Wi-Lan USA, Inc. v. Ericsson, Inc. , 574 F. App'x 931 ( 2014 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
WI-LAN USA, INC. AND WI-LAN, INC.,
Plaintiffs-Appellants,
v.
ERICSSON, INC. AND
TELEFONAKTIEBOLAGET LM ERICSSON,
Defendants-Appellees.
______________________
2013-1485
______________________
Appeal from the United States District Court for the
Southern District of Florida in No. 12-CV-23569, Judge
Donald M. Middlebrooks.
----------------------
WI-LAN, INC.,
Plaintiff-Appellee,
v.
ALCATEL-LUCENT USA, INC.,
Defendant,
AND
TELEFONAKTIEBOLAGET LM ERICSSON,
ERICSSON, INC., SONY MOBILE
COMMUNICATIONS AB (also known as Sony Eric-
2 WI-LAN USA, INC. v. ERICSSON, INC.
son Mobile Communications AB), AND SONY
MOBILE COMMUNICATIONS (USA), INC. (also
known as Sony Ericsson Mobile Communications
(USA), Inc.),
Defendants-Appellants.
______________________
2013-1566
______________________
Appeal from the United States District Court for the
Eastern District of Texas in No. 10-CV-0521, Chief Judge
Leonard Davis.
______________________
Decided: August 1, 2014
______________________
MATTHEW POWERS, Tensegrity Law Group, LLP, of
Redwood Shores, California, argued for Wi-Lan Inc. et al.
On the brief were DAVID B. WEAVER, STEPHEN M. HASH,
AVELYN M. ROSS and AJEET P. PAI, Vinson & Elkins, LLP,
of Austin, Texas. Of counsel was AARON MATTHEW
NATHAN, Tensegrity Law Group, LLP, of Redwood Shores,
California.
JOSHUA C. KRUMHOLZ, Holland & Knight LLP, of Bos-
ton, Massachusetts, argued for Telefonaktiebolaget LM
Ericsson, et al. With him on the brief were JACOB K.
BARON, for Telefonaktiebolaget LM Ericsson, et al.; BRUCE
S. SOSTEK, RICHARD L. WYNNE, JR., J. MICHAEL HEINLEN,
and JUSTIN S. COHEN, Thompson & Knight, LLP, of Dal-
las, Texas, for Telefonaktiebolaget LM Ericsson, et al;
KARA F. STOLL and JASON L. ROMRELL, Finnegan, Hender-
son, Farabow, Garrett & Dunner, LLP, of Washington,
DC, for Sony Mobile Communications AB, et al.
______________________
WI-LAN USA, INC. v. ERICSSON, INC. 3
Before MOORE, O’MALLEY, and WALLACH, Circuit Judges.
O’MALLEY, Circuit Judge.
Wi-LAN USA Inc. and Wi-LAN Inc. (collectively, “Wi-
LAN”) brought two separate patent infringement suits
against Ericsson Inc., Telefonaktiebolaget LM Ericsson,
Sony Mobile Communications AB, and Sony Mobile
Communications (USA) Inc. (collectively, “Ericsson”)—one
in the United States District Court for the Eastern Dis-
trict of Texas, No. 10-CV-0521 (“the Texas court”), and the
other in the United States District Court for the Southern
District of Florida, No. 12-CV-23569 (“the Florida court”).
The parties asked both district courts to interpret a prior
agreement between Wi-LAN and Ericsson, which alleged-
ly limited Wi-LAN’s ability to assert certain patents
against Ericsson. The Texas and Florida courts granted
contradictory summary judgments, which the parties
appeal. For the reasons below, we affirm the Texas
court’s decision and reverse the Florida court’s decision.
I. BACKGROUND
The agreement at issue references two wireless
standards. The Universal Mobile Telecommunications
System (“UMTS”) standard broadly defines third genera-
tion cellular network specifications and protocols—more
commonly known as “3G.” The UMTS standard consists
of a number of narrower standards, including High Speed
Packet Access (“HSPA”). HSPA is a wireless standard
that specifically relates to the transfer of data between
the network and a mobile device. Because HSPA is a
subpart of UMTS, a device can be UMTS-compliant, but
not HSPA-compliant. Conversely, if the device is HSPA-
compliant, then it must be UMTS-compliant.
