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`FILED
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`JUL 39 2003
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`memo w. wwm
`~o«iv‘5"n‘5.&%“‘°'°°""Gamma
`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`INTELLIGRAPHICS, INC.,
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`No. C-O7-2499 JCS
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`Plaintiff,
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`v.
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`MARVELL SEMICONDUCTOR, INC.,
`Defendants.
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`/
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`- I.
`
`INTRODUCTION
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`REDACTED
`ORDER RE: 1) MARVELL
`SEMICONDUCTOR, INC.’S MOTION FOR
`JUDGMENT ON THE PLEADINGS ON THE
`SIXTH CAUSE OF ACTION (COPYRIGHT)
`OF THE FIRST AMENDED COMPLAINT;
`AND 2) MARVELL SEMICONDUCTOR,
`INC.’S MOTION FOR PARTIAL SUMMARY
`JUDGMENT ON INTELLIGRAPHICS’
`CLAIM THAT MARVELL FRAUDULENTLY
`INDUCED INTELLIGRAPHICS TO ENTER
`AMENDMENT 3 [Docket Nos. 72, 73]
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`F-I-I:E-B-I:lNBE'R-S'E79:L
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`In this action, Plaintifi‘ Intelligraphics, Inc. (“Intelligmphics”), a software development
`' company, has sued Marvell Semiconductor, Inc. (“Marvell”) in connection with a contract between
`Intelligraphics and Marvell for the development of customized software for a new wireless
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`networking chip produced by Marvell. The following motions are currently before the Court:
`1) Marvell Semiconductor, Inc.’s Motion for Judgment on the Pleadings on the Sixth Cause of
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`Fraudulently Induced Intelligraphics to Enter Amendment 3 (the “Summary Judgment Motion”). All
`parties have consented to the jurisdiction of a United States Magistrate Judge pursuant to 28 U.S.C.
`§ 636(c). The Court held a hearing on the motions on Friday, July 25, 2008, at 9:30 am. For the
`27 reasons stated below, the Rule l2(c) Motions is DENIED. The Summary Judgment Motion is
`28 DENIED, in part with prejudice and in part without prejudice.
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`l
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`%\ “I”
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`REDACTED
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`- II.
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`BACKGROUND
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`A.
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`First Amended Complaint
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`In July 2003, Intelligraphics and Marvell entered into a “SOFTWARE DEVELOPMENT
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`The contract was set up such that the price to be paid for the work on
`each piece of “Custom Software” developed thereunder was to be set
`out in a “Development Schedule with Milestone DeliverabIes” for each
`individual “Custom Software” project. The “Development Fee” for
`each piece of software was defined as the total of all related
`“Milestone” payments. Exhibit C to the contract set out a series of
`Milestone Deliverables, each associated with a fixed fee. The contract
`then declared that only when a specific Milestone Deliverable for a
`specific software project was delivered by INTELLIGRAPHICS and
`accepted by MARVELL, per a Statement of Acceptance — and
`INTELLIGRAPHICS received payment in fiill for that Milestone
`Deliverable by MARVVELL —— were the intellectual property rights to
`that specific Milestone Deliverable transferred from
`INTELLIGRAPHICS to MARVELL.
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`Id. (emphasis in original). The SDLA granted Marvell a non-exclusive provisional license to
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`Intelligraphics’s existing Basic 802.11-related modules (the “Base Code”) which was to be
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`incorporated into the final product. PAC, 1 8. This was necessary to allow Marvell to test and
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`inspect the software prior to acceptance. Id. The SDLA provided further that Intelligraphics would
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`retain ownership rights to the custom sofiware until Marvell paid the applicable Development Fee
`for each Milestone Deliverable delivered by Intelligraphics and accepted by Marvell, at which point
`Marvell would assume ownership of the Milestone Deliverable and all intellectual property rights
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`Subsequently, the parties developed a number of “scope of work” (“SOW”) attachments to
`the SDLA, containing new projects. FAC, 1111 11-12. According to Intelligraphics, by the time these
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`2
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`agreements were reached, the parties had “changed their definition of ‘Development Fee’ to be based
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`on a ‘time and materials’ billing, rather than fixed fee.” FAC, 1[ 11. This new definition of the
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`Development Fee was incorporated into the individual amendments relating to the SOWS. Id.
