Case: 19-2179 Document: 72 Page: 1 Filed: 02/11/2021
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
OYSTER OPTICS, LLC,
Plaintiff-Appellant
v.
INFINERA CORP.,
Defendant-Appellee
______________________
2019-2179
______________________
Appeal from the United States District Court for the
Eastern District of Texas in Nos. 2:16-cv-01295 and 2:18-
cv-00296-JRG, Judge J. Rodney Gilstrap.
______________________
Decided: February 11, 2021
______________________
MARC A. FENSTER, Russ, August & Kabat, Los Angeles,
CA, for plaintiff-appellant. Also represented by PAUL A.
KROEGER, REZA MIRZAIE, NEIL A. RUBIN.
JOSEPH V. COLAIANNI, JR., Fish & Richardson P.C.,
Washington, D.C., for respondent-appellee. Also repre-
sented by RUFFIN B. CORDELL, CHRISTOPHER DRYER,
INDRANIL MUKERJI.
______________________
Case: 19-2179 Document: 72 Page: 2 Filed: 02/11/2021
2 OYSTER OPTICS, LLC v. INFINERA CORP.
Before NEWMAN, O’MALLEY, and TARANTO, Circuit Judges.
Opinion for the court filed by Circuit Judge O’MALLEY.
Dissenting opinion filed by Circuit Judge NEWMAN.
O’MALLEY, Circuit Judge.
This case presents a narrow question of contract inter-
pretation. The parties dispute whether a license and re-
lease granted by Appellant to an entity and its “Affiliates”
apply to Appellee, barring Appellant’s claims of patent in-
fringement. We conclude that at least the license applies
to Appellee, and, additionally, that the license is retroac-
tive. Accordingly, we affirm the district court’s judgment
in favor of Appellee.
BACKGROUND
This appeal finds its roots in lawsuits filed by Oyster
Optics, LLC (“Oyster”) in 2016 against several entities, al-
leging infringement of patents directed to telecommunica-
tion systems and methods. Among the defendants were
Coriant (USA) Inc., Coriant North America, and Coriant
Operations, Inc. (collectively, “Coriant”) and Infinera Cor-
poration (“Infinera”). The United States District Court for
the Eastern District of Texas consolidated these cases. Af-
ter almost two years of litigation, Oyster and Coriant en-
tered into a settlement agreement (the “Agreement”). As
part of the settlement, Oyster granted Coriant and its “Af-
filiates” a license to several patents, including those at is-
sue in this appeal. Oyster also released Coriant and its
“Affiliates” from “any and all” claims based on the licensed
patents, arising from activities in the United States up to
June 27, 2018—the effective date of the Agreement.
Separately, Oyster filed an additional suit against In-
finera in 2018, asserting infringement of an additional
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OYSTER OPTICS, LLC v. INFINERA CORP. 3
patent. 1 On October 1, 2018—only a few months after Oys-
ter and Coriant had settled their dispute—Infinera ac-
quired Coriant. Infinera then filed a motion for summary
judgment in this case, contending that it is a beneficiary of
Oyster’s license and release under the express terms of the
Agreement. It argued that it was an Affiliate of Coriant
under the Agreement, which defines the term to include
any party with a greater than 50% ownership stake in Co-
riant, “now or in the future.” J.A. 1033–34. Citing the li-
cense and release provisions of the Agreement, Infinera
argued that the broad language of those provisions barred
Oyster’s infringement claims.
The district court agreed with Infinera. Oyster Optics,
LLC v. Infinera Corp., 2019 WL 2603173 (E.D. Tex. June
25, 2019). Methodically applying the definitions of key
terms—including “Affiliates,” “Licensed Patents,” and “Li-
censed Products”—the district court concluded that, as an
Affiliate of Coriant, Infinera had obtained a license and re-
lease under the Agreement’s “unambiguous text.” Id. at
*7–10. Accordingly, the district court entered judgment in
favor of Infinera. Oyster appeals. We have jurisdiction
pursuant to 28 U.S.C. §§ 1291 and 1295.
