Openwave Systems Inc. v. Myriad France S.A.S.

Filing 256

ORDER DENYING SUMMARY JUDGMENT by Judge Alsup denying 136 Motion for Summary Judgment; denying 145 Motion for Summary Judgment; denying 168 Motion for Summary Judgment (whalc1, COURT STAFF) (Filed on 5/13/2011)

1
2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7
FOR THE NORTHERN DISTRICT OF CALIFORNIA
8
9
OPENWAVE SYSTEMS INC.,

11
For the Northern District of California

United States District Court

10

12
13
14

No. C 10-02805 WHA

Plaintiff,
v.

ORDER DENYING
SUMMARY JUDGMENT

MYRIAD FRANCE S.A.S.,
Defendant.
/

15
16

AND RELATED COUNTERCLAIMS
/

17
18

INTRODUCTION

19

In this dispute regarding the ownership of 36 patents and one patent application, plaintiff

20

and counterdefendant Openwave Systems Inc. moves for partial summary judgment on its claim

21

for declaratory relief. Defendant and counterclaimant Myriad France S.A.S. opposes. For the

22

reasons stated below, Openwave’s motion is DENIED.

23
24

STATEMENT
Openwave is a California company that develops software for use in networked

25

computing. Many computer networks utilize a client-server architecture. This architecture

26

enables multiple “client” devices — such as mobile phones and personal computers — to request

27

data and services from one central “server” machine. Before 2008, Openwave developed

28

software products for use on both the client side and on the server side of such networked

1

computing. In March 2008, however, Openwave announced plans to discontinue its client-side

2

business and focus exclusively on its server-side business (Schuman Exhs. 2, 3 at 29–30).

3

In June 2008, Openwave sold the client-side business to Purple Labs S.A., a French

4

company. The transaction documentation included an Asset Purchase Agreement and an

5

Intellectual Property License Agreement, both dated June 27, 2008 (Rushforth Exh. A; Schuman

6

Exh. 1). As part of the transaction, Openwave assigned twenty United States patents, two United

7

States patent applications, and four foreign patents to Purple Labs (Rushforth Exh. A at

8

Agreement 1, Schedule 3–4). Openwave also licensed two other United States patents to Purple

9

Labs (Schuman Exh. 1 at § 1.7, Exh. A).

11
For the Northern District of California

United States District Court

10

12
13
14
15
16
17
18
19
20
21
22

The IPLA included the following provision to address the subsequent assignment of lateridentified patents that should have been, but were not, assigned as part of the June 2008 deal:
2.4
Missing Assigned Patents. From time to time,
Purple Labs may become aware of the existence of a Missing
Assigned Patent. For those Missing Assigned Patents that Purple
Labs identifies to Openwave and are confirmed by Openwave to
comply fully with the definition of an [sic] Missing Assigned
Patent, Openwave shall assign all of its right, title and interest in
such Missing Assigned Patents to Purple Labs and shall execute a
patent assignment substantially in the form of Exhibit B for such
Missing Assigned Patents.
(Schuman Exh. 1 at § 2.4). The IPLA defined “Missing Assigned Patents” as follows:
1.3
“Missing Assigned Patents” means patents owned
by Openwave immediately prior to the execution of the APA (or
patents issuing on patent applications owned by Openwave
immediately prior to the execution of the APA) that (a) contain
claims that, immediately prior to the execution of the APA, cover
products or services in the “Business” (as defined in the APA) but
do not cover products or services in the Openwave Field of Use;
and (b) were not assigned to Purple Labs as “Seller IP” pursuant to
the APA.

23

(id. at § 1.3). The “Business” was the “mobile client software business” Openwave sold to

24

Purple Labs (Rushforth Exh. A at A-1), and the Openwave Field of Use referred to the “server

25

software” business Openwave retained (Schuman Exh. 1 at § 1.9). Specifically, “Business” was

26

defined to mean “the mobile client software business of the Seller, and its direct and indirect

27

subsidiaries, that develops, distributes, markets, sells, licenses, and supports various handset

28

software clients such as browsers, SMS, EMS and MMS and email messaging clients, java
2

1

clients, UI, widgets, graphics engines and other software designed for mobile handsets”

2

(Rushforth Exh. A at A-1).