4 WI-LAN USA, INC. v. ERICSSON, INC.
A. The Wi-LAN-Ericsson Agreement
In October 2006, Wi-LAN sent a letter to Ericsson, al-
leging infringement of four of Wi-LAN’s patents (“the Wi-
LAN Patents”). 1 Wi-LAN asserted that the four patents
covered all HSPA-compliant products. Because Ericsson
sold HSPA-compliant products, according to Wi-LAN,
Ericsson infringed the Wi-LAN Patents. Wi-LAN re-
tained McKool Smith PC (“McKool”) to assist with the
assertion of its four HSPA patents. McKool, however, had
previously represented Ericsson in a number of matters
involving UMTS related technology, which encompasses
HSPA technology. To resolve the alleged infringement
and avoid a potential conflict of interest posed by
McKool’s representation of Wi-LAN, the parties executed
the Patent Conflict and Resolution Agreement (“the
PCRA”) on February 13, 2008. 2 The PCRA granted
certain rights to Ericsson in exchange for $100,000 as
consideration. The exact scope of those rights is at issue
in this appeal. 3
Three Articles in the PCRA grant rights to Ericsson:
(1) Article III, titled “Non-Assert and Release” (“the Non-
Assert Provision”); (2) Article IV, titled “Patents Other
Than the Wi-LAN Patents” (“the Damages Provision”);
and (3) Article VII, titled “Most-Favoured Licensee Provi-
1 U.S. Patent Nos. 5,282,222; 6,192,068; 6,320,897;
and RE37,802.
2 Sony has a separate contract with Wi-LAN, but
the parties all agree that the language is materially the
same. For simplicity, we will refer only to the LM Erics-
son contract.
3 To resolve the potential McKool conflict, the
PCRA also stated that neither party could engage McKool
to represent them in any dispute involving the other
party.
WI-LAN USA, INC. v. ERICSSON, INC. 5
sions” (“the MFL Provision”). The parties disagree about
the scope of each of these provisions.
The Non-Assert Provision states:
III. Section 1. Subject to the provisions of
ARTICLE V hereof, WI-LAN hereby irrevocably
covenants that neither WI-LAN nor its
AFFILIATES will, directly or indirectly, alone or
by, with or through others, cause, induce or au-
thorize, or voluntarily assist, participate or coop-
erate in, the commencement, maintenance or
prosecution of any ACTION seeking or having the
tendency to establish any liability on the part of,
or to exact any sanction or penalty, or any injunc-
tive, equitable, legal, declaratory, administrative
or other relief from or against LME, its direct or
indirect distributors, AFFILIATES, CUSTOMERS
or any other individual or entity arising from, by
reason of, or in connection with making, using,
selling, offering to sell or importing LME
PRODUCTS which would, but for this Agreement,
infringe any WI-LAN PATENTS. . . .
Joint Appendix (“J.A.”) 665 (emphasis added). The par-
ties agree that the Non-Assert Provision grants a cove-
nant not to sue to Ericsson, but disagree over which
patents or products it covers. Wi-LAN asserts that Article
III grants a covenant not to sue Ericsson for alleged
infringement of one or more of the claims in the four
patents identified in schedule A to the agreement, desig-
nated the “Wi-LAN Patents.” 4 Ericsson contends that the
4 We recognize that “Wi-LAN Patents” as defined
by the PCRA includes the four patents identified in
schedule A as well as any related re-examinations, reis-
sues, continuations, continuations-in-part, divisionals,
and continuing prosecution applications (and divisions
6 WI-LAN USA, INC. v. ERICSSON, INC.
Non-Assert Provision bars any claim of infringement with
respect to any Ericsson product that infringes the identi-
fied Wi-LAN patents, including infringement claims
premised on different patents owned by Wi-LAN—even
patents unrelated to HSPA technology.
