Comcast Cable Communications Management, LLC v. MaxLinear, Inc.
1:23-cv-04436
S.D.N.Y.Sep 19, 2024Background
- Comcast and MaxLinear entered into a Vendor Support Agreement (VSA) in August 2020, with MaxLinear agreeing to provide support services for chips used in Comcast's broadband gateways.
- The VSA included a covenant not to assert IP claims and a general indemnification provision, as well as specific termination procedures for both the VSA and related Statements of Work (SOW).
- In March 2021, MaxLinear assigned certain patents to Entropic Communications, which later sued Comcast for patent infringement in 2023.
- Comcast contested the assignment as an attempt to evade the covenant not to sue; MaxLinear subsequently attempted to terminate both the VSA and SOW.
- Comcast filed suit seeking declaratory relief to invalidate the termination, indemnification for the California lawsuit, and, alternatively, damages for breach of the implied covenant of good faith and fair dealing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Declaratory Judgment (SOW) | SOW was improperly terminated and should remain in effect | No actual harm as SOW would have expired regardless; court lacks jurisdiction | Dismissed; no actual controversy remains as SOW expired |
| Declaratory Judgment (VSA) | VSA termination was invalid; harms continue if not enforced | No present injury, so court lacks jurisdiction | Not dismissed; actual controversy exists due to VSA's protections |
| Indemnification | Entitled to indemnification due to MaxLinear's conduct | No indemnification owed without gross negligence/intentional misconduct | Not dismissed; fact questions preclude dismissal at this stage |
| Breach of Implied Covenant | MaxLinear's alleged actions aimed to deprive Comcast of contract benefits | No showing of bad faith or implied violations beyond contract terms | Not dismissed; plausible claim of bad faith alleged |
Key Cases Cited
- United States v. Juvenile Male, 131 S. Ct. 2860 (2011) (sets out injury requirement for federal jurisdiction)
- Alvarez v. Smith, 558 U.S. 87 (2009) (actual controversy requirement for justiciability)
- Nike, Inc. v. Already, LLC, 663 F.3d 89 (2d Cir. 2011), aff’d, 568 U.S. 85 (2013) (actual controversy standard in declaratory judgment context)
- Dalton v. Educ. Testing Serv., 87 N.Y.2d 384 (1995) (standard for breach of implied covenant of good faith and fair dealing)
- Richbell Info. Servs., Inc. v. Jupiter Partners, L.P., 309 A.D.2d 288 (1st Dep't 2003) (bad faith conduct can constitute breach of implied covenant)