Case 1:19-cv-11276-RGS Document 37 Filed 11/12/19 Page 1 of 10
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF MASSACHUSETTS
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`Civil Action No. 1:19-cv-11276
`FILED UNDER SEAL
`Leave to file granted on November 11, 2019
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`)))))))))
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`UNILOC 2017 LLC,
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`Plaintiff,
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`v.
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`AKAMAI TECHNOLOGIES, INC.,
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`Defendant.
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`REPLY IN SUPPORT OF AKAMAI TECHNOLOGIES, INC.’S MOTION FOR
`JUDGMENT ON THE PLEADINGS
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`Case 1:19-cv-11276-RGS Document 37 Filed 11/12/19 Page 2 of 10
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`Uniloc’s Opposition confirms it has no basis to maintain this case against Akamai.
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`Uniloc does not (and cannot) dispute the following critical facts:
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`• Akamai is an “IBM Strategic Partner” under the 2016 and 2018 Patent Purchase
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`Agreements governing Uniloc’s rights to the Asserted Patents (see Akamai Br. 7-8
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`(Dkt. 28); Opp. 4 (Dkt. 31));
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`• “IBM Strategic Partners” are within the definition of a “Licensee” under the Patent
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`Purchase Agreements—and thus Akamai is also a “Licensee” under the Agreements
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`(see Akamai Br. 7-8; Opp. 2);
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`• Uniloc’s right to sue third parties is “
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`” listed in the Agreement,
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`including that Uniloc “
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`” with IBM’s contractual relationships with
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`its Licensees (Dkt. 22-1, Ex. 1 (2016 Agreement) §§ 2.4, 4.2; Akamai Br. 6; Opp. 2-
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`3); and
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`•
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`If Uniloc knowingly sues or maintains a suit against a Licensee for infringement of
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`the Asserted Patents, then it must indemnify the Licensee for all losses and expenses
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`arising from the suit (Akamai Br. 8; Opp. 3).
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`Uniloc concedes based on these facts that the case should be dismissed. It nevertheless
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`argues that—even though Uniloc entities previously dismissed two suits against Akamai on the
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`same patents—its claims should now be dismissed a third time without prejudice. Uniloc’s
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`arguments are wrong on the facts and the law.
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`First, Uniloc is wrong that it has the right to sue “anyone it chooses”—including IBM
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`Strategic Partners and Licensees like Akamai—for alleged infringement of the Asserted Patents.
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`Opp. 1. Uniloc’s argument is contradicted by the “
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`” on suing third parties in Section
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`4.2 of the 2016 Agreement, which Akamai addressed in its opening brief (Akamai Br. 6-7) and
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`Case 1:19-cv-11276-RGS Document 37 Filed 11/12/19 Page 3 of 10
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`Uniloc ignores (Opp. 2-3). Specifically, Section 4.2 of the Agreement provides that Uniloc’s
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`right to bring suits against third parties on the Asserted Patents is “
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`.” See 2016 Agreement § 4.2. Those restrictions include a bar on Uniloc from
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`interfering with any contractual relationship between IBM and its “Licensees” in Section 2.4.
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`See, e.g., id. § 2.4 (
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`); Akamai Br.
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`5-7. See id. As provided in Akamai’s Amended Answer and Counterclaims, Akamai has an
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`extensive ongoing contractual relationship with IBM pursuant to which it has engaged in over
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` of business with IBM. See Dkt. 23 (Declaration of William Kamenides) at ¶ 3;
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`Dkt. 23-1, Ex. 3 (Akamai Sales Data for IBM); Dkt. 23-7, Ex. 11 (Akamai website: “By securely
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`optimizing IBM’s content based on type and destination, Akamai enables IBM to ensure a
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`flawless web experience for customers — no matter where they are.”). Uniloc’s suit plainly
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`interferes with this Akamai-IBM relationship: Uniloc’s claims are directed to Akamai’s “Luna
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`Control Center” that Akamai’s customers—including IBM—use to manage their content
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`delivery services from Akamai. See Complaint, e.g., ¶ 18 (alleging that “Akamai also infringed
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`the ’578 Patent by actively inducing the use of the Luna Control Center CDN. Akamai’s
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`customers who used the system as Akamai instructed infringed the ’578 Patent, as described
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`above.”). The Agreement thus plainly bars Uniloc from suing Licensees such as Akamai. See
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`2016 Agreement § 2.4, 4.2.
