FutureVision.com, LLC v. Time Warner Cable, Inc. et al

Filing 152

MEMORANDUM OPINION: Defendants' license defense is GRANTED. Signed by Judge Mary Pat Thynge on 2/1/16. (cak)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
FUTUREVISION.COM, LLC.,

:
:
Plaintiff,
:
:
v.
:
:
CEQUEL COMMUNICATIONS, LLC D/B/A :
SUDDENLINK COMMUNICATIONS,
:
COMCAST OF HOUSTON, LLC, and
:
COMCAST CABLE COMMUNICATIONS, :
LLC,
:
:
Defendants.
:

C. A. No. 13-855-GMS-MPT

MEMORANDUM
I.

INTRODUCTION
This patent case was originally filed by plaintiff FutureVision.com, LLC

(“FutureVision”) in the Eastern District of Texas in June 2012 against Comcast of
Houston, LLC, Comcast Cable Communications, LLC, (collectively “Comcast”) and
Cequel Communications, LLC d/b/a Suddenlink Communications (“Cequel”)
(collectively, “defendants”) and other now-settled defendants alleging infringement of
U.S. Patent No. 5,877,755 (“the ‘755 patent”).1 FutureVision is the successor-in-interest
to an operating entity involved in the development of interactive television.
On April 22, 2013, The Honorable Leonard Davis granted defendants’ motion to
transfer venue, which resulted in the transfer of the matter to this court on May 16,
2013.2 A scheduling order was entered on October 16, 2014.3 The matter was stayed
1

D.I. 1, 143 at 1.
D.I. 79. At the time of the transfer, Time Warner Cable, Inc. and Charter
Communications, LLC were also defendants. They were dismissed on May 15, 2015.
2

through April 9, 2015, and all deadlines were again stayed on April 13, 2015.4 The
second stay was until May 11, 2015, at which time a status report was due. As a result
of the joint status report, the matter was referred to this judge for the purpose of
discovery relating to the licensing issue, disposition of the licensing issue, and ADR
following that disposition.5 The stay was continued pending disposition of the licensing
issue and any subsequent ADR.6 The parties consented to this judge’s jurisdiction on
the dispositive motion regarding the license issue pursuant to 26 U.S.C § 636(c).7 A
scheduling order was entered regarding discovery, briefing and oral argument on the
licensing issue on September 18, 2015.8 Currently before the court is the defense of
license raised by defendants.
II.

BACKGROUND9
Defendants are cable operators with cable systems operating throughout the

country. Their vendors generally are ARRIS and Cisco. Each of the markets that
defendants have throughout the United States is either an ARRIS or Cisco market. The
’755 patent, the method patent-at-issue, relates to two-way interactivity, that is, the
cable office, also referred to as a headend, needs to communicate with a set top box
(“STB”) or cable box located in a customer’s home to provide services. Similarly, the

D.I. 119.
3
D.I. 90.
4
D.I. 114, 116.
5
D.I. 121.
6
Id.
7
D.I. 127.
8
D.I. 125.
9
The information contained in this section is taken from the parties’ briefs and
the transcript of oral argument on December 16, 2015 (“Transcript”).
2

STB needs to communicate with the cable office or supplier of the cable services. The
equipment on which such communications rely is provided by either Cisco or ARRIS for
defendants. Pace plc (“Pace”) is another vendor, who also provides some limited STBs
to both defendants. In addition, Harmonic and SeaChange provide some additional
Video on Demand (“VOD”) equipment. Neither Harmonic nor SeaChange equipment
can operate without using Cisco or ARRIS equipment to perform their functions.10
The interactivity referenced in the ’755 patent concerns the communications
between the cable headend and the STB in the customer’s home, which is part of an
interactive television system. When a customer uses his television, a program received
from the cable office is sent to the STB which allows the request of additional media.
As shown in figures 1 and 6 of the ’755 patent, that information is displayed on the
customer’s television screen which allows selection through the television remote
regarding what additional content is desired. In response to the customer’s selection, a
signal is sent to the cable office and depending on the customer’s response, additional
content may be provided to the STB.11
In its complaint, FutureVision initially alleged that “[a]ll of the Defendants employ
commonly sourced hardware from Motorola and Cisco/Scientific Atlanta, which
consequently share substantial overlap in terms of development, manufacture and
operation.”12 FutureVision also maintained that the ’755 patent was infringed by
defendants via the use of “products includ[ing], but not limited to, Motorola and
10

