Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-01825/USCOURTS-ca13-14-01825-0/pdf.json

Parties Involved:
DISH Network Corporation
Not party
EchoStar Corporation
Not party
Personalized Media Communications, L.L.C.
Appellee
Rovi Guides, Inc.
Appellant
TVG-PMC, Inc.
Appellant

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

PERSONALIZED MEDIA COMMUNICATIONS, 

L.L.C.,

Plaintiff-Appellee

v.

ROVI GUIDES, INC., TVG-PMC, INC.,

Defendants-Appellants

ECHOSTAR CORPORATION, DISH NETWORK 

CORPORATION, FKA ECHOSTAR 

COMMUNICATIONS CORPORATION,

Defendants

______________________ 

2014-1825

______________________ 

Appeal from the United States District Court for the 

Eastern District of Texas in No. 2:08-cv-00070-RSP, 

Magistrate Judge Roy S. Payne.

______________________ 

Decided: December 22, 2015

______________________ 

 DANIEL J. SHIH, Susman Godfrey LLP, Seattle, WA, 

argued for plaintiff-appellee. Also represented by 

STEPHEN D. SUSMAN, CHANLER ASHTON LANGHAM, HouCase: 14-1825 Document: 84-2 Page: 1 Filed: 12/22/2015
2 PERSONALIZED MEDIA v. ROVI GUIDES, INC. 

ston, TX; ARUN SUBRAMANIAN, New York, NY; STEPHEN 

SCHREINER, Goodwin Procter LLP, Washington, DC.

 JOEL LANCE THOLLANDER, McKool Smith, P.C., Austin, TX, argued for defendants-appellants. Also represented by RODERICK GEORGE DORMAN, MARC MORRIS, McKool 

Smith Hennigan, P.C., Los Angeles, CA; DANIEL LUKE 

GEYSER, Stris & Maher LLP, Los Angeles, CA.

______________________ 

Before REYNA, MAYER, and CHEN, Circuit Judges.

REYNA, Circuit Judge. 

Plaintiff-Appellee Personalized Media Communications (“PMC”) is the assignee of U.S. Patent Nos. 

4,965,825; 5,109,414; 5,233,654; 5,335,277; and 5,887,243 

(collectively, the “Harvey Patents”), which relate to distributing and controlling media content. DefendantAppellants EchoStar Corporation (“EchoStar”) and Rovi 

Guides, Inc. (“Rovi”) make and sell interactive television 

programming guides for finding, watching, and recording

television shows, and for performing related functionality. 

Rovi holds a limited license to use the Harvey Patents in 

the “Interactive Program Guide” (“IPG”) field, and EchoStar is its sub-licensee. 

In 2008, PMC sued EchoStar for infringement of the 

Harvey Patents. EchoStar asserted a license defense, and

Rovi intervened as EchoStar’s licensor. PMC moved for

summary judgment on EchoStar’s license defense, arguing that the accused technology falls outside the scope of 

Rovi’s license. J.A. 2801-22. The district court granted 

PMC’s motion because it found that “the contract at issue 

is unambiguous and does not cover the accused instrumentalities in this case.” J.A. 11. The district court 

concluded that because the license’s scope is unambiguous, consideration of extrinsic evidence was unnecessary. 

J.A. 9-10.

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PERSONALIZED MEDIA v. ROVI GUIDES, INC. 3

The issue on appeal is whether the district court erred 

in its determination that Rovi’s license is unambiguous, 

such that extrinsic evidence was rightfully excluded. We 

hold that the license is ambiguous, and accordingly, we 

vacate the district court’s grant of summary judgment and 

remand for further consideration in light of the extrinsic 

evidence. 

I. BACKGROUND

In 2000, PMC and Rovi entered into a license agreement (the “IPG License” or “License”) giving Rovi exclusive rights to use the Harvey Patents in the IPG field. 

