Court Opinion

ID: 5000474
Source: CourtListenerOpinion
Date Created: 2021-09-30 17:05:05.368273+00
Date Added: 2024-06-11T08:17:06.168435
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
INTEL CORPORATION,             )
                               )
          Plaintiff,           )
                               )
     v.                        )                 C.A. No. 2021-0021-MTZ
                               )
FORTRESS INVESTMENT GROUP, )
LLC, VLSI TECHNOLOGY LLC, CF )
VLSI HOLDINGS LLC, FINJAN LLC, )
FINJAN SOFTWARE, INC., FINJAN )
HOLDINGS, INC., and CFIP       )
GOLDFISH HOLDINGS LLC,         )
                               )
          Defendants.          )

                        MEMORANDUM OPINION
                        Date Submitted: June 10, 2021
                       Date Decided: September 30, 2021

Jack B. Blumenfeld, Kenneth J. Nachbar, Ryan D. Stottmann, Elizabeth A. Mullin,
and Miranda N. Gilbert, MORRIS, NICHOLS, ARSHT & TUNNELL LLP,
Wilmington, Delaware; Attorneys for Plaintiff Intel Corporation.

Jeffrey L. Moyer, Kelly E. Farnan, Blake Rohrbacher, and Valerie A. Caras,
RICHARDS, LAYTON & FINGER, P.A., Wilmington, Delaware; Attorneys for
Defendants Fortress Investment Group, LLC, CFIP Goldfish Holdings LLC, and
CF VLSI Holdings LLC.

Brian E. Farnan and Michael J. Farnan, FARNAN LLP; Ben Hattenbach and Iian
D. Jablon, IRELL & MANELLA LLP, Los Angeles, California; Attorneys for
Defendant VLSI Technology LLC.
John W. Shaw, Karen E. Keller, and Jeffrey T. Castellano, SHAW KELLER LLP,
Wilmington, Delaware; James P. Feeney, DYKEMA GOSSETT PLLC,
Bloomfield Hills, Michigan; Lisa A. Brown, DYKEMA GOSSETT PLLC, Detroit,
Michigan; Michael Dorfman, DYKEMA GOSSETT PLLC, Chicago, Illinois;
Attorneys for Defendants Finjan LLC, Finjan Software Inc., and Finjan Holdings
Inc.

ZURN, Vice Chancellor
       Several years ago, a technology company was sued by the same non-

practicing entity (“NPE”) for patent infringement in multiple jurisdictions.1 Those

actions proceeded apace, with some having reached a verdict. Last year, the

technology company alerted the NPE of its belief that it has a license to the NPE’s

asserted patents via a contract with the NPE’s affiliate. Rather than assert a license

defense in each infringement action, the technology company has come to this Court

seeking a sweeping declaratory judgment and an order of specific performance

regarding all patents held by the NPE, its affiliates, and their parent company. The

technology company also asserts claims for breach of contract and tortious

interference.

       The Court of Chancery is proudly a court of limited subject matter

jurisdiction. This Court defends that limitation and has a duty to examine issues of

subject matter jurisdiction sua sponte. Because the technology company has an

adequate remedy at law in the form of a license defense in the infringement actions,

this Court does not have subject matter jurisdiction over its requests for declaratory

relief or specific performance. Those claims are therefore dismissed.

       The technology company’s breach of contract claims—that necessarily

depend on the resolution of the license defense—are stayed. And even assuming the

1
 A non-practicing entity is a company that acquires and holds a patent portfolio and derives
income from enforcing those patents, not by developing any marketable product or process.

                                             1
existence of an underlying breach, the technology company has failed to plead the

NPE and its parent company tortiously interfered with the affiliate’s contract.

Therefore, the tortious interference claims are dismissed.

        I.     BACKGROUND2
        Plaintiff Intel Corporation (“Intel”) is a Delaware corporation and a

multinational technology company. Intel was sued for patent infringement by Finjan

Software, Inc. (“Fijian Software”), a non-practicing entity. The litigation was

resolved via a 2012 Confidential Settlement, Release and Patent License Agreement

(the “Agreement”) among Intel, its affiliate McAfee, Inc., Finjan Software, and

Finjan, Inc. (together with Finjan Software, the “Finjan Signatories”).              The

Agreement established “a broad patent peace” between the signatories and their

“Affiliates” for a ten-year “Capture Period.”3 “Affiliates” are defined as:

2
 I draw the following facts from the Verified Complaint, as well as the documents attached
and integral to it. Docket Item (“D.I.”) 1 [hereinafter “Compl.”]. See, e.g., Himawan v.
Cephalon, Inc., 2018 WL 6822708, at *2 (Del. Ch. Dec. 28, 2018); In re Gardner Denver,
Inc. S’holders Litig., 2014 WL 715705, at *2 (Del. Ch. Feb. 21, 2014).
3
    Compl. ¶¶ 24–28.

                                            2
         [I]n relation to a specified Person (i) any Person that, now or hereafter,
         directly or indirectly through one or more entities, controls or is
         controlled by, or is under common control with, such specified Person,
         or (ii) any other Person, now or hereafter, that is deemed to be an
         affiliate of such specified Person under interpretations of the Exchange
         Act. As used in this Section 1.2, “controls”, “control” and “controlled”
         means the possession, direct or indirect, of the power to direct the
         management and policies of a Person, whether through the ownership
         of any percentage of voting interests of such Person, through contract
         or otherwise.4

         Under the Agreement, the applicable patents included “all Patent Rights” that

the Finjan Signatories “owned or controlled at any time on or after November 6,

2012 by [the Finjan Signatories] or to which [they have] the right to grant

licenses . . . without the requirement to pay consideration . . . for the grant of a

license” and “that have a filing date or priority date” on or before the end of the

Capture Period, November 20, 2022.5                The Agreement granted Intel a “non-

exclusive, perpetual, irrevocable license” to the applicable patents, a release from

liability resulting from possible infringement, and a covenant not to bring an

infringement action against Intel.6

         Intel asserts this Agreement assured patent peace with not only the Finjan

Signatories, but also any entity that was or became subject to the “common control”

4
 Id. Ex. A § 1.2. The parties dispute the meaning of “Affiliates” under the Agreement.
This opinion does not resolve that issue.
5
    Compl. ¶¶ 29–30; id. Ex. A § 1.10.
6
    Compl. ¶ 31; id. Ex. A §§ 3.1, 4.1, 5.1.

                                               3
of one or both Finjan Signatories, which was thereby bound not to sue Intel and its

Affiliates for infringing defined patents during the Capture Period.7

          On July 24, 2020, the Finjan Signatories’ corporate parent, Finjan Holdings,

Inc., was acquired by Defendant Fortress Investment Group, LLC (“Fortress”), a

global investment manager (the “Acquisition”).8 Fortress acquired Finjan Holdings

through an acquisition vehicle, Defendant CFIP Goldfish Holdings LLC (“Goldfish

Holdings”).

