. 279), and Tommy Geske’s Motion to Compel (Doc. 297). 1 For the following
reasons, the Court GRANTS IN PART and DENIES IN PART the Motions.

1

The parties have also filed a litany of Motions to Seal, which the Court will address in a separate

Order.
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I.
BACKGROUND
This case is about MRI machines. Philips manufactures MRI machines and sells them to
healthcare providers like hospitals. Doc. 242, Pl.’s App’x, 1. Philips also offers maintenance and
repair services for Philips MRI machines. Id. However, Philips is not the only entity that provides
such services for its MRI machines. There are several companies called Independent Service
Operators (“ISOs”) that also provide these services. Doc. 246, Defs.’ App’x, 3. Defendants Image
Technology Consulting II (“Image II”) and Axiom Imaging, Inc. (“Axiom”) are ISOs that contract
with the owners of the MRI machines to provide maintenance and repair services on Philips MRIs.
Id. Defendant Marshall Shannon owns these two companies. Id. at 1. Shannon also previously owned
Defendant Image Technology Consulting (“Image Tech”), which is no longer operating. Id. at 1–2.
A.

Philips Security Measures
Philips MRI machines contain complicated software that helps the machines operate

efficiently. Philips considers some of the software tools on these machines to be proprietary trade
secrets and has implemented strict security measures to protect them. Doc. 242, Pl.’s App’x, 1–2.
Philips classifies its tools based on how sensitive Philips considers the software. Doc. 243, Pl.’s Sealed
App’x, 192–93. The more sensitive the information, the higher its Customer Service Intellectual
Property (“CSIP”) classification. See id. at 193. For example, CSIP Level 0 information and tools are
generally available to any party who asked Philips for permission to access them. Id. However, only
Philips employees or companies that entered into licensing agreements with Philips have access to
CSIP Level 1 tools. Id. And Philips reserves CSIP Level 2 classification for its most commercially
sensitive information—generally only Philips’ Field Service Engineers can access this information. Id.

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Under the company’s security measures, Philips assigns every authorized user a CSIP
classification. Id. at 17. Philips then issues the user an Integrated Security Tool (“IST”) certificate
granting them access to all information and tools that fall under their assigned CSIP classification.
Id. When the user inputs their IST certificate onto a Philips MRI, the system allows them to access
only the information their certificate says they are authorized to access. See id. Thus, if someone’s
IST certificate designated them with a CSIP Level 1 classification, they would only be authorized to
access materials on the MRI machine that are designated CSIP Level 1 or lower.
Philips originally classified many of the tools the ISOs used to provide their services (“Service
Tools”) as CSIP Level 0. Doc. 243, Pl.’s Sealed App’x, 20. The tools Defendants used to provide the
repair and maintenance services (“Service Tools”) were on the MRI machines’ installation menu,
which Defendants could access freely because they had CSIP Level 0 classification. See id. at 21.
Thus, for many years, ISOs were able to provide their maintenance and repair services without
needing permission from Philips. Id. at 20. However, Philips implemented a new software update in
2019, called Software Pack 5 (“SP5”), which changed the Service Tools’ classification to CSIP Level
1. Id. at 20–21. After the SP5 update, the Service Tools were no longer accessible on the MRIs’
installation menu. Id. Thus, Defendants could not use the Service Tools without getting permission
from Philips, even if the owners of the MRI machines wanted to hire the Defendants to provide
maintenance and repair services on their MRI machines.
B.

Defendants’ Circumvention of Philips Security Measures
Defendants knew that they would not be able to access the Service Tools on any Philips MRI

machine that had installed the SP5 software. See Doc. 242, Pl.’s App’x, 354–55. Because they wanted
to continue providing maintenance services to their customers, Defendants obtained a fake IST

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certificate to bypass Philips’ security measures. Id. at 354. This fake IST certificate tricked Philips’
security measures into thinking the user was a Philips Field Service Engineer named Donald Trump
and provided Defendants access to all information classified as CSIP Level 2 or lower. Doc. 243,
Pl.’s Sealed App’x, 39–41. Importantly, Philips did not issue the Donald Trump IST certificate and
Philips never authorized Defendants to access any information classified higher than CSIP Level 0.
Doc. 242, Pl.’s App’x, 364.
Philips learned that Shannon and Image Tech had a fake IST certificate on June 4, 2021.
Doc. 242, Pl.’s App’x, 430, 433. Philips filed this lawsuit against Shannon and Image Tech in January
2022. Doc. 1, Compl. In July 2023, Philips learned that Axiom and Image II had also engaged in
conduct that Philips alleges is unlawful. Doc. 267, Pl.’s App’x, 5. Philips amended its Complaint to
assert claims against Axiom and Image II on September 14, 2023. Doc. 119, Second Am. Compl.
Philips then served Axiom and Image II on September 22, 2023. Doc. 125, Summons; Doc. 126,
Summons.
Philips has four remaining claims 2 that it asserts against each Defendant: (1) a Computer
Fraud and Abuse Act (“CFAA”) claim; (2) a Digital Millenium Copyright Act (“DMCA”) claim; (3)
an unfair competition claim under Texas law; and (4) a common law fraud claim, also under Texas
law. Doc. 119, Second Am. Compl., ¶¶ 66–142. Philips has moved for summary judgment as to
liability on all of its claims except for unfair competition. Doc. 240, Pl.’s Br. Mot. Summ. J., 4.
Philips has also moved to exclude some opinions offered by Defendants’ expert witness. Doc. 227,
Mot. Exclude. Defendants have moved for summary judgment on all of Philips’ claims. Doc. 245,
Defs.’ Br. Mot. Summ. J., 1. Defendants have also moved to strike Philips’ expert testimony. Doc.

2

The Court previously granted Philips default judgment on its misappropriation of trade secrets
claims as an evidentiary sanction.
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234, Mot. Strike; Doc. 275, Mot. Strike; Doc. 279, Mot. Strike. The Court considers the Motions
below.
II.
LEGAL STANDARD
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate
when the pleadings and record evidence show that no genuine issue of material fact exists and that,
as a matter of law, the movant is entitled to judgment. Hart v. Hairston, 343 F.3d 762, 764 (5th Cir.
2003). On a motion for summary judgment, the burden is on the movant to prove that no genuine
issue of material fact exists. Provident Life & Accident Ins. Co. v. Goel, 274 F.3d 984, 991 (5th Cir.
2001). To determine whether a genuine issue exists for trial, the court must view all of the evidence
in the light most favorable to the non-movant. See Chaplin v. NationsCredit Corp., 307 F.3d 368, 371–
72 (5th Cir. 2002).
When the party with the burden of proof is the movant, it must establish each element of
its claim as a matter of law. Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). If the nonmovant bears the burden of proof at trial, the summary judgment movant need not support its
motion with evidence negating the non-movant’s case. Latimer v. SmithKline & French Labs., 919 F.2d
301, 303 (5th Cir. 1990). Rather, the movant may satisfy its burden by pointing to the absence of
evidence to support the non-movant’s case. Id.; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th
Cir. 1994).
Once the movant has met its burden, the burden shifts to the non-movant, who must show
that summary judgment is not appropriate. Little, 37 F.3d at 1075 (citing Celotex Corp. v. Catrett, 477
U.S. 317, 325 (1986)). “This burden is not satisfied with some metaphysical doubt as to material

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facts, . . . by conclusory allegations, . . . by unsubstantiated assertions, or by only a scintilla of
evidence.” Id. (internal citations omitted). A non-moving party with the burden of proof must
“identify specific evidence in the record and articulate the manner in which that evidence supports
that party’s claim,” Johnson v. Deep E. Tex. Reg’l Narcotics Trafficking Task Force, 379 F.3d 293, 301
(5th Cir. 2004), and “come forward with ‘specific facts showing that there is a genuine issue for trial.’”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis in original)
(quoting FED. R. CIV. P. 56(e)).
III.
ANALYSIS
The Court starts by granting in part and denying in part each side’s respective Motions to
Strike. The Court then addresses the parties’ Motions for Summary Judgment and concludes that
Philips is entitled to summary judgment as to liability on its CFAA, DMCA, and fraud claims, while
the statute of limitations bars Philips’ unfair competition claim against Axiom and Image II for any
conduct that occurred before September 22, 2021. The only issues that will be resolved at trial are:
(1) Philips’ unfair competition claim against Shannon and Image Tech; (2) whether there are any
instances of Philips’ unfair competition claim against Axiom and Image II that accrued after
September 2021; (3) whether the federal accrual rule delays the accrual date of Philips’ CFAA claim
against Axiom and Image II until July 2023; and (4) Philips’ damages for its four remaining claims.
A.

