DIRECTV's distributors win Federal Circuit appeal affirming their patent-exhaustion victory on summary judgment
Clients DIRECTV, LLC
On behalf of DIRECTV, LLC, Jones Day successfully argued an appeal before the United States Court of Appeals for the Federal Circuit, which affirmed a grant of summary judgment based on the patent-exhaustion doctrine, in favor of four distributors of equipment for receiving DIRECTV satellite-television broadcasts. In the patent infringement lawsuit, plaintiff Global Communications ("Global") contended that the distributors violated its satellite transmission-related patents by distributing allegedly infringing components to dealers and installers for use in the DIRECTV system. The distributors, however, had purchased most of the components in question from DIRECTV, which Global had earlier covenanted not to sue for any activities related to the patents in dispute. Represented by Jones Day, the distributors moved for summary judgment regarding the items purchased from DIRECTV, arguing that DIRECTV's authorized sales of those items exhausted any patent rights that Global might have had in them.
The district court held that the distributors' patent-exhaustion argument was "exactly right" and granted them summary judgment, eliminating from liability the vast majority of components at issue. Thereafter, Global dismissed with prejudice its claims based on components the distributors obtained from elsewhere, and appealed the summary-judgment ruling of patent exhaustion regarding components they obtained from DIRECTV. In its May 8, 2013 order—issued just two days after oral argument—the Federal Circuit rejected Global's contentions and affirmed the district court's grant of summary judgment in its entirety. By doing so, the Federal Circuit reaffirmed the patent-exhaustion doctrine's important role in protecting downstream purchasers from patent owners seeking to extract duplicate royalties.
The Jones Day team that successfully represented DIRECTV's distributors in the appeal was led by Greg Castanias and Jennifer Swize of the Firm's Washington Office.
Global Communications, Inc. v. PDI Communications, Inc. et al., Civil Action No. 4:11-cv-00541 (N.D. Fla. May 21, 2012), Appeal No. 2012-1619 (Fed. Cir. May 8, 2013)