Sony Electronics, Inc. v. Soundview Technologies, 3:00CV754 JBA.

• Decision Date: 16 July 2001
• Docket Number: No. 3:00CV754 JBA.,3:00CV754 JBA.
• Citation: 157 F.Supp.2d 172
• Court: Connecticut Supreme Court
• Parties: SONY ELECTRONICS, INC. Consumer Electronics Assn. Electronic Industries, Inc., Plaintiffs, v. SOUNDVIEW TECHNOLOGIES, INC., Defendant, Soundview Technologies, Inc., Counterclaim Plaintiff, v. Sony Corporation of America, et al Counterclaim Defendants.

157 F.Supp.2d 172

SONY ELECTRONICS, INC. Consumer Electronics Assn. Electronic Industries, Inc., Plaintiffs, v. SOUNDVIEW TECHNOLOGIES, INC., Defendant, Soundview Technologies, Inc., Counterclaim Plaintiff, v. Sony Corporation of America, et al Counterclaim Defendants.

No. 3:00CV754 JBA.

United States District Court, D. Connecticut.

July 16, 2001.

Gale R. Peterson, San Antonio, TX, pro se.

Jacqueline D. Bucar, S. Peter Sachner, Timothy P. Jensen, Tyler, Cooper & Alcorn, New Haven, CT, Richard L. DeLucia, Richard S. Gresalfi, Elizabeth A. Gardner, Kenyon & Kenyon, New York, NY, Richard M. Steuer, Kaye, Scholer, Fierman, Hays & Handler, New York, NY, Gary M. Hoffman, Dickstein, Shapiro & Morin, Washington, DC, Stephen P. Sachner, Hitt, Sachner & Miele, Cheshire, CT, Jaime A. Siegel, Park Ridge, NJ, for Sony Electronics, Inc., Sony Corp. of America.

Jacqueline D. Bucar, S. Peter Sachner, Timothy P. Jensen, Tyler, Cooper & Alcorn, New Haven, CT, Gary M. Hoffman, Dickstein, Shapiro & Morin, Washington, DC, Stephen P. Sachner, Hitt, Sachner & Miele, Cheshire, CT, for Consumer Electronics Ass'n, Electronic Industries Alliance.

Amy S. Owen, Miles & Stockbridge, McLean, VA, for Soundview Tech, Inc.

Garrard Russ Beeney, Jeffrey Scott, Sullivan & Cromwell, New York, NY, John M. DiMatteo, Michael Stacchini, Neal Feivelson, Patterson, Belknap, Webb &amp Tyler, New York, NY, James Sicilian, Eric L. Sussman, Day, Berry & Howard, Hartford, CT, for Philips Electronic NA Corp.

Joseph L. Clasen, Robinson & Cole, Stamford, CT, John J. Bogdanski, David S. Monastersky, Howd & Ludorf, Hartford, CT, John-Henry McKim Steele, Kenneth A. Votre, Votre & Associates, New Haven, CT, Amy S. Owen, Miles & Stockbridge, McLean, VA, Raymond P. Niro, Paul C. Gibbons, John C. Janka, Robert P. Greenspoon, Niro, Scavone, Haller & Niro, Chicago, IL, Eugene M. Cummings, David M. Mundt, Cook, Alex, McFarron, Manzo, Cummings & Mehler, Chicago, IL, for Soundview Tech, Inc.

Richard M. Steuer, Kaye, Scholer, Fierman, Hays & Handler, New York, NY, Michael S. Culver, Oliff & Berridge, Alexandria, VA, for Sony Corp. of America.

John E. Coffey, Reed, Smith, Hazel & Thomas, Falls Church, VA, for Philips Electronics NA Corp.

Joseph L. Clasen, David J. Burke, Brian E. Moran, James M. Ruel, Robinson & Cole, Stamford, CT, Vincent J. Belusko, Robert S. McArthur, Eric Shih, Morrison & Foerster, Los Angeles, CA, Les J. Weinstein, Squire, Sanders, Dempsey, Los Angeles, CA, for Mitsubishi Digital Electronics America, Inc.

