Comcast IP Holdings I LLC v. Sprint Communications Company LP et al
MEMORANDUM OPINION re 160 MOTION for Summary Judgment that Comcast's Claims Against Sprint's Use of Alcatel-Lucent Products Are Barred by License and Estoppel. Signed by Judge Richard G. Andrews on 7/15/2014. (nms)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
Comcast IP Holdings I, LLC,
Civil Action No. 12-205-RGA
Sprint Communications Company L.P.,
Sprint Spectrum L.P., and Nextel
Ryan P. Newell, Esq., Connolly Gallagher LLP, Wilmington, DE; Antony I. Fenwick, Esq.
(argued), Davis Polk & Wardwell, LLP, Menlo Park, CA; David Lisson, Esq., Davis Polk &
Wardwell, LLP, Menlo Park, CA, attorneys for Plaintiff.
Richard K. Herrmann, Esq., Morris James LLP, Wilmington, DE; Brian C. Riopelle, Esq.
(argued), McGuire Woods LLP, Richmond, VA; David E. Finkelson, Esq., McGuire Woods LLP,
Richmond, VA; Robert H. Reckers, Esq., Shook, Hardy & Bacon LLP, Houston, TX, attorneys
Presently before the Court is Sprint's Motion for Summary Judgment that Comcast's
Claims Against Sprint's Use of Alcatel-Lucent Products are Barred by License and Estoppel (D.I.
160) and related briefing. (D.I. 161, 188, 209). On May 15, 2014, the Court heard oral argument
on this motion. (D.I. 239).
This is a patent infringement action. Plaintiff Comcast IP Holdings currently alleges that
Defendant Sprint infringes U.S. Patent No. 6,873,694 ("the '694 patent"), U.S. Patent No.
7,012,916 ("the '916 patent"), U.S. Patent No. 8,170,008 ("the '008 patent"), and U.S. Patent
No. 8,204,046 ("the '046 patent"). Sprint contends that it has a license to the '008 patent, either
express or implied, via a licensing agreement between Hewlett-Packard ("HP"), the original
assignee of the patent, and Lucent, the predecessor to Alcatel-Lucent and the manufacturer of
some of the accused equipment.
"The court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law."
FED.R.C1v.P. 56(a). The moving party has the initial burden of proving the absence of a
genuinely disputed material fact relative to the claims in question. Celotex Corp. v. Catrett, 477
U.S. 317, 330 (1986). Material facts are those "that could affect the outcome" of the proceeding,
and "a dispute about a material fact is 'genuine' if the evidence is sufficient to permit a
reasonable jury to return a verdict for the nonmoving party." Lamont v. New Jersey, 637 F.3d
177, 181 (3d Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The
burden on the moving party may be discharged by pointing out to the district court that there is
an absence of evidence supporting the non-moving party's case. Celotex, 477 U.S. at 323.
The burden then shifts to the non-movant to demonstrate the existence of a genuine issue
for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986);
Williams v. Borough of West Chester, Pa., 891 F.2d 458, 460-61 (3d Cir. 1989). A non-moving
party asserting that a fact is genuinely disputed must support such an assertion by: "(A) citing to
particular parts of materials in the record, including depositions, documents, electronically stored
information, affidavits or declarations, stipulations ... , admissions, interrogatory answers, or
other materials; or (B) showing that the materials cited [by the opposing party] do not establish
the absence ... of a genuine dispute .... "
R. C1v. P. 56(c)(1). 1
When determining whether a genuine issue of material fact exists, the court must view
the evidence in the light most favorable to the nonmoving party and draw all reasonable
inferences in that party's favor. Scott v. Harris, 550 U.S. 372, 380 (2007); Wishkin v. Potter, 476
F.3d 180, 184 (3d Cir. 2007). A dispute is "genuine" only ifthe evidence is such that a reasonable
jury could return a verdict for the non-moving party. Anderson, 477 U.S. at 247--49; see
Matsushita Elec. Indus. Co., 475 U.S. at 586-87 ("Where the record taken as a whole could not
lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for
trial.'"). If the non-moving party fails to make a sufficient showing on an essential element of its
case with respect to which it has the burden of proof, the moving party is entitled to judgment as
a matter oflaw. See Celotex Corp., 477 U.S. at 322.
