UNITED STATES INTERNATIONAL TRADE COMMISSION

WASHINGTON, D.C.

In the Matter of

CERTAIN NETWORKING DEVICES, Investigation No. 337-TA-____

COMPUTERS, AND COMPONENTS Docket No. 3593
THEREOF AND SYSTEMS
CONTAINING THE SAME

PROPOSED RESPONDENT NETAPP’S PUBLIC INTEREST STATEMENT

 Pursuant to Commission Rule 210.8(c), Proposed Respondent NetApp, Inc. (“NetApp”) submits

this statement addressing the effects on the public interest by the complaint of Proven Networks, LLC

(“Proven”). See 87 Fed. Reg. 2902-03 (Jan. 19, 2022).

The exclusion order sought by Proven—a non-practicing entity (“NPE”) that does not make any

products of its own—would bar from importation a significant number of data storage and management

products that are critical to allow U.S. companies, industries, government entities and end users to manage

critical data resources. NetApp is a decades-old innovative software company based in San Jose, CA,

employing over 8,000 employees in the U.S. and 10,000 employees worldwide. NetApp empowers

organizations to lead with data in the age of accelerated digital transformation by providing systems,

software and cloud services that enable organizations to run their applications optimally from a data center

to the cloud.

Proven, on the other hand, is a recently formed LLC organized by its litigation counsel, whose

sole purpose and business is to assert patents and tax innovative companies under the threat of litigation.

Indeed, Proven shares an address with its counsel at Russ August & Kabat (“RAK”), until two years ago

was known as “RAK Investments III,” 1 and is managed by several of the attorneys representing it here. 2

Proven previously asserted other patents against NetApp in district court, but with its district court case

stalled, it is now seeking to leverage the threat of an exclusion order and the cost of Section 337

proceedings to extract money from NetApp. But as an attorney-owned NPE, of course, Proven lacks any

requisite domestic industry of its own.

In sum, Proven’s complaint presents the antithesis of what a Section 337 investigation is supposed

to be. Proven is a litigation-driven complainant seeking to harm an important domestic industry, not

protect one. In such a situation, public interest concerns are heightened—indeed, in many recent

investigations involving NPEs, the Commission has delegated public interest issues to the ALJ. 3 Yet

1
https://businesssearch.sos.ca.gov/Document/RetrievePDF?Id=201930210911-27826776.
2
https://businesssearch.sos.ca.gov/Document/RetrievePDF?Id=201930210911-27348685.
3
See, e.g., Notices of Institution in Inv. Nos. 337-TA-1295, 1280, -1268, -1267, -1193, -1150, each of
which involved an NPE complainant represented by Russ August & Kabat—Proven’s counsel here.

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Proven’s public interest statement waves aside any public interest concerns, dismissing them in conclusory

fashion.

As explained below, there are indeed substantial concerns that an exclusionary remedy would

harm not just a specific domestic industry, but have widespread adverse effects for the public in the United

States. Between these severe public interest concerns and the fact that there is no domestic industry

seeking protection here, the Commission should spend its limited resources elsewhere and not institute an

investigation. 4 At minimum, the Commission should delegate public interest to the ALJ to allow for

thorough discovery and investigation into public interest issues.

I. Overview of the Products Potentially Subject to the Orders in the United States

Proven alleges that NetApp violates Section 337 based on the alleged infringement of U.S. Patent

No. 8,687,573 by several NetApp products, including the NetApp FAS90xx series, FAS80xx series, FAS

500f, FAS20xx series, and other products running various versions of Clustered Data ONTAP—NetApp’s

proprietary operating system. Compl. ¶29. Through these products and software, NetApp offers best-in-

class flexible and purpose-built data management solutions to help customers build storage infrastructure

that maximize performance, leveraging the cloud. These products are deployed across virtually all

economic sectors in the United States, including asset management, automotive, banking, capital markets,

clinical data management, cloud computing, content creation, distribution, education, electronics and

semiconductors, energy, engineering, governments, financial services, healthcare, healthcare providers,

high-tech, information technology, insurance, life sciences, manufacturing, media and entertainment, oil

and gas, pharmaceuticals and biotechnology, power and utilities, public sector, retail, service providers,

software, telecommunications, and travel and transportation. 5 Independent third parties have identified

NetApp as a “leader” in the industry, describing its product offerings as “very well-established . . . with

worldwide adoption across several workloads and use cases” and noting that “NetApp has an extensive

4
Proven’s complaint includes other deficiencies potentially warranting non-institution, such as failing to
include a complete assignment history establishing Proven as the patent owner. See Compl. Ex. 2; 19
C.F.R. § 210.12(a)(9)(ii).
5
See https://www.netapp.com/customers/.