DISCUSSION
We review a grant of summary judgment under the law
of the regional circuit, which in this case is the Fifth Cir-
cuit. The Fifth Circuit reviews a grant “of summary judg-
ment de novo, applying the same standard as the district
court.” Robinson v. Orient Marine Co., 505 F.3d 364, 365
(5th Cir. 2007). Summary judgment is appropriate where
“there is no genuine dispute as to any material fact and the
1 At the parties’ request, the district court severed
the 2016 case against Infinera from the earlier-filed litiga-
tion and consolidated it with the 2018 Infinera litigation.
This consolidated action is before us in this appeal.
Case: 19-2179 Document: 72 Page: 4 Filed: 02/11/2021
4 OYSTER OPTICS, LLC v. INFINERA CORP.
movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). The Fifth Circuit “review[s] the district
court’s legal conclusions, including its interpretation of
contracts, de novo.” Texaco Expl. & Prod., Inc. v. AmClyde
Engineered Prods. Co., 448 F.3d 760, 777 (5th Cir. 2006).
The Agreement is governed by New York law, pursuant to
which a “written agreement that is complete, clear, and un-
ambiguous on its face must be enforced according to the
plain meaning of its terms.” Schron v. Troutman Sanders
LLP, 986 N.E.2d 430, 433 (N.Y. 2013).
On appeal, Oyster argues that the district court erred
by extending the release to cover Infinera, which only be-
came an Affiliate after the effective date of the release. It
also contends that the license cannot be applied to Infinera,
or, at a minimum, can only be applied to infringement after
Infinera’s acquisition of Coriant because licenses are ordi-
narily prospective and the provisions of the Agreement
demonstrate an intent to provide a prospective license only.
Although the parties devote considerable attention to the
release, this appeal can be fully resolved by focusing on the
license granted to Coriant and its Affiliates. As explained
below, review of the Agreement reveals that (1) Infinera
obtained a license to the patents-in-suit, and (2) the license
was retroactive.
A. Infinera, an “Affiliate” of Coriant, Obtained a Li-
cense to the Asserted Patents
Section 4.1, the license provision of the Agreement, is
reproduced in full below:
Subject to the terms and conditions of this Agree-
ment, Oyster hereby grants to each of the Coriant
Defendants, their Affiliates, a non-exclusive, non-
transferable, non-assignable (except as provided
herein), royalty-free, irrevocable, perpetual, and
fully paid-up license, without the right to subli-
cense, in the Territory under the Licensed Patents,
to make, have made, use, offer for sale, sell, import,
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OYSTER OPTICS, LLC v. INFINERA CORP. 5
export, distribute, or otherwise supply, provide or
dispose of, the Licensed Product.
J.A. 1046. “Affiliates” is defined as including “any Person,
now or in the future” who “has Control of a Party hereto.”
J.A. 1042, § 1.1. “Control,” in turn, is defined as including
more-than-half decisional ownership. Id. “Person” in-
cludes any corporation.
The Agreement provides a list of “Licensed Patents,”
which include the patents-in-suit—i.e., each patent that In-
finera is accused of infringing is a Licensed Patent. “Li-
censed Product,” moreover, is defined to include “any
Subject Matter made, have made, used, offered for sale,
sold, imported, exported, distributed, or otherwise sup-
plied, provided or disposed of, in the U.S. at any time, di-
rectly or indirectly by or for or on behalf of any of the
Coriant Defendants, their Affiliates, or respective prede-
cessors.” J.A. 1043, § 1.4 (emphasis added). And, the
Agreement broadly defines “Subject Matter” as “regardless
of origin, any method(s), process(es), product(s), product
line(s), . . . device(s), system(s), component(s) . . . and/or
combination(s)” thereof. Id., § 1.7.
We have no doubt that Infinera is Coriant’s Affiliate
and that Infinera’s accused products are Licensed Prod-
ucts. As an owner of 100% of the shares in Coriant, i.e., a
Person who has “Control” of Coriant, Infinera falls
squarely within the definition of Affiliate. Infinera’s tim-
ing of obtaining such control is immaterial, moreover, given
the Agreement’s express language that an Affiliate in-
cludes entities having Control of Coriant “now or in future.”
