Title: LG Electronics, Inc. v. InterDigital Communications, Inc.
Citation: N/A
Docket Number: 475, 2014
State: Delaware
Issuer: Delaware Supreme Court
Date: April 14, 2015

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
 
LG ELECTRONICS, INC.,  
 
§ 
 
 
 
 
 
 
 
 
 
 
§  
 
Plaintiff Below, 
 
 
§  
No. 475, 2014 
 
Appellant,  
 
 
 
§  
 
 
 
 
 
 
 
§ 
 
v.  
 
 
 
 
§ 
 
 
 
 
 
 
 
§ 
Court Below:  Court of 
INTERDIGITAL  
 
 
 
§  
Chancery of the State of 
COMMUNICATIONS, INC.,  
 
§ 
Delaware 
INTERDIGITAL TECHNOLOGY  
§ 
CORP., and IPR LICENSING, INC., 
§ 
C.A. No. 9747-VCL  
 
 
 
 
 
 
§ 
 
 
Defendants Below,  
 
§ 
 
Appellees. 
 
 
 
§ 
 
 
 
Submitted: 
March 11, 2015 
Decided: 
April 14, 2015 
 
Before STRINE, Chief Justice; HOLLAND and VALIHURA, Justices; 
CHAPMAN and NEWELL, Judges; constituting the Court en Banc. 
 
 
Upon appeal from the Court of Chancery.  AFFIRMED. 
 
 
Jeremy D. Anderson, Esquire, Joseph B. Warden, Esquire, Fish & Richardson 
P.C., Wilmington, Delaware; Michael J. McKeon, Esquire (argued), Christian 
Chu, Esquire, Scott A. Elengold, Esquire, Fish & Richardson P.C., Washington, 
DC, for the Appellant. 
 
Neal C. Belgam, Esquire, Kelly A. Green, Esquire, Smith, Katzenstein & Jenkins 
LLP, Wilmington, Delaware; David S. Steuer, Esquire (argued), Michael B. 
Levin, Esquire, Matthew R. Reed, Esquire, Wilson Sonsini Goodrich & Rosati, 
P.C., Palo Alto, California, for the Appellees. 
 
 
STRINE, Chief Justice, for the Majority: 
                                          
 
 Sitting by designation under Del. Const. art. IV, § 12. 
1 
 
I. 
INTRODUCTION 
 
LG Electronics, Inc. (“LG”) sought a declaration in the Court of Chancery 
that InterDigital Communications, Inc., InterDigital Technology Corporation, and 
IPR Licensing Inc. (collectively, “InterDigital”) had breached a nondisclosure 
agreement between the parties by disclosing confidential information during a 
pending arbitration proceeding.  In a precise, detailed opinion, the Court of 
Chancery granted InterDigital‟s motion to dismiss, holding that all of LG‟s claims 
were properly before the arbitral tribunal, and deferring to the first-filed 
proceeding based on the factors established by this Court in McWane Cast Iron 
Pipe Corp. v. McDowell-Wellman Engineering Co.1  We agree that the McWane 
doctrine applies in this case, and that it supports dismissing LG‟s claims. 
This dispute arose from a contract signed by the parties in 2006, the 
Wireless Patent License Agreement (the “License Agreement”), which provides 
for arbitration as the mechanism to resolve any claims arising under that 
Agreement.  In 2011, when the parties were engaged in judicial proceedings in 
multiple forums, including in an arbitration proceeding initiated by LG, LG and 
InterDigital entered into another contract that governed the circumstances under 
which certain “settlement communications” could be disclosed.  That non-
disclosure agreement (“NDA”) contained a broad provision permitting both parties 
                                          
 
1 LG Elecs., Inc. v. InterDigital Commc’ns, Inc., 98 A.3d 135 (Del. Ch. 2014). 
2 
 
to enforce the agreement in “any court, agency, or tribunal having personal 
jurisdiction over the Party in alleged breach of this Agreement . . . .”2   
After the parties executed the NDA, LG filed its opening brief with the 
three-member arbitration panel (the “Tribunal”), arguing that its claims should be 
decided without reference to certain evidence that it alleged was barred from use 
by the NDA.  InterDigital contended in response that, in its view, the NDA did not 
prohibit the Tribunal from considering the contested evidence.  LG disagreed, and 
further argued that despite having raised the subject of whether the NDA 
prevented the introduction of the evidence in the first place, the Tribunal had no 
authority to decide the matter.  Opening yet another front, LG then filed suit in the 
Court of Chancery, seeking declaratory relief and an injunction to prevent 
InterDigital from using the evidence in the arbitration proceeding because that 
usage would supposedly violate the NDA. 
The Court of Chancery, citing the long-standing principles of McWane and 
other relevant authority, declined to decide a question that was pending in the 
arbitration proceeding that LG had itself initiated and where it had first raised the 
issue.  On appeal, LG argues that the Court of Chancery‟s ruling was in error, and 
contends that it is being forced to arbitrate an issue against its will because the 
License Agreement contained an arbitration clause, even though the NDA did not.  
But LG‟s arguments on appeal are confused.  The Court of Chancery did not 
premise its ruling on the arbitration clause in the License Agreement.  Rather, the 
                                          
 
2 App. to Opening Br. at 30 (NDA ¶ 9) (emphasis added). 
3 
 
Court of Chancery relied on the plain terms of the NDA itself.  Those terms give 
both parties the right to enforce the NDA not just in a court, but also before an 
“agency” or a “tribunal,” two terms that LG concedes were likely intended to 
cover proceedings before a regulatory agency or, most relevant here, an arbitration 
panel.  Consistent with what the Court of Chancery found, and LG does not 
contest, the term “tribunal” has long been understood to encompass arbitral 
tribunals, including the one deciding the underlying dispute over the License 
Agreement.3   
Furthermore, the NDA does not give LG the right to proliferate forums and 
to have the Court of Chancery resolve an evidentiary issue that was already 
pending before a forum—the Tribunal—contemplated by the NDA itself, the 
forum in which LG first injected the NDA issue.  In fact, because both parties 
have the right to enforce its terms in “any court, agency, or tribunal,” InterDigital 
was entitled to seek a declaration for itself from the Tribunal that the NDA does 
not bar the use of evidence it wished to introduce in the arbitration proceeding.  
The Court of Chancery was thus within its discretion to hold that resolution of the 
dispute be confined to the first-filed action under the principles of McWane.   
The Court of Chancery‟s decision was also consistent with well-reasoned 
precedent suggesting that courts should accord respect to arbitration proceedings 
by hesitating to inject themselves into the process.  As in all forms of dispute 
resolution, evidentiary issues often arise in arbitration and must be decided as part 
                                          
 
3 LG Elecs., 98 A.3d at 139. 
4 
 
of resolving the underlying dispute properly before the arbitrators.  If courts 
interject themselves into every procedural dispute, the value of arbitration as an 
efficient dispute resolution mechanism will be compromised.   
We therefore affirm the Court of Chancery‟s judgment dismissing the case.  
II. 
BACKGROUND4 
This case arises out of a complicated set of facts, involving multiple 
agreements, and multiple legal proceedings, between the parties.  We will focus 
only on the background relevant to the issues before us in this appeal. 
LG is a consumer electronics and telecommunications company based in 
Seoul, Korea.  InterDigital, a Delaware corporation, develops technologies for use 
in digital cellular and wireless products and networks.  In 2006, LG and 
InterDigital entered into the License Agreement, granting LG a license to certain 
InterDigital patents.  The Agreement included a section permitting either party to 
submit any disputes “arising under this Agreement” to arbitration.5  The 
Agreement incorporated the AAA International Rules,6 which provide that the 
panel is empowered to rule on issues related to its own jurisdiction,7 that issues of 
evidence are presumptively part of the arbitration panel‟s purview,8 and that the 
tribunal is authorized to “determine the admissibility, relevance, materiality and 
                                          
 
4 The undisputed facts are drawn from the Court of Chancery‟s opinion and the record on 
appeal.   
5 App. to Opening Br. at 63 (License Agreement § 5.2). 
6 App. to Opening Br. at 63 (License Agreement § 5.2). 
7 App. to Answer Br. at 140 (International Dispute Resolution Procedures Article 15). 
8 App. to Answering Br. at 143 (International Dispute Resolution Procedures Article 19). 
5 
 
weight of the evidence offered by any party,” taking into account the “applicable 
principles of legal privilege, such as those involving the confidentiality of 
communications between a lawyer and client.”9  The AAA rules also provide that 
the panel can “take whatever interim measures it deems necessary, including 
injunctive relief.”10  The License Agreement further stipulated that the 
“Arbitration Panel shall have the exclusive authority to permit requests for the 
production of relevant documents, including confidential discovery to the extent 
required by a party in order to establish its case. . . . ”11 
In 2011, InterDigital filed a complaint with the United States International 
Trade Commission (ITC), an independent federal agency, against a number of 
defendants, alleging various claims of patent infringement.  InterDigital eventually 
added LG as a defendant to those proceedings.  LG moved to terminate the ITC 
investigation in favor of arbitration under the License Agreement.  LG then 
commenced arbitration in the International Centre for Dispute Resolution.  
Eventually, after multiple rounds of appeals, InterDigital withdrew its ITC 
complaint against LG in favor of the then-pending arbitration.   
Two months after LG commenced the arbitration, but before a panel was 
formed, LG and InterDigital entered into an Agreement Governing Confidential 
Settlement Communications, the “NDA” at issue in this appeal.  The NDA, which 
stated that it was to be governed by Delaware law, restricted the parties‟ use of 
                                          
 
9 App. to Answer Br. at 144 (International Dispute Resolution Procedures Article 20). 
10 App. to Answer Br. at 144 (International Dispute Resolution Procedures Article 21). 
11 App. to Opening Br. at 64 (License Agreement § 5.2(e)). 
6 
 
specified “settlement communications” in “any existing or future legal, judicial, 
administrative or arbitration proceeding.”12  Unlike the License Agreement, the 
NDA did not contain a specific provision mandating arbitration.  Indeed, it 
explicitly stipulated that “this Agreement does not contain or incorporate any 
formal dispute resolution procedure.”13  Nevertheless, the NDA provided that “any 
Party shall have the right, in addition to all other remedies at law or in equity, to 
have the provisions of this Agreement specially enforced by any court, agency, or 
tribunal having personal jurisdiction over the Party in alleged breach of this 
Agreement . . . .”14   
On April 19, 2013, LG submitted its opening brief to the Tribunal.  In its 
brief, LG emphasized that it was purposely withholding fact witness statements 
and supporting documents that it alleged were barred under the NDA.  Two weeks 
later, InterDigital‟s counsel sent a letter to the Tribunal, disagreeing with LG‟s 
interpretation of the NDA and requesting an order confirming that InterDigital was 
permitted to submit witness testimony and supporting documents.  The Tribunal 
issued an order declining InterDigital‟s request as “premature,” holding that the 
issue of whether evidence was admissible under the NDA could be addressed 
when evidence was introduced that one party alleged should be precluded.15   
                                          
 
12 App. to Opening Br. at 27 (NDA ¶ 1). 
13 App. to Opening Br. at 30 (NDA ¶ 9). 
14 Id. 
15 App. to Opening Br. at 98 (Letter from the Hon. Benjamin J. Greenberg, May 8, 2013). 
7 
 
