Oyster Optics, LLC v. Infinera Corporation, 2:18-cv-00206

Background

Oyster sued multiple defendants, including Coriant and Infinera, for infringement of three patents (the Patents‑in‑Suit); cases were consolidated in the Eastern District of Texas.
Oyster and Coriant executed a settlement agreement on June 28, 2018 (Effective Date defined as June 27, 2018) that: (1) granted Coriant and its “Affiliates” a royalty‑free, irrevocable, perpetual license to the Licensed Patents; and (2) released Coriant and its Affiliates from claims based on the Licensed Patents arising from U.S. activities up to the Effective Date.
Appendix B to the Agreement expressly lists the Patents‑in‑Suit; “Affiliate” is defined to include any person “now or in the future” that has control (50%+ voting or ownership) of a Party.
Infinera acquired Coriant on October 1, 2018, obtaining 100% ownership; Oyster continued its infringement suit against Infinera alleging post‑and‑pre‑acquisition sales of accused products in the United States.
Infinera moved for summary judgment asserting it is covered by the Agreement’s Release and License as Coriant’s post‑acquisition Affiliate; Oyster argued Infinera is not covered because it became an Affiliate after the Effective Date and also raised breach/no‑circumvention theories.
The court found the Agreement clear and unambiguous, held Infinera is an Affiliate as defined, and concluded the Release and License cover Oyster’s claims against Infinera; Oyster’s parol‑evidence requests and circumvention arguments were rejected.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Infinera is covered by the Agreement’s Release	Affiliate status requires present control at time of suit; Infinera became an Affiliate only after the Effective Date, so Release doesn’t cover it	Definition of Affiliate includes any Person "now or in the future" with Control; Infinera’s acquisition makes it an Affiliate and within the Release	Held: Infinera is an Affiliate; the Release covers claims against it for U.S. activities up to June 27, 2018
Whether Infinera has a license under the Agreement to make/sell the accused products	Assignment/no‑assignment language and transaction structure deprive Infinera of license rights; license shouldn’t immunize an acquirer’s products	License expressly grants Coriant Defendants and their Affiliates a perpetual, royalty‑free license; Section 13.2 permits assignment to Affiliates	Held: Infinera is licensed as an Affiliate; accused products fall within Licensed Product and are licensed in the U.S.
Whether the warranty excluding sales to other consolidated‑defendants prevents Release coverage	Coriant warranted it and its Affiliates do not sell transceivers to other consolidated defendants; Infinera supplies to itself and thus should be excluded	Warranty applies only to sales to other named defendants, not to self‑supply; nothing in text excludes consolidated defendants generally	Held: Warranty language does not carve out Infinera; Release still applies
Whether further discovery/parol evidence or no‑circumvention claim preclude summary judgment	Oyster requested discovery to show circumvention and proffered extrinsic evidence of intent and fraud	Agreement is unambiguous; parol evidence barred absent ambiguity; no evidence of fraud/mistake; no circumvention shown on four corners	Held: Denied discovery/parol evidence; no breach of no‑circumvention clause; summary judgment granted for Infinera

Key Cases Cited

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard)
Carborundum Co. v. Molten Metal Equip. Innovations, Inc., 72 F.3d 872 (Fed. Cir. 1995) (license as waiver of exclusionary rights)
Spindelfabrik Suessen‑Schurr v. Schubert & Salzer Maschinenfabrik, 829 F.2d 1075 (Fed. Cir. 1987) (licenses can cover future patents/rights)
Schering Corp. v. Roussel‑UCLAF SA, 104 F.3d 341 (Fed. Cir. 1997) (distinguishing releases and licenses; releases address past conduct)
Greenfield v. Philles Records, Inc., 780 N.E.2d 166 (N.Y. 2002) (New York law: clear, unambiguous contract terms control; courts will not rewrite negotiated agreements)
Schron v. Troutman Sanders LLP, 986 N.E.2d 430 (N.Y. 2013) (contract interpretation focuses on parties’ objective intent as expressed in writing)