There is an extensive record in this case. To the extent a party does not properly oppose factual
assertions, the Court considers the factual assertion to be undisputed and a basis on which to
grant summary judgment. FED. R. C1v. P. 56(e)(2) & (3).
Comcast is currently asserting the '008 patent against Sprint. Comcast acquired the '008
from HP in 2008, subject to any outstanding licenses. One of those licenses was a 2001 crosslicensing agreement between HP and Lucent. Lucent, now Alcatel-Lucent, manufactures many of
the devices which Sprint uses, and which Comcast accuses of performing the patented methods.
Because Sprint contends that the 2001 license applies to these products, it argues that Comcast
cannot assert the '008 patent against Sprint's use oflicensed products. (DJ. 161 at 4).
Sprint has two theories as to why Comcast's infringement allegations are barred. The first
is that the license expressly covers the asserted patents and accused products. (D.I. 161 at 5). The
second is that there is an implied license because HP, as Comcast's predecessor in interest,
already received consideration for the licensing rights, and Comcast may not derogate these
rights. (D.I. 161at5). In order to prove that the license applies, Sprint must prove: that the
license covered the '008 patent, that the license was extended to Lucent's customers, that the
license now rests with Alcatel-Lucent, and that the license extends to Sprint as a customer of
Alcatel-Lucent. Because I decide this motion on the first issue, I need not and do not reach the
In 2001, HP and Lucent entered into a cross-licensing agreement granting "personal,
nonexclusive and non-transferable licenses under [HP's] PATENTS to LUCENT-GRL. .. to
make, have made, use, lease, sell, offer to sell and import LICENSED PRODUCTS." (DJ. 166-1
at 38). The Appendix to the agreement defines "PATENTS" as "all patents (including utility
models but excluding design patents and design registrations) issued or having enforceable rights
in any country of the world from an application filed on or before January 31, 2001." (D .I. 166-1
at 49). The '008 patent is a"[c]ontinuation of application No. 11/066,880, filed on Feb. 25, 2005,
now Pat. No. 7,804,816, which is a division of application No. 10/052,285, filed on Jan. 18,
2002, now Pat. No. 7,012,916, which is a division of application No. 091077,795, filed as
application No. PCT/GB96/03055 on Dec. 11, 1996, now Pat. No. 6,466,570." (D.I. 59-5 at 2).
In the briefing, Sprint argued that the '008 patent "issued from" application No.
PCT/GB96/03055, which was filed on Dec. 11, 1996, and therefore was subject to the license.
(DJ. 161 at 15). As pointed out by Comcast both in the briefing and at oral argument, had the
parties intended to cover continuation or divisional applications, they would have stated "issued
from or claiming priority to." At oral argument, Comcast cited numerous cases supporting this
understanding of the language "issued from." (D.I. 239 at 75:1-8). It is unambiguous that the
'008 patent did not "issue from" an application filed before January 31, 2001. The '008 patent
issued from application No. 12/389,843, which was filed on Feb. 20, 2009. (D.I. 59-5 at 2).
Apparently understanding that the "issued from" argument was not a winner, at oral argument
Sprint based the assertion that the '008 patent was covered by the license on the "enforceable
The definition of patent in the agreement covers "patents ... issued or having enforceable
rights in any country of the world from an application filed on or before January 31, 2001." (D .I.
166-1 at 49). Under a straightforward reading of this language, the phrase "in any country of the
world" modifies both "issued" and "having enforceable rights." Therefore, the language is
understood as covering two separate things: "patents issued in any country of the world from an
application filed on or before January 31, 200 l ," and "patents having enforceable rights in any
country of the world from an application filed on or before January 31, 2001." It is clear what is
or is not a patent issued in any country of the world. However, it is not immediately clear what is
a patent, not issued, but having enforceable rights in a country. I asked that the parties submit
supplemental letter briefing on this narrow issue. (D.I. 243).