William M. Bloss, Jacobs, Grudberg, Belt & Dow., P.C., New Haven, CT, Joseph L. Clasen, James M. Ruel, Robinson & Cole, Stamford, CT, Vincent J. Belusko, Robert S. McArthur, Eric Shih, Morrison & Foerster, Los Angeles, CA, Les J. Weinstein, Squire, Sanders, Dempsey, Los Angeles, CA, for Mitsubishi Electronics America, Inc.

Richard J. Buturla, Robert L. Berchem, Berchem, Moses & Devlin, P.C., Milford, CT, Steven M. Pesner, Robert A. Johnson, Mira Helms Martinez, Akin, Gump, Strauss, Hauer & Feld, New York, NY, Adam Sheeh, Akin, Gump, Strauss, Hauer & Feld, Austin, TX, for Samsung Electronics America, Inc.

Glenn M. Cunningham, Patrick M. Fahey, Shipman & Goodwin, Hartford, CT, Thomas J. Nolan, John S. Schuster, Dale J. Giali, Ben M. Davidosn, Keri R. Curtis, Julie S. Gabler, Andrew Eliseev, Howrey, Simon, Arnold & White, Los Angeles, CA, Lewis G. Schwartz, Stamford, CT, for Pioneer Electronics (USA) Inc.

William M. Bloss, Jacobs, Grudberg, Belt & Dow., P.C., New Haven, CT, Alinor Clemans Sterling, Jacobs, Grudberg, Belt & Dow, P.C., new Haven, CT, Thomas G. Gallatin, jr., Latham & Watkins, New York, NY, Michael J. Shea, Larry S. Nixon, Jeffry H. Nelson, Nixon & Vanderhye, Arlington, VA, for Toshiba America Consumer Products, Inc.

William M. Bloss, Jacobs, Grudberg, Belt & Dow., P.C., New Haven, CT, Alinor Clemans Sterling, Robert W. Adams, Mickey Gill, Nixon & Vanderhye, Arlingtin, VA, for Sharp Electronics Corp.

William M. Bloss, Jacobs, Grudberg, Belt & Dow., P.C., New Haven, CT, Morton Amster, Michael J. Berger, Joseph M. Casino, John S. Economou, Abraham Kasdan, Amster, Rothstein & Ebenstein, New York, NY, for Matsushita Elec. Corp. of America, JVC Americas Corp.

William M. Bloss, Jacobs, Grudberg, Belt & Dow., P.C., New Haven, CT, Alinor Clemans Sterling, Nixon & Vanderhye, Arlingtin, VA, William J. Speranza, Wiggin & Dana, Stamford, CT, Kathleen McGillis Haley, Carl W. Schwarz, Michael D. Switzer, McDermott, Will & Emery, Washington, DC, for Hitachi America Ltd.

MEMORANDUM OF DECISION [DOC. # 148, # 152, # 170, # 172]

ARTERTON, District Judge.

This patent and antitrust case concerns the intellectual property rights of counterclaim plaintiff Soundview Technologies, Inc. (Soundview) to the V-Chip technology utilized by a number of television manufacturers, counterclaim defendants. Familiarity with the procedural and factual background of this litigation is presumed. See, e.g., Ruling on Counterclaim Defendant EIA's Motion to Dismiss dated June 14, 2001 [doc. # 262]. Relevant to the instant motion, counterclaim defendant Sharp Electronics Corporation (Sharp) claims it received an implied governmental license to use Soundview's patented V-chip technology when Congress passed the Telecommunications Act of 1996 (the 1996 Act); in the alternative, it argues that Soundview is both legally and equitably estopped from bringing this infringement action because of its conduct before the Federal Communications Commission (FCC) during the proceedings to promulgate regulations under the 1996 Act. All of the remaining counterclaim defendants (Sony, Toshiba, Matsushita, JVC, Mitsubishi Digital Electronics, and the Electronic Industries Association) have moved to join Sharp's motion. See doc. # 148, # 152, # 170, # 172. For the reasons that follow, the motion is DENIED.

