D-Link System’s Motion for Summary Judgment Case No. 17-cv-00039-JD 

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CAUSE OF ACTION INSTITUTE 

JOHN J. VECCHIONE [admitted pro hac vice] [Lead Counsel] 

 john.vecchione@causeofaction.org 

MICHAEL D. PEPSON [admitted pro hac vice] 

Admitted only in Maryland. 

Practice limited to matters and proceedings before Unite States Courts and agencies. 

 michael.pepson@causeofaction.org 

JESSICA LEE THOMPSON [admitted pro hac vice] 

 jessica.thompson@causeofaction.org 

ASHLEY SALVINO [admitted pro hac vice] 

 ashley.salvino@causeofaction.org 

JOSHUA N. SCHOPF [admitted pro hac vice] 

 josh.schopf@causeofaction.org 

NICHOLE C. WILSON [admitted pro hac vice] 

 nichole.wilson@causeofaction.org 

KARA E. MCKENNA [admitted pro hac vice] 

 kara.mckenna@causeofaction.org 

1875 Eye Street N.W., Suite 800 

Washington, DC 20006 

Telephone: (202) 422-4332/Facsimile: (202) 330-5842 

Christine Yang (SBN 102048) 

 chrisyang@sjclawpc.com 

LAW OFFICES OF S.J. CHRISTINE YANG

17220 Newhope Street, Suites 101 &102 

Fountain Valley, CA 92708 

Telephone: 714.641.4022 

Facsimile: 714.641.2082 

Christopher Kao (SBN 237716) 

 christopher.kao@pillsburylaw.com 

Brock S. Weber (SBN 261383) 

 brock.weber@pillsburylaw.com 

PILLSBURY WINTHROP SHAW PITTMAN LLP 

Four Embarcadero Center, 22nd Floor 

San Francisco, CA 94111-5998 

Tel.: 415.983.1000 / Facsimile: 415.983.1200 

Attorneys for Defendant D-Link Systems, Inc.

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

FEDERAL TRADE COMMISSION, 

Plaintiff, 

v. 

D-LINK SYSTEMS, INC., 

Defendants.

Case No. 3:17-cv-00039-JD 

DEFENDANT D-LINK SYSTEMS, INC.’S 

NOTICE OF MOTION 

AND MOTION FOR SUMMARY 

JUDGMENT; MEMORANDUM OF 

POINTS AND AUTHORITIES 

Date: Thursday, November 1, 2018 

Time: 10:00 a.m. 

Courtroom: 11 

Judge: Honorable James Donato 

Case 3:17-cv-00039-JD Document 183 Filed 09/21/18 Page 1 of 28
D-Link System’s Motion for Summary Judgment i Case No. 17-cv-00039-JD 

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TABLE OF CONTENTS 

Page 

NOTICE OF MOTION AND MOTION ......................................................................................... 1

MEMORANDUM OF POINTS AND AUTHORITIES ................................................................. 2

I. INTRODUCTION ............................................................................................................... 2

II. RELEVANT PROCEDURAL HISTORY .......................................................................... 3

III. RELEVANT FACTUAL BACKGROUND ....................................................................... 5

A. Each of DLS’ Allegedly Deceptive Statements Were Made in the Past, 

and Do Not Reflect DLS’ Current Advertising Practices. ...................................... 5

1. Count II: PX 1 ............................................................................................. 5

2. Count III: PX 2-PX 5 ................................................................................... 6

3. Count VI: PX 10 and PX 11 ........................................................................ 7

B. DLS Addressed and Resolved Each of the Potential Vulnerabilities 

Alleged in the FTC’s Complaint Before The Complaint Was Even Filed. ............. 8

1. Paragraph 15-18 ........................................................................................... 8

2. Paragraph 21 (Count III) ........................................................................... 10

3. Paragraph 24 (Count VI) ........................................................................... 10

C. The Current Security Practices Used for DLS’ Products Are More 

Than Reasonable ................................................................................................... 10

IV. LEGAL STANDARD ....................................................................................................... 14

V. ARGUMENT .................................................................................................................... 14

A. There is No Evidence Warranting Any Prospective Injunctive Relief. ................. 15

1. All of DLS’ Allegedly Deceptive Statements, and “Unreasonable” 

Security Practices Occurred Well In The Past, And Are Not Ongoing. .... 16

2. There Is No Evidence DLS Will Violate Section 5 in the Future ............. 18

B. In Any Case, The Permanent Injunctive Relief Sought By The FTC Is 

Barred as a Matter of Law. .................................................................................... 20

VI. CONCLUSION ................................................................................................................. 24

 

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TABLE OF AUTHORITIES 

Page(s) 

Cases

Anderson v. Liberty Lobby, Inc., 

477 U.S. 242 (1986) ............................................................................................................. 14, 23 

Brickman v. Fitbit, 

No. 3:15-cv-02077-JD, Inc., 2017 WL 6209307 (N.D. Cal. 2017) ............................................ 14 

Celotex Corp. v. Catrett, 

477 U.S. 317 (1986) ................................................................................................................... 14 

CFPB v. Gordon, 

819 F.3d 1179 (9th Cir. 2016) .................................................................................................... 15 

Columbia Pictures Indus. v. Gary Fung, 

710 F.3d 1020 (9th Cir. 2013) .................................................................................................... 20 

Enrico’s, Inc. v. Rice, 

730 F.2d 1250 (9th Cir. 1984) .................................................................................................... 15 

FTC v. AbbVie Inc., 

No. 14-5151, 2018 WL 3830533 (E.D. Pa. June 29, 2018) ....................................................... 18 

FTC v. Accusearch Inc., 

570 F.3d 1187 (10th Cir. 2009) .................................................................................................. 19 

FTC v. Amazon.com, Inc., 

No. C14-1038-JCC, 2016 WL 10654030 (W.D. Wash. 2016) ........................................... passim

FTC v. Evans Prods. Co., 

775 F.2d 1084 (9th Cir. 1985) .................................................................................... 2, 15, 17, 24 

FTC v. H. N. Singer, Inc., 

668 F.2d 1107 (9th Cir. 1982) .................................................................................................... 24 

FTC v. Infinity Grp. Servs., 

No. SACV 09-977 DOC (MLGx), 2009 WL 10670551 (C.D. Cal. Sep. 2, 2009) .................... 18 

FTC v. Neovi, Inc., 

604 F.3d 1150 (9th Cir. 2010) .................................................................................................... 23 

F.T.C. v. Merchant Services Direct, LLC, 

No. 13-CV-0279-TOR, 2013 WL 4094394 (E.D. Wash. 2013) ................................................ 16 

In re Nat’l Credit Mgmt. Grp. LLC, 

21 F. Supp. 2d 424 (D.N.J. 1998) ............................................................................................... 19 

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LabMD, Inc. v. FTC, 

891 F.3d 1286 (11th Cir. 2018) ........................................................................................... passim

Negusie v. Holder, 

555 U.S. 511 (2009) ................................................................................................................... 23 

Sears, Roebuck & Co. v. FTC, 

676 F.2d 385 (9th Cir. 1982) ...................................................................................................... 19 

U.S. v. ACB Sales & Serv., Inc., 

683 F. Supp. 734 (D. Ariz. 1987) ............................................................................................... 18 

U.S. v. Laerdal Mfg. Corp., 

73 F.3d 852 (9th Cir. 1995) ........................................................................................................ 18 

Statutes and Codes

15 U.S.C. § 45(l) ............................................................................................................................... 23 

15 U.S.C. § 53(b)(1) ......................................................................................................................... 15 

I5 U.S.C. § 53(b) .............................................................................................................................. 15 

Rules and Regulations

Fed. R. Civ. P. 56 ............................................................................................................................. 14 

Fed. R. Civ. P. 56(a) ......................................................................................................................... 14 

Fed. R. Civ. P. 65(d)(1)(B)-(C) ........................................................................................................ 20 

Other Authorities

S.Rep. 93-151, 30-31 ........................................................................................................................ 24 

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D-Link Systems’ Motion for Summary Judgment 1 Case No. 17-cv-00039-JD 

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NOTICE OF MOTION AND MOTION 

TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: 

PLEASE TAKE NOTICE that on November 1, 2018, or as soon thereafter as this may be 

heard, before the Honorable James Donato of the United States District Court for the Northern 

District of California, defendant D-Link Systems, Inc. (“DLS”) will, and hereby does, move this 

Court for summary judgment or partial summary judgment pursuant to Federal Rules of Civil 

Procedure 56. This Motion is based upon this Notice of Motion and Motion; the accompanying 

Memorandum of Points and Authorities; the Declarations of Michael Pepson,1 William Brown 

(“Brown Decl.”), and Peter Tsai (“Tsai Decl.”), and Kuang Chun Hung (“Hung Decl.”) in support 

thereof, and other related documents filed in connection with this Motion; all pleadings and papers 

filed in this action; oral argument of counsel; and any other matter properly considered. 