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and loyal customer base.” 6

II. Public Health, Welfare, and Safety Concerns

In its Statement Regarding the Public Interest, Proven incorrectly implies that concerns about

public health, safety, and welfare are limited to investigations “involving pharmaceuticals, essential

equipment for medical treatment, or green technology products.” Proven’s Statement Regarding Public

Interest (“Proven PI Statement”) at 2. There is no such rule. Here, NetApp’s employees (and many of its

customers) are among those that the United States Cybersecurity and Infrastructure Security Agency

(“CISA”) identified as “essential critical infrastructure workers”—those who work in the

“telecommunications” and “information technology systems” as well as those in “defense, food and

agriculture, transportation and logistics, energy, water and wastewater, and law enforcement.” 7 CISA’s

identification of these workers demonstrates the criticality of NetApp’s business to the U.S. economy and

the public health, safety, and welfare, especially during the COVID-19 pandemic. Similarly, the use of

NetApp’s products by organizations in these industries and sectors is likewise critical, and excluding such

products would raise substantial public safety and welfare concerns.

In fact, NetApp’s products identified in the complaint are indeed critical to healthcare-related

issues that even Proven acknowledges implicate public interest concerns. For example, a healthcare

system servicing millions of Americans in two western states used NetApp’s products to build its storage

infrastructure to run its mission-critical workloads. 8 Especially in the midst of the COVID-19 pandemic,

healthcare data management—aided by NetApp’s products—is critical to the public health and welfare.

NetApp’s products also are deployed in many other CISA-identified critical industries and sectors,

including telecommunications, information technology systems, and energy. For example, NetApp’s

products are deployed for 911 emergency services that “touch millions of people every day,” 9 for suppliers

6
See https://www.netapp.com/pdf.html?item=/media/7932-ar-idc-marketscape-worldwide-scale-out-
vendor-assessment.pdf.
7
See https://www.cisa.gov/sites/default/files/publications/ECIW_4.0_Guidance_on_Essential_
Critical_Infrastructure_Workers_Final3_508_0.pdf.
8
https://www.netapp.com/pdf.html?item=/media/28387-cs-anonymous-Healthcare.pdf.
9
E.g., https://www.netapp.com/pdf.html?item=/media/28336-cs-Bandwidth.pdf.

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of computer network technology, 10 and for a North Carolina utility service that serves 150,000

customers. 11 Further, NetApp’s products are used by countless public and private university and

education systems, including Syracuse University, 12 the University of Colorado-Boulder, 13 Miami-Dade

County Public School District, 14 among others. Excluding NetApp’s products, which are deployed in so

many vital industries and sectors (and data centers serving an even wider variety of industries), would

have a significant detrimental impact on public health, welfare, and safety in the United States.

III. Identification of Like or Directly Competitive Articles and Capacity to Replace

NetApp’s Products in the Market

Proven asserts without evidence that “Proven’s licensees and non-Respondent third parties

adequately supply the market” and “have the capacity to increase domestic production of networking

products.” Proven PI Statement at 3-4. Proven vastly oversimplifies and mischaracterizes the complexity

and nature of the market. Proven, which does not make any products, identified just two licensees by

name—both of which are networking companies and do not compete with NetApp for on-premise/cloud

storage systems and data management services. The capacity of the market to replace NetApp’s

innovative products with commercially reasonable alternatives is far from certain—indeed, it is unlikely.

NetApp is the third largest supplier of enterprise external storage systems, securing about 10% of

the worldwide market. 15 Should NetApp’s products be excluded from entry into the U.S., it is not simply

a matter of competitors ramping up production to fill in the gap. Given the current challenges and

uncertainties that exist in the broader technology supply chain, there is no basis to assume that any

“licensees and non-Respondent third parties” could adequately increase production on short notice. It is

not a given that the participants in the storage and data management industry have the capacity or ability

to ratchet up production or reallocate products to cover the scope of Proven’s requested remedy.

10
E.g., https://www.netapp.com/pdf.html?item=/media/28251-cs-Mellanox.pdf;
https://www.netapp.com/pdf.html?item=/media/28343-cs-tcdi.pdf.
11
E.g., https://www.netapp.com/pdf.html?item=/media/28247-cs-greenville-utilities.pdf.
12
https://www.netapp.com/pdf.html?item=/media/28168-cs-Syracuse.pdf.
13
https://www.netapp.com/pdf.html?item=/media/28426-cs-CU-Boulder.pdf.
14
https://www.netapp.com/pdf.html?item=/media/28165-cs-miami-dade-public-schools.pdf.
15
Measured by revenue as of 2Q2021. See https://www.idc.com/getdoc.jsp?containerId=prUS48220321.