InterDigital then filed its response brief to the Tribunal, including evidence 
that LG contends breached the NDA.  In that brief, InterDigital explained why it 
believed the evidence was admissible, in contrast to LG‟s claims.  LG requested 
that InterDigital “cure its breach” by withdrawing the response brief and re-filing 
it without the alleged confidential communications.   
When InterDigital did not respond, LG filed a verified complaint against 
InterDigital in the Court of Chancery, arguing that InterDigital had breached the 
NDA by including confidential communications in its response brief.  LG 
requested a declaration that InterDigital was in breach of the NDA, and an 
injunction requiring InterDigital to withdraw its response brief from the arbitration 
proceeding and prohibiting InterDigital from “submitting, using, and relying on 
any Settlement Communications to the Arbitration Tribunal and any other 
improper use . . . .”16  Although LG had first raised the issue in the arbitration 
proceedings, it asserted that the Tribunal could not properly decide issues of 
admissibility under the NDA because that agreement did not contain its own 
arbitration clause.  InterDigital moved to dismiss LG‟s claims, arguing that under 
the McWane doctrine, the Court of Chancery should dismiss the case as involving 
evidentiary issues properly before the Tribunal in the ongoing arbitration.  
In an opinion dated August 20, 2014, the Court of Chancery granted 
InterDigital‟s motion to dismiss.  Applying the principles of McWane, the Court of 
Chancery found that the arbitration constituted a first-filed action, the Tribunal 
                                          
 
16 App. to Answering Br. at 24 (Verified Complaint). 
8 
 
could provide prompt and complete justice, and the arbitration involved the same 
parties and the same issues.17  Thus, the Court of Chancery determined that LG‟s 
claims should be resolved by the Tribunal to avoid duplication, inefficiency, and 
potentially inconsistent rulings, and dismissed the case.  LG appealed. 
After LG filed its appeal and submitted its opening brief, the Tribunal 
issued an order finding that it had the authority to interpret the NDA to rule on the 
evidentiary issues presented by the parties that were relevant to determining the 
substantive claims before it.18  The Tribunal found that InterDigital‟s interpretation 
of the NDA was correct, and therefore permitted the contested evidence to be 
introduced in the proceeding.19   
III. 
ANALYSIS 
This Court held in McWane that:  
a Delaware action will not be stayed as a matter of right by reason of 
a prior action pending in another jurisdiction involving the same 
parties and the same issues; that such stay may be warranted, 
however, by facts and circumstances sufficient to move the 
discretion of the Court; that such discretion should be exercised 
freely in favor of the stay when there is a prior action pending 
elsewhere, in a court capable of doing prompt and complete justice, 
involving the same parties and the same issues; that, as a general 
rule, litigation should be confined to the forum in which it is first 
commenced . . .; that these concepts are impelled by considerations 
                                          
 
17 LG Elecs., Inc. v. InterDigital Commc’ns, Inc., 98 A.3d 135, 136 (Del. Ch. 2014). 
18 App. to Answering Br. at 257 (LG Elecs., Inc. v. InterDigital Commc’ns, Inc., IDCR 
Case No. 50-20-1200-0226, Decision and Order Regarding “Agreement Governing 
Settlement Communications,” Oct. 27, 2014). 
19 Id. at 258. 
9 
 
of comity and the necessities of an orderly and efficient 
administration of justice.20 
 
Following that case, Delaware courts considering a motion to stay or 
dismiss in favor of a previously filed action have applied McWane‟s three-factor 
test: (1) is there a prior action pending elsewhere; (2) in a court capable of doing 
prompt and complete justice; (3) involving the same parties and the same issues?  
If all three criteria are met, “McWane and its progeny establish a strong preference 
for the litigation of a dispute in the forum in which the first action” was filed.21  
We review a trial court‟s stay or dismissal of a case under McWane for abuse of 
discretion,22 but we review de novo any issues of law “applied in reaching that 
decision.”23  
A. 
The Court of Chancery Correctly Determined that the Arbitration 
Proceeding Constituted a First-Filed Action for Purposes of McWane 
 
As the Court of Chancery noted, this case appears to be the first in which 
Delaware courts have considered whether an arbitration proceeding constitutes a 
first-filed action for purposes of the McWane doctrine.24  LG contended before the 
Court of Chancery and again on appeal that the absence of relevant precedent 
suggests that McWane does not apply to arbitration proceedings.   
                                          
 
20 McWane Cast Iron Pipe Corp. v. McDowell-Wellman Eng’g Co., 263 A.2d 281, 283 
(Del. 1970) (emphasis added). 
21 DONALD J. WOLFE, JR. & MICHAEL A. PITTENGER, CORPORATE AND COMMERCIAL 
PRACTICE IN THE DELAWARE COURT OF CHANCERY § 5.01, at 5-3 (2013). 
22 See, e.g., Lisa, S.A. v. Mayorga, 993 A.2d 1042, 1047 (Del. 2010). 
23 Alaska Elec. Pension Fund v. Brown, 988 A.2d 412, 417 (Del. 2010). 
24 LG Elecs., Inc. v. InterDigital Commc’ns, Inc., 98 A.3d 135, 138 (Del. Ch. 2014). 
10 
 
We agree with the Court of Chancery that there is no principled reason to 
distinguish an arbitration proceeding from other first-filed actions.  First, as the 
Court of Chancery observed, arbitrations are typically treated as “prior actions” for 
other purposes, including issue and claim preclusion.25  Moreover, the principles 
underlying McWane apply equally when the first-filed action is an arbitration: the 
desire to avoid the “wasteful duplication of time, effort, and expense that occurs 
when judges, lawyers, parties, and witnesses are simultaneously engaged in the 
adjudication of the same cause of action in two courts,” and “the possibility of 
inconsistent and conflicting rulings and judgments and an unseemly race by each 
party to trial and judgment in the forum of its choice.”26   
Those factors remain relevant in a case like this one, in which the only 
relief that LG seeks is a declaration that evidence is not admissible in the first-filed 
action.  The parties and the Tribunal have all expended considerable “time, effort, 
and expense” in arguing over the admissibility of evidence under the NDA, in the 
specific context in which InterDigital‟s alleged breach occurred and for which LG 
seeks equitable relief.  In light of Delaware‟s public policy favoring arbitration,27 
                                          
 
25 Id; cf. Medicis Pharm. Corp. v. Anacor Pharm., Inc., 2013 WL 4509652, at *10 (Del. 
Ch. Aug. 12, 2013) (noting that the “the first-filed status” of an arbitration proceeding 
“conceivably could play a role in the Court‟s decision” to dismiss pending claims in favor 
of arbitration). 
26 McWane Cast Iron Pipe Corp. v. McDowell-Wellman Eng’g Co., 263 A.2d 281, 283 
(Del. 1970). 
27 See, e.g., Elf Atochem N. Am., Inc. v. Jaffari, 727 A.2d 286, 295 (Del. 1999) (“Our 
conclusion is bolstered by the fact that Delaware recognizes a strong public policy in 
favor of arbitration.  Normally, doubts on the issue of whether a particular issue is 
arbitrable will be resolved in favor of arbitration.”); SOC-SMG, Inc. v. Day & 
Zimmermann, Inc., 2010 WL 3634204, at *3 (Del. Ch. Sept. 15, 2010) (“To have a 
11 
 
Delaware courts should be as reluctant to interfere in a dispute already before an 
arbitral panel as they would be to interfere in a dispute already before another 
court.28  When that dispute is about an issue incidental to the first-filed proceeding, 
e.g., the admissibility of evidence, considerations of “comity and . . . the orderly 
and efficient administration of justice” are even more compelling.29  Accordingly, 
we find that the parties‟ arbitration proceeding constitutes a first-filed action for 
purposes of the McWane analysis. 
B. 
The Court of Chancery Correctly Concluded that the Arbitration 
Tribunal is Capable of Doing Prompt and Complete Justice 
 
The Court of Chancery determined that the Tribunal was “capable of doing 
prompt and complete justice” under the second prong of the McWane analysis 
because the Tribunal is empowered to decide the dispute and can provide 
appropriate relief.  LG argues that both findings were in error.   
1. 
The Arbitration Tribunal is Empowered to Decide Issues Incidental to a 
Dispute Properly Before It 
 
For much of its brief, LG focuses on arguing an issue of its own 
contrivance, which played no role in the Court of Chancery‟s ruling.30  LG claims 
                                                                                                                             
 
Delaware court inject itself into this situation would show disrespect toward the 
Arbitration panel, which has the broad authority to address these issues in the first 
instance, and would be contrary to our state‟s—and our nation‟s—strong public policy 
favoring arbitration.”). 
28 See generally McWane, 263 A.2d 282-83. 
29 Id. at 282. 
30 LG argued to the Court of Chancery that the NDA‟s reference to a “tribunal” did not 
necessarily mean the Tribunal which had been formed to consider its claims under the 
License Agreement, and that the Tribunal could not grant LG‟s requested relief as a 
matter of equitable rather than legal relief.  In an argument not advanced on appeal, LG 
claimed that because the License Agreement used the phrase “arbitrators at law,” the 
12 
 
that the Court of Chancery is forcing LG to arbitrate a subject that is not arbitrable 
because the NDA, unlike the License Agreement, does not contain an arbitration 
clause.  This framing of the Court of Chancery‟s ruling misunderstands the careful 
reasoning supporting the court‟s decision to dismiss LG‟s claims in favor of the 
arbitration proceeding, and ignores what the NDA itself says.   
It is true that the NDA does not contain a clause requiring that any dispute 
regarding its enforcement or applicability be resolved in arbitration, as the Court 
of Chancery recognized.31  But the NDA also does not provide LG the right to 
bring any dispute before a court at any time, regardless of the effect such an action 
would have on the resources of LG‟s contractual partner, InterDigital, the 
judiciary, or an arbitration tribunal.  By its plain terms, the NDA can be enforced 
not just in any “court,” but also in any “agency” or “tribunal.”  It is on this 
provision of the NDA that the Court of Chancery properly focused.     
Two independent reasons support the Court of Chancery‟s determination 
that this dispute can be decided by the Tribunal.  First, the terms of the NDA itself 
clarify that the parties intended for a “tribunal” to have the authority to enforce the 
agreement.  As LG conceded at oral argument, the NDA was a bilateral 
                                                                                                                             
