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Illinois Computer Research, LLC v. Best Buy Stores

June 29, 2011

ILLINOIS COMPUTER RESEARCH, LLC, PLAINTIFF/COUNTERCLAIM DEFENDANT,
v.
BEST BUY STORES, L.P., AND BESTBUY.COM, LLC, DEFENDANTS/ COUNTERCLAIM PLAINTIFF.



The opinion of the court was delivered by: Judge James B. Zagel

MEMORANDUM OPINION AND ORDER

This dispute involves an alleged patent infringement regarding Rocketfish sound cards. Defendants ("Best Buy") deny that they have infringed Plaintiff's ("ICR") patent asserting that they are authorized to exploit the patent pursuant to the terms of a non-exclusive patent license and settlement agreement. Best Buy now moves for summary judgment, which Plaintiff opposes. For the following reasons, I grant Defendants' motion for summary judgment.

I. STATEMENT OF FACTS

On June 14, 2010 ICR entered into a non-exclusive patent license and settlement agreement ("License Agreement") with Creative Products ("Creative") and Sears Roebuck and Co., regarding alleged infringement of U.S. Patent No. 7,154,819 ("the '819 Patent"). The License Agreement granted Creative, Creative's Affiliates, and Authorized Third Parties of Creative (including Creative's "customers" and "resellers") the right under the '819 Patent to make, use, import, export, offer for sale, sell, and otherwise exploit or dispose of Creative Products. Creative Products include "any and all . . . products. . . made, used, sold, offered for sale, or imported by or for" Creative and/or Creative's Affiliates. The License Agreement also grants a release to Creative, its Affiliates, and the Authorized Third Parties for claims relating to the '819 patent, and ICR granted a covenant not to sue Creative, its Affiliates, and the Authorized Third Parties for infringement of any ICR Patent by Creative Products for a period of three years. The License Agreement expressly provides that "no right . . .to become a foundry for Third Parties is granted" pursuant to the Agreement. The license agreement between Creative and ICR does not expressly name Ectiva as an affiliate of Creative, nor does the agreement expressly grant a license to Best Buy.

This lawsuit accuses Best Buy Stores, L.P., and BestBuy.com, LLC of infringing the '819 Patent by selling certain "accused 'sound cards.'" The agreement for the manufacture of the sound cards ("the manufacturing agreement") was entered into by Best Buy China and Ectiva, a Singaporean company. The manufacturing agreement provides that in the event Best Buy engaged Ectiva to render consulting, design, or engineering services in connection with the Rocketfish cards, the parties would execute a Statement of Work describing the services to be rendered. Best Buy has not provided this Statement of Work.

Best Buy asserts that Rocketfish Sound Cards are sold by Creative (through its affiliate, Ectiva Pte Ltd. ("Ectiva")) to Best Buy's affiliates for ultimate sale on the BestBuy.com website and in Best Buy's stores. The sound cards are designed by Creative and manufactured pursuant to Creative's design and specifications. The sound cards are manufactured by Shenzhen Sea Star Technology Co., Ltd. ("Shenzhen"). Shenzhen manufactures these cards for Creative, and Creative in turn sells the sound cards, through its affiliate Ectiva, to Best Buy China. Best Buy only supplied guidelines relating to the use of Best Buy's Rocketfish trademark on product packaging and in the software driver installation software to Creative.

IRC disputes three material facts asserted by Best Buy: (1) that Ectiva is an affiliate of Creative, (2) that Ectiva is not serving as a foundry for Best Buy; and (3) that the sound cards are manufactured according to a design provided by Creative. For the following reasons, I reject IRC's objections.

II. DISCUSSION

Best Buy argues that it is licensed under the License Agreement because it is an Authorized Third Party. Pursuant to Section 2.2 of the License Agreement, an entity is an "Authorized Third Party" if it "(1) makes, uses, imports, exports, offers for sale, sells, or otherwise exploits or disposes of (2) Creative products; (3) directly or indirectly, from, to, or with authority from Creative or Creative's Affiliates. Here, Best Buy argues that these requirements are satisfied because it sells the Rocketfish sound cards, which are Creative's product, with the authority of Evica, one of Creative's affiliates. It is undisputed that Best Buy sells the accused sound cards. What is in dispute is (1) whether Evica is an affiliate of Creative, and (2) whether the sound cards are Creative products.

A. Evica Is An Affiliate of Creative.

ICR attacks the evidence purporting to show that Ectiva and Creative are affiliates on two grounds. First, ICR objects to the authenticity of certain documents. Next, IRC challenges the personal knowledge of Best Buy's declarants. Neither objection is meritorious.

1. Authenticity Objections

First, ICR challenges the authentication of two exhibits to Jonathan Baker's ("Baker") declaration. The Baker Declaration contains two exhibits purporting to be "true and correct [copies] of the Singapore Accounting and Corporate Regulatory Authority March 2, 2011 official business profile[s]" for Ectiva and CTI (H) Pte Ltd. ("CTI"). Exhibit 2 purports to show that Ectiva is a subsidiary of CTI, and Exhibit 3 showing that CTI is a subsidiary of Creative Technoloy, Ltd., a party to the licensing agreement at issue. Taken together these two exhibits purport to show that Ectiva is an affiliate of Creative.

ICR argues that these two exhibits fail to meet the authentication requirements of Federal Rule of Evidence 901. Specifically, ICR argues that Baker's assertion that these exhibits are "true and correct" copies from the Singapore Accounting and Corporate Regulatory Authority are insufficient because Baker is an attorney for Skadden, Arps, Slate, Meagher & Flom LLP, and not an employee of Singapore Accounting and Corporate Regulatory Authority. Notably, ICR ...


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