Case 1:16-cv-03852-JPO Document 84 Filed 12/14/16 Page 1 of 9
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`16-CV-3852 (JPO)
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`OPINION AND ORDER
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`COMCAST CORPORATION, COMCAST
`CABLE COMMUNICATIONS, LLC,
`COMCAST CABLE COMMUNICATIONS
`MANAGEMENT, LLC, COMCAST OF
`HOUSTON, LLC, COMCAST BUSINESS
`COMMUNICATIONS, LLC, COMCAST
`HOLDINGS CORPORATION, COMCAST
`SHARED SERVICES, LLC, and COMCAST
`STB SOFTWARE I, LLC,
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`Plaintiffs,
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`-v-
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`ROVI CORPORATION, ROVI GUIDES, INC.,
`ROVI TECHNOLOGIES CORP., and VEVEO,
`INC.,
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`J. PAUL OETKEN, District Judge:
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`Defendants.
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`On June 1, 2016, Comcast Corporation, Comcast Cable Communications, LLC, Comcast
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`Cable Communications Management, LLC, Comcast of Houston, LLC, Comcast Business
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`Communications, LLC, Comcast Holdings Corporation, Comcast Shared Services, LLC, and
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`Comcast STB Software I, LLC (collectively, “Comcast” or “Plaintiffs”) filed a motion for
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`preliminary injunction, seeking to enjoin Rovi Corporation, Rovi Guides, Inc., Rovi
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`Technologies Corp., and Veveo Inc. (together, “Rovi” or “Defendants”) from continuing to
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`prosecute their patent infringement claims against Plaintiffs in the Eastern District of Texas and
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`the International Trade Commission (“ITC”). (See Dkt. No. 25). On June 10, 2016, Defendants
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`filed a motion to dismiss, or alternatively, to stay or transfer the present action, as the Eastern
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`District of Texas was the first-filed forum. (See Dkt. No. 49.) On June 22, 2016, Plaintiffs filed
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`a letter motion for a stay pursuant to 28 U.S.C. § 1659(a) in light of the ITC action. (See Dkt.
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`Case 1:16-cv-03852-JPO Document 84 Filed 12/14/16 Page 2 of 9
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`No. 57.) A hearing on this matter was held on July 12, 2016. (See Dkt. No. 72.) On August 16,
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`2016, the Court denied Plaintiffs’ motion for a preliminary injunction, granted Defendants’
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`motion to the extent that it requested a stay, and denied as moot Plaintiff’s letter motion to stay
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`the ITC proceedings. (See Dkt. No. 75.) The Court reasoned that the first-filed forum, the
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`Eastern District of Texas, should first determine whether it was the appropriate forum in which
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`to resolve the parties’ disputes. (Id.)
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`On October 25, 2016, the Eastern District of Texas granted Plaintiffs’ motions to change
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`venue to this Court pursuant to a forum-selection clause in a contract between Comcast and
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`Rovi. (Dkt. No. 79-1.) The parties now agree that Plaintiff’s preliminary injunction motion is
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`ripe for resolution by this Court to the extent it seeks to enjoin Rovi’s prosecution of its action in
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`the ITC. (See Dkt. No. 80; Dkt. No. 82.) The Court, therefore, lifts the stay previously imposed
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`to resolve the pending motion for a preliminary injunction as regards the ITC action. For the
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`reasons that follow, the Court denies Plaintiffs’ motion for a preliminary injunction and stays the
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`portion of the present action that overlaps with the ITC action pursuant to 28 U.S.C. § 1659(a)
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`until any judgment by the ITC becomes final.
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`I.
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`Background
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`On May 23, 2016, Comcast commenced the present action for breach of contract and a
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`declaratory judgment of patent noninfringement against Rovi. (Dkt. No. 1.) Before Comcast
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`filed the present action, Rovi had commenced proceedings in the ITC. See In the Matter of
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`Certain Digital Video Receivers and Hardware and Software Components Thereof, Inv. No.
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`337-TA-1001 (ITC Apr. 6, 2016). The earlier-filed ITC action involves seven of the fifteen
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`patents at issue in the present action.1 (Dkt. No. 28-6.) The complainants in that action—Rovi
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`At the ITC, Rovi asserts U.S. Patent Nos. 6,418,556; 8,000,263; 8,046,801; 8,566,871;
`8,578,413; 8,621,512; and 8,768,147 (together, the “ITC patents”). In addition to the ITC
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`Corporation and Rovi Guides Inc.—allege that the Plaintiffs here (except Comcast of Houston,
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`LLC and Comcast STB) infringe at least one claim of each of the asserted ITC patents. (Dkt.
