Walker Digital, LLC v. Expedia, Inc.

950 F. Supp. 2d 729, 2013 WL 3070615, 2013 U.S. Dist. LEXIS 85741
CourtDistrict Court, D. Delaware
DecidedJune 19, 2013
DocketCiv. Nos. 11-313-SLR, 12-140-SLR, 12-141-SLR, 12-142-SLR
StatusPublished
Cited by1 cases

This text of 950 F. Supp. 2d 729 (Walker Digital, LLC v. Expedia, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Walker Digital, LLC v. Expedia, Inc., 950 F. Supp. 2d 729, 2013 WL 3070615, 2013 U.S. Dist. LEXIS 85741 (D. Del. 2013).

Opinion

MEMORANDUM OPINION

SUE L. ROBINSON, District Judge.

I. INTRODUCTION

On April 11, 2011, plaintiff Walker Digital, LLC (“plaintiff’) filed Civ. No. 11-313 against ten defendants, including eBay, Inc. (“eBay”), for allegedly infringing U.S. Patent Nos. 7,831,470 (“the '470 patent”) and 7,827,056 (“the '056 patent”). (Civ. No. 11-313, D.I. 1) Currently before the court in Civ. No. 11-313 is defendants Amazon.com, Inc. (“Amazon”), Zappos.com, Inc. (“Zappos”), and Expedia, Inc.’s motion to dismiss under Rule 12(b)(1) for lack of standing (Id., D.I. 242), and Amazon and Zappos’ motion for leave to file amended answers (Id., D.I. 258).

On February 7, 2012, plaintiff filed separate actions against defendants Amazon, Barnes & Noble, Inc., and Expedia, Inc., alleging infringement of U.S. Patent No. 8,112,359 (“the '359 patent”). (Civ. No. 12-140, D.I. 1; Civ. No. 12-141, D.I. 1; Civ. No. 12-142, D.I. 1) Currently before the court are these defendants’ motions to dismiss under Rule 12(b)(1) for lack of standing. (Civ. No. 12-140, D.I. 75; Civ. No. 12-141, D.I. 52; and Civ. No. 12-142, D.I. 44)

The court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338(a). For the reasons that follow, the defendants’ motions to dismiss are granted.1

II. BACKGROUND

On April 11,2011, plaintiff filed Civ. No. 11-315 against numerous defendants, including eBay, alleging infringement of U.S. Patent No. 7,236,942 (“the '942 patent”). (Civ. No. 11-315, D.I. 1) In order to settle Civ. No. 11-315, plaintiff and eBay, Inc. (“eBay”) entered into a Confidential Settlement and License Agreement (“Settlement Agreement”). Pursuant to the Settlement Agreement, plaintiff

grant[ed] to EBAY, effective immediately,[2] an irrevocable, nonexclusive, fully paid-up, worldwide license, under the PATENT RIGHTS to use, make, have made, sell, offer to sell, modify, import, export, and otherwise offer, dispose of, distribute, display, host, advertise, and/pr promote any COVERED PRODUCT directly or indirectly through any channel, including through multiple tiers of distribution. The license grant herein also extends to EBAY THIRD PARTIES but only with respect to COVERED PRODUCTS.

(Civ. No. 11-313, D.I. 244, ex. I at 9) The phrase “PATENT RIGHTS” was defined in the Settlement Agreement as follows:

“PATENT RIGHTS” shall mean any patents or patent applications worldwide, existing presently or in the future, owned or controlled by WALKER DIGITAL presently or at any time in the future, including but not limited to: (a) [732]*732U.S. Patent Nos. 7,236,942 and 7,827,056 and (b) the entire families of U.S. Patent Nos. 7,236,942 and 7,827,056 anywhere in the world, including but not limited to all of their parents, continuations, continuations-in-part, divisional, reissues, and re-examinations; (c) all patent applications or patents claiming priority to any of the foregoing patents or claiming priority to any application that led to any of foregoing patents; and (d) all foreign counterparts to any of the foregoing. WALKER DIGITAL represents that a current list of worldwide patents and patent applications that compris[e] PATENT RIGHTS is attached as Appendix B.

(Id. at 3-4) The Settlement Agreement also contained a standard merger clause, acknowledging that “this Agreement sets forth the entire agreement and understanding of the PARTIES hereto as to the subject matter hereof, and shall not be subject to any change or modification except by the execution of a written instrument executed to by authorized persons for the PARTIES hereto.” (Id. at 13)

In addition to Appendix B, but neither mentioned in the body of the Settlement Agreement nor separately executed, is a document labeled “EXHIBIT A, PATENT PURCHASE TERMS.” (Id. at 53) The first paragraph of this document provides as follows:

1. SALE OF PATENTS
1.1 Purchase and Sale. Walker Digital LLC (“Seller” for purposes of this Exhibit A) hereby conveys, assigns, and transfers to eBay Inc. (“Purchaser” for purposes of this Exhibit A), and Purchaser hereby accepts, all right title, and interest in and to the patents and patent applications described on Schedule A (collectively, the “Transferred Patents”). The Transferred Patents include all counterparts, continuations, eontinuations-in-part, divisionals, reissues, reexaminations, and extensions thereof, and all current, future, or abandoned patents and patent applications (whether filed by Seller or Purchaser and whether filed before, on, or after the Effective Date) claiming priority from, derived from, or related to any of the foregoing in any jurisdiction. The sale of the Transferred Patents to Purchaser includes the transfer of (i) the right to sue and recover damages for past, present, and/or future infringement; (ii) the right to injunctive relief and; (iii) any and all causes of action relating to any of the inventions or discoveries described in the Transferred Patents. Seller reserves no rights whatsoever in the Transferred Patents.

(Id.) In section 3.1(e), the Seller represented that,

with respect to each Transferred Patent: (i) no action, suit, litigation, arbitration, investigation, prosecution, or other proceeding (a “Proceeding”) is pending or, to the knowledge of Seller, threatened, nor has any claim or demand been made, which challenges or challenged the legality, validity, enforceability, or use by Seller or such Transferred Patent; and (ii) all maintenance, annuity, and other fees have been fully paid and all filings have been properly and timely made....

(Id. at 54) Attached to Exhibit A is Schedule A; not surprisingly, many (but not all) of the patents and patent applications listed on Schedule A are listed on Appendix B, the “master list” of plaintiffs “PATENT RIGHTS.”3 (Id. at 56) Also listed on Appendix B are the patents-at-issue (in the case of the '359 patent, the application relating thereto). (Id. at 40, 49) The [733]*733“Short Form Patent Assignment,” attached as Schedule B and executed subsequent to the Settlement Agreement, uses yet different language in describing the property conveyed through the transaction at issue:

(1) any and all improvement disclosed in United States Patent Application Serial No. _ and entitled
(2) all original and reissued letters patents that have been or shall be issued in the United States and in all foreign countries on any of said improvements; and in and to all divisional, continuing, reissue, extension, substitution and renewal applications, and all other patent applications that have been filed or shall be filed in the United States and in any foreign countries, on any of said improvements; and in and to all rights attaching to said improvements (including any and all rights under the Hague Convention, the Paris Convention for the Protection of Industrial Property, and under the Patent Cooperation Treaty); and

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950 F. Supp. 2d 729, 2013 WL 3070615, 2013 U.S. Dist. LEXIS 85741, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walker-digital-llc-v-expedia-inc-ded-2013.