Transcript at 8, 12-15. The above description was not disputed by
FutureVision.
11
Id.
12
D.I. 143, Ex. 1 at ¶ 13.
3

Cisco/Scientific Atlanta set top boxes, 1-Guide software, Motorola NC-1500 Network
Controller, out-of-band modulators, return path demodulators, and their related
components, that fall within the scope of at least one claim of the ’755 patent.”13 Its
original infringement contentions, provided before discovery, identified certain
components which are now licensed, including those of Motorola.14 As noted by
FutureVision, ARRIS acquired Motorola’s Home business, which included its STBs in
2013, and Cisco acquired Scientific Atlanta and its equipment in 2005.15 FutureVision
no longer accuses Motorola equipment as providing infringing functionality, in part due
to the ARRIS sublicense through RPX.16 It also acknowledges that Cisco is licensed
through RPX, affirming ARRIS (Motorola) and Cisco (Scientific Atlanta) set top box
configurations are not accused. It maintains, however, that other functionality identified
by defendants infringes.17
On April 21, 2015, FutureVision entered into an agreement with patent
aggregator RPX (the “RPX Agreement”), which licensed the ’755 patent to RPX and its
members.18 It is not disputed that Exhibit A to the RPX Agreement lists the RPX
members, which includes ARRIS and Cisco as members at the time of execution.19 As
a result, ARRIS and Cisco were licensed under the RPX Agreement.20 Neither Comcast
13

Id. at ¶¶ 27, 34.
D.I. 144 at 1.
15
Id. n.1, 2. Cisco completed the acquisition of Scientific Atlanta in 2006. See
D.I. 143, Ex. 6 Cisco Annual Report.
16
D.I. 144 at 3.
17
Id.
18
D.I. 143 at 1, Ex. 2 at § 1.2(a)(i); RPX Agreement at Exs. A-B.
19
Id.; D.I. 144 at 1-2.
20
In addition to Pace, Comcast also uses STBs provided by Samsung, who is an
RPX member and licensed under the RPX Agreement. D.I. 143 at Ex. A, No. 149.
14

4

nor Cequel are members of RPX, but certain of its suppliers, ARRIS or Motorola and
Cisco are. At the time of the RPX Agreement, all patents licensed by FutureVision,
including the ’755 patent, were either abandoned or expired.21
During the discovery phase of the licensing issue, FutureVision deposed
representatives of Comcast and Cequel. Thereafter, it amended its infringement
contentions and withdrew claims 12 through 20 of the ’755 patent as infringed and
asserts that it removed all references or reliance on licensed equipment.22 In its revised
infringement contentions, VOD and interactive text remain as part of the accused
services.
Relevant provisions of the RPX Agreement to the issues in defendants’ motion
include the following.
Under Definitions:23
“Affiliates(s)” of an Entity shall mean any and all Entities, now or in the
future and for so long as the Control exists, that are Controlled, directly or
indirectly by the Entity. As used herein, and otherwise where applicable in
the Agreement, the term “Affiliate” shall include the affiliate definitions set
for in Exhibit C attached hereto.24
“Claims” shall mean any and all claims, counterclaims, third-party claims,
contribution claims, indemnity claims, demands, actions, liabilities,
damages, losses, causes of action, and all other claims of every kind and
nature in law or equity, whether arising under state, federal, international
or other law, which arise from or relate to in any way the Patents, or which
are (currently or in the future) or were asserted in, could have been
asserted in, or which arise from the same transactions or occurrences as
those claims that are (currently or in the future) or were asserted in any
21
22

and 2.