 

1

 Exhibits are attached to the Declaration of Michael Pepson unless otherwise indicated. 

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MEMORANDUM OF POINTS AND AUTHORITIES 

I. INTRODUCTION 

Based on the undisputed and indisputable facts in the record, the FTC has no basis under 

controlling precedent to obtain permanent injunctive relief—the only relief that it is seeking—

against Defendant D-Link Systems, Inc. (“DLS”) in this case. Accordingly, the Court should grant 

summary judgment in DLS’ favor on each of the FTC’s remaining claims in this case. 

Specifically, the FTC’s remaining “deception” claims (Counts II, III and VI of the 

Complaint) at this stage of the case, after the completion of fact and expert discovery, are based 

entirely on expert conjecture completely unsupported by evidence. Simply put, there are no 

consumer victims here. The FTC has not presented any evidence that an identifiable “consumer” 

was actually “deceived” by the challenged statements made by DLS, and has now confirmed that it 

will not present a single “consumer” witness at trial. Nor has the FTC presented any evidence that 

any of the accused products were actually compromised in the real world. (Indeed, the FTC’s own 

security expert agrees with DLS on this point.) Thus, there is no harm for the Court to remedy in 

this case. 

Moreover, the record establishes that the specific statements and practices challenged by 

FTC here were all voluntarily addressed and resolved by DLS long ago; most before this case was 

filed. And there is no evidence that the FTC can use to meet its burden under FTC v. Evans Prods. 

Co., 775 F.2d 1084 (9th Cir. 1985), to show that these practices are likely to reoccur. To the 

contrary, the evidence shows that DLS, and the D-Link brand, like any responsible corporate 

citizen, has continuously (and voluntarily) adopted at great expense increasingly advanced security 

practices since at least 2010—well before the FTC investigation, before the FTC filed its Complaint 

in this case, and continuing today—to keep pace with the ever-changing security threat 

environment, as newer security tools and better practices become known. 

As there is no genuine dispute as to any of these material facts, the FTC cannot obtain the 

sole relief it seeks here—a forward-looking permanent injunction under Section 13(b) “to prevent 

future violations” of the FTC Act. For this reason alone, this Court should grant DLS’s Motion on 

the discrete—but dispositive—issue that the FTC is not entitled to the relief it seeks here. See FTC 

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v. Amazon.com, Inc., No. C14-1038-JCC, 2016 WL 10654030, at *4-6 (W.D. Wash. 2016) 

(granting summary judgment on this exact issue). 

In addition, summary judgment is also appropriate because the type of injunctive relief the 

FTC purports to seek here—a mandatory injunction commanding a complete overhaul of the 

security practices used for DLS’ products measured against an indeterminable, ever-shifting 

“reasonableness” standard to be supervised by this Court based on expert testimony—is barred, as a 

matter of law, by Rule 65(d) of the Federal Rules of Civil Procedure, the text and structure of the 

FTC Act, and basic requirements of due process. See LabMD, Inc. v. FTC, 891 F.3d 1286 (11th 

Cir. 2018). This Court should not be expected to set de facto security policy for the entire industry 

via micro-management of DLS’ security practices under a mandatory injunction so vague as to be 

effectively incomprehensible and thus unenforceable. Nor should the FTC be permitted to use DLS 

and this case as a vehicle to conduct a rulemaking via litigation implicating complex policy 

considerations in a rapidly changing area of technology. 

II. RELEVANT PROCEDURAL HISTORY 

The FTC notified DLS that it was conducting an investigation into DLS’ products and 

practices in May 2013. The next month, in June 2013, the FTC served DLS with a Civil 

Investigative Demand (“CID”) propounding numerous interrogatories and requiring DLS to 

produce documents. DLS voluntarily complied with the CID. In June 2014, the FTC served CIDs 

on both DLS and a DLS employee, William Brown, for oral testimony. DLS and Mr. Brown 

voluntarily complied with this CID and provided deposition testimony to the FTC in July, 2014. In 

July and again in October 2015, FTC Staff provided DLS’ counsel with proposed administrative 

complaints and consent orders. Efforts by DLS to reach a negotiated resolution with the FTC futile 

and ended in December 2015. More than eleven ensuing months passed without any further contact 

from the FTC. 

Then, out of the blue, on November 1, 2016, FTC Staff surprised DLS with a new proposed 

federal court complaint and a 20-year consent order. DLS was pressured by the FTC to either 

accept the consent order, or defend the litigation. Companies subject to the terms of these standard 

FTC consent orders are, among other things, required to “establish and implement, and thereafter 

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maintain, a comprehensive information security program that is reasonably designed to address 

security risks related to new and existing Covered Devices and Covered Information” and “obtain 

initial and biannual assessments and reports” from third parties at substantial expense. See, e.g., 

Ex. 32 (Asus consent) at pp. 4-6, pts. II-III; Ex. 31 (Trendnet consent) at pp. 4-7, pts. II-III; see also

Ex. 28 (Arias Tr.) at 73:14-15. DLS vigorously objected to such an oppressive and draconian 20-

year consent order, and submitted multiple white papers to present its position during ensuing 

meetings with FTC. Ultimately, two of the then-three active FTC Commissioners (who have both 

since left the FTC) voted to authorize FTC Staff to proceed with the Complaint in this case. 

Commissioner Maureen Ohlhausen, who was later the Acting Chairwoman of the FTC, dissented. 

Ex. 34 (FTC Press Release). 

On the eve of the annual Consumer Electronics Show in Las Vegas (one of the world’s 

largest shows in the electronics industry, where all major consumer electronics companies present 

and promote their latest products and services), the FTC filed its Complaint against DLS on 

January 5, 2017. The Complaint alleged one “unfairness” claim (Count I) and five “deception” 

claims (Counts II-VI) in violation of Section 5 of the FTC Act, 15 U.S.C. § 45. On September 18, 

2017, the Court dismissed the “unfairness” claim and two of the “deception” claims (Counts IV and 

V). See Dkt. No. 90. The operative Complaint, as narrowed by the Court, alleges three “deception” 

claims (Counts II, III, and VI), which solely rely on paragraphs 15-18, 20-21, and 24 of the 

Complaint, and Exhibits PX 1-5 and PX 10-11. See Compl. ¶¶ 31-36, 43-45. The Complaint “does 

not allege any actual consumer injury in the form of a monetary loss or an actual incident where 

sensitive personal data was accessed or exposed.” Dkt. No. 90 at 8:18-20. The FTC “does not 

allege that D-Link [Systems] intended to deceive consumers.” Ex. 23 (Dkt. No. 28) at 12 n.5. 

With the exception of Count III, which relies on exhibits PX 2-5 (“datasheets” for four 

specific DLS router models), the Complaint does not identify the DLS product models at issue in 

this case. However, at the Court’s instruction, see Dkt. No. 137; Dkt. No. 42 at 17:23-18:3, the 

FTC has identified the accused products at issue in this case in Appendix A of its Initial 

Disclosures. Ex. 17 (FTC 3d ID), at 22 (Appx A). The FTC has asserted that Count II relates to all 

product models listed in Appendix A; Count III relates to four identified DLS router models (DIRCase 3:17-cv-00039-JD Document 183 Filed 09/21/18 Page 8 of 28
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615, DIR-412, DIR-815, DIR-645); and—until August 24, 2018—that Count VI relates to seven 

identified DLS IP camera models (DCS-930L, DCS-2310L, DCS-3410, DCS-3411/3430, DCS3716, DCS6210, and DCS-6510). Ex. 11 (FTC Rog Resp.), at 10-16 (Nos. 12-13). According to 

FTC, the time period for its “deception” claims “is the time frame in which the representations 

identified in Exhibits 1-11 of the FTC Complaint were available to consumers.” Ex. 10 (FTC Rog 

Resp.) at 10 (No. 7). 