                  A.   VLSI Sues Intel For Patent Infringement.

          Fortress has another subsidiary, defendant CF VLSI Holdings LLC (“VLSI

Holdings”).        VLSI Holdings in turn owns defendant VLSI Technology LLC

(“VLSI,” and together with Fortress, VLSI Holdings, Goldfish Holdings, Finjan,

Finjan Software, and Finjan Holdings, “Defendants”), a Delaware limited liability

company and a non-practicing entity. A chart showing the relationships among the

Defendants follows.9

7
    Id. ¶ 27.
8
  Finjan Holdings, Inc. converted from a corporation to a limited liability company and
changed its name to Finjan Holdings LLC. D.I. 28 n.1. Finjan Holdings LLC is a Delaware
limited liability company, and a subsidiary of Goldfish Holdings. Compl. ¶¶ 7, 9. On July
31, 2020, Finjan, Inc. converted from a corporation to a limited liability company and
changed its name to Finjan LLC. Id. n.1. Finjan LLC is a Delaware limited liability
company and a subsidiary of Finjan Holdings. Id. ¶¶ 6, 9. Finjan Software is a Delaware
corporation, which was dissolved in 2013. Id. ¶¶ 5, 9. D.I. 28 Ex. A.
9
    Compl. ¶ 9.

                                            4
      VLSI owns the patents identified in the Complaint in this action. VLSI filed

at least seven patent infringement suits against Intel since 2017. The suit in the

Northern District of California (the “California Action”) was initiated on October 2,

201710 but stayed until September 1, 2021; the court ordered a status update from

the parties by September 27, 2021.11 On June 28, 2018, VLSI sued Intel in the

10
  Id. ¶¶ 60–63; VLSI Tech. LLC v. Intel Corp., No. 5:17-CV-05671-BLF (N.D. Cal.). The
California Action alleges past and current infringement of U.S. Patent Nos. 7,676,806,
7,706,207, 7,709,303, 8,004,922, 8,020,014, 8,268,672, and 8,566,836. Compl. ¶ 61.
11
  Order Modifying Case Schedule and Extending the Stay Until September 1, 2021, VLSI
Tech. LLC v. Intel Corp., No. 5:17-CV-05671-BLF (N.D. Cal. June 15, 2020), ECF No.

                                          5
United States District Court for the District of Delaware for past and current

infringement of U.S. Patent Nos. 7,246,027, 7,247,552, 7,523,331, and 8,081,026

(the “Delaware Action”).12 On July 6, 2021, the District Court of Delaware denied

Intel’s motion to stay but granted Intel leave to amend its answer and add an

affirmative license defense.13

         On April 11, 2019, VLSI filed three lawsuits against Intel in the United States

District Court for the Western District of Texas alleging past and current

infringement of U.S. Patent Nos. 8,156,357, 7,523,373, 7,725,759, 7,793,025,

7,606,983, 7,292,485, 6,633,187, and 6,366,522 (the “Texas Actions”).14             On

February 25, 2021, the court granted Intel’s motion for summary judgment of

noninfringement on the ‘357 patent.15 On March 2, 2021, a federal jury in Texas

found for VLSI and awarded damages for infringement of the ‘373 and ‘759

290; Order Requesting Status Update by September 27, 2021, VLSI Tech. LLC v. Intel
Corp., No. 5:17-CV-05671-BLF (N.D. Cal. Sept. 13, 2021), ECF No. 309.
12
  Compl. ¶¶ 64–69; VLSI Tech. LLC v. Intel Corp., No. 1:18-CV-00966-CFC (D. Del.).
“[VLSI] previously also alleged that Intel was infringing U.S. Patent No. 6,212,633.”
Compl. ¶ 65. VLSI dropped claims related to this patent. Id. ¶ 67.
13
     D.I. 91; D.I. 92.
14
  Compl. ¶¶ 70–73. As a result of transfers and consolidations, the Texas Actions, all
captioned VLSI Technology LLC v. Intel Corporation, have been filed under the following
case numbers: No. 1:19-CV-0977-ADA; No. 6:19-CV-00254-ADA; No. 6:19-CV-00255-
ADA; No. 6:19-CV-00256-ADA; No. 6:21-CV-00057-ADA; and No. 6:21-CV-00299-
ADA.
15
     VLSI Tech. LLC v. Intel Corp., 2021 WL 1432705, (W.D. Tex. Feb. 25, 2021).

                                            6
patents.16 On April 21, 2021, a federal jury in another of the Texas Actions found

for Intel on the ‘187 and ‘522 patents.17 On May 17, 2021, the court in the third

Texas Action addressing the ‘025, ‘983, and ‘485 patents reset trial for

December 16, 2021.18

         On May 5, 2019, VLSI sued Intel in courts in Shanghai and Shenzhen, China,

for past and current infringement of Chinese patents ZL201080025173.7 and

ZL201410094015.9, respectively (collectively, the “China Actions” and together

with the California Action, Delaware Action, and Texas Actions, the “Infringement

Actions”).19 The Shenzhen court has not set dates for hearing or trial.20 There is a

post-trial stay in the Shanghai litigation.21

         Several months after the Infringement Actions were initiated, and a month

after the Acquisition, Intel sent a letter dated August 17, 2020 to the Defendants

asserting, “As a result of Fortress’s acquisition of Finjan, Intel holds a worldwide,

16
  D.I. 22 at 6; Jury Verdict, VLSI Tech. LLC v. Intel Corp., No. 6:21-CV-00057-ADA
(W.D. Tex. Mar. 2, 2021), ECF No. 564.
17
  Jury Verdict, VLSI Tech. LLC v. Intel Corp., No. 6:21-CV-00299-ADA (W.D. Tex.
Apr. 21, 2021), ECF No. 549.
18
  Order, Jury Selection and Trial Reset for 12/6/2021 09:00 AM before Judge Alan D.
Albright, VLSI Tech. LLC v. Intel Corp., No. 1:19-CV-00977-ADA (W.D. Tex.
May 17, 2021), ECF No. 525.
19
     Compl. ¶¶ 74–81.
20
     D.I. 81 Ex. A ¶ 4.
21
     Id. ¶¶ 2–3.

                                            7
fully paid-up, perpetual, irrevocable license to Fortress entities’ patents, including

all patents presently asserted by VLSI Technology LLC in California, Delaware,

Texas, and China.”22        Intel requested that VLSI “dismiss all pending patent

infringement litigation against Intel with prejudice.”23 Intel further invoked the

Agreement’s dispute resolution provision by providing “notice to Finjan and

Fortress” regarding their alleged breaches of Sections 4, 5.1, and 8.3.24

Alternatively, Intel indicated that it was “willing to agree to waive all Dispute

Resolution requirements of Section 9.3 if Finjan/Fortress agree that Intel can proceed

immediately to file a complaint in Delaware Chancery Court for adjudication of the

dispute.”25 Intel’s letter did not request VLSI’s participation in the dispute resolution

process.26 While Finjan agreed to participate in dispute resolution, Fortress and

VLSI did not.