Oyster’s contention that the agreement only applies to
those who were “Affiliates” as of the effective date of the
license flies in the face of the plain language of the Agree-
ment. The definition of Licensed Product, moreover,
broadly includes products made, used, or offered for sale,
by, for, or on behalf of an Affiliate. Because Infinera is an
Affiliate, under Section 4.1 of the Agreement, Oyster has
Case: 19-2179 Document: 72 Page: 6 Filed: 02/11/2021
6 OYSTER OPTICS, LLC v. INFINERA CORP.
granted Infinera a license under the Licensed Patents, in-
cluding the patents-in-suit, to make, have made, use, offer
for sale, sell, import, export, distribute, or otherwise sup-
ply, provide or dispose of, its accused products. Accord-
ingly, under the plain reading of the text, Infinera is a
beneficiary of the full scope of the license.
As it did before the district court, on appeal, Oyster ar-
gues that the license cannot be read to apply to Infinera
because of the Agreement’s limitations on assignability.
Here, Oyster points to Section 13.2, which, in case of an
acquisition of Coriant, limits assignability of the Agree-
ment to Licensed Products “substantially developed” before
the date of acquisition. Oyster Br. at 40–41 (citing J.A.
1049, § 13.2). In Oyster’s view, an acquirer (such an Infin-
era) enjoys a license only as to Coriant’s pre-acquisition
products and successors of those Coriant products. Id. We
are not convinced. As the district court correctly noted, as
an Affiliate of Coriant, Infinera independently enjoys a li-
cense to the patents-in-suit under Section 4.1. We agree
with the district court that any purported assignment of
the Agreement is irrelevant because “Infinera’s license
rights stem directly from its status as an ‘Affiliate.’” Oys-
ter, 2019 WL 2603173, at *10.
We are likewise not convinced by Oyster’s argument
that Infinera’s acquisition of Coriant breaches the Agree-
ment’s “no circumvention” clause, § 14, by which each
party covenanted not to act through or in conjunction with
any Affiliate or Third Party to circumvent or frustrate the
purposes of the Agreement. Relying on its flawed reading
of the assignability clause, Oyster insists that one purpose
of the Agreement was to prevent other defendants, like In-
finera, from taking advantage of the Agreement. Oyster
Br. 48. But Oyster’s stated purpose of the Agreement is
unsupported by the text; neither the assignability clause
nor any other terms reflect such an intent. Indeed, Oyster
agreed to extend a license to Coriant and its Affiliates with-
out limiting the term “Affiliates” in the manner it now
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OYSTER OPTICS, LLC v. INFINERA CORP. 7
suggests—i.e., by expressly excluding the other defendants
from this definition. Accordingly, we conclude that the li-
cense applies to Infinera. 2
B. Infinera’s License Is Retroactive
Oyster contends that, even if Infinera is a licensee, the
license cannot be “unlimited in temporal scope.” Oyster Br.
49. It argues that licenses are generally prospective while
releases are retroactive, and that this principle must be ap-
plied to the Agreement. In Oyster’s view, the presence of
distinct release and license provisions in the Agreement
means the license only applies to acts after the effective
date of the release, and as to Infinera, only after it became
an Affiliate. Id. at 50–51. Any other reading, in Oyster’s
view, “swallow[s]” the release and renders it superfluous.
Id. at 51. We again disagree.
Although Oyster correctly notes that licenses are gen-
erally prospective, it ignores the plain text of the Agree-
ment rendering this particular license retroactive. We
reject any suggestion by Oyster that licenses can never be
2 The dissent claims that our decision is premature,
citing to two cases filed by appellants asserting fraud in
connection with the license agreement at issue here. Dis-
sent at 5. The first has been voluntarily dismissed. Re-
quest for Dismissal, Oyster Optics, LLC v. Coriant (USA)
Inc., No. 19-CV-354065 (Cal. Super. Ct. Nov. 5, 2019). The
second involves a patent not asserted in this case. See, e.g.,
Complaint at 4, Oyster Optics, LLC v. Infinera Corp., No.