Comcast's response was the more persuasive of the two. Comcast posits that this
language refers to patents which are issued not in any country, but by a transnational body such
as the European Patent Office ("EPO"). (D.I. 247 at 2-3). Under the European Patent Convention
("EPC"), an applicant may file a patent application with the EPO, which will examine the
application and determine whether it is patentable. (D.I. 247-1 at arts. 75, 90). If the application
is patentable, the EPO will issue a European patent, which can be brought into force in some or
all of the EPC member countries. (D.I. 247-1 at arts. 2, 64; see also D.I. 247-2). Such a European
patent may have enforceable rights in a particular country even though it was not issued in a
particular country. (See D.I. 247-3). Based on the above interpretation of "enforceable rights," I
find that the '008 patent is not a patent having "enforceable rights in any country of the world
from an application filed on or before January 31, 2001."
Because the 2001 license did not expressly cover the '008 patent, Sprint's express license
theory fails. However, Sprint cites to Gen. Protecht Grp., Inc. v. Leviton Mfg. Co., Inc., 651 F.3d
1355, 1361 (Fed. Cir. 2011), for the proposition that, absent some clearly-articulated provision in
the contract, the law imposes an implied license to continuation patents that issue from
previously licensed patents. Sprint argues that even if the '008 patent was not expressly licensed,
it is subject to an implied license. (D.I. 161at15).
The caselaw makes clear that an implied license arises because a licensor is estopped
from '"taking back in any extent that for which [it] has already received consideration.'"
TransCore, LP v. Elec. Transaction Consultants Corp., 563 F.3d 1271, 1279 (Fed. Cir. 2009)
(citation omitted). The most common circumstance in which this arises is when two parties settle
as to one patent, generally by entering into a licensing agreement, and then one of the parties
asserts the continuation patent. See, e.g., TransCore, 463 F.3d at 1273; Gen. Protecht, 651 F.3d
at 1357-58. In that situation, a patentee may be estopped from asserting the continuation patent,
because to do so would prevent the licensee from practicing the parent patent. TransCore, 463
F.3d at 1279 ("[I]n order for [the licensee] to obtain the benefit of its bargain with TransCore, it
must be permitted to practice the [continuation] patent to the same extent it may practice the
This doctrine, however, is a narrow one:
Our subsequent cases confirm the limited scope of TransCore. In General
Protecht Group, Inc. v. Leviton Manufacturing Co., Inc., we found an implied
license where the asserted patents had "[t]he same inventive subject matter [as
that] disclosed in the licensed patents" and "[t]he same products were accused."
651F.3d1355, 1361 (Fed. Cir. 2011). As in TransCore, the patents at issue in
General Protecht were continuations of the licensed patents. See id. at 1360
(quoting TransCore, 563 F.3d at 1279-80). We observed that "the newly asserted
continuations are based on the same disclosure as the previously licensed patents
and that, by definition, the continuations can claim no new inventions not already
supported in the earlier issued patents." Id. at 1361. After explaining that
TransCore "prohibits a patent licensor from derogating from rights granted under
the license," we held that "where ... continuations issue from parent patents that
previously have been licensed as to certain products, it may be presumed that,
absent a clear indication of mutual intent to the contrary, those products are
impliedly licensed under the continuations as well." Id. (emphasis added). In Intel
Corp. v. Negotiated Data Solutions, Inc., we explained that TransCore and
General Protecht "analyzed a licensee's rights when the patent holder received a
continuation patent" and "recognized that allowing the patent holder to sue on
subsequent patents, when those later patents contain the same inventive subject
matter that was licensed, risks derogating rights for which the licensee paid
consideration." 703 F.3d 1360, 1366 (Fed. Cir. 2012) (emphases added). Taken
together, these cases stand for the rule that a license or a covenant not to sue
enumerating specific patents may legally estop the patentee from asserting
continuations of the licensed patents in the absence of mutual intent to the
contrary. See Gen. Protecht, 651 F.3d at 1361; TransCore, 563 F.3d at 1279.
