Alcoa Corporation and Alcoa USA Corp. v. Anheuser-Busch InBev SA/NV

Background

In 2013, InBev entered into a patent-licensing agreement with Alcoa, Inc., then the parent of Alcoa Corporation and Alcoa USA Corp. The agreement licensed InBev to produce a lightweight, re-closable aluminum bottle and required the parties to protect confidential information exchanged during the project. The agreement also contained an arbitration provision covering whether a breach had occurred and other disputes arising from the agreement, while excluding disputes about infringement, validity, or enforceability of specified Alcoa patent rights.

Anheuser-Busch InBev SA/NV, Anheuser-Busch Companies, LLC, and Metal Container Corporation asserted that Alcoa breached the 2013 agreement by using and disclosing confidential information to obtain patents. They demanded arbitration on two claims. Alcoa’s two-count complaint sought declarations that those claims were not arbitrable, that the 2013 agreement had been superseded by a later 2019 agreement, and that the arbitration violated the 2019 agreement.

Whether the Court or Arbitrator Decided Arbitrability

The court explained that “arbitrability”—whether a particular dispute must be decided in arbitration—is ordinarily for a court unless the parties clearly and unmistakably assigned that question to the arbitrator. Although the agreement incorporated American Arbitration Association rules allowing an arbitrator to decide jurisdiction, the court found that the arbitration clause was narrow because it limited the arbitrator’s authority and contained exceptions. The court therefore decided whether the claims fell within the clause.

Scope of the Arbitration Clause

The court held that both claims in Anheuser-Busch InBev’s demand fell within the 2013 agreement’s provision covering breaches, including confidentiality breaches. The claims alleged that Alcoa used confidential information in patent applications and, alternatively, failed to provide required notice concerning intellectual-property rights.

The court rejected Alcoa’s argument that the claims actually challenged rights in a patent covered by the 2019 agreement. The court found that the arbitration demand did not assert inventorship or challenge the patent’s validity, enforceability, or ownership. It also rejected Alcoa’s argument that the 2019 agreement’s merger clause extinguished the 2013 agreement’s confidentiality obligations. The court reasoned that the agreements concerned different subjects and that the 2013 agreement expressly preserved post-termination confidentiality duties. It concluded that the 2019 agreement did not supersede or extinguish the 2013 agreement’s arbitration provision.

Which Parties Were Bound

Alcoa Corporation and Alcoa USA Corp. had not signed the 2013 agreement. The court considered legal theories that can bind a nonsignatory, including assumption of contractual obligations and estoppel based on receiving a direct benefit from a contract.

The court held that Alcoa Corporation had assumed Alcoa, Inc.’s obligations under a 2016 separation and distribution agreement. That agreement transferred relevant assets and required Alcoa Corporation to assume liabilities arising from specified contracts, which included the 2013 agreement. The court held that this assumption included the obligation to arbitrate, even though the 2013 agreement had expired, because it contained continuing post-termination obligations.

The court rejected estoppel as a basis for compelling Alcoa USA to arbitrate. Although Alcoa USA received assignments of patents and a patent application from Alcoa, Inc., the court found that any benefit from alleged misuse of confidential information was indirect rather than a direct benefit contemplated by the 2013 agreement. The court also found no evidence that Alcoa USA assumed the 2013 agreement’s benefits and liabilities. Alcoa USA therefore was not bound by the arbitration provision.

The court separately held that Anheuser-Busch Companies, LLC and Metal Container Corporation were not parties to the 2013 agreement and had not shown that they assumed its benefits or liabilities. They therefore could not bring claims against Alcoa in arbitration.

Disposition

Judge P. Castel granted Anheuser-Busch InBev SA/NV’s motion insofar as Alcoa Corporation was compelled to arbitrate the two claims in the arbitration demand. The court stayed the entire action pending arbitration. It reserved other issues for the arbitrator and stated that, after arbitration, it would hear from the parties about whether either claim in Alcoa’s complaint survived.