Case 1:22-cv-00904-RGA-SRF Document 219 Filed 09/12/24 Page 1 of 41 PageID #: 26353
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`ACCELERATION BAY, LLC,
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`Plaintiff,
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`v.
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`AMAZON WEB SERVICES, INC.,
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`Defendant.
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`Civil Action No. 22-904-RGA
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`MEMORANDUM OPINION
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`Philip A. Rovner, POTTER ANDERSON & CORROON, LLP, Wilmington, DE; Paul J. Andre,
`Lisa Kobialka, James Hannah (argued), Kristopher Kastens, Michael Lee, Christina M. Finn,
`KRAMER LEVIN NAFTALIS & FRANKEL LLP, Redwood Shores, CA; Aaron M. Frankel
`(argued), Marcus A. Colucci, Pooja P. Parekh, KRAMER LEVIN NAFTALIS & FRANKEL
`LLP, New York, NY,
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`Attorneys for Plaintiff.
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`Jack B. Blumenfeld, Jennifer Ying, MORRIS, NICHOLS, ARSHT & TUNNELL LLP,
`Wilmington, DE; Alan M. Fisch, R. Williams Sigler (argued), Jeffrey M. Saltman (argued), Lisa
`N. Phillips, Kyle K. Tsui, Lauren Hutchison (argued), FISCH SIGLER LLP, Washington, D.C.;
`Ken K. Fung, FISCH SIGLER LLP, San Mateo, CA,
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`Attorneys for Defendant.
`
`September 12, 2024
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`1
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`Case 1:22-cv-00904-RGA-SRF Document 219 Filed 09/12/24 Page 2 of 41 PageID #: 26354
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`/s/ Richard G. Andrews
`ANDREWS, U.S. DISTRICT JUDGE:
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`Before me are Plaintiff’s summary judgment and Daubert motions (D.I. 150) and
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`Defendant’s summary judgment and Daubert motions (D.I. 147). The motions have been fully
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`briefed. (D.I. 148, 161, 170 (Defendant’s motion); D.I. 151, 159, 172 (Plaintiff’s motion)). I
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`heard oral argument on August 21, 2024 (Hearing Tr.).1 At my request, the parties submitted
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`supplemental letter briefing on several issues in dispute. (D.I. 192, 193, 194, 195).
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`For the reasons set forth below, Plaintiff’s summary judgment and Daubert motions are
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`GRANTED IN PART and DENIED IN PART. Defendant’s summary judgment and Daubert
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`motions are GRANTED IN PART and DENIED IN PART.
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`I.
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`BACKGROUND
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`Plaintiff owns U.S. Patent Nos. 6,701,344 (“the ’344 patent”), 6,714,966 (“the ’966
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`patent”), 6,732,147 (“the ’147 patent”), 6,829,634 (“the ’634 patent”), and 6,910,069 (“the ’069
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`patent”). Plaintiff acquired the patents from Boeing, the original assignee and owner of the
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`patents, on December 10, 2014. (D.I. 149-1, Ex. 4). The sale agreement provides that Boeing
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`will receive seventy-five percent of the proceeds from the settlements, sales, and licensing
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`revenues that Plaintiff obtains from the patents. (Id. at 4).
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`The asserted patents are directed towards computer network systems and methods of
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`adding participants to, removing participants from, and delivering information across computer
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`networks. The ’344 Patent issued on March 2, 2004 and expired on September 21, 2021. (D.I.
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`149-1, Ex. 11 ¶ 249). The ’966 patent issued on March 30, 2004 and expired on November 10,
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`2021. (Id.). The ’147 patent issued on May 4, 2004 and expired on July 20, 2022. (Id.). The
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`1 Citations to the transcript of the argument, which is docketed at D.I. 197, are in the format
`“Hearing Tr. at __.”
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`2
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`’634 Patent issued on December 7, 2004 and expired on August 7, 2022. (Id.). The ’069 Patent
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`issued on June 21, 2005 and expired on July 9, 2022. (Id.).