The FTC did not seek a preliminary injunction in this case. Ex. 12 (FTC RFA Resp.) at 6 

(Nos. 4-5). Nor is FTC seeking monetary relief. Id. (No. 6). Instead, FTC is solely seeking 

prospective permanent injunctive relief purportedly to prevent future violations of the FTC Act. Id.

(Nos. 5-6); Compl., Prayer for Relief, ¶ A; Ex. 6 (FTC 30(b)(6)) at 316:11-317:10. 

III. RELEVANT FACTUAL BACKGROUND 

A. Each of DLS’ Allegedly Deceptive Statements Were Made in the Past, and Do 

Not Reflect DLS’ Current Advertising Practices. 

 

As set forth below, the FTC’s remaining “deception” claims are predicated on isolated past 

statements, most of which were ceased by DLS long before the Complaint was filed and, in any 

event, do not reflect DLS’s current advertising practices. 

1. Count II: PX 1 

PX 1 of FTC’s Complaint is not an advertisement at all, Rather, it is a “Security Event 

Response Policy” that was previously displayed on DLS’s technical support site, 

http://support.dlink.com , see PX 1; Ex. 5 (Wang Tr.) at 153:16, but has not been available there since 

September 2015. Compl. ¶ 20; Ans. (Dkt. No. 92) ¶ 15; see Ex. 6 (FTC 30(b)(6)) at 304:12-305:7. PX 

1 was developed by DLS as part of an experiential learning process to keep in step with the evolving 

security threat management process. See Ex. 3 (Brown Tr.) at 214-219. Among other things, this 

Security Event Response Policy provided a link to a form that third-party security researchers could use 

to report what they perceived as potential vulnerabilities to DLS for investigation and, if needed, 

remediation. See Ex 3 (Brown Tr.) 65-69; Ex. 5 (Wang Tr.) at 33:11-34:4. 

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D-Link Systems’ Motion for Summary Judgment 6 Case No. 17-cv-00039-JD 

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In any event, the FTC’s own marketing expert has opined that this document does not 

communicate that DLS products are free from vulnerabilities, Ex. 13 (Shimp Tr.) 147:5-15, and that 

it does not make any implied claims, id. 205:19-25.2 

2. Count III: PX 2-PX 5 

The statements at issue in Count III apply to four discrete router models: DIR-615, DIR-412, 

DIR-815, DIR-645. See Ex. 11 (FTC Rog Resp.) at 11-15 (No. 12); Compl., PX 2-5. The FTC 

does not dispute that these routers did, in fact, provide the specific security features listed in PX 2-5, 

such as Stateful Packet Inspection (SPI) and Network Address Translation (NAT) firewall features; 

Wi-Fi Alliance (WFA) Wi-Fi Protected AccessTM (WPA, WPA2) encryption standards; and WFA 

Wi-Fi Protected Setup (WPS). Instead, the FTC claims that PX 2-5 contain “representations about 

the general security of ... [these] device[s] that are false and misleading.” See Ex. 11 (FTC Rog 

Resp.), at 11-15 (No. 12). 

PX 2-PX 5 are “datasheets” for these product models, all of which are no longer sold by 

DLS. Brown Decl. ¶¶ 9, 13-16. These datasheets were originally created in 2010 (PX 3), 2011 

(PX 2, PX 5), and 2012 (PX 4), long before the FTC filed its Complaint in this case. See PX 2-5; 

Brown Decl. ¶ 9. The DLS product datasheets are different from what prospective purchasers 

would see on DLS product packaging at retail stores (e.g., Best Buy or Office Depot); thus, for 

example, the packaging boxes for the DIR-645, DR-412, DIR-815, and DIR-615 routers do not 

contain the challenged statements. Brown Decl. ¶ 12 & Ex. A. 

DLS stopped selling the router models that PX 2-PX 5 pertain to no later than October 

2016.3 See Brown Decl. ¶¶ 13-16. As part of the standard DLS product lifecycle, after DLS stops 

selling a product, information including “datasheets” are removed from DLS’s marketing website, 

http://us.dlink.com, and product information and DLS “datasheets” are archived into DLS’s support 

 

2

 The FTC’s expert further testified that he did not know the “target market” for the document, but 

believed only “highly motivated” people would read it. See Ex. 13 (Shimp Tr.) 107:23-108:17, 

113:2-9, 123:16-23, 128:14-17, 144:10-14. He stated that he did not know what percentage of the 

population would fall into this category, id. 109:22-25, and agreed that PX1 would “have no 

impact” on any other consumers, id. 115:20-116:7, 156:4-21. 

3

 The last sales date for the DIR-412 was in March 2015; for the DIR-815, December 2015; for the 

DIR-645, March 2016; and for the DIR-615, October 2016. Brown Decl. ¶ 9. 

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site, support.dlink.com. This archived information is used solely for the purpose of facilitating 

technical support of legacy products when requested by end-users.4 See Ex. 2 (DLS 30(b)(6)) at 

155:4-156:22; Brown Decl. ¶¶ 17-20 & Ex. B; see also Ex. 3 (Brown Tr.) at 20:10-21:24. The 

accused “datasheets” are not currently used for marketing purposes. See Brown Decl. ¶¶ 20 & Ex. B. 

With the exception of archived data sheets and user manuals accessible through DLS’s 

technical support website, http://support.dlink.com, the challenged statements do not appear 

currently on the DLS website, http://us.dlink.com/, or in product advertising.5 Brown Decl. ¶ 22. 

This is DLS’s standard practice today, which also now includes quarterly audits conducted by DLS 

in an effort to ensure that the challenged statements do not appear on http://us.dlink.com or in 

product advertising. Id. 

3. Count VI: PX 10 and PX 11 

PX 10 and PX 11 are not advertisements, were not intended for marketing purposes, and 

have never been used for marketing purposes. Brown Decl. ¶ 24. Rather, PX 10 and PX 11 are one 

of many images of the graphical user interface (“GUI”) that an end user would have briefly seen 

when using DLS’ now-outdated Setup Wizard for Microsoft Windows PCs only after purchasing 

the camera, during the setup process of the camera and the desktop software that could be used with 

the camera. Ex. 2 (DLS 30(b)(6)) at 187:6-188:13, 189:1-24; see, e.g., Brown Decl. ¶¶ 27-28, & 

Exs. E (DCS-2310L Setup Wizard), Ex. F (Business Camera/PX 10).6 Moreover, before an end 

user would even see PX 11, for example, using the Setup Wizard for the DCS-2310L camera, he or 

she would be required to agree to the terms of an End User License Agreement (“EULA”) advising 

 

4

 The process for accessing “datasheets” like PX2-PX5 through DLS’s website involves multiple 

steps and would alert any visitor to the fact that the products have been discontinued. See Brown 

Decl. ¶ 25; see also id. ¶¶ 18-19. 

5

 Indeed, since 2014, DLS management has instructed DLS personnel not to use challenged 

statements or similar language on http://us.dlink.com. Brown Decl. ¶ 21. 

6

 PX 10 and PX 11 are specifically taken from DLS user manuals that contain some representative 

images of the GUI for the Setup Wizard. Ex. 12 (FTC RFA Resp.) at 41-42 (Nos. 78-82 (PX11)); 

Ex. 17 (Van Liere Report) at 6 (¶¶ 10, 12 n.1) (citing page numbers of user manuals); Ex. B; see 

Brown Decl. ¶ 25 & Ex. C. The FTC does not claim that these user manuals were “deceptive,” 

apart from just these isolated GUI images. See Ex. 12 (FTC RFA Resp.) at 42 (No. 82). In any 

event, these user manuals are for discontinued products and, like PX 2-PX 5, now remain archived 

on DLS’s support website solely to facilitate technical support. See Brown Decl. ¶ 25. 

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that DLS did not guarantee perfect security or the absence of vulnerabilities. See Brown Decl. 

¶¶ 24-25, 27 & Ex. E. The FTC does not allege that these disclaimers are inadequate in any way. 

Ex. 6 (FTC 30(b)(6)) at 321. 

DLS consumer IP cameras manufactured after January 2015 do not use and are incompatible 

with the old Setup Wizard, which included the image in PX 11. Brown Decl. ¶ 30 & Ex. G; see 

also Ex. 2 (DLS 30(b)(6)) at 186:6-16, 193:1-8. Since 2015, the setup process these cameras relies 

on the “mydlink” and “mydlink lite” mobile applications, not the old Microsoft Windows and Apple 

MacOS mydlink Setup Wizards. Brown Decl. ¶ 30. These mobile applications do not contain any 

of the challenged statements that appear in PX 10 and 11.7 Brown Decl. ¶ 30. 

