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

Filing 358

ORDER GRANTING MYRIAD'S MOTION IN LIMINE NO. 1 AND PARTIAL SUMMARY JUDGMENT, Order by Hon. William Alsup granting 336 Motion in Limine.(whalc1, COURT STAFF) (Filed on 8/19/2011)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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OPENWAVE SYSTEMS INC.,

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For the Northern District of California

United States District Court

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No. C 10-02805 WHA

Plaintiff,
v.

ORDER GRANTING
MYRIAD’S MOTION
IN LIMINE NO. 1 AND
PARTIAL SUMMARY
JUDGMENT

MYRIAD FRANCE S.A.S.,
Defendant.
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AND RELATED COUNTERCLAIMS
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INTRODUCTION
In this dispute regarding ownership of 36 patents and one patent application, defendant

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moves in limine to exclude evidence that the parties did not intend a contract clause limiting

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assignment of contract rights to apply to a particular corporate transaction. For the following

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reasons, the motion is GRANTED. This order also grants partial summary judgment on one of the

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threshold issues identified for trial in the first phase of this action.

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STATEMENT

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The facts of the case were set forth in the May 2011 order denying summary judgment

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(Dkt. No. 256). One of the threshold issues designated for the first phase was whether Myriad

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France S.A.S. has standing to assert rights under the June 2008 agreement between Openwave

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Systems Inc. and Purple Labs S.A., Myriad’s claimed predecessor. Specifically, the issue was

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framed as whether the 2009 transaction between Purple Labs and Esmertec AG constituted an

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attempted transfer of Purple Labs’ rights under the 2008 Intellectual Property License Agreement

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pursuant to California law, and, if so, whether the transfer fell under any of the IPLA’s four

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enumerated exceptions that Myriad contends do not require Openwave’s prior written consent

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(Dkt. No. 303 at 9). Myriad now moves in limine to exclude evidence that the parties did not

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intend the exceptions to apply to the 2009 transaction between Purple Labs and Esmertec;

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Openwave opposes (Dkt. No. 336).

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ANALYSIS
The IPLA is a fully-integrated contract (June 29 Order, Dkt. No. 303 at 5–6). As such,
parol evidence may be admitted only if it is relevant to prove a meaning to which the language of

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For the Northern District of California

United States District Court

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the IPLA is reasonably susceptible. United States Cellular Inv. Co. of Los Angeles v. GTE

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Mobilnet, Inc., 281 F.3d 929, 938 (9th Cir. 2002).

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The plain language of the IPLA provides that a party may assign its rights under the

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agreement “to a successor of any portion of the business of such Party resulting from a

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reorganization, spin-off, sale, or divestiture of such business” without the other party’s consent

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(Dkt. No. 142-1 at § 7.3). Myriad has presented credible evidence that Purple Labs’ 2009

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transaction with Esmertec constituted a “reorganization” under California law. Specifically,

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Myriad explains that Purple Labs became a wholly owned subsidiary of Esmertec through a

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process defined as “reorganization” under Section 181(b) of the California Corporations Code

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(Br. 1–4; Dkt. No. 164 at § 2.1).

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Openwave argues that the 2009 transaction did not constitute a reorganization under

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Section 181(b) because it did not satisfy the condition that “immediately after the acquisition, the

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acquiring entity has control of the other entity” CAL. CORP. CODE § 181(b). Openwave does not

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contest that Purple Labs became a wholly owned subsidiary of Esmertec. Instead, Openwave

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emphasizes that Purple Labs also acquired a majority of the shares in Esmertec (Opp. 3–5). This

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observation is irrelevant to the control inquiry. For purposes of Section 181, control “means the

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ownership directly or indirectly of shares or equity securities possessing more than 50 percent of

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the voting power of a domestic corporation, a foreign corporation, or an other business entity.”
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CAL. CORP. CODE § 160(b). Since Purple Labs became a wholly owned subsidiary of Esmertec,

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Esmertec owned all of the shares in Purple Labs, and therefore Esmertec had control of Purple

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Labs as defined by the statute. That Purple Labs chose to invest heavily in Esmertec does not

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change this analysis.

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This order finds that the 2009 corporate transaction between Purple Labs and Esmertec

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was a reorganization under California law. Accordingly, the exception set forth in Section 7.3(c)

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of the IPLA applies, and the fact that Openwave did not provide prior written permission for

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the 2009 transaction does not impair Myriad’s standing to assert rights under the IPLA. This

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order does not reach the parties’ arguments concerning the following: (1) whether any other
exceptions in Section 7.3 of the IPLA apply to the 2009 transaction; (2) whether the 2009

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For the Northern District of California

United States District Court

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transaction involved an attempted transfer of rights; (3) whether Openwave timely disclosed its

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intent to rely on extrinsic evidence regarding the standing issue; and (4) whether Openwave

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witnesses are knowledgeable regarding Section 7.3. At trial, Openwave will not be allowed to

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introduce evidence to show that the exceptions in Section 7.3 of the IPLA were not intended to

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cover the 2009 transaction between Purple Labs and Esmertec. Indeed, the threshold question of

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Myriad’s standing to assert rights under the IPLA no longer will be part of the trial.

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CONCLUSION
For the foregoing reasons, Myriad’s first motion in limine is GRANTED. Additionally,

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partial summary judgment on the threshold issue of Myriad’s standing to assert rights under the

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June 2008 agreement between Openwave and Purple Labs is GRANTED in favor of Myriad and

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against Openwave. This order finds that the 2009 transaction between Purple Labs and Esmertec

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does not impair Myriad’s standing to assert rights under the IPLA.

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IT IS SO ORDERED.

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Dated: August 19, 2011.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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