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`Defendant offers customers a variety of cloud computing products, including “Virtual
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`Private Clouds” (“VPCs”), which are virtual networks that run on computing resources isolated
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`from those used by Defendant’s other customers, and services for connecting VPCs with each
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`other and with other networks. (D.I. 148 at 5–8; D.I. 151 at 3–6). Plaintiff filed this case on July
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`6, 2022, alleging Defendant infringed the asserted patents through various VPC-related products.
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`(D.I. 1). The products that remain accused are VPC, Transit Gateway, CloudFront, Elastic Cloud
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`Computing (“EC2”), Elastic Kubernetes Services (“EKS”), GameLift, and App Mesh.2 (D.I.
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`149-1, Ex. 1 at 3). The remaining asserted claims are claims 13 and 21 of the ’344 patent, claim
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`1 of the ’966 patent, claims 10 and 25 of the ’634 patent, claim 6 of the ’147 patent, and claim 1
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`of the ’069 patent.3 (D.I. 188 at 1).
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`II. LEGAL STANDARD
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`A. Summary Judgment
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`“The court shall grant summary judgment if the movant shows that there is no genuine
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`dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
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`R. Civ. P. 56(a). The moving party has the initial burden of proving the absence of a genuinely
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`disputed material fact relative to the claims in question. Celotex Corp. v. Catrett, 477 U.S. 317,
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`323 (1986). Material facts are those “that could affect the outcome” of the proceeding. Lamont
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`2 Plaintiff also identified three accused products of Defendant’s parent company in its
`infringement contentions. (D.I. 149-1, Ex. 1 at 3 (listing Luna, Prime Video, and Twitch as
`Amazon’s infringing products)).
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` 3
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` During the time it has taken to decide the pending motions, the parties have narrowed the case.
`For example, Plaintiff no longer asserts any claims of the ’344 or ’069 patents. (D.I. 211 at 4).
`3
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`v. New Jersey, 637 F.3d 177, 181 (3d Cir. 2011). “[A] dispute about a material fact is ‘genuine’
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`if the evidence is sufficient to permit a reasonable jury to return a verdict for the non-moving
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`party.” Id. The burden on the moving party may be discharged by pointing out to the district
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`court that there is an absence of evidence supporting the non-moving party’s case. Celotex, 477
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`U.S. at 323.
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`The burden then shifts to the non-movant to demonstrate the existence of a genuine issue
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`for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87 (1986);
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`Williams v. Borough of West Chester, 891 F.2d 458, 460–61 (3d Cir. 1989). A non-moving party
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`asserting that a fact is genuinely disputed must support such an assertion by: “(A) citing to
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`particular parts of materials in the record, including depositions, documents, electronically stored
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`information, affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or
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`other materials; or (B) showing that the materials cited [by the opposing party] do not establish
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`the absence . . . of a genuine dispute . . . .” Fed. R. Civ. P. 56(c)(1). The non-moving party’s
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`evidence “must amount to more than a scintilla, but may amount to less (in the evaluation of the
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`court) than a preponderance.” Williams, 891 F.2d at 460–61.
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`When determining whether a genuine issue of material fact exists, the court must view
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`the evidence in the light most favorable to the non-moving party and draw all reasonable
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`inferences in that party’s favor. Scott v. Harris, 550 U.S. 372, 380 (2007); Wishkin v. Potter,
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`476 F.3d 180, 184 (3d Cir. 2007). If the non-moving party fails to make a sufficient showing on
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`an essential element of its case with respect to which it has the burden of proof, the moving party
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`is entitled to judgment as a matter of law. See Celotex Corp., 477 U.S. at 322.
