TQ Delta LLC v. ADTRAN Inc.

Filing 762

MEMORANDUM OPINION. Signed by Judge Richard G. Andrews on 8/15/2019. Associated Cases: 1:14-cv-00954-RGA, 1:15-cv-00121-RGA(nms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
TQ DELTA, LLC,
Plaintiff,
Civil Action No. 14-954-RGA

V.

ADTRAN, INC. ,
Defendant.

ADTRAN, INC.,
Plaintiff and
Counterclaim Defendant,
Civil Action No . 15-1 2 1-RGA

V.

TQ DELTA, LLC,
Defendant and
Counterclaim Plaintiff.

MEMORANDUM OPINION
Brian E. Farnan and Michael J. Farnan, FARNAN LLP, Wilmington, DE; Peter J. McAndrews
(argued), Timothy J. Malloy, Thomas J. Wimbiscus, Sharon A. Hwang, Paul W. McAndrews,
and Anna M. Targowska, MCANDREWS , HELD & MALLOY, LTD. , Chicago, IL, attorneys
for Plaintiff TQ Delta LLC.
Kenneth L. Dorsney, MORRIS JAMES LLP, Wilmington, DE; Garland Stephens (argued),
Melissa L. Hotze, Justin L. Constant and Rene E. Mai, WEIL, GOTSHAL & MANGES LLP,
Houston, TX, attorneys for Defendant Adtran, Inc.

August

is:-,

2019

Currently pending before the Court are Defendant's Motion for Summary Judgment on
License of the Disputed Patents (D.I. 518) 1 and Plaintiffs Cross-Motion for Summary Judgment
on the License Issue. (D.I. 526). The parties have fully briefed the issues. (D.I. 519, 527, 536,
546). I heard oral argument on June 14, 2019. (D .I. 617). After clarifying my construction of the
License, I asked the parties to provide letters addressing the effect of the clarified construction on
the remaining summary judgment issues. (D.I. 674,675). The parties have submitted their letters.
(D.I. 688, 689, 709, 715).

I.

BACKGROUND
The motions arise from an ongoing dispute between the parties as to ten of the Patents-In-

Suit (the "Disputed Patents").2 I summarized the relevant background in my May 21 , 2018 and
July 23 , 2019 memorandum opinions on the license issue and incorporate that background here.
(D.I. 398 at 1-2; D.I. 674 at 2-4).
In my July 23, 2019 Memorandum Opinion, I clarified my construction of the license,
stating,
any patent that falls within the scope of the positive license grant that is used for or
could be used in conjunction with one of the seven listed xDSL standards is
licensed. Any patent that cannot be used for or in conjunction with one of the seven
listed xDSL standards is unlicensed. Any patent within the scope of the positive
license grant that is used for or can be used in conjunction with both listed and
unlisted xDSL standards is licensed.

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All docket item citations refer to C.A. No. 14-954 unless otherwise noted.
The parties refer to these ten patents as the "Disputed Patents," because they involve a dispute about contract
construction. I adopt this terminology. The Disputed Patents are U.S. Patent Nos . 7,453 ,881 , 7,809,028, 7,978,706,
8,422,511 , 7,796,705 , 8,3 35,956, 8,407,546, 8,468,411 , 8,645,784, and 8,598,577. (D.I. 232 at 6).

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(D.I. 674 at 11). The parties have now responded to this construction and addressed its impact on
the remaining summary judgment issues, including whether the Disputed Patents are licensed
under the License Agreement.
The Disputed Patents can be subdivided into two groups based on which ITU-T standard,
if complied with, is alleged to require infringement. The G.bond patents-in-suit are U.S. Patent
Nos. 7,453 ,881 , 7,809,028, 8,422,511 , and 7,978,706. (D.I. 689 at 2). The G.inp patents-in-suit
are U.S Patent Nos. 7,796,705, 8,468,411 , 8,595,577, 8,407,546, 8,645,784, and 8,335,956. (Id.
at 3).
II.

LEGAL ST AND ARD

"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 oflaw." Fed. R.
Civ. 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)). When determining
whether a genuine issue of material fact exists, the court must view the evidence in the light most
favorable to the non-moving 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).

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III.

DISCUSSION
A. G.bond Patents-In-Suit

The parties agree that the G.bond patents-in-suit are not carved out of the license grant
under the clarified construction, i.e., they are licensed. (D.I. 688 at 3-4; D.I. 689 at 2). However,
Plaintiff argues that Defendant has failed to prove that the license exhausts Plaintiffs patent rights
with respect to Defendant. (D.I. 689 at 2).
Plaintiff attempts to revive an argument that I have already rejected. (D.I. 448 at 2-5 ; D.I.
496 at 3 n.2). I declined to reconsider my original opinion on Defendant' s summary judgment
motion based on the purported new information relating to exhaustion.