                 B.    Intel Files A Complaint In This Court.
           On January 11, 2021, Intel filed a complaint here bringing five causes of

action (the “Complaint”). The Complaint contends Intel has a license to all of the

patents Defendants own or control under the Agreement because each of the

22
     Compl. Ex. E.
23
     Id.
24
     Id.
25
     Id.
26
     Id.

                                           8
Defendants, as entities under Fortress’s corporate umbrella, are Affiliates of Finjan

as defined by the Agreement.27           Intel seeks a declaratory judgment that the

Agreement grants Intel “a worldwide, paid-up, non-exclusive, perpetual, irrevocable

license under Finjan’s Patents” extending to “all patents owned or controlled” by

Defendants as Affiliates of the Finjan Signatories.28 Intel seeks a second declaration

that all of the patents asserted in the Infringement Actions (the “Asserted Patents”)

are subject to the Agreement’s patent license. The proposed declaratory judgment

would state, in effect, that Intel has a license to use the Asserted Patents and

therefore, cannot be held liable for infringement. Intel alleges that this license is a

defense to the Infringement Actions and that the Infringement Actions are a breach

of the Agreement’s covenant not to sue. Intel also asserts that Fortress and VLSI

tortiously interfered with Finjan’s Agreement.

27
   Compl. ¶¶ 56–57; id. Ex. A § 1.2. The Agreement defines Affiliate to include “any
Person that, now or hereafter, directly or indirectly through one or more entities, controls
or is controlled by, or is under common control with, such specified Person.” Id. Intel
contends that as a result of the Acquisition, each of the Defendants “controls or is controlled
by, or is under common control with” the Finjan Signatories. Compl. ¶¶ 26, 49–50, 56–
57. Any Affiliate who controls or is under “common control with” the Finjan Signatories
is encompassed within the Agreement’s definition of “Finjan;” following Intel’s logic, “all
patents owned or controlled” by Affiliates are included in the definition of “Finjan’s
Patents.” Id. ¶¶ 29, 57. Intel also points to Finjan Holdings’s description of the Acquisition
as “‘affiliates of Fortress Investment Group LLC (collectively “Fortress”)’ acquired Finjan
Holdings.” Id. ¶ 48 (quoting id. Ex. C at 5).
28
     Compl. Ex. A § 3.1(a); Compl. ¶¶ 58, 82–85, 95–102, 109.

                                              9
         On March 3, 2021, Defendants filed three motions to dismiss (the

“Motions”).29 The Motions are fully briefed.30 I heard argument on May 5 and sua

sponte raised the issue of whether this Court has subject matter jurisdiction.31 The

parties submitted supplemental briefing regarding subject matter jurisdiction as of

June 10.32

         II.     ANALYSIS

         “The Court of Chancery is proudly a court of limited jurisdiction.”33

“Equitable jurisdiction is a predicate issue for every matter in this court of limited

jurisdiction.”34 The Court has a duty to determine whether it has subject matter

jurisdiction over a plaintiff’s claims and can raise the jurisdictional issue sua

29
  D.I. 22 (VLSI’s motion to dismiss); D.I. 23 (Fortress, Goldfish Holdings, and VLSI
Holdings’s motion to dismiss); D.I. 27 (Finjan, Finjan Holdings, and Finjan Software’s
motion to dismiss).
30
     D.I. 52; D.I. 62; D.I. 63; D.I. 67.
31
     D.I. 83 at 5, 53, 90 [hereinafter “Hr’g Tr”].
32
     D.I. 81; D.I. 85; D.I. 88.
33
  Perlman v. Vox Media, Inc., 2019 WL 2647520, at *4 (Del. Ch. June 27, 2019); see also
Pike Creek Recreational Servs., LLC v. New Castle Cty., 238 A.3d 208, 212 (Del. Super.
2020) (“Delaware proudly guards the historic and important distinction between legal and
equitable jurisdiction.” (quoting Weston Invs., Inc. v. Domtar Indus., Inc., 2002 WL
31011141, at *1 (Del. Super. Sept. 4, 2002)) (internal quotation marks omitted)).
34
  Preston Hollow Cap., LLC v. Nuveen, LLC, 2019 WL 3801471, at *4 (Del. Ch.
Aug. 13, 2019) (citing Athene Life & Annuity Co. v. Am. Gen. Life Ins. Co., 2019 WL
3451376 (Del. Ch. July 31, 2019)).

                                                10
sponte.35 “The Court of Chancery can exercise subject matter jurisdiction only when

a case falls into one of three buckets.”36 Those buckets contain cases in which (i) “a

plaintiff states an equitable claim,” (ii) “a plaintiff requests equitable relief and there

is no adequate remedy at law,” and (iii) “jurisdiction exists by statute.”37 Intel seeks

to invoke this Court’s limited jurisdiction through the second bucket, requesting

equitable relief in the form of declaratory judgments and specific performance.

Defendants contend that Intel has an adequate remedy at law.38

                 A.   This Court Does Not Have Subject Matter Jurisdiction Over
                      Intel’s License Defense.
          Intel comes to this Court seeking a declaration absolving it of patent

infringement liability vis a vis all the Defendants and all the patents they hold,

buttressed by an order of specific performance. Intel’s liability for infringing the

35
   See, e.g., Ct. Ch. R. 12(h)(3) (“Whenever it appears by suggestion of the parties or
otherwise that the Court lacks jurisdiction of the subject matter, the Court shall dismiss the
action.”); Envo, Inc. v. Walters, 2009 WL 5173807, at *4 n.10 (Del. Ch. Dec. 30, 2009)
(“The issue of subject matter jurisdiction is so crucial that it may be raised at any time
before final judgment and by the court sua sponte.”), aff’d, 2013 WL 1283533 (Del.
Mar. 28, 2013) (TABLE); IBM Corp. v. Comdisco, Inc., 602 A.2d 74, 77 n.5 (Del. Ch.
1991) (“[U]nlike many jurisdictions, judges in the Delaware Court of Chancery are
obligated to decide whether a matter comes within the equitable jurisdiction of this Court
regardless of whether the issue has been raised by the parties.” (citations omitted)).
36
  Delawareans for Educ. Opportunity v. Carney, 2018 WL 4849935, at *5 (Del. Ch.
Oct. 5, 2018); see also Candlewood Timber Grp., LLC v. Pan Am. Energy, LLC, 859 A.2d
989, 997 (Del. 2004) (identifying the three ways the “Court of Chancery can acquire
subject matter jurisdiction”).
37
     Delawareans for Educ. Opportunity, 2018 WL 4849935, at *5.
38
     D.I. 85 at 7.

                                             11
Asserted Patents is or was pending before several other jurisdictions, in which Intel

has an adequate remedy at law in the form of a license defense. There is no

controversy over the rest of Defendants’ patents.

                         1.   Intel Has An Adequate Remedy At Law That Prevents
                              This Court From Exercising Jurisdiction.

          In Count II, Intel seeks a declaration that it has a license for the Asserted

Patents; Count IV seeks specific performance of the Agreement’s reciprocal

covenant not to sue. These counts present the question of whether each Defendant

is a Finjan Affiliate under the Agreement, such that all patents owned or controlled

by Finjan and all entities under the Fortress umbrella are licensed to Intel under the

Agreement. In essence, Intel seeks a single declaration and injunction that would

stand in for a license defense in the many fora in which Intel has been sued.

