Walker Digital LLC v. Facebook Inc. et al

Filing 314

MEMORANDUM OPINION. Signed by Judge Sue L. Robinson on 6/19/2013. Associated Cases: 1:11-cv-00313-SLR, 1:12-cv-00140-SLR, 1:12-cv-00141-SLR, 1:12-cv-00142-SLR(nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

WALKER DIGITAL, LLC,
Plaintiff,

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v.

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Civ. No. 11-313-SLR

EXPEDIA, INC., AMAZON.COM, INC., )
AMERICAN AIRLINES, INC., and
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ZAPPOS.COM, INC.,
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Defendants.

WALKER DIGITAL, LLC,
Plaintiff,

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v.
AMAZON.COM, INC.,
Defendant.

WALKER DIGITAL, LLC,
Plaintiff,
V.

BARNES & NOBLE, INC.,
Defendant.

Civ. No. 12-140-SLR

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Civ. No. 12-141-SLR

WALKER DIGITAL, LLC,
Plaintiff,
v.
EXPEDIA, INC.,
Defendant.

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Civ. No. 12-142-SLR

Richard D. Kirk, Esquire and Stephen B. Brauerman, Esquire, and Vanessa R.
Tiradentes, Esquire of Bayard, P.A., Wilmington, Delaware. Counsel for Plaintiff. Of
Counsel: Anthony G. Simon, Esquire of The Simon Law Firm, P.C., Marc A. Fenster,
Esquire and Benjamin T. Wang, Esquire of Russ, August & Kabat, and Timothy E.
Grochocinski, Esquire of lnnovaLaw, LLC.
Richard L. Horwitz, Esquire, David E. Moore, Esquire, and Bindu A. Palapura, Esquire
of Potter Anderson & Corroon LLP, Wilmington, Delaware. Counsel for Defendants
Amazon.com, Inc, Zappos.com, Inc., and Target Corp. Of Counsel: Eliza V. Bechtold,
Esquire, Klaus H. Hamm, Esquire, Salumeh R. Loesch, Esquire, JeffreyS. Love,
Esquire, Todd M. Siegel, Esquire, Philip Warrick, Esquire, Garth A. Winn, Esquire,
Kristen L. Reichenbach, Esquire, and Carla Todenhagen, Esquire of Klarquist
Sparkman, LLP.
William J. Marsden, Jr., Esquire and Gregory Booker, Esquire of Fish and Richardson,
P.C., Wilmington, Delaware. Counsel for Defendant Expedia, Inc. Of Counsel: Ahmed
J. Davis, Esquire, Gabriel Olander, Esquire, and Linhong Zhang, Esquire of Fish &
Richardson P.C.
Chad S. C. Stover, Esquire of Novak Druce Connolly Bove +Quigg LLP, Wilmington,
Delaware. Counsel for Defendant American Airlines, Inc. Of Counsel: John B.
Campbell, Jr., Esquire and Phillip Aurentz of McKool Smith.
Philip A. Rovner, Esquire and Alan R. Silverstein, Esquire of Potter Anderson &
Corroon LLP, Wilmington, Delaware. Counsel for Defendant Barnes & Noble, Inc.

