Powertech Technology Inc v. Tessera, Inc.

Filing 93

ORDER by Judge Claudia Wilken DENYING DEFENDANTS 20 MOTION TO DISMISS AND TO STRIKE. (ndr, COURT STAFF) (Filed on 5/21/2012)

Download PDF
1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 POWERTECH TECHNOLOGY, INC., 5 6 7 Plaintiff, United States District Court For the Northern District of California 10 ORDER DENYING DEFENDANT’S MOTION TO DISMISS AND TO STRIKE (Docket No. 20) v. TESSERA, INC., 8 9 No. C 11-6121 CW Defendant. ________________________________/ Defendant Tessera, Inc. moves to dismiss and to strike the 11 claims brought against it by Plaintiff Powertech Technology, Inc. 12 (PTI). 13 filed by the parties and their oral arguments at the hearing, the 14 Court DENIES Tessera’s motion. PTI opposes the motion. 15 16 Having considered the papers BACKGROUND On October 20, 2003, PTI and Tessera entered into a contract 17 called Tessera Compliant Chip License Agreement (TCC License). 18 Compl., Appendix A (TCC License). 19 use Tessera’s patents to make integrated circuit packages and to 20 use or sell these products world-wide. 21 ¶ II.A. 22 payments to Tessera. The TCC License allows PTI to Compl. ¶ 1; TCC License In return, PTI is obliged to make certain royalty See TCC License § III. 23 The TCC License states in part, 24 License Grant. Subject to . . . Licensee’s payment of the fees and royalties stated herein . . ., Tessera hereby grants Licensee a world-wide, non-exclusive, nontransferable, non-sublicensable, limited license to the Tessera Patents to assemble ICs into TCC Licensed Products and use or sell such TCC License Products. 25 26 27 28 . . . 1 2 3 4 5 6 7 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Termination for Breach. Either party may terminate this Agreement due to the other party’s breach of this Agreement, such as failure to perform its duties, obligations, or other responsibilities herein . . . The parties agree that such breach will cause substantial damages to the party not in breach. Therefore, the parties agree to work together to mitigate the effect of any such breach; however, the non-breaching party may terminate this Agreement if such breach is not cured or sufficiently mitigated (to the non-breaching party’s satisfaction) within sixty (60) days of notice thereof. . . . Governing Law. . . . Both parties shall use reasonable efforts to resolve by mutual agreement any disputes, controversies, claims or differences which may arise from, under, out of or in connection with this Agreement. If such disputes, controversies, claims or differences cannot be settled between the parties, any dispute resolution proceedings shall take place in the United States, but if either party files a claim in state or federal court, such claim shall be filed in the state or federal courts of California. Nothing herein shall alter or affect any other rights either party may have to redress any breach or act of the other party. Notwithstanding any provision herein, after the sixty (60) day cure period set forth in Paragraph VIII.B and notice of termination of this Agreement by one of the parties, either party may bring an action in the U.S. International Trade Commission. No waiver. Any waiver, express or implied, by either of the parties hereto of any right hereunder or default by the other party, shall not constitute or be deemed a continuing waiver or a waiver of any other right or default. No failure or delay on the part of either party in the exercise of any right or privilege hereunder shall operate as waiver thereof, nor shall any single or partial exercise of such right or privilege preclude other or further exercise thereof or of any other right or privilege. . . . TCC License ¶¶ II.A, VIII.B, XIV.A, XIV.B. PTI has performed its obligations under the TCC License, including paying its ongoing royalties to Tessera. Compl. ¶ 22. In December 2007, Tessera initiated ITC Investigation No. 26 337-TA-630 (the 630 Investigation), accusing certain companies of 27 infringing certain Tessera patents, including its 5,663,106 patent 28 (’106 patent), through the importation and sale of particular wBGA 2 1 and uBGA products. 2 a civil action in the Eastern District of Texas, in which it 3 asserted the same patents against the same defendants for the same 4 products as in the ITC action. 