B. DLS Addressed and Resolved Each of the Potential Vulnerabilities Alleged in 

the FTC’s Complaint Before The Complaint Was Even Filed. 

 As set forth below, each of the specific examples of DLS’s allegedly “unreasonable” 

security practices set forth in the Complaint had been addressed by DLS long before the FTC filed 

its Complaint in this case. 

1. Paragraph 15-18 

As to FTC’s allegations regarding “hard-coded” user credentials and other “backdoors,” 

prior to 2013, some pre-set credentials were accidentally included in some D-Link-branded products 

(specifically, business IP cameras) by DLS’ product vendors during the manufacturing process. 

These pre-set credentials could in theory be exploited to gain access to the data on these cameras, 

although no instances of such exploitations have ever occurred in the real world, to DLS’ 

knowledge. See Ex. 7 (Graff Tr.) at 200:5-10; Ex. 8 (Graff Rep.) at p.88 ¶ 173.

In any event, as soon as DLS learned that its vendors had left pre-set credentials in the 

business IP cameras, DLS immediately demanded that the vendors provide product and software 

 

7

 The Microsoft Windows “Securicam” CD Setup Wizard from which the image was derived that 

became PX 10 was derived was exclusively used for DLS Business IP Camera products that are 

intended to be sold for commercial use. Brown Decl. ¶¶ 31-33 & Ex. H. Installation of the 

commercial category of products for business entities requires more sophisticated technical 

knowledge and/or experience in electronic networking area and is normally performed by educated 

technicians, not by the ordinary consumers. Brown Decl. ¶ 32; Ex. 3 (Brown Tr.) at 16:15-25, 

102:6-103:4, 211:16-18; Ex. 5 (Wang Dep. Tr.) at 229:8-230:11. 

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updates to address and resolve these issues as quickly as possible. In addition, as part of DLS’ 

constant improvement process for security threats, all DLS products were phased in to include 

testing and searching for these kinds of persistent credentials prior to product release. Since 2014, 

DLS’s current practices include: (a) screening all products and their firmware for unintentionally 

coded credentials before release; (b) supplying all products with unique initial passwords; (c) 

requiring the user to set his own password during set up of the products; and (d) overwriting (and 

thus invalidating) the initial password after the user sets his password. See Tsai Decl. ¶ 12. In 

addition, all products are now checked through state-of-the-art “white-box” security testing. Tsai 

Decl. ¶ 23; Ex. 1 (Tsai Tr.) at 150-155; Ex. 4 (Hsu Tr.) at 34; Hung Decl. ¶ 8. 

The allegations in the Complaint regarding a “private key” relate to a single, isolated 

incident caused by a third-party developer’s inadvertent failure to remove the code for the digital 

certificate before releasing the software. Ex. 1 (Tsai Tr.) at 250:4-13. There is no evidence that any 

harm resulted from this issue. See Ex. 8 (Graff Rep.) at 86-87, ¶ 167); Ex. 7 (Graff Tr.) at 173:11-13, 

199:8-10. Appropriate steps were quickly taken to prevent recurrence, and this issue has not 

reoccurred since. See Ex. 1 (Tsai Tr.) at 251:16-25, 254; Ex. 3 (Brown Tr.) at 282-84; Ex. 2 (DLS 

30(b)(6)) at 195:16-22. 

Finally, since 2015—long before FTC filed its Complaint—passwords for “mydlink” 

registered devices and “mydlink” mobile applications have not been stored in clear text. See Tsai 

Decl. ¶ 15; Ex. 18 (Brown IHT) at 689:17-20. Further, there is no evidence that the alleged clear 

text vulnerability regarding the mobile app has ever been exploited. See Ex. 7 (Graff Tr.) at 

228:5-10. 

After more than five years of investigation and discovery in the U.S. and abroad, the FTC 

has not identified any evidence of a real-world exploit of any of these alleged vulnerabilities. See

Ex. 8 (Graff Report) at ¶ 173; Graff Dep. Tr. 200:5-10, 173:11-13, 199:8-10, 221:11-13, 225:6-8, 

228:5-10, 233:13-21, 236:18-237:5, 265:10-13, 266:11-14, 267:22-268:3, 268:13-17, 270:1-4, 

271:1-4, 271:17-272:2. 

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2. Paragraph 21 (Count III) 

With the exception of the DIR-412 (PX 3),8 which DLS has not sold since 2015, any 

potential vulnerabilities affecting the accused routers at issue in Count III (DIR-615, DIR-815, DIR645) have all been fixed via firmware updates. Brown Decl. ¶ 34. There is no evidence that any of 

these were exploited or that any DLS router was compromised. Ex. 7 (Graff Tr.) at 200:5-10, 

265:10-13 (DIR-615), 266:11-14 (DIR-615), 267:22-268:3 (DIR-615), 268:13-17 (DIR-412), 

270:1-4 (DIR-815), 271:1-4 (DIR-645); Ex. 8 (Graff Rep.) at p.88 ¶ 173. 

3. Paragraph 24 (Count VI) 

The reported potential vulnerabilities affecting the accused DLS consumer IP cameras at 

issue in Count VI have been fixed via firmware updates, except for functional nuisances, which, 

even if exploited in the real world, would not result in loss of private information. Brown Decl. 

¶ 34. There is no evidence that any of these were exploited or that any DLS IP camera was 

compromised. See Ex. 7 (Graff Tr.) at 200:5-10, 271:17-272:2 (Count VI IP Cameras); Ex. 8 (Graff 

Rep.) at p.88 ¶ 173; Ex. 6 (FTC 30(b)(6)) at 110:12-101:12. 

C. The Current Security Practices Used for DLS’ Products Are More Than 

Reasonable 

 Security-related best practices evolve, as they must, over time to keep pace with new 

technology and the changing threat environment. Ex. 26 at FTC-DLS-00033389 (“Security threats 

and best practices evolve quickly.”); Ex. 36 at FTC-DLS-00034669 (“security threats and 

technology constantly evolve”). “[T]here is no such thing as perfect security[.]” Ex. 12 (FTC RFA 

Resp.) at 35-36 (Nos. 61-62). “[I]t is impossible to eliminate all security vulnerabilities[.]” Ex. 9 

(Graff Reb.) at 20, ¶ 32. 

 There can be no genuine factual dispute that the security practices used for the products DLS 

sells have been constantly improving and evolving over the past eight years, and that the resources 

 

8

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current high-speed mobile wireless LTE technology. This one-off vulnerability could not be fixed 

due to a unique combination of technological and practical issues; instead, DLS offered more recent 

models as replacements. Ex. 18 (Brown IHT) at 794:21-795:8; Ex. 2 (DLS 30(b)(6)) at 263:3-25; 

Ex. 25 (Schaumont Rebuttal) at ¶ 4.b, n.10. 

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devoted to these issues have only increased. Long before the FTC commenced this action, DLS and 

D-Link Corporation (“DKC”) demonstrated their commitment to the security of D-Link brand 

products by voluntarily and continuously implementing newer, more advanced security practices to 

prevent and respond to rapidly-evolving security threats. Beginning in 2012, DLS adopted this 

evolving security response model, which remains the current and official practice for all DLS 

products, completely through its vendor supply chain. Among other things, the security practices 

for DLS products include the following: 

 Pre-2012: The internal testing department (the “D-Lab”) of DKC regularly conducts both 

functional and security pre-release quality assurance testing on all products and firmware. See

Ex. 1 (Tsai Tr.) at 48:14-50:24, 68:9-69:2, 240:19-25; Ex. 4 (Hsu Dep.) at 20:12-22:2. In 

addition, recognized third-party security experts are also contracted to perform certain security 

tests of DLS products. See Ex. XX (Rapid7 30(b)(6) at 121:7-123:16. Since before 2012, 

DLS personnel have also actively monitored and investigated potential security issues, 

including working with third-party researchers and hiring third-party experts to test DLS 

products and firmware as needed. See Ex. 18 (Brown IHT) at 34:9-52:22, 165:9-24, 191:2-17; 

see Ex. 3 (Brown Tr.) at 127:12-20, 139:11-22, 146:11-25. 