J.A. 2363. The parties defined the IPG field in Section 1.3 

of the agreement, which reads, in relevant part:

[Sentence One] The “Interactive Program 

Guide” field means applications and services (collectively “IPG Applications”), the primary purpose 

of which is to provide descriptive information (including without limitation program listings) relating to television or radio programming available 

to Consumers, and which may, or through actions 

by a Consumer may, control Consumer equipment 

that enables viewing, listening, recording or storing of such television or radio programming, but 

where such IPG applications are not primarily intended to provide descriptive information relating 

solely to advertising or promotional programming 

available to Consumers. 

[Sentence Two] Such IPG Applications shall include, without limitation, tuning, flip, browse, parental control, recording, reminders, favorites, 

searching or sorting listings by any category or 

criteria, video on demand, near video on demand, 

pay per view, picture in guide functionality, help, 

user profile setup, generation or use, TV mail, TV 

chat, and TV newsgroups. 

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[Sentence Three] The Interactive Program 

Guide field shall also include the ability to access 

from such IPG Applications any other interactive 

or passive application, service or feature; provided, however, that the creation, distribution, 

transmission and use by a Consumer of such other 

interactive or passive applications, features, or 

services or the television or radio programming 

accessible through such IPG Applications shall 

not be deemed to be included in the Interactive 

Program Guide field.

J.A. 2360.

In 2008, PMC sued EchoStar, a Rovi sub-licensee, in 

the Eastern District of Texas for infringement of the 

Harvey patents. PMC accused EchoStar’s uplink centers 

and set top box equipment of infringing by implementing 

various functionality, including video-on-demand, payper-view, interactive or premium-content television 

applications, transmission, encryption/decryption, video 

recording, and program processing. Rovi intervened to 

argue that EchoStar’s activity fell within the scope of the

IPG License. 

PMC sought declaratory judgment that PMC’s infringement claims are outside the IPG field, as defined in 

the License. EchoStar argued that the accused technologies are within the IPG field because they are listed in 

Sentence Two as example IPG Applications. J.A. 3297-98. 

PMC countered that the Applications listed in Sentence 

Two are only licensed when their “primary purpose . . . is 

to provide descriptive information,” as required by Sentence One, and that the accused technologies did not have 

that primary purpose. J.A. 2810-11. Rovi argued that 

Sentence Two lists not example IPG Applications, but 

“features and functions of or driven by IPG Applications,” 

and that such features and functions are licensed regardCase: 14-1825 Document: 84-2 Page: 4 Filed: 12/22/2015
PERSONALIZED MEDIA v. ROVI GUIDES, INC. 5

less of whether they meet the primary purpose requirement. J.A. 4975.

The district court adopted PMC’s position. It reasoned that the language “[s]uch IPG Applications” in 

Sentence Two “suggests a definitive link between the first 

and second sentences—namely that the list set forth in 

the second sentence is a subset of examples of the ‘IPG 

Applications’ generally referred to in the first sentence, 

which are covered if the primary purpose of the application is to provide descriptive information.” J.A. 6. The 

court concluded that, “[h]aving found no ambiguity in the 

contract, the Court need not review extrinsic evidence.” 

J.A. 9.

On appeal, Rovi again argues that the examples in 

Sentence Two are not “IPG Applications,” but merely 

functions that are licensed when performed in connection 

with a licensed IPG Application (i.e., a guide whose primary purpose is to provide descriptive information). It 

argues that Sentence Two cannot list example IPG Applications that are licensed only if they meet the primary 

purpose requirement because some of the listed items, 

such as tuning, cannot have a primary purpose of providing descriptive information. 

PMC now abandons its position below and agrees with 

Rovi that Sentence Two lists functions rather than example IPG Applications. But it disagrees with Rovi that 

those functions are covered whenever performed in connection with a guide. Instead, PMC argues that the 

License covers only invocation of those listed functions by 

a licensed guide, but not the performance of those functions or the components that actuate that performance. 

In support, it highlights Sentence Three, which states 

that the licensed guides may access applications, services, 

or features that are not themselves licensed. Accordingly, 

PMC concludes that although the “ability to access external features may be covered, those features themselves 

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6 PERSONALIZED MEDIA v. ROVI GUIDES, INC. 

are not.” PMC Opening Br. 32. PMC contends that to 

read the License otherwise would transform a limited 

field-of-use license covering only program guides into a 

broad license covering virtually every aspect of a modern 

television system.