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`No. 16 ¶ 45.)
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`In both this action and the ITC action, Rovi alleges that Comcast’s interactive
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`programming guides and set-top boxes infringe its patents. (Dkt. No. 27 at 6.) In its pending
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`motion for preliminary injunction, Comcast asks this Court to enjoin Rovi from continuing to
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`prosecute its infringement action in the ITC, and to order Rovi to terminate that action based on
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`its reading of two forum-selection clauses in contracts between Comcast and Rovi: a software
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`cross license agreement (the “Software Agreement”) and an expired patent license and
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`distribution agreement (the “Patent Agreement”). (Dkt. No. 25.)
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`In 2010, Comcast and Rovi entered into a series of agreements that include the Software
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`Agreement and Patent Agreement (the “Agreements”). (Dkt. No. 58 at 4.) Each Agreement
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`contains a forum-selection clause. The Software Agreement provides, in relevant part:
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`The Parties agree that any suit, action or proceeding seeking to
`enforce any provision of, or based on any matter arising out of or in
`connection with, this Agreement or the transactions contemplated
`hereby shall be brought in the United States District Court for New
`York or any New York State court sitting in New York County, so
`long as one of such courts shall have subject matter jurisdiction over
`such suit, . . . .
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`(Dkt. No. 28-4 § 12.09.) The Patent Agreement provides, in relevant part: “The parties hereby
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`agree and consent to the exclusive jurisdiction and venue of the states and/or federal courts
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`situated in New York, New York, for any dispute arising from this AGREEMENT.” (Dkt. No.
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`28-5 § 23.) By its terms, the Patent Agreement expired on March 31, 2016 (id. at § 17(a)), but
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`its forum-selection clause purports to “survive indefinitely” (id. §§ 17(d)(vi), 23). Rovi argues
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`patents, U.S. Patent Nos. 6,725,281; 7,895,218; 7,996,864; 8,122,034; 8,433,696; 8,713,595;
`8,755,666; are 9,172,987 are implicated in the present action. (Dkt. No. 16 ¶¶ 43-44.)
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`that neither Agreement’s forum-selection clause bars its patent infringement claims at the ITC.
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`(Dkt. No. 58.)
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`II.
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`Legal Standards
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`As an initial matter, Federal Circuit law governs the issue of whether to grant a
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`preliminary injunction to enjoin Rovi’s participation in an ITC action because it involves a
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`procedural matter arising from substantive issues that are unique to the Federal Circuit’s
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`jurisdiction. See Gen. Protecht Grp., Inc. v. Leviton Mfg. Co., 651 F.3d 1355, 1359 (Fed. Cir.
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`2011) (applying Federal Circuit law to a case “involving an injunction against participation
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`in . . . an ITC investigation”); Texas Instruments Inc. v. Tessera, Inc., 231 F.3d 1325, 1328 (Fed.
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`Cir. 2000) (holding that a “preliminary injunction motion . . . to enjoin [a party] from continued
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`participation in an ITC proceeding” is governed by the Federal Circuit’s procedural law).
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`Interpretation of a license agreement, however, requires the Court to engage in general
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`contract interpretation, which is “not within the exclusive jurisdiction of the Federal Circuit,”
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`and is “ordinarily a question of state law.” Texas Instruments, 231 F.3d at 1329 (quoting Volt
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`Info. Sci., Inc. v. Bd. of Tr. of Leland Stanford Junior Univ., 489 U.S. 468, 474 (1989)). The
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`governing-law clauses of the Agreements require interpretation of the agreements in accordance
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`with New York law. (Dkt. No. 28-4 § 12.08; Dkt. No. 28-5 § 23.) This Court will, therefore,
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`apply New York state law to interpret the license agreements.
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`As for the relief sought, a preliminary injunction is an “extraordinary remedy that may
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`only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v.
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`Natural Res. Def. Council, Inc., 555 U.S. 7, 22 (2008). “A plaintiff seeking a preliminary
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`injunction must establish that he is likely to succeed on the merits, that he is likely to suffer
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`irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor,
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`and that an injunction is in the public interest.” Id. at 20; see also Texas Instruments, 231 F.3d at
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`1328 (Fed. Cir. 2000).