Endo Pharm. Inc. v. Actavis, Inc., 746 F.3d 1371, 1378 (Fed. Cir. 2014). Therefore, the relevant
question is whether the inventive scope of the parent patent is such that in practicing that patent
one would necessarily practice the '008 patent. For instance, if Alcatel-Lucent were to make a
product which practiced the claims of the parent patent, would such a product infringe the '008
patent? Such a finding would weigh in favor of an implied license. In that case, Comcast,
through HP, would have already received compensation, and any extra compensation would not
be justified. However, at this point the record does not support such a finding. 1
Sprint cites to Motorola, Inc. v. Analog Devices, Inc., 2004 WL 5633740, at *4 (E.D. Tex.
Aug. 10, 2004), where the court found that it would be unreasonable to interpret a cross-licensing
agreement to disclaim continuation patents, because "the reneging party would get a new 'filing
date,' thus voiding the license, but also retain the benefits of the earlier priority date." (D.I. 209
at 12). The Court emphasized the fact that a license granted on January 1 could be disavowed by
the filing of a continuation application on January 2. Id. Here, over 8 years passed between the
grant of the license and the filing of the continuation application. There is no capricious
disavowal of the license, at least based on the record at hand. In any event, the license in
Motorola did not contain any language evidencing intent to the contrary, and therefore is
consistent with the default rule of an implied license. Id. at *3.
Given that the '008 patent traces its priority through two divisional applications, it seems unlikely that the subject
matter is overlapping. See 35 U.S.C. § 121 ("If two or more independent and distinct inventions are claimed in one
application, the Director may require the application to be restricted to one of the inventions.").
Sprint contends that, just like the license in Motorola, the license agreement at issue did
not contain any "clear indication" of intent not to grant an implied license. (D.I. 209 at 12). Yet
Sprint does not address Section 4.01 of the license, which states:
Other than the provisions of Section 1.04, none of the parties nor any of their
RELATED COMPANIES makes any representations, extends any warranties of
any kind, assumes any responsibility or obligation whatever, or confers any right
by implication, estoppel or otherwise, other than the licenses, rights and
warranties herein expressly granted.
(D.I. 166-1 at 42). This section of the license agreement clearly disclaims any implied rights or
rights via estoppel. Implied licenses arise under legal estoppel. TransCore, 563 F.3d at 1279. I
therefore find that the agreement contains a "clear indication" not to extend the license to
continuation patents via an implied license. I find that the license does not cover continuation
patents, and therefore does not estop Comcast from asserting the '008 patent against Sprint.
Because Sprint has not proven that the license covers the asserted patents, I deny its
motion for summary judgment. While Comcast has not filed a competing motion for summary
judgment on this issue, at oral argument I asked for a letter explaining whether it would be
appropriate for me to grant summary judgment for Comcast without such a motion. (D.I. 239 at
87). Comcast filed such a letter (D.I. 233), and Sprint filed an opposition letter. (D.I. 240).
R. Crv. P. 56(f)(l) allows the Court to grant summary judgment for a nonmovant after giving
notice and a reasonable time to respond. Gibson v. Mayor & Council a/City of Wilmington, 355
F.3d 215, 219 (3d Cir. 2004), allows for an exception to the notice requirement "subject to the
meeting of three conditions: (1) the point at issue is purely legal; (2) the record was fully
developed, and (3) the failure to give notice does not prejudice the party." Comcast argues that
these conditions are met. Sprint contends that the issue is whether the Court should exercise its
authority to grant summary judgment sua sponte, not whether the exception to the notice
requirement is met.
I see these issues as overlapping. I agree that this is a purely legal issue, and that Sprint
would not be prejudiced. However, I believe that the record is not sufficiently developed in order
to grant summary judgment in Comcast's favor. For instance, it is not clear whether the accused
products incorporate technology covered by a patent subject to the license agreement. In such a
case, equity might weigh in favor of estoppel, even in the face of Section 4.01 of the license. The
Federal Rules of Civil Procedure allow me to grant summary judgment sua sponte, but they do
not require me to do so. I therefore decline to grant summary judgment in Comcast's favor.
For the reasons above, Sprint's Motion for Summary Judgment that Comcast's Claims
Against Sprint's Use of Alcatel-Lucent Products are Barred by License and Estoppel (D.I. 160) is
denied. An appropriate order will be entered.
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