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`The 2016 Agreement’s indemnity provision confirms this. See 2016 Agreement § 4.3.
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`Section 4.3 of the Agreement provides that if Uniloc knowingly sues a Licensee for
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`infringement, then Uniloc must indemnify the Licensee for all losses, costs, and expenses
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`Case 1:19-cv-11276-RGS Document 37 Filed 11/12/19 Page 4 of 10
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`arising from the suit—meaning that Uniloc cannot recover anything in a suit against a Licensee
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`like Akamai. See 2016 Agreement § 4.3
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`. It
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`would thus make little sense to interpret the Patent Purchase Agreements, as Uniloc has urged, to
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`somehow permit Uniloc to sue Licensees for infringement of the Asserted Patents, only to then
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`require Uniloc to indemnify the Licensee for all losses, costs, and expenses arising from the suit.
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`See Agility Pub. Warehousing Co. KSCP v. Mattis, 852 F.3d 1370, 1380 (Fed. Cir. 2017) (“We
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`consider the contract as a whole and interpret it to harmonize and give meaning to all of its
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`parts.”); Farmers Ins. Exch. v. RNK, Inc., 632 F.3d 777, 785 (1st Cir. 2011) (“In interpreting
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`contractual language, we consider the contract as a whole.”).
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`Accordingly, because Uniloc has failed to state any plausible claim for which relief can
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`be granted, its case should be dismissed with prejudice. See Artrip v. Ball Corp., 735 F. App’x
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`708, 714-15 (Fed. Cir. 2018) (affirming dismissal with prejudice where the plaintiff had failed to
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`state a plausible infringement claim); see also Networktwo Commc’ns Grp., Inc. v. Spring Valley
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`Mktg. Grp. & Communityisp, Inc., No. 99-cv-72913, 2003 WL 1119763, at *9 (E.D. Mich. Feb.
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`13, 2003) (dismissing breach of contract claim with prejudice where the alleged damages were
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`“barred by the terms” of the relevant contract).
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`Uniloc’s reliance on the Federal Circuit’s decision in Uniloc USA, Inc. v. ADP, LLC, 772
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`Fed. Appx. 890 (Fed. Cir. 2019) is misplaced. Specifically, Uniloc argues that the Federal
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`Circuit held that the indemnity provision of the 2016 Agreement applies only if IBM “considers
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`Uniloc to be in breach” or “has asserted a right to sublicense and release” the “ostensible third-
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`party beneficiary.” Opp. 3. The court made no such ruling. Instead, in that case, certain parties
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`Case 1:19-cv-11276-RGS Document 37 Filed 11/12/19 Page 5 of 10
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`asserted that Uniloc breached the indemnity provision of the 2016 Agreement even though they
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`were not IBM Strategic Partners or Licensees and did “not assert that they are intended
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`beneficiaries of the contract.” See Uniloc, 772 Fed. Appx. at 895 (emphasis added). The court
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`held that those parties had no right to invoke the indemnity provision because each of them was
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`“a non-beneficiary third party.” Id. (emphasis added). Unlike the parties in that case, Akamai
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`undisputedly is an IBM Strategic Partner and Licensee under the 2016 Agreement and therefore
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`is a third-party beneficiary of the Agreement. See Akamai Br. 7-8; Opp. 2. Indeed, the 2016
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`Agreement expressly provides that “
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`2016 Agreement § 2.5.
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`.” See
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`Second, Uniloc’s argument that this case should be dismissed without prejudice on the
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`grounds that it could somehow later “resolve the contractual issue” is wrong as a matter of law.