5 Tech. Co., No. 07–534 (E.D. Tex. Dec. 7, 2007), Docket No. 1.1 Compl. ¶ 5. Tessera also simultaneously filed Complaint, Tessera, Inc. v. A–DATA 6 PTI was not named as a respondent in the ITC action or 7 defendant in the Texas action, but Powerchip Semiconductor Corp. 8 (PSC), ProMos Technologies Corp., and Elpida Memory Inc. were. 9 related litigation, PTI has since asserted that these companies In United States District Court For the Northern District of California 10 were among PTI’s customers for the accused products. 11 Mot. to Dismiss, Powertech Technology, Inc. v. Tessera, Inc. (PTI 12 I), Case No. 10-945 (N.D. Cal.), Docket No. 33; Powertech 13 Technology, Inc. v. Tessera, Inc., 660 F.3d 1301, 1304 (Fed. Cir. 14 2011). 15 See Opp. to In August 2009, the Administrative Law Judge (ALJ) in the 630 16 Investigation issued an initial determination, finding, among 17 other things, that for uBGA products, “Tessera’s patent rights are 18 exhausted as to those accused products purchased from Tessera’s 19 licensees,” precluding any liability based on these products. 20 Tessera v. ITC, 646 F.3d 1357, 1363 (Fed. Cir. 2011) (summarizing 21 the ALJ’s conclusions). 22 final determination in the 630 Investigation, affirming the ALJ’s 23 finding of patent exhaustion. 24 holding). On January 4, 2010, the ITC issued its Id. (summarizing the ITC’s 25 26 27 28 1 The Texas action was subsequently stayed pending the final resolution of the 630 Investigation. Order, Tessera, Inc. v. A– DATA Tech. Co., No. 07–534 (E.D. Tex. Feb. 28, 2008), Docket No. 48. 3 1 On March 5, 2010, several months after the ITC issued its final determination in the 630 Investigation, PTI filed an action 3 for declaratory relief in this Court. 4 No. 1. 5 and invalidity of the ’106 patent and maintained that it faced an 6 imminent threat of injury because Tessera had accused PTI’s 7 customers of infringement based on PTI-packaged products. 8 April 1, 2010, Tessera moved to dismiss the case for lack of 9 subject matter jurisdiction, stating that, to its knowledge, “PTI 10 United States District Court For the Northern District of California 2 is a licensee in good standing and it and its customers therefore 11 enjoy protection against any suit accusing its licensed products 12 of infringement of the ’106 patent or any other licensed patent.” 13 Mot. to Dismiss, PTI I, Docket No. 14, 6. 14 that its license with PTI “protects PTI and its customers.” 15 at 3. 16 subject matter jurisdiction, finding that there was no Article III 17 case or controversy between the parties, because Tessera had 18 explicitly excluded licensed products from its enforcement 19 actions. 20 Dist. Lexis 53621, at *7-8 (N.D. Cal.). See Compl., PTI I, Docket In that case, PTI sought declarations of non-infringement On Tessera also asserted Id. In June 2010, this Court dismissed the action for lack of Powertech Technology, Inc. v. Tessera, Inc., 2010 U.S. 21 On May 23, 2011, the Federal Circuit affirmed in part the 22 ITC’s final determination in the 630 Investigation and reversed it 23 in part.2 24 of patent exhaustion for the infringement accusations against the 25 uBGA products, and stated that because “Tessera’s licensees were In particular, the Federal Circuit upheld the finding 26 27 28 2 The Federal Circuit also affirmed the ITC’s determination that the wBGA products did not infringe the ’106 patent. Tessera v. ITC, 646 F.3d at 1366-67. 4 1 authorized to sell the accused products” at the time of sale 2 without reservation, Tessera could not subsequently assert its 3 patent rights against the licensees’ customers. 4 646 F.3d at 1369-71. 5 argument that its licensees’ sales to their customers were 6 initially unauthorized until the time that the licensee remitted 7 the related royalty payment to Tessera which, under its licensing 8 agreements, may not happen for months after the products were 9 sold. United States District Court For the Northern District of California 10 Tessera v. ITC, In so holding, the court rejected Tessera’s Id. at 1370. Several months later, on September 30, 2011, the Federal 11 Circuit reversed this Court’s dismissal in PTI I, finding that a 12 controversy did exist between the parties. 13 Inc. v. Tessera, Inc., 660 F.3d 1301, 1307-10 (Fed. Cir. 2011). 14 On appeal, Tessera had again argued that it had not accused PTI’s 15 products, and that “PTI has paid all the royalties due. . . . PTI 16 and its customers therefore enjoy protection against suit on PTI’s 17 licensed products on any of the hundreds of licensed patents, of 18 which the ’106 patent is but one.” 19 Brief of Defendant-Appellee Tessera, Inc. 4, Powertech, Case No. 20 10-1489 (Fed. Cir. Jan. 18, 2011). 