3

The IPLA separately addressed the subsequent licensing of “omitted necessary IP” — any

4

intellectual property that was retained or received in the deal by one party, but which turned out

5

to be “reasonably necessary” to the business retained or received by the other party. Upon

6

receiving notice of omitted necessary IP, a party was required to “automatically grant” a license.

7

Regarding such demands by Purple Labs, the IPLA stated:

8
9

11
For the Northern District of California

United States District Court

10

12
13

3.2
For Purple Labs. If Purple Labs reasonably
determines that Openwave, as of the Effective Date, owned any
intellectual property or Intellectual Property Right that (a) was not
included within the Seller IP or the Licensed Patents and (b) is
reasonably necessary for Purple Labs’ use, development,
modification, manufacture, marketing, distribution, sale, or support
of products and services in the PL Field of Use (the “Omitted PL
Necessary IP”), then Purple Labs may give written notice to
Openwave identifying such Omitted PL Necessary IP, whereupon
Openwave will automatically grant to Purple Labs the following
licenses, as appropriate:

14

(Schuman Exh. 1 at § 3.2). The PL Field of Use referred to the client-side business involving

15

“software designed for mobile handsets” that was sold to Purple Labs (id. at § 1.10). Two

16

automatic licenses were set forth, one tailored to patent rights, and the other encompassing all

17

other types of intellectual property (id. at § 3.2(a)–(b)).

18

In July 2008 — about a week after the deal closed — Purple Labs requested “a cross

19

licensing agreement” on one of the patents Openwave had retained (Schuman Exh. 20 at 3).

20

Purple Labs, however, did not pursue that request, and no additional license was granted. No

21

other licensing or assignment requests were made for the next two years.

22
23

*

*

*

In February 2009, Purple Labs and Esmertec AG executed a business-combination

24

agreement under which Purple Labs became a wholly-owned subsidiary of Esmertec (Schuman

25

Exh. 22 at § 2.1). The rest of the history connecting Purple Labs with Myriad is less clear.

26

Myriad explains that after the February 2009 business-combination deal, Esmertec AG changed

27

its name to Myriad Group AG, and “Purple Labs SA changed its name to Myriad France and its

28

corporate form to an SAS.” Myriad, however, identifies no evidence documenting these name
3

1

changes (Opp. 23). Openwave recounts that Purple Labs “was acquired by” Myriad Group AG,

2

“a publicly traded Swiss conglomerate” on or about March 2009. Openwave identifies no

3

evidence of this supposed transaction, but Openwave adopts the allegation from Myriad’s

4

pleadings that “on or about July 2009 the shareholders of Purple Labs changed Purple Labs’

5

company name into Myriad France S.A.S.” (Br. 9–10; Dkt. No. 52 ¶10). An August 2009 French

6

public record refers to “the company Purple Labs SA, currently named MYRIAD FRANCE,

7

SAS” (Hellfeld Exh. 30 at MYR009502). Thus, it appears that sometime between February 2009

8

and August 2009 Purple Labs became Myriad, the defendant and counterplaintiff in this action.

9

In July 2010, Myriad sold all of the United States patents and patent applications from the
July 2008 Openwave deal to Google Inc. (Schuman Exh. 26 at MYR053082–84). During

11
For the Northern District of California

United States District Court

10

Myriad’s negotiations with Google, Myriad’s counsel offered, “if you have identified specific

12

patents owned by OPWV that you would be happy to purchase through us, pls let me know as we

13

may have a way to get them (if they are somehow browser related)” (Schuman Exh. 23

14

at MYR052861). Two weeks later, on July 27, 2010, Myriad sent Openwave a letter demanding

15

assignment of ten patents pursuant to the missing-assigned-patents provision of the June 2008

16

agreement (Schuman Exh. 24). Five months later, on December 28, 2010, Myriad sent Openwave

17

a second letter demanding assignment of an additional twenty-five patents and one patent

18

application (Schuman Exh. 25). Myriad’s demand for these patent assets is the subject of the

19

present dispute.