23
24

See D.I. 143, Ex. 2 at Ex. B at Future01328.
D.I. 144 at 2. As a result, the two independent claims remaining are Claims 1
See 143, Ex. 2 at 1-4.
Id., Ex. 2 at 1 (emphasis added).
5

Licensor Litigations with respect to the Patents, whether such claims are
absolute or contingent, in tort, contract or otherwise, direct or indirect,
present or future, known or unknown, that exist or may have existed prior
to the Effective Date.25
“Combined Licensed Product and Service” shall mean any past, present
or future combination or use, whether by an RPX Licensee or a third party,
of a Licensed Product and Service with any other product, service,
technology, or material, only if a portion of such Licensed Product and
Service provided by or on behalf of an RPX Licensee or an RPX Licensee
Affiliate satisfies, in whole or in part, an element or step of a claim in any
Patent.26
“Licensed Product and Service’” shall mean any past, present or future
product, service, software, technology, or material (including any
components, devices, data, media, or any other portions thereof), at any
time, made, have made, used, purchased, provided, hosted, sold, leased,
licensed, distributed, transmitted, exported, imported or offered for sale,
lease, or import by or on behalf of an RPX Licensee or an RPX Licensee
Affiliate, alone or in combination with other products, software, technology,
materials and services, the manufacture, use, purchase, provision,
hosting, sale lease, license, distribution, transmittal, export, import (or offer
for sale lease or import) of which would result in infringement (direct,
indirect or otherwise) of one or more Patents, irrespective of whether the
product service, software, technology, or material (including any
components, devices, data, media or any other portions thereof) were or
had been made, used, purchased, provided, hosted, sold, leased,
licensed, distributed, transmitted, exported, imported or offered for sale,
lease, or import in the United States. Licensed Product and Service will
include any Combined Licensed Product and Service.27
“Licensor Litigation Defendants” shall mean parties adverse to Licensor in
any Licensor Litigation. Any one of the Licensor Litigation Defendants is a
“Licensor litigation Defendant”.28
“Option Companies” shall mean Entities identified in Exhibit G each such
Entity’s Affiliates and any business unit or division that such Entity may
divest while such Entity’s RPX membership agreement is in effect. Each

25

Id., Ex. 2 at 1 (emphasis added).
Id., Ex. 2 at 2 (emphasis added).
27
Id., Ex. 2 at 2 (emphasis added).
28
Id., Ex. 2 at 3.
26

6

such Entity is an “Option Company”.29
Exhibit G, titled Option Companies and Expanded License Fee Payments,
identifies three entities and the amount of fee payments: Cequel at $100,000; Comcast
at $500,000; and Pace at $750,000.30
Other pertinent sections of the RPX Agreement include:
1.2

Patent License and License Option

(a)
Effective upon RPX payment to Licensor of the License Fee,
Licensor shall automatically be deemed to grant, and does hereby grant,
to RPX the Patent License, which Patent License shall include:
(i) the exclusive and irrevocable right of RPX to grant
sublicenses under the Patent License to all RPX Members;
and
(ii) the non-exclusive and irrevocable right of RPX to grant
sublicenses under the Patent License to each of the Option
Companies; provided RPX has paid to Licensor the
applicable Expanded License Fee Payment for each such
sublicense granted under this Section 1.2(a)(ii).
The Patent License shall also include the express right of RPX to
release the foregoing sublicenses from all claims for damages for past,
present and future infringement of the Patents. Upon RPX’s payment of
the License Fee and/or any Expanded License Fee Payment, as
applicable, any Entity that is granted a sublicense by RPX (directly or
indirectly) in accordance with Section 1.2(a) shall be deemed an “RPX
Licensee” for the purposes of this Agreement.
(b) . . . Upon RPX providing Licensor with written notice that RPX
has granted a sublicense to any Option Company pursuant to Section
1.2(a)(ii) and paying Licensor the Applicable Expanded License Fee
Payment for such Option Company, Licensor shall immediately complete
the Release and Dismissal Obligation with respect to such Option
29

Id., Ex. 2 at 3.
Id., Ex. 2 at Ex. G. Exhibit G also required payment for any other Licensor
Litigation Defendant, excluding Cequel, Comcast and Pace, at a fee of $250,000. Id.,
Ex. 2 at Ex. G.
30

7

Company . . . in the event such Option Company . . . is a Licensor
Litigation Defendant.31
III.