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`4
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`B. Infringement
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`A patent is directly infringed when a person “without authority makes, uses, offers to sell,
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`or sells any patented invention, within the United States or imports into the United States any
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`patented invention during the term of the patent.” 35 U.S.C. § 271(a). Determining
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`infringement is a two-step analysis. Markman v. Westview Instruments, Inc., 52 F.3d 967, 976
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`(Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370 (1996). First, the court must construe the asserted
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`claims to ascertain their meaning and scope. Id. The trier of fact must then compare the
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`properly construed claims with the accused infringing product. Id. This second step is a
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`question of fact. Bai v. L & L Wings, Inc., 160 F.3d 1350, 1353 (Fed. Cir. 1998). The patent
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`owner bears the burden of proving infringement by a preponderance of the evidence. SmithKline
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`Diagnostics, Inc. v. Helena Lab’ys Corp., 859 F.2d 878, 889 (Fed. Cir. 1988).
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`“Literal infringement of a claim exists when every limitation recited in the claim is found
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`in the accused device.” Kahn v. Gen. Motors Corp., 135 F.3d 1472, 1477 (Fed. Cir. 1998). “If
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`any claim limitation is absent from the accused device, there is no literal infringement as a matter
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`of law.” Bayer AG v. Elan Pharm. Research Corp., 212 F.3d 1241, 1247 (Fed. Cir. 2000). A
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`product that does not literally infringe a patent claim may still infringe under the doctrine of
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`equivalents if the differences between an individual limitation of the claimed invention and an
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`element of the accused product are insubstantial. See Warner–Jenkinson Co. v. Hilton Davis
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`Chem. Co., 520 U.S. 17, 24 (1997). The patent owner has the burden of proving infringement
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`and must meet its burden by a preponderance of the evidence. See SmithKline Diagnostics, Inc.
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`v. Helena Lab. Corp., 859 F.2d 878, 889 (Fed. Cir. 1988) (citations omitted).
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`When an accused infringer moves for summary judgment of non-infringement, such
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`relief may be granted only if at least one limitation of the claim in question does not read on an
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`element of the accused product, either literally or under the doctrine of equivalents. See Chimie
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`v. PPG Indus., Inc., 402 F.3d 1371, 1376 (Fed. Cir. 2005); see also TechSearch, L.L.C. v. Intel
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`Corp., 286 F.3d 1360, 1369 (Fed. Cir. 2002) (“Summary judgment of noninfringement is . . .
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`appropriate where the patent owner's proof is deficient in meeting an essential part of the legal
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`standard for infringement, because such failure will render all other facts immaterial.”). Thus,
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`summary judgment of non-infringement can only be granted if, after viewing the facts in the
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`light most favorable to the non-movant, there is no genuine issue as to whether the accused
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`product is covered by the claims (as construed by the court). See Pitney Bowes, Inc. v. Hewlett–
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`Packard Co., 182 F.3d 1298, 1304 (Fed. Cir. 1999).
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`C. Obviousness
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`A patent claim is invalid as obvious under 35 U.S.C. § 103 “if the differences between the
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`claimed invention and the prior art are such that the claimed invention as a whole would have been
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`obvious before the effective filing date of the claimed invention to a person having ordinary skill
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`in the art to which the claimed invention pertains.” 35 U.S.C. § 103; see also KSR Int’l Co. v.
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`Teleflex Inc., 550 U.S. 398, 406–07 (2007). “As patents are presumed valid, a defendant bears the
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`burden of proving invalidity by clear and convincing evidence.” Shire, LLC v. Amneal Pharms.,
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`LLC, 802 F.3d 1301, 1306 (Fed. Cir. 2015) (cleaned up). “Under § 103, the scope and content of
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`the prior art are to be determined; differences between the prior art and the claims at issue are to
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`be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this
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`background, the obviousness or nonobviousness of the subject matter is determined.” KSR, 550
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`U.S. at 406 (citations and quotation marks omitted).