 
Tribunal could not provide the equitable relief LG sought.  In a thorough exegesis of the 
historical distinction between law and equity, the Court of Chancery persuasively 
explained why the Tribunal did have the authority to provide equitable relief.  LG Elecs., 
Inc. v. InterDigital Commc’ns, Inc., 98 A.3d 135, 140-45 (Del. Ch. 2014).  In light of that 
well-reasoned judgment, LG did not reiterate its argument on appeal.  In fact, as noted, 
the AAA rules that the parties agreed to in the License Agreement explicitly empower the 
Tribunal to provide equitable relief.  See App. to Answer Br. at 144 (International 
Dispute Resolution Procedures Article 21). 
31 See LG Elecs., 98 A.3d at 139. 
13 
 
agreement,32 and it specifically permitted both parties to seek relief from “any 
court, agency, or tribunal.”33  As LG also conceded, the NDA‟s reference to a 
“tribunal” as one of the three forums in which either party can seek “special[] 
enforce[ment]” was most likely to ensure that the NDA‟s terms could be 
interpreted and enforced by an arbitral tribunal, including the one that LG sought 
to form two months before it signed the NDA.34  As discussed, the parties were 
engaged in multiple disputes when they signed the NDA, including before the U.S. 
District Court for the District of Delaware (“court”),35 the ITC (“agency”), and the 
arbitration Tribunal (“tribunal”).  The parties thus likely intended for the NDA to 
cover evidentiary matters in all of the legal proceedings in which they were 
enmeshed.  In other words, because LG had already initiated the arbitration when 
the NDA was signed, these sophisticated parties could have easily excluded an 
arbitral tribunal as an enforcement option.  Instead, the NDA‟s broad language 
expressly included a “tribunal” as one of the proper forums for enforcement. 
Moreover, LG was the first party to put the NDA at issue in the arbitration, 
by contending in its opening brief to the Tribunal that the agreement barred the 
introduction of certain evidence.  The Tribunal determined in its ruling on the 
NDA that LG‟s brief equated to “request[ing] that the NDA be „specially 
                                          
 
32 Videotape: Oral Argument Before the Delaware Supreme Court, at 32:21 (LG Elecs., 
Inc. v. InterDigital Commc’ns, Inc., No. 475, 2014, Mar. 11, 2015). 
33 App. to Opening Br. at 30 (NDA ¶ 9). 
34 Videotape: Oral Argument Before the Delaware Supreme Court, at 35:20 (LG Elecs., 
Inc. v. InterDigital Commc’ns, Inc., No. 475, 2014, Mar. 11, 2015). 
35 InterDigital Commc’ns v. Huawei Techs. Co., C.A. No. 11-654-MSG (D. Del). 
14 
 
enforced‟ by the Arbitral Tribunal.”36  But even if LG‟s attempt to raise the issue 
before the Tribunal did not constitute an official request to have the Tribunal 
decide the issue, InterDigital‟s later response to the Tribunal did constitute such a 
request for relief.   
LG only initiated suit in Delaware after InterDigital had requested such 
relief before the Tribunal, and after the Tribunal declined to rule immediately that 
the NDA did not bar certain evidence under LG‟s preferred interpretation.  
Notably, LG‟s action in the Court of Chancery sought declaratory, not just 
injunctive, relief about the applicability of the NDA, just as InterDigital had earlier 
requested of the Tribunal.  In other words, LG wanted to have it both ways: by 
first raising the issue in its opening brief in the arbitration proceeding, LG sought 
to bind InterDigital‟s hands in introducing relevant evidence in the arbitration 
panel, but also prevent the Tribunal from ruling on the issue of whether 
InterDigital could do so.37   
What LG seems to ignore is that InterDigital had its own right to seek relief 
under the contract.  Just as LG was entitled to ask a court to enforce the specific 
terms of the NDA by way of injunctive or declaratory relief, so too was 
InterDigital entitled to seek a declaration that the NDA did not bar the use of 
certain evidence in the context of a concrete evidentiary dispute arising in the 
                                          
 
36 App. to Answering Br. at 259 (LG Elecs., Inc. v. InterDigital Commc’ns, Inc., IDCR 
Case No. 50-20-1200-0226, Decision and Order Regarding “Agreement Governing 
Settlement Communications,” Oct. 27, 2014). 
37 See App. to Opening Br. at 146 (Answering Brief in Opposition to Defendants‟ Motion 
to Dismiss). 
15 
 
arbitration proceeding.38  Nor was this right to declaratory relief limited to the non-
breaching party.  The most logical reading of the phrase “any party shall have the 
right, in addition to all other remedies at law or in equity, to have the provisions of 
this Agreement specially enforced by any court, agency or tribunal having 
personal jurisdiction over the Party in alleged breach . . .” is in accordance with its 
plain terms.  That is, either party to the contract had the right to avail itself of any 
“remedies at law or in equity,” including the right to seek declaratory relief, as LG 
itself recognized when it sought a declaratory judgment from the Court of 
Chancery.  Moreover, under Delaware law, which indisputably covered the NDA, 
either party to a contract can seek declaratory relief.39  Because the NDA 
specifically included a “tribunal” as one of the forums in which both parties could 
seek relief, InterDigital was entitled by the terms of the NDA itself to keep the 
related litigation in one forum, the one chosen by LG.  Thus, when LG tried to 
prevent InterDigital from introducing the contested evidence, InterDigital properly 
brought the issue up to the Tribunal, which properly decided the issue, because it 
was vested with the authority to determine incidental evidentiary issues.   
As the Court of Chancery determined, the NDA does not “entitle[] LG to 
insist on a judicial forum.”40  Had the parties wanted to limit the authority of the 
Tribunal to determine evidentiary matters, thereby limiting the power granted in 
the License Agreement itself, they could have done so in the NDA.  It is not 
                                          
 
38 App. to Opening Br. at 30 (NDA ¶ 9). 
39 See 10 Del. C. § 6501. 
40 LG Elecs., Inc. v. InterDigital Commc’ns, Inc., 98 A.3d 135, 139 (Del. Ch. 2014). 
16 
 
uncommon for sophisticated parties to name an exclusive forum in which to bring 
disputes that arise under an agreement;41 indeed, the parties to this case did so in 
their License Agreement.42  But these same parties specifically declined to confine 
litigation to an exclusive forum in the NDA, and instead used a broad phrase 
enabling “any court, agency, or tribunal” to enforce the agreement.43  Because the 
parties did not include a clause limiting litigation to the courts or any particular 
court in the NDA, we agree with the Court of Chancery that this dispute was 
properly subject to arbitration, and that the Tribunal was a “tribunal” within the 
meaning of the NDA.  LG was thus not “forced to arbitrate the merits of a dispute” 
against its will; it got exactly what it bargained for in Paragraph 9 of the NDA.44   
Secondly, the broad right to have the NDA enforced by any “tribunal” is 
consistent with the accepted principle that arbitrators can decide evidentiary issues 
relevant to disputes pending before them.45  This Court has never held that parties 
                                          
 
41 See generally 7 WILLISTON ON CONTRACTS § 15:15 (4th ed. 2014). 
42 App. to Opening Br. at 63 (License Agreement § 5.2). 
43 App. to Opening Br. at 30 (NDA ¶ 9). 
44 Cf. CA, Inc. v. Ingres Corp., 2009 WL 4575009, at *47 (Del. Ch. Dec. 7, 2009) aff’d, 8 
A.3d 1143 (Del. 2010) (“The 2007 Reseller Agreement is a contract with dignity, but it 
remains just one of several contracts that govern the ongoing relationship between CA 
and Ingres.  Traditionally, courts try to give a consistent reading to interrelated 
agreements.  Such consistency is especially warranted here because of the complex 
relationship between CA and Ingres.  Indeed, it is because of this complexity that the 
parties inserted broad choice of forum provisions in the Legacy Support Agreement and 
the CA Support Agreement in an effort to prevent the kind of claim splitting and 
piecemeal litigation that Ingres‟ California Action threatens.”). 
45 2 DOMKE ON COM. ARB. § 29:9 (2014) (“Arbitrators have discretionary power to admit 
and hear any evidence that the parties may wish to present through witnesses or 
documents.  Arbitrators are not constrained by formal rules of evidence or procedure.  
Rather, they enjoy wide latitude in the conduct of proceedings.  Moreover, they are the 
final judges of such matters as the admissibility and relevance of evidence.  Rulings of 
17 
 
must enumerate each and every matter to be addressed by an arbitrator; rather, 
consistent with the policy across state and federal courts,46 this Court has held that 
the arbitrator‟s power to resolve a dispute necessarily includes the power to 
resolve procedural issues relevant to that dispute.47  When a party clearly 
expresses the intent to arbitrate—as LG did by agreeing to arbitrate disputes 
arising under the License Agreement and by initiating the arbitration in the first 
place—it cannot then insist that every incidental question be resolved by the 
courts.48  That is especially true when the parties have explicitly agreed that the 
arbitrator has the power to decide those issues, as the parties did here by 
                                                                                                                             
 
arbitrators on the admissibility of evidence are not subject to review by courts since such 
action would „result on in waste of time, the interruption of the arbitration proceeding, 
and encourage delaying tactics.”).   
46 See 21 WILLISTON ON CONTRACTS § 57:99 (4th ed. 2014) (“Since arbitrators have the 
power to manage and conduct the arbitration hearing, they have wide latitude . . . to 
determine what evidence should be considered, and to determine the admissibility, 
relevance, materiality and weight of any evidence.  Arbitrators . . . are in a better position 
to determine the relevancy and materiality of evidence to the controversy. . . .  [I]t should 
not be a function of a court to hold itself open as an appellate tribunal to rule upon any 
question of evidence that may arise in the course of arbitration. . . .”); see also John Wiley 
& Sons, Inc. v. Livingston, 376 U.S. 543, 557 (1964) (“Once it is determined, as we have, 
that the parties are obligated to submit the subject matter of a dispute to arbitration, 
„procedural‟ questions which grow out of the dispute and bear on its final disposition 
should be left to the arbitrator.”); Hoteles Condado Beach, La Concha & Convention Ctr. 
v. Union De Tronquistas Local 901, 763 F.2d 34, 39 (1st Cir. 1985) (“The arbitrator is 
the judge of the admissibility and relevancy of evidence submitted in an arbitration 
proceeding.”).  
47 See, e.g., SBC Interactive, Inc. v. Corporate Media Partners, 714 A.2d 758, 762 (Del. 
1998); see also Mehiel v. Solo Cup Co., 2005 WL 1252348, at *6 (Del. Ch. May 13, 
2005) (“In the face of an unambiguous intent to arbitrate this dispute, I must conclude 
that the parties‟ contentions concerning discovery do not raise questions of „substantive 
arbitrability.‟  Thus, the scope of the arbitrator‟s authority to compel discovery is a 
procedural question and one that must be addressed by the arbitrator, who will determine, 
based upon the language of the contract, and the procedures the parties submit to, what 
that authority is.”). 
48 See Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84 (2002). 
18 
 
incorporating the AAA International Rules, which provide that the arbitration 
panel can decide issues of evidence and determine the limits of its own 
jurisdiction,49 and by stipulating that the arbitrator “shall have the exclusive 
authority” over discovery in the License Agreement.50 
But even if parties do not specifically provide that the arbitrator has the 
power to decide procedural questions, it is implicit in the Tribunal‟s power to 
decide a dispute that it can decide the evidentiary questions that inevitably arise.51  
As the Court of Chancery aptly noted, “[a]llowing parties to seek judicial review 
every time an arbitrator rules on . . . a procedural issue would frustrate the arbitral 
process.  If the Tribunal errs, LG can seek judicial review after the award becomes 
final.”52   
The Seventh Circuit‟s reasoning in Trustmark Ins. Co. v. John Hancock 
Life Ins. Co., in which the appeals court overturned a district court judgment that 
                                          