The Court Grants in Part and Denies in Part the Motions to Strike.
The parties have filed six Motions to Strike. Philips moves to exclude the opinions of

Defendants’ expert Michael Fenn. Doc. 227, Mot. Exclude. Philips has also moved to strike an
amicus brief, Doc. 221, Mot. Strike, and a response filed by Thomas Quinn, who is not a party to

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this lawsuit. Doc. 255, Mot. Strike. Defendants have likewise filed a Motion to Strike the Expert
Report and Testimony of Philips’ experts Dr. Alberto Gutierrez, Dr. Alessandro Orso, and W. Todd
Schoettelkotte. Doc. 234, Mot. Strike; Doc. 275, Mot. Strike; Doc. 279, Mot. Strike. The Court
addresses each Motion to Strike in turn.
1. The Court Grants in Part and Denies in Part Philips’ Motion to Exclude Fenn’s
Testimony.
“‘In considering a Rule 56(c) motion opposed by expert testimony, the trial court has broad
discretion to rule on the admissibility of the expert’s evidence and may inquire into the reliability
and foundation of any expert’s opinion.’” Munoz v. Orr, 200 F.3d 291, 301 (5th Cir. 2000)
(alterations omitted) (quoting Washington v. Armstrong World Indus., Inc., 839 F.2d 1121, 1123 (5th
Cir. 1988)). The admissibility of expert testimony is governed by Federal Rule of Evidence 702,
which permits an otherwise qualified expert to testify if the proponent demonstrates the following:
(a) the expert’s scientific, technical, or other specialized knowledge will help the trier
of fact to understand the evidence or to determine a fact in issue; (b) the testimony
is based on sufficient facts or data; (c) the testimony is the product of reliable
principles and methods; and (d) the expert has reliably applied the principles and
methods to the facts of the case.
FED. R. EVID. 702. As the Supreme Court explained in Daubert v. Merrell Dow Pharms., Inc., Rule 702
requires that courts act as gatekeepers to “ensure that any and all scientific testimony . . . is not only
relevant, but reliable.” 509 U.S. 579, 589 (1993).
“The court may admit proffered expert testimony only if the proponent, who bears the
burden of proof, demonstrates that (1) the expert is qualified, (2) the evidence is relevant to the suit,
and (3) the evidence is reliable.” Equal Emp. Opportunity Comm’n v. S&B Indus., Inc., No. 3:15-CV0641-D, 2017 WL 345641, at *2 (N.D. Tex. Jan. 24, 2017) (Fitzwater, J.). “The burden is on the
proponent of the expert testimony to establish its admissibility by a preponderance of the evidence.”
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Galvez v. KLLM Transp. Servs., LLC, 575 F. Supp. 3d 748, 759 (N.D. Tex. 2021) (Fitzwater, J.).
“Experts cannot render conclusions of law or provide opinions on legal issues.” Renfroe v. Parker, 974
F.3d 594, 598 (5th Cir. 2020) (citation omitted).
Philips moves to exclude five of Fenn’s opinions. First, Fenn provided testimony discussing
how the DMCA defines “effective” and “modifications,” and opined as to whether those definitions
are satisfied in this case. Doc. 228, Br. Mot. Exclude, 1. Second, Fenn testified that he believes
certain FDA regulations justified Defendants’ actions in this lawsuit. Id. at 1–2. Third, Fenn testified
that Defendants were authorized to work on the MRI machines by their customers. Id. at 2. Fourth,
Fenn opined that he believes Defendants’ methods of circumvention were “necessary” as required
to be exempted from the DMCA. Id. Fifth, Fenn testified that he believes a skilled engineer could
create a fake IST certificate to circumvent Philips’ security measures. Id. at 2–3. The Court addresses
each opinion in turn.
i. Fenn may not provide testimony on the meaning of terms defined by the DMCA.
Fenn’s testimony on whether Philips’ security measures were effective and whether
Defendants modifying registry files would constitute “modifications” is inadmissible because these
are attempts to provide legal opinions. Section 1201(a)(1) of the DMCA provides that “[n]o person
shall circumvent a technological measure that effectively controls access to a work protected under
this title.” 17 U.S.C. § 1201(a)(1)(A). The DMCA further provides that “a technological measure
‘effectively controls access to a work’ if the measure, in the ordinary course of its operation, requires
the application of information, or a process or a treatment, with the authority of the copyright
owner, to gain access to the work.” Id. § 1201(a)(3)(B).
Fenn opined that Defendants did not violate the DMCA because Philips’ security measures

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were not effective. Doc. 230, Pl.’s Sealed App’x, 59. Specifically, Fenn testified that Philips’ security
measures “[do] not use industry standard protection techniques like digital signatures for its IST
certificates.” Id. By testifying to whether Philips’ security measures fell within the meaning of
“effective” as written in the statute, Fenn attempted to provide a legal opinion. And in any event,
the DMCA simply requires the technological measure to “require[] the application of information,
or a process or a treatment” for the technological measure to effectively control access to a work. 17
U.S.C. § 1201(a)(3)(B). It does not require the technological measures to conform with industry
standards. Thus, Fenn may not opine on whether he believes the security measures were effective,
as his testimony offers a legal opinion and is inconsistent with the text of the DMCA.
Next, Fenn opined as to whether Defendants modifying registry files would constitute
“modifications” that would mean the right to repair DMCA exemption does not apply. Doc. 228,
Br. Mot. Exclude, 9. Fenn testified that Defendants did not make any modifications to the MRI
machines because “Defendants did not make any permanent modifications to the software.” Doc.
230, Pl.’s Sealed App’x, 58. This is a legal opinion because Fenn is testifying as to the meaning of
“modification” under the DMCA’s right to repair exemption. See Renfroe, 974 F.3d at 598.
Accordingly, the Court grants the Motion to Strike as to Fenn’s testimony on the meaning of
“effective” and “modifications.”
ii. Fenn may not provide testimony discussing FDA regulations.
Philips next moves to exclude portions of Fenn’s report discussing whether the Defendants’
conduct was authorized by various FDA regulations. Doc. 228, Br. Mot. Exclude, 11. Because this
testimony is attempting to establish that Defendants complied with FDA regulations, the Court
finds that these statements are likewise inadmissible legal opinions. See Renfroe, 974 F.3d at 598.

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iii. Fenn may not testify as to whether customers authorized Defendants to access MRI
machines.
Philips next moves to exclude one sentence in Fenn’s report in which Fenn states that
customers authorized Defendants to access their MRI machines. Doc. 228, Br. Mot. Exclude, 11.
Defendants respond that Fenn does not intend to testify as to what any customers told Defendants.
Doc. 259, Resp., 7. To assuage Philips’ concerns, Fenn may not testify as to whether customers told
Shannon he could work on their MRI machines because such testimony is not an expert opinion,
FED. R. EVID. 702, and it would constitute inadmissible hearsay. FED. R. EVID. 801(c).
iv. Fenn may testify as to whether Defendants’ circumventions were a necessary step to repairing
an MRI machine.
Philips next moves to exclude Fenn’s testimony that Defendants circumventing Philips’
technical measures was necessary to repair or maintain the MRI machines. Doc. 228, Br. Mot.
Exclude, 13. Philips argues that Fenn does not know whether the methods Defendants used were
necessary to repair the machine, and that Fenn did not use a reliable methodology when reaching
his opinions. Id. The Court rejects both arguments.
Philips argues that Fenn only considered whether the methods of circumvention were
necessary to access certain service tools as opposed to whether the circumventions were necessary to
repair the MRI machine. Id. at 14. This argument fails because Fenn said that “using a fake IST
certificate (or modifying the Windows Registry) was a necessary step for Defendants to execute
service tools for at least Planned Maintenance, Repair, and Troubleshooting.” Doc. 230, Pl.’s App’x,
57. Thus, Fenn knew whether the methods Defendants used were necessary to service the machine,
and Fenn used a reliable methodology because he expressly considered whether Defendants needed
any tools classified at CSIP Level 1 to maintain or repair the MRI machine.

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Philips next contends that Fenn’s testimony about whether Defendants’ circumventions
were necessary “would be highly prejudicial and risk jury confusion.” Doc. 228, Br. Mot. Exclude,
14. This argument lacks merit. A court may exclude evidence “if its probative value is substantially
outweighed by a danger of . . . unfair prejudice.” FED. R. EVID. 403 (emphasis added). “Unfair
prejudice as used in rule 403 is not to be equated with testimony that is merely adverse to the
opposing party.” Brazos River Auth. v. GE Ionics, Inc., 469 F.3d 416, 427 (5th Cir. 2006) (quotations
omitted). While testimony suggesting that the DMCA exemption applies to some of Defendants’
circumventions may prejudice Philips’ case, Philips has entirely failed to explain how it is unfairly
prejudicial or how it would confuse the jury. So the Court rejects this argument.
v. The Court need not address Fenn’s testimony on reverse engineering.
Philips lastly moves to exclude Fenn’s testimony that Philips did not use reasonable measures
to protect its trade secrets. Doc. 228, Br. Mot. Exclude, 16. Because the Court previously granted
Philips default judgment on its trade secret claims, any testimony regarding the trade secrets claims
is no longer at issue in this lawsuit. Accordingly, the Court denies as moot the Motion to Exclude
as to Fenn’s testimony on reverse engineering.
2. The Court Grants Defendants’ Motion to Strike Dr. Gutierrez’s Testimony.
The Court next grants Defendants’ Motion to Strike Dr. Gutierrez’s Testimony because this
testimony offers impermissible legal opinions. One of Philips’ expert witnesses, Dr. Gutierrez, plans
to offer testimony interpreting FDA regulations. Doc. 236, Def.’s App’x, 4.
As Philips persuasively argued in its Motion to Exclude Fenn’s Opinions, any testimony
discussing the meaning of an FDA regulation is an impermissible legal opinion. Van Winkle v. Rogers,
No. 6:19-CV-01264, 2022 WL 4231013, at *4 (W.D. La. Sept. 13, 2022), aff’d, 82 F.4th 370 (5th