          Intel argues that it needs a declaration and injunction from this Court because

it lacks an adequate remedy at law in the many Infringement Actions against it.39

This Court does not “have jurisdiction to determine any matter wherein sufficient

remedy may be had by common law, or statute, before any other court or jurisdiction

of this State.”40 “The question is whether the remedy available at law will afford the

39
     Id. at 9.
40
     10 Del. C. § 342.

                                            12
plaintiffs full, fair, and complete relief.”41 “In deciding whether or not equitable

jurisdiction exists, the Court must look beyond the remedies nominally being sought,

and focus upon the allegations of the complaint in light of what the plaintiff really

seeks to gain by bringing his or her claim.”42 “[W]hen there exists an adequate and

sufficient remedy at law, a claim cannot be converted to a cause in equity by the

mere invocation of a formulaic prayer for traditional equitable relief.”43 In other

words, this Court must “take a practical view of the complaint” to determine what a

plaintiff really wants.44 From there, “[a] practical analysis of the adequacy of any

41
   Delawareans for Educ. Opportunity, 2018 WL 4849935, at *5 (quoting Hughes Tool Co.
v. Fawcett Publ’ns, Inc., 315 A.2d 577, 579 (Del. 1974)); Donald J. Wolfe, Jr. & Michael
A. Pittenger, Corporate and Commercial Practice in the Delaware Court of Chancery §
2.03[b][2], at 2-33–34 (2021) [hereinafter Wolfe & Pittenger] (“As alluded to above, this
is not to say that the mere existence of a potential remedy at law of any stripe will suffice
to divest the Court of Chancery of subject matter jurisdiction. To preclude the exercise of
concurrent equitable jurisdiction, the alternative legal remedy at a minimum must be
available to the plaintiff as a matter of right and must offer full, fair, and complete relief,
as prompt, practical, and efficient to the ends of justice as the requested equitable remedy.”
(footnotes omitted) (compiling cases)); see also El Paso Nat. Gas Co. v. TransAmerican
Nat. Gas Corp., 669 A.2d 36, 39 (Del. 1995); Theis v. Board of Educ., 2000 WL 341061,
at *1 (Del. Ch. Mar. 17, 2000); In re Wife, K., 297 A.2d 424, 425–26 (Del. Ch. 1972))).
42
     Candlewood, 859 A.2d at 997.
43
  Wolfe & Pittenger, § 2.03[a], at 2-3; id. (“In the more plain-spoken words of Chancellor
Chandler, ‘one cannot parade a duck around and call it a swan.’” (quoting Hillsboro
Energy, LLC v. Secure Energy, Inc., 2008 WL 4561227, at *2 (Del. Ch. Oct. 3, 2008))).
44
  United BioSource LLC v. Bracket Hldg. Corp., 2017 WL 2256618, at *2 (Del. Ch.
May 23, 2017) (quoting Int’l Bus. Machs. Corp. v. Comdisco, Inc., 602 A.2d 74, 78 (Del.
Ch. 1991)).

                                              13
legal remedy, then, must be the point of departure for each matter which comes

before this Court.”45

           In general, “the ability of a party to obtain the equivalent of injunctive relief

by raising its contentions as a defense in an action at law[] constitutes an adequate

remedy that precludes injunctive relief in equity.”46 Put differently, “[w]here there

is a defense cognizable at law the possessor of it has an adequate remedy at law and

equity will not enjoin his adversary from suing.”47 Where a party can seek an

45
     Id.
46
   Takeda Pharms. U.S.A., Inc. v. Genentech, Inc., 2019 WL 1377221, at *5 (Del. Ch.
Mar. 26, 2019) (quoting Manor Healthcare Corp. v. Tolbert, 1986 WL 5476, at *3 (Del.
Ch. May 13, 1986)) (internal quotation marks omitted); see also El Paso Nat. Gas Co. v.
TransAmerican Nat. Gas Corp., 1994 WL 248195, at *3 (Del. Ch. May 31, 1994), aff’d,
669 A.2d 36 (Del. 1995) (“It would only have to litigate its forum-based defense and, if
successful, El Paso could measure its damages by the costs of litigation.”); Buczik v.
Wonchoba, 1993 WL 93444, at *2 (Del. Ch. Mar. 24, 1993) (ruling plaintiff “clearly has
an adequate remedy at law because she may raise the release as an affirmative defense” in
another action); E.I. duPont de Nemours & Co. v. HEM Rsch., Inc., 1989 WL 122053, at
*4 (Del. Ch. Oct. 13, 1989) (granting motion to dismiss equitable rescission claim because
“plaintiff would have an adequate legal defense to an action by defendant under the
instrument”); Barsky v. Flaherty, 1987 WL 33981, at *11 n.1 (Del. Ch. Dec. 30, 1987)
(“Moreover, it appears that Barsky would be entitled to raise defensively (or by a motion
to stay) in the Ohio action, the same contentions that he raises in support of his injunction
motion in this action. Barsky therefore has an adequate remedy at law.” (citing Manor
Healthcare, 1986 WL 5476)).
47
  Takeda, 2019 WL 1377221, at *5 (quoting Gray Co. v. Alemite Corp., 174 A. 136, 144
(Del. Ch. 1934)).

                                              14
adequate legal remedy via a defense in a different forum, the Court of Chancery does

not have subject matter jurisdiction to grant equitable relief.48

          Here, Intel wants to escape the Infringement Actions without liability. To

achieve this, it has nominally sought equitable relief in this Court in the form of

declarations and specific performance. Intel has an adequate remedy at law in the

form of a license defense in the Infringement Actions. This Court’s decision in

Takeda Pharmaceuticals U.S.A., Inc. v. Genetech, Inc. is analogous.49 Like Intel,

the plaintiff was an alleged infringer facing patent litigation in other fora.50 The

plaintiff argued it had a patent license defense to the infringement claims based on

the definition of patents in an agreement to which it—but not the patentholder—was

a party.51 The alleged infringer filed a complaint against the licensor in the Court of

Chancery “seek[ing] a declaratory judgment that [the alleged infringer] has a license

48
   El Paso, 669 A.2 at 40 (affirming a Chancery plaintiff could raise its defense in a first-
filed Texas action and therefore had an adequate remedy at law); Buczik, 1993 WL 93444,
at *1–2 (holding the court did not have subject matter jurisdiction to grant specific
performance enforcing a release where the plaintiff had “an adequate remedy at law
because she may raise the release as an affirmative defense”); see also Manor Healthcare,
1986 WL 5476, at *3 (“In this case the grounds urged by Manor in support of its claim for
injunctive relief in this Court could be asserted defensively by Manor in the Oklahoma
action, either as an affirmative defense or in a motion to dismiss that action. In other factual
settings, this Court has found that the ability of a party to obtain the equivalent of injunctive
relief by raising its contentions as a defense in an action at law, constitutes an adequate
remedy that precludes injunctive relief in equity.” (collecting cases)).
49
     2019 WL 1377221.
50
     Id. at *3.
51
     Id. at *1, *3.