The Damages Provision states:
IV. Section 1. With respect to patents other than
the WI-LAN PATENTS (to which Article III of this
Agreement applies), and subject to the provisions
of ARTICLE V hereof, WI-LAN hereby agrees that
no damages shall accrue against LME, or its di-
rect or indirect distributors, AFFILIATES and
CUSTOMERS for infringement of any patents
that, on or after the EFFECTIVE DATE, are
owned or controlled by WI-LAN where liability re-
sults from making, having made, importing, us-
ing, selling, offering to sell or otherwise disposing
of LME’S UMTS/HSPA PRODUCTS and damag-
es shall only accrue for such making, having
made, importing, using, selling, offering to sell or
otherwise disposing of UMTS/HSPA PRODUCTS
beginning after such time as WI-LAN commences
an ACTION against LME or its AFFILIATES re-
lating to UMTS/HSPA PRODUCTS and infringe-
ment of said WI-LAN patents.
J.A. 666 (emphases added). This provision limits the
damages available to Wi-LAN from Ericsson for infringe-
ment of patents other than the designated Wi-LAN pa-
tents by Ericsson UMTS/HSPA-compliant products.
Though the damages provision is not specifically at issue
there-of), requests for continued examination, provisional
patent applications, and any foreign equivalents thereof.
For ease of reference, however, we will refer to these as
the four Wi-LAN Patents.
WI-LAN USA, INC. v. ERICSSON, INC. 7
on appeal, both parties refer to it to support their argu-
ments regarding the scope of the other two provisions.
Finally, the MFL provision states:
VII. Section 1. In the event Wi-LAN owns or con-
trols the licensing of patents not already addressed
under this Agreement and which are infringed or
alleged to be infringed by UMTS/HSPA
PRODUCTS, WI-LAN hereby agrees that at any
time during the TERM of this Agreement, at
LME’s request, WI-LAN will grant to LME and its
AFFILIATES a non-exclusive license to make,
have made, use, sell, offer for sale, lease or other-
wise dispose of, and import LME PRODUCTS in-
cluding UMTS/HSPA PRODUCTS and Wi-LAN
agrees to grant such a license at most-favored li-
censee status as compared to any future licensee
of WI-LAN.
J.A. 667 (emphases added). The MFL Provision allows
Ericsson to request a license at “most-favored licensee
status” if Wi-LAN “owns or controls” patents not already
addressed in the agreement “which are infringed or
alleged to be infringed by UMTS/HSPA PRODUCTS.”
The parties disagree about the correct interpretation of
multiple parts of the MFL Provision, including whether it
applies to patents that Wi-LAN acquired after the execu-
tion of the PCRA.
B. The Texas Case
On October 5, 2010, Wi-LAN filed suit against Erics-
son in the Texas court, alleging infringement of four
patents (“the Texas Patents”). 5 Wi-LAN acquired the
Texas Patents in April 2009—over a year after the effec-
5 U.S. Patent Nos. 6,088,326; 6,195,327; 6,222,819;
and 6,381,211.
8 WI-LAN USA, INC. v. ERICSSON, INC.
tive date of the PCRA. The products Wi-LAN accused in
the Texas action were HSPA-compliant and UMTS-
compliant devices. In its answer, as both affirmative
defenses and counterclaims, Ericsson alleged that, by
filing the Texas action, Wi-LAN breached the Non-Assert
and MFL Provisions of the PCRA. Both parties moved for
summary judgment based on those PCRA defenses and
counterclaims.
On June 4, 2013, the Texas court granted Wi-LAN’s
motion for partial summary judgment, finding that Wi-
LAN did not breach the Non-Assert and MFL Provisions
in the PCRA. The Texas court first explained that, even
under Ericsson’s interpretation of the Non-Assert Provi-
sion, Ericsson was not entitled to summary judgment
because it never conceded that, but for the PCRA, the
accused products infringe the Wi-LAN Patents. 6 The
Texas court then turned to the text of the Non-Assert
Provision, finding Wi-LAN’s interpretation of it correct.
The Texas court pointed out that the Damages Provision
(Article IV) specifically states that it covers suits com-
menced against Ericsson’s UMTS/HSPA products prem-
ised on patents “other” than the Wi-LAN Patents, which
the Damages Provision says is the subject of Article III.
