DIRECTV and component manufacturers prevail on summary judgment in patent infringement case
Client(s) DIRECTV Group, Inc., The
Jones Day representing The DIRECTV Group, Inc., as well as numerous manufacturers of components used in DIRECTV's systems, prevailed by obtaining summary judgment rulings holding: (1) that a covenant not to sue between DIRECTV and Global was breached by Global's filing of this lawsuit; and (2) that the component manufacturers did not infringe Global's patents.
On November 16, 2015, the United States District Court for the Northern District of Florida entered a series of decisions holding (1) that a number of companies that manufactured component parts for DIRECTV home satellite units did not contributorily infringe the asserted claims of several patents owned by plaintiff Global Communications, Inc., and (2) that Global had breached a prior settlement agreement between Global and DIRECTV by suing DIRECTV in the case. The orders led to a stipulated dismissal of all of Global's claims against all of the remaining defendants.
DIRECTV provides satellite television service to subscribers through equipment, including satellite dishes and television set-top boxes, whose component parts are made by a variety of companies. Global had previously sued DIRECTV for infringement of a set of patents known as the "single-wire patents," but settled that dispute in 2004 for a lump-sum payment while promising to "forever refrain" from suing DIRECTV or any DIRECTV subscriber "based, in whole or in part, on the alleged infringement of the Single Wire Patent Rights."
In 2011, Global sued four DIRECTV distributors—companies that purchased equipment from DIRECTV and distributed it downstream in the DIRECTV supply-chain operation for eventual use by DIRECTV subscribers. Jones Day, representing the DIRECTV distributors, succeeded in having Global's case dismissed on the basis of the doctrine of patent exhaustion, and the Federal Circuit affirmed. Global Commc'ns, Inc. v. PDI Commc'ns, Inc., No. 4:11-cv-541 (N.D. Fla. May 21, 2012), aff'd without opinion, 503 F.App'x 951 (Fed. Cir. 2013).
Global sued for a third time on its patents in 2012, naming not only DIRECTV (for assembling the patented system at customer's homes) but also 23 upstream manufacturers of component parts. Jones Day, now representing DIRECTV and the upstream manufacturers, first succeeded in obtaining DIRECTV's dismissal from the case based on the 2004 settlement, and then moved the district court to dismiss Global's infringement claims against the component makers, and to grant DIRECTV a partial summary judgment of liability for breach of the settlement agreement. After argument, the district court granted DIRECTV's and the component manufacturers' motions in November 2015.
The court's analysis was straightforward: Because Global's infringement claims were all based on the notion that the component manufacturers were contributing to DIRECTV's infringement, but DIRECTV was authorized by the 2004 agreement's unconditional covenant not to sue (the "forever refrain" clause) to make, use, or sell otherwise infringing products, there was no direct infringer, and thus, under established Federal Circuit and Supreme Court precedent, the manufacturers could not "contribute" to DIRECTV's (nonexistent) infringement: "[A] manufacturer does not contributorily infringe by making component parts that someone else will combine for a noninfringing use."
On DIRECTV's motion for partial summary judgment of breach-of-contract liability, the court's analysis was even simpler: "Global covenanted not to sue DirecTV for infringement of the single-wire patents. By filing this lawsuit, Global breached the covenant."
The cross-office, cross-practice Jones Day team that brought this years-long dispute to a successful conclusion included Greg Castanias (Washington), who argued the summary-judgment motions; Rick McKnight, Steve Corr, and Alex Houle Smith (Los Angeles), Ken Smith and Andrew Pinson (Atlanta), Leo Agozzino (Cleveland), and Caroline Edsall (Washington).
Global Communications, Inc. v. DIRECTV, Inc., The DIRECTV Groups, Inc., et al., Case No. 4:12-cv-00651-RH-CAS (N.D. Fla., Tallahassee Div.)