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`In May 2006, the parties began discussions relating to two new projects: I) the “Hourly Vista
`WLAN Driver Development” project (the “Vista Project”); and 2) the Hourly CCX v.4 Funk
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`Supplicant Development project (the “CCX Project”). FAC, ‘ll 13. These projects were documented
`by creating Amendment 3 to the SDLA, along with Attachments 1 and 2 thereto. 1d., 1! 14.
`Attachment 2 contained a section entitled “Payments” that stated, in part, as follows:
`8.
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`FAC, W 14-15 (quoting Section 8 of SDLA).
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`lntelligraphics would stop work on the two projects when the $250,000.00 Payment Cap had been
`reached absent a renegotiation of the payable amount, Marvell employee Carey LeRoy represented in
`a telephone conversation that such a provision was unnecessary because the provisions quoted above
`already indicated that this was the case. FAC, if 16. Marvell further represented that it would pay for
`all of Intelligraphics’s work on a time and materials basis and negotiate accordingly when and if the
`total Development Fees on the two projects reached $250,000.00.
`Ia’.
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`Work began immediately for the Vista Project but the project lasted only for a short period of
`time. FAC, 1] 17. Work on the CCX Project did not begin right away because Marvell had not
`finalized contract negotiations with Funk Software for access to the Funk Supplicant source code,
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`which was necessary in order for Intelligraphics to proceed with the CCX Project. Id. In the
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`This involved rewriting sofiware and firmware for the MARVELL
`wireless networking cards to address what MARVELL had detennined
`were new customer 1' uirements for wireless mobility in laptops and
`other mobile wirelessedevices. In this context the term ‘roaming’
`describes the software fimctions that are necessary to manage a
`wireless device that is moving through a Multiple Access Point
`environment, where the signal strength and usability of each Access
`Point may quickly change as the device changes location relative to
`each Access Point. By contrast, the original 802.11 roamin sofiware
`(that portion having been developed by MARVELL in the tirrnware)
`had minimal roaming support and used relatively primitive roaming
`algorithms.
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`12
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`FAC, 1! 18. As originally envisioned, the Advanced Roaming Project involved only making
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`functionality to the driver or require any work on any Supplicant modules. FAC, 1] 19. However,
`while detailed specifications for the Advanced Roaming Project were created, no Scope of Work
`attachment for Amendment 3 was ever created. Id. Intelligraphics alleges that “at all times, both
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`' FAC, 1[ 20. Amendment 3 and Attachments 1 and 2 were executed in early August and work began
`on the CCX project in mid-August. Id. However, sometime after work began on the Advanced
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`Roaming Project (whether before or after Amendment 3 and the attachments were executed is 9
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`unclear), Marvell changed the scope of the CCX Project and the Advanced Roaming Project. FAC,
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`MARVELL had originally assigned INTELLIGRAPHICS to work
`only on the Supplicant part of the CCX project, while MARVELL —
`which had its own software development capability — would handle the
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`driver and firmware modifications. After the Advanced Roaming
`projectrstarted, however, MARVELL informed INTELLIGRAPHICS
`that it wanted INTELLIGRAPHICS to take over the work on some of
`the CCX modifications to the driver software as well. Specifically, it
`instructed INTELLIGRAPHICS to completely scrap the advanced
`roaming design and all work completed thus far on the project and to
`redesign it from scratch so that it included comprehensive support for
`both Advanced and CCX roaming. This redesign was not completed
`until late August — well after the contract was signed by
`INTELLIGRAPHICS.
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`Id.
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`Intelligraphics further alleges that it encountered problems with the driver portion of the
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`amount of work required for the now combined CCX Roaming project.” FAC, 1} 22.
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`According to Intelligraphics, in August 2006 Marvel] assigned another project to
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`Intelligraphics, asking it to rewrite Marvell’s 802.11 Windows-based software so it could run in a
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`VRTX environment on Motorola’s MIPS processor (the “Motorola Project”). FAC, 1] 23.