2:19-cv-00257 (E.D. Tex. July 29, 2019). No claims of fraud
were ever made in this case, either in response to the as-
sertion that the license provided a complete defense to the
claims of infringement or otherwise. The only question be-
fore the district court, and now this court, is the meaning
of the license agreement, which both parties assert is clear
on its face. That is the only issue we decide.
Case: 19-2179 Document: 72 Page: 8 Filed: 02/11/2021
8 OYSTER OPTICS, LLC v. INFINERA CORP.
retroactive. Patent licenses are prospective unless the par-
ties make them retroactive with clear language. That is
exactly what the parties did here. As explained above, the
license provision extends to any “Licensed Product,” which
includes products made, used, or sold, “at any time” by Co-
riant and its Affiliates. J.A. 1043, § 1.4. This clear lan-
guage makes the license fully retroactive.
In this regard, Oyster’s reliance on Ditzik v. Ergotron,
Inc., No. 05-73584, 2008 WL 2858765 (E.D. Mich. July 23,
2008) is misplaced. Oyster contends that our analysis
should follow Ditzik, where the court concluded a license
was temporally restricted even where the definition of Li-
censed Products encompassed products sold “in the past
and in the future.” Oyster Reply Br. 4–5, 28. A key dis-
tinction between the license grant in Ditzik and the license
from Oyster is that the Ditzik license was expressly limited
to the “Term” of the agreement—defined as the period from
the effective date of the agreement to the expiration date of
the patent. No such limitations exist in the license at issue
here. 3
We also reject the contention that this reading renders
the release provision superfluous. As Infinera correctly
points out, the release is broader than the license and does
other work in the agreement. It extends, for example, to
Coriant’s customers, manufacturers, and suppliers. It ap-
plies, moreover, not just to claims of patent infringement,
but to “any and all claims” arising from activities based on
“the conduct of the Litigation.” J.A. 1044, § 3.1. Notably,
the release does not extend to “products or components” of
Third Parties that were “not by, for, or on behalf of” Coriant
and its Affiliates, id., buttressing the reading that the re-
lease serves to immunize Coriant and its Affiliates’
3 That same distinction was present in the agree-
ment at issue in Oyster Optics, LLC v. Alcatel-Lucent USA,
Inc., 816 F. App’x 438 (Fed. Cir. 2020).
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OYSTER OPTICS, LLC v. INFINERA CORP. 9
suppliers and manufacturers. Thus, contrary to Oyster’s
arguments, the license does not render the release super-
fluous. Oyster does not point to any persuasive reason to
depart from the plain language of the agreement.
Accordingly, we conclude that Infinera obtained a ret-
roactive license in the patents-in-suit when it became an
Affiliate of Coriant.
CONCLUSION
We have considered Oyster’s remaining arguments and
find them unpersuasive. For the foregoing reasons, the dis-
trict court’s judgment is
AFFIRMED
Case: 19-2179 Document: 72 Page: 10 Filed: 02/11/2021
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
OYSTER OPTICS, LLC,
Plaintiff-Appellant
v.
INFINERA CORP.,
Defendant-Appellee
______________________
2019-2179
______________________
Appeal from the United States District Court for the
Eastern District of Texas in Nos. 2:16-cv-01295-JRG, 2:18-
cv-00206-JRG, Chief Judge J. Rodney Gilstrap.
______________________
NEWMAN, Circuit Judge, dissenting.
The Settlement and License Agreement between Oys-
ter Optics, LLC (“Oyster”) and the three Coriant compa-
nies, in settlement of Oyster’s suit for patent infringement,
did not also resolve, without Oyster’s intent, Oyster’s pa-
tent infringement suit against Infinera Corporation (“In-
finera”). The Settlement and License Agreement between
Oyster and Coriant cannot reasonably be interpreted as ab-
solving Infinera of the liability asserted in Oyster’s concur-
rent infringement suit against Infinera. The district
court’s ruling is contrary to the law of contracts and is con-
trary to the rules of integrity of commerce.