20
21

*

*

*

Openwave filed this action in June 2010, alleging that Myriad had failed to comply with

22

certain aspects of the June 2008 deal relating to escrow funds and indemnity (Compl.). The

23

operative complaint, however, no longer raises these issues. Openwave now seeks a declaratory

24

judgment that Myriad is not entitled to assignment of the disputed patent assets. Openwave also

25

seeks injunctive relief and damages on the theory that Myriad’s demands amount to unfair

26

competition and intentional interference with prospective economic advantage (Sec. Amd.

27

Compl. 4–6). Myriad’s operative counterclaims seek a declaratory judgment that Myriad is

28

entitled to assignment of the 35 patents and one patent application it has identified, as well as
4

1

specific performance of the missing-assigned-patents provision and attorney’s fees and costs (Sec.

2

Amd. Countercl. 11–12).

3

In November 2010, this action was divided into phases, and the parties were instructed

4

that the following threshold issues would be resolved first: (1) the meaning of the word “cover”

5

in the definition of Missing Assigned Patents; (2) the standing of Myriad France SAS to assert

6

rights under the June 2008 agreement; and (3) the validity of the contract clause providing for

7

assignment of “Missing Assigned Patents.” Fact discovery regarding these threshold issues has

8

closed. Openwave now moves for partial summary judgment on its claim for declaratory relief.

9

Most of Openwave’s arguments target the first two threshold issues, but Openwave also advances
broader summary judgment arguments. Myriad opposes. This order follows full briefing and a

11
For the Northern District of California

United States District Court

10

hearing on the motion.

12
13

ANALYSIS
Summary judgment is proper when “there is no genuine dispute as to any material fact and

14

the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In this analysis, all

15

reasonable inferences must be drawn in the light most favorable to the non-moving party.

16

Johnson v. Racnho Santiago Cmty. Coll. Dist., 623 F.3d 1011, 1018 (9th Cir. 2010). Unsupported

17

conjecture or conclusory statements, however, cannot defeat summary judgment. Surrell v. Cal.

18

Water Serv. Co., 518 F.3d 1097, 1103 (9th Cir. 2008).

19

Where the party moving for summary judgment would bear the burden of proof at trial,

20

that party bears the initial burden of producing evidence that would entitle it to a directed verdict

21

if uncontroverted at trial. See C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc.,

22

213 F.3d 474, 480 (9th Cir. 2000). Where the party moving for summary judgment would not

23

bear the burden of proof at trial, that party bears the initial burden of either producing evidence

24

that negates an essential element of the non-moving party’s claims, or showing that the non-

25

moving party does not have enough evidence of an essential element to carry its ultimate burden

26

of persuasion at trial. See Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102

27

(9th Cir. 2000). If the moving party does not satisfy its initial burden, then the non-moving party

28

has no obligation to produce anything and summary judgment must be denied. If, however, the
5

1

moving party satisfies its initial burden of production, then the non-moving party must produce

2

admissible evidence to show there exists a genuine issue of material fact. Id. at 1102–03.
JUDICIAL NOTICE.

Openwave requests that the Court take judicial notice of the patents and patent application

5

whose ownership are disputed in this action (Dkt. No. 140). “A Court shall take judicial notice if

6

requested by a party and supplied with the necessary information.” FRE 201(d). Judicial notice

7

is appropriate for facts not subject to reasonable dispute in that they are “capable of accurate and

8

ready determination by resort to sources whose accuracy cannot reasonably be questioned.”

9

FRE 201(b). In particular, a court may take judicial notice of matters of public record. Lee v.

10

City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Openwave provided copies of all the

11
For the Northern District of California

1.

4

United States District Court

3

patent and application documents, supported by a sworn declaration (Dkt. No. 140). These items

12

are matters of public record. Accordingly, the request for judicial notice is GRANTED.

13

2.

STANDING.

14

One of the threshold issues designated for determination during this phase of the action is

15

“the standing of Myriad France SAS to assert rights under the contract” (Dkt. No. 26 at 1).