`Intelligraphics alleges that the parties agreed this work would be performed on a time and materials
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`basis. PAC, 1] 24. Again, however, no contractual addenda or amendments to the SDLA were
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`Id. At that point, Intelligraphics had already performed $80,000.00 of work on the project. Id.
`Intelligraphics, in turn, informed Marvell that it could not finish the project under this cap and that it
`would stop work ifMarvell refiised to pay for work actually performed. PAC, 1] 25. In January and
`February of 2007, Marvell’s Alan Cunningham verbally told Intelligraphics that Marvell would
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`i
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`source code to Marvell, ultimately performing $122,273.98 in work on the project. Id. However,
`Marvell refused to pay beyond the $100,000.00. Id.
`In the meantime, Intelligraphics was working on the Vista, Advanced Roaming and CCX
`projects, for which Intelligraphics reported and billed Marvell all together. FAC, 1] 26. When total
`development fees, on a time and materials basis, began to approach $250,000.00, Intelligraphics
`contacted Marvell to obtain authorization to work beyond the $250,000.00 cap. Id. Marvell’s Bart
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`Based on the factual allegations summan'zed above, Intelligraphics asserts the following
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`Marvell intentionally made its promise to pay all Development Fees on a time and materials basis for
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`Development sofiware and to negotiate in good faith any contractual amendments necessary to
`facilitate such payment without any intent to perform. FAC, 1] 44. Similarly, Intelligraphics alleges,
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`Intelligraphics’ copyright infringement claim (Claim 6) is based on the allegation that
`Man/ell’s incorporation of Intelligraphics’ “copyrighted Advanced Roaming Software and its
`, Motorola development project software into its microchips and marketing and selling these
`= microchips .
`.
`. without making the payment ofall Development Fees incurred for such work on a
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`
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`time and materials basis necessary to the effective purchase ofINTELLIGRAPHICS’ intellectual
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`property rights with regard to such software — constitute infringement of INTELLIGRAPHICS’
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`copyrights.” FAC, 1] 68.
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`

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`B.
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`The Motions
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`1.
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`The Rule l2(c) Motion
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`Marvell brings a motion for judgment on the pleadings, pursuant to Rule l2(c) oftheoFederal
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`. Motion at 5 (quoting FAC, Ex. A (SDLA), § 6.l(b) (emphasis added by Mawell)). According to
`Marvell, these rights constitute a broad license in the Custom Software that covers the conduct that
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`Intelligraphics alleges infringes its copyrights. Id.
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`Marvell argues that the rights set forth in Section 6.l(b) of the SDLA covers the conduct on
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`which Intelligraphics bases its copyright infringement claim and therefore, that claim must fail. It
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`= , § 5-1 (providing that Intelligraphics -
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`Custom Software set forth in Section 6.l(b) cannot be contingent upon payment of the Development
`Fees but rather, represent a license that was necessary to allow the testing envisioned under. the
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`agreement. Motion at 9.
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`In its Opposition, Intelligiaphics challenges Marve1l’s interpretation of Section 6. l(b),
`arguing that it does not create a license of any kind and that not even a “testing license” was required
`22
`23 H under the SDLA because Section 3.2 gave Marvell the explicit right to test the sofiware that
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`. .” Id. at 13. This phrase, Intelligraphics asserts, implies that subsection b refers to
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`the rights that had already been purchased by Man/ell by paying the Development Fee, as set forth in
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`10
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`\
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`lntelligraphics acknowledges that there
`subsection a, and not to any license for testing. Id. at 13-14.
`is a discrepancy between the definition of Custom Software, which defines Custom Software as
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`software that is already “tested and fully functional,” and the language of Section 3.2, which requires
`Marvell to “evaluate and test the .
`.
`. Custom Software” (implying that Custom Software also
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`encompasses software that has not yet been tested and accepted). Id. at 5-6. It concludes, however,
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`that this inconsistency is merely a drafting error on the part ot'Marvell’s legal department (which
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`drafted the SDLA). Id.