21 Circuit rejected Tessera’s position that it had not accused PTI’s 22 products as inconsistent with the position that Tessera had argued 23 before it in the ITC action, that the products were initially 24 unauthorized until the royalty payments were subsequently made and 25 that some licensees, including PTI, had underpaid their royalties 26 or paid them late, so exhaustion was not triggered. 27 specifically noted that 28 5 Powertech Technology, Corrected Non-Confidential In its decision, the Federal The court 1 2 3 4 5 we have no doubt that PTI’s customers and products were specifically targeted in [the ITC and Texas actions]. For example, witnesses for Elpida testified that the accused products in the ITC and Texas actions were licensed from several licensees, including PTI. Indeed, Tessera’s infringement expert in the ITC action focused part of his analysis on an Elpida wBGA chip that was clearly packaged by PTI and identified with a PTI model number. Powertech, 660 F.3d at 1308 n.4. 6 A week later, on October 6, 2011, PTI notified Tessera by 7 letter that PTI believed that Tessera was in breach under the TCC 8 License. Compl. ¶ 20. 9 PTI initiated the current case on December 6, 2011. Docket 10 United States District Court For the Northern District of California No. 1. PTI alleges that Tessera breached the TCC License by 11 initiating an investigation in the ITC accusing PTI’s products, 12 without first providing sixty days’ notice to PTI, terminating the 13 license and providing notice of the termination, as required in 14 Paragraph XIV.A of the TCC License. Compl. ¶¶ 3-8. PTI contends 15 that Tessera breached the License Grant provision of the TCC 16 License by targeting PTI’s products and customers, even though PTI 17 had fully complied with the TCC License and paid royalties, 18 without first terminating the TCC License. Compl. ¶¶ 9-10. PTI 19 further argues that Tessera breached this provision by accusing 20 the products even though its patent rights with respect to them 21 were exhausted. Compl. ¶¶ 11-12. PTI asserts claims for: (1) 22 declaratory judgment that PTI may terminate the TCC License; (2) 23 breach of contract; and (3) breach of the implied covenant of good 24 faith and fair dealing. 25 DISCUSSION 26 Tessera moves to dismiss PTI’s complaint pursuant to Federal 27 Rule of Civil Procedure 12(b)(6). Tessera alternatively seeks to 28 6 1 strike PTI’s complaint under California’s anti-Strategic Lawsuit 2 Against Public Participation (anti-SLAPP) statute, Cal. Code Civ. 3 Proc. § 425.16(b). 4 I. 5 6 Motion to Dismiss A. Legal Standard A complaint must contain a “short and plain statement of the 7 claim showing that the pleader is entitled to relief.” 8 Rule of Civil Procedure 8(a). 9 failure to state a claim, dismissal is appropriate only when the Federal On a motion under Rule 12(b)(6) for United States District Court For the Northern District of California 10 complaint does not give the defendant fair notice of a legally 11 cognizable claim and the grounds on which it rests. 12 Corp. v. Twombly, 550 U.S. 544, 555 (2007). 13 whether the complaint is sufficient to state a claim, the court 14 will take all material allegations as true and construe them in 15 the light most favorable to the plaintiff. NL Indus., Inc. v. 16 Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). However, this 17 principle is inapplicable to legal conclusions; “threadbare 18 recitals of the elements of a cause of action, supported by mere 19 conclusory statements,” are not taken as true. 20 129 S. Ct. 1937, 1949-50 (2009) (citing Twombly, 550 U.S. at 555). 21 When granting a motion to dismiss, the court is generally 22 required to grant the plaintiff leave to amend, even if no request 23 to amend the pleading was made, unless amendment would be futile. 24 Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 25 F.2d 242, 246-47 (9th Cir. 1990). 26 amendment would be futile, the court examines whether the 27 complaint could be amended to cure the defect requiring dismissal 28 “without contradicting any of the allegations of [the] original Bell Atl. In considering Ashcroft v. Iqbal, In determining whether 7 1 complaint.” 2 Cir. 1990). 3 Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Although the court is generally confined to consideration of 4 the allegations in the pleadings, when the complaint is 5 accompanied by attached documents, such documents are deemed part 6 of the complaint and may be considered in evaluating the merits of 7 a Rule 12(b)(6) motion. 8 1265, 1267 (9th Cir. 1987). 