In light of the disparate interpretations advanced by 

the parties and by the district court, Rovi argues that the 

License is ambiguous, and that we should therefore 

vacate the district court’s judgment and remand for 

consideration of the extrinsic evidence. We agree. 

II. STANDARD OF REVIEW

Because summary judgment is not an issue unique to 

patent law, we apply the law of the regional circuit where 

the appeal would otherwise lay, which is here the Fifth 

Circuit. Depuy Spine, Inc. v. Medtronic Sofamor Danek, 

Inc., 469 F.3d 1005, 1013 (Fed. Cir. 2006). The Fifth 

Circuit “reviews a motion for judgment as a matter of law 

de novo, applying the same legal standard as did the trial 

court.” Ford v. Cimarron Ins. Co., 230 F.3d 828, 830 (5th 

Cir. 2000). Summary judgment should be granted “if the 

movant shows that there is no genuine dispute as to any 

material fact and the movant is entitled to judgment as a 

matter of law.” Fed. R. Civ. P. 56(a). 

The parties agree that Delaware law governs the interpretation of the IPG License. Under Delaware law, the 

interpretation of a contract—including a determination of 

whether an ambiguity exists—is reviewed de novo. Paul 

v. Deloitte & Touche LLP, 974 A.2d 140, 145 (Del. 2009). 

Delaware follows an objective theory of contracts, under 

which the contract is construed as it would be understood 

by “an objective, reasonable third party.” Estate of Osborn 

v. Kemp, 991 A.2d 1153, 1159 (Del. 2010). A contract is 

ambiguous if it is subject to two different reasonable 

interpretations, Rhone-Poulenc Basic Chems. Co. v. American Motorists Ins. Co., 616 A.2d 1192, 1196 (Del. 1992), 

and extrinsic evidence is not admissible on the question of 

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PERSONALIZED MEDIA v. ROVI GUIDES, INC. 7

whether an ambiguity exists, O’Brien v. Progressive N. 

Ins. Co., 785 A.2d 281, 288-89 (Del. 2001). The fact that 

the parties disagree on the correct interpretation of the 

contract does not automatically make the contract ambiguous. Rhone-Poulenc 616 A.2d at 1196. 

III. DISCUSSION

The only issue on appeal is whether the IPG License 

is facially ambiguous on the disputed issue, such that 

consideration of extrinsic evidence is appropriate. We 

conclude that the IPG License contains at least two 

ambiguities, which the lower court must resolve in light of 

the extrinsic evidence. First, the License is ambiguous 

regarding whether Sentence Two lists features of an IPG 

Application, as both parties propose on appeal, or “a 

subset of examples of the ‘IPG Applications’ generally 

referred to in the second sentence,” as the parties argued 

below and the district court found. J.A. 6. Second, if 

Sentence two lists functions rather than example Applications, it is unclear whether the License permits a licensed 

guide merely to access those functions, as PMC proposes, 

or whether the License also covers actual performance of 

the accessed functions, as Rovi proposes. 

A 

The core dispute below was whether the items listed 

in Sentence Two are example IPG Applications subject to 

the primary purpose requirement of Sentence One. Both 

parties agreed that Sentence Two lists example IPG 

Applications, but they disagreed on whether each such 

Application must also meet the primary purpose requirement. The district court’s rationale for concluding that 

the listed items are subject to the primary purpose requirement was its understanding that “the list set forth in 

the second sentence is a subset of examples of the ‘IPG 

Applications’ generally referred to in the first sentence,

which are covered if the primary purpose of the application is to provide descriptive information.” J.A. 6.

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8 PERSONALIZED MEDIA v. ROVI GUIDES, INC. 

Although the district court was correct that the recitation of “IPG Applications” in Sentence Two clearly refers 

back to the “IPG Applications” defined in Sentence One, it 

was incorrect that Sentence Two therefore necessarily 

lists examples of these Applications rather than their 

features. Nothing in the structure of the sentence “[s]uch 

IPG Applications shall include . . . ,” requires that what 

follows are example Applications rather than features of 

such Applications. For example, while the sentence “such 

sports shall include baseball and football” lists examples 

of sports, the sentence “such sports shall include running 

and jumping” lists features of sports. The sentence structure therefore does not settle the ambiguity. 