LEGAL STANDARD
A license, whether express or implied, is a contract subject to “the ordinary

principles of state contract law.”32 “‘In a suit for patent infringement, the burden of
proving the establishment of an implied license falls upon the defendant.’”33
IV.

DISCUSSION
FutureVision originally accused three of defendants’ services of infringement: (a)

interactive program guides, (b) video-on-demand menus and previews, and (c)
interactive advertisements.34 After revising its contentions, video-on-demand menus
and previews and interactive program guides remained accused. Defendants state for
both Comcast and Cequel, each of the accused services are delivered using Cisco or
ARRIS equipment.35 Defendants maintain each of those services are expressly
licensed to the ‘755 patent and, to the extent FutureVision contends defendants’

31

Id., Ex. 2 at 4-5 (emphasis added).
Power Lift, Inc. v. Weatherford Nipple-Up Sys., Inc., 871 F.2d 1082, 1085 (Fed.
Cir. 1989).
33
LG Electronics, Inc v. Bizcom Electronics, 453 F.3d 1364, 1369 (Fed. Cir.2006)
(quoting Bandag, Inc. v. Al Bolser’s Tire Stores Inc., 750 F.2d 903, 924 (Fed. Cir. 1984)
(citing Bassick Mfg. Co. v. Adams Grease Gun Corp.. 54 F.2d 285, 286 (2d. Cir.
1931))); see also Monsanto Co. v. Scruggs, 459 F.3d 1328, 1334 (Fed. Cir. 2006)
(assertions of implied license is an affirmative defense); Jazz Photo Corp. v. Int’l Trade
Comm’n, 264 F.3d 1094, 1102 (Fed. Cir. 2001) (“The burden of establishing an
affirmative defense is on the party raising the defense.”).
34
D.I. 143 at 3-4; id., Ex. 8 (Plaintiff’s Disclosure of Asserted Claims and
Preliminary Infringement Contentions). Defendants note FutureVision accused
“interactive advertisements” only for Comcast and did not make any such allegations
with respect to Cequel. Id. at 4 n.2.
35
Id. at 4. Defendants also reserve the right to seek relief for FutureVision’s
litigation conduct. D.I. 147 at 7, n.14.
32

8

services are not licensed, FutureVision’s claims are exhausted due to a license held by
defendants’ suppliers Cisco and ARRIS.36
The ‘755 patent specification states that in its “broadest embodiment”:
the present invention is directed to [1] a network having downstream
broadcast capabilities, [2] upstream interactive communication capability
and [3] a microprocessor-based CPE (Customer Premise Equipment)
capable of loading and executing a core program and accessing broadcast
data files. The present invention accesses specific data files which are
broadcast and which correspond to video, textual and/or audio
presentation.37
Defendants maintain each of the claims of the ‘755 patent recites, among other
limitations, each of the three basic enumerated components.38
Claims 1 and 2 are the only independent claims being asserted.
Claim 1 recites:
In an interactive television network including a central broadcast server
and a microprocessor-based customer premise equipment, including a
processor, a memory, and a subscriber interface, a method for delivering
a multimedia data file corresponding to an application core program from
the central broadcast server to the microprocessor-based customer
premised equipment, said application core program comprising logic, the
method comprising:
storing the application core program file in the memory;
transmitting a signal from the microprocessor-based customer
premise equipment to the central broadcast server representing a
request for the multimedia data file;
downloading the multimedia data file from the central broadcast
server to the microprocessor-based customer premise equipment;
36