9 Durning v. First Boston Corp., 815 F.2d B. Discussion United States District Court For the Northern District of California 10 Tessera argues that PTI’s claims against it are barred under 11 the Noerr-Pennington doctrine, which provides that a defendant is 12 immune from liability for claims based on its exercise of its 13 First Amendment right to petition the government for redress of 14 grievances. 15 U.S. 657, 669 (1965); Eastern Railroad Presidents Conference v. 16 Noerr Motor Freight, Inc., 365 U.S. 127 (1961); Sosa v. DIRECTV, 17 Inc., 437 F.3d 923, 929 (9th Cir. 2006). 18 amend. 1 (“Congress shall make no law . . . abridging . . . the 19 right of the people . . . to petition the Government for a redress 20 of grievances.”). 21 Tessera are not based on Tessera’s petitioning activity and that 22 the Noerr-Pennington doctrine does not apply to claims based on 23 the breach of a private contractual obligation. 24 United Mine Workers of America v. Pennington, 381 See also U.S. Const. In response, PTI argues that its claims against “The Noerr-Pennington doctrine derives from the Petition 25 Clause of the First Amendment and provides that ‘those who 26 petition any department of the government for redress are 27 generally immune from statutory liability for their petitioning 28 conduct.’” Kearney v. Foley & Lardner, LLP, 590 F.3d 638, 643-44 8 1 (9th Cir. 2009) (quoting Sosa, 437 F.3d at 929). 2 emerged in the antitrust context.” 3 omitted). 4 part on “the principle that [it] would not ‘lightly impute to 5 Congress an intent to invade . . . freedoms’ protected by the Bill 6 of Rights, such as the right to petition.” 7 NLRB, 536 U.S. 516, 525 (2002) (quoting Noerr, 365 U.S. at 138). 8 “Recognizing that the ‘right to petition extends to all 9 departments of the government’ and includes access to courts, the “It initially Id. at 644 (citations The Supreme Court based the creation of the doctrine in BE & K Constr. Co. v. United States District Court For the Northern District of California 10 Supreme Court extended the doctrine to provide immunity for the 11 use of ‘the channels and procedures’ of state and federal courts 12 to advocate causes.” 13 Id. (quoting Sosa, 437 F.3d at 929-30). Because “Noerr-Pennington is a label for a form of First 14 Amendment protection,” the Ninth Circuit has stated that “to say 15 that one does not have Noerr-Pennington immunity is to conclude 16 that one’s petitioning activity is unprotected by the First 17 Amendment.” 18 (declining to consider that whether the doctrine “provides greater 19 protection than the First Amendment”). 20 Kidney Ctrs., 146 F.3d 1056, 1059 (9th Cir. 1998) (“the doctrine 21 is a direct application of the Petition Clause”). 22 antitrust context, the Ninth Circuit has stated, “Because the 23 Noerr-Pennington doctrine grows out of the Petition Clause, its 24 reach extends only so far as necessary to steer the Sherman Act 25 clear of violating the First Amendment.” 26 Cohler, 410 F.3d 1180, 1184 (9th Cir. 2005). 27 28 White v. Lee, 227 F.3d 1214, 1231 (9th Cir. 2000) See also Kottle v. N.W. In the Freeman v. Lasky, Haas & “The Supreme Court has since held that Noerr-Pennington principles ‘apply with full force in other statutory contexts’ 9 1 outside antitrust.” 2 F.3d at 930). 3 applies to state law tort claims. 4 Am. Mktg. FSI, 546 F.3d 991, 1006-1007 (9th Cir. 2008) 5 (considering a claim for tortious interference with prospective 6 economic advantage under California law); see also Video Int’l 7 Prod., Inc. v. Warner-Amex Cable Commc’ns, Inc., 858 F.2d 1075 8 (5th Cir. 1988)) (applying doctrine to state law claim for 9 tortious interference with contracts). United States District Court For the Northern District of California 10 Kearney, 590 F.3d at 644 (quoting Sosa, 437 In 2008, the Ninth Circuit found that the doctrine Theme Promotions, Inc. v. News While the Noerr-Pennington doctrine protects “those who 11 petition the government for redress . . . from antitrust, 12 statutory, or tort liability,” Luxpro Corp. v. Apple Inc., 2011 13 U.S. Dist. LEXIS 35008 (N.D. Cal.), Tessera provides no compelling 14 authority that the doctrine immunizes against breach of contract 15 claims. 16 address the doctrine’s applicability to contract claims. 17 Gunderson v. Univ. of Alaska, 902 P.2d 323, 326-27 & n.4 (Alaska 18 1995), the Alaska Supreme Court discussed the Noerr-Pennington 19 doctrine in relation to common law tort claims for interference 20 with contractual relations and interference with prospective 21 advantage, not claims for breach of contract. 