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Mandamus Denied but Jurisdictional Door Left Open a Crack

The US Court of Appeals for the Federal Circuit denied a patent owner’s writ of mandamus seeking to prevent a defendant from amending its answer to add an affirmative licensing defense, but also noted that the defense was added only after the district court found that there were no remaining claims. In re VLSI Technology LLC, Case No. 24-116 (Fed. Cir. Mar. 18, 2024) (Moore, Taranto, Chen, JJ.)

VLSI asserted four patents against Intel in the Northern District of California. In December 2023, the district court granted summary judgment that two of the patents were not infringed and denied summary judgment of noninfringement on the remaining two patents. The parties additionally submitted cross motions for summary judgment on a licensing defense that turned on a forum selection clause, but the court denied both motions. To deprive the court of jurisdiction, VLSI granted Intel a covenant not to sue for infringement of the remaining two patents in the case. Two days later, Intel moved to amend its answer to add a counterclaim for a declaratory judgment that Intel was licensed to VLSI’s entire patent portfolio. The district court granted Intel’s motion, and VLSI filed a mandamus petition to block Intel’s amendment.

The Federal Circuit denied VLSI’s petition for two primary reasons. First, the Court determined that VLSI had not shown that it had no other available means of obtaining relief. The district court expressly invited the parties to brief issues pertaining to Intel’s licensing defense in subsequent briefing, and VLSI had since filed a motion to dismiss pertaining to this very issue. The Court also noted that VLSI could raise this issue on appeal after a final judgment. Second, the Court determined that VLSI failed to show that the district court abused its discretion in allowing Intel to amend its answer, finding that Intel acted diligently in seeking to amend its answer and that VLSI had long since known about the potential defense.

With respect to the substantive issue of whether the district court had subject matter jurisdiction, the Federal Circuit declined to offer an opinion at this stage. Nevertheless, in an apparent message to the court below, the final sentence of the Court’s opinion reads, “[w]e only note that Intel’s motion to amend its answer was filed after the court determined there were no remaining claims, such that no case or controversy remained before the court.”

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Liability for Copyright Infringement Attaches if Conduct Exceeds Scope of License

The US Court of Appeals for the Ninth Circuit revived a software owner’s copyright infringement suit because the district court erred in granting summary judgment of no infringement by failing to analyze whether the accused infringer exceeded the scope of a copyright license. Oracle America, Inc., et al. v. Hewlett Packard Enterprise Company, Case No. 19-15506 (9th Cir. Aug. 20, 2020) (Smith, J.).

Oracle owns registered copyrights for Solaris software, including copyrighted software patches. Oracle requires its customers have a prepaid annual support contract, for each server they desire to be under support, to access the software patches. Customers under a support plan can access patches through an Oracle support website.

Hewlett Packard Enterprise (HPE) provides a “one-stop-shop” for support to its customers, including HPE servers running Solaris. HPE provides this support directly and through its partners. One of HPE’s partners is Terix Computer Company. Terix arranged for joint HPE-Terix customers to have Oracle support for all of their servers through a single server support plan. Terix accomplished this by downloading Solaris software patches, using the customer’s credentials (created using a Terix-supplied credit card), to make copies for servers that were not part of the support contract.

In 2013, Oracle sued Terix for copyright infringement. The court granted Oracle summary judgment, and Terix stipulated to a judgment on the claims without admitting liability. Oracle and HPE entered into an agreement, effective May 6, 2015, to toll the statute of limitations for any claims Oracle might assert against HPE.

In 2016, Oracle sued HPE for direct copyright infringement concerning HPE’s direct support customers, and for indirect infringement concerning joint HPE-Terix customers. Oracle also sued for claims of intentional interference and unfair competition under California state law. The parties did not dispute that the tolling agreement applied, so the court considered whether the copyright infringement claims were barred for conduct before May 6, 2012. The Copyright Act provides that a copyright infringement claim is subject to a three-year statute of limitations, which runs separately for each violation. Under Ninth Circuit law, a copyright infringement claim begins to accrue “when a when a party discovers, or reasonably should have discovered, the alleged infringement.” Importantly, actual or constructive knowledge triggers the statute of limitations. The Ninth Circuit has explained that suspicion of copyright infringement places a duty on the copyright holder to investigate further into possible infringement or lose the claim.

Oracle conceded that it had concerns about Terix and suspicions about HPE as early as 2010, but argued that HPE used fraudulent means to keep Oracle unaware of its actions, so it had no duty to inquire. The district court disagreed, finding that once Oracle had constructive knowledge, the doctrine of fraudulent concealment was no longer an option to toll the limitations. Because Oracle failed to investigate HPE, the court determined that HPE was entitled to summary judgment on the infringement claims for pre-May 6, 2012, conduct. Oracle appealed.

The Ninth Circuit explained that to prove indirect infringement, Oracle had to show that [...]

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Lightbulb Moment: It’s Possible to Grant an Implied Copyright Sublicense

Addressing for the first time the issue of implied copyright sublicenses, the US Court of Appeals for the First Circuit held that where a copyright license provides an unrestricted right to grant sublicenses, a copyright licensee may do so impliedly and without express language. Photographic Illustrators Corp. v. Orgill, Case No. 19-1452 (1st Cir. Mar. 13, 2020) (Kayatta, J.).


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