16

Openwave now requests a summary judgment ruling that Myriad lacks standing to invoke the

17

missing-assigned-patents provision of the IPLA. Openwave, however, has not earned such

18

a ruling.

19

Openwave relies on the following provision from the IPLA: “Any purported transfer,

20

assignment, or delegation without the appropriate prior written consent will be null and void

21

when attempted and of no force or effect.” This provision follows a sentence explaining that

22

neither party may assign the agreement or any rights under it to any third party without the other

23

party’s prior written consent, except in four types of circumstances (Schuman Exh. 1 at § 7.3).

24

Openwave argues that “Myriad’s acquisition of Purple Labs is an attempted transfer of rights by

25

Purple Labs” under California law (Br. 18). To support this conclusion, however, Openwave

26

cites only one district court decision. Closer scrutiny of California law, which Myriad does not

27

dispute governs the question whether an attempted transfer of rights took place, reveals that the

28

answer is not so simple.
6

1

Under California law, the meaning of bilateral contract terms forbidding assignment is a

2

matter of interpretation. When interpreting such language, the validity of an assignment that

3

results merely from a change in the legal form of ownership of a business depends upon whether

4

the assignment affects the interests protected by the nonassignability provision. Trubowitch v.

5

Riverbank Canning Co., 182 P.2d 182, 30 Cal. 2d 335, 344–45 (1947). Contrary to what

6

Openwave suggests, the law does not presume that a forbidden (and therefore void) transfer of

7

rights occurred when Purple Labs became a subsidiary of Esmertec.

8
9

Openwave does not provide any analysis of facts or law regarding whether the
“acquisition” (a term that Openwave uses and Myriad disputes) of Purple Labs affected the
interests protected by the nonassignability provision, or even what those interests might be. Nor

11
For the Northern District of California

United States District Court

10

does Openwave address any of the four exceptions enumerated in the agreement that would allow

12

assignment without prior consent. As such, Openwave has not established that the “acquisition”

13

of Purple Labs involved a void transfer of rights. Openwave failed to carry its initial burden of

14

showing that Myriad lacks standing, so no burden is shifted to Myriad on the standing issue.

15

Openwave’s request for a summary judgment ruling that Myriad lacks standing to invoke the

16

missing-assigned-patents provision of the IPLA is DENIED.

17

3.

18

Related to the question whether Myriad may assert rights under an agreement made by

TIMELINESS AND LACHES.

19

Purple Labs is the question whether Myriad may now assert rights under an agreement made in

20

July 2008. Openwave argues that Myriad’s demand for assignment of the disputed patents is

21

untimely pursuant to the agreement itself, and also is barred by laches. Both arguments fail.

22
23

A.

Timeliness.

Section 2.4 of the IPLA provides for the assignment of Missing Assigned Patents whose

24

existence Purple Labs may become aware of “[f]rom time to time.” This language does not

25

suggest that the right to assignment of Missing Assigned Patents came with an expiration date.

26

Openwave nonetheless argues that it did.

27
28

Specifically, Openwave argues that the parties intended the phrase “from time to time” to
give Purple Labs “no longer than eighteen months from the June 2008 closing date to identify
7

1

allegedly missing patents” (Br. 16) (emphasis omitted). Openwave points to drafts of the IPLA

2

that did not include any provision addressing “Missing Assigned Patents” or their assignment, but

3

that did include an eighteen-month limitation in the provision for licensing of “Omitted Necessary

4

IP” (Schuman Exhs. 15, 16, 34). Openwave presents deposition testimony explaining that

5

Openwave preferred a shorter limitation, and that the language “from time to time” was

6

introduced because the parties could not agree to a compromised time limit:

7

From time to time was added because Purple Labs wanted the
18-month outset, and Openwave wanted something less than
18 months, and the parties could not agree on a time less than
18 months and more than 90 days or six months from Openwave,
so from time to time was added with the intent that it would not
be forever.