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 IV. Adverse Impact on U.S. Consumers

U.S. consumers—including a wide variety of businesses, non-profits, educational institutions,

governmental entities, and other enterprises that use NetApp’s innovative data management and storage

solutions—would be substantially harmed by an exclusion order. While Proven alludes to “commercial

alternatives to the accused products,” it identifies none—indeed, NetApp’s products are unique and cannot

simply be swapped out on a whim. 16 The accused products use ONTAP, a proprietary operating system

that is not automatically compatible or functional with third-party products. NetApp’s data management

solutions are purpose-built to support its customers’ unique requirements, and many of its customers rely

heavily on NetApp products for their data management and storage. Exclusion of NetApp’s products

would require its customers to attempt to source solutions from other companies with their own proprietary

software and data formats, and migrate data to these new solutions—a challenging and complex process.

And in addition to retooling their data storage environments, internal information technology personnel

would need to be retrained to service and maintain any third-party solution. This process would be

required even if a single NetApp product needed to be replaced. Thus, U.S. consumers would suffer

significant switching and maintenance costs—if they were even able to obtain an adequate supply of

products at all—and could face potentially major operational disruptions. And exclusion would also mean

increased prices and shortages resulting from reduced competition in the data storage market.

V. Conclusion

In a case like this one—with an attorney-owned NPE seeking not to protect a domestic industry,

but to extract payments from one under threat of an exclusion order—the public interest in protection of

IP rights is outweighed by the substantial public interest concerns identified above. The Commission

should therefore decline to institute, or at a minimum delegate public interest issues to the ALJ.

16
In some instances, NetApp’s products cannot be replaced at all. For example, NetApp is the only
enterprise external storage systems vendor to achieve NSA’s Commercial Solutions for Classified (CSfC)
Validation for both hardware and software full drive encryption. See https://www.nsa.gov/Resources/
Commercial-Solutions-for-Classified-Program/Components-List/#hw-fde; https://www.netapp.com/newsr
oom/press-releases/news-rel-20211215-870245/.

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 Respectfully submitted,

Dated: January 27, 2022 /s/ Matthew J Rizzolo

Matthew J. Rizzolo
ROPES & GRAY LLP
2099 Pennsylvania Ave NW
Washington, DC 20006-6807
Telephone: (202) 508-4600
Facsimile: (202) 508-4650

James R. Batchelder
Daniel W. Richards
ROPES & GRAY LLP
1900 University Avenue, 6th Floor
East Palo Alto, CA 94303-2284
Telephone: (650) 617-4000
Facsimile: (650) 617-4090

Josef B. Schenker
ROPES & GRAY LLP
1211 Avenue of the Americas
New York, NY 10036-8704
Telephone: (212) 596-9000
Facsimile: (212) 596-9090

Counsel for Proposed Respondent NetApp,

Inc.

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 CERTIFICATE OF SERVICE
I, Saron Harry, hereby certify that on January 27, 2022, true and correct copies of the foregoing
were served on the parties listed below:

Lisa R. Barton ☒Via EDIS

☐Via Hand Delivery
Secretary to the Commission
U.S. INTERNATIONAL TRADE COMMISSION
500 E Street S.W., Room 112 ☐Via Overnight Mail
Washington, D.C. 20436

Counsel for Complainant Proven Networks, LLC ☐Via Hand Delivery

Reza Mirzaie ☐Via Overnight Mail
☒Via Electronic Mail
Marc A. Fenster
Paul Kroeger
RUSS AUGUST & KABAT rmirzaie@raklaw.com
12424 Wilshire Boulevard, 12th Floor mfenster@raklaw.com
Los Angeles, CA 90025 pkroeger@raklaw.com
jlink@raklaw.com
Jonathan Link sudick@raklaw.com
RUSS AUGUST & KABAT
915 E Street NW, Suite 405
Washington, DC. 20004

Steven Udick
RUSS AUGUST & KABAT
5570 FM 423, Suite 250-2069
Frisco, TX 75034

/s/ Saron Harry

Saron Harry
Senior Litigation Paralegal
ROPES & GRAY LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199-3600
617-951-7381
Saron.Harry@ropesgray.com