Plaintiffs initial

opposition to Defendant' s motion for summary judgment did not mention exhaustion. (D.I. 255).
In addressing Plaintiffs motion for reconsideration, I determined that the delay in receiving the
"new evidence" related to exhaustion was "primarily the result of Plaintiff's own actions" and
re~sed to reconsider the original motion on those grounds. (D.I. 448 at 4-5). Moreover, when I
ordered further briefing on the license issue, I made clear that I solely vacated my prior opinions
and orders (D.I. 398, 399, 448) "insofar as they address whether the Disputed Patents apply to at
least one of the seven listed xDSL standards" (D.I. 496 at 3) and that I did "not vacate the portion
of the Memorandum Order that addresses ' new information."' (Id. at 3 n.2) . Plaintiff may not
now have the exhaustion issue reconsidered.
Thus, the G.bond patents-in-suit are not subject to the Carve-Out and are licensed under
the License Agreement.
B. G.inp Patents-In-Suit

The parties continue to dispute whether the G.inp standard is used in conjunction with any
one of the listed xDSL standards. (D.I. 688 at 3-4; D.I. 689 at 3). Plaintiff asserts that "when a

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DSL connection is made using the G.inp standard, that DSL connection is not also using an ADSL2
or VDSL2 compliant connection" because "retransmission is used instead of convolutional
interleaving," a mandatory requirement of ADSL2NDSL2. (D.I. 689 at 3). Defendant argues that
the G.inp patents-in-suit "could be used in conjunction" with ADSL and VDSL because
(1) Plaintiff has previously used "operate in conjunction with" language in its briefing on this
issue,3 (2) Plaintiff's infringement contentions rely on listed xDSL standards to prove infringement
of each asserted claim, and (3) the G.inp standard states that it can or must be used in conjunction
with at least one of the listed xDSL standards. (D.I. 688 at 3-4).
There is a genuine dispute of material fact. I will not take Plaintiff's previous use of "in
conjunction with" to be an admission because the previous briefs were not written in the context
of the clarified construction. The remainder of the evidence, if taken in the light most favorable
to Plaintiff, would allow a reasonable jury to determine that the G.inp patents-in-suit are not
licensed. However, taken in the light most favorable to Defendant, the evidence would also permit
a reasonable jury to determine that the G.inp patents-in-suit are licensed.
Thus, I will deny both parties ' motions for summary judgment as to the G.inp patents-insuit.

C. Whether Lantiq Chips are DSL Products
Plaintiff asserts that regardless of whether the Patents-In-Suit are licensed, the license is
not applicable to all products made by Intel or Lantiq. (D.I. 689 at 3). Plaintiff argues that
Defendant must prove that each accused product is a "DSL Product" under the License Agreement.

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Defendant also challenges Plaintiffs argument that G.inp is not used in conjunction with ADSLN DSL because it
(1 ) "cannot be reconciled with the statements by TQ Delta and its expert in multiple rounds of summary judgment
briefing" and (2) that this is a contrary position taken solely to survive summary judgment. (D.I. 709 at 1-2). However,
I agree with Plaintiff that its previous briefing could not have taken the current construction of the License Agreement
into account. Additionally, I do not believe that Dr. Cooklev ' s previous sworn testimony clearly contradicts his
deposition testimony. Ifit does, Defendant may highlight these contradictions at trial. (D.I. 715 at 1).

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(Id.).

Defendant argues that Plaintiff has "already conceded this point by its admission that

ADTRAN products containing Lantiq chips are licensed under all of its other asserted patents."
(D.I. 688 at 4).
I agree with Defendant. As I previously determined, "Plaintiff's interrogatory response
and admission to this Court amount to Plaintiff's agreement that the accused products themselves
are licensed to the twenty-eight patents" asserted against products that implement ADSL2,
ADSL2+, and/or VDSL2. (D.I. 398 at 12). The accused products are therefore "DSL Products"
within the meaning of the License Agreement. Thus, the G.bond patents-in-suit are licensed for
the accused products.

IV.

CONCLUSION
For the foregoing reasons, I will GRANT Defendant' s Motion as to the G.bond patents-in-

suit, DENY Defendant' s Motion as to the G.inp patents-in-suit, and DENY Plaintiffs crossmotion in its entirety.
An accompanying order will be entered.

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