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`A court is required to consider secondary considerations, or objective indicia of
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`nonobviousness, before reaching an obviousness determination, as a “check against hindsight
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`bias.” See In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., 676 F.3d
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`1063, 1078–79 (Fed. Cir. 2012). “Such secondary considerations as commercial success, long felt
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`but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances
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`surrounding the origin of the subject matter sought to be patented.” Graham v. John Deere Co. of
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`Kansas City, 383 U.S. 1, 17–18 (1966).
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`D. Daubert
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`
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`Federal Rule of Evidence 702 sets out the requirements for expert witness testimony and
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`states:
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`A witness who is qualified as an expert by knowledge, skill, experience, training,
`or education may testify in the form of an opinion or otherwise if the proponent
`demonstrates to the court that it is more likely than not: (a) the expert’s scientific,
`technical, or other specialized knowledge will help the trier of fact to understand
`the evidence or to determine a fact in issue; (b) the testimony is based on sufficient
`facts or data; (c) the testimony is the product of reliable principles and methods;
`and (d) the expert’s opinion reflects a reliable application of the principles and
`methods to the facts of the case.
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`FED. R. EVID. 702 (amended Dec. 1, 2023). The Third Circuit has explained:
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`Rule 702 embodies a trilogy of restrictions on expert testimony: qualification,
`reliability and fit. Qualification refers to the requirement that the witness possess
`specialized expertise. We have interpreted this requirement liberally, holding that
`“a broad range of knowledge, skills, and training qualify an expert.” Secondly, the
`testimony must be reliable; it “must be based on the ‘methods and procedures of
`science’ rather than on ‘subjective belief or unsupported speculation’; the expert
`must have ‘good grounds’ for his o[r] her belief. In sum, Daubert holds that an
`inquiry into the reliability of scientific evidence under Rule 702 requires a
`determination as to its scientific validity.” Finally, Rule 702 requires that the expert
`testimony must fit the issues in the case. In other words, the expert’s testimony
`must be relevant for the purposes of the case and must assist the trier of fact. The
`Supreme Court explained in Daubert that “Rule 702’s ‘helpfulness’ standard
`requires a valid scientific connection to the pertinent inquiry as a precondition to
`admissibility.”
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`By means of a so-called “Daubert hearing,” the district court acts as a gatekeeper,
`preventing opinion testimony that does not meet the requirements of qualification,
`reliability and fit from reaching the jury. See Daubert (“Faced with a proffer of
`expert scientific testimony, then, the trial judge must determine at the outset,
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`pursuant to Rule 104(a) [of the Federal Rules of Evidence] whether the expert is
`proposing to testify to (1) scientific knowledge that (2) will assist the trier of fact
`to understand or determine a fact in issue.”).
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`Schneider ex rel. Estate of Schneider v. Fried, 320 F.3d 396, 404–05 (3d Cir. 2003) (footnote
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`and internal citations omitted).4
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`III. DISCUSSION
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`A. Defendant’s Motions
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`1. Infringement
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`Defendant seeks summary judgment of noninfringement on the basis that the accused
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`products do not meet the m-regular limitation of the asserted claims. (D.I. 148 at 19). I believe
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`that a genuine issue of material fact exists regarding whether the accused products meet this
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`claim limitation. I deny the motion for summary judgment of noninfringement.
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`2. The AWS-Boeing Non-Assertion Clause
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`Defendant argues that Plaintiff is barred from enforcing the asserted patents against VPC,
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`EC2 and CloudFront because Boeing bargained away this right in 2010. (Id.).
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`In October 2010, Defendant and Boeing entered into an “AWS Enterprise Customer
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`Agreement” (“the 2010 Agreement”). (D.I. 149-1, Ex. 3). The contract includes a non-assertion
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`clause that reads:
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`7.6. Non-Assertion. During and after the term of the Agreement, Company will
`not assert, nor will Company authorize or assist any third party to assert, against
`AWS, its affiliates or any of their respective customers, vendors, business partners,
`or licensors, any patent infringement claim with respect to any Services that
`Company elects to use.
