Uniloc 2017 LLC v. Google LLC
| Decision Date | 04 November 2022 |
| Docket Number | 2021-1498,2021-1500,2021-1501,2021-1502,2021-1503,2021-1504,2021-1505,2021-1506,2021-1507,2021-1508,2021-1509 |
| Parties | UNILOC 2017 LLC, Plaintiff-Appellant v. GOOGLE LLC, Defendant-Appellee |
| Court | U.S. Court of Appeals — Federal Circuit |
Appeals from the United States District Court for the Northern District of California in Nos. 4:20-cv-04355-YGR 4:20-cv-05330-YGR, 4:20-cv-05333-YGR, 4:20-cv-05334- YGR 4:20-cv-05339-YGR, 4:20-cv-05341-YGR, 4:20-cv- 05342-YGR 4:20-cv-05343-YGR, 4:20-cv-05344-YGR, 4:20- cv-05345-YGR, 4:20-cv-05346-YGR, Judge Yvonne Gonzalez Rogers.
JEFFREY A. LAMKEN, MoloLamken LLP, Washington, DC, argued for plaintiff-appellant. Also represented by KENNETH E. NOTTER, III, LUCAS M. WALKER; JORDAN RICE, Chicago, IL; AARON JACOBS, Prince Lobel Tye LLP, Boston, MA.
DAN L. BAGATELL, Perkins Coie LLP, Hanover, NH, argued for defendant-appellee. Also represented by ANDREW DUFRESNE, SOPEN B. SHAH, Madison, WI; ELIZABETH BRANN, Paul Hastings LLP, San Diego, CA; ROBERT UNIKEL, Chicago, IL.
Before LOURIE, DYK, and HUGHES, Circuit Judges.
Uniloc 2017 LLC ("Uniloc 2017") brought multiple patent infringement suits against Google LLC in the Eastern District of Texas. Uniloc 2017 alleged that various Google products infringed a variety of patents directed to innovations in multimedia content delivery (Nos. 6,628,712, 6,952,450, 7,012,960, and 8,407,609), IT security (Nos. 8,949,954 and 9,564,952), high-resolution imaging (No. 6,349,154), network connectivity (No. 8,194,632), video conferencing (No. 6,473,114), and image and text searching (Nos. 6,253,201 and 6,366,908). Those suits were later transferred to the Northern District of California. Google moved to dismiss the actions, alleging Uniloc 2017 lacked standing, and thus the court lacked subject matter jurisdiction. Google's theory was that Uniloc 2017 lacked standing because it lacked the right to exclude, its predecessors having granted Fortress Credit Co. LLC a license and an unfettered right to sublicense to the asserted patents as part of a financing arrangement.
Uniloc 2017 argued that its predecessors had not granted such a license to Fortress and, even if they had, the license would not eliminate Uniloc 2017's standing. Uniloc 2017 further argued that, in any event, any license had been eliminated by a Termination Agreement executed between Uniloc 2017's predecessors and Fortress before these suits commenced. The district court granted Google's motion to dismiss, finding that a license had been granted; that the license survived the Termination Agreement; and that Uniloc 2017 therefore lacked standing. We hold that the district court erred in interpreting the Termination Agreement and in concluding there was no subject matter jurisdiction. We reverse and remand.
In two related appeals,[1] we today determine that Uniloc 2017 is collaterally estopped from arguing both that Uniloc 2017's predecessors had not licensed Fortress and that Fortress's license did not deprive Uniloc 2017 of standing. Uniloc USA, Inc. v. Motorola Mobility LLC, __F. 4th__ (Fed. Cir. 2022). This case presents a different issue: Whether the Termination Agreement terminated Fortress's license, and thereby restored Uniloc 2017's standing to sue, an issue as to which there is no claim of collateral estoppel.
The background of the present controversy is as follows. On December 30, 2014, Uniloc 2017's predecessors, Uniloc Luxembourg ("Uniloc Lux") and Uniloc USA (together, "the Unilocs"), entered into a Revenue Sharing and Note and Warrant Purchase Agreement ("RSA") with Fortress in connection with a loan Fortress made to the Unilocs. The RSA stated:
[T]he [Unilocs] shall grant to [Fortress], for the benefit of the Secured Parties, a non-exclusive, royalty free, license (including the right to grant sublicenses) with respect to the Patents, which shall be evidenced by, and reflected in, the Patent License Agreement. [Fortress] and the Secured Parties agree that [Fortress] shall only use such license following an Event of Default.
J.A. 593, § 2.8. In other words, Fortress would effectively obtain a license if there was an Event of Default.
There were three enumerated Events of Default, one of which was the failure "to perform or observe any of the covenants or agreements contained in Article VI." J.A. 602 § 7.1.2. One such covenant was: "As of March 31, 2017 and the last day of each fiscal quarter thereafter, the [Unilocs] shall have received at least $20,000,000 in Actual Monetization Revenues during the four fiscal quarter period ending on such date." J.A. 596 § 6.2.2.