                                               15
and an anti-suit injunction against the [patentholder] and anyone acting in active

concert or participation with it.”52 This Court held it did not have subject matter

jurisdiction to grant the equitable relief the plaintiff sought because it had an

adequate remedy at law in the form of its patent license defense.53 The Court’s

“conclusion depend[ed] on Takeda’s ability to assert a license defense in” the

infringement action.54

          Intel argues Takeda is inapplicable because in that case, unlike this one, the

patentholder was not a party to the Chancery action and thus could not be bound by

this Court’s ruling.55 In Intel’s view, the patentholder’s absence from the Chancery

action meant the infringement action offered Takeda a superior legal remedy. Here,

because all the Defendants are joined in the Chancery action, Intel asserts that “only

injunctive relief in this Court would bind all parties and address all issues.”56

          But the Federal Circuit has found that a first-filed infringement action can,

and should, resolve the scope of a license granted by a licensor that is not a party to

the infringement dispute. Futurewei Technologies, Inc. (Futurewei I) v. Acacia

52
     Id. at *1.
53
     Id. at *5–7.
54
     Id. at *7.
55
   D.I. 81 at 16 (“Takeda and its subsidiaries then filed suit against Roche’s subsidiary in
[the Court of] Chancery—without joining Roche.”).
56
     Id. at 17.

                                            16
Research Corp. addressed a patent infringement defendant’s attempt to assert a

license defense in a second-filed action.57        Huawei had been sued for patent

infringement in the Eastern District of Texas, and responded by suing the

patentholder, as well as the parties to a license to which Huawei asserted it was a

third party beneficiary, in a California District Court, seeking declaratory judgments

for noninfringement and patent invalidity.58         The California court dismissed

Huawei’s claims.59 On appeal, the Federal Circuit affirmed that Huawei should

assert its license defense as a third party beneficiary in the first-filed Texas

infringement action.60 “Separating the third-party-beneficiary issue [from the non-

infringement and invalidity issues in the Texas case] cannot serve the objective of

efficiency.”61 Under this authority, Intel can and should pursue its license defense

in the Infringement Actions, even though not all Defendants are parties to those

actions.

57
     2012 WL 12905300 (C.D. Cal. Oct. 22, 2012).
58
     Id. at *1.
59
     Id. at *7.
60
  Futurewei Techs., Inc. (Futurewei II) v. Acacia Rsch. Corp., 737 F.3d 704, 707–08 (Fed.
Cir. 2013); id. at 709 (“[T]here is no doubt that Huawei can argue for that status in the
Texas case. And there is likewise no doubt that keeping the issue in the Texas case will
serve key objectives in the first-to-file rule, including the minimization or avoidance of
‘duplication of effort, waste of judicial resources, and risk of inconsistent rulings that
would accompany parallel litigation.’” (citations omitted)).
61
     Id. at 709.

                                           17
          Intel also contends the number of Infringement Actions makes its license

defenses inadequate. Intel argues it “will continue to be subjected to the burden of

litigating multiple infringement actions” and the risk of inconsistent judgements.62

Intel suggests the time and expense spent litigating in several fora constitutes

irreparable harm.63 But the adequacy of a legal remedy is not destroyed because of

“the mere existence of a convenient or preferable equitable remedy.”64 “[E]quity

will not interfere where the object is to obtain a consolidation of actions, or to save

the expense of separate actions.’”65 And even if this Court had jurisdiction, Intel

would still face the risk of inconsistent analyses or outcomes, at least between this

Court and the Delaware Action in which Intel is asserting a license defense.66

          Along these same lines, Intel asserts that a successful license defense in a

United States District Court action might not serve to collaterally estop a judgment

62
     D.I. 81 at 13.
63
     Id. at 14.
64
  N. Am. Philips Corp. v. Aetna Cas. & Sur. Co., 1988 WL 60376, at *3 (Del. Ch.
June 9, 1988) (citing Chateau Apartments Co. v. City of Wilm., 391 A.2d 205 (Del. Supr.
1978); and then citing Dieman v. Sussex Cty., (Del. Ch. Aug. 25, 1982)).
65
  N. Am. Philips Corp., 1988 WL 60376, at *3 (quoting Murphy v. City of Wilm., 6 Houst.
108, 139 (Del. Ct. E. and A. 1880)); Takeda, 2019 WL 1377221, at (“[T]he Court’s subject
matter jurisdiction does not depend on convenience.”).
66
   See Takeda, 2019 WL 1377221, at *7 (“I decline to decide these issues: I lack
jurisdiction to do so, and addressing those issues in tandem with the German court may
risk inconsistent analyses or outcomes.”). Intel has also not addressed how a sweeping
declaration in its favor would be consistent with the verdict against it in VLSI Tech. LLC v.
Intel Corp., No. 6:21-CV-00057-ADA (W.D. Tex.).

                                             18
in a Chinese court, particularly in the absence of an injunction.67 But Intel has not

demonstrated that it has no adequate means of presenting its license defense, on a

standalone basis or as buttressed by a federal judgment, to the Chinese courts. 68

         If Intel had come to this Court two years ago, on the heels of the Infringement

Actions, the adequacy of its legal remedies and the boundary of this Court’s subject

matter jurisdiction would have been clear. Now, Intel suggests its remedy at law is

not “presently available” because it is too late for Intel to assert a license defense, or

take discovery in support of that defense, in many of the Infringement Actions.69

Some of the cases have proceeded to a verdict; in others, the courts have not ruled

on Intel’s motions to amend its answers to include its license defense.70

         The fact that Intel has not yet availed itself of a remedy at law in every

Infringement Action does not render that remedy inadequate for purposes of

invoking this Court’s subject matter jurisdiction. As the maxim goes, “Equity aids

67
     D.I. 81 at 16.
68
  Takeda, 2019 WL 1377221, at *6 (finding Takeda did not offer evidence that the German
court could not effectively resolve the disputes before it and therefore, Takeda had an
adequate legal remedy in the German infringement proceedings).
69
   D.I. 81 at 12–13, 15–16; see also id. at 15 (“[T]he Shanghai court has evidenced a
reluctance to adjudicate Intel’s license defense as it did not review the issue during trial.”)
(citing id. Ex. A ¶¶ 2–3).
70
     Id. at 12–13.