MEMORANDUM OPINION

Dated: June 19, 2013
Wilmington, Delaware

~0
I. INTRODUCTION
On April 11, 2011, plaintiff Walker Digital, LLC ("plaintiff') filed Civ. No. 11-313
against ten defendants, including eBay, Inc. ("eBay"), for allegedly infringing U.S.
Patent Nos. 7,831,470 ("the '470 patent") and 7,827,056 ("the '056 patent"). (Civ. No.
11-313, D.l. 1) Currently before the court in Civ. No. 11-313 is defendants
Amazon.com, Inc. ("Amazon"), Zappos.com, Inc. ("Zappos"), and Expedia, Inc.'s motion
to dismiss under Rule 12(b)(1) for lack of standing (!d., D. I. 242), and Amazon and
Zappos' motion for leave to file amended answers (!d., D. I. 258).
On February 7, 2012, plaintiff filed separate actions against defendants Amazon,
Barnes & Noble, Inc., and Expedia, Inc., alleging infringement of U.S. Patent No.
8,112,359 ("the '359 patent"). (Civ. No. 12-140, D.l. 1; Civ. No. 12-141, D.l. 1; Civ. No.
12-142, D.l. 1) Currently before the court are these defendants' motions to dismiss
under Rule 12(b)(1)forlackofstanding. (Civ. No.12-140, D.l. 75; Civ. No.12-141, D.l.
52; and Civ. No. 12-142, D.l. 44)
The court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338(a). For the
reasons that follow, the defendants' motions to dismiss are granted. 1
II. BACKGROUND
On April 11, 2011, plaintiff filed Civ. No. 11-315 against numerous defendants,
including eBay, alleging infringement of U.S. Patent No. 7,236,942 ("the '942 patent").
(Civ. No. 11-315, D.l. 1) In order to settle Civ. No. 11-315, plaintiff and eBay, Inc.
("eBay") entered into a Confidential Settlement and License Agreement ("Settlement
1

The motion for leave to file amended answers (Civ. No. 11-313, D.l. 258) is
denied as moot.

Agreement"). Pursuant to the Settlement Agreement, plaintiff
grant[ed] to EBAY, effective immediately,[2] an irrevocable,
nonexclusive, fully paid-up, worldwide license, under the
PATENT RIGHTS to use, make, have made, sell, offer to
sell, modify, import, export, and otherwise offer, dispose of,
distribute, display, host, advertise, and/pr promote any
COVERED PRODUCT directly or indirectly through any
channel, including through multiple tiers of distribution. The
license grant herein also extends to EBAY THIRD PARTIES
but only with respect to COVERED PRODUCTS.
(Civ. No. 11-313, D. I. 244, ex. I at 9) The phrase "PATENT RIGHTS" was defined in
the Settlement Agreement as follows:
"PATENT RIGHTS" shall mean any patents or patent
applications worldwide, existing presently or in the future,
owned or controlled by WALKER DIGITAL presently or at
any time in the future, including but not limited to: (a) U.S.
Patent Nos. 7,236,942 and 7,827,056 and (b) the entire
families of U.S. Patent Nos. 7,236,942 and 7,827,056
anywhere in the world, including but not limited to all of their
parents, continuations, continuations-in-part, divisionals,
reissues, and re-examinations; (c) all patent applications or
patents claiming priority to any of the foregoing patents or
claiming priority to any application that led to any of
foregoing patents; and (d) all foreign counterparts to any of
the foregoing. WALKER DIGITAL represents that a current
list of worldwide patents and patent applications that
compris[e] PATENT RIGHTS is attached as Appendix B.
(!d. at 3-4) The Settlement Agreement also contained a standard merger clause,

acknowledging that "this Agreement sets forth the entire agreement and understanding
of the PARTIES hereto as to the subject matter hereof, and shall not be subject to any
change or modification except by the execution of a written instrument executed to by
authorized persons for the PARTIES hereto." (!d. at 13)

2

The parties do not dispute that the transfer of rights occurred at the execution of
the Settlement Agreement on December 9, 2011.

2

In addition to Appendix B, but neither mentioned in the body of the Settlement
Agreement nor separately executed, is a document labeled "EXHIBIT A, PATENT
PURCHASE TERMS." (/d. at 53) The first paragraph of this document provides as
follows:
1. SALE OF PATENTS
1.1 Purchase and Sale. Walker Digital LLC ("Seller" for purposes
of this Exhibit A) hereby conveys, assigns, and transfers to eBay Inc.
("Purchaser" for purposes of this Exhibit A), and Purchaser hereby
accepts, all right title, and interest in and to the patents and patent
applications described on Schedule A (collectively, the "Transferred
Patents"). The Transferred Patents include all counterparts,
continuations, continuations-in-part, divisionals, reissues, reexaminations,
and extensions thereof, and all current, future, or abandoned patents
and patent applications (whether filed by Seller or Purchaser and whether
filed before, on, or after the Effective Date) claiming priority from, derived
from, or related to any of the foregoing in any jurisdiction. The sale of the
Transferred Patents to Purchaser includes the transfer of (i) the right to
sue and recover damages for past, present, and/or future infringement;
(ii) the right to injunctive relief and; (iii) any and all causes of action relating
to any of the inventions or discoveries described in the Transferred Patents.
Seller reserves no rights whatsoever in the Transferred Patents.
(/d.) In section 3.1 (e), the Seller represented that,