Though the Non-Assert Provision states that it applies to
“LME PRODUCTS which would, but for this Agreement,
infringe any WI-LAN PATENTS,” the Texas court found
that—based on the PCRA as a whole, including the noted
language in the Damages Provision—the Non-Assert
Provision unambiguously only covered the four Wi-LAN
Patents. With respect to the MFL Provision, the Texas
6 Ericsson attempts to get around this fact on ap-
peal by now stipulating that the products at issue in the
Texas action do infringe the Wi-LAN Patents. This
stipulation is untimely, however, and we do not consider
it.
WI-LAN USA, INC. v. ERICSSON, INC. 9
court concluded that, because the Damages Provision
specifically addressed the Texas patents, the MFL Provi-
sion does not apply. 7 See Wi-LAN Inc. v. Alcatel-Lucent
USA Inc., No. 6:10-cv-521, ECF No. 410, slip op. at 8 (E.D.
Tex. June 4, 2013) (referencing J.A. 667 (“In the event Wi-
LAN owns or controls the licensing of patents not already
addressed under this Agreement . . . .” (emphasis added))).
C. The Florida Case
On October 1, 2012—two years after Wi-LAN filed the
Texas complaint and while the Texas litigation was still
ongoing—Wi-LAN sued Ericsson in the Florida court,
alleging infringement of three different patents (“the
Florida Patents”). 8 The products accused of infringement
in the Florida action were not UMTS-compliant devices
and the patents at issue were not the Wi-LAN Patents.
Again, the patents in suit were patents which issued after
the effective date of the PCRA. As it did in the Texas
action, Ericsson asserted affirmative defenses and coun-
terclaims based on the Non-Assert and MFL provisions of
the PCRA.
On June 20, 2013—two weeks after the Texas court
addressed the PCRA in its summary judgment order—the
7 Because the trial court found that Wi-LAN’s pa-
tent infringement suit was not barred, the patent in-
fringement issues proceeded to trial, where the jury found
that Ericsson did not infringe the Texas Patents. Wi-LAN
separately appealed the jury’s finding of no infringement,
but the parties voluntarily dismissed that appeal. As a
result, it is undisputed that Ericsson does not infringe the
Texas Patents. The Texas controversy is only still alive
because Ericsson asserts it is entitled to attorneys fees
and other damages for Wi-LAN’s breach of the PCRA.
8 U.S. Patent Nos. 8,027,298; 8,249,014; and
8,229,437, issued in 2011, 2012, and 2012, respectively.
10 WI-LAN USA, INC. v. ERICSSON, INC.
Florida court granted summary judgment in favor of
Ericsson, finding that, because Ericsson was entitled to,
and was willing to accept, a most-favored license pursu-
ant to the MFL Provision of the PCRA, the controversy
between Wi-LAN and Ericsson was moot. After first
finding that no issue preclusion arose from the Texas
court’s earlier consideration of the PCRA, the Florida
court concluded that, because Wi-LAN accused Ericsson of
infringing some of its patents by making, importing,
using, selling, or offering to sell allegedly infringing
HSPA-compliant products in the Texas litigation, the
MFL Provision enabled Ericsson to demand a license that
covered the Texas Patents under most-favored licensee
terms. Since Ericsson confirmed that it was willing to
accept a license under the same terms as an agreement
between BelAir Networks Inc. and Wi-LAN (“the BelAir
License”), the Florida court concluded that Wi-LAN was
obligated to grant a license on those terms to Ericsson.
The BelAir License covered both the Texas Patents and
the Florida Patents. Because the Florida court found that
the MFL Provision entitled Ericsson to a license that
covered the Florida Patents, it dismissed all of the in-
fringement claims and entered final judgment. The
Florida court did not analyze or rule upon the scope of the
Non-Assert Provision.
Wi-LAN timely appealed from this judgment. In re-
sponse, Ericsson appealed the Texas court’s judgment as
to both the Non-Assert and MFL Provisions. Because
both the Texas case and the Florida case involved claims
of patent infringement, we have jurisdiction under 35
U.S.C. § 1295(a)(1) (2012).
II. DISCUSSION
We review a district court’s grant of summary judg-
ment under the law of the regional circuit. Lexion Med.
LLC v. Northgate Techs. Inc., 641 F.3d 1352, 1358 (Fed.