 
49 App. to Answer Br. at 140-44 (International Dispute Resolution Procedures Articles 
15, 19 and 20).  The AAA Rules are consistent with those of other international 
arbitration bodies as well.  See Konstantin Pilkov, Evidence in International Arbitration: 
Criteria for Admission, http://arbitration-blog.eu/evidence-international-arbitration-
criteria-admission/ (last visited March 24, 2015) (citing various arbitration rules in 
support of the proposition that they typically “give broad authority to arbitrators 
regarding the consideration of evidence”). 
50 See App. to Opening Br. at 63 (License Agreement § 5.2). 
51 See 6 C.J.S. Arbitration § 161 (2015) (“A general submission of all matters and 
differences between the parties gives the arbitrators the power to award or decide not 
only with respect to all matters of account, claims, debts, or demands which the parties 
may have against each other, but also all matters connected therewith or incidental 
thereto.”). 
52 LG Elecs., Inc. v. InterDigital Commc’ns, Inc., 98 A.3d 135, 140 (Del. Ch. 2014). 
19 
 
an arbitrator did not have the power to construe a confidentiality agreement, is 
instructive.53  The Seventh Circuit explained: 
The district judge also erred in concluding that the arbitrators are 
powerless to construe the confidentiality agreement.  True, that 
agreement lacks its own arbitration clause, but the parties did agree 
to arbitrate their disputes about reinsurance.  Arbitrators who have 
been appointed to resolve a commercial dispute are entitled to 
resolve ancillary questions that affect their task.  What‟s more, the 
confidentiality agreement—a standard form in insurance arbitration, 
signed while the arbitration was under way—is closely related to the 
substance of the first arbitration and presumptively within the scope 
of the reinsurance contracts’ comprehensive arbitration clauses, 
which cover all disputes arising out of the original dispute.54  
 
Just as in that case, the Tribunal here was authorized to resolve the ancillary 
question of the admissibility of evidence in the proceeding before it based on the 
plain language of the License Agreement.  And just as the Tribunal could 
determine that otherwise relevant evidence was inadmissible on the grounds of 
attorney-client privilege, for example,55 so too was it empowered to bar evidence 
precluded from use by the NDA.56  The breadth of the arbitration clause in the 
                                          
 
53 Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.), 631 F.3d 869 (7th Cir. 
2011). 
54 Id. at 874 (internal citations omitted) (emphasis added). 
55 See 21 WILLISTON ON CONTRACTS § 57:97 (4th ed. 2014) (“Arbitration rules often 
provide that the arbitrator shall take into account applicable principles of legal privilege, 
including those involving the confidentiality of communications between a lawyer and 
client.  An arbitrator may order the redaction of information allegedly protected by the 
attorney-client privilege.”). 
56 Cf. SOC-SMG, Inc. v. Day & Zimmermann, Inc., 2010 WL 3634204, at *2 (Del. Ch. 
Sept. 15, 2010) (“Any member of this court knows that the adjudication of disputes, and 
the discovery issues necessarily related to them, often involves the resolution of questions 
about the use of privileged information and of issues of attorney responsibility.  For that 
reason, it is not surprising that arbitrators have ruled on disqualification and privilege 
motions and that courts have refused to intervene on an interlocutory basis to either first-
or second-guess those rulings.  Rather, the interests of justice are served by charging the 
20 
 
License Agreement in this case, compared to the arbitration clause in the contracts 
at issue in Trustmark, does not require a different outcome: both of the respective 
contracts provided for arbitration using the AAA rules, and both entitle the arbitral 
tribunal to “decide for themselves those procedural questions that arise on the way 
to a final disposition.”57   
Nor is there any conflict between the reality that the NDA by itself vested 
the Tribunal with the authority to resolve the parties‟ dispute and the fact that the 
scope of the Tribunal‟s powers is detailed in the separate License Agreement.  
InterDigital does not contend that, absent the arbitration clause in License 
Agreement, the parties would have to arbitrate any related dispute.  But the issue 
raised by the alleged violation of the NDA is a matter of the admissibility of 
evidence in the arbitration proceeding, which is ultimately about the License 
Agreement.  The parties are bound by both agreements, and by the plain terms of 
both, this dispute is properly before the Tribunal. 
                                                                                                                             
 
arbitrators with deciding the overall matter, including allegations of discovery abuse and 
disqualification motions, in the first instance.”); see also Trustmark Ins. Co., 631 F.3d at 
874 (observing that if “one or both of the contestants can get immediate review in a 
federal district court” of every procedural ruling, it “would be the end of arbitration as a 
speedy and (relatively) low-cost alternative to litigation.”). 
57 Trustmark Ins. Co., 631 F.3d at 874.  As in Trustmark, the parties‟ arbitration clause in 
the License Agreement provided broadly that any dispute “arising under” the Agreement 
would be subject to arbitration.  See, e.g., Orix LF, LP v. Inscap Asset Mgmt., LLC, 2010 
WL 1463404, at *1 (Del. Ch. Apr. 13, 2010); CAPROC Manager, Inc. v. Policemen’s & 
Firemen’s Ret. Sys. of City of Pontiac, 2005 WL 937613, at *2 (Del. Ch. Apr. 18, 2005); 
Andarko Petroleum Corp. v. Panhandle Eastern Corp., 1987 WL 16508, at *2-3 (Del. 
Ch. Sept. 8, 1987).  Moreover, for purposes of the precise question before us—whether 
the Tribunal is empowered to decide an issue of the admissibility of evidence relevant to 
the dispute before it—the License Agreement provides the answer, regardless of the 
precise scope of the arbitration clause.  
21 
 
2. 
The Tribunal Can Provide Appropriate Relief  
LG next argues that the Tribunal cannot provide appropriate relief.  But the 
only relief LG sought in the Court of Chancery was relevant to the ongoing 
arbitration, i.e., enjoining InterDigital from using the alleged confidential 
communications as evidence in that proceeding.  Although the Tribunal ultimately 
determined that LG‟s claims were without merit, if it had ruled in LG‟s favor and 
excluded the contested evidence, the case before the Court of Chancery would 
have become moot.   
LG also contends that it sought relief against hypothetical future breaches 
of the NDA, which cannot be addressed by the Tribunal.  But those claims are not 
yet ripe.  As the Court of Chancery found, LG has not established that InterDigital 
engaged in a “pattern of conduct” that suggests InterDigital will again “breach” 
the NDA outside of the arbitration proceeding.58  The only claim of breach that LG 
alleged before the Court of Chancery arose from InterDigital‟s response brief in 
the arbitration, which the Tribunal was capable of addressing.59 
                                          
 
58 LG Elecs., 98 A.3d at 145. 
59 In addition to the reasons cited by the Court of Chancery, we note that an additional 
factor supports its decision that this case should be dismissed: the Court of Chancery, as a 
court of equity, does not have jurisdiction to hear an issue when the claimant has an 
adequate remedy at law.  See, e.g., El Paso Natural Gas Co. v. TransAmerican Natural 
Gas Corp., 669 A.2d 36 (Del. 1995); Yuen v. Gemstar-TV Guide Int’l, Inc., 2004 WL 
1517133, at *2 (Del. Ch. June 30, 2004) (“The court „will not „accept jurisdiction over‟ 
claims that are properly committed to arbitration since in such circumstances arbitration 
is an adequate legal remedy.‟  This comports with Delaware‟s strong public policy 
favoring arbitration and Delaware courts will interpret contracts as requiring arbitration if 
they can reasonably do so.”).  Here, the only claim ripe for injunctive relief or specific 
performance could have been—and ultimately was—decided by the Tribunal.  If LG 
22 
 
Because we agree with the Court of Chancery that the dispute is arbitrable, 
and the Tribunal is capable of providing appropriate relief, we find that the second 
prong of the McWane test was met.  
C. 
The Court of Chancery Correctly Concluded that the Arbitration 
Involves the Same Issues 
 
Finally, LG argues on appeal that the issues involved in the arbitration are 
not “substantially or functionally identical” to those at issue in the Delaware 
proceeding.  This claim is without merit.  The relief that LG seeks is to have 
evidence excluded from the ongoing arbitration proceeding because it alleges that 
the NDA prohibits the use of that evidence.  The Tribunal can—and eventually 
did—determine whether the contested evidence is admissible, based on the 
parties‟ agreement to have an arbitrator decide evidentiary issues relevant to 
disputes arising under the License Agreement.60 
D. 
The McWane Factors Support Dismissing this Case 
 
Because we agree with the Court of Chancery that the arbitration 
constitutes a “prior action,” the Tribunal is capable of doing prompt and complete 
justice, and the arbitration involves the same parties and the same issues, we agree 
that McWane applies, and thus the Court of Chancery‟s decision to dismiss this 
case in favor of the first-filed proceeding.  We therefore find that the Court of 
Chancery did not abuse its discretion. 
                                                                                                                             
 
wishes to seek monetary damages for InterDigital‟s alleged breach after the Tribunal 
renders its final verdict, it can do so in an appropriate court of law. 
60 App. to Opening Br. at 64 (License Agreement § 5.2(e)). 
23 
 
For the foregoing reasons, the judgment of the Court of Chancery is hereby 
AFFIRMED.
1 
VALIHURA, Justice, dissenting: 
I disagree with the Court of Chancery and the Majority, and, therefore, I 
respectfully dissent.  Before addressing the points of divergence, I state my 
agreement with the Majority on several basic points. 
First, the Court of Chancery and the Majority appropriately reiterate the 
concerns expressed in various cases that, as a general matter, courts should accord 
respect to arbitration proceedings by “hesitating to inject themselves into the 
process.”61  The Majority correctly notes that if courts were to interject themselves 
into every procedural dispute, the value of arbitration as an efficient dispute 
resolution mechanism would be compromised.   
Second, as a general matter, arbitrators are typically vested with the power 
to decide evidentiary and discovery issues relevant to the disputes pending before 
them.  I agree that this general view is consistent across state and federal courts.   
However, I disagree with the Majority‟s conclusion that the underlying 
dispute arising under the NDA (the “Dispute”) is arbitrable and that an analysis 
under the doctrine set forth in McWane Cast Iron Pipe Corp. v. McDowell-
Wellman Eng’g Co.62 was appropriate.  The Majority ignores several cases that 
require a contract to reflect clearly the parties‟ intention to require a matter to be 
arbitrated before a party can be compelled to arbitrate.  Instead, the Majority 
                                          
 
61 Majority Op. at 3. 
62 263 A.2d 281 (Del. 1970). 
2 
contends that two independent reasons support the Court of Chancery‟s 
determination that the arbitration tribunal (the “Tribunal”) should adjudicate the 
Dispute.  First, the Majority holds that “the terms of the NDA itself clarify that the 
parties intended for a „tribunal‟ to have authority to enforce the agreement.”63   
Second, the Majority contends that “the broad right to have the NDA enforced by 
any „tribunal‟ is consistent with the accepted principle that arbitrators can decide 
evidentiary issues relevant to disputes pending before them.”64   Under the unique 
circumstances presented here, I disagree with both prongs of the Majority‟s 
reasoning. 
A Party May Only Be Compelled to Arbitrate a Dispute When a Contract 
Contains a Clear Intention to Arbitrate the Claim 
Well-settled law requires a contract to reflect clearly the parties‟ intention to 
require a matter to be arbitrated before a party can be compelled to arbitrate.  The 
United States Supreme Court has explained that “arbitration is a matter of contract 
and a party cannot be required to submit to arbitration any dispute which he has not 
agreed to submit.”65  “This axiom recognizes the fact that arbitrators derive their 
                                          