22 Western Ry. v. Terminal R.R. Ass’n of St. Louis, 1998 U.S. Dist. 23 LEXIS 4614 (S.D. Ill.), the court does not make clear what causes 24 of action were asserted in the case, it observed that “courts have 25 extended the protections of the Noerr-Pennington doctrine to 26 insulate parties from claims alleging intentional interference 27 with a contract right or other economic expectation,” thus finding 28 the claims in the case barred because “the courts view the First None of the cases upon which Tessera relies directly 10 In While in Gateway 1 Amendment right to petition the government for redress to be 2 superior to contract rights as well” as to antitrust claims. 3 at *7 (citing Village of Lake Barrington v. Hogan, 272 Ill. App. 4 3d 225, 233 (1995) (addressing tortious interference with contract 5 and economic advantage in relation to Illinois state privileges)). 6 In Bethany Bldg., Inc. v. Dungan Civic Ass’n, 2003 Phila. Ct. Com. 7 Pl. LEXIS 20 (2003), the court examined the conduct complained of 8 in the complaint as a whole and found that the case, which 9 included nine separate charges, was barred by the Noerr-Pennington Id. United States District Court For the Northern District of California 10 doctrine, without any separate analysis of the applicability of 11 the doctrine to the breach of contract claim. 12 However, the court separately held that the breach of contract 13 claim failed as a matter of law, because the plaintiffs had not 14 alleged the existence of an enforceable contract between them and 15 any defendant. 16 Test & Assembly Ctr., Case No. RG08410327 (Cal. Sup. Ct. 2009), 17 the Alameda County Superior Court held, without elaboration or 18 discussion, that claims of breach of contract, breach of the 19 covenant of good faith and fair dealing and violation of the UCL 20 were barred by the state law litigation privilege and the Noerr- 21 Pennington doctrine, without separating the two privileges or the 22 various causes of action. 23 Id. at *9. Id. at *4-9. Similarly, in Tessera, Inc. v. United Even if the Noerr-Pennington doctrine could apply in the 24 context of claims for breach of contract and of the implied 25 covenant of good faith and fair dealing, it would not bar PTI’s 26 claims in this matter. 27 test to determine whether the defendant’s conduct is immunized: 28 (1) identify whether the lawsuit imposes a burden on petitioning In BE & K, “the Court adopted a three-part 11 1 rights, (2) decide whether the alleged activities constitute 2 protected petitioning activity, and (3) analyze whether the 3 statutes at issue may be construed to preclude that burden on the 4 protected petitioning activity.” 5 BE & K, 536 U.S. at 530-33, 535-37). 6 Kearney, 590 F.3d at 644 (citing PTI’s lawsuit does not impose a burden on Tessera’s 7 petitioning rights. 8 right to petition the government for redress, by among other 9 things, bringing an ITC investigation,” Opp. at 11, to the extent While, as PTI acknowledges, “Tessera has the United States District Court For the Northern District of California 10 that Tessera has waived these rights through contract, the 11 Noerr-Pennington doctrine does not shield Tessera from liability 12 for failing to comply with that contract. 13 accuses Tessera of breaching the contract between the parties by 14 failing to comply with the requirements of the agreement, 15 including to provide notice and to terminate the TCC License prior 16 to bringing the ITC Investigation, not simply by instituting that 17 proceeding. 18 asserting these claims. 19 II. 20 A. In this case, PTI Thus, Noerr-Pennington does not prevent PTI from Motion to Strike under California’s Anti-SLAPP Statute Legal Standard 21 California’s anti-SLAPP statute provides, 22 A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim. 23 24 25 26 27 Cal. Civ. Proc. Code § 425.16(b)(1). 28 motions to strike are available to litigants proceeding in federal 12 California anti-SLAPP 1 court. 2 Cir. 2005). 3 Thomas v. Fry’s Elecs., Inc., 400 F.3d 1206, 1206 (9th Courts analyze these motions in two steps. “First, the 4 defendant must make a prima facie showing that the plaintiff's 5 suit arises from an act in furtherance of the defendant’s rights 6 of petition or free speech.” 7 F.3d 590, 595 (9th Cir. 2010) (citation and internal quotation 8 marks omitted). 9 facie showing, the burden shifts to the plaintiff to demonstrate a United States District Court For the Northern District of California 10 11 Mindys Cosmetics, Inc. v. Dakar, 611 “Second, once the defendant has made a prima probability of prevailing on the challenged claims.” Id. “At [the] second step of the anti-SLAPP inquiry, the required 12 probability that [a party] will prevail need not be high.” 13 v. Hallmark Cards, 580 F.3d 874, 888-89 (9th Cir. 2009). 