Id. at 1. In light of the court’s rulings herein, and lack of argument at the
hearing, the court need not address defendants’ doctrine of exhaustion argument set
forth in their opening brief.
37
‘755 patent, 3:37-47.
38
D.I. 143 at 3.
9

storing the multimedia data file in the memory;
and executing logic in application core program file.39
Claim 2 recites:
A method for interactive broadcasting of multimedia information from a
digital integration center comprising a central broadcast server and an
interactive response server to a microprocessor-based customer premise
equipment comprising a memory, a central processing unit, and a
subscriber interface, in communication with said digital integration center,
comprising the steps of:
selecting at least one core program file and at least one multimedia
data file from the central broadcast server,
broadcasting the core program file and the multimedia data file from
the central broadcast server to the microprocessor-based customer
premise equipment,
receiving the core program file in the memory, loading the core
program file into the central processing unit,
executing the core program file in the central processing unit,
obtaining an interactive command information from a subscriber via
the subscriber interface,
sending the interactive command information from the subscriber
interface to the interactive response server
and selecting at least one core program file and at least one
multimedia data file corresponding to the interactive command
information.40
On December 1, 2015, the day before filing its opposition brief, FutureVision filed
its Amended Infringement Contentions (“Revised Contentions”).41 The Revised
39

‘755 patent, claim 1.
‘755 patent, claim 2.
41
D.I. 147, Ex. A (“Plaintiff’s Amended Disclosure of Asserted Claims and
Amended Infringement Contentions”). FutureVision served its original infringement
contents against Comcast and Cequel in Delaware on or about January 19, 2015
40

10

Contentions removed infringement accusations as to Arris (Motorola) and Cisco
(Scientific Atlanta) set top box configurations because those entities are licensed
through the RPX Agreement.42 FutureVision continues to accuse Pace set top box
configurations of infringement based on its assertion that those set top boxes are
unlicensed, even after ARRIS’s acquisition of Pace.43 FutureVision also maintains its
Revised Contentions demonstrate “each of Comcast and Cequel provide a complete
infringing system without reference to licensed components satisfying an element of the
asserted claims.”44
Defendants assert they are licensed under the ‘755 patent for several
independent reasons. First, they point out Cisco and ARRIS licenced under the RPX
Agreement.45 They contend the accused methods are licensed because they are
performed using Cisco and/or ARRIS products. Turning to the RPX agreement,

without having conducted discovery and prior to the April 21, 2015 execution of the RPX
Agreement. D.I. 144 at 3. FutureVision prepared its Revised Contentions following a
single targeted deposition of each of Comcast and Cequel in connection with the
briefing on the license issue on November 6 and 17, respectively. Id. at 2. The subject
of the depositions was the proprietary network architecture of the “headend” of Comcast
and Cequel. Id. at 4. The Cequel deposition was taken on the same day that
defendants filed their opening brief.
42
D.I. 144 at 4; id. at 1 (“Defendants Comcast and Cequel are not members of
RPX, though some of its suppliers are, including Motorola and Cisco.” (footnotes
omitted)). At the time of briefing and oral argument, ARRIS was expected to acquire
Pace. On January 4, 2016, the ARRIS acquisition of Pace was completed. D.I. 150.
43
D.I. 144 at 4; D.I. 151.
44
D.I. 144 at 4; id. at 2 (FutureVision “has narrowed and amended its
infringement contentions so as not to rely on any licensed components. It has dropped
claims 12-20 and removed any reference or reliance upon licensed equipment.”).
FutureVision currently asserts Comcast infringes claims 1-7 and 10-11 and Cequel
infringes claim 1. Id. at 5.
45
See D.I. 143, Ex. 2 at Ex. A (listing “RPX Members,” including ARRIS Group
Inc. and Cisco Systems Inc.).
11