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`
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`4 The Court of Appeals wrote under an earlier version of Rule 702. Subsequent amendments
`affect the substance of the rule, but I do not think they alter the applicability of the quoted
`discussion.
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`(Id. § 7.6). “Company” is defined in the contract as “The Boeing Company.” (Id. at 1).
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`“Services” is defined as “(a) any web services that AWS makes generally available during the
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`term of this Agreement for which Company registers on the AWS Site or (b) any Premium
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`Support.” (Id. § 1). Plaintiff does not dispute that any existing encumbrances traveled with the
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`sale of the patents. (Hearing Tr. at 8:15–25). Plaintiff nevertheless raises several challenges to
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`the enforceability of the non-assertion clause.
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`a. Abandonment
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`Plaintiff argues that Defendant abandoned the non-assertion clause in 2017 based on an
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`announcement posted on Defendant’s website. (D.I. 161 at 2). This announcement states:
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`The AWS Customer Agreement was updated on June 28, 2017. In this update we
`are improving the terms of the AWS Customer Agreement related to intellectual
`property rights. These changes include . . . removing the patent non-assert clause.
`AWS customers do not need to take any action to get the benefit of the updates to
`the online AWS Customer Agreement.
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`(D.I. 161 at 2 (quoting D.I. 162-1, Ex. 3)).
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`Plaintiff identifies several other items in the record as further evidence of abandonment.
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`In 2019, Plaintiff sent a letter to Defendant (“the 2019 Letter”) with the subject line “Notice of
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`Patents from Acceleration Bay.” (D.I. 149-1, Ex. 9, at 337 of 506; see infra Section III.A.3).
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`Defendant’s response to this letter states, “Amazon takes these types of allegations seriously.
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`We will review your allegations and get back to you when appropriate.” (D.I. 149-1, Ex. 10).
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`Plaintiff maintains Defendant’s failure to assert it had a license confirmed Defendant had
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`abandoned its license.
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`In 2022, Defendant and Boeing entered an “Amended and Restated AWS Enterprise
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`Agreement” (“the 2022 Amendment”), which amended and restated the 2010 Agreement as well
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`as the two 2013 amendments and the 2018 amendment. (D.I. 162-1, Ex. 4). Plaintiff argues the
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`2022 Amendment’s replacement of the non-assertion clause language with the word
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`“RESERVED” serves as evidence of abandonment. (D.I. 161 at 3–4). Plaintiff further asserts
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`this change should be considered a novation. (Id.).
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`
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`None of Plaintiff’s cited evidence supports a finding of abandonment. Defendant’s
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`announcement that it removed the non-assertion clause in its “AWS Customer Agreement” does
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`not support an inference that Defendant abandoned the non-assertion clause in the “AWS
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`Enterprise Customer Agreement,” an entirely different agreement, between Defendant and
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`Boeing. Defendant’s response to the 2019 Letter does not indicate that Defendant took any
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`position on whether it had a license; rather the response appears to be a generic corporate reply
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`to allegations of infringement. The 2022 Amendment has an effective date of February 28, 2022
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`and states, “The term of this Agreement will commence on the Effective Date.” (D.I. 162-1, Ex.
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`4, at 1; id. § 6.1). The contract language makes clear that the 2022 Amendment only governs
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`going forward from February 28, 2022. Plaintiff identifies no language in the 2022 Amendment
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`that suggests Boeing and Defendant intended the amendment to have a retroactive effect.
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`There is no indication that Defendant and Boeing intended the 2022 Amendment to be a
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`novation of Boeing’s obligations under the non-assertion clause. “Novation has been described
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`as a mutual agreement among all parties concerned for discharge of a valid existing obligation by
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`the substitution of a new, valid obligation on the part of the debtor or another.” Peterson Power
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`Sys., Inc. v. Turner Logistics, LLC, 141 Wash. App. 1021, 2007 WL 3245259, at *4 (2007). “To
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`effect a novation there must be a clear and definite intention on the part of all concerned that
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`novation is the purpose of the agreement, for it is a well settled principle that novation is never to
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`be presumed.” Id. “To find novation, a court requires clear and satisfactory proof of a clear and
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`definite intention on the part of all concerned.” Id. (internal quotations and citations omitted).