Case: 19-2179 Document: 72 Page: 11 Filed: 02/11/2021
2 OYSTER OPTICS, LLC v. INFINERA CORP.
My colleagues’ affirmance of the district court decision
is not only incorrect, but is also not ripe for review, for Oys-
ter is now challenging the bona fides of the Coriant Settle-
ment and License Agreement, in the district court and also
in California State court.
I respectfully dissent.
DISCUSSION
In 2016, Oyster initiated infringement actions against
the three affiliated Coriant companies, Coriant Operations,
Inc., Coriant (USA) Inc., and Coriant North America, LLC
(together herein, “Coriant”), charging infringement of eight
Oyster patents on network systems that send light waves
along optical fibers for digital data transmission. That lit-
igation was resolved by a Settlement and License Agree-
ment dated June 27, 2018, licensing Coriant to use the
patented technology and releasing liability for past in-
fringement.
Oyster also filed suit against Infinera in 2016 for in-
fringement of seven of the same patents, and in 2018 as-
serted an additional patent. The Infinera and Coriant suits
were consolidated for some purposes in the district court,
but were separated at the joint request of Oyster and Cori-
ant in view of their forthcoming settlement.
After Oyster and Coriant settled their litigation and ex-
ecuted the Settlement and License Agreement, Infinera
moved the district court for dismissal of the Oyster-Infin-
era suit, stating that Infinera’s infringement issues were
resolved in the Oyster-Coriant Agreement. The Oyster-Co-
riant Agreement makes no mention of the concurrent Oys-
ter-Infinera litigation. However, the district court granted
the dismissal, and my colleagues now agree.
I cannot share this interpretation of the Oyster-Coriant
Agreement. It plainly was not Oyster’s intent and under-
standing of its settlement with Coriant. The law of con-
tracts, as well as New York law, which applies to this
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OYSTER OPTICS, LLC v. INFINERA CORP. 3
Agreement, does not countenance contract interpretation
that is contrary to the mutual intent and understanding of
the parties to the contract.
Nonetheless, the district court construed the Oyster-
Coriant Settlement and License Agreement to license and
release Infinera under the Oyster patents, based on the ref-
erence to future affiliates in the Agreement. The district
court terminated Oyster’s litigation against Infinera, ac-
cepting that Infinera was now fully licensed, and released
from liability for past infringement. Such a result was
plainly not Oyster’s understanding and intent when it set-
tled with Coriant. “The objective of contract interpretation
is to give effect to the expressed intentions of the parties.”
Rothenberg v. Lincoln Farm Camp, Inc., 755 F.2d 1017,
1019 (2d Cir. 1985) (applying New York law).
The general law of contracts does not permit contract
interpretation contrary to the mutual intention and under-
standing of the parties. A concealed intention that is ma-
terial to the contract understanding does not bind the
unknowing party, see Restatement (Second) of Contracts
§ 201(2) (1981):
Where the parties have attached different mean-
ings to a promise or agreement or a term thereof, it
is interpreted in accordance with the meaning at-
tached by one of them if at the time the agreement
was made . . . that party had no reason to know of
any different meaning attached by the other, and
the other had reason to know the meaning attached
by the first party.
A concealed meaning that the concealing party knows
would not be accepted by the other party is not a mutual
understanding. Restatement (Second) of Contracts
§ 201(3) (a party to an agreement is not “bound by the
meaning attached by the other” as a result of “a failure of
mutual assent”).
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4 OYSTER OPTICS, LLC v. INFINERA CORP.
The parties to the Oyster-Coriant Agreement did not
have the mutual intent and understanding that this Agree-
ment would license and release Infinera from infringement
of Oyster’s patents. New York law is clear that “a release
may not be read to cover matters which the parties did not
desire or intend to dispose of.” Cahill v. Regan, 5 N.Y.2d
292, 299 (1959). See also Comm’rs of State Ins. Fund v.