 September 2012: Beginning in September 2012, the Institute for Information Industry (“III”, 

now known as “Onward Security”)—an independent third-party security expert located in 

Taipei, Taiwan, which has been recognized by the FTC for its expertise and has advised 

multiple companies subject to FTC consent orders to implement security practices that have 

been deemed acceptable by FTC, see Hung Decl. ¶¶ 3-11; Ex. 29 (DX26) (Trendnet requests 

FTC approval of III); Ex. 30 (III reports to FTC); Ex. 29 (Arias Tr.) at 72:2-79:2—was 

retained to conduct sophisticated “black-box” security testing. Ex. 1 (Tsai Tr.) at 40:1- 46:11, 

52:15-57:10, 68:9-69:2, 73:23-74: 240:19-25; Tsai Decl. ¶¶ 6-7 & Ex. A. 

 2013: Onward Security’s engagement was expanded in 2013 to increase the annual minimum 

number of “black box” tests and also provide for “white box” source code tests. Ex. 1 (Tsai 

Tr.) at 115:2-118:12, 122:15-124:25. DLS also enhanced its process for actively monitoring 

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party security researchers to report perceived potential vulnerabilities to DLS. Ex 3 (Brown 

Tr.) 65-69; Ex. 5 (Wang Tr.) at 33:11-34:4; Ex. 1 (Tsai Tr.) at 130:20-131:10; Ex. 4 (Hsu 

Dep.) at 22:16-23:4. 

 2014: Onward Security’s contract is expanded again to facilitate investigation of reported 

potential vulnerabilities and, if appropriate, third-party vendors’ creation of firmware fixes. 

Ex. 1 (Tsai Tr.) at 128:2-130:11, 144:7-146:17; Tsai Decl. ¶¶ 9-10. Onward Security also 

begins performing pre-release black-box testing for new platforms, new firmware, and 

products from new vendors. Tsai Decl. ¶ 11. 

 September 2015: Onward Security began conducting secure coding trainings, attended by 

vendors and DKC employees who are involved in product cybersecurity and management. See 

Ex. 1 (Tsai Tr.) at 162:23-164:22, 165:21-168:22; Tsai Decl. ¶¶ 13-14 & Ex. B. Cf. Ex. 8 

(Graff Rep.) at 134-35 (¶¶ 271-72) (“[T]he content of these training sessions was likely of 

substantial quality, and improving over the presentations dated in subsequent years.”). 

 December 2015: DKC licensed a white-box security threat testing software, Checkmarx, and 

began trials with this source code testing tool with the third-party vendors that make most of 

the accused DLS products. See Ex. 1 (Tsai Tr.) at152:4-23; Tsai Decl. ¶ 17. (In 2016, for the 

trial vendors, submission of firmware required the submission of a completed Checkmarx 

report, or a report from another DKC approved tool prior to submission to the DKC D-Lab 

quality assurance test group. Ex. 1 (Tsai Tr.) at152:4-23; Tsai Decl. ¶ 17.) 

 March 2016: Beginning in March 2016, an upgraded Security Management System (“SIM”) 

has been used to track reported potential vulnerabilities identified post-release and facilitates 

vendors’ creation of quality firmware fixes. Tsai Decl. ¶ 16. Cf. Ex. 8 (Graff Rep.) at pp. 51, 

140 (¶¶ 100, 284 (“Assuming that access to the SIM was rolled out to D-Link Systems by no 

later than 2016, it represents a significant step forward in security quality[.]”)). 

 April 2016: The Building Security In Maturity Model (“BSIMM”) began to be implemented 

for the D-Link brand products. Tsai Decl. ¶ 18. 

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 June 2016: Onward Security was hired to assist with the implementation of BSIMM for the 

D-Link brand products. Tsai Decl. ¶ 18; Hung Decl. ¶ 6; Ex. 8 (Graff Rep.) at 143, ¶ 290 

(“BSIMM is a good step[.]”). 

 November 2016: DKC, with Onward Security’s assistance, created initial versions of 

BSIMM policy, procedure, guideline, and recordkeeping documents. Tsai Decl. ¶¶ 21-22 & 

Ex. C; see Hung Decl. ¶ 7. Cf. Ex. 8 (Graff Rep.) at 143, ¶ 291. 

 March 2017: The BSIMM security policies initially developed in November 2016 were 

formally adopted in March 2017. See Ex. 1 (Tsai Tr.) at 176-177, 239-240; Ex. 2 (DLS 

30(b)(6)) at 63-66, 79-82; Tsai Decl. ¶ 22; Hung Decl. ¶ 8. Cf. Ex. 8 (Graff Rep.) at 143, 

¶ 291 (“These policies seem very promising.”). Starting at this time, vendors that make and 

create firmware for the products DLS sells were required to conduct pre-release “white box” 

tests on products and firmware using source code scan tools like Checkmarx, and provide the 

scan reports to DKC for review and confirmation. Ex. 1 (Tsai Tr.) at 150:7-151:8, 153:2-

155:14; Ex. 4 (Hsu Tr.) at 34:9-40:7; Ex. 2 (DLS 30(b)(6)) at 93:3-23; Tsai Decl. ¶ 23; Hung 

Decl. ¶ 8. Cf. Ex. 9 (Graff Rebuttal) at 6, ¶ 9 (“I agree that source-code scanning is a sound 

effective practice[.]”). Onward Security was hired to ensure compliance with the BSIMM 

policies through internal and external audits. Ex. 1 (Tsai Tr.) at 182:16-188:21; Tsai Decl. 

¶ 14; Hung Decl. ¶ 9. 

 August and November 2017: An independent third party, Bureau Veritas (“BV”), conducted

two external audits, and issued preliminary and final audit reports concluding that BSIMM is 

being successfully implemented over time. Tsai Decl. ¶¶ 26-27, Exs. D (1st BV Audit 

Report), E (final BV report); Hung Decl. ¶ 9. 

 The FTC’s security expert agrees that the security practices implemented to protect the DLS 

products are “generally sound practices.” Ex. 8 (Graff Rep.) at pp. 122-23, ¶ 246. And although 

the parties’ security experts offer conflicting opinions as to whether “reasonable” security practices 

were used (primarily pre-September 2015), there is no genuine factual dispute that the security 

practices used for DLS’ products have continuously evolved and matured, as illustrated above, and 

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that these improvements were made on a voluntary basis at substantial expense.9 And critically, 

even the FTC’s security expert does not seriously claim that the security practices used for the 

routers and IP cameras DLS has sold since March 2017 are unreasonable, or that the products are 

not currently secure. See Ex. 8 (Graff Rep.), at 122-24, 143-49, ¶¶ 246-247, 291, 297-302; Ex. 7 

(Graff Tr.) at 252:12-253:5, 268:1-269:1, 270:1-7, 271:1-11, 272:3-7, 288:7-295:9. Cf. Ex. 24 

(Schaumont Rep.) ¶¶ 70, 114; Ex. 25 (Schaumont Rebuttal) at 4, 13-14, 42, ¶¶ 4.a, 13-15, 63. 

IV. LEGAL STANDARD 

Summary judgment is appropriate when the pleadings, discovery, and affidavits show “no 

genuine dispute as to any material fact and [that] the movant is entitled to judgment as a matter of 

law.” Fed. R. Civ. P. 56(a); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “A 

principal purpose of summary judgment ‘is to isolate and dispose of factually unsupported claims.’” 

Brickman v. Fitbit, No. 3:15-cv-02077-JD, Inc., 2017 WL 6209307, at *2 (N.D. Cal. 2017) (quoting 

Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986)). “The moving party must initially establish 

the absence of a genuine issue of material fact, which it can do by ‘pointing out to the district court 

... that there is an absence of evidence to support the nonmoving party’s case.’” Id. (quoting 

Celotex, 477 U.S. at 325). Once the moving party meets its initial burden, the nonmoving party 

must, by affidavits or discovery, set forth specific facts showing that there is a genuine issue for 

trial. Fed. R. Civ. P. 56.

V. ARGUMENT 

As this Court observed in ruling on DLS’ Motion to Dismiss in September 2017: “The FTC 

does not identify a single incident where a consumer’s financial, medical or other sensitive personal 

information has been accessed, exposed or misused in any way, or whose IP camera has been 

compromised by unauthorized parties, or who has suffered any harm or even simple annoyance and 

inconvenience from the alleged security flaws in the DLS devices.” Dkt. No. 90 at 8:25-9:2. A 

year later, and after costly, burdensome discovery in the U.S. and abroad, the FTC indisputably still 

cannot identify a single individual consumer who suffered any harm of any kind (even 

 

9

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over the past several years. See Tsai Decl. ¶ 28. 