with respect to each Transferred Patent: (i) no action, suit, litigation,
arbitration, investigation, prosecution, or other proceeding (a "Proceeding")
is pending or, to the knowledge of Seller, threatened, nor has any claim
or demand been made, which challenges or challenged the legality,
validity, enforceability, or use by Seller or such Transferred Patent; and
(ii) all maintenance, annuity, and other fees have been fully paid and all
filings have been properly and timely made ....
(/d. at 54) Attached to Exhibit A is Schedule A; not surprisingly, many (but not all) of the

patents and patent applications listed on Schedule A are listed on Appendix B, the
"master list" of plaintiff's "PATENT RIGHTS." 3 (/d. at 56) Also listed on Appendix Bare
3

Specifically, all of the issued patents are listed, as well as all of the pending (as
opposed to abandoned) patent applications. (/d. at 56)

3

the patents-at-issue (in the case of the '359 patent, the application relating thereto). (!d.
at 40, 49) The "Short Form Patent Assignment," attached as Schedule Band executed
subsequent to the Settlement Agreement, uses yet different language in describing the
property conveyed through the transaction at issue:
(1) any and all improvement disclosed in United States
Patent Application Serial No.
and
entitled _ _ _ _ _ _ _ _ _ __
(2) all original and reissued letters patents that have been or
shall be issued in the United States and in all foreign
countries on any of said improvements; and in and to all
divisional, continuing, reissue, extension, substitution and
renewal applications, and all other patent applications that
have been filed or shall be filed in the United States and in
any foreign countries, on any of said improvements; and in
and to all rights attaching to said improvements (including
any and all rights under the Hague Convention, the Paris
Convention for the Protection of Industrial Property, and
under the Patent Cooperation Treaty); and
(3) all past, present and future proceeds of said letters
patent (including, but not limited to, all license royalties and
proceeds of infringement suits); and in and to any and all
causes of action for past, present, and future infringement of
any of said letters patent, or relating to any inventions or
discoveries described therein, including the right to collect
royalties for all such infringements and the right to sue on all
such causes of action for its own use and benefit and the
use and benefit of its successors, assigns and legal
representatives.

(!d. at 57)
Schedule A of the Settlement Agreement lists U.S. Patent Nos. 6,694,300 ("the
'300 patent), 6,196,458 ("the '458 patent"), 6,898,570 ("the '570 patent"), and the
applications for each such patent. (!d. at 56) The genealogy of the patents-at-issue all
relate back to one or more of such patents. More specifically, the '470 patent is a

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continuation-in-part of an application, which is a continuation-in-part of the '300 patent;
the '470 patent is also related to the '458 and '570 patents. (See '470 patent, 1:35-55)
The '056 patent is a continuation of an application, which is a continuation-in-part of the
'300 patent; the '056 patent is also related to the '458 patent. (See '056 patent, 1:9-13,
34-50) The '359 patent is a continuation of U.S. Patent No. 7,856,379, which is a
continuation of the '942 patent, which is a continuation-in-part of the '300 patent. The

'359 patent is also a continuation-in-part of the U.S. Patent No. 6,405, 174, which in turn
is a continuation-in-part of the '300 patent. (See '359 patent, 1:7-26)