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Cir. 2023). Thus, Philips may not offer its own expert witness to provide the exact same testimony
that Philips successfully sought to exclude.
Philips contends that Defendants did not offer any specific opinion in Dr. Gutierrez’s report
that constitutes a legal opinion. Gutierrez plans on testifying that “the installation instructions
described in 21 CFR 820.170 are limited to the initial installation of the device when sold by the
manufacturer and, therefore, would not impose any disclosure obligation on the manufacturer when
a used device is subsequently installed or serviced by a third party.” Doc. 236, Pl.’s App’x, 14. As
this testimony attempts to interpret the scope of a regulation, it is a legal opinion.
In sum, no witness may provide any testimony interpreting a regulation. The meaning of
regulations are legal questions decided by the Court, not an expert witness.
3. The Court Denies Defendants’ Motion to Strike Dr. Orso’s Testimony.
Defendants next move to strike two portions of Dr. Orso’s testimony. First, Defendants
move to strike as unreliable Dr. Orso’s report because he assumed that Defendants used all 511
CSIP Level 1 tools or higher that were available on Philips MRI machines. Doc. 276, Br. Mot. Strike,
7–8. The Court denies as moot the Motion to Strike this testimony because it only discusses damages
and liability for Philips’ misappropriation of trade secrets claims. The Court already granted Philips
default judgment on its misappropriation of trade secret claims and awarded Philips damages as an
evidentiary sanction.
Next, Defendants move to strike Dr. Orso’s opinion that Defendants circumvented Philips’
security measures 22 times. Doc. 276, Br. Mot. Strike, 7–8. Defendants argue this opinion is
unreliable because ten of the 22 times are based on circumventions of an MRI machine that is no
longer located at the facility Defendants serviced. Doc. 314, Reply, 5. The Court finds that this

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argument fails to establish that Dr. Orso’s testimony is unreliable. It speaks to the weight of his
opinion, not its admissibility. See Villegas v. Cequent Performance Prod., Inc., No. SA-15-CV-473-XR,
2017 WL 816872, at *10 (W.D. Tex. Mar. 1, 2017) (“[A]n expert’s ignorance of certain facts . . . is
a matter of probative weight, rather than admissibility, of evidence.”). As the Court explained in a
previous Order (Doc. 328), Dr. Orso conducted extensive forensic analysis to identify the times he
believes Defendants circumvented Philips’ security measures. If Defendants dispute his findings,
they may do so at trial. See Daubert, 509 U.S. at 596 (“Vigorous cross-examination, presentation of
contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate
means of attacking shaky but admissible evidence.”).
4. The Court Denies Defendants’ Motion to Strike Schoettelkotte’s Testimony.
Defendants lastly move to strike Schoettelkotte’s expert testimony on damages. First,
Defendants move to strike his report as to reasonable royalty damages. The Court denies the Motion
as to this point as moot because the Court already sanctioned Defendants for spoliation and awarded
Philips reasonable royalties.
Defendants then move to strike Schoettelkotte’s report because it “does not appropriately
attribute [Philips’] alleged damages to the respective actions of each of the specific Defendants.” Doc.
280, Br. Mot. Strike, 12. Defendants argue they are each separate entities, thus the damages should
be separated between them. See id. Defendants cite no authority to support their proposition that
this is grounds to strike an expert opinion on damages. Thus, the Court denies the Motion.
Lastly, Defendants argue that Schoettelkotte made misleading statements about remediation
costs in his expert report. Doc. 280, Br. Mot. Strike, 13. Defendants argue it was improper because
Schoettelkotte included remediation costs in his report, yet he testified that remediation costs were

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not part of his damages model. Id. However, Defendants entirely fail to explain why this is grounds
to strike his discussion on remediation costs, so the Court denies the Defendants’ Motion to Strike
this part of his testimony.
5. The Court Denies Philips’ Motion to Strike the Amicus Brief and Quinn’s Response.
Philips next moves to strike Tommy Geske’s Amicus Brief and Quinn’s Response. Doc. 221,
Mot. Strike; Doc. 255, Mot. Strike. After Philips filed these two Motions to Strike, Geske filed a
Motion to Compel (Doc. 297), seeking a Court order to compel Philips to follow the Northern
District of Texas’s Local rules “rather than cavalierly ignore them.” The Court denies as moot
Philips’ Motion to Strike Amicus Brief (Doc. 221) and Philips’ Motion to Strike Quinn’s Response
(Doc. 255) because the Court did not need to consider either the Amicus Brief or Quinn’s Response
when ruling on the merits of this Order. Lastly, the Court denies Geske’s Motion to Compel (Doc.
297) as he is not a party to this lawsuit, so he may not seek a Court Order in this case.
B.

The Court Grants in Part and Denies in Part Philips’ Motion for Summary Judgment on its CFAA,
DMCA, and Fraud Claims, and the Court Grants in Part and Denies in Part Defendants’ Motion
for Summary Judgment.
The Court grants Philips summary judgment as to liability on its CFAA, DMCA, and fraud

claims. The Court denies Defendants’ Motion for Summary Judgment as to Philips’ unfair
competition claim against Shannon and Image Tech. However, the Court finds that Philips’ unfair
competition claim against Axiom and Image II is barred by the statute of limitations for any conduct
occurring before September 22, 2021. The Court also finds there is a genuine issue of material fact
whether Philips’ CFAA claim against Axiom and Image II is barred by the statute of limitations.
1. Philips is Entitled to Summary Judgment on its CFAA Claim as to Liability.
Philips has established that it is entitled to judgment as a matter of law on its CFAA claim

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as to liability. Under § 1030(a)(2)(C), it is a violation of the CFAA to “intentionally access[] a
computer without authorization or exceed[] authorized access, and thereby obtain[] . . . information
from any protected computer.” Thus, Philips is entitled to summary judgment by proving that: (1)
Defendants intentionally exceeded their authorized access and (2) obtained information (3) on a
protected computer. Philips has established all three elements of its CFAA claim as a matter of law.
i. Defendants intentionally exceeded their authorized access by using the fake IST certificate to
access their customers’ MRI machines.
The CFAA defines “exceeds authorized access” as “to access a computer with authorization
and to use such access to obtain or alter information in the computer that the accesser is not entitled
so to obtain or alter.” 18 U.S.C. § 1030(e)(6). Thus, to prevail on its CFAA claim, Philips must
establish that Defendants either “obtain[ed] access without authorization” or “obtain[ed] access with
authorization but then us[ed] that access improperly.” Musacchio v. United States, 577 U.S. 237, 240
(2016).
Defendants intentionally exceeded their authorized access by using a fake IST certificate to
access CSIP Level 1 and higher information. It is undisputed that Philips only authorized
Defendants to access CSIP Level 0 information. See Doc. 242, Pl.’s App’x, 364 (Shannon testifying
that he had never been granted access to CSIP Level 1 materials or higher). And it is undisputed
that, after SP5, the Service Tools were classified as CSIP Level 1 information. Doc. 243, Pl.’s Sealed
App’x, 20–21. Thus, Defendants used the Donald Trump IST certificate to access Service Tools
which they did not have permission to access. Therefore, Philips has proven the first element of its
CFAA claim as a matter of law.
Defendants argue that they did not violate the CFAA because their customers, the owners
of the MRI machines, gave them authority to perform maintenance services. Doc. 245, Defs.’ Br.
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Mot. Summ. J., 11. However, the owners of the MRI machines are not allowed to give Defendants
access to CSIP Level 1 software. See Doc. 242, Pl.’s App’x, 84 (explaining that a purchaser of a Philips
MRI machine is not authorized to provide third parties with access to Philips’ proprietary software
tools). Because the MRI owners could not provide Defendants with access to the Service Tools,
Defendants still exceeded their authorized access when they used the fake IST certificate to gain
access to CSIP Level 1 and higher software. See 18 U.S.C. § 1030(e)(6).
Defendants next argue that a regulation promulgated by the Federal Drug Administration
(“FDA”), 21 C.F.R. § 820.170, serves as a defense. Doc. 245, Defs.’ Br. Mot. Summ. J., 11–12. The
Court has previously rejected this argument and held that Ҥ 820.170 does not grant Defendants
access to unauthorized information.” Doc. 27, Mem. Op. & Order, 12. The Court will not revisit
its prior Order and again concludes that § 820.170 does not serve as a defense to Philips’ claim
under the CFAA.
Defendants also argue that the Library of Congress’s right to repair DMCA exemption
excuses this conduct, “and the CFAA cannot be interpreted to conflict with the” right to repair
exemption. Doc. 271, Defs.’ Resp., 14. The Court notes that it is not at all clear that the right to
repair exemption conflicts with the CFAA because the regulation only exempts conduct from
liability under the DMCA. See 37 C.F.R. § 201.40(a). So while Defendants’ conduct might be
exempted from violating the DMCA, that does not necessarily mean Defendants cannot incur
liability from violating other statutes. Regardless, even assuming that the DMCA exemption conflicts
with the CFAA, “a valid statute always prevails over a conflicting regulation.” Duarte v. Mayorkas, 27
F.4th 1044, 1060 n.13 (5th Cir. 2022) (citation omitted). Further, Defendants cite no authority that
the DMCA exemption bars liability under the CFAA. Therefore, the Court rejects this argument.