 
63 Majority Op. at 12. 
64 Id. at 16. 
65 AT&T Techs., Inc. v. Commc’ns Workers of America, 475 U.S. 643, 648 (1986) (internal 
quotation omitted); see also Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002) 
(“This Court has determined that „arbitration is a matter of contract and a party cannot be 
required to submit to arbitration any dispute which he has not agreed so to submit.‟” (quoting 
Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582 (1960))). 
3 
authority to resolve disputes only because the parties have agreed in advance to 
submit such grievances to arbitration.”66 
Citing to another United States Supreme Court case, First Options of 
Chicago, Inc. v. Kaplan,67 this Court, in DMS Props.-First, Inc. v. P.W. Scott 
Assocs., Inc.,68 reiterated this well-settled principle: 
[T]he United States Supreme Court held that courts should not 
presume that the parties agreed to arbitrate arbitrability unless there is 
“clear and unmistakable evidence that they did so.”  Thus, the legal 
presumptions are reversed when there is silence or ambiguity about 
who should decide arbitrability vis-à-vis when there is silence or 
ambiguity about the question of whether a particular merits-related 
dispute is within the scope of a valid arbitration agreement.69 
One respected treatise summarizes the importance of looking to the 
contractual language to determine whether a claim is arbitrable: 
The decision to submit a dispute to arbitration must be contracted for 
expressly by the parties to the agreement.  The range of issues to be 
arbitrated is restricted by the terms of the agreement.  Despite a strong 
public policy favoring the submission of disputes to arbitration, courts 
are not allowed to do violence to the expressed intention of the parties 
or to ignore the fundamental rule that an agreement to submit a 
dispute to arbitration is contractual in nature.  The agreement to 
arbitrate must be clearly intended by the parties.  In other words, a 
party cannot be compelled to arbitrate a particular dispute unless the 
agreement expressly encompasses the subject matter of the dispute.70 
                                          
 
66 AT&T Techs., Inc., 475 U.S. at 648 (citing Gateway Coal Co. v. Mine Workers, 414 U.S. 368, 
374 (1974)). 
67 514 U.S. 938, 943 (1995). 
68 748 A.2d 389 (Del. 2000). 
69 Id. at 392. 
70 Fletcher Cyclopedia of the Law of Corporations, 9A Fletcher Cyc. Corp. § 4724.10 (emphasis 
added) (internal citations omitted). 
4 
The overarching principle is that arbitration is a matter of contract.  Without 
a clearly evidenced intention to arbitrate the Dispute, LG cannot be compelled to 
arbitrate the Dispute.  While the Majority ignores this well-established line of 
authority, the Court of Chancery acknowledged it, including our decision in DMS.  
But the Court of Chancery erred by holding that “[t]he NDA is . . . not 
dispositive,” and that “[i]t neither empowers InterDigital nor entitles LG to insist 
on a judicial forum.”71  Here, the absence of a clear intent to arbitrate the Dispute is 
dispositive. 
Despite Complete Unanimity on the Point That There Is No Clear 
Expression of Intent to Arbitrate the Dispute, the Majority and the Court 
of Chancery Erroneously Require Arbitration 
One fact agreed upon by all who have examined this matter is the following:  
the NDA does not contain a clear expression of intent to arbitrate disputes arising 
under it.  The Court of Chancery acknowledged this undisputed critical fact in 
stating that:  “LG is correct that the language is not sufficiently clear to constitute 
an agreement to arbitrate the dispute.”72  The Majority also acknowledges this 
point:  “It is true that the NDA does not contain a clause requiring that any dispute 
                                          
 
71 LG Elecs., Inc. v. InterDigital Commc’ns, Inc., 98 A.3d 135, 139 (Del. Ch. 2014). 
72 LG Elecs., Inc., 98 A.3d at 139 (citing DMS Props.-First, Inc., 748 A.2d at 391 (“A party 
cannot be forced to arbitrate the merits of a dispute . . . in the absence of a clear expression of 
such intent in a valid agreement.”)). 
5 
regarding its enforcement or applicability be resolved in arbitration, as the Court of 
Chancery recognized.”73   
It must follow that LG cannot be forced to arbitrate the Dispute, which all 
agree arises under the NDA.  Without a clear expression of intent to arbitrate an 
issue, “a party . . . has a right to have the merits of [a] dispute adjudicated ab initio 
in a court of competent jurisdiction.”74 
The Majority focuses on paragraph 9 of the NDA and erroneously concludes 
that in it LG expressly agreed to arbitrate the Dispute.  The Majority states: 
By its plain terms, the NDA can be enforced not just in any “court,” 
but also in any “agency” or “tribunal.”  It is on this provision of the 
NDA that the Court of Chancery properly focused.75 
The Majority‟s reliance on the word “tribunal” in the NDA misses the mark 
because the use of the word “tribunal” does not require arbitration.  The issue here 
is whether arbitration is required -- not whether it is foreclosed.  Whether LG 
could agree to arbitrate a claim arising under the NDA is irrelevant since LG has 
                                          
 
73 Majority Op. at 12. 
74 DMS Props.-First, Inc., 748 A.2d at 391.  The Court of Chancery‟s decision in Medicis 
Pharm. Corp. v. Anacor Pharms., Inc., 2013 WL 4509652 (Del. Ch. Aug. 12, 2013), supports the 
proposition that substantive arbitrability is a threshold question that must be addressed before 
any comity analysis can begin.  There, the parties were in an arbitration proceeding (that was 
filed first) involving a license agreement, when one party filed suit in the Court of Chancery 
seeking specific performance of the same agreement.  While the first-filed arbitration involved 
the same parties and the same substantive issues, the Court of Chancery refused to dismiss the 
case, finding that the equitable claim fell outside the bounds of the arbitration clause in the 
license agreement.  The agreement in Medicis allowed for arbitration of certain disputes, but 
provided that each party would have the right to institute judicial proceedings in order to enforce 
the instituting party‟s rights through specific performance, injunction or other similar equitable 
relief. 
75 Majority Op. at 12. 
6 
sought relief under the NDA against the allegedly breaching party (InterDigital) in 
a judicial forum. 
Critical to the Majority‟s holding that the Dispute is arbitrable is its 
conclusion that “the NDA was a bilateral agreement, and it specifically permitted 
both parties to seek relief from „any court, agency, or tribunal.‟”76  The Majority 
offers three bases to support its conclusion -- the language of the NDA itself 
(specifically, paragraph 9); the suggestion that LG agreed to arbitration by asking 
the Tribunal to resolve the Dispute; and finally, LG‟s “concession” at oral 
argument that the NDA is “bilateral.”  However, each premise the Majority relies 
upon is refuted by either the language of the NDA or the factual record presented 
to us on appeal. 
Under Paragraph 9 of the NDA, an Allegedly Breaching Party Cannot 
Compel the Non-Breaching Party to Arbitrate a Dispute 
The Majority avoids the well-established “clear intent” rule as set forth 
above by misconstruing the language of the NDA.  Paragraph 9 of the NDA states 
in relevant part: 
Although this Agreement does not contain or incorporate any formal 
dispute resolution procedure, any party shall have the right, in 
addition to all other remedies at law or in equity, to have the 
provisions of this Agreement specifically enforced by any court, 
agency, or tribunal having personal jurisdiction over the Party in 
alleged breach of this Agreement and to seek a temporary or 
permanent injunction or order prohibiting the allegedly breaching 
                                          
 
76 Id. at 12-13 (citing App. to Opening Br. at A30, NDA ¶ 9). 
7 
Party (including the agents, officers, directors, employees, and 
attorneys as the case may be) from such unauthorized use or 
disclosure of any Settlement Communications or Confidential 
Information.77 
In providing that the NDA “does not contain or incorporate any formal dispute 
resolution procedure,” the parties obviously decided not to include in the NDA a 
provision requiring arbitration of disputes arising under the NDA.78  The Majority 
agrees that “[u]nlike the License Agreement, the NDA [does] not contain a specific 
provision mandating arbitration.”79   
The NDA is not “bilateral” in the sense that the Majority contends, namely, 
that the allegedly breaching party (e.g., the party accused of misuse of the 
confidential information) can compel the non-breaching party to arbitrate.  Rather, 
a party has the right, under paragraph 9 of the NDA, to seek an order from a court 
prohibiting the allegedly breaching Party from unauthorized use or disclosure of 
                                          
 
77 App. to Opening Br. at A30, NDA ¶ 9. 
78 Counsel for InterDigital appeared to agree in the proceedings below that the NDA does not 
require arbitration:   
There is no threshold arbitrability issue here.  We have not contended that the 
NDA has a mandatory arbitration clause.  We don‟t make that argument.  All 
we‟ve argued is that the arbitration tribunal is not prohibited by the absence of an 
arbitration clause from considering whether the NDA prevents introduction of 
evidence before it. 
App. to Opening Br. at A239.  Instead, counsel for InterDigital urged the Court of Chancery to 
follow the United States Court of Appeals for the Seventh Circuit‟s decision in Trustmark Ins. 
Co. v. John Hancock Life Ins. Co., 631 F.3d 869 (7th Cir. 2011), and to allow the arbitrator to 
construe the NDA to make evidentiary determinations.  App. to Opening Br. at A240-42. 
79 Majority Op. at 6. 
8 
Settlement Communications.80  Thus, the most faithful reading of paragraph 9 of 
the NDA under our case law is that the non-breaching party can invoke its 
contractual right to a judicial forum if it chooses, and neither party can compel 
arbitration.  LG consistently took this position in its briefing and argument before 
this Court.81 
Both the Court of Chancery and the Majority Erroneously Conclude That 
LG Agreed or Conceded That the Tribunal Had the Power to Determine 
Whether the Dispute Was Arbitrable. 
 
