Digital Reg of Texas, LLC v. Adobe Systems Incorporated et al

Filing 438

ORDER by Judge Claudia Wilken DENYING DEFENDANTS 427 MOTION FOR PARTIAL SUMMARY JUDGMENT. (ndr, COURT STAFF) (Filed on 9/26/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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DIGITAL REG OF TEXAS, LLC,

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Plaintiff,
v.
ADOBE SYSTEMS INCORPORATED, et
al.,

United States District Court
For the Northern District of California

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________________________________/
Defendants Adobe Systems Incorporated, Electronic Arts, Inc.,
and Symantec Corporation1 have filed a motion for partial summary
judgment of noninfringement on the ground that their and their
customers’ use of the accused products in combination with any
Microsoft product is licensed under Plaintiff Digital Reg’s 2009
Patent License and Settlement Agreement with Microsoft.
opposes the motion.

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Plaintiff

Having considered the parties’ papers, the

Court DENIES Defendants’ motions.
BACKGROUND

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ORDER DENYING
DEFENDANTS’ MOTION
FOR PARTIAL
SUMMARY JUDGMENT
(Docket No. 427)

Defendants.

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No. C 12-1971 CW

Plaintiff brings this suit against Defendants alleging
infringement of seven patents, Patent No. 6,389,541 (the ‘541
patent), Patent No. 6,751,670 (the ‘670 patent), Patent No,
7,127,515 (the ‘515 patent), Patent No. 7,272,655 (the ‘655
patent), Patent No. 7,421,741 (the ‘741 patent), 7,562,150 (the
‘150 patent), and Patent No. 7,673,059 (the ‘059 patent).
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Defendants state that Defendant Ubisoft might seek to join
their motion for summary judgment. Ubisoft has not yet done so.
Any future motion by Ubisoft on the grounds addressed in the
instant motion for summary judgment will likely be denied.

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Defendants now move for partial summary judgment, arguing

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that, to the extent the accused products are used in combination

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with Microsoft products, that use is permissible under a 2009

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settlement agreement and license between Plaintiff and Microsoft

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(Microsoft License).

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The Microsoft License agreement resolved a 2007 lawsuit

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Plaintiff filed against Microsoft in the Eastern District of Texas

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for infringement of the ‘541 patent.

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United States District Court
For the Northern District of California

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The Microsoft License grants

to Third Parties, including but not limited to direct
and indirect customers, licensees, purchasers,
resellers, distributors and end users of Microsoft
Products, a worldwide, non-exclusive, non-transferable,
non-sublicensable, fully paid-up irrevocable license
under the Licensed Patents: (a) to use, sell, offer to
sell, repair, maintain, support, dispose of, and
otherwise exploit, including, but not limited to
providing, distributing, exporting, and importing,
whether alone or in combination with other things,
Microsoft Products and (b) to use, whether alone or in
combination with other things, Microsoft Products to
perform, practice and use any process, method, formula
or subject matter covered by, or which are a component,
step, feature or element of any process, method, formula
or subject matter covered by, or which are a component,
step, feature or element of any process, method, formula
or subject matter covered by, any claim of any Licensed
Patent.

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Greenblatt Dec., Ex. 1 ¶ 2.1.2.

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defines “Licensed Patent” as:

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The Microsoft License further

(a) U.S. Patent No. 6,389,541 (the “‘541 Patent”), (b)
any and all patents and patent applications throughout
the world that claim priority from, or contain any claim
that could have claimed priority from, the ‘541 Patent,
(c) each and every patent and patent application related
to any of (a) or (b) and (d) every substitution,
divisional renewal, extension, continuation,
continuation-in-part, foreign counterpart, reissue or
re-examination of any of (a), (b) or (c).
Greenblatt Dec., Ex. 1 ¶ 1.5.
The parties to the license agreed that it would be governed
by Washington State law.

Greenblatt Dec., Ex. 1 ¶ 7.7.
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Microsoft

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paid Plaintiff $487,500 for the release of Plaintiff’s claims and

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the license.

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LEGAL STANDARD

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Summary judgment is properly granted when no genuine and

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disputed issues of material fact remain, and when, viewing the

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evidence most favorably to the non-moving party, the movant is

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clearly entitled to prevail as a matter of law.

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56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986);

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Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir.

United States District Court
For the Northern District of California

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Fed. R. Civ. P.

1987).
The moving party bears the burden of showing that there is no

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material factual dispute.

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true the opposing party's evidence, if supported by affidavits or

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other evidentiary material.

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815 F.2d at 1289.

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Therefore, the court must regard as

Celotex, 477 U.S. at 324; Eisenberg,

The court must draw all reasonable inferences

in favor of the party against whom summary judgment is sought.

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Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
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587 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952
F.2d 1551, 1558 (9th Cir. 1991).
Material facts which would preclude entry of summary judgment

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are those which, under applicable substantive law, may affect the

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outcome of the case.

The substantive law will identify which

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facts are material.

Anderson v. Liberty Lobby, Inc., 477 U.S.

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242, 248 (1986).