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ii. Defendants obtained information on the Philips MRI machines.
A party “obtains information” under § 1030(a)(2)(C) by simply observing or reading
information. Good ‘Nuff Garage, LLC v. McCulley, No. 3:21CV571, 2022 WL 4485810, at *12 (E.D.
Va. Sept. 26, 2022) (citing S.Rep. No. 104-357, at *7, 1996 WL 492169 (1996)). Thus, Philips can
establish this element of its CFAA claim by demonstrating that Defendants observed information
on the MRI machines located in parts of the computer that Defendants were not authorized to
access.
By using the Donald Trump IST certificate, Defendants accessed Service Tools which they
did not have authority to access. Defendants subsequently used the Service Tools after SP5
reclassified them to CSIP Level 1. Doc. 243, Pl.’s Sealed App’x, 39–41. Thus, Philips has proven
that Defendants obtained information as Defendants observed information when they used the
Service Tools. See Good ‘Nuff Garage, 2022 WL 4485810, at *12.
iii. The Philips MRI machines are protected computers.
Lastly, a protected computer is any computer that “is used in or affecting interstate
commerce.” 18 U.S.C. § 1030(e)(2)(B). Proving that a computer has internet access is generally
sufficient to establish that it is used in interstate commerce. See Complete Logistical Servs., LLC v. Rulh,
394 F. Supp. 3d 625, 645–46 (E.D. La. 2019). Here, the Philips MRI machines had internet access,
Doc. 243, Pl.’s Sealed App’x, 275, so the MRI machines are protected computers.
iv. Philips has incurred costs greater than $5,000.
In addition to the substantive elements imposed by the CFAA, a plaintiff may only maintain
a CFAA cause of action if the plaintiff has incurred losses of more than $5,000 in a one-year period.
18 U.S.C. § 1030(c)(4)(A)(i)(I), (g). The CFAA defines “loss” as “including the cost of responding to

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an offense, conducting a damage assessment.” Id. § 1030(e)(11). Here, Philips has presented evidence
that it “incurr[ed] an internal investigation cost of $6,809” while investigating the extent of
Defendants’ CFAA violations. Doc. 240, Br. Mot., 27 (citing Doc. 242, Pl.’s App’x, 728). Thus,
Philips has established it incurred more than $5,000 in losses in one year. 18 U.S.C. § 1030(e)(11).
In sum, Philips has proven each element of its CFAA claim as a matter of law and is therefore
entitled to summary judgment as to liability. Philips’ damages with regard to its CFAA claim will be
resolved at trial.
2. Philips is Entitled to Summary Judgment on its DMCA Claim as to Liability.
Philips is entitled to judgment as a matter of law on its DMCA claim as to liability for all
circumventions that occurred before October 28, 2021. Section 1201(a)(1) of the DMCA provides
that “[n]o person shall circumvent a technological measure that effectively controls access to a work
protected under this title.” 17 U.S.C. § 1201(a)(1)(A). “[T]o ‘circumvent a technological measure’
means to descramble a scrambled work, to decrypt an encrypted work, or otherwise to avoid, bypass,
remove, deactivate, or impair a technological measure, without the authority of the copyright
owner.” Id. § 1201(a)(3)(A). “[A] technological measure ‘effectively controls access to a work’ if the
measure, in the ordinary course of its operation, requires the application of information, or a process
or a treatment, with the authority of the copyright owner, to gain access to the work.” Id.
§ 1201(a)(3)(B).
i. Philips’ security measures protected copyrighted works.
The Court finds that Philips’ technical measures limited access to works subject to copyright
protection. As a preliminary matter, the DMCA only applies if the plaintiff used technical measures
to control access to works that are subject to copyright protection. 17 U.S.C. § 1201(a)(1)(A). As a

-18-

literary work, computer code can be subject to copyright protection. Vault Corp. v. Quaid Software,
Ltd., 847 F.2d 255, 259 (5th Cir. 1988). Philips has introduced evidence sufficient to prove as a
matter of law that its security measures protected the Service Tools, Doc. 243, Pl.’s Sealed App’x,
580–82, which consist of software code that Philips argues is subject to copyright protection. Doc.
241, Pl.’s Br. Mot. Summ. J., 14. Because Defendants do not contest whether this software is a
protected work under the Copyright Act, the Court concludes that Philips satisfied this part of its
DMCA claim.
ii. Defendants circumvented a technological measure.
Defendants circumvented Philips’ technological measures by using a fake IST certificate to
get access to the Philips MRI machines. A party “circumvents a technological measure” when it
avoids or bypasses a copyright owner’s protective measures. MGE UPS Sys., Inc. v. GE Consumer &
Indus., Inc., 622 F.3d 361, 366 (5th Cir. 2010). Here, Philips had protective measures in place, such
as passwords, that were designed to ensure people could only access information in accordance with
their CSIP classification. Doc. 243, Pl.’s Sealed App’x, 580–82. Defendants then used a fake IST
certificate to bypass these protective measures. Id. at 39–41. Philips has thus established that
Defendants circumvented Philips’ technological measures as a matter of law.
iii. Philips’ technological measures effectively controlled access to Philips’ protected works.
Philips has established as a matter of law that its technological measures effectively controlled
access to Philips’ copyrighted software. A plaintiff establishes this element of a DMCA claim when
the protective measures require someone to, with the plaintiff’s approval, apply information or use
some process to gain access to the copyrighted works. 17 U.S.C. § 1201(a)(3)(B).
In Digital Drilling Data Systems, L.L.C. v. Petrolink Services, Inc., the Fifth Circuit concluded

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that a plaintiff had not effectively controlled access to their copyrighted works because the plaintiff’s
software code “was stored in an open database file.” 965 F.3d 365, 376 (5th Cir. 2020). Thus, anyone
could access the copyrighted software without needing the plaintiff’s permission. Id.
Here, Philips controls access to the copyrighted software by requiring both a password and
an IST certificate to access any information classified as CSIP Level 1 or higher. Doc. 243, Pl.’s
Sealed App’x, 582–83. And someone can generally only obtain this information directly from
Philips—the proprietary software is not available on a public database. See id. at 17. Philips has also
produced contracts showing that it did not allow its licensees to share their access with someone
who had not contracted with Philips. Doc. 242, Pl.’s App’x, 84. Thus, parties can only lawfully obtain
access to CSIP Level 1 information or higher if they receive permission from Philips. Therefore,
Philips has demonstrated as a matter of law that it effectively controlled access to its copyrighted
works. See 17 U.S.C. § 1201(a)(3)(B); see also Dig. Drilling Data Sys., 965 F.3d at 376.
iv. The DMCA right to repair exemption applies to some of the circumventions at issue in this
case.
On October 28, 2021, the Library of Congress promulgated a regulation that creates a “right
to repair” exemption to the DMCA. 37 C.F.R. § 201.40(b). The right to repair exemption to the
DMCA protects circumvention of technological measures on medical devices, if the defendant
engages in a non-infringing use, only “when circumvention is a necessary step to allow the diagnosis,
maintenance, or repair of such a device.” Id. § 201.40(b)(15). Defendants argue that this exemption
to the DMCA bars Philips’ DMCA claims. 3 Doc. 245, Defs.’ Br. Mot. Summ. J., 8.

3

Philips insists that the Court has already held that the right to repair exemption does not apply
here. Doc. 266, Pl.’s Resp., 24. However, the Court has only held that the reverse engineering exemption to
the DMCA does not apply because the reverse engineering exemption requires an individual to have “lawfully
obtained the right to use a copy of the computer program.” Doc. 185, Mem. Op. & Order, 10 (citing 21
U.S.C. § 1201(f)).
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The DMCA right to repair exemption applies to the conduct at issue in this lawsuit.
Defendants circumvented Philips’ security measures to gain access to the tools Defendants needed
to provide maintenance and repair services on medical devices. Indeed, Defendants contracted with
hospitals to ensure the MRI machines were working as designed. Doc. 246, Defs.’ App’x, 2–3. This
is the exact conduct contemplated by § 201.40(b)(15). However, this exemption does not excuse all
of Defendants’ circumventions.
Philips presents four arguments for why the DMCA right to repair exemption does not apply
here. First, Philips argues that the exemption does not apply retroactively, so any circumventions
that occurred before the Library of Congress promulgated this regulation are not protected. Doc.
240, Pl.’s Br. Mot. Summ. J., 19–20. Second, Philips argues that the Exemption only protects noninfringing uses, and Defendants infringed protected works. Id. at 21. Third, Philips contends that
the DMCA exemption does not apply because Defendants modified files when they circumvented
security measures. Id. Fourth, Philips argues that Defendants did not need to circumvent the security
measures to provide maintenance services. Id. at 22–23. The Court addresses each argument in turn.
a. The right to repair exemption does not apply retroactively.
Any circumventions that occurred before October 28, 2021, do not fall within the scope of
the right to repair exemption to the DMCA. There is a presumption that regulations do not apply
retroactively. See Germain v. US Bank Nat’l Ass’n as Tr. for Morgan Stanley Mortg. Loan Tr. 2006-7, 920
F.3d 269, 274–75 (5th Cir. 2019). A court may apply a regulation retroactively if “the regulation
clearly expresses [that] it is to be applied retroactively.” Id. at 274. When a regulation does not clearly
express that it should be applied retroactively, the Court should not apply the regulation “to the
event or act in question” if doing so would have a “retroactive effect.” Id. at 275. A regulation has