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`Opp. 4. As an initial matter, it is well established that a “ruling allowing a Motion to Dismiss for
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`failure to state a claim is presumed to be with prejudice.” Segelman v. City of Springfield, 561
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`F. Supp. 2d 123, 125 (D. Mass. 2008) (emphasis added); see also United States ex rel. Karvelas
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`v. Melrose-Wakefield Hosp., 360 F.3d 220, 241 (1st Cir. 2004) (holding that “a dismissal
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`pursuant to Fed. R. Civ. P. 12(b)(6) is presumed to be with prejudice”), abrogated on other
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`grounds by United States ex rel. Gagne v. City of Worcester, 565 F.3d 40 (1st Cir. 2009).
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`Moreover, it is well established that the “mere possibility” of entitlement to relief is not
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`sufficient to withstand dismissal. See Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (“mere
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`possibility” that the plaintiff might have a claim is not sufficient to state a plausible claim).
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`Because Uniloc does not (and cannot) propose any amendment to its complaint to cure the
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`deficiencies in its claims, despite having had the opportunity to do so, the dismissal should be
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`with prejudice. See Hensley v. Imprivata, 260 F. Supp. 3d 101, 127 n.11 (D. Mass. 2017)
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`Case 1:19-cv-11276-RGS Document 37 Filed 11/12/19 Page 6 of 10
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`(because “Plaintiff never asked to file a second amended complaint to cure the deficiencies
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`identified by Defendants … this case is dismissed with prejudice”).
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`Third, Uniloc is wrong that it should be allowed to dismiss its claims without prejudice
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`under Fed. R. Civ. P. 41. See Opp. 4. Indeed, Uniloc does not dispute that:
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`• The prior Uniloc entities previously voluntarily dismissed the same claims against
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`Akamai under Rule 41(a)(1). See Uniloc USA, Inc. et al. v. Akamai Technologies Inc.,
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`Case No. 2:16-cv-01316 (Dkt. 48) (E.D.T.X. August 11, 2017) (“Pursuant to Fed. R. Civ.
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`P. 41(a)(1)(A)(i), the Plaintiffs hereby give notice that the above captioned action is
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`hereby voluntarily dismissed Without Prejudice against the Defendant, Akamai
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`Technologies, Inc., pursuant to Fed. R. Civ. P. 41(a)(1)(A)(i).”).
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`• Uniloc should be treated as the same plaintiff as the prior Uniloc entities for purposes of
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`Rule 41(a)(1)(B)’s rule that a second voluntary dismissal operates as an adjudication on
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`the merits. See id.; Akamai Br. 16-17.
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`• Uniloc has repeatedly admitted that “it will ask this Court to dismiss the action” (Dkt. 25,
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`Answer ¶ 49), that “[i]t does not make business sense for Uniloc 2017 to continue this
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`action” (Opp., 4), and that Uniloc has “directed [its counsel] to dismiss the action” (Dkt.
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`22-4, Ex. 5 at 3).
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`Accordingly, given the prior dismissals by Uniloc entities of the same claims, Uniloc’s proposed
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`voluntary dismissal of this action must be with prejudice. See Cooter & Gell v. Hartmarx Corp.,
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`496 U.S. 384, 394 (1990) (“If the plaintiff invokes Rule 41(a)(1) a second time for an ‘action
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`based on or including the same claim,’ the action must be dismissed with prejudice.”).
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`Finally, Uniloc misleadingly attempts to excuse its failure to properly investigate its
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`claims by citing to a patent purchase agreement with IBM in 2017 (“2017 Agreement”) to buy
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`Case 1:19-cv-11276-RGS Document 37 Filed 11/12/19 Page 7 of 10
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`different patents. Opp. 5. Uniloc suggests that Akamai should have notified the Court of this
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`2017 Agreement because it purportedly shows that IBM “white-listed” Akamai to be sued by
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`Uniloc for alleged infringement of the Asserted Patents. See id. IBM did no such thing. The
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`purported “white list” in the 2017 Agreement is not part of the 2016 or 2018 Patent Purchase
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`Agreement for the Asserted Patents; rather, it applies only to the 2017 Agreement, which
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`involved different patents. Ex. 12 (2017 Agreement) at Exhibit A (providing a list of patents that
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`does not include the asserted patents). Notably, despite accusing Akamai of not citing the 2017
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`Agreement, Uniloc’s opposition omits the vast majority of the 2017 Agreement—including the
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`list of patents covered by the Agreement. See Dkt. 31-2 (Uniloc Exhibit A, providing only
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`incomplete excerpts of the 2017 Agreement). The full agreement, filed with Akamai’s Reply as
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`Exhibit 12, shows that the list of patents covered by the 2017 Agreement does not include the
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`Asserted Patents. See Ex. 12 (2017 Agreement) at Exhibit A (patent list). Uniloc also omits that
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`the 2017 Agreement uses a different definition of “IBM Strategic Partner” than the 2016 Patent
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`Purchase Agreement. Compare 2016 Agreement, § 5 (
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`2017 Agreement, § 5 (
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`) with
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`). The 2017 Agreement thus does not
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`show that Akamai is not an IBM Strategic Partner under the 2016 and 2018 Purchase
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`Agreements for the Asserted Patents.