Ill. STANDARD OF REVIEW
Once jurisdiction is challenged, the party asserting subject matter jurisdiction has
the burden of proving its existence. See Carpet Group lnt'l v. Oriental Rug Importers
Ass'n, Inc., 227 F.3d 62, 69 (3d Cir. 2000). Under Rule 12(b)(1), the court's jurisdiction

may be challenged either facially (based on the legal sufficiency of the claim) or
factually (based on the sufficiency of jurisdictional fact). See 2 James W Moore,
Moore's Federal Practice§ 12.30[4] (3d ed. 1997). Under a facial challenge to

jurisdiction, the court must accept as true the allegations contained in the complaint.
See id. Dismissal for a facial challenge to jurisdiction is "proper only when the claim

'clearly appears to be immaterial and made solely for the purpose of obtaining
jurisdiction or ... is wholly insubstantial and frivolous."' Kehr Packages, Inc. v. Fide/cor,
Inc., 926 F.2d 1406, 1408-09 (3d Cir. 1991) (quoting Bell v. Hood, 327 U.S. 678, 682

(1946)).
Under a factual attack, however, the court is not "confine[d] to allegations in the .

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.. complaint, but [can] consider affidavits, depositions, and testimony to resolve factual
issues bearing on jurisdiction." Gotha v. United States, 115 F.3d 176, 179 (3d Cir.
1997); see also Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891-92 (3d
Cir. 1977). In such a situation, "no presumptive truthfulness attaches to plaintiff's
allegations, and the existence of disputed material facts will not preclude the trial court
from evaluating for itself the merits of jurisdictional claims." Carpet Group, 227 F.3d at
69 (quoting Mortensen, 549 F.2d at 891). Although the court should determine subject
matter jurisdiction at the outset of a case, "the truth of jurisdictional allegations need not
always be determined with finality at the threshold of litigation." 2 Moore § 12.30[1 ].
Rather, a party may first establish jurisdiction "by means of a nonfrivolous assertion of
jurisdictional elements and any litigation of a contested subject-matter jurisdictional fact
issue occurs in comparatively summary procedure before a judge alone (as distinct
from litigation of the same fact issue as an element of the cause of action, if the claim
survives the jurisdictional objection)." Jerome B. Grubart, Inc. v. Great Lakes Dredge &
Dock Co., 513 U.S. 527, 537-38 (1995) (citations omitted).

Article Ill standing requires: "(1) an injury-in-fact ... ; (2) a causal connection
between the injury and the conduct complained of; and (3) that it must be likely, as
opposed to merely speculative, that the injury will be redressed by a favorable
decision." Winer Family Trust v. Queen, 503 F.3d 319, 325 (3d Cir. 2007). To have
standing, "the 'injury in fact' test requires more than an injury to a cognizable interest. It
requires that the party seeking review be himself among the injured." Lujan v.
Defenders of Wildlife, 504 U.S. 555, 561 (1992) (quoting Sierra Club v. Morton, 405

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U.S. 734, 734-735 (1972)).
Plaintiff bears the burden of establishing that it has standing to bring an action
for patent infringement. Sicom Sys., Ltd. v. Agilent Techs., Inc., 427 F.3d 971, 976
(Fed. Cir. 2005). The Patent Act provides that "[a] patentee" is entitled to bring a civil
action for patent infringement. 35 U.S.C. § 281. The term "patentee" includes "not only
the patentee to whom the patent was issued but also the successors to the patentee."
ld. at§ 1OO(d). These sections "have been interpreted to require that a suit for
infringement of patent rights ordinarily be brought by a party holding legal title to the
patent." Propat Intern. Corp. v. RPost, Inc., 473 F.3d 1187, 1189 (Fed. Cir. 2007)
(citing Sicom Sys. Ltd., 427 F.3d at 976); see also Mars, Inc. v. Coin Acceptors, Inc.,
527 F.3d 1359, 1367 (Fed. Cir. 2008); Mentor HIS, Inc. v. Med. Device Alliance, Inc.,
240 F.3d 1016, 1017 (Fed. Cir. 2001). A party that holds the exclusionary rights to a
patent suffers constitutional injury-in-fact. See Morrow v. Microsoft Corp., 499 F.3d
1332, 1341 (Fed. Cir. 2007).
IV. ANALYSIS
The parties dispute whether the Settlement Agreement transferred all rights to
the three patents-at-issue- the '470, '056, and '359 patents- to eBay on December 9,
2011, thus terminating plaintiff's constitutional standing to pursue the above captioned
litigation. In Delaware, the interpretation of contracts is a matter of law for the court to
determine. See Rhone-Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d
1192, 1195 (Del. 1992). A court's interpretation of a contract "will give priority to the
parties' intentions as reflected in the four corners of the agreement." GMG Capital