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retroactive effect if it “attaches new legal consequences to events completed before [the regulation’s]
enactment.” Id. (quoting I.N.S. v. St. Cyr, 533 U.S. 289, 321 (2001)).
There is nothing in the text of the DMCA right to repair exemption that suggests it should
apply retroactively. See generally 37 C.F.R. § 201.40(b)(15). And because Defendants attempt to use
it as a defense that did not exist at the time Defendants violated the DMCA, this application would
have a retroactive effect. See Germain, 920 F.3d at 275. Therefore, the DMCA right to repair
exemption is inapplicable to any circumvention that occurred before the Library of Congress
promulgated it on October 28, 2021. Otherwise, it would have an impermissible retroactive effect.
Here, Philips has identified 21 times that it believes Defendants circumvented Philips’
security measures using a fake IST certificate before September 2019. Doc. 243, Pl.’s Sealed App’x,
547–65. All these claimed circumventions occurred before the Library of Congress promulgated the
right to repair exemption to the DMCA. Therefore, the exemption does not excuse any of this
conduct.
However, Philips also presents evidence that Defendants circumvented its technological
measures once in September 2022. Id. at 565. Thus, the DMCA exemption could potentially apply
to the single instance Philips has identified Defendants using a fake IST certificate after the Library
of Congress promulgated the right to repair exemption.
b. Defendants’ circumventions were for a non-infringing purpose.
Second, Philips argues that the DMCA exemption does not apply because Defendants
infringed Philips’ copyrighted software. Doc. 240, Pl.’s Br. Mot. Summ. J., 21. The DMCA requires
any exemption promulgated by the Library of Congress to only cover “noninfringing uses.” 17
U.S.C. § 1201(a)(1)(D). Philips argues that Defendants’ circumventions were infringing uses of

-22-

Philips’ proprietary software because Defendants’ circumventions were motivated to “bypass Philips’
security to freeride and make non-transformative use of Philips’ protected software for commercial
gain.” Doc. 240, Pl.’s Br. Mot. Summ. J., 21. The Court rejects this argument. The Library of
Congress promulgated a regulation that allows owners of medical devices to circumvent security
measures to perform maintenance and repair services on their medical devices. See 37 C.F.R.
§ 201.40(b)(15). Here, the owners of the medical devices simply contracted with Defendants to do
so. Doc. 246, Defs.’ App’x, 2. Thus, it is not at all clear why this would constitute an infringing use
of Philips’ copyrighted software. Accordingly, the Court rejects this argument.
c. Defendants did not modify any registry files after the Library of Congress
promulgated the right to repair exemption.
Third, Philips argues that the DMCA exemption does not apply because Defendants
modified Philips’ software when they circumvented Philips’ technological measures. Doc. 241, Pl.’s
Br. Mot. Summ. J., 21–22. The parties agree that the DMCA Exemption does not protect any
circumventions that modify a medical device or the medical device’s software. 4 One of Philips’
circumvention methods involved modifying registry files. Doc. 243, Pl.’s Sealed App’x, 55–56. When
someone modifies a registry file, they are changing the software on a Philips MRI machine. See id. at
576. Shannon testified that he modified a registry file “two or three times,” and he told his employees
to modify other registry files. Doc. 242, Pl.’s App’x, 415. Thus, modifying a registry file would
potentially not be protected under the DMCA exemption.

4

Register’s Recommendation, Section 1201 Rulemaking: Eighth Triennial Proceeding to Determine
Exemptions
to
the
Prohibition
on
Circumvention
at
208,
available
at
https://cdn.loc.gov/copyright/1201/2021/2021_Section_1201_Registers_Recommendation.pdf.
Both sides appear to agree that the Register’s Recommendation is binding even though this language
is not found in the DMCA exemption. Doc. 241, Pl.’s Br. Mot. Summ. J., 21–22; Doc. 271, Defs.’ Resp., 9–
10. Accordingly, the Court will assume that a circumvention that results in modifying the software on a
medical device is not exempted from DMCA liability.
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However, Defendants did not always modify registry files when they circumvented Philips’
technological measures. As discussed throughout this Order, Defendants would also use a fake IST
certificate to circumvent the security measures, and the use of a fake IST certificate does not involve
modifying the software on an MRI machine. Thus, Defendants’ circumventions where they modified
a registry file are not protected by the exemption, but this finding does not mean that all of
Defendants’ circumventions are likewise not protected.
There is no evidence that Defendants modified a registry file when they supposedly used a
fake IST certificate in 2022. Doc. 243, Pl.’s Sealed App’x, 564–65. Thus, this argument fails to
establish that the 2022 circumvention that occurred while the exemption was in effect is not
protected.
d. Defendants’ circumvention of Philips’ security measures was necessary to
perform maintenance and repair services on Philips MRI machines.
Fourth, Philips argues that Defendants did not need to circumvent Philips’ security measures
to provide maintenance and repair services for the MRI machines. As relevant here, the DMCA
right to repair exemption only authorizes circumventing technological measures that are necessary
for the maintenance or repair of a medical device. 37 C.F.R. § 201.40(b)(15). Philips argues that the
DMCA exemption does not apply because Defendants’ circumventions gave them “access to a
massive suite of Philips’ proprietary services tools that Shannon admits he does not need.” Doc. 241,
Pl.’s Br. Mot., 22. This argument fails. The relevant inquiry is not whether the circumvention gave
Defendants access to more than they needed to maintain or repair the medical devices. Instead, the
inquiry is whether the circumvention was necessary for Defendants to be able to perform such
services on the medical devices. See 37 C.F.R. § 201.40(b)(15).
The evidence before the Court indicates that Defendants needed to use the Service Tools to
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provide maintenance services on the MRI machines, Doc. 246, Defs.’ App’x, 2–3, and they could
not access the Service Tools without circumventing Philips’ security measures after SP5. Id. Thus,
Defendants needed to circumvent the technological measures to repair and maintain medical
devices. The fact that Defendants also received access to more materials than they needed to provide
repair services does not mean that Defendants’ circumvention was not necessary to repair the device.
In sum, Philips is entitled to judgment as a matter of law on its DMCA claims. At trial,
Philips may recover damages for every time Defendants circumvented Philips’ technological
measures before the DMCA exemption was promulgated on October 28, 2021, and every time
Defendants circumvented the technological measures after the DMCA exemption was promulgated
when Defendants modified a registry file. Philips may not, however, recover damages for Defendants’
circumventions after October 28, 2021, where Defendants did not modify any software, because
such circumventions are protected by the DMCA right to repair exemption as a matter of law.
3. Philips is Entitled to Summary Judgment on its Fraud Claim.
Philips is entitled to summary judgment as to liability on its fraud claim. Under Texas law,
fraud claims have six elements:
(1) that a material representation was made; (2) the representation was false; (3) when
the representation was made, the speaker knew it was false or made it recklessly
without any knowledge of the truth and as a positive assertion; (4) the speaker made
the representation with the intent that the other party should act upon it; (5) the
party acted in reliance on the representation; and (6) the party thereby suffered
injury.
Lawrence v. Fed. Home Loan Mortg. Corp., 808 F.3d 670, 674 (5th Cir. 2015); see also Ernst & Young,
L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001). “A representation is material if the
representation was important to the plaintiff in making a decision, such that a reasonable person
would be induced to act on and attach importance to the representation in making the decision.”
-25-

Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, Inc., 590 S.W.3d 471, 496 (Tex. 2019).
As with its CFAA and DMCA claims, Philips relies on Defendants using a fake IST certificate
to support its fraud claim. When Defendants used the fake Donald Trump IST certificate,
Defendants made a false representation that they were a Philips Field Service Engineer who was
allowed to access CSIP Level 2 materials. See Lawrence, 808 F.3d at 674. A reasonable person would
find this representation material because using the fake IST certificate gave Defendants access to
Philips’ proprietary software tools. See Barrow-Shaver Res. Co., 590 S.W.3d at 496. Thus, the first two
elements of Philips’ fraud claim are satisfied.
Next, Defendants knew that the representation was false because Shannon has admitted that
he only ever had authority to access CSIP Level 0 tools. Doc. 242, Pl.’s App’x, 364. Thus, Shannon
knew that he was not a Field Service Engineer who was allowed to access CSIP Level 2 information
when he used the fake IST certificate. See Lawrence, 808 F.3d at 674.
Defendants further made the misrepresentation with the intent that Philips would grant
them access to the MRI machine. Shannon admitted that he used the fake IST certificate because
he wanted to circumvent Philips’ security measures, Doc. 242, Pl.’s App’x, 354–55, thus the intent
element of the fraud claim is satisfied. See Lawrence, 808 F.3d at 674.
The last two elements of the fraud claim are satisfied because Philips relied on Defendants’
misrepresentation when Philips allowed Defendants access the CSIP Level 2 tools on Philips MRI
machines, and Philips was injured by the misrepresentation because Defendants were able to access
Philips’ proprietary software. Id. Accordingly, Philips has established each element of its fraud claim
as a matter of law, and the Court grants Philips summary judgment as to liability on the fraud claim.
At trial, Philips may present evidence on what damages it incurred in connection with its common

-26-

law fraud claim.
4. There is a Genuine Issue of Material Fact on Philips’ Unfair Competition Claim.
There is a genuine issue of material fact on Philips’ state-law claim for unfair competition.
Under Texas law, “[u]nfair competition . . . is the umbrella for all statutory and nonstatutory causes
of action arising out of business conduct which is contrary to honest practice in industrial or
commercial matters.” Taylor Pub. Co. v. Jostens, Inc., 216 F.3d 465, 486 (5th Cir. 2000) (internal
quotation omitted). But a claim for unfair competition cannot stand on its own; rather, liability
must be premised on some other independent substantive tort or illegal conduct. See id.; Schoellkopf
v. Pledger, 778 S.W.2d 897, 904–05 (Tex. App.—Dallas 1989, writ denied). Here, Philips’ claim for
unfair competition is premised on Defendants violating the DMCA and the CFAA. Doc. 119,
Second Am. Compl., ¶¶ 123–32. Because the Court found that Philips has established Defendants
violated the DMCA and the CFAA, there is an underlying tort to support Philips’ unfair
competition claim.
Defendants argue that Philips’ claim for unfair competition fails because Defendants’
circumventions of Philips’ security measures are not illegal as such circumventions are “expressly
authorized by law.” Doc. 245, Defs.’ Br. Mot. Summ. J., 12. Specifically, Defendants contend that
regulations promulgated by the FDA and the Library of Congress allowed Defendants to use a fake
IST certificate to access the Service Tools. See id. The Court has rejected this argument previously,
and as discussed above, most circumventions occurred before the right to repair exemption to the
DMCA took effect. Accordingly, the Court denies Defendants’ Motion for Summary Judgment as
to Philips’ unfair competition claim.