                                              19
the vigilant, not those who slumber on their rights.”71 Equity’s reluctance to aid the

slumbering classically manifests in denying an equitable claim based on laches. But

I believe equity will also refuse to aid one who slumbered on its legal rights by

expanding its jealously guarded subject matter jurisdiction to compensate for that

failure.72 By the time Intel filed its January 2021 Complaint, it had enjoyed an

available legal remedy in the form of license defenses in the Infringement Actions

for several months, since the July 2020 Acquisition.73 Intel’s choice not to promptly

pursue those defenses in every Infringement Action does not change or blur the

boundary of this Court’s equitable jurisdiction.74

71
   2 Pomeroy’s Equity Jurisprudence § 418 (5th ed. 1941) (explaining that the maxim
“equity aids the vigilant, not those who slumber on their rights”—the equitable basis for
the doctrine of laches—“may properly be regarded as a special form of the yet more general
principle, He who seeks equity must do equity”).
72

73
   Intel asserted its license defense in a letter to Defendants dated August 17, 2020, after
each of the Infringement Actions had been initiated. See Compl. Ex. E. Intel raised a
license defense in both of the China Actions and sought to raise a license defense in one of
the Texas Actions before filing the January 11, 2021 Complaint. D.I. 81 at 4, 6. For
reasons that are unclear, Intel did not raise its license defense in other actions until after
filing its Complaint here. See id. at 4 (describing how Intel did not raise a license defense
in two of the three Texas Actions until after Intel filed the Complaint in the Court of
Chancery); id. at 5 (describing how Intel did not raise a license defense in the Delaware
Action until after Intel filed the Complaint in the Court of Chancery); id. at 6 (stating Intel
did not raise a license defense in the California Action).
74
   Cf. Buczik, 1993 WL 93444, at *2 (finding plaintiff’s fear that “raising the release as an
affirmative defense in the Superior Court action would not be an adequate remedy because
the jury . . . might disregard the merits of the release” meritless); Maplewood Indus., Inc.
v. Dep’t of Nat. Res. & Env’t Control, 1989 WL 155944, at *4 (Del. Ch. Dec. 7, 1989)
(finding plaintiff had an adequate remedy at law via a damages action, notwithstanding

                                              20
         Finally, Intel suggests that it lacks an adequate remedy outside of the Court of

Chancery because of the Agreement’s forum selection clause. Section 11.4 provides

“[a]ll disputes and litigation regarding this Agreement and matters connected with

its performance shall be subject to the exclusive jurisdiction of the Court of Chancery

of the State of Delaware . . . or the United States District Court for the State of

Delaware.”75 Intel is the defendant in a patent infringement suit before the United

States District Court for the State of Delaware.76 Intel may present its license defense

in that existing forum and comply with the Agreement’s forum selection clause.77

defendant’s possible sovereign immunity defense to plaintiff’s action, should plaintiff
chose to move forward); id. (“Without deciding an issue which is not before me, moreover,
it appears that an action at law is available to the plaintiffs if they are correct with respect
to their constitutional claims.”).
75
     Compl. Ex. A § 11.4; Compl. ¶ 37; D.I 81 at 9–10.
76
     See VLSI Tech. LLC v. Intel Corp., No. 1:18-CV-00966-CFC (D. Del.).
77
   Alternatively, it appears Intel may present its license defense in the first-filed forum, the
California Action. In Futurewei I, Huawei claimed it had to assert its rights under a license
in the agreement’s selected forum. 2012 WL 12905300, at *4–7. The Federal Circuit held
it could and should assert those rights in the first-filed infringement action in a different
forum. Futurewei II, 737 F.3d at 708 (“Here, Huawei has said that its status as a third-
party beneficiary can matter for two purposes: to invoke the license agreement’s section
2.1 to protect it against the allegations it is infringing the five patents; and to invoke the
agreement’s section 9.1, regarding forum selection. Those provisions of the license
agreement are already at issue in the first-filed Texas action, or readily could be.”); id. at
710 (“It makes no sense for this count to be adjudicated as a stand-alone claim in California
while the relevant, substantive claims to which it directly relates are being litigated in
Texas.”); see Comcast Corp. v. Rovi Corp., 2016 WL 4991625, at *3 (S.D.N.Y.
Sept. 16, 2016) (“Litigants who believe that a forum selection clause governs an action
brought in an alternative forum should first seek to resolve the venue issue in the first-filed
forum, absent exceptional circumstances.”); see also Zix Corp. v. Echoworx Corp., 2016
WL 7042221, at *2–3 (E.D. Tex. June 9, 2016) (discussing the “continuum” of

                                              21
         For the foregoing reasons, it appears that the relief Intel seeks here is

duplicative of an adequate remedy at law, and so this Court lacks subject matter

jurisdiction.78 Counts II and IV are dismissed without prejudice.79

                       2.     Plaintiff’s Breach Of Contract Claim Cannot Be
                              Resolved Without Resolving Plaintiff’s Claims Seeking
                              Equitable Relief.

         Building on its theory that the Agreement granted Intel a license to VLSI’s

Asserted Patents, Intel contends Fortress and VLSI breached their obligations under

the Agreement by

         (i) refusing to follow the Dispute Resolution Process outlined in the
         [Agreement]; (ii) denying that Intel is licensed under all Asserted
         Patents, (iii) denying that Intel is released from all liability under them,
         and (iv) continuing to litigate (or causing a related entity to continue to
         litigate) the various patent infringement actions, currently ongoing
         across the U.S. and abroad, relating to the Asserted Patents against
         Intel.80

considerations for choosing a forum for license defenses, balancing the license agreement’s
contracted forum with the infringement plaintiff’s first-filed forum). But see Gen. Protecht
Gp., Inc. v. Leviton Mfg. Co., Inc., 651 F.3d 1355 (Fed. Cir. 2011) (granting a preliminary
injunction to enforce the parties’ forum selection clause over the first-filed rule).
78
     See El Paso, 669 A.2 at 40 (citing Gray, 174 A. at 144).
79
   See Takeda, 2019 WL 1377221, at *7 & n.73 (granting dismissal without prejudice for
lack of subject matter jurisdiction and collecting cases).
80
     Compl. ¶ 114.

                                             22
Intel also argues Finjan breached its obligations by failing to cause its Affiliates, e.g.

VLSI, to comply with the Agreement’s license, release, and covenant not to sue.81

Intel contends the breaches have caused it to “expend[] time and resources

simultaneously defending itself against alleged infringement of the Asserted Patents,

while seeking to vindicate its right to be free from such patent infringement actions

under the [Agreement].”82

         To successfully plead a breach of contract claim, a plaintiff must demonstrate:

(1) the existence of the contract; (2) the breach of an obligation imposed by that

contract; and (3) the resultant damage to the plaintiff.83 While the parties do not

dispute the existence of the Agreement, they do dispute which parties are bound by

the Agreement and the duties owed.

         Intel’s breach claims present issues within the scope of Intel’s license

defenses, namely (i) the definition of Affiliates, (ii) whether Fortress and VLSI are

bound by the Agreement, and (iii) whether Finjan’s Patents encompass the Asserted

Patents. I would need to resolve these issues in order to determine whether Finjan,

81
   Id. ¶ 113 (asserting Finjan breached the Agreement by: “(i) failing to cause its Affiliates
to comply with the [Agreement], as required by § 8.3, including by failing to secure Intel’s
license to the Asserted Patents and release from all liability under them, and (ii) failing to
ensure that Affiliates comply with the [Agreement]’s covenant not to sue.”).
82
     Id. ¶ 115.
83
  VLIW Tech., LLC v. Hewlett-Packard Co., 840 A.2d 606, 612 (Del. 2003) (citations
omitted).