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/nvs., LLC v. Athenian Venture Partners I, L.P., 36 A.3d 776, 779 (Del. 2012) (citing
Paul v. De/oitte & Touche, LLP, 974 A.2d 140, 145 (Del. 2009)). "In upholding the
intentions of the parties, a court must construe the agreement as a whole, giving effect
to all provisions therein." E./. duPont de Nemours and Co. v. Shell Oil Co., 498 A.2d
1108, 1113 (Del. 1985) (citations omitted). "[T]he meaning which arises from a
particular portion of an agreement cannot control the meaning of the entire agreement
where such inference runs counter to the agreement's overall scheme or plan." /d. "[l]f
part of the contract is irreconcilable with the main purpose of the contract, that part will
be given no effect in order that the main purpose of the contract can be achieved." 11
Williston on Contracts§ 32:9 (4th ed.).
If a contract's terms are clear and unambiguous, the court will interpret such
terms according to their ordinary and usual meaning. See Paul, 974 A.2d at 145.
Contract terms are held to be clear and unambiguous "when they establish the parties'
common meaning so that a reasonable person in the position of either party would have
no expectations inconsistent with the contract language." Eagle Indus., Inc. v.

DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232 (Del. 1997) (citing Rhone-Poulenc,
616 A.2d at 1196). "A contract is not rendered ambiguous simply because the parties
do not agree upon its proper construction. Rather, a contract is ambiguous only when
the provisions in controversy are reasonably or fairly susceptible of different
interpretations or may have two or more different meanings." Rhone-Poulenc, 616 A.2d
at 1195. If a court determines that a contractual provision is ambiguous, the "court may
consider evidence of prior agreements and communications of the parties as well as

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trade usage or course of dealing." Eagle Indus., 702 A.2d at 1233.
The Settlement Agreement ostensibly includes two separate conveyances of
rights from plaintiff to eBay: a nonexclusive license to some 544 patents and patent
applications listed on Appendix B, and ownership rights to a subsection of those
patents and patent applications as listed on Schedule A. The language used to
describe the intellectual property conveyed is different in both instances; nonetheless,
each conveyance is effected using very broad language. In divining whether plaintiff
conveyed ownership rights to the patents-at-issue through operation of Exhibit
A/Schedule A, the court starts with the basic principle that it "must give effect to all
terms of the instrument, must read the instrument as a whole, and, if possible, reconcile
all the provisions of the instrument." See Dow Chemical Co. v. Nova Chemicals Corp.,
458 Fed. Appx. 910, 914 (Fed. Cir. 2012) (citing Elliott Assocs. v. Avatex Corp., 715
A.2d 843, 854 (Del. 1998)).
The first sentence of Section 1.1 of Exhibit A assigns the term "Transferred
Patents" to those patents "described on Schedule A." The second sentence further
defines the term "Transferred Patents" to include "all" related patents "whether filed by
Seller or Purchaser" and regardless of filing date. 4 See Regents of the Univ. of New

Mexico v. Knight, 321 F.3d 1111, 1120 (Fed. Cir. 2003) (holding that a patent policy
covering "all divisions, continuations, substitutions, renewal, and reissue applications"
was "more than sufficient" to require inventors to assign continuation-in-part