-27-

5. The Statute of Limitations Only Bars Philips’ Unfair Competition Claim Against Axiom
and Image II.
Defendants argue that all four of Philips’ remaining claims against Axiom and Image II are
barred by their respective statute of limitations. Doc. 245, Defs.’ Br. Mot. Summ. J., 5–7.
Importantly, Defendants do not argue that any of Philips’ claims against Shannon or Image Tech
are barred by the statute of limitations.
CFAA and unfair competition claims have a statute of limitations of two years. 18 U.S.C.
§ 1030(g); see TEX. CIV. PRAC. & REM. CODE § 16.003(a). Claims asserted under the DMCA have a
three-year statute of limitations. 17 U.S.C. § 507(b). And Texas common law fraud claims have a
four-year statute of limitations period. TEX. CIV. PRAC. & REM. CODE § 16.004(a)(4). Philips’ two
federal claims, the CFAA and DMCA claims, were commenced once Philips filed its Second
Amended Complaint. See Caldwell v. Martin Marietta Corp., 632 F.2d 1184, 1188 (5th Cir. 1980)
(“[A]n action commences simply upon the filing of a complaint.”); see also 18 U.S.C. § 1030(g); 17
U.S.C. § 507(b). But under Texas law, a “plaintiff must not only file suit within the limitations
period, but must also use due diligence in serving the defendant with process if the defendant is
served after the expiration of the limitations period.” Gant v. DeLeon, 786 S.W.2d 259, 260 (Tex.
1990).
The Court must look to the date of each circumvention to determine whether any of them
are barred by the respective statute of limitations. As discussed above, these circumventions
constitute the conduct giving rise to liability for all of Philips’ remaining claims. Dr. Orso testified
that he believes Defendants circumvented Philips’ technological measures at least 22 times. Doc.
243, Pl.’s Sealed App’x, 573. Twenty-one of the 22 circumventions occurred before September 2019,
which is more than four years before Philips asserted its claims against Axiom and Image II. Id. at
-28-

547–64. Therefore, the statute of limitations bars all four claims against Axiom and Image II in
connection with the earlier 21 circumventions unless Philips can demonstrate that an exception to
the statute of limitations applies.
Philips argues both that its claims against Axiom and Image II relate back to the original
Complaint and that they are subject to the discovery rule. Doc. 265, Pl.’s Resp., 16. For reasons the
Court will explain below, the Court concludes that Philips’ claims against Axiom and Image II do
not relate back to the original Complaint. However, Philips’ fraud and DMCA claims are not barred
by the statute of limitations under a different exception. Additionally, there is a genuine issue of
material fact whether Philips’ CFAA claim against Axiom and Image II is barred by the statute of
limitations. Lastly, the Court concludes that any acts of unfair competition that occurred before
September 22, 2021, are barred by the statute of limitations.
i. Philips’ claims against Axiom and Image II do not relate back to Philips’ original Complaint.
Philips’ claims against Axiom and Image II do not relate back to the original Complaint. A
plaintiff’s claim is not barred by the statute of limitations if it relates back to the original complaint.
FED. R. CIV. P. 15(c). An amendment adding a new party to the lawsuit relates back to the original
complaint if:
the amendment changes the party or the naming of the party against whom a claim
is asserted, if Rule 15(c)(1)(B) is satisfied and if, within the period provided by Rule
4(m) for serving the summons and complaint, the party to be brought in by
amendment:
(i) received such notice of the action that it will not be prejudiced in
defending on the merits; and
(ii) knew or should have known that the action would have been brought
against it, but for a mistake concerning the proper party’s identity.
FED. R. CIV. P. 15(c)(1)(C)(i)–(ii).
Rule 15(c)(1)(C) has three elements: “(1) the same conduct, transaction, or occurrence; (2)
-29-

notice [to the new defendant]; and (3) mistake.” Liggins v. City of Duncanville, No. 3:20-CV-0654-S,
2021 WL 929105, at *4 (N.D. Tex. Mar. 11, 2021) (Scholer, J.). Philips has the burden to show that
its amendment adding Axiom and Image II to this lawsuit relates back to the original Complaint.
Al-Dahir v. F.B.I., 454 F. App’x 238, 242 (5th Cir. 2011). “Rule 15(c) does not allow an amended
complaint adding new defendants to relate back if the newly-added defendants were not named
originally because the plaintiff did not know their identities.” Winzer v. Kaufman Cnty., 916 F.3d
464, 470 (5th Cir. 2019) (citation omitted). But if the plaintiff identified the wrong company when
initially filing suit, then the amended complaint can relate back to the original complaint. See Krupski
v. Costa Crociere S. p. A., 560 U.S. 538, 554 (2010).
Here, Philips has failed to meet its burden of establishing that it did not originally sue Axiom
and Image II because of a mistake regarding the proper identity of the Defendants. Philips claims
that its mistake was failing to name every corporate party involved in this lawsuit, and that this
mistake was caused by “confusion over the corporate entities involved in the unlawful conduct.”
Doc. 266, Pl.’s Resp., 16–17. In other words, the mistake was that Philips did not learn that Axiom
and Image II existed until Shannon’s deposition in July 2023. The Court fails to see any distinction
between a plaintiff not knowing the defendant’s identity and Philips’ argument that it did not know
every corporate entity that committed the unlawful conduct. Cf. Winzer, 916 F.3d at 471 (“Failing
to identify individual defendants cannot be characterized as a mistake.” (citation and alteration
omitted)); see also Mornes v. Valdez, 414 F. Supp. 3d 888, 891 (N.D. Tex. 2019) (Toliver, M.J.)
(“Plaintiff alleges that he only recently learned of Judd’s identity, not that he was mistaken as to her
identity. Thus, the relation-back doctrine does not apply.”).

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In Philips’ Response, Philips argues that that it did not know Axiom and Image II were
involved with Shannon and Image Tech until July 2023, Doc. 266, Pl.’s Resp., 20, which further
suggests that its failure to join the two Defendants was because it failed to identify the two
companies, as opposed to made a mistake regarding which companies were the proper defendants.
Accordingly, the Court concludes that Philips’ claims against Axiom and Image II do not relate back
to the original Complaint.
ii. Philips’ DMCA and fraud claims against Axiom and Image II are timely, but the Texas
discovery rule does not render Philips’ claim for unfair competition timely, and there is a
genuine issue of material fact regarding whether the federal accrual rule renders Philips’ CFAA
claim timely.
Philips’ DMCA and fraud claims against Axiom and Image II are timely because Philips did
not discover its injury until June 4, 2021. But the statute of limitations has run on Philips’ unfair
competition claim against Axiom and Image II for every circumvention that occurred before
September 22, 2021, while there is a genuine issue of material fact on whether Philips’ CFAA claim
is barred by the statute of limitations. The Court first notes that the date the statute of limitations
began running for Philips’ state-law claims will be determined using the Texas discovery rule, while
the date for Philips’ federal claims will be dictated by the federal accrual rule. The Court will discuss
Philips’ state and federal claims separately because they are governed by different standards.
a. The Texas discovery rule delays the accrual of the Texas fraud and unfair
competition claims until June 4, 2021.
The Texas discovery rule “defers accrual of a cause of action until the plaintiff knew or,
exercising reasonable diligence, should have known of the facts giving rise to the cause of action.”
Comput. Assocs. Int’l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1996). “The discovery rule applies
only when the nature of the plaintiff’s injury is both inherently undiscoverable and objectively