8
9
10

in the missing-assigned-patents provision embodies the parties’ intent that the rights conferred by
For the Northern District of California

United States District Court

(Schuman Exh. 9 at 212:21–213:2). Thus, Openwave argues that the phrase “from time to time”
11
12
that provision would expire after some period of time between ninety days and eighteen months.
13
Openwave also asserts that California courts have construed similar language to mean “within a
14
reasonable time” (Br. 16).
15
This argument does not hold water. Nowhere in Openwave’s evidence regarding
16
negotiation of the eighteen-month limitation is there a clear indication that it was intended to
17
apply to the missing-assigned-patents provision of Section 2.4 as well as to the omitted18

necessary-IP provision of Section 3.2.1 Moreover, the fact that the parties failed to agree to a

19
specific number does not imply that they agreed to a range. Even if the parties agreed “that it
20
would not be forever,” their selection of the phrase “from time to time” indicates their preference
21
to roll the dice on possible future disputes. Openwave’s evidence shows that this language was
22
adopted because it did not convey a specific time limit. Reading one into it would frustrate the
23
parties’ intent.
24
As to the interpretation of similar language by California courts, Openwave cites only one
25
decision. In 1934, the California Court of Appeal found that “the words ‘at any time’ in the letter
26
27
1

28

It is, however, worth noting that Myriad submitted a redline draft of the IPLA that includes a crossedout eighteen-month limitation in the missing-assigned-patents provision of Section 2.4 (Hellfeld Exh. 24
at MYR040936).

8

1

above quoted do not mean to the end of time, but only that acceptance of the proposal could be

2

made on payment of $2,500 by appellant within a reasonable time; and under section 1587 of the

3

Civil Code it was revoked by a failure to accept long before the time tender was made.” Throop

4

v. McGregor, 34 P.2d 187, 139 Cal. App. 451, 454 (1934) (emphasis added). This single example

5

from a contract formation context does not compel the interpretation urged by Openwave in this

6

contract performance dispute. Openwave has not carried its burden of showing that Myriad’s

7

patent-assignment demands are unreasonably untimely per the terms of the June 2008 agreement.

8

No burden is shifted to Myriad on this issue. Openwave’s request for a summary judgment

9

determination of untimeliness is DENIED. A trial will decide whether the request was
unreasonably late.

11
For the Northern District of California

United States District Court

10

12

B.

Laches.

Openwave also argues that Myriad’s demand for assignment of the patent assets is barred

13

by the equitable doctrine of laches (Br. 17). “To demonstrate laches, [Openwave] must prove

14

both an unreasonable delay by [Myriad] and prejudice to itself.” Danjaq LLC v. Sony Corp.,

15

263 F.3d 942, 951 (9th Cir. 2001). Openwave has not carried this burden.

16

The question of unreasonable delay is determined in two steps. First, the length of the

17

delay is assessed, and then its reasonableness is considered. Jarrow Formulas, Inc. v. Nutrition

18

Now, Inc., 304 F.3d 829, 838 (9th Cir. 2002). The length of the delay is measured from the time

19

the party knew or should have known about its potential claim until the time when the claim was

20

filed. Danjaq, 236 F.3d at 952. Myriad’s patent-assignment counterclaims initially were filed in

21

December 2010, two and a half years after the deal was closed (Dkt. No. 31 at 10). Openwave

22

refers to “Myriad’s twenty-five month delay,” suggesting that the clock began to run immediately

23

in June 2008, before the ink on the contract was dry (Br. 17). The missing-assigned-patents

24

provision, however, presupposes that Myriad did not and could not have know about the patents

25

at the time the agreement was executed. The question of when Myriad discovered or should have

26

discovered its patent-assignment claims must be answered by looking beyond the time

27

of execution.