The Majority also avoids the well-established “clear intent” rule by finding 
that the parties agreed to submit the Dispute to arbitration.  Yet the record simply 
does not support this conclusion.   
In its April 19, 2013 opening brief to the Tribunal, LG stated that it “chose 
not to present with this opening brief any witness statement related to negotiations 
                                          
 
80 See App. to Opening Br. at A30, NDA ¶ 9.  For example, at argument, counsel for LG stated:  
“We both have rights under the confidentiality agreement.  But it‟s not bilateral in the sense that 
if we invoke our right to go to a district court or a court that has jurisdiction, that they can raise it 
elsewhere.”  Transcript of Oral Argument at 38, LG Elecs., Inc. v. InterDigital Commc’ns, Inc., 
No. 475, 2014 (Del. Mar. 11, 2015). 
81 The Majority ignores LG‟s claim for injunctive relief in pressing its strained interpretation of 
paragraph 9 of the NDA.  It first states that LG sought “only” declaratory relief.  Majority Op. at 
10.  This is incorrect as the trial court‟s rulings acknowledge, see App. to Opening Br. at A268; 
LG Elecs., Inc., 98 A.3d at 136, and as the face of LG‟s verified complaint reveals.  See App. to 
Opening Br. at A14, A23-25.  Then, focusing on a portion of paragraph 9 of the NDA, the 
Majority argues that the right to declaratory relief was not limited to the non-breaching party.  
However, paragraph 9, in providing that “any party shall have the right . . . to have the provisions 
of this Agreement specifically enforced by any court, agency, or tribunal having personal 
jurisdiction over the Party in alleged breach of this Agreement and to seek a temporary or 
permanent injunction or order prohibiting the allegedly breaching Party . . . from such 
unauthorized use,” necessarily means that the non-breaching party has the right to seek 
injunctive relief in a court against the allegedly breaching party -- as LG did here. 
9 
leading to the execution of the present Agreement or subsequent to its execution” 
because of the NDA the parties signed on May 9, 2012.82  As of April 19, 2013, the 
record does not indicate that InterDigital had a different interpretation of the NDA.  
InterDigital then wrote to LG on April 25, 2013, arguing that the NDA did not 
preclude the submission of the communications at issue.  On May 1, 2013, after 
LG advised the Tribunal that it would not be relying on Settlement 
Communications covered by the NDA, InterDigital requested the Tribunal to rule 
on the issue.83 
In its May 3, 2013 letter to the Tribunal, LG responded and expressly stated 
that the Tribunal should not interject itself in resolving the Dispute.  Specifically, 
LG stated: 
InterDigital gives no basis for its request that the Tribunal issue “an 
order confirming that InterDigital is permitted to submit witness 
testimony and documents as evidence of the parties‟ understanding of 
the proper interpretation of the PLA.”  . . . In essence, InterDigital is 
asking the Tribunal to assert jurisdiction over an apparent dispute 
related to the NDA, to interpret the NDA, and to grant InterDigital 
leave to breach the NDA.  But InterDigital fails to acknowledge that 
the NDA does not contain an arbitration clause.84  
                                          
 
82 App. to Opening Br. at A214-15. 
83 Specifically, InterDigital requested that the Tribunal enter “an order confirming that the 2012 
NDA does not prevent the parties from submitting witness testimony and communications 
between the parties as evidence of the proper interpretations of the PLA.”  App. to Opening Br. 
at A34. 
84 App. to Opening Br. at A48 (bold emphasis in original; italics emphasis added). 
10 
In the same letter, LG further argued that “[a]rbitral jurisdiction is a creature of 
contract and the NDA does not provide for arbitral interpretation.”85  Thus, LG did 
not agree to have the Tribunal resolve the Dispute.86 
Nor does the record support the Court of Chancery‟s conclusion that “[t]he 
parties agree that the Tribunal at least has the power to determine if the underlying 
dispute is arbitrable . . . .”87  For example, LG argued during oral argument before 
this Court:  “But one thing we do not agree on, we do not agree the tribunal has the 
power to determine that the underlying dispute is arbitrable.  We never agreed on 
that.  We‟ve been disputing that from the beginning.”88 
The Majority Errs by Concluding That LG Conceded at Oral Argument 
that the Tribunal May Resolve the Dispute 
Nor did LG concede at oral argument before this Court, as the Majority 
contends, that the Tribunal had the power to resolve the Dispute.89  The Majority 
                                          
 
85 Id. 
86 The Majority hints at the vulnerability of its position in stating that “even if LG‟s attempt to 
raise the issue before the Tribunal did not constitute an official request to have the Tribunal 
decide the issue, InterDigital‟s later response to the Tribunal did constitute such a request for 
relief.”  Majority Op. at 14.  Yet, as shown above, paragraph 9 of the NDA is not “bilateral” in 
the sense that the non-breaching party can be forced into an arbitral forum. 
87 LG Elecs., Inc., 98 A.3d at 138. 
88 Transcript of Oral Argument at 10, LG Elecs., Inc. v. InterDigital Commc’ns, Inc., No. 475, 
2014 (Del. Mar. 11, 2015). 
89 The Majority states: 
As LG conceded at oral argument, the NDA was a bilateral agreement, and it 
specifically permitted both parties to seek relief from “any court, agency or 
tribunal.”  As LG also conceded, the NDA‟s reference to a “tribunal” as one of 
three forums in which either party can seek “special[] enforce[ment]” was most 
likely to ensure that the NDA‟s terms could be interpreted and enforced by an 
11 
cites to the videotape of the oral argument twice.  Neither a viewing of the 
videotape nor a reading of the transcript of the oral argument, in my view, evinces 
such a concession.90  Moreover, as noted above, LG did not agree that an alleged 
breaching party could compel a non-breaching party to arbitrate disputes arising 
under the NDA. 
There is logic to LG‟s insistence on its bargained-for contractual right to 
have the Dispute heard in the Court of Chancery in that a judicial resolution here -- 
while admittedly inefficient -- allows the non-breaching party to prevent the other 
party from tainting a proceeding with information that should be precluded.  If the 
purpose of the NDA is to keep Settlement Communications out of certain 
proceedings,91 it defeats the purpose to have the adjudicators rule on their 
admissibility -- and thereafter ask them to “unring the bell” if they conclude that 
the submissions were inadmissible.  LG understandably claims that it would be 
irreparably harmed by having Settlement Communications disclosed in the 
Tribunal for this reason.  This argument caries some force.  While judges in bench 
trials, for example, are frequently asked to disregard evidence, the “taint” issue is 
                                                                                                                                        
arbitral tribunal, including the one that LG sought to form two months before it 
signed the NDA. 
Majority Op. at 12-13. 
90 A transcription of these cited portions appear as Exhibit A hereto. 
91 For example, paragraph 1 of the NDA provides that, “[e]xcept as otherwise set forth in the 
Agreement, Settlement Communications shall not be (a) used, referenced, or relied upon in any 
existing or future legal, judicial, administrative or arbitration proceeding . . . .”  App. to Opening 
Br. at A27, NDA ¶ 1. 
12 
more pronounced in the arbitration context where the standard of review of an 
evidentiary issue is a typically high hurdle on appeal.92  As it turns out in this case, 
that precise harm has come to pass -- the Tribunal did admit the challenged 
documents into evidence over LG‟s objections.  LG‟s counsel now maintains that 
the decision is “effectively unreviewable.”93 
Similarly, based upon its flawed factual assumption that LG had conceded 
that the Tribunal had power to determine the matter of arbitrability,94 the Court of 
Chancery erroneously concluded that “[t]his case therefore presents the rare 
instance when both the arbitral tribunal and the court have jurisdiction such that 
McWane could apply.”95  Had the trial court not erred in this regard, it would not 
have applied McWane, as that was the basis for its application of McWane. 
No Delaware case has ever applied McWane to dismiss a suit in favor of a 
first-filed arbitration.  There is a logical reason for this absence of case law as the 
Court of Chancery observed:   
                                          
 
92 During the argument below and to this Court, counsel for LG stated that the difficulty of 
getting an erroneous decision as to the Settlement Communications overturned was a critical 
reason for negotiating the NDA protections.  App. to Opening Br. at A278-80. 
93 They maintain that overturning the Tribunal‟s decision would require a showing of “manifest 
injustice.”  Transcript of Oral Argument at 12-13, LG Elecs., Inc. v. InterDigital Commc’ns, Inc., 
No. 475, 2014 (Del. Mar. 11, 2015). 
94 In this regard, the Court of Chancery states, “[t]he parties agree that the Tribunal at least has 
the power to determine if the underlying dispute is arbitrable, and the parties also agree that the 
specific matter at issue in this case arises out of the NDA, which does not contain an arbitration 
provision.”  LG Elecs., Inc., 98 A.3d at 138. 
95 Id. 
13 
In most cases involving an existing arbitration, the defendants will 
move to dismiss the later-filed action on the grounds that the parties 
are required to arbitrate the dispute.  The court will then rule on the 
issue of substantive arbitrability or, depending on the parties‟ contract, 
dismiss the action so that the arbitral tribunal can rule on that issue.  If 
the dispute is arbitrable, McWane never comes up.  If the dispute is 
not arbitrable, then the arbitral tribunal is not “capable of doing 
prompt and complete justice” and McWane does not apply.96 
By erroneously concluding that the parties had agreed that the Tribunal has the 
power to determine if the Dispute is arbitrable, the Court of Chancery avoided 
what it described as a “Morton‟s fork.”97  Similarly, absent the Majority‟s error in 
finding that LG had agreed to have claims arising under the NDA adjudicated by 
an arbitrator, the Majority would be left with only the second basis for its decision, 
which I believe is also incorrect under the unique circumstances presented here. 
The Rights Under the NDA Are Not Merely “Procedural” -- Rather, They 
Are Separately Bargained-For Substantive Rights 
The second “lynchpin” of the Majority‟s Opinion is that the “broad right to 
have the NDA enforced by any „tribunal‟ is consistent with the accepted principle 
that arbitrators can decide evidentiary issues relevant to disputes pending before 
them.”98  This reasoning ignores the fact that sophisticated parties expressly agreed 
in the NDA to have Settlement Communications treated in accordance with its 
substantive terms.  In addition, the License Agreement arbitration provision does 
                                          
 
96 Id. 
97 See supra text accompanying note 28. 
98 Majority Op. at 16. 
14 
not sweep within its reach the issue of the use of “Settlement Communications” as 
that term is defined in the NDA.99    
By its plain language, the NDA precludes Settlement Communications from 
being “used, referenced, or relied upon in any existing or future legal, judicial, 
administrative or arbitration proceeding.”100  Thus, the NDA‟s prohibition on the 
use of Settlement Communications in any existing proceedings, to an objective 
third party, would include the present arbitration that was pending when the parties 
executed the NDA.101  
In this case, the Majority‟s decision vitiates the parties‟ bargained-for 
substantive rights for the sake of efficiency.  However, this Court has made clear 
that absent a clear contractual intent to arbitrate, it is error to require arbitration in 
order to avoid obvious inefficiency.  For example, in Parfi Holding AB v. Mirror 
                                          
 
99 The arbitration provision of the License Agreement is narrow in scope and provides in 
Sections 5.2: 
If a dispute arising under this Agreement has not been resolved by the non-
binding procedures set forth in Section 5.1 within the time periods provided, 
either party may submit the dispute to arbitration administered by the AAA under 
its AAA International Rules and as set forth in this Section . . . . 
On March 19, 2012, LG commenced the Arbitration pursuant to Article 5.2 seeking a declaration 
that the License Agreement covers the patents asserted by InterDigital.  App. to Opening Br. at 
A63-64. 
100 App. to Opening Br. at A27, NDA ¶ 1. 
101 See Estate of Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010) (“Delaware adheres to the 
„objective‟ theory of contracts, i.e., a contract‟s construction should be that which would be 
understood by an objective, reasonable third party.”). 
15 
Image Internet, Inc.,102 this Court set forth the steps necessary to assess the 
arbitrability of a claim: 
First, the court must determine whether the arbitration clause is broad 
or narrow in scope.  Second, the court must apply the relevant scope 
of the provision to the asserted legal claim to determine whether the 
claim falls within the scope of the contractual provisions that require 
arbitration.  If the court is evaluating a narrow arbitration clause, it 
will ask if the cause of action pursued in court directly relates to a 
right in the contract.  If the arbitration clause is broad in scope, the 
court will defer to arbitration on any issues that touch on contract 
rights or contract performance.103 
In Parfi, the issue was whether an underwriting agreement‟s broad 
arbitration clause would encompass fiduciary duty claims raised by a stockholder 
of a corporation when those same claims were based on the identical conduct that 
was an alleged breach of an underwriting agreement and grounds for a claim of 
fraudulent inducement into that agreement.  We held that it was error for the Court 
of Chancery to find that the fiduciary duty claims were arbitrable, despite the 
obvious inefficiency of allowing these intertwined claims to proceed in two 
separate forums.104  While the public policy of Delaware favors arbitration, we 
have concluded that “[t]he policy that favors alternative dispute resolution 
mechanisms, such as arbitration, does not trump basic principles of contract 
                                          
