On May 15, 2013, The Storm Law Firm, acting as counsel of record, filed a petition for a writ of certiorari on behalf of ClearPlay, Inc. in the United States Supreme Court. The petition raises two important issues related to patent licensing, and about which the federal circuit courts—including the Eleventh Circuit and the Federal Circuit—have issued conflicting decisions.
ClearPlay is a producer of parental-control “filtering” technology for electronic devices such as DVD players that allows the viewer to filter out “objectionable content”—including bloodshed, nudity, sex, substance abuse, violence, and vulgarity—from movies. Respondent Nissim Corp., founded and owned by Max Abecassis, owns certain patents that are licensed to manufacturers of DVD players. In 2004, Nissim sued ClearPlay, alleging infringement of five patents. ClearPlay vigorously contested the lawsuit for over a year. Then, on the eve of trial, Nissim proposed a settlement and granted ClearPlay a license to Nissim’s patents.
However, after accepting royalty payments under the license agreement, Nissim misrepresented to ClearPlay’s business partners, including Samsung, Target, and Best Buy, that ClearPlay’s products (1) violated certain covenants of the parties’ license agreement unrelated to the patents’ field of use, (2) were accordingly “unlicensed,” and (3) therefore infringed on Nissim’ patents. Nissim’s false assertions that ClearPlay’s products were “unlicensed,” combined with direct threats of patent litigation, destroyed ClearPlay’s valuable business relationships.
ClearPlay filed suit in the District Court for the Southern District of Florida, asserting state-law causes of action for tortious interference with contractual and prospective business relations, breach of contract, and a claim for violation of Florida’s Deceptive and Unfair Trade Practices Act. Among its allegations, ClearPlay claimed that Nissim had breached the license provision of the License Agreement, which constituted an implied promise that Nissim would not sue ClearPlay or its sublicensed business partners for infringement. The Eleventh Circuit affirmed the trial court’s summary judgment decision dismissing all of ClearPlay’s claims on the basis of federal conflict preemption and based on its holding that ClearPlay’s patent license did not provide ClearPlay with a contractual right not to be sued for patent infringement.
The petition asks the Supreme Court to grant certiorari to the Eleventh Circuit to address the following questions:
- Whether a patent license is an affirmative covenant not to sue, as held by the Federal Circuit and adopted by several other circuits, or whether a license allows the licensor to threaten infringement suits, as held by the Eleventh Circuit?
- Do federal patent laws preempt state-law business-interference claims when the veracity of a licensor’s assertions that its products were “unlicensed” can be determined by looking to the terms of the license agreement without regard to any issues of patent law?
Lead attorney Eric Storm stated, “We are very pleased that ClearPlay has entrusted The Storm Law Firm to prepare its petition to our nation’s highest court.”
