Court Opinion

ID: 210700
Source: CourtListenerOpinion
Date Created: 2011-03-13 08:15:30+00
Date Added: 2024-06-11T17:28:02.582310
License: Public Domain

Note: This disposition is nonprecedential.
 United States Court of Appeals for the Federal Circuit

                                         05-1358

                             IMMERSION CORPORATION,

                                                      Plaintiff/Cross Defendant-Appellee,

                                            v.

                SONY COMPUTER ENTERTAINMENT AMERICA INC.
                  and SONY COMPUTER ENTERTAINMENT INC.,

                                                      Defendants/Cross Claimants-
                                                      Appellees.

                                            v.

                              INTERNET SERVICES, LLC,

                                                     Cross Defendant/Cross Claimant-
                                                     Appellant.

        Morgan Chu, Irell & Manella LLP, of Los Angeles, California, argued for
plaintiff/cross defendant-appellee. With him on the brief were Richard M. Birnholz,
Andrei Iancu, and Alan J. Heinrich. Of counsel on the brief was William K. West, Jr.,
Howrey LLP, of Washington, DC.

       Donald R. Dunner, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., of
Washington, DC, argued for defendants/cross claimants-appellees. With him on the
brief were Douglas B. Henderson, Steven M. Anzalone, and Kara F. Stoll. Of counsel
on the brief were Matthew D. Powers, Edward R. Reines, Douglas E. Lumish, and
Sonal N. Mehta, Weil, Gotshal & Manges LLP, of Redwood Shores, California, and
Gregory S. Coleman, Weil, Gotshal & Manges LLP, of Austin, Texas.

       Mark A. Lemley, Keker & Van Nest, LLP, of San Francisco, California, argued for
cross defendant/cross claimant-appellant. With him on the brief were Daralyn J. Durie
and Matthias A. Kamber.

Appealed from: United States District Court for the Northern District of California

Judge Claudia Wilken
                     NOTE: This disposition is nonprecedential.

 United States Court of Appeals for the Federal Circuit

                                     05-1358*

                          IMMERSION CORPORATION,

                                                   Plaintiff/Cross Defendant-Appellee,

                                         v.

               SONY COMPUTER ENTERTAINMENT AMERICA INC.
                 and SONY COMPUTER ENTERTAINMENT INC.,

                                                   Defendants/Cross Claimants-
                                                   Appellees.

                                         v.

                           INTERNET SERVICES, LLC,

                                                   Cross Defendant/Cross Claimant-
                                                   Appellant.

                         __________________________

                         DECIDED: April 4, 2007
                         __________________________

Before NEWMAN, Circuit Judge, ARCHER, Senior Circuit Judge, and PROST, Circuit
Judge.

PROST, Circuit Judge.

      Internet Services, LLC (“ISLLC”) appeals the district court’s dismissal of its

claims. We affirm.

      *      05-1227 and 05-1441 were dismissed.
                                      BACKGROUND

         Immersion Corporation (“Immersion”) sued Sony Computer Entertainment

America Inc. and Sony Computer Entertainment Inc. (collectively, “Sony”) in the United

States District Court for the Northern District of California, alleging infringement of U.S.

Patent No. 6,275,213 (“’213 patent”) and U.S. Patent No. 6,424,333 (“’333 patent”) by

Sony’s video game systems.         Sony filed counterclaims against Immersion seeking

declaratory judgments of non-infringement, invalidity, and unenforceability.

         A jury found the asserted patents not invalid and infringed by Sony. The district

court further determined that there was no inequitable conduct during prosecution of the

patents. Consequently, the district court entered judgment in favor of Immersion. Sony

initially appealed the district court’s judgment; however, it later withdrew its appeal, and

this court dismissed the appeal on March 14, 2007.

         In the months before trial, ISLLC, a purported Immersion licensee, sent several

letters to Sony claiming that Immersion had granted ISLLC a world-wide exclusive right

to all of Immersion’s intellectual property as applied to “content-restricted” video games.

In the letters, ISLLC alleged that it had some rights in the Immersion-Sony litigation. On

July 12, 2004, Sony moved under Rule 19 of the Federal Rules of Civil Procedure for a

determination of whether ISLLC was a necessary or indispensable party to the action.

With trial between Immersion and Sony set to begin on August 16, 2004, the district

court held a pre-trial hearing to determine whether to include ISLLC and postpone the

trial.   During the hearing, the court suggested that Sony file an amended answer

asserting a cross-claim against ISLLC for a declaratory judgment that ISLLC could not

sue Sony under ISLLC’s license with Immersion.