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DISCUSSION
Defendants argue that (1) they are “Third Parties” under the

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terms of the Microsoft License; (2) the six other patents-in-suit

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are “related” to the ‘541 patent and are therefore “Licensed

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Patents” under the terms of the Microsoft License; and

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(3) Plaintiff’s infringement contentions are based, at least in

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part, on Defendants’ and their customers’ use of the accused

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products in combination with various Microsoft products.

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Accordingly, Defendants seek partial summary judgment that certain

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United States District Court
For the Northern District of California

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products are licensed and do not infringe any patent-in-suit when

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used in combination with a Microsoft product.

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Plaintiff counters that the six other patents-in-suit are not

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“Licensed Patents” and Defendants’ and their customers’ use of the

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accused products does not fall within the license granted to third

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parties under the terms of the Microsoft License.

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I.

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Licensed Patents
Defendants argue that each of the seven patents-in-suit is a

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“Licensed Patent” as defined by the Microsoft License.

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note the broad inclusion of “each and every patent and patent

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application related to” the ‘541 patent in the definition.

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Greenblatt Dec., Ex. 1 at ¶ 1.5(c).

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other patents-in-suit are clearly “related to” the ‘541 patent.

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Defendants

See

Defendants argue that the six

Plaintiff counters that, in the context of the Microsoft

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License as a whole, the term “Licensed Patents” can only be

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reasonably read to refer to the ‘541 patent and other patents that

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are part of the ‘541 patent “family tree,” meaning those patents

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in a technical priority relationship with the ‘541 patent.

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Further, Plaintiff argues, none of the six other patents-in-suit

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are part of that family tree.

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Defendants argue that “related to” must refer to more than

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the patents in the ‘541 family tree because limiting the “related

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to” clause to patents in the ‘541 family tree would make that

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section of the definition redundant of section (b), which includes

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“any and all patents and patent applications throughout the world

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that claim priority from, or contain any claim that could have

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claimed priority from, the ‘541 Patent.”

Greenblatt Dec., Ex. 1

United States District Court
For the Northern District of California

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at ¶ 1.5(b).

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refers to “descendant” patents, that is patents that claimed or

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could have claimed priority from the ‘541 patent, not “ancestor”

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patents, patents from which the ‘541 claimed or could have claimed

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priority.

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any other patent, there is no evidence that it could not have done

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so.

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extend to those patents from which the ‘541 patent could have

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claimed priority, even though it did not.

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there are triable questions of fact with respect to the meaning of

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the term “related to” in the definition of “Licensed Patents.”

But, as Plaintiff points out, section (b) only

Although the ‘541 patent did not claim priority from

The parties reasonably could have intended the license to

The Court finds that

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Defendants further argue that the six other patents-in-suit

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are related to the ‘541 patent because Plaintiff has represented

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that they “relate to similar subject matter” and described the

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patents as part of “the superdistribution family of patents.”

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Docket No. 71 at 11 n.22, Greenblatt Dec., Ex. 5 at 321.

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this argument relies on Defendants’ broad interpretation of the

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term “related to.”

However,

As discussed above, the Court finds that

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See

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triable questions of fact remain with respect to the proper

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interpretation of the contract language.

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II.

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“In Combination With” “Microsoft Products”
Defendants argue that, at least in certain circumstances,

each of the accused products is used in combination with a

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Microsoft product.

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party, use of the accused products is permissible under Paragraph

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2.1.2 of the Microsoft License.

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shown as a matter of law that the language of Paragraph 2.1.2

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United States District Court
For the Northern District of California

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grants a license to all Third Parties to use all products that

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perform a claim of the patents in issue as long as they use them

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in combination with Microsoft Products.

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be to use “Microsoft Products” that perform a claim of “any

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Licensed Patents,” whether in combination with other things or

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not.

Defendants further contend that, as a third

However, Defendants have not

Instead, this license may

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Paragraph 2.1.2(b) provides a license to Third Parties

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to use, whether alone or in combination with other
things, Microsoft Products to perform, practice and use
any process, method, formula or subject matter covered
by, or which are a component, step, feature or element
of any process, method, formula or subject matter
covered by, any claim of any Licensed Patent.

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Greenblatt Dec. Ex. 1 at ¶ 2.1.2(b).

One reasonable reading of

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this provision is that the “to perform” and the “which are”

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clauses refer to “Microsoft Products.”

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or in combination with other things” could reasonably be

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interpreted to describe how the Microsoft Product might perform a

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claim of a patent or may constitute a component or feature of a

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patent.

The phrase “whether alone

Read in this manner, the provision does not extend the

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License to any other product that is used in combination with a

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Microsoft Product.

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The Court finds that Defendants have not shown as a matter of

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law that the Microsoft License extends to any product when used in

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combination with a Microsoft product.

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only extend to Microsoft products that perform any claim of any

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Licensed Patent, whether used alone or in combination with other

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things.

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United States District Court
For the Northern District of California

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The Microsoft License may

CONCLUSION
For the foregoing reasons, the Court DENIES Defendants’

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motion for partial summary judgment. (Docket No. 427.)

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of the trial of this case must be delayed until May 12, 2014.

The start

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IT IS SO ORDERED.

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Dated: 9/26/2013

CLAUDIA WILKEN
United States District Judge

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