AUO Corporation v. Trivale Technologies, LLC, et al.

Background

AUO Corporation’s First Amended Complaint asserted two groups of claims:

- Claims 1 through 20 sought declarations that AUO did not infringe ten patents and that the patents were invalid. - Claims 21 through 23 asserted state-law claims for tortious interference with a business relationship, tortious interference with a contract, and unfair competition under California Business and Professions Code section 17200.

The state-law claims were based on letters and emails in which Trivale Technologies, LLC and IPValue Management, Inc. allegedly accused AUO and its customers of infringing Trivale’s patents and discussed patent validity. The defendants moved to strike the state-law claims under California’s anti-SLAPP statute, relying on the Noerr-Pennington doctrine. That doctrine generally protects efforts to petition the government, including courts, from liability, and the Ninth Circuit has extended that protection to prelitigation settlement demands. IPValue also moved under Federal Rule of Civil Procedure 12(b)(1), which concerns subject-matter jurisdiction, to dismiss the declaratory-judgment claims against it because AUO did not allege that IPValue was a patent holder.

Declaratory-Judgment Claims Against IPValue

The court explained that, in a patent declaratory-judgment case, the defendant must hold the patent rights necessary for the court to adjudicate the dispute. The complaint alleged that Trivale claimed to be the patents’ assignee and alleged, on information and belief, that IPValue had an ownership interest in, significant control over, and a significant financial interest in the patents.

The defendants challenged those allegations with a factual challenge to subject-matter jurisdiction and submitted a public assignment record involving Mitsubishi Electric Corporation and Trivale. AUO submitted no evidence of IPValue’s ownership interest. Instead, AUO argued that IPValue might be Trivale’s exclusive licensee and cited a news article suggesting that Trivale was a shell created to shield IPValue from liability.

The court held that AUO had not provided competent proof that IPValue held a sufficient ownership interest or other patent rights to establish subject-matter jurisdiction. The court did not decide whether an alter-ego theory could establish jurisdiction because AUO had not pleaded that theory, and the news article alone did not satisfy AUO’s burden. The motion to dismiss the declaratory-judgment claims against IPValue was granted. The court granted AUO leave to amend because the evidence did not establish that amendment would necessarily be untruthful or futile.

State-Law Claims and the Noerr-Pennington Doctrine

The court held that the state-law claims were barred by the Noerr-Pennington doctrine. It concluded that the letters and emails accusing AUO and its customers of infringement and discussing the patents were prelitigation settlement demands. Because the state-law claims were based entirely on those communications, they arose from conduct protected by the defendants’ right to petition.

AUO argued that the sham exception applied. That exception requires allegations supporting both objective baselessness and an improper motive. AUO alleged that the defendants contacted customers without disclosing their discussions with AUO, did not acknowledge AUO’s indemnification obligation, and later withdrew infringement assertions concerning several patents after receiving evidence from AUO.

The court found those allegations insufficient. It reasoned that the defendants could sue the customers regardless of AUO’s indemnification obligation, and AUO had not explained why the defendants had to disclose their discussions with AUO or their assessment of indemnification issues. The court also found that withdrawing some infringement assertions after receiving additional information did not, by itself, show that the original demands were entirely baseless or intended only to harass. The court therefore concluded that the complaint did not allege specific activities plausibly showing objective baselessness and improper motive.

Disposition

Judge Rita F. Lin granted the defendants’ motion to strike the state-law claims under California’s anti-SLAPP statute. The court granted AUO leave to amend because this was the first ruling on the legal sufficiency of those claims and the record did not establish that amendment would be futile.

The court denied AUO’s request for attorney fees and costs without prejudice to renewal. The defendants’ alternative motion to dismiss the state-law claims was denied as moot. The motion to dismiss was granted as to the declaratory-judgment claims against IPValue and was otherwise denied as moot. The court did not reach the defendants’ preemption argument or other alternative grounds for striking the state-law claims.

AUO was permitted to file an amended complaint by October 7, 2026. The amended complaint could not add new claims or parties or otherwise change the allegations except to correct the identified deficiencies, unless the court allowed the changes or the parties stipulated to them.