14 plaintiff must show “only a ‘minimum level of legal sufficiency 15 and triability.’” 16 Thrifty Oil Co., 23 Cal. 4th 429, 438 n.5 (2000)). 17 need only “state and substantiate a legally sufficient claim.” 18 Mindys, 611 F.3d at 598 (citation and internal quotation marks 19 omitted). 20 the credibility or comparative probative strength of competing 21 evidence,’ but ‘should grant the motion if, as a matter of law, 22 the defendant’s evidence supporting the motion defeats the 23 plaintiff’s attempt to establish evidentiary support for the 24 claim.’” 25 Chidester, 28 Cal. 4th 811, 821 (2002)). Hilton A Mindys, 611 F.3d at 598 (quoting Linder v. The plaintiff In conducting its analysis, the “court ‘does not weigh Id. at 599 (quoting Wilson v. Parker, Covert & 26 27 28 13 1 B. Discussion 2 1. 3 The parties do not dispute that Tessera’s filing and pursuit Arising from 4 of the ITC action constitute protected activities within the 5 meaning of the anti-SLAPP statute. 6 the instant complaint “arises from” those activities, including 7 whether the anti-SLAPP statute can apply to claims of breach of 8 contract and of the implied covenant. Instead, they dispute whether For this determination, “the critical consideration is 10 United States District Court For the Northern District of California 9 whether the cause of action is based on the defendant’s protected 11 free speech or petitioning activity.” 12 Cal. 4th 82, 89 (2002) (emphasis in original). 13 California Supreme Court held that a breach of contract claim may 14 fall within the scope of the anti-SLAPP statute, because 15 “[n]othing in the statute itself categorically excludes any 16 particular type of action from its operation.” 17 Instead of focusing on “the form of the plaintiff’s cause of 18 action,” the statute focuses on “the defendant’s activity that 19 gives rise to his or her asserted liability.” 20 Cotati, 29 Cal. 4th at 78 (“the defendant’s act underlying the 21 plaintiff’s cause of action must itself have been an act in 22 furtherance of the right of petition or free speech.”). 23 case, the court found that the breach of contract and other claims 24 arose out of protected litigation activity because, “but for the 25 federal lawsuit and [defendant’s] alleged actions taken in 26 connection with that litigation, plaintiffs’ present claims would 27 have no basis.” Navellier v. Sletten, 29 Navellier, 29 Cal. 4th at 90. 28 14 In Navellier, the Id. at 92. Id.; see also In that 1 When, as here “a pleading contains allegations regarding both 2 protected and unprotected activity, ‘it is the principal thrust or 3 gravamen of the plaintiff’s cause of action that determines 4 whether the anti-SLAPP statute applies.’” 5 Simpson Thacher & Bartlett LLP, 179 Cal. App. 4th 1204, 1219-20 6 (2009) (quoting Martinez v. Metabolife Internat., Inc., 113 Cal. 7 App. 4th 181, 188 (2003)). 8 protected activity do not ‘subject the cause of action to the 9 anti-SLAPP statute.’” PrediWave Corp. v. “Incidental allegations regarding Id. at 1220 (quoting Martinez, 113 Cal. United States District Court For the Northern District of California 10 App. 4th at 188. 11 the legislative intent” that the anti-SLAPP statute “be broadly 12 interpreted,” because a plaintiff cannot “deprive a defendant of 13 anti-SLAPP protection by bringing a complaint based upon both 14 protected and unprotected conduct.” 15 Election v. Sierra Club, 45 Cal. 4th 309, 319 (2008). 16 “The ‘principal thrust or gravamen’ test serves Club Members for an Honest Here, PTI accuses Tessera of breach of contract and breach of 17 the implied covenant of good faith and fair dealing for 18 petitioning the ITC without first giving notice and terminating 19 the TCC License, as agreed in that contract. 20 filing and prosecution of the ITC action, PTI would have no basis 21 for the claims against Tessera alleged here. 22 of PTI’s complaint implicates Tessera’s protected activity, 23 because, without the allegations regarding Tessera’s protected 24 activity, PTI would be unable to state a claim against Tessera. 25 Thus, PTI’s complaint arises from Tessera’s protected activity for 26 the purposes of the anti-SLAPP statute. 27 28 But for Tessera’s The central thrust As noted by the California Supreme Court in Navallier, such a finding does not mean that Tessera cannot be sued for breaching 15 1 the TCC License because its alleged breach was related to 2 petitioning activity. 3 bar any suit that possesses “minimal merit.” 