Standard

Sharp acknowledges that it has the burden of proof on its affirmative defenses of implied license and estoppel. See, e.g., Mooney v. City of New York, 219 F.3d 123 (2d Cir.2000), citing United States v. Omdahl, 104 F.3d 1143, 1146 (9th Cir.1997) (party asserting the affirmative defense of estoppel has burden of proof). In order to prevail on its summary judgment motion, therefore, Sharp must demonstrate that no reasonable fact-finder could find against it on its affirmative defenses, and that it is entitled to judgment as a matter of law. The Court further notes that at the time this motion was filed, Soundview had not yet taken any discovery, and "[o]nly in the rarest of cases may summary judgment be granted against a plaintiff who has not been afforded the opportunity to conduct discovery." Hellstrom v. U.S. Dep't of Veterans Affairs, 201 F.3d 94, 97 (2d Cir. 2000).

Discussion

In patent law, the granting of a license "signifies a patentee's waiver of the statutory right to exclude others from making, using, or selling the patented invention." Wang Laboratories, Inc. v. Mitsubishi Electronics America, Inc., 103 F.3d 1571, 1580 (Fed.Cir.1997), cert. denied, 522 U.S. 818, 118 S.Ct. 69, 139 L.Ed.2d 30 (1997). An implied license, like an express license, is a complete defense to a claim of patent infringement. Carborundum Company v. Molten Metal Equipment Innovations, Inc., 72 F.3d 872, 878 (Fed.Cir.1995). An implied license may arise by acquiescence, conduct, equitable estoppel or by legal estoppel. Wang, 103 F.3d at 1580 (citations omitted). "These labels describe not different kinds of licenses, but rather different categories of conduct which lead to the same conclusion: an implied license." Id. The Federal Circuit has noted that "judicially implied licenses are rare under any doctrine." Wang, 103 F.3d at 1581; see also Stickle v. Heublein, 716 F.2d 1550, 1558 (Fed.Cir. 1983) (referring to "the relatively few instances where implied licenses have been found ...."). Whether an implied license exists is a question of law. Carborundum, 72 F.3d at 877.

Sharp claims that two bases exist for the finding of an implied license: first (what Sharp calls "legal estoppel"), the United States government granted it an implied license by virtue of its mandate in the 1996 Act that V-chip technology be incorporated into new television sets sold in this country; and second, that Soundview is equitably estopped from denying the existence of an implied license because it had a legal obligation to inform the FCC of its patent claims and of the license granted to the U.S. government. The Court concludes that summary judgment is inappropriate on either of these grounds, as Sharp has failed to demonstrate that it is entitled to judgment as a matter of law.

In analyzing the federal government's authority to grant licenses on Soundview's patent (the '584 patent), the Court agrees with Sharp that the relevant language is that of paragraph 1(b) of Executive Order No. 10096, which provides for the reservation to the government of a non-exclusive, royalty-free license "with power to grant licenses for all governmental purposes." Sharp Ex. 5. All of the documents and forms filled out by Elam and the other inventor of the '584 patent reference this provision, and contrary to Soundview's position, the language of paragraph 1(b) does on its face reserve to the government the power to grant licenses. Such licenses can only be granted for "governmental purposes," however, and Sharp's argument founders on this requirement. Sharp maintains that `governmental purposes' must be interpreted to mean anything the government does, which includes legislating to require that V-chips be included in television sets. As Soundview caustically points out, however, "Sharp and its co-conspirators sell their TV sets to consumers to watch `Wheel of Fortune,' not the United States government to run air traffic control centers or the like." Soundview Mem. at 19. More to the point, the legislation adopted by Congress, while manifesting a "compelling interest" in implementing the technology to allow the blocking of...