Wiav Solutions LLC v. Motorola Inc
| Decision Date | 22 December 2010 |
| Docket Number | No. 2010-1266,2010-1266 |
| Parties | WIAV SOLUTIONS LLC, Plaintiff-Appellant, v. MOTOROLA, INC., Defendant-Appellee, and NOKIA CORPORATION and NOKIA INC., Defendants-Appellees, and PALM, INC., Defendant-Appellee, and MINDSPEED TECHNOLOGIES, INC., Defendant-Appellee, and SONY ERICSSON MOBILE COMMUNICATIONS AB and SONY ERICSSON MOBILE COMMUNICATIONS (USA), INC., Defendants-Appellees, and PERSONAL COMMUNICATIONS DEVICES LLC and PERSONAL COMMUNICATIONS DEVICES HOLDINGS, LLC, and UTSTARCOM, INC., Defendants. |
| Court | U.S. Court of Appeals — Federal Circuit |
United States Court of appeals
for the Federal Circuit Appeal from the United States District Court for the Eastern District of Virginia in case No. 09-CV-0447, Senior Judge Robert E. Payne.
J. Michael Jakes, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief were E. Robert Yoches; Christopher Schultz, of Cambridge, Massachusetts; Scott A. Herbst and Lily Lim, of Palo Alto, California.
Joseph E Thomas, Thomas Whitelaw & Tyler LLP, of Irvine, California, for defendant-appellee Mindspeed Technologies, Inc. With him on the brief for Mindspeed was Kerri A. Rich.
William K. West, Jr., Howrey LLP, of Washington, DC, argued for all defendants-appellees With him on the brief for Motorola, Inc., were Gregory J. Commins, Jr., and Andrew R. Sommer, of Washington, DC; and Jonathan E. Retsky, of Chicago, Illinois. On the brief for Nokia Corporation et al., were Frank G. Smith, III, Siraj M. Abhyankar, John D. Haynes and Ryan W. Koppelman, of Alston & Bird LLP, of Atlanta, Georgia.
On the brief for Sony Ericsson Mobile Communications AB et al. were Kevin P.B. Johnson, Quinn Emanuel Urquhart Oliver & Hedges LLP, of Redwood Shores, California, and Eric Huang, of New York, New York. On the brief for Utstarcom, Inc. was Dana D. Mcdaniel. On the brief for Palm, Inc., were Robert M. Tyler and John Lee Newby, II, McGuire Woods LLP, of Richmond, Virginia. On the brief for Personal Communications Devices LLC et al. were Thomas R. DeSimone, Gibbons P.C., of New York, New York, and Andrew M. Grodin, of Newark, New Jersey.
WiAV Solutions LLC ("WiAV") is the owner of United States Patent No. 6, 539, 205 ("the '205 Patent") and No. 6, 680, 920 ("the '920 Patent") and the purported exclusive licensee in a specific field of use of the following seven patents owned by Mindspeed Technologies, Inc. ("Mind-speed"): United States Patent No. 6, 104, 992; No. 6, 256, 606; No. 6, 385, 573 ("the '573 Patent"); No. 6, 507, 814; No. 6, 633, 841; No. 7, 120, 578; and No. 7, 266, 493 ("the '493 Patent") (collectively, "the Mindspeed Patents"). WiAV filed a complaint alleging that defendants Motorola, Inc.; Nokia Corporation; Nokia Inc.; Palm, Inc.; Sony Ericsson Mobile Communications (USA), Inc.; Personal Communications Devices LLC; Personal Communications Devices Holdings, LLC; and UTStarcom, Inc. (collectively, "the Defendants") and Sony Ericsson Mobile Communications AB had infringed all nine patents. At the urging of the Defendants, the United States District Court for the Eastern District of Virginia dismissed the counts of WiAV's complaint concerning the Mindspeed Patents for lack of constitutional standing. WiAV Solutions LLC v. Motorola, Inc., 679 F. Supp. 2d 639 (E.D. Va. 2009) ("Dismissal Order"). The district court concluded that WiAV lacked constitutional standing to assert the Mindspeed Patents against the Defendants because several third parties have a limited right to license the patents in WiAV's alleged exclusive field of use. Id. at 648.
Because the district court erred when it concluded that the third-party licensing rights at issue deprived WiAV of constitutional standing to assert the Mindspeed Patents against the Defendants, this court reverses the judgment of the district court and remands for further proceedings consistent with this opinion.