29 Cal. 4th at 93. The statute does not Id. 4 2. 5 The “essential elements” of a breach of contract claim are Probability of prevailing 6 “(1) the contract, (2) plaintiff’s performance or excuse for 7 nonperformance, (3) defendant’s breach, and (4) the resulting 8 damages to plaintiff.” 9 822, 830 (1968). Reichert v. General Ins. Co., 68 Cal. 2d Tessera does not dispute that there is an United States District Court For the Northern District of California 10 enforceable contract between the parties or that PTI has fully 11 performed its obligations thereunder. 12 that PTI has failed to meet its burden of establishing a 13 probability of prevailing on its claims, because its claims are 14 barred by the Noerr-Pennington doctrine, Tessera has not breached 15 the TCC License, PTI has not established that it was damaged, and 16 PTI’s claims are barred by waiver, forfeiture, laches and 17 estoppel. 18 Instead, Tessera argues The Court has already addressed, and rejected, Tessera’s 19 contentions related to the Noerr-Pennington doctrine. 20 further notes that, in addressing the second prong of the anti- 21 SLAPP inquiry, the California Supreme Court has recognized that “a 22 defendant who in fact has validly contracted not to speak or 23 petition has in effect ‘waived’ the right to the anti-SLAPP 24 statute’s protection in the event he or she later breaches that 25 contract.” 26 Tessera’s remaining arguments unavailing for the reasons discussed 27 below and declines to strike PTI’s complaint. Navellier, 29 Cal. 4th at 94. 28 16 The Court The Court also finds 1 a. Breach 2 Tessera does not dispute that it did failed to give notice to 3 PTI or terminate the TCC License before instituting the ITC action 4 or before arguing in the ITC that PTI’s products were unlicensed 5 for the period of time before PTI paid royalties. 6 Tessera argues that it did not breach the TCC License for three 7 reasons. 8 9 Instead, First, Tessera argues that the forum selection clause relates to disputes between the parties only and it did not name PTI in United States District Court For the Northern District of California 10 the ITC action. 11 has previously taken the position that the license agreement 12 precludes any suit against PTI or against PTI’s customers in which 13 PTI’s products are accused, and thus PTI has offered at least some 14 evidence that would demonstrate that the contract’s ambiguous 15 terms may be interpreted to encompass suits in which PTI’s 16 products are accused. PTI has submitted evidence that Tessera itself 17 Tessera also argues that it did not breach the agreement, 18 because PTI had encouraged it to file the action against PTI’s 19 customers, and there was thus no dispute or disagreement between 20 the parties that would have triggered the forum selection clause’s 21 requirements of notice and termination. 22 this alleged encouragement in support of its affirmative defenses 23 of waiver and equitable estoppel. 24 correspondence between the parties on which Tessera relies does 25 not support its position. 26 points relate to a separate ITC Investigation, No. 337-TA-605, 27 which is not at issue here. 28 relate to the 630 Investigation, PTI encouraged Tessera to proceed Tessera also relies on However, the email Several of the emails to which Tessera In some of the other emails, which do 17 1 against several companies that were getting at least some of their 2 products from unlicensed sources and to tell another company to 3 use only licensed sources. 4 encouraged Tessera to accuse the PTI-packaged products as well. 5 In other emails, rather than encouraging Tessera to bring an ITC 6 action, PTI appears to have been defending itself against 7 Tessera’s characterization of the ITC action as something that 8 Tessera was bringing to help PTI, by arguing that Tessera brought 9 the suit to benefit itself primarily, in order to make sure that United States District Court For the Northern District of California 10 11 This does not establish that PTI companies like PTI continue to pay royalties. Finally, Tessera argues that it had tried to exclude PTI’s 12 licensed products from the 630 Investigation consistently 13 throughout the ITC process. 14 Federal Circuit has already rejected this characterization of its 15 arguments. However, as discussed above, the 16 Accordingly, Tessera’s arguments do not defeat PTI’s showing 17 of a minimum level of the legal sufficiency and triability of its 18 claim that Tessera breached the TCC License. 19 established that it is likely to succeed on its affirmative 20 defenses of waiver and equitable estoppel. 