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`“A novation is simply a substitution.” Pabst v. Hardwick, 105 Wash. App. 1028, 2001 WL
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`293184, at *3 (2001) (citing MacPherson v. Franco, 34 Wash. 2d 179, 182 (1949)). “Between
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`the same parties, a novation substitutes a new obligation for an old one.” Id. “The elements are:
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`the necessary parties, a valid prior obligation to be displaced by the new obligation,
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`consideration, and mutual agreement.” Id.
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`The contract makes clear that the 2022 Amendment is effective going forward from
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`February 28, 2022 and does not affect pre-existing obligations. Furthermore, for novation to
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`occur, there must be “a valid prior obligation to be displaced by the new obligation.” Pabst, 105
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`Wash. App. 1028, 2001 WL 293184, at *3. While Boeing might have had prior obligations
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`regarding patents it still owned as of the date of the 2022 Amendment, the asserted patents were
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`sold to Plaintiff in 2014. Boeing had no valid prior obligation regarding the asserted patents
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`under the non-assert clause. Plaintiff points to no case law that suggests that novation can alter
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`obligations possessed by third parties not involved in the contractual relationship. Rather,
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`Plaintiff appears to be a necessary party to a novation affecting its obligations regarding the
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`asserted patents.
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`For the stated reasons, I find no reasonable jury could have found the non-assertion
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`clause was abandoned or was subject to novation.
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`b. Lack of Consideration
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`Plaintiff argues the non-assert clause is unenforceable due to lack of consideration. (D.I.
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`161 at 4). Plaintiff focuses on the fact that the “AWS Enterprise Customer Agreement” is a
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`“form agreement” that offers no “special pricing” in exchange for Boeing’s obligation not to
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`assert its patents. (D.I. 161 at 5–6).
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`Plaintiff is incorrect that Boeing received no consideration. Boeing gained, among other
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`benefits, the right to access the Services provided by Defendant. (See D.I. 149-1, Ex. 3 § 2.1).
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`To the extent that Plaintiff is asking that I find the rate paid under the 2010 Agreement should
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`have been lower because of Boeing’s large patent portfolio, such an inquiry would be
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`inappropriate. See Browning v. Johnson, 70 Wash. 2d 145, 147 (1967) (“Where the
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`consideration is legally sufficient, the courts are loath to inquire into its ‘adequacy,’ that is, into
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`the comparative value of the promises and acts exchanged.”). If Boeing thought it was not
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`receiving adequate consideration, the company and its team of experienced lawyers had, and
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`should have taken, the opportunity to negotiate the contract terms.
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`c. Ambiguity
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`Plaintiff argues the language of the non-assertion clause is ambiguous because there are
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`two possible interpretations as to the scope of the infringing use covered. (D.I. 161 at 6; Hearing
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`Tr. at 21:23–23:21). Plaintiff proposes an interpretation of the non-assertion clause that prohibits
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`Boeing from “assert[ing] or assist[ing] others in asserting infringement claims that are based on
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`Boeing’s own use of AWS services.” (D.I. 161 at 6).
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`Whether a contract provision is ambiguous is a question of law. Stranberg v. Lasz, 115
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`Wash. App. 396, 402 (2003). “A provision is not ambiguous merely because the parties suggest
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`opposing meanings.” Id. (citing Mayer v. Pierce County Med. Bureau, Inc., 80 Wash. App. 416,
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`420 (1995)). “If a contract provision's meaning is uncertain or is subject to two or more
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`reasonable interpretations after analyzing the language and considering extrinsic evidence (if
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`appropriate), the provision is ambiguous.” Viking Bank v. Firgrove Commons 3, LLC, 183
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`Wash. App. 706, 713 (2014). There is a “high standard of clarity for exculpatory clauses:
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`although such clauses are enforceable in commercial transactions, the law disfavors promises not
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`to sue in the future.” United Emps. Ins. Co. v. Mentor, 1996 WL 509559, at *2 (Wash. Ct. App.
