Uniloc 2017 LLC v. Google LLC

Background

Uniloc 2017 LLC brought multiple patent-infringement suits against Google LLC involving patents concerning multimedia content delivery, information-technology security, high-resolution imaging, network connectivity, video conferencing, and image and text searching. The cases were initially filed in the Eastern District of Texas and later transferred to the Northern District of California. The district court ordered Google to file one motion covering the transferred cases.

Google moved to dismiss for lack of subject-matter jurisdiction, arguing that Uniloc lacked standing—the legal ability to bring the patent suits. Google relied on agreements between Uniloc’s predecessors and Fortress Credit Co. LLC. Under those agreements, Fortress could receive a patent license, including the right to grant sublicenses, after an event of default under a loan arrangement. The district court found that an event of default had occurred, that Fortress had obtained the license, and that Uniloc therefore lacked the necessary right to exclude others from the patents.

The parties later entered a Payoff and Termination Agreement on May 3, 2018. That agreement stated that the earlier revenue-sharing agreement and patent-license agreement “shall terminate” and would have no further effect. Uniloc 2017 acquired the relevant patents from its predecessor on the same day. The district court nevertheless concluded that Fortress’s license survived because the License Agreement described it as “irrevocable.” It granted Google’s motion and dismissed the cases for lack of subject-matter jurisdiction.

Federal Circuit’s analysis

The Federal Circuit explained that related appeals had already established that Fortress received a license and that the license deprived Uniloc 2017 of standing. The issue in this appeal was whether the Payoff and Termination Agreement ended that license.

The court applied New York contract law and interpreted the agreements as a matter of law. It held that the Termination Agreement’s broad language was sufficient to eliminate Fortress’s license. The word “irrevocable,” the court held, meant that the license could not be revoked unilaterally by the party that granted it. It did not mean that Uniloc and Fortress could not terminate the license by mutual agreement.

The court also considered a License Agreement provision stating that rights that naturally survive termination would continue. It concluded that a bare, unused license was not the kind of right that naturally survived termination. The agreement’s separate provision allowing termination by mutual written agreement, while expressly preserving previously granted sublicenses, further supported that conclusion. The court also rejected Google’s argument that the license survived because the underlying event of default had not been cured or annulled.

Ruling

The Federal Circuit held that the license did not survive the Termination Agreement. Because Fortress therefore could not sublicense the patents when Uniloc brought suit, and Google agreed that Uniloc had standing under those circumstances, the court held that the district court erred in dismissing the cases for lack of subject-matter jurisdiction.

Circuit Judge Dyk authored the Federal Circuit’s opinion. The court reversed and remanded for further proceedings consistent with its opinion.