`lntelligraphics argues that when read in light of the entire agreement ~
`which uses the word “license” only in Section 4.1, for the Base Code and Enhanced Base Code,
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`it
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`is clear that this drafting error does not reflect any intent by the parties to create a testing license for
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`the Custom Sofiware. Id. at 7. Finally, Intelligraphics argues that to the extent the language of the
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`In its Reply, Marvel points to the phrase in Section 6. l (b) giving Marvell the right to
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`“sublicense” the Custom Soflware source code, implying that the section addressed Marvell’s rights
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`to the Custom Software as a licensee and not as a copyright owner (in which case, it would be
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`expected that the word “license” would have been used). Reply at 1. Marvell also argues that the
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`right to sublicense would be surplusage if Section 6. l(b) referred to Marvell’s rights after obtaining
`ownership of the rights to the custom software because only licensees - and not copyright owners ~
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`are required to obtain pennission to grant sublicensesl Id. To the extent that Section 6.1 might
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`arguably be interpreted to require payment of the Development Fee in subsection a as a condition
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`precedent for the rights set forth in subsection b, Marvell argues that this is insufficient to support
`Intelligraphics’s claim because conditions precedent are disfavored and will not be read into
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`contracts unless required plain, unambiguous language. Id. at 3 (citing Effects Assocs. v. Cohen, 908
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`F.2d 555, 559 n.7 (9th Cir. l990). Further, Marvell rejects Intelligraphics’ reliance on the first
`sentence of Section 6. l(b) as an indication that subsection b referred to Marvell’s rights to the
`Custom Software after paying the Development Fee. Reply at 4. Rather, Marvell asserts, this
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`sentence refers to Marvell’s preexisting rights to its own software, defined in Section 1.9 of the
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`11
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`2.
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`The Summary Judgment Motion
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`Marvell seeks summary judgment as to Intelligraphics’ claim for fraudulent inducement on
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`the basis that the alleged false promise that lntelligraphics asserts induced it to enter into
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`Amendment 3 — namely, the promise to pay all Development Fees earned on a time and material
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`Marvell further argues that even assuming that Marvell falsely represented to Intelligraphics the
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`meaning of the payment terms of Amendment 3, Intelligraphics could not have reasonably relied on
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`this representation and therefore, lntelligraphics’s claim for fraudulent inducement fails on that basis
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`as well. Id.
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`Regarding the parol evidence rule, Marvell relies on California law, citing to Cal Civ. Proc.
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`Code § 1856(a). Id. at 4. That section provides:
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`Terms set forth in a writing intended by the parties as a final
`expression of their agreement with respect to such terms as are
`included therein may not be contradicted by evidence of any prior
`agreement or of a contemporaneous oral agreement.
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`Cal. Civ. Proc. Code § 1856(a)‘. Because the SDLA contains an integration clause, Marvell asserts, it
`is the final expression of the parties’ agreement and therefore, the parol evidence rule applies.
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`'
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`Summary Judgment Motion at 6 (citing SDLA, § 12.10). Section 12.10 of the SDLA provides as
`follows:
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`12
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`24
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`E FAC, Ex. A (SDLA), § 12.10. Further, Marvell argues, Marvell’s alleged promise that it would pay
`for work on the projects that exceeded the $250,000.00 cap directly contradicts the express terms of
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`In support of its Summary Judgment Motion, Marvell filed a Joint Statement of Facts on
`19 Marvell Semiconductor, Inc.’s Motion for Partial Summary Judgment on lntelligraphics’ Claim that
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`the Summary Judgment motion only, the allegations contained in paragraphs 16, 44, and 46 —
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`13
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`describing the alleged representations by Marvell counsel Carey LeRoy relating to the payment
`provision, alleging that Marvell made these representations without any intention to perform, and
`; alleging that Intelligraphics reasonably relied on the representations -— may be treated as actually
`proved. Id. at 2-3.
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`In its Opposition, Intelligraphics argues that the parol evidence rule does not apply because
`the alleged representations by Marvell’s counsel do not contradict the terms of the contract but
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`‘
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`rather, are consistent with the terms ofthe contract. Summary Judgment Opposition at 11-13.