Cir. 2011). The Fifth Circuit and the Eleventh Circuit
WI-LAN USA, INC. v. ERICSSON, INC. 11
both review a grant of summary judgment de novo. See
Ramirez v. Knowlton, 542 F.3d 124, 128 (5th Cir. 2008);
Pennington v. City of Huntsville, 261 F.3d 1262, 1265
(11th Cir. 2001). Summary judgment is appropriate if the
movant “shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a) (2012).
This appeal requires us to interpret two provisions of
the PCRA: the Non-Assert Provision and the MFL Provi-
sion. Based on the contractual choice of law provision, we
apply New York contract law to interpret the terms of the
PCRA. Under New York law, “[t]he fundamental, neutral
precept of contract interpretation is that agreements are
construed in accord with the parties’ intent.” Greenfield
v. Philles Records, Inc., 780 N.E.2d 166, 170 (N.Y. 2002).
When an agreement is unambiguous on its face, it must
be enforced according to the plain meaning of its terms.
Lockheed Martin Corp. v. Retail Holdings, N.V., 639 F.3d
63, 69 (2d Cir. 2011) (applying New York contract law).
“In interpreting an unambiguous contract, the court is to
consider its ‘[p]articular words’ not in isolation ‘but in the
light of the obligation as a whole and the intention of the
parties as manifested thereby.’” JA Apparel Corp. v.
Abboud, 568 F.3d 390, 397 (2d Cir. 2009) (quoting Kass v.
Kass, 696 N.E.2d 174, 181 (1998)). We may not, however,
consider any extrinsic evidence as to the parties’ inten-
tions if the agreement is unambiguous. Id.A. The Covenant Not to Sue
Because the Texas court found that the Non-Assert
Provision only applied to the four Wi-LAN Patents, the
court granted summary judgment for Wi-LAN that its
claims in the Texas suit were not barred by Article III of
the PCRA. On appeal, Ericsson argues that the Texas
court’s interpretation was wrong because the plain lan-
guage of the covenant not to sue applies to all of Erics-
son’s HSPA products, not just to the four Wi-LAN Patents
12 WI-LAN USA, INC. v. ERICSSON, INC.
specified in the agreement. Ericsson stresses that the
Non-Assert Provision, as drafted, covers “PRODUCTS
which would, but for this agreement, infringe any WI-
LAN PATENTS.” Appellee’s Br. 34 (quoting J.A. 764–65)
(emphasis added by Ericsson). According to Ericsson,
limiting this provision to a covenant not to sue based on
only the Wi-LAN Patents would be re-writing the con-
tract, which New York law cautions against. Though the
Texas court was concerned that Ericsson’s interpretation
would render the Damages Provision meaningless, Erics-
son contends that, under its interpretation, the Damages
Provision still encompasses a broader range of products—
all UMTS/HSPA-compliant products, not just HSPA-
compliant products. According to Ericsson, it sought
protection for products, instead of from specific patents,
because of the McKool conflict. Ericsson contends that,
because McKool was the counsel that was best suited to
defend it against possible future claims against
UMTS/HSPA products by Wi-LAN, the broader protection
for all of its products makes sense.
Wi-LAN counters that Ericsson’s interpretation im-
permissibly focuses only on a single sentence in the entire
PCRA, whereas New York law requires the court look at
the contract as a whole. Wi-LAN argues that the remain-
der of the Non-Assert Provision makes clear that it only
bars Wi-LAN from asserting the four specified Wi-LAN
Patents because the rest of the Non-Assert Provision
refers specifically to those patents. See, e.g., J.A. 665
(“WI-LAN reserves and retains all rights to sue or assert
against [Ericsson’s] suppliers . . . that [Ericsson products],
or components thereof, infringe any WI-LAN
PATENTS.”). According to Wi-LAN, Ericsson’s interpreta-
tion is also inconsistent with the Damages Provision,
which explicitly states that the Non-Assert Provision
applies to the four defined Wi-LAN Patents. See J.A. 666
(“With respect to patents other than the WI-LAN
PATENTS (to which Article III of this Agreement applies)
WI-LAN USA, INC. v. ERICSSON, INC. 13
. . . .”). Wi-LAN further insists that New York law disfa-
vors broad readings of covenants not to sue. Appellant’s
Reply Br. 24 (citing Joao v. Cenuco, Inc., 376 F. Supp. 2d
380, 382–83 (S.D.N.Y. 2005) (applying New York contract
law)).
