Twitter, Inc. v. Voip-Pal.com, Inc.

Background

Twitter brought a declaratory judgment action seeking a ruling that it did not infringe U.S. Patent No. 9,935,872, owned by Voip-Pal.com, Inc. Voip-Pal moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), which challenges the court’s subject-matter jurisdiction. Voip-Pal argued that it had eliminated the dispute by giving Twitter a covenant not to sue.

The covenant stated that Voip-Pal unconditionally and irrevocably would not sue Twitter, now or in the future, for infringement of any claim of the patent based on products and services that Twitter was making, using, selling, offering for sale, or importing on the covenant’s date, or had done so before that date.

Parties’ Arguments

Twitter argued that the covenant did not cover its customers or unspecified third parties involved in Twitter’s platform. It relied on earlier decisions involving Voip-Pal’s covenants to Apple and AT&T, as well as other patent cases.

The court found those cases materially different. In the Apple and AT&T cases, Voip-Pal had sued or accused customers of infringement. In this case, Voip-Pal had not sued Twitter on the ’872 patent, had not alleged that Twitter’s customers infringed that patent, and had never accused Twitter’s customers of infringing any other Voip-Pal patent. The court also distinguished a case involving a covenant that was conditional and another involving customers who had been accused of infringement.

Ruling

The court explained that jurisdiction in a declaratory judgment case depends on whether a substantial controversy remains under all the circumstances. It concluded that the possible infringement of Twitter’s customers, who had never been accused of infringement by Voip-Pal, did not create an unresolved actual controversy. The covenant therefore divested the court of subject-matter jurisdiction.

Judge James Donato granted Voip-Pal’s motion to dismiss. The opinion does not state that the dismissal was with or without prejudice.