United States District Court, D. Delaware
E. Farnan, Esq., Michael J. Farnan, Esq., FARNAN LLP,
Wilmington, DE; Peter J. McAndrews, Esq., Timothy J. Malloy,
Esq., Thomas J. Wimbiscus, Esq., Paul W. McAndrews, Esq.,
Anna M. Targowska, Esq., James P. Murphy, Esq., MCANDREWS,
HELD & MALLOY, Chicago, IL.
Attorneys for TQ Delta.
Kenneth L. Dorsney, Esq., MORRIS JAMES LLP, Wilmington, DE;
Paul M. Sykes, Esq., John E. Goodman, Esq., David W. Holt,
Esq., Benn C. Wilson, Esq., Jake M. Gipson, Esq., BRADLEY
ARANT BOULT CUMMINGS LLP, Birmingham, AL.
Attorneys for Adtran.
ANDREWS, U.S. DISTRICT JUDGE
before the Court are Defendant's Motion for Summary
Judgment on the License Issue (D.I. 231) and related briefing
(D.I. 232, 255, 274).
reasons that follow, the Court will GRANT
Defendant's Motion for Summary Judgment on the License
Issue, as to the twenty-eight Patents-in-Suit asserted
against products that comply with G.992.3 [ADSL2], G.992.5
[ADSL2], and/or G.993.2 [VDSL2] standards, and as to the
other ten Patents-in-Suit (the "Disputed
Patents"). (D.I. 231).
Patents-in-Suit relate to Digital Subscriber Line
("DSL") technology. DSL technology "uses
digital encoding to provide high-speed data transmission over
existing copper wire telephone lines." (D.I. 232 at 3).
Patents-in-Suit are subject to a license held by Lantiq
Deutschland GmbH ("Lantiq"). (D.I. 233, Exh. 1,
§ 2, Schedule D). Between 1999 and 2009, Lantiq and its
predecessors paid Aware, Inc. ("Aware") to develop
DSL technology for use in Lantiq DSL chips. During that time,
Lantiq obtained a license to any patents obtained by Aware
covering the DSL chips. (D.I. 232 at 1; D.I. 255 at 4-5). As
Aware invented new DSL technologies, it entered into new or
amended licenses with Lantiq. (See, e.g., D.I. 233,
Exh. 26, Amendments 1-7). This allowed the parties "to
account for the additional value of the improved [and]
different inventions." (D.I. 255 at 7).
purchased Aware's DSL business in 2009. In doing so,
Lantiq "acquir[ed] a number of Aware's DSL-related
patents, " and renewed "its license to all
others" (the "Lantiq License"). (D.I. 232 at
2012, Plaintiff purchased the Patents-in-Suit from Aware,
subject to the Lantiq License. (D.I. 232 at 1; D.I. 255 at
5-6). In 2014, Plaintiff filed this patent infringement suit
against Defendant. (D.I.I).
accused products contain chips supplied by Lantiq. (D.I. 232
at 1). Defendant contends that as a result, it holds a
license to the Patents-in-Suit. (Id.). Plaintiff, on
the other hand, contends that Defendant does not hold a
license to the Patents-in-Suit. (D.I. 255 atl).
parties agree that Defendant holds a license to the
Patents-in-Suit under the Lantiq License, unless the patents
are covered by an exclusion in the Lantiq License (the
"Carve-Out"). (D.I. 232 at 2; D.I. 255 at 6). The
only issue before the Court is whether the Patents-in-Suit
are excluded from the Lantiq License by the Carve-Out. The
license, including the Carve-Out, reads as follows:
(i) Aware hereby grants to Lantiq and its affiliates a
non-exclusive, non-transferable (except as specified in
Section 10 of the Agreement), perpetual, world wide,
royalty-bearing (as set forth in Section 6), irrevocable
right and license to the Non-Purchased Patents relating to
the DSL Technology to use, have used, develop, have
developed, make, have made, provide services related to,
market, sell or lease DSL Products and/or Home Networking
Products. In no event shall any right or licenses granted by
Aware in this Secton 4.1.1 (i) hereunder extend to the use of
any Non-Purchased Patents in Wireless Applications. The
license granted in this Section 4.1.1 (i) shall not include a
license to patents of Aware solely used for or applicable for
products compliant with an xDSL standard other than ADSL.
128, DSL.Lite, Full Rate ADSL, ADSL2, or ADSL2, VDSL1 and
VDSL2 (including all annexes, appendices, optional features
233, Exh. 18, § 4.1.1). I refer to the final sentence as
the Carve-Out. The license goes on to state:
For clarity: the license includes a license to
those patents of Aware for products compliant with other
standards provided that those patents are applicable to the
(Id.) (italics in original). I refer to this as the
"xDSL standard[s]" referenced in the Carve-Out are
promulgated by the International Telecommunications Union
("ITU"). (D.I. 232 at 4). The ITU defines
"xDSL" as "[a]ny of the various types of
Digital Subscriber Lines." (D.I. 233, Exh. 5 at 2).
parties dispute whether Defendant's products are licensed
to two different groups of Patents-in-Suit.
the parties dispute whether Defendant's products are
licensed to the ten Disputed Patents. Plaintiff alleges that
the ten Disputed Patents cover the functionality specified in
three particular ITU standards: ITU-T G.998.1 (entitled
"ATM-based multi-pair bonding"), ITU-T G.998.2
(entitled "Ethernet-based multi-pair bonding"), and
ITU-T G.998.4 (entitled "Improved impulse noise
protection for digital subscriber line (DSL)
transceivers"). (D.I. 255 at 15; D.I. 233, Exh. 24; D.I.
233, Exh. 7; D.I. 233, Exh. 8). ITU-T G.998.1 and ITU-T
G.998.2 together are called "G.bond, " and ITU-T
G.998.4 is called "G.inp." (D.I. 232 at 5).
the parties dispute whether Defendant's products are
licensed to twenty-eight other patents. During discovery,
Defendant served an interrogatory asking Plaintiff to
"explain in detail each and every basis for [its]
contention that an [accused product] is not licensed"
under the Lantiq License. (D.I. 233, Exh. 2 at 4-6; D.I. 232
at 13). In response, Plaintiff stated:
[Defendant's] Accused Products that use a Lantiq DSL
chipset and that implement G.992.3 [ADSL2], G.992.5 [ADSL2],
and/or G.993.2 [VDSL2] are licensed under the [twenty-eight]
TQ Delta patents, but only to the extent of the G.992.3,