defendants rely on the definitions of “Licensed Product and Service” and “Combined
Licensed Product and Service.” “Licensed Product and Service” includes “any
Combined Licensed Product and Service” and “Combined Licensed Product and
Service”46 is defined as “any past, present or future combination or use . . . of a
Licensed Product and Service with any other . . . service . . . if a portion of such
Licensed Product and Service . . . satisfies, in whole or in part, an element or step of a
claim in any patent.”47
Defendants conclude that if Cisco or ARRIS equipment satisfy in whole or in part
any step of method claims 1 or 2, defendants are licensed.48 Specifically, claim 1
requires “transmitting a signal from the microprocessor-based customer premise
equipment to the central broadcast server” and claim 2 requires “sending the interactive
command information from the subscriber interface to the interactive response server,”
each being an upstream signal from a set top box. Defendants insist they cannot
“transmit a signal” or “send interactive command information” from the set top box “to
the central broadcast server” or “to the interactive response server” in the headend or
anything in the headend without the use of Cisco or ARRIS equipment.49 In support,
defendants rely on an annotated diagram of the accused systems with arrows showing
a signal being sent from the set top box to ARRIS and Cisco equipment at the
headend.50 Deposition testimony of Comcast and Cequel likewise supports defendants’
46

Id., Ex. 2 at 2.
Id., Ex. 2 at 2 (emphasis added).
48
Transcript at 19; D.I. 147 at 5.
49
Transcript at 22-23.
50
Id. at 24-25; D.I. 147 at 4; Id., Ex. D (showing the path a signal transmitted
from the set top box towards the headend requires Cisco QPSK DeMod and
47

12

position. Comcast’s deponent testified as follows.
Q. In what way would you consider the Video On Demand system twoway interactive?
A. The experience from a user’s perspective, just to walk through that.
Q. Huh-huh.
A. After the user has navigated through the program guide to the Video
On Demand function of the application–the–the user would be
presented–well, the request would be to launch the VOD function. There’s
a button on the– on the guide menu that presents that. When the user
navigates to that the guide application would make a request to the VOD
client, the VOD client inside the set-top box to present the top level menu
as an example. That VOD client would launch a command to–and send
that upstream through the HPC network through the RBT, RBD, RPT, the
NC1500, and that would get routed to a VOD server.51
Cequel’s deponent similarly testified that the upstream signal is handled by
Motorola/Cisco equipment.
Q. So when a consumer presses the button to request a preview of a
video-on-demand, can you walk me through the hardware that passes
through upstream?
MR. JACOBSON: Object to form.
A. The high-level components would be a laser receiver a QPSK demod,
the DNCS, networking equipment in between here and there. Generally
Cisco or Juniper are our markets. And on to the SeaChange back office
system.
QUESTIONS BY MR. SCHMID:

Motorola/ARRIS RPD). At oral argument, FutureVision presented a slide of Exhibit 2
from the deposition of Rob Knee of Comcast showing only one arrow for the signal path
from the set top box to the headend with that signal first being received at a Cisco
QPSK DeMod. See FutureVision oral argument presentation at slide 6.
51
D.I. 147, Ex. B (Deposition of Rob Knee) at 36:8-37:1; see also id. at 4 n.6 for
citations to similarly supporting testimony by Knee explaining signal transmission from
the set top box to the headend being handled via Motorola/Cisco equipment.
13

Q. Just to be clear, you did describe that in the sequential order from the
consumer–
A. Yes.52
FutureVision acknowledges it previously identified Motorola equipment as
providing infringing functionality, but no longer does so based on changes that have
arisen since those contentions were provided, including the ARRIS sublicense through
RPX.53 Although, FutureVision maintains its Revised Contentions demonstrate other
functionality infringes, a “Licensed Product [or] Service provided by or on behalf of an
RPX Licensee or an RPX Licensee Affiliate [need only satisfy], in whole or in part, an
element or step of a claim in any Patent” to be a “Combined Licensed Product and
Service.”54 Defendants’ evidence demonstrates their use of Pace set top boxes, even if
52

