In re Qimonda Ag

• Decision Date: 07 November 2012
• Docket Number: No. 09–14766–RGM.,09–14766–RGM.
• Parties: In re QIMONDA AG, Debtor.
• Court: United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — Eastern District of Virginia

482 B.R. 879

In re QIMONDA AG, Debtor.

No. 09–14766–RGM.

United States Bankruptcy Court,
E.D. Virginia,
Alexandria Division.

Nov. 7, 2012.

[482 B.R. 883]

Jeffrey Anderson Showalter, Esquire, Morrison & Foerster LLP, McLean, VA, William A. Gray, Esquire, Sands Anderson PC, Richmond, VA, for Debtor.

Michael Jaffé, Insolvency Administrator, Cole Schotz Meisel Forman, et al., G. David Dean, Esquire, Cole, Schotz, Meisel, Forman & Leonard, Baltimore, MD, John Alexander Trocki, III, Esquire, Morrison & Foerster LLP, McLean, VA, for Insolvency Administrator.

Peter J. Carney, Esquire, Roberto J. Kampfner, Esquire, White & Case LLP, Washington, DC, for Altis Semiconductor SNC.

MEMORANDUM OPINION
BRIAN F. KENNEY, Bankruptcy Judge.

This matter comes before the Court on the Foreign Representative's Motion to Enforce and/or Apply the Automatic Stay (Docket No. 673) in order to enjoin the prosecution of a lawsuit recently filed in the Northern District of California by Altis Semiconductor SNC (“Altis”) against Qimonda AG (“Qimonda”) and its affiliate, Qimonda Licensing LLC (“Qimonda Licensing”). Altis has filed an Opposition (Docket No. 677), in which Altis opposes the relief sought by the Debtor, and in the alternative, requests relief from the automatic stay. The Foreign Representative has filed a Reply Memorandum (Docket No. 680). The Court heard the arguments of the parties on October 9, 2012.

For the reasons stated below, the Court will order that: (1) Altis's lawsuit against Qimonda, insofar as it alleges pre-petition breaches of the Joint Development Agreements, and/or pre-petition breaches of confidentiality, is a violation of the automatic stay under 11 U.S.C. § 362(a)(1), and will be enjoined (or alternatively, will be enjoined pursuant to 11 U.S.C. § 1521(a)(1)); (2) Altis's request that the District Court declare the sale to Adesto “void” is an impermissible collateral attack on this Court's March 11th Order, and will be enjoined; (3) Altis will be enjoined from seeking relief under Paragraph 2 of its Prayer for Relief, that the “Defendants be enjoined from selling or licensing any intellectual property co-owned with Altis through [the parties'] joint development relationship to the detriment of Altis,” as being an impermissible attempt to exercise control over property of the debtor within the territorial jurisdiction of the United States under 11 U.S.C. § 362(a)(3) (or alternatively, will be enjoined pursuant to 11 U.S.C. § 1521(a)(1)); (4) Altis's Motion for relief from the automatic stay will be granted in part, as to any alleged post-petition breaches of the JDA's and/or alleged violations of fiduciary duty, though collection of any verdict in favor of Altis will be stayed as to assets of the debtor located within the territorial jurisdiction of the United States pursuant to 11 U.S.C. § 1521(a)(2); and (5) the Altis lawsuit is not a violation of the stay as to Qimonda Licensing, and the Court will decline to extend the automatic stay as to Qimonda Licensing.

FINDINGS OF FACT

For purposes of this Opinion, the Court assumes familiarity with the underlying facts of the Qimonda Chapter 15 case pending in this Court.

[482 B.R. 884]

In re Qimonda AG, 462 B.R. 165 (Bankr.E.D.Va.2011).¹ In addition, the Court makes the following findings of fact:

1. Qimonda is a German company. Its business involved the development, manufacture and sale of semiconductor memory devices.

2. On January 23, 2009, Qimonda filed an Insolvency Petition with the Munich Insolvency Court in Germany. Dr. Michael Jaffé was appointed as the Insolvency Administrator.²

3. On June 15, 2009 (the “Petition Date”), Qimonda filed a Chapter 15 Petition with this Court, seeking recognition of the German insolvency proceeding as the main foreign proceeding.

4. On July 22, 2009, the Court entered an Order (the “Recognition Order”) approving the petition. Docket No. 56. Pursuant to 11 U.S.C. § 1520, this gave effect to Sections 361, 362, 363, 549 and 552 of the Bankruptcy Code (11 U.S.C. §§ 361, 362, 363, 549 & 552), with respect to property of the debtor located within the territorial jurisdiction of the United States. At the same time, the Court entered a supplemental Order (the “Supplemental Recognition Order”) granting the debtor additional relief pursuant to 11 U.S.C. § 1521, and implementing Bankruptcy Code Sections 305–307, 342, 345, 349, 350, 364–366, 503, 504, 546, 551 and 558 of the Bankruptcy Code. Docket No. 57.

