Audio MPEG, Inc. v. Dell Inc.

272 F. Supp. 3d 813
District Court, E.D. Virginia·Decided August 9, 2017·No. Civil No. 2:15cv73 (Lead Case), Civil No. 2:16cv82 (Consolidated Case)·Published·Cited by 1 cases

Opinion

OPINION AND ORDER

Mark S. Davis, UNITED STATES DISTRICT JUDGE

This matter is before the Court on a motion for summary judgment 'filed by Dell Inc. (“Defendant” or “Dell”), on the claims alleged by Audio MPEG, Inc. (“Audio MPEG”), U.S. Philips Corporation (“Philips”), TDF SAS (“TDF”), and Institute fur Rundfunktechnik GmbH (“IRT”) (collectively, “Plaintiffs”). ECF No. 417. For the reasons set forth below, the Court DENIES the motion for summary judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Background

The undisputed facts before the Court establish as follows:1

(1) This patent infringement action arises out of Dell’s alleged infringement of the following audio technology patents: United States Patent No. 5, 323, 396 (“the ’396 patent”), United States Patent No. 5,777,992 (“the ’992 patent”), and United States Patent No. 5,539,829 (“the ’829 patent”) (collectively, the “asserted patents”). Compl. ¶¶ 19-46. The ’396 patent and the ’992 patent expired on June 21, 2011, id. ¶¶ 6, 30, and the ’829 patent expired on July 23, 2013, id. ¶ 36; see generally Patents, Compl. Ex. 1, ECF No. 1-1.

(2) Through compression of audio files using MPEG Standards2 to encode and decode digital audio signals, the patented technologies facilitate the playing of music and other audio on electronic devices. Compl. ¶¶ 2, 22.

(3) Plaintiffs Philips, TDF, and IRT (“Patent Owners”), own the asserted patents, id. ¶ 24, and plaintiff Audio MPEG has the exclusive right in the United States to license, sue, and collect fees, costs, and damages relating to infringe[817]*817ment of the asserted patents on behalf of all Plaintiffs, id. ¶ 41.

(4) Since 1996, Audio MPEG has offered a “joint license” on all of the Patent Owners’ MPEG audio patents, including the asserted patents, prior to their expiration. Id. ¶ 42.

(5) Effective November 1, 2006, Audio MPEG executed a license agreement with Microsoft Corporation (“Microsoft”) on behalf of the patent owners (“License Agreement”). License Agreement § 1.01 (eff. Nov. 1, 2006), Def.’s Summ. J. Ex. 7, ECF No. 423-4. '

(6) The License Agreement authorized Microsoft “to make, have made, use, import, copy, have copied, sell, license, Offer for sale or license, and otherwise distribute PC Software for use solely on Personal Computers.” License Agreement § 2.02. ■

(7) Pursuant to the License Agreement, “PC Software” includes any “software product that (a) is solely for use on a Personal Computer, (b) is offered for license to or suitable for use by an end user, (c) is offered for license or distributed by LICENSEE or its Controlled Companies under LICENSEE’S trademark or trade name, (d) is covered by at least one claim of the patent rights listed in Enclosure 1 or 2 and (e) conforms to the ISO/IE C 11172-3 or ISO/IEC 13818-3.” License Agreement § 1.03.

(8) The License Agreement does not grant any “rights to any other' software or product that decodes or receives the encoded or broadcast information,” License Agreement § 2.04, and requires Microsoft to “include in its end user license agreement for PC Software á provision that the PC Software is intended for the end user’s own use, is subject to certain intellectual property rights, and may not be commercially redistributed without LICENSEE’S consent,” id. § 2.05.

(9) Microsoft paid $5,665,000.00 for the software license from Audio MPEG. License Agreement § 4.02.

(10) Microsoft agreed to “promptly notify their Computer Seller cústomers” that it had licensed audio patents from Audio MPEG for Microsoft’s “PC Software for Personal Computers.” License Agreement § 15.02. Further, Microsoft agreed to “notify their Computer Seller customers (1) that they obtain the benefit of LICENSEE’S PC Software license, and do not need to obtain a separate license from Audio MPEG or SISVEL for LICENSEE’S PC Software; and (2) that LICENSEE’S license covers only LICENSEE’S PC Software for Personal Computers and not any hardware or any other software capable of encoding ■ or decoding MP3/MPEG Audio files.” Id.

(11) Audio MPEG and Microsoft agreed that the terms of the License Agreement would be “governed by, interpreted and construed” according to the laws of the state of New York. License Agreement § 18.01.

(12) Microsoft distributes the Windows operating system, which includes MPEG-compliant' code that compresses and decompresses audio files (“codecs”). See Fry Rebuttal Report ¶ 19 (Feb. 7, 2017), Pis.’ Ex. RRR, ECF No. 475-12 (describing the codecs “contained in the Microsoft operating system”); Fry Suppl. Report ¶28 (Dec. 28, 2016), Pis.’ Ex. CCC, ECF No. 475-3 (“A codec is a piece of software that encodes and/or decodes a digital, data stream. Codecs typically exist as a part of a shared library, such as a DLL, so they can be utilized by more than one software program.”).

(13) It is possible for non-Microsoft software products to use the Windows codecs by “calling the codecs.” Pis.’ Resp. Br. 12, ECF No. 472 (“Plaintiffs agree that cer[818]*818tain versions of the Microsoft Windows operating system include codecs that are capable of being ‘called’ by non-Microsoft software.”).

(14).Microsoft .licensed its Windows operating system to Dell for installation on personal computers (“Microsoft>-Dell License Agreement”). See Microsoft-Dell License'Agreement § 2(a) (eff. Aug. 1, 2009), Def.’s Summ, J, Ex. 11, ECF No. 423 — 8; Pis.’ Resp. Br, 12.

(15) Dell sold at least one computer that included a non-Microsoft program that allowed a user to play MPEG-compatible audio files. Pis.’ Resp. Br. 12.

In addition to the above undisputed facts, Dell alleges, and Plaintiffs disagree, (1) that the Audio MPEG-Mierosoft License Agreement included a license for third party software to “call” the Windows codecs for compressing or decompressing audio files, and (2) that the allegedly infringing software actually calls the Windows codecs. Compare Def.’s Opening Br. 7, ECF No. 422 (arguing that the allegedly infringing software does “not contain software code capable of performing any of the asserted claims”); with Pis.’ Resp. Br. 12 (arguing that the allegedly infringing software “contain[s] source code capable of performing the Asserted Claims”).

B. Procedural Background

On February 20, 2015, Plaintiffs filed a three-count complaint in the Norfolk Division of this Court alleging that Hewlett-Packard Company (“HP”) infringed the asserted patents. See generally HP Compl., ECF No. 1. On December 21, 2015,' Plaintiffs filed a three-count complaint against Dell in the Alexandria Division of this Court alleging that Dell infringed the asserted patents. Compl., Audio MPEG, Inc., et al. v. Dell Inc., No. 1:15cv1674 (E.D. Va. 2015). On February 22, 2016, the Alexandria Division transferred the Dell case to the Norfolk Division to be consolidated with the HP case. No. 2:15cv73, ECF No. 73. On May 16, 2016, Plaintiffs and HP settled, leaving Dell as the sole remaining defendant in the case. Hr’g Tr. 3:22-4:16, ECF No. 136.

Free access — add to your briefcase to read the full text and ask questions with AI

Audio MPEG, Inc. v. Dell Inc., 272 F. Supp. 3d 813 (E.D. Va. 2017).

272 F. Supp. 3d 813 (Audio MPEG, Inc. v. Dell Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related