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`Sept. 9, 1996).
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`To assist in determining the meaning of contract language, Washington courts apply “the
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`context rule.” Id. (citing Berg v. Hudesman, 115 Wash. 2d 657, 666–69 (1990)). “This rule
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`allows examination of the context surrounding a contract's execution, including the consideration
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`of extrinsic evidence to help understand the parties’ intent.” Id. (citing Hearst Commc'ns, Inc. v.
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`Seattle Times Co., 154 Wash. 2d 493, 502 (2005)). “Washington courts focus on objective
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`manifestations of the contract rather than the subjective intent of the parties; thus, the subjective
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`intent of the parties is generally irrelevant if the intent can be determined from the actual words
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`used.” Brogan & Anensen LLC v. Lamphiear, 165 Wash. 2d 773, 776 (2009) (en banc) (citing
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`Hearst, 154 Wash. 2d at 504).
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`“Extrinsic evidence is to be used to determine the meaning of specific words and terms
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`used and not to show an intention independent of the instrument or to vary, contradict or modify
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`the written word.” Viking Bank, 183 Wash. App. at 713 (quoting Hearst, 154 Wash. 2d at 503)
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`(cleaned up). “If relevant for determining mutual intent, extrinsic evidence may include (1) the
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`subject matter and objective of the contract, (2) all the circumstances surrounding the making of
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`the contract, (3) the subsequent acts and conduct of the parties, and (4) the reasonableness of
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`respective interpretations urged by the parties.” Hearst, 154 Wash. 2d at 502 (citing Berg, 115
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`Wash. 2d at 663).
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`I find, even after accounting for the higher clarity standard for exculpatory clauses, that
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`the language of the non-assertion clause is unambiguous with respect to the scope of the
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`infringing use covered. Boeing agreed it will not “authorize any third party to assert, against
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`AWS . . . any patent infringement claim with respect to any Services that Company elects to
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`Case 1:22-cv-00904-RGA-SRF Document 219 Filed 09/12/24 Page 14 of 41 PageID #: 26366
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`use.” (D.I. 149-1, Ex. 3 § 7.6). The provision’s language contains no hint that the clause
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`contains an additional limitation specifying that the non-assertion clause only applies to patent
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`infringement claims based on infringing use stemming from Boeing’s use of Defendant’s
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`Services.5 Plaintiff fails to offer evidence that its interpretation is a reasonable interpretation of
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`the contract language. In its briefing, Plaintiff focuses on the phrase “with respect to any
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`Services that Company elects to use.” (D.I. 161 at 6). A facial reading of this language shows
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`that the phrase expresses a limitation about which Services are subject to the non-assertion
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`clause. Beyond Plaintiff’s conclusory assertion, it does not explain how this phrase also includes
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`the limitation that Boeing only promised not to assert or assist others in asserting infringement
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`actions based on Boeing’s own use of AWS services.
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`Plaintiff’s extrinsic evidence, which focuses on the circumstances of the contract, does
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`not support its interpretation. Plaintiff asserts that both parties are large, sophisticated
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`companies, that the agreement was a form agreement, and that the purpose of the agreement was
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`to purchase cloud services, not to give a broad portfolio license to Boeing’s entire patent
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`5 Plaintiff cites two articles as evidence that the public criticized the “abusive nature and the
`serious ambiguities” of a similar provision in a different set of Defendant’s contracts. (See D.I.