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`In fact, the 2016 Patent Purchase Agreement for the Asserted Patents includes the same
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`type of purported “white list” of companies who are not IBM Strategic Partners—and Akamai is
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`not on the list in the 2016 Agreement. See 2016 Agreement, Exhibit C. That discrepancy
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`between the two agreements should have signaled to Uniloc that it should at least investigate—
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`Case 1:19-cv-11276-RGS Document 37 Filed 11/12/19 Page 8 of 10
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`by simply reaching out to IBM—whether Akamai was a Strategic Partner under the 2016 and
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`2018 Patent Purchase Agreements. It was particularly unreasonable for Uniloc not to have done
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`so given the undisputed evidence that Akamai publicly described IBM as one of its key
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`customers and partners. See Akamai Br. 11-12 (citing Akamai Annual Reports and website
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`showing that IBM is a key customer and partner of Akamai).1
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`*
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`*
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`*
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`Akamai should not be forced to spend hundreds of thousands of dollars defending itself
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`against Uniloc’s serial and unsupported claims. Akamai therefore respectfully requests that
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`Uniloc’s claims be dismissed with prejudice.
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`1 Uniloc also incorrectly attempts to justify its failure to disclose the 2016 Agreement by arguing
`that this action “had not reached the discovery stage.” Opp. 5. It is undisputed that Uniloc failed
`to mention or disclose the 2016 Agreement in its initial disclosures, despite being obligated to
`disclose documents regarding the extent of its ownership of the Asserted Patents. Uniloc also
`incorrectly stated in its Initial Disclosures that it did not have any indemnity agreements relevant
`to this suit, which is directly contrary the indemnity provision of Section 4.3 of the 2016
`Agreement. See Akamai Br. 9-10.
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`CONFIDENTIAL PURSUANT TO THE COURT’S DEFAULT PO
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`Case 1:19-cv-11276-RGS Document 37 Filed 11/12/19 Page 9 of 10
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`Date: November 8, 2019
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`Respectfully submitted,
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`/s/ Michael J. Summersgill
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`Michael J. Summersgill (BBO #632816)
`Dana O. Burwell (BBO #682413)
`Rachel S. Bier (BBO #703223)
`WILMERHALE LLP
`60 State Street
`Boston, Massachusetts 02109
`Tel: (617) 526-6000
`Fax: (617) 526-5000
`michael.summersgill@wilmerhale.com
`dana.burwell@wilmerhale.com
`rachel.bier@wilmerhale.com
`
`Arthur W. Coviello (BBO #670152)
`WILMERHALE LLP
`950 Page Mill Road
`Palo Alto, CA 94304
`Tel: (650) 858-6069
`Fax: (650) 858-6100
`arthur.coviello@wilmerhale.com
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`ATTORNEYS FOR DEFENDANT
`AKAMAI TECHNOLOGIES, INC.
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`Case 1:19-cv-11276-RGS Document 37 Filed 11/12/19 Page 10 of 10
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`CERTIFICATE OF SERVICE
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`I hereby certify that the foregoing document, filed through the ECF system, will be sent
`electronically to the registered participants as identified on the Notice of Electronic Filing (NEF)
`on November 8, 2019.
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`
`
` /s/ Michael J. Summersgill
`Michael J. Summersgill
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