A. The Mindspeed Patents
The Mindspeed Patents relate to aspects of signal transmission, as well as the encoding and decoding of data. At the center of this dispute are licensing rights in the Mindspeed Patents held by six third parties: Conexant Systems, Inc. ("Conexant"); Rockwell Science Center, LLC ("Rockwell Science Center"); Skyworks Solutions, Inc. ("Skyworks"); Qualcomm Incorporated ("Qualcomm"); Mindspeed; and Sipro Lab Telecom ("Sipro"). The rights stem from a series of spin offs and licensing agreements dating back to the late 1990's. These transactions, as well as the transaction purporting to grant WiAV an exclusive license to the Mindspeed Patents, are summarized below.
Rockwell International Corporation ("Rockwell International"), the original owner of the Mindspeed Patents, effected an assignment of the patents to Conexant when Rockwell International spun off the company in December 1998. As part of the spin-off, Conexant granted a subsidiary of Rockwell International, Rockwell Science Center, a limited, non-exclusive license to use the Mindspeed Patents in connection with its business. Conexant also permitted Rockwell Science Center to: (1) sublicense Rockwell International and its "Affiliates," i.e., any entity that "controls, is controlled by, or is under common control with" Rockwell International; and (2) transfer the license in connection with the sale by either Rockwell International or its Affiliates of all or part of their respective businesses "to which such intellectual property rights relate."
When Conexant subsequently spun off a portion of its business as Skyworks in January 2003, Conexant and Skyworks executed an agreement giving Skyworks an exclusive license in the field of "Wireless Handsets" to commercialize products covered by the Mindspeed Patents. The agreement defines a "Wireless Handset" as a device (or a component of a device) that "is capable of wireless communication of real-time voice" and "communicates directly to a Wireless WAN Infrastructure." Within this limited field, the agreement grants Skyworks the exclusive right to assert infringement claims against third parties and to assign or sublicense its rights as it sees fit. The agreement also provides Skyworks the exclusive right to license the patents to Qualcomm in all fields, as well as the right to assert infringement claims under the patents against Qualcomm in all fields, but prohibits Skyworks from assigning these rights without the prior written consent of Conexant.
For its part, Conexant retained the right under the agreement to "make, have made, use, offer to sell, export, and import Conexant Products in the field of Wireless Handsets." The agreement defines "Conexant Products" as products in which "the specifications and designs... are developed or owned by, or exclusively licensed to, Conexant or a Subsidiary of Conexant." Conexant may license this right as part of "a divesture, sale, or spin-off of any Conexant business unit... and/or... to any third party that works under a joint development agreement with Conexant" to develop a Conexant Product. Conexant also reserved the right to sublicense its wholly-owned subsidiary Mindspeed with respect to "Mindspeed Products"—products having "specifications and designs... developed or owned by, or exclusively licensed to Mind-speed or a Mindspeed Subsidiary"—including a limited right to allow Mindspeed to assign and license its rights in the Mindspeed Patents.
Conexant assigned title to the Mindspeed Patents to their current holder, Mindspeed, when Conexant spun off Mindspeed in June 2003. In addition, Conexant gave Mindspeed rights in the Mindspeed Patents similar to those Conexant had reserved for itself when it spun off Skyworks. In particular, Conexant granted Mindspeed a non-exclusive license to, among other things, produce and market Mindspeed Products. Conexant also permitted Mindspeed to: (1) assign some of its rights to Mindspeed subsidiaries; and (2) sublicense its rights to Mindspeed subsidiaries; to divested, sold, or spun-off business units; and to joint development partners working on Mindspeed Products. Conexant again reserved for itself a similar set of rights to practice, assign, and license the patents with respect to Conexant Products.
In April 2005, two years after Skyworks received the right to license Qualcomm, Skyworks exercised that rightand granted Qualcomm a non-exclusive license to make, import, and sell components for a particular type of wireless communication device. The license permits Qualcomm to extend this right to Qualcomm "Affiliates," i.e., of Qualcomm.
The parties do not dispute that Mindspeed granted Sipro the right to offer a limited license to two of the Mindspeed Patents (the '573 and '493 patents) as part of a patent pool for the G.729.1 speech coding standard. The license permits licensees to manufacture and sell "Licensed Products" for the sole purpose of encoding and decoding data in accordance with the speech coding standard. The term "Licensed Products" excludes all "Wireless Applications," which the license defines as any product or service capable of supporting communication over a wireless interface. But the license notes that WLAN, a wireless communication method, is not included within the definition of "Wireless Application."
Finally, in September 2007, Skyworks and WiAV entered into an agreement granting WiAV the rights WiAV asserts in the underlying action. Under the agreement, WiAV received "all of Skyworks' right, title, and interest, in and to the [Mindspeed Patents] in the Wireless Handset field of use." The agreement explicitly provides WiAV the "exclusive right" to (1) make, use, offer to sell, export, and import hardware products in...
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