4

The record indicates that eBay added the language "whether filed before, on, or
after the effective date" to the second sentence of Section 1.1, another indication that
eBay intended to receive more than just those patents and applications described on
Schedule A. (D. I. 12-140, D.l. 77, ex. XIII at 53)
9

applications). To ignore the second sentence of Section 1.1 would conflict with the
"general principle[] of contract law, [that] a contract should be interpreted in such a way
as to not render any of its provisions illusory or meaningless." Sonitrol Holding Co. v.
Marceau /nvestissements, 607 A.2d 1177, 1183 (Del. 1992) (citing Seabreak
Homeowners Ass'n v. Gresser, Del. Ch., 517 A.2d 263, 269 (1986), aff'd, 538 A.2d
1113 (Del. 1988).
Comparing the language used by the parties throughout the entire transaction,
plaintiff described its "PATENT RIGHTS" for purposes of the licensing agreement as
comprising those patents and patent applications listed on Appendix B. Despite this
broad grant, plaintiff more specifically described the property licensed as "including but
not limited to ... the entire families of' the '942 and '056 patents, further described as
"including but not limited to all of their parents, continuations, continuations-in-part,

divisionals, reissues, and re-examinations." 5 (Civ. No. 11-313, D.l. 244, ex. I at 3)
(emphasis added) In contrast, the term "Transferred Patents," for purposes of Exhibit
A, was comprised of those patents and patent applications listed on Schedule A, further
described using virtually the same language as above: "all counterparts,

continuations, continuations-in-part, divisionals, reissues, reexamintions, and
extensions thereof, and all current, future, or abandoned patents and patent
applications ... claiming priority from, derived from, or related to any of the foregoing in
any jurisdiction." (/d. at 53) (emphasis added) The court cannot discern the difference
5

Piaintiff's argument that the identification of the '056 patent in this section clearly
shows that it did not transfer the '056 patent rings hollow as all of the issued patents
listed on Schedule A (held out by plaintiff to be a complete list of Transferred Patents)
are also listed on Appendix B (seemingly the list of licensed patents).
10

between the breadth of these two descriptions and finds this "granting" language to be
unambiguous. 6
The court concludes that, under the broad granting language of Exhibit A, the
Settlement Agreement clearly transferred ownership rights of the '359 patent to eBay.
Therefore, the motions to dismiss Civ. Nos. 12-140, 12-141, and 12-142 are granted. 7
With respect to the '470 and '056 patents, the broad granting language is
inconsistent with plaintiff's warranty that none of the Transferred Patents were the
subject of litigation (Civ. No. 11-313, D.l. 244, ex. I at 54, Section 3.1 (e)), as plaintiff
was actively litigating the '942 patent (Civ. No. 11-315), as well as the '470 and '056
patents (Civ. No. 11-313), at the time of the Settlement Agreement. 8 While a court
should seek to give meaning to all provisions of a contract if possible, when
"irreconcilable differences between contract clauses [arise, the court] is to enforce the
clause relatively more important or principal to the contract." 11 Williston on Contracts

§§ 32:5, 32:9; c.f Ludwig Honold Mfg. Co. v. Fletcher, 405 F. 2d 1123, 1131 (3rd Cir.

6

Compare, e.g., the language at issue in Dow, a case relied upon by plaintiff for
this argument in its briefing in Civ. No. 12-140. (Civ. No. 12-140, D.l. 87 at 8-10) In
Dow, the only affirmative description of the transferred patents was the following: "The
parties shall provide a schedule of Patent Rights as Schedule A to this Agreement,
within ninety (90) days of the Effective Date, and shall provide subsequent supplements
thereto from time to time during the Term." Dow, 458 Fed. Appx. at 913. The Federal
Circuit held that this sentence "makes it abundantly clear that Dow and DGTI intended
Schedule A to include a list of all of the transferred patents (among other things)." /d. at
914. For Dow to be applicable to the facts at bar, Section 1.1 would have to be limited
to the first sentence which, clearly, is not the case.
7