28
9

1

Myriad sent Openwave a letter demanding assignment of some of the disputed patent

December 2010. Thus, Myriad was aware of its potential claims by those dates. Openwave does

4

not present any evidence that Myriad knew or should have know of its claims earlier. Openwave

5

cites Myriad’s July 2008 licensing request as “evidence that Purple Labs appreciated that it

6

needed to act promptly to identify any IP that it should have but didn’t get as part of the 2008

7

transaction with Openwave,” but this inference is a stretch (Br. 16). As Myriad notes, the passive

8

language of the IPLA does not impose any affirmative duty to look for Missing Assigned Patents

9

but rather allows Myriad to demand assignment whenever Myriad “may become aware of the

10

existence of a Missing Assigned Patent” (Opp. 16; Schuman Exh. 1 at § 2.4). In light of this

11
For the Northern District of California

assets in July 2010 and a second letter demanding assignment of the rest of them in

3

United States District Court

2

contract language, a trier of fact need not agree with Openwave that Myriad was obligated to

12

identify Missing Assigned Patents promptly.

13

On the present record, it cannot be said that Myriad knew or should have known of its

14

assignment claim before July 2010 for ten of the patents and December 2010 for the rest. Thus,

15

the delay period for purposes of this laches analysis was only five months for the first group of

16

patents and no time at all for the second group. These periods of time are so short that they are

17

presumptively reasonable. The reasonableness of a claimant’s delay typically is considered in

18

light of the time allotted by the limitations period from an analogous statue. Jarrow, 304 F.3d at

19

838. Here, the parties dispute what limitations period might be used as a measuring stick, but a

20

delay of five or zero months would be reasonable by comparison to any statute. Openwave has

21

not established that Myriad’s delay was unreasonable. Accordingly, Openwave’s request for a

22

summary judgment ruling that Myriad’s patent-assignment demand is barred by laches is

23

DENIED. This order need not reach the question whether Openwave was prejudiced by

24

Myriad’s delay.

25

4.

26

Openwave seeks summary judgment regarding Myriad’s assignment demand for the

CONFIRMATION BY OPENWAVE.

27

additional reason that Openwave has not confirmed that the disputed patents qualify as Missing

28

Assigned Patents. Specifically, Openwave argues that the phrase “and are confirmed by
10

1

Openwave to comply fully with the definition of an [sic] Missing Assigned Patent” in Section 2.4

2

of the IPLA is a condition precedent to assignment, and that this condition has not been fulfilled.

3

Accordingly, Openwave argues, Myriad is not entitled to assignment (Br. 10–11).

4

Even if Openwave’s interpretation of the confirmation clause were adopted, Openwave

confirmation that a particular patent qualified as a Missing Assigned Patent. On the contrary, the

7

implied covenant of good faith and fair dealing would require Openwave to exercise its

8

discretionary power in good faith. Carma Developers (Cal.), Inc. v. Marathon Dev. Cal., Inc.,

9

826 P.2d 710, 726 (1992). Openwave makes the conclusory statement that “there is abundant

10

record evidence demonstrating that Openwave’s interpretation of the Missing Assigned Patents

11
For the Northern District of California

would not have carte blanche to block assignment by arbitrarily and capriciously withholding

6

United States District Court

5

Clause is not arbitrary or objectively unreasonable” (Reply Br. 7). Openwave, however, does not

12

cite any evidence that would support a summary judgment determination as a matter of law that it

13

acted in good faith in refusing to confirm that any of the disputed patent assets qualify as Missing

14

Assigned Patents.

15

Indeed, Myriad has identified thirty-six issued or pending patents as meeting the

16

definition, and Openwave has not confirmed even a single one of them. Prior to the July 2008

17

negotiations, Openwave advertised 42 United States patent assets, including 31 issued patents, as

18

“covering” its client products (Hellfeld Exh. 3 at OPWV00044840). When finalizing the deal,

19

Openwave identified and assigned only twenty United States patents and two pending

20

applications (Rushforth Exh. A at Agreement 1, Schedule 3–4). In light of this reduction, the

21

procedure in question was written into the contract for resolving how many of the remainder, if

22

any, covered the client-side business. Openwave has not carried its burden of proving that every

23

single one of its thirty-six denials was not assignable, much less denied in good faith.

24

Accordingly, Openwave’s motion for a summary judgment determination that the confirmation

25

clause defeats Myriad’s patent-assignment demands is DENIED.
INTERPRETATION OF “COVER.”

26

5.