Fortune Interior Dismantling Corp., 7 A.D.3d 427, 428
(N.Y. App. Div. 2004) (“The scope of a general release de-
pends on the controversy being settled and the purpose for
which the release is actually given.”). On facts similar to
those herein, in Ditzik v. Ergotron, Inc., No. 05-73584, 2008
WL 2858765 (E.D. Mich. July 23, 2008), the court found
that there was not an “unambiguous intent to release
Plaintiff’s claims against any other defendant that might
come under common control with [the Defendant] in the fu-
ture.” Id. at *4.
A valid contract requires a meeting of the minds on
shared knowledge, not concealment of information known
to only one side, with knowledge that the concealed infor-
mation is material. The Oyster-Coriant Settlement and Li-
cense Agreement was executed on June 27, 2018, and the
Infinera-Coriant understanding that Infinera would ac-
quire Coriant was publicly announced on July 23, 2018.
Oyster states that it did not learn of the concurrent “secret
negotiations” between Coriant and Infinera until docu-
ments were produced in discovery, showing that the mer-
ger between Infinera and Coriant was in process while
Coriant and Oyster were writing the Settlement and Li-
cense Agreement. Oyster Br. 15.
Coriant’s request to include future affiliates in the Set-
tlement and License Agreement must be viewed in the con-
text that existed, to which Coriant’s withheld knowledge
was highly significant. Oyster states that had it known
“[o]therwise, it would have objected.” Reply Br. 7. It is
noteworthy that Coriant had “confirm[ed] that there is no
inadvertent increase in the scope of the rights conveyed,”
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OYSTER OPTICS, LLC v. INFINERA CORP. 5
and that “Oyster can sue . . . anyone other than Coriant,”
when questioned in the context of Coriant’s customers and
suppliers. J.A. 931 (emails between Coriant counsel and
Oyster counsel, May 30, 2018).
The Oyster-Coriant Agreement requires the “parties”
to dismiss the litigation between Oyster and Coriant, but
does not mention dismissal of the litigation between Oyster
and Infinera. However, Infinera’s present motion to dis-
miss states that the Oyster-Coriant Agreement requires
dismissal of the Oyster-Infinera litigation. Agreement to
dismiss litigation cannot be inferred, and the non-disclo-
sure by Coriant negates the court's interpretation of the
Oyster-Coriant Agreement as dismissing the Oyster-Infin-
era litigation based on the inference that Oyster has li-
censed and released Infinera. See Davis v. Blige, 505 F.3d
90, 102 (2d Cir. 2007) (settlements and releases under New
York law “are generally retrospective and exclusively be-
tween the parties to the settlement. . . . [A]bsent clear lan-
guage to the contrary, they are not licenses for future use”);
see also Unova, Inc. v. Acer Inc., 363 F.3d 1278, 1282–83
(Fed. Cir. 2004) (holding that a release to the acquired com-
pany did not extend to the acquiring company’s infringe-
ment before the acquisition).
The issues of the bona fides of the Oyster-Coriant
Agreement are being litigated elsewhere. Oyster filed, and
then withdrew without prejudice, a complaint in the Supe-
rior Court of California, County of Santa Clara for promis-
sory fraud, concealment, reformation of contract, and
rescission of contract, No. 19-CV-354065 (Cal. Complaint,
Aug. 26, 2019). Oyster also filed suit against Infinera and
Coriant in the Eastern District of Texas including counts
of fraud and concealment, and the release and license of
the Oyster-Coriant Agreement have been pleaded by the
defendants. No. 2:19-cv-00257 (E.D. Tex. Complaint, Oct.
28, 2019). Oyster Br. 17–18.
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6 OYSTER OPTICS, LLC v. INFINERA CORP.
In view of these unresolved issues and ongoing litiga-
tion, it is inappropriate for this court now to affirm the dis-
trict court’s summary judgment and dismissal. From my
colleagues’ contrary ruling, I respectfully dissent.