The Altis Joint Development Agreements

5. In October 2003, Altis and Qimonda's predecessor, Infineon Technologies, entered into a Joint Development Agreement (the “2003 JDA”) for the purpose of jointly developing “an MRAM product demonstrator based on 7SF and a next generation MRAM technology, potentially based on 8SF semiconductor technology.” 2003 JDA, Docket 680, Ex. A, p. 2. This was later amended to the design and development of “an MRAM technology based on 180nm CMOS and a next generation MRAM technology based on 130nm CMOS or smaller feature sizes,” as well as “the development and validation of a CBRAM technology as part of the MRAM Project.” Docket 680, Ex. A, amendment, p. 34–35.

6. With respect to patents, the 2003 JDA provided that any invention, discovery, design or improvement conceived or reduced to practice (whether solely by one party, or jointly) “shall be jointly owned by the PARTIES and title to all PATENTS issued thereon shall be jointly owned by the PARTIES, unless otherwise agreed in writing by the Parties.” 2003 JDA, Sec. 7.1.

7. The 2003 JDA further provided:

7.2 Licensing Rights. INFINEON and its AFFILIATES shall have the right to grant licenses (including the right for any licensee to grant sublicenses) to third parties under any of the PATENTS as per Section 7. 1, or to assign such PATENTS to third parties,

[482 B.R. 885]

without compensation to ALTIS and/or its employees or DELEGATES and with necessary consent hereby given by ALTIS for the granting of such licenses or for such assignment, as may be required by the law of any country. ALTIS shall not have the right to grant licenses or sublicenses to third parties. (Emphasis added).

8. The 2003 JDA also contains very specific provisions, and remedies, with respect to confidential information. See 2003 JDA, §§ 5.2 (“Confidential Information”), 5.3 (“Confidentiality, General Exceptions”), 5.4 (“Exceptions”), 5.5 (“Disclosure Rights INFINEON”), 5.6 (“Disclosure Rights, ALTIS”), 5.7 (“Minor Portions”) & 5.8 (“Restricted Information”).

9. In August 2007, Altis and Qimonda entered into a similar JDA (the “2007 JDA”), for the purpose of jointly developing “MRAM and CBRAM technology, transition metal oxide memory technology and phase change memory technology.” 2007 JDA, Docket 680, Ex. B, p. 2. The 2007 JDA contained confidentiality provisions similar to those of the 2003 JDA. See 2007 JDA, §§ 4.2 (“Confidential Information”), 4.3 (“Confidentiality, General Exceptions”), 4.4 (“Exceptions”), 4.5 (“Disclosure Rights QIMONDA”), 4.6 (“Disclosure Rights, ALTIS”), 4.7 (“Minor Portions”) & 4.8 (“Restricted Information”).

10. The 2007 JDA contained different provisions relating to the respective rights of the parties in inventions, intellectual property and patents. Basically: (a) if the invention pertained uniquely to TMO (a defined term), then Qimonda would own the patent; (b) if one party created the invention, then that party would own the intellectual property rights; and (c) if the invention was jointly created, then ownership of the intellectual property rights would alternate, based chronologically on the time of the joint inventions. See 2007 JDA, § 6.1.

11. Section 6.2 of the 2007 JDA provides as follows:

6.2. Licensing Rights. QIMONDA, its SUBSIDIARIES and ALTIS and its SUBSIDIARIES shall have the right to grant licenses under the PATENTS on INVENTIONS respectively owned as per Section 6.1, or to assign its ownership in such PATENTS on INVENTIONS to third parties, without compensation to the other PARTY and/or its employees or delegates. (Emphasis added).

The Sale of Certain Patents to Adesto

12. On March 16, 2009, roughly three months before Qimonda filed its Chapter 15 petition with this Court, Qimonda entered into a Non–Disclosure Agreement with Adesto Technologies, the purpose of which was to enable the parties to explore the sale of Qimonda's patents.

13. On January 13, 2010, the Foreign Administrator filed a Motion to Establish Procedures for the Sale of Certain Patent Rights (the “Sale Procedures Motion”). Docket No. 202.

14. The Notice of Hearing contained a thirteen page Service List, and included Altis's parent corporations, IBM and Infineon. Docket No. 203. However, the Notice of Hearing did not include Altis as a noticed party.

15. The Foreign Administrator also caused to be published a Notice of his Motion to Establish Procedures in the Wall Street Journal, on January 19, 2010. Docket No. 210.

16. The Foreign Administrator's Motion drew a number of objections, including objections from Altis's parent corporations, Infineon (Docket No. 216) and IBM (Docket No. 214).

[482 B.R. 886]

17. On March 11, 2010, the Court entered an Order granting the Foreign Administrator's Motion (the “March 11th Order”). Docket No. 254. The March 11th Order provided, in part:

Any sales of the Patents conducted pursuant to the German Procedures shall not be made “free and clear” of any interests under Section 363(f) of the Bankruptcy Code or any other rights retained by the Objecting Parties, if any, and shall instead be made expressly subject to such interests and/or rights. Any rights in the Patents held by the Objecting Parties shall continue to exist as set forth under applicable law and may be prosecuted in any court or tribunal of competent jurisdiction.

Id. at ¶ 2(a).

18. Notably, under the terms of the March 11th Order, the “Objecting Parties” included IBM and Infineon, but did not include Altis.

19. The Foreign Representative filed a Notice of Intent to Sell a...