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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.

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Superior Court: Action May Proceed Against Licensor Despite First-Filed Actions

STMicroelectronics N.V. v. Agere Sys., Inc., C.A. No. 08C-09-099 MMJ (Del. Super. May 19, 2009) (applying New York law per choice of law provision)

This case illustrates the series of events that may arise when a subsidiary is party to a licensing agreement, but its parent is not.

Here, the licensor sued the parent company for patent infringement in the Eastern District of Texas and before the International Trade Commission.  In response, the parent and subsidiary brought this action in Delaware, claiming that the filing of the patent infringement actions, though only naming the non-signatory parent, violated the licensing agreement’s covenant not to sue.

The Superior Court permitted the claim to move forward, denying the defendant-licensors’ McWane motion on the basis that the Delaware action did not present the same legal and factual issues as the first-filed proceedings.  Further, the Court denied the defendants’ motion to dismiss for failure to state a claim and for lack of standing on the basis that additional discovery was necessary to resolve those issues.