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`Further, Intelligraphics cites to California case law that holds that the existence of an integration
`' clause in a contract, while possibly relevant to breach of contract claims, does not apply to a claim
`for fraud in the inducement. Id. at 13-15. This is because fraud in the inducement renders the entire
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`contract (including the integration clause) voidable. Id. With respect to the reasonableness of
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`Intelligraphics’s reliance on Marvell’s representations regarding the meaning ofthe Payment
`13 l provision, Intelligraphics argues that Marvell has waived its right to make this argument by
`i
`14 _;
`stipulating, in the Joint Statement, that Intelligraphics reasonably relied on Marvell’s representations.
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`A.
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`Legal Standard
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`1.
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`Federal Rule of Civil Procedure l2(c)
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`25 Milne ex rel. Coyne v. Stephen Slesinger, Inc. ., 430 F.3d 1036, 1042 (9th Cir. 2005) (quoting Owens
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`. 10(0).
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`2.
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`Federal Rule of Civil Procedure 56(c)
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`Summary judgment is appropriate “ifthe pleadings, depositions, answers to interrogatories,
`and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to
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`any material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ.
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`' genuine issue of material fact with respect to an essential element ofthe non—moving party’s claim,
`or to a defense on which the non—moving party will bear the burden of persuasion at trial. Celotex
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`Corp. v. Catrett, 477 U.S. 317, 323 (1986). Further, “CeIotex requires that for issues on which the
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`movant would bear the burden of proof at trial, that party must show affirmatively the absence of a
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`genuine issue of material fact,” that is, “that, on all the essential elements of its case on which it
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`bears the burden of proof at trial, no reasonable jury could find for the non-moving party.”
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`Fitzpatrick v. City ofAtlanta, 2 F.3d 1112, l 116 (1 1th Cir.1993). Once the movant has made this
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`showing, the burden then shifts to the party opposing summary judgment to designate “specific facts
`showing there is a genuine issue for trial.” Id. at 323. On summary judgment, the court draws all
`: reasonable factual inferences in favor ofthe non-movant. Anderson v. Liberty Lobby Inc., 477 U.S.
`242, 255 (1986).
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`3.
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`California Law Governing Contract Interpretation and the
`Consideration of Extrinsic Evidence
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`In determining whether a copyright holder has granted an implied, non—exclusive copyright
`license, the court looks to state law so long as it does not conflict with the federal Copyright Act.
`Foad Consulting Group, Inc. v. Musil Govan Azzalino, 270 F.3d 821, 827 (9th Cir. 2001) (holding
`that Califomia’s parol evidence rule does not conflict with the Copyright Act). Here, it is undisputed
`that the state law that should be applied in determining whether the SDLA grants an implied license
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`to Marvell is California contract law. It is also undisputed that California law governs
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`lntelligraphics’ state law claim for fraud in the inducement. Thus, to the extent that both of
`Marvell’s motions turn, in part, on the Court’s interpretation ofprovisions ofthe SDLA, California
`law governing the interpretation of contracts applies to both of Marvell’s motions.
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`3 Rigging C0., 69 Cal. 2d 33, 38 (1968). Under California Civ. Proc. Code Section 1856(a), “[t]erms
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`agreement with respect to those terms as are included therein may not be contradicted by evidence of
`6 i any prior agreement or ofa contemporaneous oral agreement” (“the parol evidence rule”). However,
`7 I
`there are exceptions to this rule. First, the court may admit parol evidence ifthe language ofa
`contract is ambiguous, that is, ifthe language is “reasonably susceptible” to the interpretation urged
`when considered in light of the evidence presented. Winet v. Price, 4 App. Cal. 4th 1159, 1165
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`18 | only where the “false promise is independent of, or consistent with, the written instrument.” Id.