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inconvenience) as a result of DLS’ alleged practices. Indeed, “the FTC will not present any 

consumer witnesses at trial.” Dkt. No. 137. Nor does the FTC have any evidence of a single realworld exploit of the alleged vulnerabilities purportedly affecting DLS products, as the FTC’s own 

data security expert forthrightly acknowledges. See Ex. 7 (Graff Tr.) at 200:5-10 (“I have not seen 

any evidence that the vulnerabilities have, in fact, been exploited[.]”), id. at 173:11-13 (private key), 

199:8-10 (private key), 221:11-13, 225:6-8, 228:5-10, 233:13-21, 236:18-237:5, 265:10-13 (DIR615), 266:11-14 (DIR-615), 267:22-268:3 (DIR-615), 268:13-17 (DIR-412), 270:1-4 (DIR-815), 

271:1-4 (DIR-645), 271:17-272:2 (IP Cameras); Ex. 8 (Graff Rep.) at p.88 ¶ 173 (“I have not 

reviewed any evidence that these vulnerabilities have been exploited.”), pp. 86-87, ¶ 167. 

What remains of the FTC’s case does not, and cannot, support the permanent injunctive 

relief that the FTC is seeking as a remedy for DLS’ alleged violations of the FTC Act. 

A. There is No Evidence Warranting Any Prospective Injunctive Relief. 

Permanent injunctive relief under Section 13(b) of the FTC Act requires “proper proof” that 

the alleged harm is ongoing or likely to occur in the future. See I5 U.S.C. § 53(b). “Past wrongs 

are not enough for the grant of an injunction; an injunction will issue only if the wrongs are ongoing 

or likely to recur.” FTC v. Evans Prods. Co., 775 F.2d 1084, 1087 (9th Cir. 1985) (internal 

citations and quotation marks omitted) (emphasis added); see also Enrico’s, Inc. v. Rice, 730 F.2d 

1250, 1253 (9th Cir. 1984) (“Past wrongs are not enough for the grant of an injunction.”). This is 

even true regardless of whether any alleged “injury flowing from that violation” may be “continuing 

today.” Evans Prods., 775 F.2d at 1088. 

It is ultimately the FTC’s burden to show that permanent injunctive relief under Section 

13(b) is appropriate by establishing, with evidence, that DLS is currently violating or is likely to 

violate Section 5. See FTC v. Amazon.com, Inc., No. C14-1038-JCC, 2016 WL 10654030, at *4-6 

(W.D. Wash. 2016) (“inquiry ... hinges upon whether the FTC has established, with evidence, a 

cognizable danger of a recurring violation”); CFPB v. Gordon, 819 F.3d 1179, 1197 n.9 (9th Cir. 

2016) (quoting Evans, 775 F.2d at 1087 (quoting 15 U.S.C. § 53(b)(1))) (“The FTC had authority to 

pursue the action in Evans Products under 15 U.S.C. § 53(b), which gives the FTC authority to 

pursue injunctive relief only if it [FTC] can show that a person ‘“is violating, or is about to violate” 

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any law enforced by the FTC; the statute does not mention past violations.”’” (emphasis added)); 

see also F.T.C. v. Merchant Services Direct, LLC, No. 13-CV-0279-TOR, 2013 WL 4094394, at *3 

(E.D. Wash. 2013) (“This necessarily requires the FTC to demonstrate that the violations referenced 

in its Complaint are likely to recur.” (citations omitted)). 

In this case, based on the record of undisputed and indisputable facts before the Court, the 

FTC simply cannot meet its burden to show that DLS is currently violating, or is likely to violate, 

the FTC Act in the future. Accordingly, the Court should grant summary judgment in favor of DLS 

on all of the FTC’s remaining claims on this case. See FTC v. Amazon.com, Inc., No. C14-1038-

JCC, 2016 WL 10654030, at *4-6 (W.D. Wash. 2016) (granting Amazon’s motion for partial 

summary judgment and finding that a permanent injunction is not warranted for alleged past 

practices). 

1. All of DLS’ Allegedly Deceptive Statements, and “Unreasonable” 

Security Practices Occurred Well In The Past, And Are Not Ongoing. 

As set forth in detail above, there is no genuine factual dispute that, for all practical 

purposes, the allegedly deceptive statements and “unreasonable” practices relied on by the FTC to 

support its remaining claims (Counts II, III and VI) occurred long before FTC initiated this 

litigation on January 5, 2017, and are not being made by DLS today: 

 Count II: The challenged statement at issue was removed from DLS’ support website three 

years ago in September 2015, and is no longer used by DLS for any purpose, marketing or 

otherwise. See Compl. ¶ 20 & PX 1; Ans., Dkt. 92, ¶ 20. Indeed, the FTC does not claim that 

PX 1 supports an allegation of currently deceptive advertisements. Ex. 6 (FTC 30(b)(6)) at 

221:1-22, 304-05; Compl. ¶ 20. 

 Count III: The statements at issue with respect to Count III were made in DLS datasheets 

created between 2010 and 2012 that relate to four router models that were first sold between 

2007 and 2011. Brown Decl. ¶ 9. These products are no longer sold by DLS, and as a result the 

datasheets relating to these products have long since been removed from DLS’ main product 

website and exist only as archival copies on DLS’ support website for technical support 

purposes. In addition, with one isolated exception (the DIR-412, an outdated and usable 3G 

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product that is incompatible with current mobile LTE technology), all of the alleged 

vulnerabilities with respect to these routers were fixed via firmware updates to the products well 

before the Complaint in this case was filed. Brown Decl., ¶ 34 

 Count VI: The statements at issue with respect to Count VI were made in the obsolete user 

interfaces for setting up the IP cameras at issue (which were depicted in part in old DLS user 

manuals for those cameras, as shown in PX 10 and PX 11). See Brown Decl., ¶¶ 24-25 & Ex. 

C. All of DLS’ consumer IP cameras manufactured after January 2015 are incompatible with the 

Microsoft Windows Setup Wizard application containing the allegedly deceptive statements in 

PX 11, and instead rely on the newer “mydlink” and “mydlink lite” mobile applications that 

indisputably do not contain the challenged statements. See Brown Decl., ¶¶ 29-30. 

As in Evans Products, therefore, there is no genuine factual dispute that the challenged 

advertisements at issue in this case ceased being made long before the FTC even filed its 

Complaint. Cf. 775 F.2d at 1088. Indeed, the consumer products that these statements describe 

have not been sold or shipped by DLS since the filing of the Complaint. As a result, these allegedly 

deceptive statements cannot properly serve as the basis for a permanent injunction going forward. 

The fact that PX 2-PX 5 remain archived on DLS’s support website, so that they can be accessed 

solely for required technical support for these obsolete products that are not offered for sale any 

more should not alter this result—DLS long ago ceased to utilize these statements to market 

consumer products to distributors.10 Nor should the fact that PX11 can be found within user 

manuals archived on DLS’s support website solely for technical support or can possibly be briefly 

viewed by purchasers of legacy models from unaffiliated third parties, who then consciously choose 

to ignore the setup instructions. See Brown Decl. ¶¶ 24-25, 29-30. Finally, PX10, an image from a 

Microsoft Windows Setup Wizard for Business Cameras intended for use by commercial 

enterprises for purposes such as store and warehouse surveillance that also appears within old DLS 

user manuals archived on DLS’s support website to facilitate technical support for obsolete 

commercial products, Brown Decl. ¶¶ 31-33, is insufficient to defeat summary judgment. 

 

10 In any event, de minimis potential ongoing violations are insufficient to support an injunction. 

See Amazon.com, Inc., No. C14-1038-JCC, 2016 WL 10654030, at *5-6. 

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Similarly, there is no genuine factual dispute that the overwhelming majority of the alleged 

potential vulnerabilities affecting the accused products have all been fixed, and most of them many 

years ago. See Brown Decl. ¶ 34; Ex. 24 (Schaumont Rep.) at pp. 55-59, ¶¶ 102-110, 114; Ex. 20 

(Radcliffe Rep.) Appx. B, ¶¶ 8-10. To the extent any of those alleged vulnerabilities could be 

considered “unreasonable,” DLS long ago cured the problem and there has been no reoccurrence 

since. Finally, there is no genuine factual dispute that DLS and DKC voluntarily went to great 

lengths to improve their security practices long before the Complaint was filed and continue to do 

so. Accordingly, there is also no proper basis for the Court to enter a permanent injunction with 

respect to this past conduct either. 