 
102 817 A.2d 149 (Del. 2002). 
103 Id. at 155. 
104 See also Medicis Pharm. Corp., 2013 WL 4509652 (because sophisticated parties failed to 
provide a clear intention to arbitrate certain matters, certain claims were not subject to mandatory 
arbitration while others were.  The Court of Chancery noted that the result was not “optimal.”). 
16 
interpretation.”105  Thus, “a party attempting to invoke arbitration will not prevail 
by reciting the message that courts favor arbitration when the contract language 
they rely on does not demonstrate the parties‟ intent to submit the dispute in 
question to arbitration.”106 
Given that the NDA expressly and independently addresses the use of 
Settlement Communications, it simply cannot be fairly said that disputes relating to 
Settlement Communications are swept within the License Agreement‟s narrow 
arbitration clause.  The Court of Chancery also seemed to acknowledge this point 
by characterizing the arbitration provision as not expansive enough to “sweep in” 
the Dispute: 
I would feel a lot more comfortable . . . if your dispute resolution 
provision in the PLA said “arising out of or relating to.”  I think it 
says “arising under.”  It was a narrow, specific agreement-related 
clause as opposed to a more expansive clause that I thought could 
sweep in something like that.107 
As we said in Parfi, “arbitration is a mechanism of dispute resolution created by 
contract,” and “[a]n arbitration clause, no matter how broadly construed, can 
extend only so far as the series of obligations set forth in the underlying 
agreement.”108  Thus, I believe -- as the Court of Chancery seemed to acknowledge 
                                          
 
105 Id. at *3 (quoting Parfi Holding AB, 817 A.2d at 156). 
106 Id. at *9 (citation omitted). 
107 App. to Opening Br. at A295. 
108 Parfi Holding AB, 817 A.2d at 156. 
17 
-- that the claims relating to the use of “Settlement Communications” are not 
within the narrow scope of the License Agreement‟s arbitration provision.   
Therefore, I believe that Trustmark Ins. Co. v. John Hancock Life Ins. Co.,109 
-- a case on which the Majority relies, is distinguishable.110  In Trustmark, the 
parties entered into “comprehensive arbitration clauses” in which the “parties did 
agree to arbitrate their disputes about reinsurance.”111  As a result, the United States 
Court of Appeals for the Seventh Circuit found that the confidentiality agreement 
was “presumptively within the scope of the reinsurance contract‟s comprehensive 
arbitration clauses, which cover all disputes arising out of the original dispute.”112  
Here, the arbitration clause in the License Agreement was narrowly drawn and the 
parties agreed to arbitrate only disputes arising under the License Agreement.113 
                                          
 
109 631 F.3d 869 (7th Cir. 2011). 
110 Similarly, SOC-SMG, Inc. v. Day & Zimmerman, Inc., 2010 WL 3634204 (Del. Ch. Sept. 15, 
2010), is distinguishable.  There, the Court of Chancery held that an arbitrator could address 
issues of alleged discovery abuse and alleged attorney misconduct.  The issues arose directly 
from breaches of an agreement that contained an arbitration clause.  Id. at *2.  Here, a separate 
agreement, namely, the NDA, contains separately bargained-for substantive rights that form the 
basis of the Dispute.   
111 Trustmark Ins. Co., 631 F.3d at 874. 
112 Id. (emphasis added). 
113 It is puzzling that the Majority, in observing that the Court of Chancery premised its ruling on 
the NDA and not the License Agreement, characterizes LG‟s arguments as “confused.”  Majority 
Op. at 2.  The Majority‟s second basis for its ruling relies heavily on the assertion that “the 
arbitrator‟s power to resolve a dispute necessarily includes the power to resolve procedural 
issues relevant to that dispute.”  Id. at 16-17.  Thus, it seems that the Majority itself claims that 
the Dispute arising under the NDA (which the Majority erroneously characterizes as 
“procedural”) must be resolved by relying upon the License Agreement‟s arbitration provision 
and the AAA International Rules that it designates as the governing rules. 
18 
The Majority‟s comparison of the License Agreement‟s arbitration provision 
with the one in Trustmark is flawed.  The Majority states that, “[a]s in Trustmark, 
the parties‟ arbitration clause in the License Agreement provided broadly that any 
dispute “arising under” the Agreement would be subject to arbitration.”114  
However, in Trustmark, the parties agreed to arbitrate “any dispute or difference 
between the General Manager and the John Hancock relating to the interpretation 
or performance of this agreement, including its formation or validity, or any 
transaction . . . .”115  As the Court of Chancery correctly observed, the License 
Agreement‟s “arising under” arbitration provision is far more narrow than 
Trustmark‟s “relating to” provision, and does not sweep in the Dispute.116 
Relatedly, and because the NDA is a separate contract concerning 
substantive rights regarding the use and treatment of confidential Settlement 
Communications, I believe the Court of Chancery erred in characterizing the 
Dispute as a purely “procedural” or “evidentiary” matter.  The Majority similarly 
                                          
 
114 See Majority Op. at 20 n. 57 (citations omitted). 
115 Trustmark Ins. Co. v. John Hancock Life Ins. Co., 680 F.Supp.2d 944, 949 (N.D. Ill. 2010) 
(emphasis added) , rev’d, 631 F.3d 869 (7th Cir. 2011). 
116 See App. to Opening Br. at A63, License Agreement § 5.2 Arbitration of Disputes (“If a 
dispute arising under this Agreement has not been resolved by the non-binding procedures set 
forth in Section 5.1 [Negotiation of Disputes] within the time periods provided, either party may 
submit the dispute to arbitration. . . .” (emphasis added)); see also Douzinas v. American Bureau 
of Shipping, Inc., 888 A.2d 1146, 1150 (Del. Ch. 2006) (implying that an arbitration provision 
that contains the words “relating to” is broader than one that contains “arising under”).  In 
Douzinas, the Court of Chancery noted that “the Supreme Court [has] recognized that words like 
„relate to‟ are to be read broadly.”  Id. at 1152 n.32 (citing Elf Atochem North America, Inc. v. 
Jaffari, 727 A.2d 286 (Del. 1999)). 
19 
characterizes the Dispute as “procedural,” as an “incidental question” to the 
licensing dispute, as an “evidentiary question,” or as an “ancillary question of 
admissibility.” 
LG‟s breach of contract claim regarding the Dispute is not properly 
characterized as a procedural matter that is merely incidental to the License 
Agreement arbitration.  Treating LG‟s claims as merely procedural or incidental 
matters to be resolved by the Tribunal ignores the substance of the NDA‟s 
bargained-for rights, including the ability to prevent “Settlement Communications” 
from being “used, referenced, or relied upon in any existing . . . proceeding”117 -- 
which, on its face, would include the pending arbitration.118 
Thus, LG is not raising a discovery or admissibility dispute to the Court of 
Chancery.  It is asserting a breach of contract claim under the NDA.  Resolution of 
this breach of contract claim may be a necessary predicate to the proper use of 
Settlement Communications before the Tribunal.  But the breach of contract 
dispute is a substantive matter that does not fall within the License Agreement‟s 
provision relating to the Tribunal‟s power to determine evidentiary matters. 
                                          
 
117 App. to Opening Br. at A27, NDA ¶ 1. 
118 Courts have treated non-disclosure agreements as conferring upon the parties substantive 
contractual rights.  For example, in Martin Marietta Materials, Inc. v. Vulcan Materials Co., 56 
A.3d 1072 (Del. Ch. 2012), aff’d, 68 A.3d 1208 (Del. 2012), the Court of Chancery held a trial 
on the substantive contractual rights under a non-disclosure agreement implicated by a party 
using and publicly disclosing information in aid of a hostile bid and proxy contest.  The Court of 
Chancery held that Martin Marietta breached the non-disclosure agreement, and accordingly, 
held that “the victim of any breach of the confidentiality agreements should be entitled to 
specific performance and injunctive relief should be respected.”  Id. at 1075. 
20 
The Majority compounds that error in stating that “[h]ad the parties wanted 
to limit the authority of the arbitral tribunal to determine evidentiary matters, 
thereby limiting the power granted in the License Agreement itself, they could 
have done so in the NDA.”119  It suggests that the absence of a clear intention to 
arbitrate was an inadequate basis to reject the claim that the Dispute was arbitrable, 
and that an exclusive forum provision, for example, might have added the clarity 
that LG needed in order to prevail.  But as this Court stated in DMS, if there is 
ambiguity as to whether a particular merits-based dispute is within the scope of a 
valid arbitration agreement, courts should not presume that the parties agreed to 
arbitrate the matter.120  While well-established authority affords parties access to a 
judicial forum in the absence of a clear intention to arbitrate, the Majority would 
appear to now afford parties access to a judicial forum only if there were a clear 
intention to have the matter resolved in a judicial forum (e.g., via an exclusive 
forum provision).  The Majority thereby upsets the settled expectations that parties 
depend upon in entering into their contractual arrangements. 
The Majority‟s fears that a contrary ruling would doom arbitration as a 
dispute resolution mechanism and flood the courts with discovery matters related 
to pending arbitrations are not well-founded.  This situation is fairly atypical and, 
in that sense, does not threaten long-standing practices.  What is threatened is the 
                                          
 
119 Majority Op. at 15. 
120 See DMS Props.-First, Inc., 748 A.2d at 392. 
21 
parties‟ freedom to freely contract around the general practices.  While trumpeting 
the virtues of arbitration, the Majority does violence to basic principles of freedom 
of contract and to well-established lines of precedent regarding substantive 
arbitrability.   
Because I believe that the Court of Chancery erred in the threshold 
substantive arbitrability analysis, it should not have embarked on the McWane 
analysis.  Accordingly, I will not address it here. 
For the foregoing reasons, I respectfully DISSENT. 
 