The contingent license referenced in the RSA was formally granted in the Patent License Agreement ("License Agreement") that was executed between the Unilocs and Fortress on December 30, 2014. The License Agreement stated that the license was "non-exclusive, transferrable, sub-licensable, divisible, irrevocable, fully paid-up, royalty-free and worldwide." J.A. 613, § 2.1.
Google argues that Fortress acquired a license because the Unilocs committed an Event of Default by failing to achieve the specified patent-monetization revenues. While there appears to be no dispute that the revenue targets were not achieved, Uniloc 2017 disputes that this was an Event of Default because "Fortress did not regard Uniloc as in default." Appellant's Opening Br. 53.
On May 3, 2018, the Unilocs and Fortress entered into the Payoff and Termination Agreement ("Termination Agreement") to completely pay off all loan obligations arising from the RSA. The Termination Agreement stated that "the Revenue Sharing Agreement . . . [and] the Patent License Agreement . . . shall terminate." J.A. 913, § 1(d)(i). On that same day, Uniloc 2017 acquired all relevant patents from Uniloc Lux.
In November and December of 2018, Uniloc 2017[2] filed several patent infringement suits in the Eastern District of Texas against Google, each alleging infringement of different patents in its patent portfolio.[3] Each asserted patent had been included in the License Agreement. In response, Google filed motions to dismiss for lack of standing and improper venue. The Eastern District of Texas agreed with Google that venue was improper, and the cases at issue were transferred to the Northern District of California. After transfer, the court ordered that Google file a single motion to dismiss that would govern the transferred cases. Google did so, and on December 22, 2020, the district court granted Google's motion and dismissed the Google cases for lack of subject matter jurisdiction.
The district court found that Uniloc 2017[4] committed at least one Event of Default sufficient to trigger Fortress's acquisition of the license. Having found that Fortress acquired the license, the district court concluded that Uniloc 2017 no longer had the right to exclude. Relying on cases involving exclusive licensees, as opposed to patent owners, the district court then concluded that a patent plaintiff must have exclusionary rights in the patent to have standing to sue for infringement and that a patent owner does not have such rights if another party can license the patent to the alleged infringer. It followed that Uniloc 2017 lacked standing.
The district court also found that the Termination Agreement did not eliminate Fortress's license because, under New York law, the fact that the license was "irrevocable" under the terms of the License Agreement unambiguously meant that the license survived termination because an "irrevocable" license is "not revocable for any reason." J.A. 15-19 (emphasis in original).
Uniloc 2017 appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(1). We review a dismissal for lack of subject matter jurisdiction de novo. Microsoft Corp. v. GeoTag, Inc., 817 F.3d 1305, 1311 (Fed. Cir. 2016).
In light of our decisions today in the two related appeals Uniloc USA, Inc. v. Motorola Mobility LLC, 21-1555 (Fed. Cir. 2022) and Uniloc 2017 LLC v. Blackboard Inc., 21-1795 (Fed. Cir. 2022),[5] the sole issue here is whether the Termination Agreement eliminated any license Fortress had under the RSA and License Agreement. If the license was eliminated, the parties agree that Uniloc 2017 has standing in this case.
This dispute is one of contract interpretation. We review a district court's contract interpretation de novo. Sevenson Env't Servs., Inc. v. Shaw Env't, Inc., 477 F.3d 1361, 1364-65 (Fed. Cir. 2007).
Both parties agree that New York contract law governs the interpretation of the termination issue. We therefore apply New York contract law.[6]See Lamle v. Mattel, Inc., 394 F.3d 1355, 1359 (Fed. Cir. 2005); Plastronics Socket Partners, Ltd. v. Hwang, 2022 WL 108948, at *2 (Fed. Cir. Jan. 12, 2022).
"A court's fundamental objective in interpreting a contract is to determine the parties' intent from the language employed and to fulfill their reasonable expectations." Harmony Rockaway, LLC v. Gelwan, 160 N.Y.S.3d 294 296 (App. Div. 2021) (citing Gilbane Bldg. Co./TDX Constr. Corp. v. St. Paul Fire &Marine Ins. Co., 97 N.E.3d 711, 712-13 (N.Y. 2018)). "[W]here the terms of a contract are clear and unambiguous, the intent of the parties must be found within the four corners of the contract, giving a practical interpretation to the language employed and reading the contract as a whole." Tomhannock, LLC v. Roustabout Res., LLC, 128 N.E.3d 674, 675 (N.Y. 2019) (citation omitted). "A contract is unambiguous if the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the [agreement] itself, and concerning which there is no reasonable basis for a difference of opinion." Greenfield v. Philles Recs., Inc., 780 N.E.2d...
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