                                             23
Fortress, or VLSI have breached the Agreement. But, for the reasons I have

explained, these issues are properly decided in the first-filed Infringement Actions.84

       Courts have “inherent power . . . to exercise [their] discretion to control the

disposition of actions on [their] docket[s] in order to promote economies of time and

effort for the court, litigants, and counsel.”85 Count III will be stayed until one of

the Infringement Actions determines whether Fortress and VLSI are bound by the

Agreement and whether VLSI’s patents are licensed to Intel under the Agreement.

I ask the parties to keep this Court informed of any material developments. If Intel

chooses to ask one of the Courts presiding over an Infringement Action to hear not

only its license defense, but also its breach claims building on that Court’s

interpretation of the Agreement, I ask Intel to inform this Court of that election.

              B.     Plaintiff Failed To Plead Fortress And VLSI Tortiously
                     Interfered With The Agreement.
       In the alternative to claiming Fortress and VLSI breached the Agreement, Intel

also claims Fortress and VLSI “have intentionally caused Finjan to breach the

[Agreement] by not allowing Finjan to secure Defendants’ compliance with the

84
   See Futurewei II, 737 F.3d at 709 (“The interest in the just and effective disposition of
disputes likewise does not warrant an exception to the first-to-file rule. The Texas court
can decide the issues presented by count 11, if necessary, including the relationship
between the no-third-party-beneficiary rights provision of the license agreement and either
(a) the enforcement-protection provision or (b) the [California] forum-selection
provision”).
85
  Joseph v. Shell Oil Co., 498 A.2d 1117, 1123 (Del. Ch. 1985) (citing Landis v. N. Am.
Co., 299 U.S. 248 (1936)).

                                            24
license and release provisions in the [Agreement].”86 Like Intel’s breach claims, its

tortious interference claims require Intel’s license defense to be adjudicated first.

But unlike Intel’s breach claims, they fail to pass muster under Court of Chancery

Rule 12(b)(6). They are therefore dismissed.

         The elements of tortious interference with a contract are: (1) a contract, (2)

about which defendant knew, (3) an intentional act that is a significant factor in

causing the breach of such contract, (4) without justification, (5) which causes

injury.87 Intel pleads “[o]n information and belief,” Fortress directed VLSI to not

dismiss the Infringement Actions knowing that this would cause Finjan to breach the

Agreement.88 Intel also alleges “[o]n information and belief, VLSI knew that by

intentionally failing to dismiss the [Infringement Actions], it would cause Finjan to

breach the terms of the [Agreement].”89 Intel argues Fortress and VLSI “were not

justified in their conduct because, just like they enjoyed the benefits of the

Acquisition, they assumed Finjan’s liabilities by virtue of the same Acquisition.”90

         Intel’s theory of liability depends on VLSI owing Intel a license. If VLSI does

86
     Compl. ¶ 126 (citing id. Ex. A §§ Preamble, 3.1, 5.1); Hr’g Tr. 75.
87
  Bhole, Inc. v. Shore Invs., Inc., 67 A.3d 444, 453 (Del. 2013) (internal quotation marks
omitted).
88
     Compl. ¶¶ 127–28.
89
     Id. ¶¶ 129.
90
     Id. ¶¶ 92, 130.

                                              25
not owe Intel a license, Finjan did not breach the Agreement. In order for VLSI to

owe Intel a license, it must be an Affiliate under the Agreement, contractually bound

to give a license to Intel. If VLSI is an Affiliate, so is Fortress. As a matter of logic,

Intel’s claim against VLSI requires binding VLSI, and therefore Fortress, in contract.

As a matter of law, those contractually bound entities may not be liable for tortious

interference.91 Intel’s contractual theory of liability, which must hold true for Finjan

to have committed a predicate breach, precludes a tortious interference claim against

VLSI and Fortress.

       And even if VLSI and Fortress could be liable in tort, Intel has failed to state

a claim for tortious interference. As explained by cases Intel engaged with in

briefing, nonsignatory parent and affiliate companies can tortiously interfere with

their subsidiaries’ contracts only as filtered through a “limited affiliate privilege.”92

91
   Kuroda v. SPJS Hldgs., LLC, 971 A.2d 872, 884 (Del. Ch. 2009) (“It is well settled that
a party to a contract cannot be held liable for [both] breaching the contract and for tortiously
interfering with that contract.”).
92
   Bandera Master Fund LP v. Boardwalk Pipeline P’rs, LP, 2019 WL 4927053, at *26–
28 (Del. Ch. Oct. 7, 2019); id. at *27 (“As with a corporate parent and its subsidiary, or
wholly owned affiliates with a common parent, a general partner and its controllers ‘share
the commonality of economic interests which underlay the creation of an interference
privilege.’” (quoting Shearin v. E.F. Hutton Gp., 652 A.2d 578, 590 n.14 (Del. Ch. 1994)));
Shearin, 652 A.2d at 590 n.14 (holding that for purposes of assessing justification, “the
relationship among wholly owned affiliates with a common parent is no different . . . than
that between a parent and a subsidiary”); see also NAMA Hldgs., LLC v. Related WMC
LLC, 2014 WL 6436647, at *26 (Del. Ch. Nov. 17, 2014) (“Delaware law rejects the theory
that ‘a parent and its wholly owned subsidiaries constitute a single economic unit’ such
that ‘a parent cannot be liable for interfering with the performance of a wholly owned

                                              26
“When the defendant that a plaintiff has sued for tortious interference controls an

entity that was a party to the contract, the weighing of factors becomes more complex

because of the need to balance the important policies served by a claim for tortious

interference with contract against the similarly important policies served by the

corporate form.”93 The limited affiliate privilege protects a parent or other affiliated

entity that “pursues lawful action in the good faith pursuit of the subsidiary’s profit

making activities” and “recognizes that the close economic relationship of related

entities requires enhanced latitude in defining what improper interactions would

be.”94 “In the parent-subsidiary context, the test for holding a parent corporation

liable for tortious interference ha[s] to be high or every-day consultation or direction

between parent corporations and subsidiaries about contractual implementation

would lead parents to be always brought into breach of contract cases.”95

         To sufficiently plead that a corporate parent or affiliate acted without

justification when interfering with a subsidiary’s contract, the burden is on the

subsidiary.’” (quoting Shearin, 652 A.2d at 590)); id. at *26 (“In other words, ‘a parent
corporation can be held liable for tortiously interfering with its subsidiaries’ contracts when
a plaintiff proves that the parent was not pursuing in good faith the legitimate profit seeking
activities of the affiliated enterprises.’” (quoting Allied Cap. Corp. v. GC–Sun Hldgs., L.P.,
910 A.2d 1020, 1039 (Del. Ch. 2006))).
93
     Bandera, 2019 WL 4927053, at *26.
94
     Id. (internal quotation and alteration omitted) (quoting Shearin, 652 A.2d at 590).
95
  Himawan v. Cephalon, Inc., 2018 WL 6822708, at *10 (Del. Ch. Dec. 28, 2018) (internal
quotation marks omitted) (quoting Allied Cap., 910 A.2d at 1039).