21 22 Tessera has also not b. Damages Tessera argues that PTI has not meet its anti-SLAPP burden as 23 to its second and third causes of action, for breach of contract 24 and breach of the implied covenant, because PTI cannot establish 25 that it was damaged by Tessera’s alleged breach. 26 contends that PTI cannot reclaim royalty payments that it has 27 already made. 28 18 Tessera also 1 PTI puts forward several theories of damages. PTI asserts 2 that it was harmed because, if Tessera had complied with the terms 3 of the TCC License and had terminated the agreement, PTI would not 4 have had to continue to pay royalties, which totaled more than 5 $200 million. 6 relationship with its customers was damaged by Tessera’s breach, 7 because PTI had to charge a royalty to its customers while they 8 were being sued by Tessera. At the hearing, PTI also argued that its Tessera acknowledges that PTI made royalty payments after 10 United States District Court For the Northern District of California 9 Tessera instituted the 630 Investigation without first terminating 11 the TCC License and providing the required notice. 12 Tessera, however, contends that PTI cannot recover these royalty 13 payments as a matter of law, because California law precludes 14 recovery of royalty payments made voluntarily with knowledge of 15 the facts. 16 Cal. App. 3d 1113, 1144 (1987); Western Gulf Oil Co. v. Title Ins. 17 & Tr. Co., 92 Cal. App. 2d 257, 266 (1949)). 18 Mot. at 21-22. Id. (citing Pac. Gas & Elec. Co. v. Zuckerman, 189 Here, however, PTI did not have full knowledge of the facts 19 at the time of the payments. 20 understanding that its products and customers would be free from 21 suit. 22 to PTI and to this Court that it was not accusing PTI-packaged 23 products in those suits. 24 decision in Powertech Technology, Inc. v. Tessera, Inc., 660 F.3d 25 1301 (Fed. Cir. 2011), it became evident that Tessera was taking 26 inconsistent positions and was in fact accusing products that PTI 27 had sold to its customers. PTI made these payments with the During the ITC and Texas proceedings, Tessera represented After the Federal Circuit issued its 28 19 1 Thus, PTI has met its burden to establish the minimum legal 2 sufficiency and factual triability of its damages claims. 3 does not mean that PTI will ultimately establish that it has been 4 harmed to the extent claimed. 5 6 This c. Forfeiture and Laches Tessera asserts several affirmative defenses based on PTI’s 7 purported failure to raise these claims in a timely manner, 8 arguing that PTI should have done so when Tessera first initiated 9 the ITC proceedings. Tessera does not dispute that PTI brought United States District Court For the Northern District of California 10 this action within the limitations period. 11 maintained in the prior proceedings before this Court that it was 12 not accusing PTI-packaged products, and it was not until the 13 Federal Circuit issued its decision on September 30, 2011 that it 14 became clear that Tessera was actually doing so in the other 15 actions. 16 breach a week later, and filed suit sixty days after that. 17 these facts, it is not likely that Tessera will be able to prove 18 that PTI delayed in bringing these claims. Further, Tessera As noted above, PTI provided notice to Tessera of its On 19 3. Fees and costs 20 Tessera and PTI both seek fees and costs for the anti-SLAPP 21 motion. 22 entitled to recover his or her attorneys’ fees and costs.” 23 Code Civ. Proc. § 425.16(c). 24 is entitled to fees and costs only if “the court finds that a 25 special motion to strike is frivolous or is solely intended to 26 cause unnecessary delay.” 27 completely without merit or (B) for the sole purpose of harassing 28 an opposing party.” A party who prevails on an anti-SLAPP motion “shall be Cal. In contrast, a prevailing plaintiff Id. “‘Frivolous’ means (A) totally and Cal. Code Civ. Proc. § 128.5(b)(2). 20 1 Because Tessera does not prevail on its motion to strike, the 2 Court does not award it fees and costs. 3 not find that Tessera’s motion was frivolous or only intended to 4 cause unnecessary delay, the Court also declines to award fees and 5 cost to PTI. 6 Because the Court does CONCLUSION 7 For the reasons set forth above, the Court DENIES Tessera’s 8 motion to dismiss and to strike PTI’s complaint (Docket No. 20). 9 IT IS SO ORDERED. United States District Court For the Northern District of California 10 11 12 Dated: 5/21/2012 CLAUDIA WILKEN United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?