-31-

verifiable.” Shell Oil Co. v. Ross, 356 S.W.3d 924, 930 (Tex. 2011) (citation omitted). An injury is
inherently undiscoverable “when the wrong and injury were unknown to the plaintiff because of
their very nature and not because of any fault of the plaintiff.” S.V. v. R.V., 933 S.W.2d 1, 7 (Tex.
1996). The question of whether a legal injury is inherently undiscoverable “is decided on a
categorical rather than case-specific basis.” Via Net v. TIG Ins. Co., 211 S.W.3d 310, 314 (Tex. 2006).
This requires the Court to decide if the type of injury the plaintiff suffered is inherently
undiscoverable—not whether the plaintiff’s particular injury was discoverable. Id.
The type of injuries at issue in this lawsuit were inherently undiscoverable. See Shell Oil Co.,
356 S.W.3d at 930. Philips’ injuries stem from Defendants circumventing the company’s security
measures using a fake IST certificate that impersonated a Philips Field Service Engineer. Doc. 243,
Pl.’s Sealed App’x, 39–41. A defendant hacking into a plaintiff’s computer system by impersonating
one of the plaintiff’s employees is inherently undiscoverable because the plaintiff would have no
reason to know the hacker was not their employee and because the defendant is trying to avoid
detection. Thus, the Court finds that the injuries were inherently undiscoverable, and that the
discovery rule can apply to Philips’ state-law claims. See Shell Oil Co., 356 S.W.3d at 930.
The Court holds that Philips has the burden to show there is a genuine issue of material fact
on whether the Texas discovery rule applies to Philips’ state-law claims. The Supreme Court of Texas
has held that a “defendant moving for summary judgment on the affirmative defense of limitations
has the burden to conclusively establish that defense.” KPMG Peat Marwick v. Harrison Cnty. Hous.
Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). Thus, under the Texas Rules of Civil Procedure, a
defendant moving for summary judgment has the burden “to negate the [Texas] discovery rule by
proving as a matter of law that no issue of material fact exists concerning when the plaintiff

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discovered or should have discovered his injury.” Rollins v. S. Baptist Convention, 628 S.W.3d 583,
594 (Tex. App.—Houston [1st Dist.] 2021, pet. denied) (citation omitted). However, in F.D.I.C. v.
Shrader & York, the Fifth Circuit explained that, even with claims asserted under Texas law, the
Federal Rules of Civil Procedure require the plaintiff to “produc[e] some summary judgment
evidence in support of its discovery rule argument.” 991 F.2d 216, 220 (5th Cir. 1993). But the Fifth
Circuit later held that the defendant has the burden to negate the Texas discovery rule for Texas law
claims, without explaining why it was diverging from the prior opinion. Tex. Soil Recycling, Inc. v.
Intercargo Ins. Co., 273 F.3d 644, 649 (5th Cir. 2001).
One district court within the Fifth Circuit addressed this conflicting precedent and followed
the Shrader & York decision because “earlier precedent applies” absent any intervening change in the
law. Silo Rest. Inc. v. Allied Prop. & Cas. Ins. Co., 420 F. Supp. 3d 562, 576 (W.D. Tex. 2019). The
court went on to explain that it was unaware of any subsequent intervening change in law that would
require it to follow the later Fifth Circuit opinion. Id. The Court finds this district court’s reasoning
persuasive, and holds that Philips has the burden to demonstrate the existence of a genuine issue of
material fact regarding whether the Texas discovery rule delays the accrual of its state-law claims.
The Texas discovery rule delays the accrual of Philips’ state-law claims until June 4, 2021.
Philips learned that Shannon and Image Tech had a fake IST certificate they used to circumvent
Philips’ security measures on June 4, 2021. Doc. 242, Pl.’s App’x, 430, 433. There is no evidence to
suggest that Philips knew or should have known that any of the Defendants were engaged in the
conduct at issue in this case before June 4, 2021. Further, Defendants offer no argument for why
Philips should have known about its injuries before June 4, 2021. See Doc. 245, Defs.’ Br. Mot.
Summ. J., 5–7. Thus, the Court finds that the Texas discovery rule applies, and the statute of

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limitations did not begin running on Philips’ fraud or unfair competition claims before June 4,
2021.
Philips served Axiom and Image II on September 22, 2023. 5 Doc. 125, Summons; Doc. 126,
Summons; see Gant, 786 S.W.2d at 260. Common law fraud claims have a statute of limitations of
four years. TEX. CIV. PRAC. & REM. CODE § 16.004(a)(4). Because Philips sued Axiom and Image II
just over two years after June 4, 2021, Philips’ fraud claim against Axiom and Image II is timely.
However, unfair competition claims have a statute of limitations of two years. See TEX. CIV. PRAC.
& REM. CODE § 16.003(a). Thus, to survive Defendants’ Motion for Summary Judgment as to its
unfair competition claim against Axiom and Image II, Philips needs to create a genuine issue of
material fact that its unfair competition claim did not accrue before September 22, 2021—two years
before it served Axiom and Image II.
While neither side directly addresses this issue, the Court notes that there are two relevant
dates for determining whether the discovery rule delays the accrual of Philips’ claims. First, Philips
learned that Shannon and Image Tech had a fake IST certificate on June 4, 2021, as discussed above.
Doc. 242, Pl.’s App’x, 430, 433. Second, Philips learned that Axiom and Image II were involved in
this lawsuit in July 2023. Doc. 267, Pl.’s App’x, 5. Thus, the Court needs to determine if the
discovery rule delays the accrual of Philips’ unfair competition claim until July 2023.
Philips fails to meet its burden of establishing the Texas discovery rule delays the accrual of
its unfair competition claim against Axiom and Image II until July 2023. The Supreme Court of

5

While Philips filed its Second Amended Complaint which asserted claims against Axiom and Image
II on September 14, 2023, Philips did not offer any argument establishing that it exercised reasonable
diligence in serving Axiom and Image II after filing the Second Amended Complaint. Doc. 265, Pl.’s Resp.,
15–21. Therefore, the Court will assume that Philips’ Texas law claims against Axiom and Image II did not
commence until Axiom and Image II were served on September 22, 2023.
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Texas has held that ignorance of a defendant’s identity is not grounds to delay the accrual of a statute
of limitations. Marcus & Millichap Real Est. Inv. Servs. of Nev., Inc. v. Triex Tex. Holdings, LLC, 659
S.W.3d 456, 462 (Tex. 2023). Instead, the discovery rule only delays the accrual date until Philips
learned the facts that gave rise to its claims. See id. at 461. Philips only argues that it did not learn
Axiom and Image II were proper defendants until Shannon’s deposition in July 2023. Doc. 266,
Pl.’s Resp., 18. Indeed, Dickson stated that Philips did not learn that Image II and Axiom were
involved in the conduct at issue in this lawsuit until Shannon’s deposition. Doc. 267, Pl.’s App’x, 5.
Philips knew of the facts that gave rise to its claims when it learned that Shannon and Image
Tech had a fake IST certificate because Defendants’ use of the fake IST certificate is the conduct
supporting all of Philips’ claims. Thus, once Philips learned Shannon had a fake IST certificate,
Philips learned the facts that gave rise to the claims it asserts in this lawsuit. The Court finds that
Philips’ ignorance as to the two other Defendants does not further delay the accrual of Philips’ unfair
competition claims. See Marcus & Millichap Real Est. Inv. Servs. of Nev., Inc., 659 S.W.3d at 462.
Additionally, the Court will not use the fraudulent concealment doctrine to toll the statute
of limitations of Philips’ unfair competition claim until July 2023. “Fraudulent concealment tolls
the statute of limitations after a cause of action accrues.” Lilly v. Texas Dep’t of Crim. Just., 472 S.W.3d
411, 420 (Tex. App.—Houston [14th Dist.] 2015, no pet.). Plaintiffs must prove four elements to toll
the statute of limitations because of fraudulent concealment: “(1) existence of an underlying tort; (2)
the defendant’s knowledge of the tort; (3) the defendant’s use of deception to conceal the tort; and
(4) the plaintiff’s reasonable reliance on the deception.” Id.
Here, Philips has entirely failed to explain why the Court should toll the statute of limitations
in connection with its unfair competition claim against Axiom and Image II because of fraudulent

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concealment. Philips argues that Defendants concealed the fact that Axiom and Image II were
involved in the litigation, Doc. 266, Pl.’s Resp., 20–21, but Philips offers no evidence to suggest that
Axiom and Image II concealed the existence of the unfair competition claim. In fact, Philips had
knowledge of the unfair competition claim as Philips initiated this lawsuit in January 2022. Thus,
the Court finds that the fraudulent concealment doctrine does not warrant tolling the statute of
limitations on Philips’ unfair competition claim against Axiom and Image II.
However, Philips’ unfair competition claim is not entirely barred by the statute of limitations.
Philips has evidence that Defendants circumvented its security measures once in 2022, Doc. 243,
Pl.’s Sealed App’x, 564, which means the unfair competition claim in connection with this
circumvention is timely. See TEX. CIV. PRAC. & REM. CODE § 16.003(a).
In sum, Philips’ fraud claim against Axiom and Image II is timely because the Texas discovery
rule delayed the accrual of the fraud claim until June 4, 2021. But Philips’ claim for unfair
competition against Axiom and Image II is barred by the statute of limitations in connection with
any circumvention that occurred before September 22, 2021.
b. The federal accrual rule delays the accrual of the DMCA claim until June
4, 2021, and there is a genuine issue of material fact regarding whether
the accrual date of Philips’ CFAA claim was delayed until July 2023.
The accrual date of federal claims can likewise be delayed using the federal accrual rule. 6
“Under federal law, a claim accrues and the limitations period begins to run the moment the plaintiff
becomes aware that he has suffered an injury or has sufficient information to know that he has been
injured.” King-White v. Humble Indep. Sch. Dist., 803 F.3d 754, 762 (5th Cir. 2015) (citations and