Id., Ex. C (Deposition of Eric Eby) at 42:2-15; see also id. at 4 n.6 for citations
to similarly supporting testimony by Eby explaining signal transmission from the set top
box to the headend being handled via Motorola equipment.
53
D.I. 144 at 3.
54
That a Combined Licensed Service may satisfy “in whole or in part an element
or step of a claim in any Patent” is contrary to FutureVision’s assertion that “[i]t is not
enough that a claimed, unlicensed component transmits signals to or receives signals
from a licensed component. The licensed component must satisfy a claim element or
limitation.” Id. at 4 (emphasis added). That assertion reads out the “in part” language of
the definition. The RPX Agreement is governed by California law. D.I. 143, Ex. 2 at
§ 5.4. “[C]ourts must interpret contractual language in a manner which gives force and
effect to every provision, and not in a way which renders some clauses nugatory,
inoperative, or meaningless.” City of Atascadero v. Merrill Lynch, Pierce, Pfenner &
Smith, 68 Cal. App. 4th 445, 473 (1998). At oral argument, FutureVision stated if there
is intervening equipment between the set top box and the central broadcast server that
is interposed in the communication path, that does not render it a “Combined Product
and Service.” It argued the mere fact that equipment is interposed between two
components that are purportedly claimed does not mean that it provides the necessary
step or part of a step. Transcript at 50-51. Claims 1 and 2 are method claims, however,
and FutureVision has not explained how those claimed methods could be accomplished
by the accused services absent the licensed Cisco and ARRIS equipment. That
equipment is implicated in, at least, part of the “transmitting” and “sending” of signals
elements in those claims.
14

not separately licensed, in conjunction with licensed ARRIS or Cisco products is part of
a “Combined Licensed Product and Service.” As a result, defendants’ accused services
do not infringe.
Next, defendants argue the accused methods are licensed as to the entire ‘755
patent because at least “a claim” relies on Cisco and/or ARRIS products. Defendants
again rely on the definition of “Combined Licensed Product and Service” in the RPX
Agreement in support of this argument: “any . . . combination or use . . . [that] satisfies,
in whole or in part, an element or step of a claim in any patent.” FutureVision concedes
claims 12 through 20 are no longer asserted because of the RPX license, and so admit
in its opposition brief.55 Defendants argue that by acknowledging that Cisco and ARRIS
products satisfy, in whole or in part, at least one element or step of claims 12-20 of the
‘755 patent, FutureVision has also established that the “combination or use,” i.e.
defendants’ accused “video on demand” and “interactive text,” are licensed.56
The court disagrees with defendants’ contention that so long as a single claim is
licensed for a given “combination or use,” the entire patent is licensed for that
“combination or use.” The court reads the language “an element or a step of a claim” to
refer to a single claim leading to a claim by claim analysis, as FutureVision argued,57
rather than implying a license to every claim in that particular patent.
Finally, defendants assert that allegations based on the use of Pace set top

55

D.I. 144 at 2 (“Concurrently herewith, [FutureVision] has amended its
infringement contentions so as not to rely on any licensed components. It has dropped
claims 12-20 and removed any reference or reliance upon licensed equipment.”).
56
D.I. 147 at 5.
57
Transcript at 58-59.
15

boxes must fail because those boxes are now licensed due to ARRIS’s recent
acquisition of Pace. As a result of that acquisition Pace is now an “Affiliate” as defined
in the RPX Agreement.58 The relevant language in the RPX Agreement provides:
“‘Affiliates(s)’ of an Entity shall mean any and all Entities, now or in the future and for so
long as the Control exists, that are Controlled, directly or indirectly by the Entity.”59
Defendants contend that once an entity becomes controlled by an RPX member, e.g.,
through acquisition, that entity is an “Affiliate” within the meaning of the RPX
Agreement.60 FutureVision maintains that Pace can never be an Affiliate that provides a
“Licensed Product and Service” (or “Combined Licensed Product and Service”) because
nothing it provides while an “Affiliate” of ARRIS could infringe the now-expired ‘755
patent.61 FutureVision also relies on the language “for so long as the Control exists” in
the “Affiliate” definition to argue Pace would only be deemed an “Affiliate” for purposes
of the period of time after its acquisition by ARRIS.62 Neither argument is persuasive.
First, all of the patents licensed under the RPX Agreement had expired or been
abandoned when the agreement was executed.63 Also, the definition of “Affiliate(s)” is
forward looking: “all Entities, now or in the future.” FutureVision’s interpretation would