Thus, plaintiff's motions to dismiss without prejudice are rendered moot. (Civ.
No. 12-140, D.l. 105; Civ. No. 12-141, D.l. 81; and Civ. No. 12-142, D.l. 73)
8

The '359 patent was not in litigation at the time of the Settlement Agreement
and was not mentioned in any of eBay's submissions.
11

1969) (citing 22 Williston § 619) ("Where ambiguity exists, the minor provisions must be
construed as not to conflict with the main purpose of the contract.").
Plaintiff's parol evidence does not help the court resolve this conflict. In this
regard, the record contains a letter from eBay which states in toto: "This confirms that
eBay Inc. is not the owner of [the '470 and '056 patents]. eBay Inc. reserves all rights
and no other rights, express or implied, are granted."9 (Civ. No. 11-313, D.l. 254, ex. 6)
The record also contains the declaration of Anup Tikku, Senior Patent Counsel at eBay,
wherein he avers that plaintiff and eBay did not intend to transfer the rights to patents in
litigation at the time of the transfer. (Civ. No. 11-313, D.l. 291, ex. 1)
The court declines to elevate a standard warranty clause above unambiguous
granting language - the clear purpose of the document. This seeming conflict does not
render performance of the contract impossible or meaningless, as it was (and continued
to be) easily cured through amendment or otherwise. Indeed, plaintiff dismissed Civ.

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Th is ambiguous language is a far cry from the clear language used by the
parties in lpVenture to confirm the status of a patent-in-suit. lpVenture, Inc. v. Prostar
Computer, Inc., 503 F.3d 1324, 1326-27 (Fed. Cir. 2007). In lpVenture, the Federal
Circuit considered whether Hewlett-Packard, the employer of a co-inventor of the
patent-in-suit, had an ownership interest in the patent. Hewlett-Packard expressly
disclaimed its patent rights in an agreement written during the pendency of the litigation:
lpVenture is the sole assignee of [the '235 patent and other
patents] ... [Hewlett-Packard] has never asserted any
ownership rights to the lpVenture Patents and agrees to
forbear from asserting such rights at anytime in the future ...
[Hewlett-Packard] has no rights ... and never has had any
legal or equitable rights, including any shop rights, to any of
the lpVenture Patents.
lpVenture, 503 F.3d at 1326-27. The Federal Circuit held that this confirmation of the
patent status removed the need to construe an employment agreement controlling
Hewlett-Packard's interest in the patent. /d. at 1327.

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No. 11-315 as to eBay after entering into the Settlement Agreement, and then
subsequently dismissed the case as to the other defendants. (See, e.g., Civ. No.
11-315, 0.1. 159, 338-40) Neither is eBay's letter, which purports to "reserve[] all
rights," explicit enough to circumvent the clear language of the contract.
Given the complexity of plaintiff's patent portfolio 10 and the sophistication of the
parties to the Settlement Agreement, the court relies on the unambiguous granting
language rather than the equivocal parol evidence to divine what the parties meant to
accomplish through the Settlement Agreement. Demetree v. Commonwealth Trust Co.,
No. 14354, 1996 WL 494910, at *4 (Del. Ch. Aug. 27, 1996) ("An inquiry into the
subjective unexpressed intent or understanding of the individual parties is neither
necessary nor appropriate where the words of the contract are sufficiently clear to
prevent reasonable persons from disagreeing as to their meaning."). Therefore, the
court grants defendants' motion to dismiss Civ. No. 11-313.
V. CONCLUSION
For the foregoing reasons, defendants' motions to dismiss under Rule 12(b)(1)
for lack of standing (Civ. No. 11-313, 0.1. 242; Civ. No. 12-140, 0.1. 75; Civ. No. 12-141,
D. I. 52; and Civ. No. 12-142, D. I. 44) are granted. Amazon and Zappos' motion for
leave to file amended answers to assert lack of standing as an affirmative defense (Civ.
No. 11-313, 0.1. 258) is denied as moot.

10

According to Appendix B, plaintiff owned 389 patents and 155 patent
applications at the time of the transfer, many (if not most) of them related.