6

Philips argues that the discovery rule defers accrual of its federal causes of action. Doc. 266, Pl.’s
Resp., 18. In King-White v. Humble Independent School District, the Fifth Circuit used the term “federal accrual
rule” as opposed to federal discovery rule. 803 F.3d 754, 762 (5th Cir. 2015).
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alterations omitted). The Fifth Circuit has further explained that, with respect to federal claims, the
statute of limitations “begins to run when a claimant discovers the facts that give rise to a claim and
not when a claimant discovers that those facts constitute a legal violation.” McCune v. U.S. Dep’t of
Just., 592 F. App’x 287, 290 (5th Cir. 2014). The facts that give rise to a claim are: “(1) [that] an
injury has occurred; and (2) the identity of the person who inflicted the injury.” Stewart v. Par. of
Jefferson, 951 F.2d 681, 684 (5th Cir. 1992).
Both of Philips’ federal claims, the DMCA and CFAA claims, are subject to the federal
accrual rule. “In this Circuit a copyright claim accrues ‘when [the party] knew or had reason to know
of the injury upon which the claim is based.’” Jordan v. Sony BMG Music Ent. Inc., 354 F. App’x 942,
945 (5th Cir. 2009) (alteration in original) (quoting Pritchett v. Pound, 473 F.3d 217, 220 (5th Cir.
2006)). Under the CFAA, “[n]o action may be brought under this subsection unless such action is
begun within 2 years of the date of the act complained of or the date of the discovery of the damage.”
18 U.S.C. § 1030(g).
Because Defendants demonstrated that Philips’ CFAA and DMCA claims would otherwise
fall outside of the statute of limitations, Philips now has the burden to demonstrate that there is a
genuine issue of material fact on whether the federal accrual rule delays the accrual date of its CFAA
and DMCA claims. See Garden City Boxing Club, Inc. v. Johnson, 552 F. Supp. 2d 611, 616 (N.D. Tex.
2008) (Means, J.) (“The burden is on the plaintiff to come forward and demonstrate that the
discovery rule should toll the limitations period.” (citation omitted)).
The Court finds that the statute of limitations did not begin running for any of Philips’
federal claims until June 4, 2021. As discussed above, Philips did not learn Defendants had a fake
IST certificate until June 4, 2021. Doc. 242, Pl.’s App’x, 430, 433. Thus, as the Court found with

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respect to the Texas discovery rule, Philips did not know or have reason to know of the injuries that
are the subject matter of this lawsuit before June 4, 2021. See King-White, 803 F.3d at 762.
Philips filed its claims against Axiom and Image II on September 14, 2023. Doc. 119, Second
Am. Compl.; see Caldwell, 632 F.2d at 1188 (“[A]n action commences simply upon the filing of a
complaint.”). DMCA claims have a statute of limitations of three years. 17 U.S.C. § 507(b). Because
Philips sued Axiom and Image II just over two years after June 4, 2021, Philips’ DMCA claim against
Axiom and Image II is timely. However, Philips’ CFAA claim has a statute of limitations of two
years. 18 U.S.C. § 1030(g). Thus, to survive Defendants’ Motion for Summary Judgment, Philips
needs to demonstrate there is a genuine issue of material fact that the CFAA claim against Axiom
and Image II did not accrue until Shannon’s deposition in July 2023.
There is a genuine issue of material fact regarding whether the federal accrual rule delays the
accrual of Philips’ CFAA claim until July 2023. As discussed above, in contrast with Texas’s discovery
rule, the federal accrual rule applies if Philips did not have actual or constructive knowledge of both
its injury and the identity of who caused the injury. See Piotrowski v. City of Houston, 237 F.3d 567,
576 (5th Cir. 2001). While Philips not knowing that Axiom and Image II also caused Philips’ injury
does not delay accrual of Philips’ unfair competition claim, it is sufficient to delay accrual of Philips’
CFAA claim.
Here, Philips has introduced evidence that it did not have actual knowledge of Axiom’s and
Image II’s involvement until July 2023. Doc. 267, Pl.’s App’x, 5. Thus, Philips did not have actual
knowledge of one of the critical facts necessary for an injury to accrue, even after learning that
Shannon and Image Tech had a fake IST certificate. See Piotrowski, 237 F.3d at 576.
Further, there is a genuine issue of material fact on whether Philips should have known that

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Axiom and Image II were involved in the conduct giving rise to this lawsuit. Defendants argue that
Image Tech has been inactive for over a decade, and that Philips would have discovered Image Tech
was inactive with “a simple Secretary of State search.” Doc. 245, Def.’s Br. Mot. Summ. J., 7.
However, Philips promptly investigated Shannon and Image Tech after learning they had a fake IST
certificate. Doc. 267, Pl.’s App’x, 5. And some documents produced in discovery suggested that
Image Tech was still operating. See Doc. 242, Pl.’s App’x, 343–45. Therefore, there is a genuine issue
of material fact on whether Philips should have known that Axiom and Image II also caused Philips’
injuries. See Piotrowski, 237 F.3d at 576.
In sum, Philips’ DMCA claim against Axiom and Image II is timely because the DMCA
claim did not accrue until June 4, 2021, and Philips asserted its DMCA claim against these two
defendants less than three years after the DMCA claim accrued. Additionally, there is a genuine
issue of material fact on whether Philips’ CFAA claim accrued on July 2023—which would mean
that the statute of limitations does not bar the claim—or whether the CFAA claim accrued on June
4, 2021—which would mean the CFAA’s statute of limitations bars Philips’ claim. Whether Philips
had constructive knowledge that Axiom and Image II were also involved in the lawsuit will be
resolved at trial. Accordingly, the Court denies Defendants’ Motion for Summary Judgment as to
Philips’ DMCA and CFAA claims against Axiom and Image II.
6. Philips is Entitled to Summary Judgment on Its Claims Against Shannon Because There
is Evidence that Shannon Individually Engaged in the Unlawful Conduct.
Defendants lastly move for summary judgment on Philips’ claims against Shannon.
Specifically, Defendants argue that Philips has not established that the Court should pierce the
corporate veil and hold Shannon liable for Axiom’s, Image Tech’s, or Image II’s torts. Doc. 245,
Defs.’ Br. Mot. Summ. J., 14. While it is true that, under Texas law, a member of an LLC is not
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ordinarily liable for the LLC’s debts, TEX. BUS. ORGS. CODE § 101.114, the Court need not pierce
the corporate veil to find Shannon liable here.
Philips has presented evidence establishing that Shannon is personally liable for violating
the CFAA, the DMCA, and committing fraud. As discussed above, Shannon admitted to using a
fake IST certificate to circumvent Philips’ security measures and get access to CSIP Level 2 tools.
Doc. 242, Pl.’s App’x, 354. The Court has already found that such conduct violates the CFAA, the
DMCA, and that it also constitutes fraud. Thus, Shannon is personally liable, and the Court need
not address Defendants’ arguments that the Court should not pierce the corporate veil. See Miller v.
Keyser, 90 S.W.3d 712, 717 (Tex. 2002) (“[A] corporate agent is personally liable for his own
fraudulent or tortious acts.”). Accordingly, the Court denies Defendants’ Motion for Summary
Judgment as to Philips’ claims against Shannon individually.
IV.
CONCLUSION
For the reasons discussed above, the Court GRANTS IN PART and DENIES IN PART
the parties’ Motions to Strike. Specifically, the Court DENIES AS MOOT Philips’ Motion to Strike
an Amicus Brief (Doc. 221) and Philips’ Motion to Strike a Response Filed by a Non-Party (Doc.
255). The Court GRANTS Defendants’ Motion to Strike the Expert Report of Dr. Alberto Gutierrez
(Doc. 234). Additionally, the Court GRANTS IN PART and DENIES IN PART Philips’ Motion
to Exclude Certain Opinion of Michael Fenn (Doc. 227). Lastly, the Court DENIES Defendants’
Motion to Strike the Expert Report of Dr. Alessandro Orso (Doc. 275) and Defendants’ Motion to
Strike Expert Report of Schoettelkotte (Doc. 279).
The Court then GRANTS IN PART and DENIES IN PART Philips’ Motion for Partial

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Summary Judgment (Doc. 239). Specifically, the Court GRANTS Philips summary judgment as to
liability on its CFAA, DMCA, and fraud claims against all four Defendants. However, there is a
genuine issue of material fact on whether Philips’ CFAA claim against Defendants Axiom and Image
II is barred by the statute of limitations. This fact issue will be resolved at trial.
The Court GRANTS IN PART and DENIES IN PART Defendants’ Motion for Summary
Judgment (Doc. 244). Specifically, the Court DENIES Defendants’ Motion for Summary Judgment
as to liability on all four of Philips’ remaining claims. The Court also DENIES Defendants’ Motion
for Summary Judgment as to its argument that the statute of limitations bars Philips’ CFAA, DMCA,
and fraud claims against Axiom and Image II. However, Philips’ unfair competition claim against
Axiom and Image II is barred by the statute of limitations for any circumvention of a Philips security
measure that occurred before September 22, 2021.
The following issues will be resolved at trial:
•

Whether the federal accrual rule delayed the accrual of Philips’ CFAA claim against
Defendants Axiom and Image II until July 2023;

•

The liability of Philips’ unfair competition claim against Defendants Marshall Shannon and
Image Tech;

•

The liability of Philips’ unfair competition claim against Axiom and Image II as to any
circumventions of Philips’ security measure occurring after September 22, 2021; and

•

Philips’ damages on all four of its remaining claims.

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SO ORDERED.
SIGNED: November 22, 2024.

JANE J. BOYLE
UNITED STATES DISTRICT JUDGE

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