Court Opinion

ID: 9496963
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:39:56.014192+00
Date Added: 2024-06-11T17:57:54.747058
License: Public Domain

AMBRO, Circuit Judge,
concurring.
I concur in the outcome reached by my colleagues, which vacated the District Court’s denial of arbitration. I agree that the District Court erred in reaching the merits of the dispute to decide arbitrability. I also agree that “all roads lead to Rome,” ie., arbitration (though there may be one more road not mentioned in Judge Becker’s opinion). But I disagree with my colleagues’ blanket statement that arbitrability itself is a question for the arbitrator.
It is unnecessary to leave the resolution of arbitrability to the arbitrator in this case. In Sharon Steel Corp. v. Jewell Coal and Coke Co., 735 F.2d 775, 779 (3d Cir.1984), we did so because “[t]he heart of the problem in th[at] case [wa]s the fact that the question of arbitrability [wa]s intertwined with the merits.... ” We do not have the same problem here because, as Judge Becker notes, reviewing the merits is wholly unnecessary to decide the question of arbitrability. As a result, the scope (or applicability) of an arbitration agreement is a question for judicial determination. Medtronic Ave, Inc. v. Advanced Cardiovascular Systems, Inc., 247 F.3d 44, 54 (3d Cir.2001) (“[Under the Federal Arbitration Act,] the issue of whether the dispute is within the scope of the agreement requires district court resolution.” (citing AT & T Techs., Inc. v. Communications Workers of Am., 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986); PaineWebber Inc. v. Hartmann, 921 F.2d 507, 510-11 (3d Cir.1990))). There is no harm here, however, for my colleagues and I do decide that the dispute is arbitrable rather than leaving that decision to the arbitrator.
I make one other comment-less substantive but necessarily lengthier. It is that there may be yet another “road to Rome.” I begin for background with the dispute (which, of course, we are not deciding). At base, it is whether, under the Settlement and License Agreement, Cordis has a license to the Boneau patents owned by Medtronic AVE.5 If so, Cordis is not infringing these patents by using them.
Medtronic claims that the Boneau patents are not licensed to Cordis. It points to § 1.03 of the Agreement, which defines the patents subject to its cross-licensing provisions. Section 1.03 provides that licensed patents under the Agreement “means any and all patents ... that are ... owned by Medtronic or its Affiliates ... on the Effective Date.” Medtronic AVE emphasizes that, on “the Effective Date [of the Agreement]”-November 4, 1997-the Boneau patents were not owned by Medtronic or its Affiliates. Appellee’s Br. at 29-30. They belonged to AVE, who was not affiliated with Medtronic at that time. Id. at 30. Thus, Medtronic AVE argues, Medtronic could not have licensed out the patents it did not own as of November 4, 1997. Id. at 30-31.
Cordis counters by pointing out that § 1.01 of the Agreement defines “Affiliate” as “any entity that is controlled by [Medtronic], on the Effective Date or, subject to *871Section[ ] 11.02(d) or 11.02(e)6 hereof, becomes controlled by such party, after the Effective Date. ” Appellant’s Br. at 13 (footnote and emphasis added). Cordis claims that because AVE, the owner of the Boneau patents, became controlled by Medtronic after November 4, 1997, it is an “Affiliate” of Medtronic under the Agreement whose patents (including Boneau patents) can be licensed by Cordis. Id.
Medtronic AVE does not dispute “Affiliate” includes after-acquired companies such as itself under § 1.01.7 It argues, however, that § 1.01 merely meant to confer the benefit of the cross-license to after-acquired companies without any corresponding obligation to cross-license their patents (such as the Boneau patents). Appellee’s Br. at 30. Cordis counters that after-acquired companies are subject to the obligation of licensing their patents, by pointing to § 11.02(a), which provides that the Agreement “shall be binding upon and inure to the benefit of Medtronic ... and [its] Affiliates,” and “Affiliates” include after-acquired companies. Medtronic AVE does not respond to this argument. It, however, claims that its patents are not covered under § 11.02 because § 11.02(d) (the scrambled carve-out provision quoted in note 2) specifically refers to the products, and not the patents, of major competitors.
I agree with Cordis that this dispute is a merits question that should be decided by the arbitrator, not by our Court.8 If the arguments proceed as set out above, the resolution of that dispute turns on how to read § 1.01 and § 11.02 of the Agreement. Insofar as the resolution of the issue depends on the reading of § 1.01 (“Affiliate”), the issue is arbitrable under Article X] which covers “[a]ny dispute, claim, or controversy ... arising from or relating to this Agreement....” To the extent that the dispute involves interpreting what obligation, if any, is imposed on after-acquired affiliates by § 11.02, the issue is subject to the arbitration clause in § 11.02(g), which provides that “[a]ny dispute, claim, or controversy arising under the provisions of this Section 11.02 shall be resolved pursuant to binding arbitration ... under the provisions of Article X....”
In any event, and under any interpretation, the analytical path leads to arbitration. Thus I concur.

. As noted by Judge Becker, Medtronic AVE was formerly known as Arterial Vascular Engineering, Inc. ("AVE”). It was acquired by Medtronic Inc. ("Medtronic”) in January 1999. Medtronic gave AVE a new nameMedtronic AVE. Medtronic AVE (the subsidiary), and not Medtronic (the parent), is the appellee in this case. It was Medtronic, and not Medtronic AVE, who signed the Agreement.

. Section 11.02(e) is not relevant to my analysis. Thus I do not quote it. Section 11.02(d) provides that "[i]f one of the parties hereto acquires a Major Competitor ..., then such party’s license rights shall not be extended to cover any products of such Major Competitor.” AVE, the predecessor of Medtronic AVE, is identified in § 1.05 of the Agreement as one of the Major Competitors of the signatory parties. Thus, applied to our facts the provision presumably would read: "If [Medtronic] acquires [AVE] ..., then [Medtronic's] license rights shall not be extended to cover any products of [AVE].” In light of the fact that Medtronic owns AVE, the sentence is narrishkeit. To make sense of it, should, for example, "such party’s” have been "J & J’s”, or should "license rights” have been "rights as licensor”?

. Thus, Medtronic AVE does not challenge the District Court's ruling that Medtronic AVE is bound by a valid arbitration agreement. It instead claims that the particular issue Cordis seeks to arbitrate is not within the scope of the arbitration agreement.

. Medtronic AVE also argues, and the District Court agreed, that the two amendments to the Agreement support the conclusion of nonarbitrability. The amendments purported to grant the parties license rights to patents owned by specific after-acquired companies. The amendments are, if anything, evidence with respect to the underlying dispute, not the arbitrability of it.