                                               27
plaintiff to “plead and prove that the privilege among affiliates to discuss and

recommend action is not applicable or, stated affirmatively, to allege facts that would

make the ‘interference’ improper”: the plaintiff must allege facts that support a

reasonable inference that the “interfering party was not pursuing in good faith the

legitimate profit seeking activities of the affiliated enterprises.”96 “Such a showing

would, for example, be satisfied by allegations that the interference was motivated

by some malicious or other bad faith purpose.”97

96
   Shearin, 652 A.2d at 590–91 (internal quotation marks omitted); accord NAMA Hldgs,
2014 WL 6436647, at *30 (noting a parent’s intent for the subsidiary to breach the contract
“will not support imposing liability for tortious interference if the breach is consistent with
the good faith pursuit of the subsidiary’s legitimate profit-making activities, such as
through an efficient breach of contract”); Bandera, 2019 WL 4927053, at *27 (determining
a “complaint must allege the facts that support a reasonable inference that the [affiliated
entity’s] interference was ‘motivated by some malicious or other bad faith purpose’ rather
than ‘to achieve permissible financial goals.’” (quoting Shearin, 652 A.2d at 591)); Surf’s
Up Legacy P’rs, LLC v. Virgin Fest, LLC, 2021 WL 117036, at *8 (Del. Super.
Jan. 13, 2021) (explaining the complaint must “allege facts showing [the affiliate]’s
interference was unjustified—a meddling motivated not by legitimate economic goals, but
with bad faith to injure the [contractual counterparty]” (internal quotation marks and
alterations omitted)).
        Fortress sought dismissal on the grounds that Intel did not plead a lack of
justification. D.I. 24 at 17. Specifically, Fortress contended Intel failed to allege that “any
unpled intentional act was solely motivated by an intent to interfere.” Id. (citing
WaveDivision Hldgs, LLC v. Highland Cap. Mgmt., LP, 49 A.3d 1168, 1174 (Del. 2012)).
WaveDivision explains that in considering the actor’s predominant motive as one of many
factors underlying a determination of lack of justification, the actor’s motive will only
support a finding of improper interference “[o]nly if the defendant’s sole motive was to
interfere with the contract.” 49 A.3d at 1174. As Fortress recognized in its reply brief, its
argument is even stronger through the lens of Shearin. D.I. 63 at 20.
97
   Shearin, 652 A.2d at 591; see also, e.g., Himawan, 2018 WL 6822708, at *10–11
(rejecting as conclusory an allegation that pled the defendant “did not pursue the profit-
seeking objectives of [subsidiary], but instead acted in bad faith to injure Plaintiffs,” where

                                              28
         Assuming an underlying breach, Intel has not pled any facts to support a

reasonable inference that VLSI or Fortress’s alleged interference with the

Agreement was motivated by a malicious or bad faith purpose, instead of financial

reasons shared with Finjan. In fact, Intel’s sole sentence about their justification

does not mention malice or bad faith: it appears to plead they acted out of privileged

economic alignment with Finjan affiliates, alleging they were not justified because

they “assumed Finjan’s liabilities by virtue of the same Acquisition.”98

         Intel has failed to plead that Fortress or VLSI tortiously interfered with the

Agreement. Count V is dismissed.

                C.    There Is Not An Actual Controversy As To All Patents.

         Intel also asks this Court for relief beyond the Asserted Patents, which cannot

be remedied in the Infringement Actions. Count I seeks a declaratory judgment that

the Agreement “Encompasses All Patents Owned or Controlled by Defendants.”99

the inference of bad faith was not supported); NAMA Hldgs, 2014 WL 6436647, at *30–31
(finding the parent interfered in bad faith by pursuing its own interest that the subsidiary
did not share).
98
   Compl. ¶¶ 92, 130. In briefing, Intel asserts Fortress induced Finjan’s breach to benefit
VLSI, a separate affiliate, and so is not shielded by the limited affiliate privilege. D.I. 52
at 54. Intel argues it has pled that Fortress “acted maliciously and in bad faith by acquiring
the Finjan Defendants, accepting the benefits of the Patent Licenses, and proceeding to
cause the Finjan Defendants to breach their contractual obligations to Intel Corporation for
reasons unrelated to efficient management of the Finjan Defendants.” Id. at 55. Intel did
not plead this motive, and Fortress’s pursuit of enterprise profit does not constitute malice
or bad faith toward Intel, as required under the limited affiliate privilege.
99
     Compl. ¶¶ 95–102; D.I. 81 at 10–11.

                                             29
The parties dispute whether there is an actual controversy as to Count I beyond the

Asserted Patents.100

         “Delaware courts are statutorily authorized to entertain an action for

a declaratory judgment, provided that an ‘actual controversy’ exists between the

parties.”101 To show an “actual controversy,” a party must show four factors:

         (1) It must be a controversy involving the rights or other legal relations
         of the party seeking declaratory relief; (2) it must be a controversy in
         which the claim of right or other legal interest is asserted against one
         who has an interest in contesting the claim; (3) the controversy must be
         between parties whose interests are real and adverse; (4) the issue
         involved in the controversy must be ripe for judicial determination.102
Here, the sticking point is whether the issue is ripe for judicial determination.103

“Generally, a dispute will be deemed ripe if ‘litigation sooner or later appears to be

unavoidable and where the material facts are static.’”104 Intel does not identify any

litigation other than the Infringement Actions, or any other patents other than the

Asserted Patents that are in dispute. Therefore, the scope of the Agreement beyond

the Asserted Patents is not “ripe for judicial determination;” in the absence of

100
      Compare D.I. 81 at 10–11, with D.I. 85 at 10; see Compl. ¶¶ 95–102.
101
   XI Specialty Ins. Co. v. WMI Liquidating Tr., 93 A.3d 1208, 1216–17 (Del. 2014) (citing
Stroud v. Milliken Enters., Inc., 552 A.2d 476, 479 (Del. 1989)).
102
      Id. at 1217 (quoting Stroud, 552 A.2d at 479–80).
103
   D.I. 85 at 10 (“Intel’s attempt to invoke a hypothetical, unpled dispute with respect to
an untold number of alleged Fortress-owned entities or ‘Fortress-controlled’ patents cannot
be the basis for subject matter jurisdiction in this Court.” (footnotes omitted)).
104
   XI Specialty Ins., 93 A.3d at 1217 (quoting Julian v. Julian, 2009 WL 2937121, at *3
(Del. Ch. Sept. 9, 2009)).

                                             30
ripeness, there is not an actual controversy on which the Court can grant declaratory

judgment. Count I is dismissed.

      III.   CONCLUSION
      For the foregoing reasons, Defendants’ Motions are GRANTED as to Counts

I, II, IV, and V. Defendants’ Motions as to Count III are DENIED. Count III is

STAYED; the parties shall update the Court with any material developments.

                                         31