Uniloc 2017 LLC v. Google LLC

Background

Uniloc 2017 LLC brought multiple patent-infringement suits against Google LLC. The asserted patents covered multimedia content delivery, information-technology security, high-resolution imaging, network connectivity, video conferencing, and image and text searching. The suits were initially filed in the Eastern District of Texas and later transferred to the Northern District of California.

Google moved to dismiss for lack of standing, meaning that Uniloc allegedly lacked the legally required interest to bring the patent claims. Google relied on agreements under which Uniloc 2017’s predecessors had obtained a loan from Fortress Credit Co. LLC and had granted Fortress a patent license, including the right to grant sublicenses. The district court concluded that the license had been granted, that it survived a later termination agreement, and that Uniloc therefore lacked standing. It dismissed the Google cases for lack of subject-matter jurisdiction.

Issue on appeal

The Federal Circuit stated that related decisions had already resolved that Fortress received a license and that the license deprived Uniloc 2017 of standing. The remaining issue was whether a May 3, 2018, Payoff and Termination Agreement between Uniloc’s predecessors and Fortress ended that license before Uniloc sued Google.

The parties agreed that New York contract law governed the termination issue. The 2014 License Agreement described Fortress’s license as “irrevocable” and included a right to sublicense. The 2018 Termination Agreement stated that the Revenue Sharing Agreement and Patent License Agreement “shall terminate” and would have “no further force or effect.”

Court’s analysis

The appellate court held that the termination agreement’s language was sufficient on its face to eliminate Fortress’s license. It rejected the district court’s view that the word “irrevocable” prevented termination. According to the appellate court, “irrevocable” meant that Uniloc could not revoke the license unilaterally; it did not prevent Uniloc and Fortress from terminating it by mutual agreement.

The court also considered a provision stating that rights that “by their nature” survive termination would continue. It held that this provision did not preserve a bare, unused license. The court noted that the License Agreement allowed mutual termination and specifically provided for survival of sublicenses granted before termination, which suggested that not every license right survived.

The court further rejected Google’s argument that a license triggered by an event of default could end only through the cure or annulment of that default. The court found that the loan agreement did not state that an event of default, or a license arising from it, survived a mutual agreement terminating the license.

Disposition

The appellate court held that Fortress’s license did not survive the 2018 Termination Agreement. Because Fortress therefore lacked the ability to sublicense the patents when Uniloc sued Google, and Google agreed that Uniloc had standing under those circumstances, the court reversed the district court and remanded the case for further proceedings. Judge Yvonne Rogers was the district judge whose dismissal was reversed.