 
 
 
 
 
 
 
Exhibit A 
 
 
 
 
 
IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
 
 
LG ELECTRONICS, INC., 
) 
 
) 
)No. 
475,2014 
Plaintiff Below, ) 
Appellant, 
) 
)ON APPEAL FROM C.A. 
v. 
)NO. 9747-VCL IN THE 
)COURT OF CHANCERY 
INTERDIGITAL 
)OF THE STATE OF 
COMMUNICATIONS, 
INC., 
)DELAWARE 
INTERDIGITAL 
TECHNOLOGY 
) 
CORPORATION, and IPR 
) 
LICENSING, INC., 
) 
 
) 
Defendants 
Below, 
) 
Appellees. 
) 
 
 
March 11, 2015 
 
APPEARANCES: 
JEREMY D. ANDERSON, ESQ. 
SCOTT A. ELENGOLD, ESQ. 
MICHAEL J. MCKEON, ESQ. 
JOSEPH 
B. 
WARDEN, 
ESQ. 
FISH & RICHARDSON, P.A. 
For the Appellant 
 
NEAL C. BELGAM, ESQ. 
SMITH, KATZENSTEIN & JENKINS LLP 
 
-and- 
 
DAVID S. STEUER, ESQ. 
WILSON SONSINI GOODRICH & ROSATI, P.C. 
For the Appellees 
 
WILCOX & FETZER 
Registered 
Professional 
Reporters 
1330 King Street - Wilmington, Delaware 19801 
(302) 655-0477 
www.wilfet.com 
 
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with that. But one thing we do not agree on, 
we do not agree the tribunal has the power to 
determine that the underlying dispute is 
arbitrable.  We never agreed on that. We've 
been disputing that from the beginning. 
JUDGE CHAPMAN: Counsel, doesn't 
the PLA say that any disputes, the tribunal 
can decide evidentiary disputes? 
MR. MCKEON: The 
PLA 
does 
say 
that. And if this was about the PLA and we 
were talking about the PLA, that would be 
perfectly 
acceptable. But 
the 
dispute 
at 
issue here is about the NDA, the nondisclosure 
agreement. 
CHIEF JUSTICE STRINE: No. But I 
 
think what Judge Chapman is getting at is you 
name an arbitrator to decide a dispute, and 
the reality is, and parties love this. They 
say that when it's convenient they want to go 
to the arbitration because it's so efficient. 
Then they say but every single 
thing that the arbitrator does is collateral, 
like all the normal things that a judge or an 
arbitrator has to do to actually decide the 
 
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matter, which includes rule on issues of 
admissibility, what evidence comes in. 
And 
I 
believe 
what 
Judge 
Chapman's getting at is doesn't the arbitrator 
have the power under this to make the normal 
evidentiary rulings that are necessary to get 
the case decided? 
MR. MCKEON: So the answer to 
 
that is yes. 
 
CHIEF JUSTICE STRINE: And if the 
 
arbitrator 
rules 
in 
your 
favor 
on 
the 
contractual issue and keeps the evidence out, 
you would have a complete remedy at law from 
the harm you were seeking to avoid in the 
Court of Chancery, right? 
MR. MCKEON: Again, 
we 
dispute 
the fact they have the power to adjudicate the 
contract. 
The evidence issue -- 
CHIEF JUSTICE STRINE: They have 
 
the power to keep out evidence because it's 
being admitted in violation of a privilege or 
other thing. 
MR. MCKEON: Certainly they have 
 
that power, Your Honor. 
 
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CHIEF JUSTICE STRINE: And if 
 
that was kept out, that was the only live harm 
you were seeking to have the Court of Chancery 
rectify, right? 
MR. MCKEON: Well, Your Honor, I 
take a step back and say we don't have our day 
in court because, in fact, as you may be 
aware, since the opinion below was issued, the 
arbitration panel did pick up the issue and 
determined that materials could come into the 
case. So it ruled against us. 
CHIEF JUSTICE STRINE: Yes. 
 
MR. MCKEON: And that was after 
our proceeding below, subsequent to that. 
In 
fact, if you look at what they did -- 
CHIEF JUSTICE STRINE: And if 
 
they were wrong at the end and you have FAA 
review, that's potentially something you can 
raise under that, right? 
MR. MCKEON: You're right, Your 
Honor. But it's effectively unreviewable. 
The manifest injustice, the standard on 
reviewing that, when we believe that we had a 
private contract right and they should never 
 
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have even dealt with that contract, the 
standard for review is quite difficult. 
So that is why we were in 
Delaware, which we had a right to under our 
contract that we negotiated that the Delaware 
court 
should 
determine 
that, 
not 
the 
arbitration panel because we never agreed to 
that. And what's happened here fundamentally 
is we've forgotten about -- 
CHIEF JUSTICE STRINE: Wait. How 
 
can you even invoke the jurisdiction of the 
Court of Chancery, then? Because if there's 
a -- if the arbitrator keeping the evidence 
out is an adequate remedy. 
MR. MCKEON: Because we have a 
specific right in this contract, Your Honor, 
to go -- 
CHIEF JUSTICE STRINE: Specific 
 
performance is only granted if, you know, it's 
typically only granted when it's necessary. 
If you could obtain the relief in arbitration, 
why would the Court of Chancery grant a 
specific performance anyway? 
MR. MCKEON: Because we have a 
 
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Mr. Steuer. 
 
MR. MCKEON: Thank you. Just a 
few points to follow up, if I may. 
On Medicis, of course there was a 
judicial carve-out, and which entitled the 
parties to go enforce it in court. In 
this 
case the NDA, of course, the specific language 
that was agreed on by both sides, two 
sophisticated parties, that we were entitled 
to go and enforce it in court. 
CHIEF JUSTICE STRINE: Okay. But 
 
you're 
also 
entitled 
to 
enforce 
it 
in 
tribunal. 
You 
make 
a 
big 
point 
in 
the 
arbitration going in, we're suing you in 
arbitration. 
They can't use this information. 
I 
asked 
you 
whether 
it 
was 
bilateral or not. They send back and say, 
yes, you can, Tribunal. You then say, no, you 
can't. Isn't that pending before a tribunal 
first? 
MR. MCKEON: The NDA issue, Your 
Honor, we think -- 
CHIEF JUSTICE STRINE: The NDA 
 
says you can go to a court, agency, or 
 
37 
 
 
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tribunal. 
I asked you whether it was 
 
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bilateral. 
I think you said that it is 
 
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bilateral, and you then went and you sued them 
 
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in arbitration and said they can't do this. 
 
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These guys come back, your friends come back 
 
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and say, yes, we can. It's not a violation. 
 
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You come back to the arbitrator 
 
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and say, no, it's not, but you can't rule on 
 
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it. We don't think you're a tribunal. 
 
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You go to the Court of Chancery. 
 
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Court of Chancery says, you know what? 
 
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Arbitration tribunal is a tribunal. It has 
 
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equitable 
authority. It was the first 
 
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contractually named tribunal court or agency 
 
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seized with the question, and under McWane 
 
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we're not supposed to have two tribunals doing 
 
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the same thing at once. And this is also 
 
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analogous to a well-settled line of law about 
 
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arbitrators getting to decide evidentiary 
 
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disputes and I'm just going to follow this 
 
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sort of pretty moderate course of action. 
 
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MR. MCKEON: So, your Honor, just 
 
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to respond to that, again, I think first of 
 
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all in terms of who raised it in the 
 
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arbitration, 
we 
certainly 
started 
the 
arbitration because, of course, they sued us. 
CHIEF JUSTICE STRINE: But it 
 
doesn't matter who raised it because unless 
you're saying that you -- is there a language 
in the contract that says you're the only one 
who has rights? 
MR. MCKEON: We both have rights 
under the confidentiality agreement. But it's 
not bilateral in the sense that if we invoke 
our right to go to a district court or a court 
that has jurisdiction, that they can raise it 
somewhere 
else. 
CHIEF JUSTICE STRINE: You're the 
 
first person in the -- you're the first party 
in the tribunal who actually said this is 
relevant and nobody can bring this in, right? 
MR. MCKEON: We referenced it, 
Your Honor. We 
referenced 
it 
as 
a 
prophylactic measure saying -- 
CHIEF JUSTICE STRINE: And after 
 
they said they were going to, you then said, 
no, no, no, they can't. 
MR. MCKEON: What we said was, 
 
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Tribunal, you don't have the power to deal 
with this. 
CHIEF JUSTICE STRINE: Because 
 
you argued they were not a tribunal and -- 
 
MR. MCKEON: Absolutely. 
They're 
 
not -- 
 
CHIEF JUSTICE STRINE: That's 
 
what I'm asking you. If the Court of Chancery 
was correct that they were, doesn't your 
argument turn to contractual dust? 
MR. MCKEON: No, Your Honor. 
Remember, the Court of Chancery below -- 
CHIEF JUSTICE STRINE: No. I 
 
want to push you on this. 
 
MR. MCKEON: Okay. 
 
CHIEF JUSTICE STRINE: If the 
 
arbitrable tribunal was a tribunal within the 
meaning of that contract. 
MR. MCKEON: No. I think that's 
incorrect because we have a right -- we have a 
right -- 
CHIEF JUSTICE STRINE: That's 
what I mean. That means that even if one of 
the named places where you can enforce this 
 
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has already had the issue put before it, you 
get to trump that and to take it to another 
one. And where in the contract does it say 
that, your right of removal? 
MR. MCKEON: Well, your Honor, 
what I would say to answer that is we have to 
go back to the fundamentals here. 
CHIEF JUSTICE STRINE: That is 
 
the fundamentals. I am asking you, it's a 
very important thing. The contract uses three 
words. You admit they're not exclusive. You 
admit you can use any of them. You 
haven't 
really 
spent 
any time arguing 
that 
the 
arbitration tribunal is not a tribunal. 
It's pending before the tribunal. 
 
Why is it that you, your client, is the 
special party under the contract who then gets 
to lift one of the named deciders in favor of 
its second -- its preferred forum? 
MR. MCKEON: Well, Your Honor, 
when you say we haven't argued, we haven't 
argued it's not a tribunal. There's 
no 
arbitration provision here, so there's no 
rights to arbitrate this. That's been our 
 
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position. 
 
CHIEF JUSTICE STRINE: No, no. I 
 
get that. But it says under the NDA that you 
can go to a tribunal for specific performance. 
I asked you whether that was bilateral, which 
means they can also invoke it and say, no, 
this doesn't gag us. You then put the issue 
and said it does gag them. 
You 
haven't 
spent 
any 
time 
arguing they are not a tribunal within the 
meaning of the NDA itself. Wouldn't you admit 
that the reason that the tribunal is in there 
is because FTC proceeding covers what? 
What 
word covers FTC proceedings? 
MR. MCKEON: It's a government 
 
agency. 
 
CHIEF JUSTICE STRINE: Agency. 
MR. MCKEON: Yes. 
CHIEF JUSTICE STRINE: You've got 
courts. You have a tribunal. Part 
of 
the 
reason why you have a tribunal is what is one 
of the obvious places they would have used 
these documents given the relationship that 
you had with them as a party? 
 
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MR. MCKEON: Well, Your Honor -- 
 
CHIEF JUSTICE STRINE: Which 
 
tribunal cover? 
 
MR. MCKEON: Your Honor, you 
know, there's international tribunals, 
there's -- 
CHIEF JUSTICE STRINE: Of what 
 
kind? 
 
MR. MCKEON:  Maybe 
it's 
arbitration, Your Honor.  But 
I 
think, 
remember, the Court below held specifically in 
this contract there was no clear manifestation 
of intent to arbitrate. 
The Court held. 
It's 
not in this contract. That's what they held. 
So there is no arbitration right. 
According to the Court, the word 
"tribunal" is there, and the Court dealt with 
this. And the Court said, you know what, yes, 
there's no right here. It's not under this 
law of this Court. There's 
no 
clear 
manifestation of that. So no, there's not a 
requirement to arbitrate. That's 
what 
the 
Court held. 
And the Court got that right. It 
 
 
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was absolutely right to hold that. That is 
why, Your Honor -- 
CHIEF JUSTICE STRINE: Thank you 
 
very much. 
 
MR. MCKEON: Thank 
you. 
CHIEF JUSTICE STRINE: And, 
Counsel, anybody who argues a case involving 
the word "arbitrability" before lunch is fully 
entitled to enjoy their lunch. So thank you 
for your excellent arguments. 
MR. MCKEON: Thank you. Thank 
you very much. 
(End of proceeding.)