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Tele-Guía Talking Yellow Pages, Inc. v. Cablevision Systems Corp.

October 31, 2007

TELE-GUÍA TALKING YELLOW PAGES, INC., PLAINTIFF,
v.
CABLEVISION SYSTEMS CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Denise Cote, District Judge

OPINION AND ORDER

On May 21, 2007, plaintiff Tele-Guía Talking Yellow Pages, Inc. ("Tele-Guía") filed this action against defendant Cablevision Systems Corporation ("CSC") for patent infringement and inducement to infringe patents. CSC has moved to dismiss this action pursuant to Rule 12(b)(7), Fed. R. Civ. P., for failure to join as necessary and indispensable parties an inventor and an assignee of the patents. The motion is denied.

BACKGROUND

The following facts are based upon documents submitted by both parties and are not in dispute for purposes of this motion. This action concerns two patents, both titled Integrated Voice-mail Based Voice and Information Processing System. U.S. Patent number 5,187,735 ("'735 Patent") was issued on February 16, 1993, and lists Jose E. Herrero Garcia and Carlos R. Jiménez Rodriguez ("Rodriguez") as inventors. As of June 4, 1990, several months after the '735 Patent application was filed, both inventors assigned the patent and any continuations*fn1 of the patent to Tele-Guía. U.S. Patent number 5,479,491 ("'491 Patent"), a continuation of the '735 patent, issued on December 26, 1995.

On or about March 23, 1999, Tele-Guía assigned to Micron, by written agreement ("Micron Agreement"), an undivided joint ownership interest in the '491 Patent. The Micron Agreement provides in part:

TELE GUIA grants to [Micron], and agrees that [Micron] shall have, the exclusive right to enforce the rights and interests under the Patent against the Designated Party and/or its agents and representatives, including the right to collect for all damages resulting from infringement occurring prior to the Effective Date of this Agreement, and the right to grant prospective licenses and sublicenses to the Designated Party. [Micron] grants to TELE GUIA, and agrees that TELE GUIA shall have, the exclusive right to enforce the rights and interests under the Patent against third parties other than the Designated Party. (Emphasis supplied). By letter dated March 25, 1999, pursuant to the Micron Agreement, Micron selected Lucent Technologies, Inc. ("Lucent") as the Designated Party.

In November 1999, a "short-form" of the Micron Agreement ("short-form Micron Agreement") was recorded with the United States Patent and Trademark Office ("USPTO"). The short-form Micron Agreement, upon which CSC relied in bringing its motion to dismiss, described the assignment of ownership rights but not the restrictions on Micron's right to enforce the patent.

On or about May 14, 2003, Tele-Guía settled a lawsuit with Liberty Cablevision of Puerto Rico, Inc. ("Liberty") by executing a settlement agreement ("Liberty Agreement"). In the Liberty Agreement, Tele-Guía warranted that it owned both patents at issue in this case, had "the right to fully release Liberty for any alleged past infringement" of the patents, and had "the right to grant licenses to other parties including Liberty." It agreed not to sue Liberty for infringement of the patents and granted Liberty a "perpetual, royalty-free, nonexclusive license" to the patents. It also agreed to indemnify and hold Liberty harmless in the event of any action on either of the patents by any party, "including but not limited to" Micron and Rodriguez. Tele-Guía warranted that, as a result of the license it was granting to Liberty, no other party, including but not limited to Micron Technology, Inc. and/or Carlos R. Jiménez Rodríguez, (1) has any claim or any interest in any claim against Liberty relating to the Patents or any other Related Patents, Related Patent applications or Related Patent Rights, or (2) has the right to any remedies associated with the Patents for past, present or future violation of either of the Patents or any other Related Patents, Related Patent applications or Related Patent Rights by Liberty.

DISCUSSION

The defendant contends that the action must be dismissed for failure to join two parties, Micron Technology, Inc. ("Micron") and Rodriguez. Second Circuit law governs the issue of whether the litigation may proceed in the absence of Micron or Rodriguez. See Katz v. Lear Siegler, Inc., 909 F.2d 1459, 1461 (Fed. Cir. 1990).

Rule 12(b)(7) provides that an action may be dismissed for failure to join a party under Rule 19 of the Federal Rules of Civil Procedure. The Rule 19 framework was described by this Court in In re WorldCom, Inc. Sec. Litig., No. 02 Civ. 3288 (DLC), 2004 WL 2955237 (S.D.N.Y Dec. 22, 2004). In brief, Rule 19 sets forth a two-step test for determining whether a court must dismiss an action for failure to join an indispensable party. Viacom Int'l Inc. v. Kearney, 212 F.3d 721, 724 (2d Cir. 2000). First, the court must determine whether an absent party is a "necessary" party under Rule 19(a). Id. Rule 19(a) provides that the absent party should be joined, if feasible, where:

(1) in the person's absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (i) as a practical matter impair or impede the person's ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest.

Fed. R. Civ. P. 19(a). See MasterCard Int'l Inc. v. Visa Int'l Svc. Ass'n, Inc., 471 F.3d 377, 385 (2d Cir. 2006) (citing Fed. R. Civ. P. 19(a)). With respect to the second prong of Rule 19(a), "there must be more than an unsupported assertion that [the non-joined party] has a claim to that interest." Jonesfilm v. Lion Gate Int'l, 299 F.3d 134, 140 (2d Cir. 2002).

Where a court makes a threshold determination that a party is necessary under Rule 19(a) and joinder of the absent party is not feasible for jurisdictional or other reasons, the court must then determine whether the party is "indispensable" under Rule 19(b). Merrill Lynch & Co. Inc. v. Allegheny Energy, Inc., ---F.3d ----, No. 05-5129-cv, 2007 WL 2458411, at *6 (2d Cir. Aug. 31, 2007). Rule 19(b) provides that the following factors should be considered in making such a determination: first, to what extent a judgment rendered in the person's absence might be prejudicial to the person or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened ...


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