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`III. Discussion
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`A.
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`Preliminary Injunction
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`The Court begins by analyzing Comcast’s likelihood of success on the merits as regards
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`the forum selection clauses of (1) the Software Agreement and (2) the Patent Agreement.
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`Comcast argues that it is likely to succeed under both Agreements’ forum-selection
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`clauses, as Rovi’s ITC proceeding “aris[es]” from or is “in connection with” the Software
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`Agreement (Dkt. No. 28-4 § 12.09), and “aris[es]” from the Patent Agreement (Dkt. No. 28-5
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`§ 23), and that there is a strong presumption under New York law in favor of interpreting broadly
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`and enforcing forum-selection clauses. (Dkt. No. 27 at 10-11 (citing, inter alia, Montoya v.
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`Cousins Chanos Casino LLC, 943 N.Y.S.2d 793 (Table), at *4-6 (N.Y. Sup. Ct. Jan 12, 2012).)
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`Turning first to the Software Agreement, Rovi argues that, even if triggered, the plain
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`language of the forum-selection clause in the Software Agreement precludes its application to
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`the ITC action at issue because this Court lacks jurisdiction over the ITC proceedings. The
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`Software Agreement’s forum-selection clause includes an important limitation: It requires that
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`any “action or proceeding” “aris[ing] out of” that agreement “be brought” in New York courts,
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`but only “so long as one of such courts shall have subject matter jurisdiction over such suit.”
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`(Dkt. No. 28-4 § 12.09 (emphasis added).) Rovi’s claims in the ITC arise from § 337 of the
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`Tariff Act of 1930, 19 U.S.C. § 1337, and the ITC has exclusive jurisdiction over unfair
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`importation practices brought under that section. See Enercon GmbH v. Int’l Trade Comm’n,
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`151 F.3d 1376, 1380 (Fed. Cir. 1998); Potter v. Toei Animation Inc., 839 F. Supp. 2d 49, 53
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`(D.D.C. 2012). The Software Agreement’s forum-selection clause, therefore, does not apply to
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`its ITC action because the New York courts contemplated in the Software Agreement, including
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`this Court, do not have subject matter jurisdiction over the ITC action.
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`Comcast’s insistence that the nature of the underlying dispute—a dispute over patent
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`infringement—enables this Court to exercise its jurisdiction does not cure the jurisdictional
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`hurdle of the ITC’s exclusive jurisdiction and therefore does not overcome the Software
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`Agreement’s express requirement that this Court have jurisdiction over the dispute in order to
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`trigger the forum-selection clause. (See Dkt. No. 64 at 6; see also Dkt. No. 62 at 13-14.)2
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`Because this Court does not have jurisdiction over the proceedings commenced in the
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`ITC, and because the forum-selection clause of the Software Agreement is not triggered unless a
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`New York court has jurisdiction over the action in question, Comcast is not likely to succeed on
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`the merits of its claim that Rovi’s maintenance of the ITC action constitutes a breach of the
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`forum-selection clause of the Software Agreement.
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`Turning to the Patent Agreement, Rovi makes two arguments that the Patent Agreement’s
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`forum-selection clause does not apply to the ITC action. First, Rovi argues that the ITC
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`proceedings do not “aris[e] from” the Patent Agreement because the ITC action arises from
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`statute, not out of a dispute concerning the Agreement. (Dkt. No. 58 at 10-11.) And while the
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`Second Circuit’s case law requires that a party assert “rights or duties under the contract” in
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`order for a dispute to arise under that contract, see Phillips v. Audio Active Ltd., 494 F.3d 378,
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`Comcast argues that “[b]ecause this Court has subject matter jurisdiction over patent
`infringement cases and can hear the infringement claims Rovi asserts in the ITC, Rovi breached
`the Software Agreement by suing in the ITC.” (Dkt. No. 64 at 6; see also Dkt. No. 62 at 13-14.)
`This misses the point. “The district courts of the United States. . . are ‘courts of limited
`jurisdiction’” that “possess only that power authorized by Constitution and statute.” Exxon
`Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005) (quoting Kokkonen v. Guardian
`Life Ins. Co. of America, 511 U.S. 375, 377 (1994)). While this Court does have “original
`jurisdiction of any civil action arising under any Act of Congress relating to patents,” 28 U.S.C.