We are unpersuaded by Ericsson’s argument that a
single sentence in Article III of the PCRA trumps the
language of the rest of the contract. Although the lan-
guage in the Non-Assert Provision is admittedly impre-
cise, we must interpret the contract “in the light of the
obligation as a whole and the intention of the parties as
manifested thereby.” Kass, 696 N.E.2d at 181. The
PCRA, when read as a whole, evidences the parties’ clear
intent to restrict the Non-Assert Provision to the four
identified Wi-LAN Patents. For example, the Damages
Provision, titled “PATENTS OTHER THAN THE WI-LAN
PATENTS,” clearly indicates that the parties intended
the Damages Provision to cover UMTS/HSPA patents
“other than” the four Wi-LAN patents “to which [the Non-
Assert Provision] of this Agreement applies.” J.A. 666.
The rest of the Non-Assert Provision further supports
the intent to limit the Non-Assert Provision to the four
Wi-LAN patents by referring to only those patents. See
J.A. 665 (“WI-LAN reserves and retains all rights to sue
or assert against [Ericsson’s] suppliers . . . that [Ericsson
products], or components thereof, infringe any WI-LAN
PATENTS . . . .”); J.A. 666 (“WI-LAN (including its
AFFILIATES) shall not make any claims under its WI-
LAN PATENTS . . . relating to any . . . component pro-
duced by a third party using manufacturing drawings and
specifications [for Ericsson].”). It would be inconsistent to
grant a broad product-based covenant not to sue to Erics-
son, but only apply the exceptions and clarifications to the
four expressly defined Wi-LAN Patents. Ericsson’s pro-
posed interpretation of the provision would frustrate the
14 WI-LAN USA, INC. v. ERICSSON, INC.
clear intent of the parties to grant a covenant not to sue
that covered only the four listed patents. 9
We therefore conclude that the Texas court correctly
interpreted the Non-Assert Provision as providing a
covenant not to sue which is limited to the four Wi-LAN
Patents only.
B. The Most-Favored Licensee Provision
The Texas court and the Florida court issued conflict-
ing orders regarding whether the Texas lawsuit triggered
Wi-LAN’s obligations under the MFL Provision. The
Texas court found that the MFL Provision did not apply
because the Texas Patents were specifically addressed in
the Damages Provision, but did not address whether the
MFL Provision applied to patents Wi-LAN acquired after
the execution of the PCRA. The Florida court, on the
other hand, found that Wi-LAN’s Texas lawsuit triggered
its obligations to provide Ericsson with a license at most-
favored licensee status. To make this finding, the Florida
court necessarily concluded that: (1) the MFL Provision
applies to patents acquired after the execution of the
PCRA, as well as those Wi-LAN previously owned or
controlled, and (2) the Damages Provision does not cover
9 As a practical matter, moreover, under Ericsson’s
interpretation, Ericsson could just stipulate that a prod-
uct infringes one of the Wi-LAN Patents and assert that
the covenant not to sue applies to all activities relating to
the products. Oddly, if Wi-LAN contested that stipula-
tion, rather than argue that its products do not infringe,
Ericsson would have the burden of proving that its prod-
ucts infringe Wi-LAN’s patent. Ericsson’s argument that
it sought protection for its products because of the McKool
conflict is illogical; McKool would presumably also be the
counsel best suited to represent Ericsson in this back-
wards infringement case.
WI-LAN USA, INC. v. ERICSSON, INC. 15
the Texas Patents. See J.A. 667 (“In the event Wi-LAN
owns or controls the licensing of patents not already
addressed under this Agreement . . . .” (emphases added)).
Wi-LAN argues that the MFL Provision only applies
to patents owned or controlled as of the date of the PCRA.
Wi-LAN explains that, although other sections of the
PCRA specifically account for patents acquired in the
future, the MFL Provision does not do so. According to
Wi-LAN, the absence of language specifically accounting
for later acquired patents indicates that they are not
included in the MFL provision. Wi-LAN also argues that
New York courts have interpreted similar present tense
language in contractual provisions to exclude future
activities. According to Wi-LAN, moreover, the “in the
event” language does not alter the scope of the MFL
Provision because the PCRA, read as a whole, clearly
indicates that the MFL Provision only applies to the
patents Wi-LAN had when it executed the PCRA. Erics-
son contends that the plain language of the MFL Provi-
sion applies to all of Wi-LAN’s patents, whether they are
owned as of the effective date of the PCRA or are later
acquired. Ericsson insists that, even though the MFL
Provision uses present tense verbs, the MFL Provision
also contains the conditional “in the event” language.