`161 at 6 (citing D.I. 162-1, Exs. 1–2)). The articles provide no analysis regarding contract
`language. The single line which might suggest the non-assertion clause has multiple
`interpretations does not indicate which part of the clause is subject to multiple interpretations or
`what those multiple interpretations might be. (D.I. 162-1, Ex. 2 (“Depending on how a court
`interpreted the clause, this could have allowed AWS to expand into virtually any customer’s
`market without having to worry if it was violating patents, and prevent customers from asserting
`their patents against a hypothetical suit filed by AWS.”)). Furthermore, rather than asserting
`ambiguity, the article writer appears to be attempting to remain conservative in his assertions by
`not ruling out the possibility of a court finding a different reading. The author interprets the
`contract language as “appear[ing] to give AWS the right to deflect patent lawsuits filed by
`current and former customers—no matter the amount of services they had used during their
`business relationship with AWS—until the end of time.” (Id.). I do not rely upon the author’s
`interpretation.
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`Case 1:22-cv-00904-RGA-SRF Document 219 Filed 09/12/24 Page 15 of 41 PageID #: 26367
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`portfolio. (Hearing Tr. at 20:24–24:14; D.I. 161 at 7–8). Plaintiff fails to explain how these
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`circumstances show that the “specific words and terms” it has identified incorporates the
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`limitation it suggests. Viking Bank, 183 Wash. App. at 713. Rather than suggesting that the
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`extrinsic evidence supports its proposed interpretation, Plaintiff’s argument appears to be that the
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`extrinsic evidence demonstrates that the parties intended the agreement to be generally
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`“narrower” than it is on its face.6 Based on the evidence in the record, no reasonable jury could
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`find that Plaintiff’s proposed reading is a reasonable interpretation of the non-assertion clause
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`language.
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`I am furthermore unconvinced that the extrinsic evidence supports Plaintiff’s position
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`that the parties had a mutual intent to pursue a “narrower” contract beyond the limitations
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`expressly stated in the contract. The “objective manifestations of the contract,” the “actual
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`words used,” suggest the parties’ intent to limit the non-assertion clause’s scope based on which
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`Services Boeing used. See Brogan, 165 Wash. 2d at 776. Plaintiff argues that the definition of
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`“Service” allows Defendant to unilaterally change the scope of the non-assertion clause by
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`updating its website to change the web services covered by the contract. (D.I. 161 at 8). The
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`non-assertion clause’s scope and Defendant’s ability to alter the scope seem to be appropriately
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`limited by Boeing’s choice to elect usage of Defendant’s Services. This limitation also appears
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`to reasonably tie the non-assertion clause to the purpose of the contract by allowing Defendant to
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`6 For instance, one of Plaintiff’s repeated criticisms is that it would not make sense for Boeing to
`give Defendant license rights to its “tens of thousands of patents.” (Hearing Tr. at 20:24–24:12).
`Even under Plaintiff’s interpretation, however, for Boeing’s use of a particular service, Boeing
`would still be giving Defendant a license to its entire patent portfolio. Plaintiff’s arguments
`appear to be focused less on interpreting the contract language and more based on adequacy of
`the consideration or unconscionability. See Tadych v. Noble Ridge Constr., Inc., 200 Wash. 2d
`635, 641 (2022) (“We have defined substantive unconscionability as an unfairness of the terms
`or results.” (internal quotations omitted)).
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`offer Services to Plaintiff in exchange for Plaintiff agreeing not to pursue patent infringement
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`claims related to those Services. The parties’ use of a form agreement similarly does not provide
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`sufficient basis to discount the clear language of the contract. That the agreement was a form
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`agreement did not stop the parties from altering their agreement multiple times since 2010. (See
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`D.I. 162-1, Ex. 4; D.I. 179-1, Exs. 54–56). Boeing, a Fortune 500 company, had the ability to
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`negotiate the contract terms if it so desired.
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`I find the non-assertion clause is susceptible to only one reasonable interpretation. Hall
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`v. Custom Craft Fixtures