`§ 1338, it simply does not have jurisdiction over claims brought under Section 337 of the Tariff
`Act of 1930, see 19 U.S.C. § 1337.
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`391 (2d Cir. 2007), this Court must apply the procedural law of the Federal Circuit, as explained
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`above. The Federal Circuit has held that “[p]atent infringement disputes do arise from license
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`agreements.” Texas Instruments, 231 F.3d at 1331. Patent infringement actions relating to valid
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`license agreements are therefore properly considered as arising from those licenses, not from the
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`statute.
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`That said, the Patent Agreement is no longer operative; it expired on March 31, 2016.
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`Rovi filed its claims with the ITC after that date, seeking prospective relief. (Id. at 11-13.) Rovi
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`does not seek damages or injunctive relief on any activity by Comcast that occurred before the
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`expiration of the Patent Agreement on March 31, 2016. (See Dkt. No. 58 at 10-11; Dkt. 59-10;
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`Dkt. No. 72 at 45:3-46:25; Dkt. No. 83.) While it is true that the forum-selection clause in the
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`Patent Agreement “survive[s] indefinitely” (id. §§ 17(d)(vi), 23), claims for patent infringement
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`do not “aris[e] under” (Dkt. No. 28-5 § 23) an expired or invalid patent license agreement and,
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`therefore, do not trigger the surviving forum-selection clause by its own terms. A “forum
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`selection clause . . . is not applicable” where a plaintiff “makes it clear that it only seeks to
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`recover damages and injunctive relief based on [a defendant’s] alleged infringement that took
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`place after the expiration date of the license” because “[s]uch claims do not arise under the
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`License Agreement, and are therefore not governed by the forum selection clause.” Innovative
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`Display Techs. LLC v. Microsoft Corp., No. 2:13 Civ. 00783, 2014 WL 2757541, at *6 (E.D.
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`Tex. June 17, 2014) (citing Video Streaming Sols. LLC v. Microsoft Corp., No. 13 Civ. 7031,
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`2014 WL 2198480, at *4 (N.D. Ill. May 27, 2014)). Similarly, Rovi is not seeking relief at the
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`ITC for any unfair act that occurred prior to the expiration of the Patent Agreement.
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`Accordingly, the dispute does not arise from the expired Patent Agreement, and the forum-
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`selection clause is not triggered.
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`Comcast is therefore not likely to succeed on the merits of its claim regarding either
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`Agreement. As such, it is not entitled to a preliminary injunction, and the Court declines to
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`address the remaining factors. See Somerset Pharms., Inc. v. Dudas, 500 F.3d 1344, 1346 (Fed.
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`Cir. 2007) (“To establish entitlement to a preliminary injunction a movant must establish a
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`reasonable likelihood of success on the merits.”) (citing Nat’l Steel Car, Ltd. v. Canadian Pac.
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`Ry., Ltd., 357 F.3d 1319, 1324-25 (Fed. Cir. 2004)); In re Fenofibrate Patent Litig., 910 F. Supp.
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`2d 708, 716 (S.D.N.Y. 2012), aff’d, 499 F. App’x 974 (Fed. Cir. 2013) (denying a preliminary
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`injunction under Federal Circuit law where the movant “has failed to demonstrate that it is likely
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`to prevail on the merits on appeal” and declining to “address the remaining factors”).
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`B. Motion to Stay
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`On June 22, 2016, Comcast submitted an unopposed letter motion for a statutory stay of
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`the proceedings in this Court that overlap with the proceedings in the ITC, pursuant to 28 U.S.C.
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`§ 1659(a). (Dkt. No. 57; Dkt. No. 82 at 1 n.1.) The Court now grants that motion.
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`IV. Conclusion
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`For the foregoing reasons, Comcast’s motion to enjoin Rovi from prosecuting its action
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`pending before the ITC is DENIED.
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`Comcast’s motion for a stay pursuant to 28 U.S.C. § 1659(a) is GRANTED as to the
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`seven patents asserted in the ITC until the ITC action is terminated or any determination of the
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`ITC becomes final.
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`The parties are directed to file a letter with the Court by December 23, 2016, indicating
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`the parties’ views as to how the action should proceed, including whether either party intends to
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`move to stay the remainder of the case or whether Defendants shall answer or otherwise respond
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`to the complaint.
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`SO ORDERED.
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`Dated: December 14, 2016
`New York, New York
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`____________________________________
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` J. PAUL OETKEN
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` United States District Judge
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