According to Ericsson, under grammatical rules, the
conditional statement means that the present tense verbs
refer to presently held and later acquired patents. See
Oral Argument at 54:61, Wi-LAN USA, Inc. v. Ericsson,
Inc., 2013-1485, available at
http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20
13-1485.mp3 (“[G]rammatical rules say that, when you
put a present tense verb in a conditional sentence, it
contemplates the future.”).
We agree with Wi-LAN that it is clear the parties in-
tended the MFL Provision to only cover patents Wi-LAN
owned or controlled as of the effective date of the PCRA.
The MFL Provision uses the present tense to refer to
16 WI-LAN USA, INC. v. ERICSSON, INC.
patents that “WI-LAN owns or controls.” J.A. 667. Under
New York law, the use of the present tense means that
the MFL Provision does not apply to later acquired pa-
tents. See Aspex Eyewear, Inc. v. Altair Eywear, Inc., 361
F. Supp. 2d 210, 215 (S.D.N.Y. 2005) (applying New York
law and finding that the present tense word “is” did not
apply to later acquired patent rights); see also VKK Corp.
v. Nat’l Football League, 244 F.3d 114, 130 (2d Cir. 2001)
(applying New York law) (“The Release’s reference to
‘affiliates’ and the definition of the word are stated in the
present tense. Nothing in this definition indicates the
inclusion of future rather than present members.”).
Contrary to Ericsson’s arguments, the conditional phrase
“in the event” does not automatically mean that present
tense verbs must include future events. We are aware of
no grammatical rule that requires us to change well-
established New York contract law. We conclude that, in
context, the parties clearly intended that the “in the
event” language refer to information that is currently
unknown to the parties—i.e., in the event Wi-LAN owns—
as of the execution of the agreement—non-HSPA patents
it could assert against Ericsson products, a MFL license
will be granted to Ericsson.
This interpretation finds further support in other sec-
tions of the contract that explicitly account for later
acquired patents. See, e.g., J.A. 666 (“[N]o damages shall
accrue against [Ericsson] . . . for any infringement of any
patents that, on or after the EFFECTIVE DATE, are
owned or controlled by WI-LAN . . . .” (emphasis added)).
The fact that the PCRA uses specific terms to denote
coverage of later acquired patents in some provisions
implies the exclusion of later acquired patents when those
terms are not used. William C. Atwater & Co. v. Panama
R. Co., 159 N.E. 418, 418 (1927) (“The court should exam-
ine the entire contract and consider the relation of the
parties and the circumstances under which it was execut-
ed. Particular words should be considered, not as if
WI-LAN USA, INC. v. ERICSSON, INC. 17
isolated from the context, but in light of the obligation as
a whole and the intention of the parties as manifested
thereby.”). We therefore conclude that, based on the
language of the PCRA as a whole, the MFL Provision only
applies to Wi-LAN’s patents owned or controlled as of the
effective date of the PCRA, which the Texas and Florida
Patents were not.
Because we conclude that the MFL Provision does not
apply to patents acquired after the execution of the
PCRA, Ericsson’s rights under the MFL Provision were
not triggered by the Texas suit. We therefore reverse the
Florida court’s dismissal of Wi-LAN’s infringement suit
with respect to the Florida Patents. We need not address
the remainder of the parties’ arguments regarding the
MFL Provision. We also affirm the Texas court’s finding
that the MFL provision did not bar Wi-LAN’s Texas suit,
albeit on different grounds.
III. CONCLUSION
For the foregoing reasons, we affirm the judgment of
the United States District Court for the Eastern District
of Texas, No. 10-CV-0521.
AFFIRMED
As to the judgment of the United States District Court
for the Southern District of Florida, No. 12-CV-23569, we
reverse and remand for proceedings consistent with this
decision.
REVERSED AND REMANDED