Moreover, compelling reasons exist to believe the district court’s interpretation is not the correct one. Tellingly, both parties now disagree with the district court’s 

interpretation that Sentence Two lists example IPG 

Applications rather than features. Even PMC, who 

triumphed on the back of the district court’s interpretation, now characterizes that same interpretation as “absurd.” PMC Opening Br. 22, n7. Another problem with 

interpreting Sentence Two as enumerating example 

Applications is that some of the examples are verbs, 

which indicate features rather than independent applications. Yet another issue, as Rovi notes, is that some of the 

examples in Sentence Two can never have the primary 

purpose of providing descriptive information. For example, the primary purpose of “tuning” is to tune, not to 

provide descriptive information. It therefore makes little 

sense for the License to grant rights to tuning applications, but only so long as the primary purpose of those 

tuning applications is to provide descriptive information. 

A basic tenet of contract interpretation is that “[w]e must 

interpret the contract in a manner that gives meaning to 

all of its provisions and makes sense.” Shell Oil Co. v. 

United States, 751 F.3d 1282, 1293 (Fed. Cir. 2014). To 

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read Sentence Two as granting rights to logically impossible applications would not make sense. 

We need not decide here on the correct construction; 

we need only conclude that the language of the License is 

ambiguous. As both parties have highlighted, the district 

court based its judgment on a construction that not only 

fails to be unambiguously correct, but is likely incorrect. 

This reason is alone sufficient to vacate the court’s order 

and remand for consideration of the extrinsic evidence.

B 

If Sentence Two lists functions, as both parties now 

argue on appeal, the IPG License is still ambiguous on 

whether permission to “include” those functions permits 

performing those functions whenever “connected to the 

use of” a licensed guide (as Rovi argues) or only invoking

those functions by the licensed guide (as PMC argues). 

PMC believes that Sentence Two only permits the guide 

to invoke the listed functions, but that the performance of 

those functions—and the components that actuate that 

performance—are not themselves licensed. In contrast, 

Rovi believes that Sentence Two not only permits a licensed guide to invoke other components to perform the 

enumerated functions, but also permits the actual performance of those functions. This distinction was not 

raised before the district court.

The text of the License does not speak unambiguously 

to the rather nuanced dispute between the parties. 

Sentence Two states that licensed IPG Applications shall 

“include” the listed functions. It is reasonable to understand “include” as permitting the guide to perform the 

listed functions, and nothing in the term “include” dictates unambiguously that the guide must perform the 

function itself without invoking any external components. 

Sentence Two is at least ambiguous on this issue.

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10 PERSONALIZED MEDIA v. ROVI GUIDES, INC. 

To support its interpretation that the guide may only 

invoke unlicensed external components, PMC looks to 

context in Sentence Three. Sentence Three permits the 

guide to “access . . . other interactive or passive applications,” but specifically excludes the “creation, distribution, 

transmission and use by a Consumer of such other interactive or passive applications . . . .” But Sentence Three is 

not dispositive because it may refer only to standalone

applications used apart from a licensed guide. In addition, the recited “other interactive or passive applications” 

may reasonably be read as referring to features other 

than those listed in Sentence Two. Sentence Three therefore creates only further ambiguity.

Based on the text of the License, a reasonable third 

party could arrive at two reasonable interpretations on 

the disputed issue of invocation and performance. The 

License is therefore ambiguous on this second point, and 

consideration of extrinsic evidence is therefore appropriate on this second independent ground. Again, we do not 

decide which party’s interpretation is correct, only that 

the License is ambiguous and that consideration of extrinsic evidence is appropriate. We leave such consideration to the court of first instance.

IV. CONCLUSION

Because the License includes at least two ambiguities, 

we vacate the district court’s summary judgment and 

remand for reconsideration of the disputed scope in view 

of the extrinsic evidence. 

VACATED AND REMANDED

COSTS

No costs. 

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