`19 Ii
`Whether a contract provision is ambiguous is a question oflaw. In re Franchise Pictures
`LLC, 2008 WL 954162 (Bkrtcy. C.D. Cal., Jan. 25, 2008) *12 (citing Maflei v. N. Ins. Co. ofNew
`York, 12 F.3d 892, 898 (9th Cir. 1993)). “If it is, ordinary summary judgment is improper because
`differing views ofthe intent ofthe parties will raise genuine issues ofmaterial fact.” Id. On the
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`unambiguous, the case may be disposed of by summary judgment. Id. (citing Brobeck, Phleger &
`26 Harrison v. Telex Corp, 602 F.2d 866, 871-72 (9th Cir. 1979)).
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`B;
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`Summary Judgment Motion
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`Marvell seeks summary judgment as to Claim 3 (Fraudulent Inducement) to the extent it is
`based on statements made by Marvell’s counsel to lntelligaphics. Under California law, fraud in the
`inducement occurs “when the prornisor knows what he is signing but his consent is induced by fi'aud,
`. mutual assent is present, and the contract is formed, which, by reason of fraud, is voidable.”
`‘ Hinesley v. Oakshade Town Ctr., 135 Cal. App. 4th 289, 294-95 (2005). In this case, Intelligmphics
`asserts in support ofits fraudulent inducement claim that it entered into Amendment 3 based, in part,
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`on representations by Marvell concerning the meaning ofthe payment provision found in
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`9 Attachment 2, Section 8. In particular, Marvell’s counsel is alleged to have told lntelligraphics that
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`the payment provision, and particularly, the $250,000.00 cap, permitted Intelligraphics to stop
`11 working when the $250,000.00 cap had been reached until a new payment amount had been
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`negotiated, and that Marvell would “negotiate accordingly” when the limit was reached. Marvell,
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`however, asserts that these representations cannot be considered under the parol evidence rule and
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`therefore, it is entitled to summary judgment on the claim. In the alternative, even ifthe
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`representations are considered, Marvell argues, it is entitled to summary judgment on Claim 3
`because Intelligraphics could not have reasonably relied on them. The Court concludes that the parol
`evidence rule does not preclude consideration of the alleged representations and therefore, that
`: Defendant is not entitled to summary judgment on that basis. Further, the Court cannot find, at this
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`issue are not inconsistent with the temis of the contract themselves. Rather, they represent a
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`26 plausible interpretation ofthe significance ofthe payment provision in Attachment 2 to Amendment
`27 l 3, namely, that Intelligraphics could stop work when the $250,000.00 cap was reached, that it_ would
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`be paid for its work on a time and materials basis up to that cap, and that Marvell would negotiate in
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`termination). To the extent that the payment provision is reasonably susceptible to the meaning
`advanced by Intelligraphics, the extrinsic evidence may be considered by the Court in determining
`the significance of that provision. Therefore, the Court denies Marvell’s Summary Judgment Motion
`: on this question with prejudice.
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`A separate question is whether Intelligraphics reasonably relied on the alleged representations
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`reasonable reliance on the alleged misrepresentations. Kahn v. Lischner, 128 Cal. App. 2d 480, 489
`' (1954) (“The test is not only whether the party acted in reliance on a misrepresentation, but whether
`he wasjustified in his reliance”). “Except in the rare case where the undisputed facts leave no room
`for a reasonable difference of opinion, the question of whether a plaintifi’s reliance is reasonable is a
`question of fact.” OCMPrincipal Opportunities Fund v. CIBC World Markets, Corp., 157 Cal. App.
`4th 835, 864 (2007). California courts have, however, in a handfiil ofcases, held as a matter oflaw
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`28 I counsel could not, as a matter oflaw, show reasonable reliance); Rowland v. PaineWebber Inc., 4
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`Cal. App. 4th 279, 286 (1992) (holding that where plaintiffs asserted fiaudulent inducement claim
`based on representation by investment management company that plaintiffs did not need to read
`written agreement containing arbitration clause, plaintifls could not reasonably rely on that
`representation in seeking to avoid the arbitration clause); Cohen v. Wedbush, Noble, Cooke, Inc., 841
`F.2d 282, 287 (1988) (holding that plaintiffs could not avoid arbitration clause based on allegation
`that defendant fraudulently misled them by failing to inform them of the meaning and effect ofan
`arbitration clause in a written agreement and stating, “[w]e know of no case holding that parties
`dealing at arm’s length have a duty to explain to each other the terms ofa written contract” ,
`oven'u1ed on other grounds, Ticknor v. Choice Hotels Int ’I, Inc., 265 F.3d 931, 941 (9th Cir. 2001);
`West. Hosps. Fed. Credit Union v. E.F. Hutton & Co., Inc., 700 F. Supp. 1039, 1041 (following
`I Cohen, holding that plaintiffcould not avoid arbitration based on allegation that defendant had
`ll fraudulently induced plaintiffto sign agreement containing arbitration clause by affirmatively stating
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`that the agreement was merely “paperwork” and would not affect the plaintiffs legal rights).
