Opinion ID: 6318256
Heading Depth: 2
Heading Rank: 1

Heading: Indemnity Obligations

Text: Continental’s first theory of injury is that “should [Avanci and PatentHolder Defendants] succeed in procuring . . . non-FRAND license[s] from . . . OEM[s,]” the royalties owed on those licenses “risk being passed through to . . . Continental” via indemnity agreements. The district court determined that this averred harm was insufficient to confer Article III standing since it is “not . . . actual or imminent.” It emphasized that Continental’s amended complaint did not allege that OEMs have been or likely will be forced to take non-FRAND licenses from DefendantsAppellees, or that those OEMs have or likely will pass non-FRAND costs onto Continental through indemnity obligations. Thus, according to the district court, Continental pled a mere “potential of [] being injured.” 7 Case: 20-11032 Document: 00516219884 Page: 8 Date Filed: 02/28/2022 No. 20-11032 We agree. As Avanci and Patent-Holder Defendants observe, this alleged injury is “doubly speculative”: Continental would not be harmed unless OEMs first accepted non-FRAND licenses and then invoked their indemnification rights against Continental. Here, the pleadings do not establish that OEMs have accepted such licenses and invoked such rights. Because Continental’s “claim of injury depends on several layers of decisions by third parties—at minimum, [OEMs]”—it “is too speculative to confer Article III standing.” See Little, 575 F.3d at 541; see also Warth v. Seldin, 422 U.S. 490, 499 (1975) (“[T]he plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.”); cf. Millennium Petrochems., Inc. v. Brown & Root Holdings, Inc., 390 F.3d 336, 343 (5th Cir. 2004) (“[A]n indemnity claim does not . . . become actionable[] until all of the potential liabilities or damages . . . become fixed and certain.”). Continental seeks to bolster the adequacy of its allegations by referencing documents that the district court requested it submit to “convince [the court] that [Continental] ha[d] [suffered] potential injury.” The district court ultimately made no substantive findings as to whether Continental’s submissions were responsive or as to their contents, which it did not consider in connection with the motion to dismiss. This was within its discretion. In reviewing Continental’s submissions, we note some documents at most demonstrate that OEMs may seek to have Continental offset costs associated with licensing. “[A]s a potential contracting party, each [] is entitled to drive a hard bargain.” Wilkie v. Robbins, 551 U.S. 537, 558 (2007). Once again, none of the documents indicate that an OEM has paid or will pay Avanci and Patent-Holder Defendants non-FRAND rates for a license. And none of the documents indicate that Continental has agreed or will agree to 8 Case: 20-11032 Document: 00516219884 Page: 9 Date Filed: 02/28/2022 No. 20-11032 indemnify OEMs for non-FRAND royalties paid to Avanci and PatentHolder Defendants. “This court f[inds] no overreaching to drive a hard bargain.” Twenty Grand Offshore, Inc. v. W. India Carriers, Inc., 492 F.2d 679, 682 (5th Cir. 1974). Defendants-Appellees’ harm to Continental on account of Continental’s indemnity obligations to OEMs remains speculative. 9