27

Openwave also seeks a summary judgment ruling on the meaning of the word “cover” in

28

the definition of Missing Assigned Patents. Specifically, Openwave would limit the definition to
11

1

patents whose inventions (1) relate only to the client-side business (as opposed to the server-side

2

business or some combination of the two), and (2) were actually used in an Openwave client

3

product when the June 2008 deal was closed (Br. 11–15). This order declines to do so.

4

On the first question — whether qualifying patents must cover only the client-side

reading of the definition of Missing Assigned Patents reveals that the clause “but do not cover

7

products or services in the Openwave Field of Use” modifies the word “claims,” not the word

8

“patents.” “Claims,” of course, is plural. This reading suggests that any patent with at least two

9

claims that cover the client-side business but do not cover the server-side business is a Missing

10

Assigned Patent. The result would be assignment of any such patent, even if the patent had 100

11
For the Northern District of California

business — there is credible evidence on both sides of the scale. Myriad’s strictly grammatical

6

United States District Court

5

other claims that covered only the server-side business retained by Openwave. On the other hand,

12

Openwave points to other passages in the IPLA and to credible parol evidence suggesting that the

13

parties did not intend this result. The “Omitted Necessary IP” licensing provisions of the IPLA,

14

the emails exchanged by the companies’ CEOs immediately before the deal was closed, and the

15

patents the agreement specifically identified for assignment or licensing suggest that patents

16

covering only the client-side business were to be assigned, but patents covering both sides of the

17

business were to be retained by Openwave and licensed to Myriad. On the summary judgment

18

record, this dispute is sufficiently balanced to deny summary judgment.

19

On the second question — whether qualifying patents must correspond to actual

20

Openwave products that existed in June 2008 — Openwave also is not entitled to summary

21

judgment. The definition of Missing Assigned Patents requires claims that “cover products or

22

services in the ‘Business,’” and the Business includes “develop[ment]” (Schuman Exh. 1 at § 1.3;

23

Rushforth Exh. A at A-1). That language alone is enough to enable a reasonable trier of fact to

24

conclude that Missing Assigned Patents could cover potential client-side products as well as

25

existing ones. Openwave’s motion for a summary judgment ruling on the meaning of the word

26

“cover” is DENIED.

27
28

Although not raised in Openwave’s summary judgment motion, a lurking issue regarding
interpretation of the word “cover” is whether the coverage question must be answered by a
12

1

rigorous infringement analysis. In the Court’s tentative view, the word “cover” was not used in

2

that technical sense. A requirement that claims must “read on” a client-side product but not “read

3

on” a server-side product would entail bone-crushing infringement trials for each of the 36

4

disputed patent assets, involving both client products and server products. This enormous burden

5

cannot possibly be what the parties intended. Not one shred of proof has yet been offered that the

6

parties contemplated such a demanding standard. There will be no need for Markman hearings.

7

The jury or judge will sort out which patents are Missing Assigned Patents based on how a

8

reasonable business person would have assessed coverage.
CONCLUSION

10

For the foregoing reasons, plaintiff’s motion for summary judgment is DENIED. No

11
For the Northern District of California

United States District Court

9

motion for summary judgment having been made by Myriad, it is not possible to enter a partial

12

summary judgment in its favor on any contract-interpretation issues. The June 2 deadline for

13

filing such a motion has not yet passed, but Myriad is reminded that it must obtain prior

14

permission before filing a motion for summary judgment. The foregoing issues have been

15

massively litigated. If Myriad desires to file a motion for summary judgment, it first must seek

16

permission by way of a précis explaining what benefit could be accomplished by another round of

17

summary judgment litigation. The précis may not exceed five pages of double spaced, twelve-

18

point Times New Roman font, with no footnotes and no attachments.

19

With the benefit of the foregoing, counsel shall meet and confer in person and devise a

20

trial plan and a plan leading up to it, paying particular mind to what issues are jury versus judge

21

issues. Please file a description of the trial and pre-trial plan by JUNE 2, 2011.

22
23

IT IS SO ORDERED.

24
25

Dated: May 13, 2011.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

26
27
28
13