58

D.I. 150 at 1 (As a result of ARRIS’s acquisition of Pace on January 4, 2016,
“the accused products and services are now all provided by licensed vendors . . . , [and]
Defendants respectfully submit that their license defense should be granted and the
case dismissed for this additional reason as well.”). FutureVision responded to
defendants’ letter disagreeing that Pace was released. D.I. 151.
59
D.I. 143, Ex. 2 at 1 (emphasis added).
60
Id. at 9.
61
D.I. 144 at 7.
62
Transcript at 61.
63
D.I. 143, Ex. 2 at Ex. B (listing patents licensed by the RPX Agreement).
16

render the language regarding future affiliates superfluous.64 Moreover, the RPX
Agreement covers past infringement by Affiliates. “Licensed Product and Service” is
defined as “any past, present, or future product . . . at any time, made, have, made,
used, purchased, provided, hosted, sold . . . by or on behalf of an RPX Licensee or an
RPX Licensee Affiliate.”65 Similarly, “Combined Licensed Product and Service” is “any
past, present or future combination or use . . . provided by on behalf of an RPX
Licensee or an RPX Licensee Affiliate.”66 Therefore, any past, present, or future
product of an “Affiliate” is authorized for sale by the RPX Agreement.
FutureVision also argues Exhibit G indicates Pace was intended to be unlicensed
unless and until the option price is paid.67 This argument is also unpersuasive.
The RPX Agreement was executed on April 21, 2015. ARRIS’s planned
acquisition of Pace was announced in a press release on April 22, 2015. As a result,
FutureVision could not have known about ARRIS’s acquisition of Pace when the RPX
Agreement was executed and, therefore, could not have accounted for it in its
negotiations concerning that agreement. Defendants also contend that, when reading
the entire agreement together, Exhibit G lists sums for these entities with respect to any
activity for which they are not otherwise licensed by the agreement.68 Defendants
explain that if, for example, they developed and used their own service or used a non64

City of Atascadero v. Merrill Lynch, Pierce, Pfenner & Smith, 68 Cal. App. 4th
445, 473 (1998) (“[C]ourts must interpret contractual language in a manner which gives
force and effect to every provision, and not in a way which renders some clauses
nugatory, inoperative, or meaningless.”).
65
D.I. 143, Ex. 2 at 2.
66
Id., Ex. 2 at 2.
67
D.I. 144 at 7.
68
Transcript at 32
17

RPX member to provide the service that may be unlicensed, an “Expanded License
Fee” would likely be needed.69 Defendants note there is nothing in the “Combined
Licensed Product and Service” definition that references Exhibit G or implies a carve out
for Exhibit G which should in some way trump a plain reading of that definition.70
Defendants maintain the combination language is clear that any use satisfying any step
in whole or part would render the particular product or use licensed.71
As discussed above, under the definitions of “Licensed Product and Service” and
“Combined Licensed Product and Service” the services provided by defendants, and
Pace set top boxes, are already licensed. Therefore, there is no need to pay for an
“Expanded License” as there is no infringement.
V.

CONCLUSION
For the aforementioned reasons, defendants’ license defense is GRANTED. An

appropriate order shall issue.

Dated: February 1, 2016

/s/ Mary Pat Thynge
UNITED STATES MAGISTRATE JUDGE

69

Id.
Id. at 33.
71
Id.
70

18