Subsequent Clarifying Provision Does Not Cause Plain Language of License to Be Redundant or Permit It to Be Ignored

Authored by D. Brian Kacedon, Daniel F. Klodowski, and John C. Paul  

Abstract

A California court recently overturned a jury’s finding that Motorola was licensed under a Bluetooth Patent/Copyright License Agreement (“BPLA”) as to certain patent claims asserted in an infringement action by Fujifilm. The court was not persuaded that a sentence defining the scope of the agreement could be ignored as redundant in view of a subsequent clarifying provision. Thus, the court held that the plain language of the agreement did not grant Motorola a license to the patent claims.

In Fujifilm Corporation v. Motorola Mobility LLC, Fujifilm accused Motorola of infringing four patents related to digital cameras, cellular telephones, and wireless data transmission. For three asserted claims related to wireless data transmission, Motorola argued that it was licensed under the Bluetooth Patent/Copyright License Agreement (“BPLA”). After a trial, the jury found that Motorola was licensed as to two of the asserted claims, and judgment was entered accordingly. Among several post-judgment motions by the parties, Fujifilm moved for judgment as a matter of law that Motorola was not licensed.

There was no dispute that Motorola and Fujifilm were parties to the BPLA or that the Bluetooth technology at-issue was within the defined “Scope” of the BPLA. Motorola’s licensing defense turned on the BPLA’s two-sentence definition of “Necessary Claims” to which a license is granted under the BPLA. The first sentence requires that “Necessary Claims” be “necessarily infringed by implementing those portions of the Bluetooth Specification and/or Foundation Specification within the bounds of the Scope.” The second sentence provides, among other things, that “Necessary Claims do not include any claims . . . that read solely on any implementations of any portion of the Bluetooth Specification or Foundation Specification that are not within the bounds of the Scope.” Motorola argued that certain of Fujifilm’s asserted claims were Necessary Claims based on implementations of three Bluetooth specifications falling under the BPLA’s defined Scope. Motorola, however, did not contend that the claims were “necessarily infringed” by implementing the Bluetooth specifications, as required by the first sentence of the definition of “Necessary Claims.” Motorola’s expert testified that the specifications could be implemented without infringing. Nonetheless, Motorola argued that the claims were Necessary Claims because they recite both (1) in-Scope technology, and (2) “enabling technologies, such as wireless telephones, that are reasonably necessary to implement those technologies.”

According to the court, Motorola’s interpretation was based solely on the second sentence of the BPLA’s definition of “Necessary Claims” and disregarded the “necessarily infringed” requirement of the first sentence. Motorola’s argument was that the second sentence of the definition, which allegedly overlapped and rendered the first sentence redundant, would have been “wholly unnecessary” if the first sentence were given its plain meaning. While the court acknowledged the general legal principle that contract provisions should be read so as to avoid being overlapping or redundant with other provisions, it held that Motorola took that principle too far by attempting to read out an entire sentence of the license. The court found that the second sentence could only be reasonably read as clarifying the first sentence. The court was also not convinced by Motorola’s argument that its interpretation was supported by the BPLA’s purported purpose of facilitating sharing of intellectual property among Bluetooth SIG members and avoiding intellectual property disputes. The court pointed out that Motorola provided no support for its statement.

Because the court held that the “necessarily infringed” clause was an effective requirement of the definition of “Necessary Claims” under the BPLA, and because Motorola did not show that its technology necessarily infringed the asserted patents, the court concluded that the asserted claims were not licensed to Motorola.

Strategy and Conclusion

This case illustrates how contractual terms may be legally effective even when they are overlapping or redundant, and that in such situations, it is not appropriate to ignore the plain meaning of a contract clause merely because it overlaps with another clause.

Endnotes
¹ The Fujifilm Corporation v. Motorola Mobility LLC opinion may be found at http://www.finnegan.com/files/upload/LES_Insights_Column/2016/20160516_Fujifilm_v_Motorola_cand-3-12-cv-03587-383.pdf.