05-1358                                      2
       Accordingly, on August 17, 2004, Sony filed an amended answer with a

declaratory judgment cross-claim against ISLLC.           ISLLC, in response, filed an

infringement counterclaim against Sony.          ISLLC also filed cross-claims against

Immersion seeking: (1) a declaration that ISLLC “has an exclusive license under the

agreement with respect to Immersion[‘s patents] for, among other things, haptically

enabled video games whose topics or images are age restricted”; (2) damages for

breach of the license agreement on the theory that Immersion was operating within

ISLLC’s “exclusive field of use” under the agreement because its infringement suit

against Sony covered age-restricted games; and (3) an apportionment of the damages

awarded to Immersion. ISLLC later added a state law unjust enrichment cross-claim.

       After various procedural actions, the district court ultimately dismissed all claims

involving ISLLC.     The court held that ISLLC did not have standing to sue for

infringement of the ’213 and ’333 patents, even as a co-plaintiff with Immersion,

because it lacked the exclusive right to practice the patented inventions. Accordingly,

the court dismissed ISLLC’s counterclaims against Sony. Immersion Corp. v. Sony

Computer Entm’t Am. Inc., No. C 02-0710, slip op. at 8 (N.D. Cal. Dec. 29, 2004)

(“Immersion I”). The court also dismissed Sony’s cross-claim against ISLLC, holding

that the claim became moot once the court had held that ISLLC lacked standing to sue

Sony for infringement. Immersion Corp. v. Sony Computer Entm’t Am. Inc., No. C 02-

0710, slip op. at 4 (N.D. Cal. Mar. 24, 2005) (“Immersion II”).

       In addition, the court dismissed all of ISLLC’s claims against Immersion. Holding

that ISLLC’s rights under the license could not encompass the ’213 and ’333 patents,

the court reasoned that any claims ISLLC had under the license were independent from

05-1358                                      3
Immersion’s suit against Sony. The court therefore concluded that ISLLC had failed to

state a claim that Immersion’s suit against Sony for infringement of the ’213 and ’333

patents fell within ISLLC’s rights under the license or that ISLLC was owed a portion of

the damages. Immersion I, slip op. at 7-8. Although the court acknowledged that

ISLLC may have breach of contract and unjust enrichment claims against Immersion, it

instructed ISLLC to file those claims in a separate action. Immersion II, slip op. at 6-7.

ISLLC appeals the district court’s dismissals. This court has jurisdiction over the appeal

under 28 U.S.C. § 1295(a).

                                       DISCUSSION

       ISLLC makes only one argument on appeal: it asserts that its license from

Immersion provides it with sufficient rights under the ’213 and ’333 patents to confer

standing to sue Sony for infringement as a co-plaintiff with Immersion. ISLLC alleges

that its license provides it with exclusive rights relating to age-restricted software;

however, ISLLC agrees that all of the patent claims require both hardware and software

elements. Thus, even under ISLLC’s interpretation, its license, at most, gives it rights

with respect to only the software elements of the patent claims.

       Without a license to practice the entire invention, ISLLC’s interest in Immersion’s

patents, if any, differs from the type of interest traditionally associated with an exclusive

licensee. We need not determine, however, whether such an interest is sufficient to

confer standing to sue for infringement as a co-plaintiff with the patentee. Sony was

found liable for infringing the ’213 and ’333 patents and we take judicial notice that

Immersion, in a notice filed in the district court, acknowledged Sony’s full satisfaction of

the final judgment. Sony has satisfied the patentee’s judgment; ISLLC cannot pursue

05-1358                                      4
further recovery from Sony based on the same alleged acts of infringement of the ’213

and ’333 patents. Accordingly, we affirm the district court’s dismissal of the claims

between ISLLC and Sony.

         The district court also dismissed ISLLC’s cross-claims against Immersion,

holding that ISLLC needed standing to sue Sony as co-plaintiff with Immersion in order

to maintain its cross-claims against Immersion. We reject the district court’s rationale to

the extent that it required ISLLC to have standing to sue for patent infringement as a

prerequisite to recovering on its contract claims against Immersion. Any claims ISLLC

may have against Immersion depend on the license agreement between the two

parties, not on ISLLC’s standing to sue for patent infringement.        Nevertheless, the

district court’s dismissed ISLLC’s contract claims without prejudice; accordingly, ISLLC

remains free to file any claims arising under the license agreement in the appropriate

forum.

05-1358                                     5