Cascades Av LLC v. Evertz Microsystems Ltd.

335 F. Supp. 3d 1088
CourtDistrict Court, E.D. Illinois
DecidedAugust 20, 2018
DocketNo. 17 C 7881
StatusPublished
Cited by1 cases

This text of 335 F. Supp. 3d 1088 (Cascades Av LLC v. Evertz Microsystems Ltd.) is published on Counsel Stack Legal Research, covering District Court, E.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cascades Av LLC v. Evertz Microsystems Ltd., 335 F. Supp. 3d 1088 (illinoised 2018).

Opinion

Honorable Thomas M. Durkin, United States District Judge

Plaintiff Cascades AV LLC sued defendant Evertz Microsystems LTD for allegedly infringing three of Cascades's patents covering improvements in detecting and correcting the processing delay of a signal that has become unsynchronized with related signals (i.e. , correcting "lip sync error"). Evertz moves to dismiss Cascades's complaint under Fed. R. Civ. P. 12(b)(6), maintaining that Cascades's patent infringement claims fail as a matter of law because Evertz has a license-either express or implied-to practice the patents-in-suit. R. 18. For the following reasons, the Court denies Evertz's motion.

Standard

A Rule 12(b)(6) motion challenges the "sufficiency of the complaint." Berger v. Nat. Collegiate Athletic Assoc. , 843 F.3d 285, 289 (7th Cir. 2016). A complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), sufficient to provide defendant with "fair notice" of the claim and the basis for it. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). This standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). While "detailed factual allegations" are not required, "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. The complaint must "contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). " 'A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.' "

*1090Boucher v. Fin. Sys. of Green Bay, Inc. , 880 F.3d 362, 366 (7th Cir. 2018) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Tobey v. Chibucos , 890 F.3d 634, 646 (7th Cir. 2018).

Background

James Carl Cooper-Cascades's predecessor in interest-has invented more than 80 patents in the field of audio and video technology. R. 1 ¶ 1. Evertz is a competitor in that field who has at least one of its own patents. See id. ¶¶ 13-14. In 2007 and 2008, Evertz entered into three agreements with Cooper and two related licensing entities to settle a prior infringement dispute involving "a different family of [Cooper] patents" than the patents at issue in this case. See id. ¶¶ 7, 8.

The key agreement for purposes of this motion to dismiss is a Mutual Release and Covenant Not to Sue that Cooper and Evertz entered into on March 10, 2008 ("the Cooper Agreement"). R. 1-1. The Cooper Agreement binds third-parties to whom "Cooper assigns or licenses any of the Cooper Patents." R. 1-1 ¶ 9. The Cooper Agreement contains two provisions central to Evertz's motion to dismiss. The first is a release in paragraph 2:

2. Cooper hereby releases Evertz with respect to any and all claims that he could have brought in any proceeding against Evertz for infringement of any existing patent presently or formerly owned or controlled by him or by any company owned or controlled by him or that might hereafter revert to him ("Cooper Patent"), with respect to any past, present or future products, methods, services, or systems of Evertz that previously, currently, or in the future are made, used, sold, offered for sale, imported or exported by Evertz.

Id. ¶ 2. The second is a covenant in paragraph 4:

4. Cooper hereby covenants that neither he nor any company owned or controlled by him will bring suit, initiate any proceeding or otherwise assert any claim, assist voluntarily in the prosecution of any claim, or receive or direct to any third party any payments arising from the prosecution or settlement of any claim, apart from payments arising from the Licensing Agreements, against Evertz or its affiliates or its affiliates, customers, distributors, resellers, OEMs or end-users of its past or current products, methods, services or systems before any court or administrative agency in any country in the world, based upon or arising out of any Cooper Patent.

Id. ¶ 4. Reading these provisions together, in paragraph 4 Cooper covenants not to bring lawsuits "based upon or arising out of any Cooper Patent," and "Cooper Patent" is defined in paragraph 2 as "any existing patent" meeting certain criteria.

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335 F. Supp. 3d 1088, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cascades-av-llc-v-evertz-microsystems-ltd-illinoised-2018.