2. There Is No Evidence DLS Will Violate Section 5 in the Future 

Although the Complaint includes a boilerplate allegation that DLS is likely to violate 

Section 5 in the future, see Compl. ¶ 46, there is no evidence in the record, and the FTC has made 

no effort to develop any, suggesting there is cognizable risk of a future violation. 

The FTC cannot rely on a remote possibility or unsupported speculation about future 

conduct to justify the extraordinary remedy of an injunction, particularly where, as here, there is no 

current violation. See, e.g., U.S. v. Laerdal Mfg. Corp., 73 F.3d 852, 854 (9th Cir. 1995) (“A 

district court cannot issue an injunction unless there exists some cognizable danger of recurrent 

violation. The determination that such danger exists must be based on appropriate findings 

supported by the record.” (internal quotation marks and citations omitted)). Instead, the FTC must 

come forward with credible evidence that there is more than a “mere possibility” that DLS will 

violate Section 5 in the future. See, e.g., Amazon.com, Inc., 2016 WL 10654030, at *4-6 (granting 

Amazon’s motion for partial summary judgment and finding that a permanent injunction is not 

warranted for alleged past practices); U.S. v. ACB Sales & Serv., Inc., 683 F. Supp. 734, 741 (D. 

Ariz. 1987) (past violations outside § 13(b)’s purview); FTC v. Infinity Grp. Servs., No. SACV 09-

977 DOC (MLGx), 2009 WL 10670551, at *2 (C.D. Cal. Sep. 2, 2009) (“Section 13(b) cannot be 

used to remedy past violations of Section 5 of the FTC Act.”); FTC v. AbbVie Inc., No. 14-5151, 

2018 WL 3830533, at *34-36 (E.D. Pa. June 29, 2018) (declining to impose permanent injunction 

because FTC did not meet its burden of showing defendant is violating, or is likely to violate, the 

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FTC Act). Cf. FTC v. Accusearch Inc., 570 F.3d 1187, 1201 (10th Cir. 2009) (“When, as in this 

case, a defendant has ceased offending conduct, the party seeking injunctive relief must demonstrate 

to the court that there exists some cognizable danger of recurrent violation, something more than the 

mere possibility which serves to keep the case alive.” (quotation marks omitted)). The FTC has 

failed to do so this in this case. The FTC has not identified any evidence at all that suggests DLS 

may violate Section 5 in the future. To the contrary, the evidence that is in the record before this 

Court suggests that DLS has always, and continues to this day, endeavored to take all reasonable 

measures to protect the security of its products. 

Where, as here, the allegedly offending conduct has ceased, courts consider a variety of 

factors to determine whether prospective injunctive relief is warranted, including the degree of the 

defendant’s scienter, the sincerity of the defendant’s assurances against future violations, and the 

genuineness and success of efforts to comply. Accusearch, 570 F.3d at 1201; In re Nat’l Credit 

Mgmt. Grp. LLC, 21 F. Supp. 2d 424, 440 (D.N.J. 1998); see also Sears, Roebuck & Co. v. FTC, 

676 F.2d 385, 392 (9th Cir. 1982) (“Two factors or elements frequently influence our decision [to 

issue an injunction under Section 5]—the deliberateness and seriousness of the present violation, 

and the violator’s past record with respect to unfair advertising practices.”). 

None of these factors supports the imposition of injunctive relief in this case. Most 

importantly, as the undisputed facts set forth in detail above show (see supra 5-14), DLS and DKC 

have for many years engaged in voluntary and thorough efforts to protect the security of D-Link 

brand products by using the best practices known at the time, including establishing an internal 

testing lab, the D-Lab; continually adopting new practices and procedures and using increasingly 

advanced security testing tools to counter emerging security threats; seeking out and hiring the top 

independent experts to conduct training, perform testing, and undertake audits; and by undertaking 

great efforts to investigate reported potential vulnerabilities and, when necessary, working with 

vendors to ensure that firmware fixes are promptly released. This indisputably evinces DLS’ 

genuine and good faith efforts to comply with Section 5 at all times.11 In addition, the record 

 

11 The FTC does not provide, use, or offer any public security standards to notify technology 

companies of what they must do to comply with what FTC Staff believes at the time that Section 5 

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reflects that DLS voluntarily ceased making any of the allegedly deceptive statements long ago, and 

took immediate steps and devoted substantial resources to correcting any potential vulnerabilities in 

its products once they became known. And DLS has no “past record” at all of any unfair 

advertising practices. All of this reflects DLS’ complete sincerity in preventing any future violation 

of Section 5. Last, as to “scienter,” even FTC is not alleging DLS intentionally did anything wrong 

in the first place. Ex. 23 (Dkt. No. 28) at 12 n.5. There is therefore absolutely no basis, on this 

record, for the Court to grant the relief sought by the FTC on its remaining claims and to enter a 

permanent injunction against DLS. 

B. In Any Case, The Permanent Injunctive Relief Sought By The FTC Is Barred as 

a Matter of Law. 

Even if there was a proper basis for the Court to enter some type of injunction in this case 

(which there is not, in part for the reasons stated above), the injunctive relief the FTC seeks here—a 

mandatory injunction commanding DLS to overhaul the security practices used for its products to 

meet an indeterminable standard of reasonableness—is unenforceable. The injunction requested by 

the FTC is not sufficiently specific to be enforceable under Rule 65(d), and is inconsistent with the 

FTC Act and due process. See LabMD, Inc. v. FTC, 891 F.3d 1286, 1299-302 (11th Cir. 2018). 

“Rule 65(d) requires ‘[e]very order granting an injunction’ to ‘state its terms specifically’ 

and to ‘describe in reasonable detail—and not by referring to the complaint or other document—the 

act or acts restrained or required.’” Columbia Pictures Indus. v. Gary Fung, 710 F.3d 1020, 1047-

48 (9th Cir. 2013) (quoting Fed. R. Civ. P. 65(d)(1)(B)-(C)); see LabMD, 891 F.3d at 1300.12 

 

prohibits or requires, or is supposedly “reasonable.” See Ex. 12 (FTC RFA Resp.) at 11 (No. 12); 

Ex. 7 (Graff Tr.) at 104:10-12 (no FTC security standards or guidelines); Ex. 15 (LabMD PI Tr.) at 

94:14-15 (“[T]here are no security standards from the FTC.”). Nevertheless, in 2016, DLS even 

went so far as to consult an outside expert, Onward Security, in part to attempt to understand what 

FTC Staff thought Section 5 prohibited or required at that time. Tsai Decl. ¶¶ 18-20. This very 

same consultant has counseled other IP camera and router companies in Taiwan on compliance with 

FTC “reasonable practices” consent orders to which they were subject. See Hung Decl. ¶ 11. 

Moreover, beginning in 2016, and, at latest, by March 2017, many newer and additional practices 

were voluntarily implemented that go above and beyond those that have apparently been deemed 

acceptable by FTC (albeit not publicly, see Ex. 30 (Trendnet compliance reports). Tsai Decl. ¶¶ 18-

24 & Ex. C. 

12 “[T]he specificity provisions of Rule 65 (d) are no mere technical requirements. The Rule was 

designed to prevent uncertainty and confusion on the part of those faced with injunctive orders, and 

to avoid the possible founding of a contempt citation on a decree too vague to be understood.” 

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Moreover, specificity is particularly “important in the fashioning and enforcement of an injunction 

consequent to an action brought in district court under Section 13(b).” LabMD, 891 F.3d at 1300. 

The requirement that terms of injunctive relief under Section 13(b) of the FTC Act must be specific 

is grounded in principles of due process, the text, purpose, and structure of the FTC Act, and 

practical necessity. See LabMD, 891 F.3d at 1299-1303 & n.40. 

Here, the mandatory injunctive relief the FTC seeks, as framed by the Complaint’s core 

allegation that DLS failed to act “reasonably,” cannot meet these requirements. The FTC’s broad 

position is that DLS “engaged in ... deceptive conduct in violation of Section 5 of the FTC Act by 

failing to undertake the most basic security practices to protect their routers and IP cameras, all 

while representing that these devices were secure.” Ex. 22 (Dkt. No. 67) at 7:24-26; Ex. 23 (Dkt. 

No. 28) at 1:2-6 (same), 2:1-10, 13:22-24; see Dkt. No. 90 at 2:2-3 (“DLS’s practices constitute, in 

the FTC’s view, unfair and deceptive conduct....”). As a remedy for this purportedly “deceptive” 

failure to affirmatively implement security practices, FTC seeks “[a] permanent injunction against 

[DLS] ... including the imposition of various monitoring and reporting provisions[.]” Ex. 22 (Dkt. 

