The opinion of the court was delivered by: MARY A. McLAUGHLIN, District Judge
Agere Systems Inc. ("Agere") has moved for summary judgment on
Choice-Intersil Microsystems, Inc., Intersil Corporation, and Intersil
Americas Inc.'s ("Choice/Intersil") copyright infringement claim (Count
I); partial summary judgment on Choice/Intersil's trade secret
misappropriation claim (Count II); and summary judgment on its
counterclaim for declaratory judgment. The Court held oral argument on
the motion on February 6, 2004. The Court will grant the motion.
The basis of Agere's motion for Summary Judgment is the Court's
September 2, 2003 ruling on Choice-Intersil's motion for a preliminary
injunction. In that ruling, the Court found that Agere has rights under
the Joint Development Agreement ("JDA") and Addendum to the JDA
("Addendum") based on the unambiguous language of those contracts. Choice-Intersil Microsystems,
Inc. v. Agrere, No. 02-8219, slip op. at 2 (E.D. Pa. Sept.
2, 2003) ("Sept. 2, 2003 Mem."). The Court incorporates its
September 2, 2003 Memorandum and Order into this opinion.
The basic factual background is as follows. AT&T Corporation
("AT&T") and Digital Ocean entered into a JDA to develop a wireless
medium access controller chipset conformant with the Institute of
Electrical and Electronics Engineers, Inc. 802.11 standard ("802.11
conformant WMAC"). By 1998, the parties were exploring ways to stop work
on the project that was the subject of the JDA. By this time, Digital
Ocean and AT&T were succeeded in interest by Choice Microsystems
("Choice") and Lucent Technologies ("Lucent"), respectively. On January
6, 1999, Choice and Lucent signed the Addendum to the JDA. Sept. 2, 2003
Mem. at 5, 8, 13, 21.
Choice-Intersil Microsystems, Inc. ("Choice-Intersil") and Agere both
came into existence after a series of corporate restructurings and
acquisitions. Intersil Corporation acquired Choice and renamed it
Choice-Intersil. Agere is the spinoff corporation of Lucent's
microelectronics business. As part of the spinoff, Lucent assigned its
rights under the JDA to Agere. Sept. 2, 2003 Mem. at 4.
The question before the Court at the preliminary injunction stage was
whether Article 8.8 of the JDA continued to exist in the Addendum. Article 8.8 of the JDA provided in pertinent
part: "[e]ach Party's rights, title and interest in this Agreement and
any rights granted to each Party hereunder may be assigned to any direct
or indirect successor to the business of such Party as the result of any
internal reorganization. . . ." The Court found that Article 8.8
survived and that Agere had rights under the JDA and the Addendum as a
successor to Lucent. Sept. 2, 2003 Mem. at 28.
Because the Court held that the language of the JDA and Addendum was
unambiguous, the Court determined the meaning of the JDA and Addendum
based on their language alone and without the need to resolve issues of
fact or examine the extrinsic evidence.*fn1 Sept. 2, 2003 Mem. at 2, 27.
The main issue in Agere's motion is whether Agere has intellectual
property rights under the JDA and Addendum.*fn2 The Court decided in its earlier memorandum that Agere has such rights.
Choice/Intersil, nevertheless, argues that summary judgment should be
denied because: 1) there are disputed facts about the survival of Article
8.8 of the JDA; and 2) the standards for evaluating a motion for
preliminary injunction and summary judgment are different. The Court
found that the JDA and Addendum were unambiguous. Because the Court
interpreted the unambiguous language of the contract, that decision does
not implicate any disputed facts. The Court interpreted the contracts as
a matter of law. See Bethlehem Steel Co. V. Turner Construction
Co., 2 N.Y.2d 456, 460 (N.Y. 1957); Steuart v. McChesney,
498 Pa. 45, 48 (1982).*fn3 Because the Court interpreted the contracts
as a matter of law, any difference in the standards for determinations at
the preliminary injunction stage versus the summary judgment stage is
irrelevant to the Court's legal interpretation.
At oral argument, Choice/Intersil raised for the first time the
argument that even if Article 8.8 survived, Lucent's assignment of the
JDA to Agere was improper, because Agere did not succeed to Lucent's
business as "the result of any internal reorganization" as required by
the JDA and Addendum. Feb. 6, 2003 Tr. ("Tr.") at 10. Not only did
Choice/Intersil not raise this argument before oral argument, they
conceded the opposite at the preliminary injunction hearing.*fn4
The plaintiffs apparently brought this issue up only because Agere
argued in its opposition to a hypothetical contained in the plaintiffs'
motion to dismiss that one company's merging into a second external
company is not an internal reorganization of the first company.
See Agere's Opp. to Pls.' Mot. to Dismiss and/or for Summ. J. at 16-17. Agere's argument on
another motion does not make a disputed issue of fact here when the
plaintiffs already conceded that there was no dispute.
A decision that Agere does have intellectual property rights under the
JDA and Addendum does not end the matter, however. There are two types of
information at issue here: Joint Information and Digital Ocean/Choice
information. The plaintiffs argue that even if Agere does have rights
under the JDA and Addendum, they may still be guilty of copyright
infringement and trade secret ...