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`Here, Marvell stipulated, for the purposes ofthe instant motion only, that Intelligraphics
`reasonably relied on the representations of Marvell’s counsel. In light of that stipulation, the Court
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`carmot enter summary judgment in favor of Marvell, at least at this stage of the case, on the basis that
`Intelligraphics could not have reasonably relied on those representations. Therefore, on the question
`of reasonable reliance, the Court denies the Summary Judgment Motion without prejudice to Marvell
`bringing a future summary judgment motion on the issue after discovery has been completed.
`C.
`The Rule 12(c) Motion
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`Marvell asserts that it is entitled to judgment on the pleadings with respect to
`5 Intelligraphics’s copyright claim (Claim 6) because the SDLA unambiguously grants Marvell a
`license as to the Custom Sofiware and the conduct that Intelligraphics alleges constitutes copyright
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`scope ofthe license. Sun Microsystems, Inc. v. Microsoft, 188 F.3d 1115, 1121 (9th Cir. 1999). A
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`copyright owner may grant a nonexclusive license expressly or impliedly through conduct. Field v.
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`4 Google, Inc, 412 F. Supp. 2d 1106, l 115 (D. Nev. 2006) (citing Ejfects Ass0cs., Inc. v. Cohen, 908
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`6 Copyright § 10.03[A] (1989)). “Whether express or implied, a license is a contract governed by
`7 I ordinary principles ofstate contract law.” McCoy v. Mirsuboshi Cutlery, Inc, 67 F.3d 917, 920 (Fed.
`8 Cir. 1995) (cited with approval in Food, 270 F.3d at 827 n.l 1).
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`Here, Marvell argues that the SDLA grants Marvell an express nonexclusive license to the
`Custom Software, pointing to the language in Section 6.l(b) stating that Marvell is ‘
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`however, finds that the language of Section 6. l (b), when read in light of the entire agreement, is
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`to Marvell pursuant to Section 6(a), providing for transfer after payment ofthe Development Fee.
`On one hand, subsection 6. 1 (b) begins with the words “at all times set forth in Section
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`21 '1 rights ifthe section addressed Man/ell’s rights afler the transfer ofownership. The reference to
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`On the other hand, there is language in Section 6.I(b) that suggest it may refer to Marvell’s
`25 rights afler the transfer ofownership and therefore does not grant Marvell a license prior to payment
`26 ofthe Development Fee. First, the Court notes that Section 6.1 is entitled “Ownership by Marvell of
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`the Custom Software” and does not use the word “license” anywhere in the provision (in contrast to
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`the license for the Base Code and Enhanced Base Code found in Section 4.1). More significantly,
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`the first sentence of Section 6.l(b) states that‘
`. .” Marvell asserts that the use ofthe word "retain" in this
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`however, one would expect that the provision would have stated that Marvell retained ownership to
`the source code in the Marvel] Sofiware, not the Custom Software. Alternatively, one might ask, if
`the first sentence of Section 6. l(b) refers to the Marvell Software (as Marvell asserts), would it not
`be appropriate to limit the second sentence to the Marvell Software as well?
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`The definition of Custom Software contained in Section 1.3, which covers only software that
`is “integrated, tested and fully functional,” also supports the conclusion that Section 6. l(b), in setting
`forth Maivell’s rights in the Custom Software, applies to Man/ell’s rights after ownership has been
`transferred rather than affording a nonexclus