No. 67) at at 21:19-20; Ex. 17 (FTC 3d ID), at 26.13 

 In essence, the theory of “deception” alleged in the Complaint with respect to Counts II, III, 

and VI is based on the notion that DLS implicitly represented that it had taken “reasonable” 

measures to secure its products but did not do so. See Compl. ¶¶ 15 (alleging failure to act 

reasonably), 31-32 (using phrase “reasonable steps to secure their products” (emphasis added)); Ex. 

11 (FTC Rog Resp.), at 10-16 (Nos. 12-13) (stating with respect to Count II, III, and VI that DLS 

did not take “reasonable software testing and remediation measures” regarding “well-known and 

easily preventable software security flaws” (emphasis added)); Ex. 6 (FTC 30(b)(6)) at 361:7-10 

(PX 2), 363:6-8 (PX 3), 364:22-365:3 (PX 4), 367:2-4 (PX 5); Ex. 14 (Shimp Rep.) at ¶¶ 9-10.14 As 

 

Schmidt v. Lessard, 414 U.S. 473, 476 (1974). “[T]hose against whom an injunction is issued 

should receive fair and precisely drawn notice of what the injunction actually prohibits.” Granny 

Goose Foods v. Bhd. of Teamsters & Auto Truck Drivers, 415 U.S. 423, 444 (1974). 

13 FTC apparently seeks relief requiring DLS to either “enter into contracts with third parties or 

restructure its business operations.” See Ex. 27 (Dkt. No. 58) at 2:22-24. 

14 Paragraph 15 of the Complaint is structurally indistinguishable from a key paragraph in the 

LabMD Complaint, which the Eleventh Circuit emphasized as preclusive of injunctive relief. 

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to how the FTC intends to establish DLS’ alleged “unreasonableness,” the FTC has pinned its case 

to expert testimony. See Ex. 6 (FTC 30(b)(6)) at 366:14-15 (“A The FTC will demonstrate what 

reasonable steps are through expert testimony.”), 345:6-9, 345:16-18 (same); see also Ex. 28 (Arias 

Tr.) at 55:13-58:6. 

The FTC’s theory of liability for these “deception” claims—based upon DLS’s alleged 

failure to meet an indeterminate, ever-shifting “reasonableness” standard—therefore mirrors that of 

the now-dismissed the “unfairness” claim except that this theory of necessity relies on two layers of 

expert testimony: one FTC expert says that DLS communicated a message that DLS engages in 

what the FTC considers to be “reasonable testing and remediation” practices (DLS and its experts 

dispute this);15 a second FTC expert then says that DLS did not use “reasonable” testing practices 

and procedures (DLS and its experts dispute this).16 Indeed, “the FTC has said that for all of its 

claims ‘the core facts overlap, absolutely[.]’” Dkt. No. 90 at 3:23-24 (quoting Dkt. No. 42 at 13). 

Critically, just as the FTC’s “deception” claims here are, by necessity, predicated on layers 

of expert testimony as to an ever-shifting “reasonableness” standard, see Ex. 8 (Graff Rep.) at ¶¶ 

14-22, 297-302; Ex. 14 (Shimp Rep.) ¶ 63, so, too, is the relief. As with the FTC’s “unfairness” 

cases, the permanent injunctive relief the FTC is seeking here would include imposition of a “a 

comprehensive security program that is reasonably designed to address security risks related to new 

and existing Covered Devices and Covered Information” as well as “initial and biennial assessments 

and reports (“Assessments”) from a qualified, objective, independent third-party professional, who 

uses procedures and standards generally accepted in the profession,” as with its standard 20-year 

consent orders.17 See Exs. 31, Pts. II-III (Trendnet consent), 32, Pts. II-III (Asus consent). 

 

Compare Compl. ¶ 15, with LabMD, 891 F.3d at 1290 n.8 (reproducing paragraph of LabMD 

Complaint). See id. at *15-17.

15 Compare Ex. 14 (Shimp Rep.) ¶¶ 12, 63, with Ex. 35 (Seitz Rebbutal) pp. 18-19. 

16 Compare Ex. 8 (Graff Rep.), ¶¶ 14, 15, 17, 18, 21, 22, 297, 302 (claiming “reasonable steps” 

were not taken), with Ex. 20 (Radcliffe Rep.) Appx. B, ¶ 4; Ex. 22 (Radcliffe Rebuttal) ¶ 18; Ex. 24 

(Schaumont Rep.) ¶¶ 14, 71-72, 97-101, 113-114; Ex. 25 (Schaumont Rebuttal), ¶¶ 2.a, 5-7, 62-63. 

17 Parts II and III of the Trendnet and Asus consent orders are functionally identical to Parts I and II 

of the LabMD Final Order. Compare Ex. 32 (Asus consent) at 4-6; Ex. 31 (Trendnet consent) at 4-

7, with Ex. 33 (Final Order, In re LabMD, Dkt. No. 9357, at 2-3 (Pts. I-II) (July 28, 2016)). 

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This lack of specificity is fatal. As the 11th Circuit recently ruled in LabMD, 891 F.3d 

1286, the mandatory injunctive relief the FTC seeks here is unenforceable as a matter of law. As in 

LabMD, this type of injunction “contains no prohibitions. It does not instruct ... [DLS] to stop 

committing a specific act or practice. Rather, it commands [DLS] to overhaul and replace its datasecurity program to meet an indeterminable standard of reasonableness.” LabMD, Inc., 891 F.3d at 

1300. “This command is unenforceable.” Id. 

Moreover, tasking federal district courts with ensuring the “reasonableness” of the 

affirmative security practices technology companies must use to comply with the Section 5 by 

micromanaging injunctions is inconsistent with the text, structure, and purpose of the FTC Act. See 

id. at 1302 (“This is a scheme Congress could not have envisioned.”). 

Finally, even if the permanent injunctive relief that the FTC seeks here could meet the 

specificity requirements set by Rule 65(d) and Section 13(b) of the FTC Act—which it cannot—it 

should nonetheless be barred by Section 13(b) because is a mandatory injunction, as opposed to a 

prohibitive one, because it would affirmatively require DLS (and other third parties) to take a 

number of actions. 18 Although the Ninth Circuit has not decided this question yet, see FTC v. 

Neovi, Inc., 604 F.3d 1150, 1160 & n.10 (9th Cir. 2010), the text, structure, and history of the FTC 

Act foreclose the FTC from obtaining this type of injunctive relief under Section 13(b). 

Congress specifically allowed for mandatory injunctive relief under Section 5 of the FTC 

Act, but only where a person or entity has violated a final order of the Commission. See 15 U.S.C. 

§ 45(l). This extraordinary type of injunctive relief, however, is not allowed under Section 13(b) of 

the Act, which authorizes injunctive relief where an entity is about to violate or is violating the FTC 

Act. 15 U.S.C. § 53(b). Had Congress intended to authorize district courts to order mandatory 

injunctive relief under Section 13(b), it would have expressly so provided, as it did in Section 5(l). 

See Negusie v. Holder, 555 U.S. 511, 544-45 (2009). It did not. This is confirmed by Section 

13(b)’s purpose: “permit[ing] the Commission to bring an immediate halt to unfair or deceptive acts 

 

18 A prohibitory injunction preserves the status quo. A mandatory injunction “goes well beyond 

simply maintaining the status quo pendente lite [and] is particularly disfavored.” Anderson v. United 

States, 612 F.2d 1112, 1114 (9th Cir. 1979); see also Neovi, 604 F.3d at 1160. 

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or practices[.]” FTC v. H. N. Singer, Inc., 668 F.2d 1107, 1111 (9th Cir. 1982) (citing S.Rep. 93-

151, 30-31) (emphasis added); see also Evans Products, 775 F.2d at 1087. 

VI. CONCLUSION 

For the foregoing reasons, DLS respectfully requests that the Court grant its Motion for 

Summary Judgment. 

Dated: September 21, 2018 Respectfully submitted, 

CAUSE OF ACTION INSTITUTE 

By: /s/ John Vecchione 

 JOHN VECCHIONE [admitted pro hac vice] 

 MICHAEL PEPSON [admitted pro hac vice] 

 Attorneys for Defendant 

D-Link Systems, Inc.

 (Additional counsel listed on caption page)

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